Wednesday, February 20, 2013

Today's Headlines

Bloomberg:
  • Merkel Says Euro Has ‘Long Way’ to Go Before Crisis Is Overcome.German Chancellor Angela Merkel said the euro area has a “long way” ahead before it overcomes the three-year-old debt crisis even though measures to boost competitiveness and cut debt are bearing fruit. “We’ve achieved much but still have a lot of work ahead of us,” Merkel told Germany’s Straubinger Tagblatt/Landshuter Zeitung in an interview. The euro bailout funds, the fiscal pact governing debt reduction and an agreement on mapping out joint banking supervision are all moving forward, Merkel said. “It’s moving ahead step by step,” Merkel said. It’s now “high time” to achieve what the founders of the single currency didn’t and move states toward improving competitiveness and structural reform, Merkel told the southern German newspapers
  • French Workers Who Talk for 3 Hours Don’t Cut It, Titan Says. Titan International Inc. Chairman Maurice Taylor has got French backs up with his comments that the country’s workers earn high wages and work short hours. In a letter to French Industry Minister Arnaud Montebourg declining to reconsider buying a tire plant in the country, he wrote that France can keep its “so-called workers.” Taylor, who ran for the Republican presidential nomination in the 1996, laid out why his company walked away and won’t reexamine buying a plant that Goodyear Tire & Rubber Co., the largest U.S. tire- maker, is closing in France. “I have visited the factory several times,” Taylor wrote. “The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three. I told the French union workers this to their faces. They told me that’s the French way!” 
  • Spain Said to Impose Yield Ceiling on Bond Sales by Regions. Spain is limiting the amount of interest its 17 semi-autonomous regions can pay to borrow, shutting many out of debt markets, as it seeks to repair the nation’s finances, two people familiar with the matter said. The government wants administrations to pay yields no more than 100 basis points above sovereign securities when they sell bonds, said the people, who asked not to be identified before the policy is announced. Catalonia, the nation’s biggest region, pays 314 basis more than government debt on its 1 billion euros ($1.3 billion) of 4.95 percent bonds due 2020. 
  • China Orders More Cities to Restrict Housing Purchases. Chinese Premier Wen Jiabao called on local authorities to “decisively” curb real estate speculation and take steps to rein in the property market after data showed prices surged the most in two years last month. Cities that have had “excessively fast” price gains should promptly impose home-purchase restrictions if they’ve not done so already, China said in a statement released yesterday after a State Council meeting headed by Wen. Provincial capitals and municipalities reporting directly to the central government should also publish annual price control targets to keep new- home costs “basically stable,” according to the statement. Shares of Chinese developers listed in Shanghai fell the most in more than six months on Feb. 19 on concerns the government would impose new restrictions to cool the real estate market after prices rebounded.
  • Currency Rhetoric Heats Up With New Zealand Joining Warnings. New Zealand’s central bank governor said he’s ready to intervene in foreign-exchange markets, adding to comments by officials from South Korea to South America warning their currencies are too strong, even as Group-of-20 nations say they’ll refrain from competitive devaluation. “There seems to be a sense that the gloves are off in terms of central-bank action in currency markets,” said Mitul Kotecha, global head of foreign-exchange strategy at Credit Agricole SA in Hong Kong.
  • Einhorn Adds Short Bets as Markets Rally Amid Economic Slump. Hedge-fund manager David Einhorn reduced bets that stocks will rise as equities climbed to a five-year high while U.S. economic growth halted. "As the market continues to advance, even as the economy doesn't, we tend to become less enthusiastic," Einhorn said on a conference call today held by his Greenlight Capital RE Ltd. reinsurer. "We took some gains in our long portfolio and added to our shorts." Einhorn said long positions exceeded short wagers by 29 percentage points as of Jan. 31, down from 39 percentage points at the start of the year.
  • Apple(AAPL) Falls After IPhone Builder Foxconn Halts Hiring. Apple Inc.’s shares declined after Foxconn Technology Group, the manufacturer of products including the iPhone, froze hiring across China
  • Toll Brothers(TOL) Falls as Homebuilder’s Earnings Miss Estimates. Toll Brothers Inc., the largest U.S. luxury-home builder, fell the most in eight months after reporting fiscal first-quarter earnings and revenue that trailed analyst estimates.
