- Snowden Fleeing Damaging to U.S.-China Relations, Carney Says. Hong Kong’s decision to let fugitive Edward Snowden leave for Moscow “unquestionably” damages U.S. relations with China, President Barack Obama’s spokesman said. The U.S. government has expressed its “frustration and disappointment with Hong Kong and China” for letting Snowden flee, White House press secretary Jay Carney said today.
- Berlusconi Convicted by Milan Court in Sex-With-Minor Case. Silvio Berlusconi, the 76-year-old billionaire and former Italian prime minister, was found guilty by a Milan court of paying a minor for sex and abusing the power of his office. He was sentenced to seven years in jail. Berlusconi was also given a lifetime ban from public office, Judge Giulia Turri said in the Milan courtroom after a two-year trial. The ruling doesn’t become binding until the end of the appeals process, which could take months or years, and even if the sentence were enforced, it may involve house arrest due to his age. Turri urged prosecutors to seek perjury charges against more than 30 witnesses in the case.
- European Stocks Drop on China Concern; Erste Group Falls. European stocks fell for a fifth day, erasing their gains for the year, as Goldman Sachs Group Inc. cut China’s growth forecast amid concern banks in the world’s second-largest economy face a cash crunch. Erste Group Bank AG tumbled the most in 17 months as it planned a rights offer to repay state aid. Kazakhmys Plc plunged to a four-year low as it backed a bid to take Eurasian Natural Resources Corp. private. Kabel Deutschland Holding AG rose 1.7 percent after Vodafone Group Plc offered to buy the German cable company for 7.7 billion euros ($10.1 billion). The Stoxx Europe 600 Index declined 1.7 percent to 275.66 at the close in London. The equity benchmark has entered a so-called correction, having slumped 11 percent since May 22.
- Company Credit Swaps in U.S. Rise to Highest Level Since Dec. 5. A gauge of U.S. corporate credit risk rose for a fourth day to a more than six-month high as Chinese equities entered a bear market on concern that a cash crunch will injure the economy. The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, increased 5.7 basis points to a mid-price of 99.7 basis points at 8:28 a.m. in New York, according to prices compiled by Bloomberg. Earlier the index reached 99.8 basis points, the highest intraday level since Dec. 5.
- Copper Declines as Inventories Advance to 10-Year High. Copper fell to the lowest in almost three years in New York on concern that slowing growth in China will curb demand as inventories reach a 10-year high. Aluminum extended the longest slump since at least 1987. China’s central bank said there’s a reasonable amount of liquidity in the financial system and urged banks to control risks from credit expansion, signaling no relief from a cash squeeze. Copper stockpiles monitored by the London Metal Exchange climbed to the highest since June 2003 and Freeport-McMoran Copper & Gold Inc. (FCX)’s Grasberg mine in Indonesia is resuming output after a tunnel collapsed on May 14. “China’s credit crunch is exacerbating a slowdown there that was already going on,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “That’s going to slow world demand for copper. And inventories are growing.” Copper futures for September delivery fell 2.3 percent to settle at $3.0285 a pound at 1:12 p.m. on the Comex in New York after touching $2.9935, the lowest for a most-active contract since July 20, 2010. Trading volume in New York was 38 percent higher than the average for the past 100 days at this time, according to data compiled by Bloomberg.
- Kocherlakota Says Fed Policy Guidance Is ‘Insufficient’. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota, who doesn’t vote on monetary policy this year, said the central bank needs to set clearer guideposts for the outlook for record stimulus and commit to press on with monthly bond purchases at least until unemployment falls below 7 percent. “The committee’s communications have provided insufficient detail about how its policy strategy will play out when the recovery is more advanced,” Kocherlakota said in a statement today released by the Minneapolis Fed.
- Fed’s Fisher Says He Backs Tapering QE With Economic Improvement. Federal Reserve Bank of Dallas President Richard Fisher, who doesn’t vote on monetary policy this year, said he favors scaling back the Fed’s monthly bond-buying if the economy makes the kind of progress officials are currently expecting. “I agree fully with the chairman that we should dial back on the stimulus” should “we achieve what the 19 of us forecast,” Fisher said today in a speech in London. The central bank is currently purchasing $85 billion in bonds every month.
