- ECB’s Rescue Worsens Spain, Italy Maturity Crunch: Euro Credit. European Central Bank President Mario Draghi’s bid to bring down Spanish and Italian yields may spur the nations to sell more short-dated notes, swelling the debt pile that needs refinancing in the coming years. “In a way what the ECB has done is making the situation worse,” said Nicola Marinelli, who oversees $160 million at Glendevon King Asset Management in London. “Focusing on the short-end is very dangerous for a country because it means that every year after this they will have to roll over a much larger percentage of their debt.”
- German Exports Fell In June As Crisis Curbed Euro-Area Demand. German exports dropped more than economists forecast in June as the sovereign debt crisis curbed demand from euro-area trading partners. Exports, adjusted for work days and seasonal changes, fell 1.5 percent from May, when they jumped 4.2 percent, the Federal Statistics Office in Wiesbaden said today. Economists forecast a 1.3 percent decline, according to the median of 15 estimates in a Bloomberg News survey. Imports fell 3 percent from May.
- German June Industrial Production Fell on Construction Output. German industrial production declined in June, led by a drop in construction output. Production fell 0.9 percent from May, when it gained a revised 1.7 percent, the Economy Ministry in Berlin said today. Economists had forecast a drop of 0.8 percent, the median of 34 estimates in a Bloomberg News survey showed. Production fell 0.3 percent from a year earlier when adjusted for working days.
- King Backs Cameron Budget Plan as BOE Lowers Outlook: UK Economy.
- Cathay Pacific Stock Drops on Unexpected First-Half Loss. Cathay Pacific Airways Ltd. (293), the biggest international air-cargo carrier, fell the most in about three months in Hong Kong after posting an unexpected loss on a freight slump, higher fuel costs and waning premium travel. The airline swung to a first-half loss of HK$935 million ($121 million) as it carried 10 percent less cargo and suffered from wider losses at a freight venture with affiliate Air China Ltd. (753) Volumes have fallen because of slower global trade and competition from fast-growing Middle Eastern airlines. “Cargo is really bad,” said Jim Wong, a Hong Kong-based transport analyst at Nomura Holdings Inc.
- Fisher Says More Stimulus May Overburden Central Banks. Federal Reserve Bank of Dallas President Richard Fisher said adequate economic stimulus is in place and that global central banks may not have the capacity to undertake additional measures. “We’re at the risk of overburdening the central banks,” Fisher said in an interview today on “Bloomberg Surveillance” with Tom Keene and Sara Eisen. “We keep applying what I call monetary Ritalin to the system. We all know there’s a risk of over-prescribing.” Fisher said the largest banks have $1.5 trillion in excess reserves that they would like to put to work and that the private sector now must take the next steps to boost growth. Lawmakers also must act to eliminate uncertainty about government spending and tax rates, Fisher said. “We have done our job,” Fisher said of the Fed. “We have done enough. Just doing more doesn’t solve the problem. The problem is engaging the transmission. We provided the gas, the gas tank is full.”
- Oil Rises for Fourth Day on Supply, Middle East Tension. Oil rose for a fourth day as a government report showed U.S. stockpiles dropped more than expected and on concern tension in the Middle East will disrupt global supplies. Prices climbed to the highest level since May as the Energy Department said inventories fell 3.73 million barrels last week, more than double the 1.55 million forecast by analysts polled by Bloomberg. Former Syrian Prime Minister Riad Hijab, who defected this week, arrived in Jordan today, and Egyptian aircraft struck gunmen in northern Sinai, killing 20. “The inventory decline is far bigger than what had been expected, and that’s why prices are up,” said Marshall Berol, co-portfolio manager of the Encompass Fund in San Francisco, which has about $300 million in assets. “The tension in the Middle East is escalating.” Crude oil for September delivery rose 25 cents, or 0.3 percent, to $93.92 a barrel at 12:56 p.m. on the New York Mercantile Exchange after increasing to $94.72, the highest intraday level since May 15. Oil traded at $94.37 a barrel before release of the inventory report at 10:30 a.m. Futures have climbed 22 percent since reaching an intraday low of $77.28 on June 28. Brent oil for September settlement advanced 45 cents, or 0.4 percent, to $112.45 on the London-based ICE Futures Europe exchange.
- Northeast Asian LNG Prices Extend Drop on Weak Demand, WGI Says. LNG prices for near-term delivery to northeast Asia fell for a 10th week to their lowest in more than a year amid low demand for the fuel, World Gas Intelligence said.
- Recession Generation Opts to Rent Not Buy Houses to Cars. “Every decision that I have made since I lost my job has been colored by that insecurity I feel about the future,” said Anselmo, 28, who now rents an apartment in Austin, Texas, and works as a consultant for UnitedHealth Group Inc. “Buying a house is just further out on the timeline for me than it used to be.” Anselmo and many of his peers are wary about making large purchases after entering adulthood in the deepest recession and weakest recovery since World War II. Confronting a jobless rate above 8 percent since 2009 and student-loan debt hitting about $1 trillion, 20-to-34-year-olds are renting apartments, cars and even clothing to save money and stay flexible.
