- Israelis Rush for Masks Fearing Retaliation for Syria Strike. Israelis thronged to distribution centers to pick up government-issued gas masks, afraid their country will be targeted in retaliation if the U.S. attacks Syria. The Israel Postal Service, which is distributing the masks, announced on its website that the centers would extend their hours until evening “due to extraordinary demand.” In Haifa, the biggest city closest to the northern border with Lebanon and Syria, people waited in line for hours, Israel Radio said. Some centers ran out of masks.
- Assad’s Syria Chides Bread Lines as Civilians Brace for Hit. Syrians are forming bread lines and stocking up on other food as they brace for a possible U.S.-led attack on their soil. The Syrian government called the hoarding of bread “unjustified,” state-run news agency Sana reported today, citing Minister of Internal Trade and Consumer Protection Samir Amin. The government is ready to provide more flour to meet the increased demand, he said.
- Egypt’s Muslim Brotherhood Gears Up for Rallies Amid Crackdown. The embattled Muslim Brotherhood called on Egyptians to take to the streets tomorrow in protest against the military-installed government, looking to regain footing amid a crackdown on the group. The interim government is going after the Brotherhood as it tries to move ahead with plans to return to elected rule. It has arrested hundreds of its members and killed hundreds of its supporters, and warned today that it would use live fire if protests against the military’s July 3 toppling of Islamist President Mohamed Mursi turn violent. In a recorded statement aired late last night, Essam El-Erian, one of the few top Brotherhood leaders yet to be arrested, called for protests against what he described as “the bloody, brutal, fascist military coup that has hijacked people’s will and halted the path of democracy.”
- Rupee Dip Risks Economic Nosedive in India, Billionaire Says. India needs to immediately use its foreign exchange reserves to arrest the rupee’s record plunge as the weakening currency has the potential to send the economy into a “nosedive,” billionaire Adi Godrej said. “The whole economy will suffer dramatically -- there will be huge inflation, which will lead to high interest costs and a whole vicious cycle will be created,” Godrej, chairman of the soaps-to-real estate Godrej group, said in a phone interview yesterday. “I’m very surprised that the government and the Reserve Bank of India are not intervening sufficiently to prevent the volatility.”
- Indonesia Faces Rupiah Test After Rate Move on Record Deficit. Indonesia’s interest-rate increase yesterday helped the rupiah climb for the first time this week. To sustain that gain, the country needs to curb a record current-account gap that’s making it vulnerable to persistent pressure on emerging-market currencies. Bank Indonesia increased the benchmark reference rate to 7 percent from 6.5 percent, it said, after a meeting in Jakarta yesterday that came before the next scheduled policy review. It also raised the deposit facility rate by half a percentage point to 5.25 percent, and extended a bilateral swap deal with the Bank of Japan valued at $12 billion that will allow the two to borrow from each other’s foreign-exchange reserves.
- El-Erian Says Emerging Market Woes to Create U.S. Headwinds. Weakening emerging-market growth and spiraling currencies risk creating headwinds for a recovering U.S. economy, according to Pacific Investment Management Co.’s Mohamed El-Erian. “Longer term, we should care due to the feedback loop to the U.S.,” El-Erian, chief executive and co-chief investment officer of the world’s biggest manager of bond funds, said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. “You will see a tightening of financial conditions to markets. You will see growth more challenged and the ability of U.S. companies to get topline growth from emerging markets is going to be less going forward.”
- European Stocks Rise, Erase Monthly Drop; Vodafone Surges. European stocks rose, erasing their monthly loss, as Vodafone Group Plc surged to an 11-year high while data showed the U.S. economy grew faster than forecast in the second quarter and a drop in jobless claims beat estimates. Vodafone jumped 8.2 percent after saying Verizon Communications Inc. is in talks to acquire its stake in their Verizon Wireless venture. Carrefour SA rallied the most in seven months after posting an increase in first-half profit. Zurich Insurance Group AG declined 2.5 percent as Chairman Josef Ackermann resigned. The Stoxx Europe 600 Index added 0.8 percent to 300.13. The gauge lost 2.2 percent in the past three days, closing yesterday at a six-week low, on concern the U.S. will take military action against Syria.
- Gold Falls From 3-Month High as Data May Bolster Tapering. Gold retreated the most in more than two weeks as better-than-expected U.S. economic data reinforced the case for the Federal Reserve to slow stimulus measures. Gold futures for December delivery fell 0.4 percent to settle at $1,412.90 an ounce at 1:55 p.m. on the Comex in New York, the biggest drop since Aug. 13.