- U.S. FTC Said to Open Probe of Oil Price-Fixing After EU. The U.S. Federal Trade Commission opened a formal investigation into how prices of crude oil and petroleum-derived products are set, mirroring a European Union inquiry, two people familiar with the matter said. The investigation, now in a preliminary stage, will probably become a broad probe similar to the multi-jurisdictional inquiry into bank manipulation of the London interbank offered rate, or Libor, the people said. FTC investigators are reviewing the progress their European counterparts have made, said the people, who asked not to be named because the matter is confidential.
- Options on Debt Derivatives Nearing $100 Billion: Credit Markets. The market for options on credit derivatives indexes has surged more than 40 percent in the past month to $98.8 billion as investors search farther afield for cheap hedges protecting against a sell-off in the bond markets. The contracts, which give investors the right but not the obligation to buy or sell indexes of credit-default swaps at a certain price, have doubled from $48.7 billion a year ago, Depository Trust & Clearing Corp. data show. That compares with a 17 percent drop in the amount covered by swaps benchmarks on U.S. and European investment-grade debt and a 4 percent decline for all credit derivative products in the year through June 14.
- Emerging-market rout sparks fears of full-fledged crisis. (graph)
- Gold, copper drop as China worries mount. Copper falls to lowest level in nearly 3 years. Gold futures were under renewed pressure Monday, while copper dropped to its lowest level in nearly three years after tightening credit conditions in China triggered a global equity selloff on fears about Chinese economic growth.
- Mark Mobius: China's Problems as Big as US Subprime. While China's housing market problems are similar in scale to those faced during the U.S. subprime mortgage bubble and its banks are rife with bad loans, it won't lead to another Lehman-style crash, Franklin Templeton's Mark Mobius told CNBC on Monday. Mobius manages some $53 billion in emerging market funds and has more money invested in China than in any other market.
- Earnings Season Already Looks Like a Train Wreck. Employers Test Plans That Cap Health Costs. Hoping to cut medical costs, employers are experimenting with a new way to pay for health care, telling workers that their company health plan will pay only a fixed amount for a given test or procedure, like a CT scan or knee replacement. Employees who choose a doctor or hospital that charges more are responsible for paying the additional amount themselves.
- China Crashing: Shanghai Composite Tumbles Most Since 2009. (graphs)
- Bank Of China Declares Moratorium On Transfers, Online Banking; Counters Inoperable.
- European Stocks Plunge To Seven-Month Lows; Banks In Bear Market. (graphs)
- Market's 'Hall Pass' Is Gone: "Bad News Is No Longer Good News".
- Where Are We Now? - A World View.
- Every Student And Parent Should See These Charts On Earnings By Major.
- Glenn Hubbard Explains The Doomsday Scenario That America Will See In 20 Years If There's No Change In Spending.
- Dallas Fed Manufacturing Survey Surges.
- The Brazilian Bond Market Massacre In One Huge Slide.
Reuters:
- TREASURIES-U.S. 30-year bond prices turn positive.
- Dalio's Bridgewater big loser in market sell-off -sources. A $70 billion portfolio managed by hedge fund titan Ray Dalio's Bridgewater Associates and widely held by many pension funds is emerging as a big loser in the recent sell-off by markets, according to two people with knowledge of the numbers. The Bridgewater All Weather Fund is down roughly 6 percent through this month after losing 5 percent in May, the people said. For the year, the All Weather fund is down 8 percent.
- Hospital chain Tenet(THC) to buy Vanguard Health(VHS) for $1.73 bln.
- EMERGING MARKETS-Latam stocks drop in emerging markets sell-off.
- Green rules will leave Europe importing even dirtier fuel from elsewhere, Essar Energy warns. Draconian green regulations risk putting European refineries out of business, leaving the continent importing more fuels from dirtier plants elsewhere in the world, Essar Energy has warned.
- CDU's Willsch Recommends Greek Euro Exit. Euro exit is Greece's only chance to recover via devaluation of a new currency and structural reforms, citing Klaus-Peter Willsch, a lawmaker from German Chancellor Angela Merkel's Christian Democratic Union party and budget-committee member, as saying. After successful reforms Greece could reapply for euro membership, Willsch said. Willsch skeptical Greek Prime Minister Antonis Samaras' government can reach EU, IMF targets after failed privatization of natural gas company Depa.
- Shanghai will continue to implement the nation's property control policies, citing Pang Yuan, vice director of the Shanghai housing bureau.
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