- Adelson Sues National Jewish Democratic Council For Libel. Sheldon Adelson, chairman of the Las Vegas Sands Corp. (LVS), sued the National Jewish Democratic Council and its top officers for libel, saying the organization falsely claimed he approved of prostitution in his Macau casinos. Adelson, a billionaire and top fundraiser for Republican Mitt Romney’s presidential campaign, filed his $10 million suit today in Manhattan federal court. He claims the NJDC, its president, David Harris, and its chairman, Marc Stanley, “crossed the threshold from constitutionally protected speech to defamation of a public figure.” The suit is over an article that Adelson says was authored by Harris and posted on the NJDC website claiming Adelson approved of prostitution in his Macau casinos and urging Romney to cease accepting his donations.
- The Romney Hood Fairy Tale. The false, invented analysis behind Obama's tax claims. The charge is that even though Mr. Romney is proposing to cut tax rates for everybody across the board, Mr. Romney will finance this by imposing a tax increase on the middle class. His evidence is a single study by the Tax Policy Center, a liberal think tank that has long opposed cutting income tax rates. The political left always says Daddy Warbucks gets all the tax-cut money. So this is hardly news, except that the media are treating this joint Brookings Institution and Urban Institute analysis as if it's nonpartisan gospel. In fact, it's a highly ideological tract based on false assumptions, incomplete data and dishonest analysis. In other words, it is custom made for the Obama campaign.
- China Firm to Buy Control of U.S.-Backed Battery Maker. A123 Systems Inc., a struggling, U.S. government-backed manufacturer of advanced batteries for electric vehicles, is turning to one of China's largest auto parts makers for a bailout. The Waltham, Mass.-based company said on Wednesday that Wanxiang Group Corp., a Chinese conglomerate, agreed to acquire up to an 80% stake in return for an up to $450 million investment. The investment would secure the future of the company, which warned earlier this year it was in danger of running out of money.
- Health Law Likely to Spur Retail, Restaurant Cuts. Employers in the retail and restaurant industries are more likely than other companies to drop their health plans or cut workers' hours when new health-law requirements take effect in 2014, according to new data from the consulting firm Mercer. A Wall Street Journal article last week said retail and restaurant franchisees were bracing for higher costs as part of the law, and several said they planned to change workers' health benefits.
- Good takeover targets beyond Best Buy(BBY).
- Don’t get suckered by the Draghi put. Commentary: Unlike Greenspan, ECB chief doesn’t deliver at all.
- A ‘Brixit’ Could Be Next Problem for Europe: Nomura. The U.K. is not renowned for its smooth relationship with its European partners and, like the end of a tempestuous love affair where both partners have tried their best to accommodate the others’ demands, the relationship could finally hit the rocks with Britain leaving the EU for good, according to a report by Nomura.
- Fed Painted ‘in a Box’ as Markets Demand QE3: Kashkari. Ebullient stock markets are increasingly pricing in the possibility that the Federal Reserve will soon unveil another round of monetary stimulus, Pimco Managing Director Neel Kashkari told CNBC Wednesday. “The Fed is really in a box right now,” said Kashkari, who was an architect of the Troubled Asset Relief Program that bailed out major banks during the 2008 financial crisis. Inflation expectations and stocks are at levels that appear to be assuming imminent Fed action, he told CNBC's “Squawk Box.”“Those indicators have already priced in … that the Fed should act,” Kashkari said.
- Why $9 Corn Could Be a Big Problem for the Economy.
- Municipal Finances Reaching an 'Inflection Point': Whitney. Cash-strapped local governments are facing an "inflection point" that will force them into deciding between providing services and honoring debt obligations, financial analyst Meredith Whitney told CNBC.
- Japan Is Quietly Circling A Financial Black Hole.
- This Is The Genius Way You'll Be Paying For Everything One Day.
- Two Senators Are Trying To Make Jamie Dimon's Worst Nightmare A Reality.
- The Last Two Times Export Orders Collapsed Like This, We Were In A Recession. (graph)
- Obama Is Falling Apart In Colorado, And Here's The Number That Proves It.
- The Pace Of US Downward Revisions Is Picking Up. (graphs)
- From Chicago To New York And Back In 8.5 Milliseconds.
- Be Careful What QE You Wish For #2467: Gas Prices Surging Again.
- Flowcharting The ECB's Known Unknown Next Steps.