  • World Powers to Make New Offer to Iran, Diplomat Says. The five United Nations Security Council permanent members and Germany will make a new offer to Iran to resolve the dispute about its nuclear program in talks next week, a Western diplomat said. 
  • JPMorgan(JPM) Said to Seek First Sale of Mortgage Bonds Since Crisis. JPMorgan Chase & Co. is seeking to sell securities tied to new U.S. home loans without government backing in its first offering since the financial crisis that the debt helped trigger. The deal may close this month, according to a person familiar with the discussions. Servicers of the underlying loans may include the New York-based lender, First Republic Bank and Johnson Bank, said the person, who asked not to be identified because terms aren’t set.
  • Copper Falls to Four-Week Low as China Orders Limits on Housing. Copper fell to a four-week low in New York as China, the world’s biggest consumer, moved to cool property purchases and as inventories expanded.
Wall Street Journal: 
  • Fed Officials Feared Easy Money Could Rattle Markets. Federal Reserve officials expressed growing unease with the central bank's easy-money policies at its latest policy meeting and some suggested the Fed might need to pull them back before the job market is fully back to normal. Minutes released Wednesday of the Fed's Jan. 29-30 policy meeting showed that officials worried the central bank's easy-money policies could lead to instability in financial markets and might be hard to pull back in the future. The Fed plans to evaluate how the programs are doing at its next meeting March 19 and 20. Several officials said that the Fed should be prepared to vary the pace of its asset purchases, depending on how the economy performs and its analysis of the costs and benefits of the program, according to the minutes. Some Fed officials suggested the Fed may need to alter its stated course to continue the bond-buying programs until the job market improves "substantially," a threshold it hasn't defined.
  • J.P. Morgan(JPM) Faces Calls to Split CEO, Chairman Roles. Investors that control more than 16 million shares are calling for J.P. Morgan Chase JPM -1.01% & Co. to split the chairman and chief executive posts held since 2006 by James Dimon, citing concerns over a trading fiasco that saddled the company with more than $6 billion in losses.
MarketWatch:
CNBC: 
Zero Hedge: 
Business Insider: 
Reuters:
  • India to miss 2012/13 export target: Anand Sharma. 
  • Mortgage applications fell last week as rates rose: MBA. Applications for U.S. home mortgages fell for a second straight week as both refinancing and loan requests for new mortgages eased last week, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, was 1.7 percent lower in the week ended February 15. The MBA's seasonally adjusted index of refinancing applications fell 1.6 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, dropped 1.7 percent.
  • Asia steel output growth offsets fall in EU, U.S. in Jan. Stronger steel output in top producer China and in Asia as a whole, offset falls in Europe, the United States and most other producing regions in January, data from an industry body showed on Wednesday. Global crude steel production rose 0.8 percent to 125 million tonnes in January from the same month a year earlier, data from the World Steel Association showed. Output in China, which is also the top consumer of the alloy, rose 4.6 percent in January to 59.3 million tonnes, while Asia as a whole posted a 4 percent increase to 82.3 million tonnes.
Telegraph:
  • Losing our AAA rating could mean bank collapse and deflation. Like a condemned man, the British government awaits the sentence. It’s ceased to be a question of whether we’ll lose our AAA rating, but when.
  • Bulgaria succumbs to euro deflation curse. Another euro-pegged government defending an overvalued exchange rate bites the dust, a reminder that the underlying economic and social disaster across the Europe’s Arc of Depression is still getting worse. Bulgarian prime minister Boiko Borisov resigned this morning after days of mass protests against austerity across the country.
Radiocor:
  • S&P Sees Risk Italian Reforms May Slow After Vote. Italy's uncertain election outcome means the nation's economic overhaul risks losing steam after the Feb. 24-25 vote, citing a report by S&P. S&P said a lack of economic growth is the main credit risk for Italy.
Xinhua:
  • Wen Says China to Curb Property Speculation. Chinese Premier Wen Jiabao said the country should be "determined" in curbing property speculation and "strictly" implement home purchase limits, citing Wen speaking at a State Council meeting. Wen also said China will expand property tax trials.
  • China May Ban Barbecues in Densely Populated Urban Areas. Proposed restrictions are aimed at combating air pollution, citing draft technical guideline issued by the Ministry of Environmental Protection.

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