- Fed’s Lacker Says Central Banks’ Future Hinges on Role as Lender. Federal Reserve Bank of Richmond President Jeffrey Lacker said the future of global central banks will be shaped partly by a debate over the extent of their role as a lender of last resort. Lacker said central banks should avoid channeling credit to specific segments of the economy through rescues or asset-purchase programs. Still, “some writers” say central bank mandates provide a large role in financial stability, “in which all available tools, both monetary and credit policy, are used to minimize financial system ‘disruptions,’” he said. “Aggressive use of a central bank’s asset portfolio to channel credit to particular economic sectors or entities threatens dragging the central bank into distributional politics and places that governance arrangement at risk,” Lacker said today in Newport News, Virginia.
- Consumer Comfort in U.S. Declines to a More Than Four-Month Low. Consumer confidence fell for a third straight week to the lowest level in more than four months as Americans’ views on the economy, finances and spending soured. The Bloomberg Consumer Comfort Index declined to minus 31.7 for the period ended Aug. 25, its weakest reading since April 7, from minus 28.8 a week earlier. The gauge has dropped 8.2 points in the three weeks since reaching a more than five-year high. “Households are estimating possible reductions in disposable income due to rising gasoline prices and interest rates,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York, adding that consumers have their eye on political strife in Syria and Egypt. “The way it translates into the U.S. pocketbook is rising gas prices.”
- Fast-Food Strikes Expand Across U.S. to 50 Cities. Fast-food workers in 50 U.S. cities plan to walk off the job today in an attempt to ratchet up pressure on McDonald’s Corp. and Wendy’s Co. to raise wages. Protests that began in New York last year are spreading to cities including Boston, Chicago, Denver, San Diego and Indianapolis, according to the Service Employees International Union, which is advising the strikers. About 200 workers showed up at the two-story Rock N Roll McDonald’s store in Chicago’s River North neighborhood this morning chanting: “Hey hey, ho ho, poverty wages gotta go!”
- U.S. Banks Earned Record $42.2 Billion in 2nd Quarter, FDIC Says. U.S. banks reported record net income of $42.2 billion for the second quarter on broad gains from trading revenue, the Federal Deposit Insurance Corp. said. Banks’ earnings for the three months ending June 30 marked a second consecutive record quarter, the FDIC said today in its Quarterly Banking Profile. After the second-most profitable year on record in 2012, the boom has continued in the first half of this year as some of the largest banks scored trading success that outpaced analyst expectations.
- Daniel Henninger: ObamaCare for Everything. First health, then finance and now higher ed gets a federal fix.
- Aetna(AET) Pulls Out of NY Health Exchange. Aetna Inc, the No. 3 U.S. health insurer, said on Thursday it has decided not to sell insurance on New York's individual health insurance exchange, part of the country's healthcare reform. New York is the fifth state where Aetna has pulled its application to sell the plans that go on sale on October 1 and into effect on January 1, 2014. It has also reversed course in Maryland, Ohio, Georgia, and Connecticut, where it is based.
- Any US strike on Syria likely to extend beyond Damascus, sources say. The impending U.S. military action in Syria is likely to extend beyond the capital city of Damascus, and would be focused on the delivery systems for the Syrian regime's chemical weapons arsenal, sources told Fox News.
- Why short sellers love China’s tall buildings. When the ‘world’s tallest building’ goes up, markets come down.
- US claims, growth beat estimates; stir new taper speculation. The number of Americans filing new claims for unemployment benefits fell as expected last week, suggesting a strengthening in job gains in August after a slight pullback the prior month. Meanwhile, the U.S. economy accelerated more quickly than expected in the second quarter thanks to a surge in exports, bolstering the case for the Federal Reserve to wind down a major economic stimulus program.
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- Facebook(FB) considers adding profile photos to facial recognition. Facebook Inc is considering incorporating most of its 1 billion-plus members' profile photos into its growing facial recognition database, expanding the scope of the social network's controversial technology.
- Russia sends warships to Mediterranean as Syria tension rises. Russia is sending two warships to the east Mediterranean, Interfax news agency said on Thursday, but Moscow denied this meant it was beefing up its naval force there as Western powers prepare for military action against Syria.
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