Thursday, September 13, 2012

Today's Headilnes

Posted by Gary .....at 3:24 PM

Bloomberg:
  • Schaeuble Cautions Spain Against Aid Bid in Poke at France. German Finance Minister Wolfgang Schaeuble discouraged Spain from seeking a full international bailout, saying another request for outside aid risked a fresh round of financial-market turmoil. “I’m not in the camp that says ‘take the money,’” Schaeuble said in an interview in Berlin today when asked about French moves to press Spanish Prime Minister Mariano Rajoy’s government to ask for more aid. Spain “would be daft” to ask for a bailout on top of the 100 billion euros ($129 billion) for its banks if it didn’t need it.
  • U.S. Jobless Claims Rise to Highest in Two Months: Economy. The number of Americans who filed applications for unemployment benefits last week rose to the highest in almost two months. Jobless claims increased 15,000 in the week ended Sept. 8 to 382,000, Labor Department figures showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 370,000 claims. Employment is cooling as a global slowdown and looming U.S. tax policy changes keep businesses hesitant about hiring. Persistent joblessness, which Fed Chairman Ben S. Bernanke called a “grave concern,” persuaded policy makers today to take another step to bolster the world’s biggest economy. “The labor market is essentially gaining no traction at all,” said Brian Jones, a senior U.S. economist at Societe Generale in New York, who projected claims would rise to 380,000. “The Fed chairman’s concern about the labor market is warranted. A surge in the cost of crude oil led to the biggest increase in wholesale prices last month in more than three years. The producer price index climbed 1.7 percent after a 0.3 percent rise in July, the Labor Department also said today.
  • Wholesale Prices in U.S. Rise Most in Three Years on Oil. Wholesale prices in the U.S. increased in August by the most in more than three years, reflecting a surge in energy costs. The producer price index climbed 1.7 percent after an increase of 0.3 percent in July, the Labor Department reported today in Washington. The median estimate in a Bloomberg survey of 79 economists called for a 1.2 percent gain. The gain in producer prices was the biggest since June 2009 and reflected the biggest jump in energy costs in three years. Compared with a year ago, companies paid 2 percent more for goods, after a 0.5 percent gain in the 12 months ended in July. The core index increased 2.5 percent in the year ended in August, matching the rise a month earlier. Fuel costs surged 6.4 percent from the prior month after five straight declines. Gasoline prices advanced 13.6 percent, while home heating oil costs increased 10.8 percent, the most since October 2010. The cost of finished foods rose 0.9 percent, the biggest gain since November and reflecting higher prices for eggs, vegetables and dairy products. Expenses for intermediate goods increased 1.1 percent, and those for crude goods jumped 5.8 percent.
  • Fed Undertakes QE3 With $40 Billion in MBS Purchases a Month. The Federal Reserve said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month in a third round of quantitative easing as it seeks to boost growth and reduce unemployment. “If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,” the Federal Open Market Committee said today in a statement at the end of a two-day meeting in Washington. The FOMC said it would probably hold the federal funds rate near zero “at least through mid-2015.” Since January, the Fed had said the rate was likely to stay low at least through late 2014. The Fed said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.” The central bank is “trying to bail out the fact that the president hasn’t led, that the Senate hasn’t passed a budget, that we have a horrible economic policy coming from our regulations and from our tax policy,” Paul Ryan said at a campaign event in Wisconsin.
  • Oil Rises on Fed Stimulus And Mideast Unrest. Oil climbed as the Federal Reserve announced a plan to buy mortgage securities and on concern that protests in the Middle East and North Africa may curb supply. Futures rose after the Fed said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month to boost growth. Protesters tried to storm the U.S. Embassy in Sana’a, Yemen. A Sept. 11 attack on the U.S. Consulate in Benghazi, Libya, killed the American ambassador, Chris Stevens, and three colleagues. Crude oil for October delivery advanced $1.03, or 1.1 percent, to $98.04 a barrel at 1:21 p.m. on the New York Mercantile Exchange. The contract initially dropped to $96.51 after the release of the Fed statement at 12:30 p.m. in Washington and earlier reached $98.58, the highest level since May 4. Futures are up 8.7 percent from this time last year. Brent oil for October settlement increased 78 cents, or 0.7 percent, to $116.74 a barrel on the London-based ICE Futures Europe exchange.
  • Gold Advances Before Federal Reserve’s Monetary Decision. Gold futures topped $1,770 an ounce for the first time since February after the Federal Reserve announced plans to expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. “If the outlook for the labor market does not improve substantially, the committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate,” the Federal Open Market Committee said today in a statement. Prices jumped 3.1 percent last week amid speculation that the Fed would announce measures to stimulate growth, increasing demand for the precious metal as an inflation hedge. “Prices are reacting to the Fed’s announcements,” William Rhind, the managing director at ETF Securities in New York, said in a telephone interview. “The inflation worries will be back because of ‘‘open-ended purchases.’’ Gold futures for December delivery rose 2 percent to $1,768.80 an ounce at 1:19 p.m. on the Comex in New York. Earlier, prices jumped to $1,770.40, the highest for a most- active contract since Feb. 29.