- Monti's Bluffing Unleashes Bull Market In Crude. (graphs)
- Why London Bankers Are Shrugging Off Standard Chartered Threat. Money managers in the City of London react to the U.S. allegations that Standard Chartered hid money tied to Iran: Everyone does it. Standard Chartered may be down, but it is certainly not out. While it appears that the bank is in very hot water with state regulators over its business dealings with the Islamic Republic of Iran, its story is far from unique. Many major international banks have done business with Iran in violation of U.S. sanctions – with most paying hefty fines for doing so. That may be why senior bankers and portfolio managers in the City of London don't seem too worried about the beating Standard Chartered's stock has taken in the past few days after New York State regulators threw the book at the bank on Monday. Talk that the bank could lose its ability to work and trade in the state is being dismissed as simply "loony."
- Iron Ore-Shanghai rebar falls for 4th day in 6, ore hits 2-1/2 yr low. China's steel futures slipped for a fourth day in six on Wednesday as sluggish demand kept pressure on spot prices of raw material iron ore, and further weakness was expected in both commodities before the start of any recovery. Iron ore, down about 17 percent this year, reached its cheapest level in 2-1/2 years as Chinese steel mills, the world's biggest buyers of the ore, limited spot purchases as they awaited a rebound in steel prices.The most-traded January rebar contract on the Shanghai Futures Exchange closed down half a percent at 3,667 yuan ($580) a tonne. The contract hit an all-time low of 3,631 yuan on Friday and is down 11 percent this year. The spot steel market is "still very weak", said an iron ore trader based in Shanghai. "It's difficult to expect any meaningful recovery in both steel and iron ore prices in the near term," the trader said. A stuttering Chinese economy is limiting the country's demand for raw materials. With abundant stocks at home, analysts expect China's imports of iron ore and other commodities such as copper and crude oil to drop for a second month in a row in July. The data is due to be released on Friday.
- Coal miner Alpha Natural(ANR) posts big second-quarter loss. Alpha Natural Resources Inc, which idled four mines and cut production as coal prices slumped this year, reported a quarterly loss of $2.2 billion on Wednesday after charges to write down assets and restructure operations. The company also narrowed its production target for this year and said it might need to further adjust production levels as pricing remains "unattractive" in U.S. domestic and European export markets. Alpha's stock dropped 5.1 percent to $6.55 in Wednesday morning trading on the New York Stock Exchange.
- Copper Slips on Weak Euro; China Data Eyed.
- Fitch updates Greek mortgage assumptions.
- Rio(RIO) Hurt By Fall in Commodities Prices. Rio Tinto is sticking to plans to plough $16bn into development projects this year on hopes of a pick-up in Chinese growth, even as falling prices for key commodities such as iron ore depressed first-half earnings.
- McDonald's(MCD) sales worst in two years as US recession bites. McDonald's blamed a 'sluggish' US economy as the world's biggest fast-food chain delivered its worst monthly sales in more than two years.
- Euro founder admits some nations may be forced to leave. One of the founding fathers of the euro admits that some states may be forced to abandon the single currency, but insists Germany would be better off staying in.
- Fears are rising that euro crisis threatens region's biggest economies. New figures are fanning concerns that the eurozone debt crisis is driving its powerhouse economies, France and Germany, into recession.
- Italian Government to Cut 2012 GDP Forecast to -2.1%. The current forecast is for a -1.2% contraction in 2012 GDP.
Sydney Morning Herald:
- China Pushes for More Say on Iron Ore Prices. BEIJING is pushing for a greater say in setting the price of iron ore, just as Australia's most important export earner hovers near an eight-month low. The Ministry of Industry and Information Technology - the Chinese agency in charge of the steel industry - last week held a meeting in Beijing with major steel makers to discuss how to better influence the price. ''We need to take advantage of the slowing import growth [of iron ore] and declining price to push for a more equitable iron ore price mechanism,'' a statement on the ministry's website said.
- China Launches Trading Platform for Rare Earth Metals. BEIJING: China on Wednesday launched a trading platform for rare earth metals, state media reported, as it moves to boost its pricing power over the strategic resources for which it dominates global production. China's leading producer of rare earths, Inner Mongolia Baotou Steel Rare-Earth (Group) Hi-Tech Co., started the platform in cooperation with nine other companies and institutions, Xinhua news agency said.
- China Criticizes 4 Provinces for Lax Property Controls. China's property inspection team sent by the State Council criticized the Chinese provinces of Hubei, Hunan, Hebei and Shangdong for not "strictly" implementing property control policies.
- Iran Sees No Drop in Crude-Oil Exports to China. Iran's exports of crude oil to its biggest customer China haven't decreased, citing Iranian Deputy Foreign Minister Abbas Araghchi. "The Chinese are purchasing nearly 150,000 barrels of Iranian crude a day and continue to import oil without any decline," Araghchi said. The two countries have agreed on methods for China to pay for Iranian oil, he said.