  • U.S. Embassy Calls Out Muslim Brotherhood Over Twitter Postings. The U.S. embassy in Cairo called out the Muslim Brotherhood on Twitter over differences between English and Arabic tweets about violent protests against an anti-Islamic video. The Muslim Brotherhood’s official English-language Twitter account @Ikwanweb reposted a message from the group’s deputy head, Khairat El-Shater, saying he was “relieved none of @USembassycairo staff was hurt” and expressing his desire that relations withstand the “turbulence” of events. The U.S. Embassy in Cairo wrote back: “Thanks. By the way, have you checked out your own Arabic feeds? I hope you know we read those too,” referring to the contradiction between the Brotherhood’s Arabic and English postings. The Brotherhood’s Arabic feed included messages that praised the protests, such as “Egyptians revolt for the Prophet’s victory in front of U.S. embassy.” Muslim Brotherhood leaders have called for a nationwide protest in Cairo tomorrow against an anti-Islamic video posted on YouTube. The video, which ridicules the Islamic Prophet Muhammad, also sparked demonstrations in Libya, Tunisia and Yemen.
Wall Street Journal:
  • Anti-U.S. Protest Clashes Rage in Yemen, Egypt. Anti-American protests resumed in Egypt Thursday and spread to Yemen, where hundreds of young men breached the outer security rings of the fortified U.S. Embassy, battering a guard post with pick axes and setting vehicles aflame. Yemeni officials and Westerners here in the Yemeni capital said embassy staffers had been moved earlier to another location in the city guarded by armored vehicles, U.S. Marines and Yemeni security forces, leaving the embassy empty but for the protesters and Yemeni security forces. There was no confirmation of the embassy evacuation from American officials, two days after armed attackers at the U.S. Consulate in Benghazi, Libya killed the U.S. ambassador and three other Americans. In Cairo on Thursday, hundreds of Egyptian police in riot gear beat back crowds of young men from a street filled with tear gas outside the U.S. Embassy, injuring 16 people, as protests that began there Tuesday roiled on. The protests, initially triggered by reports of a U.S.-made video insulting the Muslim Prophet Muhammad, threatened a wider day of unrest across the Muslim world on Friday, the weekly holy day in Islam and the traditional day of demonstrations in the region. "Not our Prophet! He is a red line!" demonstrators shouted outside the U.S. Embassy in San'a, where the crowds burned the embassy's American flag. "Troops will not stand in our way in defending the honor of our prophet,'' said Abdullah al-Hashedi, a high-school student among the protesters in Yemen. Young men and teenagers managed to breach the outer walls of gates to the high wall guarding the embassy compound. Protesters ran in and out of range of Yemeni security officials to set security vehicles and tires alight outside the compound.
  • Morsi Calls for 'End' to Film, Pledges Safety for Embassies. Egyptian President Mohamed Morsi pledged to protect diplomatic missions in Cairo after protesters incensed over an anti-Islam film overran the U.S. embassy there, but he called on the Obama administration to "put an end" to the film. Mr. Morsi's comments came a day after President Barack Obama appeared to question America's relationship with Egypt, telling a Spanish-language news channel: "I don't think we would consider Egypt an ally, but we don't consider them an enemy."
  • Italy Says It Won't Seek Aid. For months, Italy pushed for a Europe-wide plan to buy the bonds of struggling countries as a path out of the euro-zone debt crisis. That plan now exists, but Italy has no intention of using it. "We don't think it's necessary, or desirable, to seek a program" of bond-market intervention, Italy's Economy Minister Vittorio Grilli said in an interview.
  • OECD Indicators Point to Continuing Slowdown.
  • Security Fears Cloud Libyan Oil Growth.
  • The New World Disorder. As the U.S. retreats, bad actors begin to fill the vacuum.
CNBC.com:
  • US Deficit Tops $1 Trillion For Fourth Straight Year. The U.S. federal budget deficit increased by $191 billion in August, topping $1 trillion for the fourth straight year. The Treasury Department says the deficit for the first 11 months of the 2012 budget year, which ends Sept. 30, totaled $1.16 trillion. That's 6 percent less than the same period last year. Tax receipts are higher because of modest improvements in the economy. Thursday's announcement means that President Barack Obama has run trillion-dollar deficits each year in office. Republican presidential candidate Mitt Romney has criticized Obama for failing to cut the deficit in half, as Obama pledged to do in early 2009. The White House in July forecast that the budget gap will total $1.2 trillion this year, down from $1.3 trillion last year.
  • BRICs Are ‘Investment Disaster’; Now ‘Uninvestable’: Pro. Brazil, Russia, India, and China — together termed BRICs — combined were a marketing-led concept that have been an investment disaster, according to John-Paul Smith, emerging markets equity strategist at Deutsche Bank. “People were launching BRIC funds three, four, and five years ago. When Jim O’Neill made the call it was a fantastic call for a few years but then, as with these things, it was taken too far. The reason they are uninvestable is because of the extent of state intervention in those markets, which nobody would have foreseen three years ago,” Smith said.

Business Insider:

Zero Hedge:

New York Times:

Reuters:

  • ECB policymakers at odds over bond-buy conditions. European Central Bank policymakers sent conflicting signals on Thursday over the conditions they want attached to their new bond-buying programme, with their apparent discord playing out in public just a week after the bank announced the plan. The new programme has buoyed markets' faith in policymakers' ability to get on top of the euro zone crisis and the ECB must be careful that internal divisions do not undermine the plan from the outset - as happened with its previous bond-buy tool. A board member, German Joerg Asmussen, appeared to take a tougher stance last Friday, saying the ECB will only buy a country's bonds if it commits to "hard reforms". Council member and Estonian central bank chief Ardo Hansson took a similar stance to Asmussen, saying the ECB may decide against buying a country's bonds if it finds the bailout programme the country signs up to is not strong enough. "If we look at a programme that is acceptable to a particular country and it turns out not to be strong enough, that is an ex-ante reason to say 'no they won't get the support from the ECB'," Hansson told MNI News in an interview. "I don't think we can formulate our policy to do whatever is needed for governments to ask for a programme that is acceptable to them," he added.
  • New York OKs nation's first ban on super-sized sugary drinks. New York City passed the first U.S. ban of oversized sugary drinks on Thursday in its latest controversial step to reduce obesity and its deadly complications. By an 8-0 vote with one abstention, the mayoral-appointed city health board outlawed sugary drinks larger than 16 ounces nearly everywhere they are sold, except groceries and convenience stores. Violators of the ban, which does not include diet sodas, face a $200 fine.
  • Greece denies report it will need third bailout.

Handelsblatt:

  • Germany's govt debt will rise to EU2.2t by the end of 2012, a record 83% of GDP, citing a study by IfW Kiel economic institute. Debt as a percentage of GDP will rise 2.4 percentage points this year compared with 2011.
  • The Christian Social Union, the sister party of German Chancellor Angela Merkel's CDU, called for the ECB to be reorganized, citing a document written by Gerda Hasselfeldt, a CSU lawmaker, and Thomas Silberhorn, European policy spokesman for the party. Decisions by the ECB should be made by an executive board and not the ECB's governing council, the CSU said. The CSU wants the size of a county's contribution to the ECB to be taken into account when decisions are made.

Augsburger Allgemeinen:

  • Peter Gauweiler, a lawmaker from German Chancellor Angela Merkel's CSU Bavarian sister party, said German President Joachim Gauck cannot sign legislation on the ESM rescue program until the government has asked the country's parliament to agree to it, citing Gauweiler.

Europa:

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