- Blasts Hit Sunni Mosques in Lebanon, Killing at Least 29. Explosions near two Sunni Muslim mosques in Lebanon’s northern city of Tripoli during Friday prayers killed at least 29 people and wounded more than 500, the official National News Agency said. One blast targeted Al Taqwa Mosque where radical Sunni cleric Sheikh Salem al-Rafei leads prayers. He wasn’t harmed, NNA said. The second hit near the entrance of the Salam mosque, not far from the house of caretaker Prime Minister Najib Miqati, who wasn’t in Tripoli at the time, according to NNA.
- UN Says One-Millionth Child Refugee Flees Syrian Conflict. The number of children among refugees who have fled Syria’s civil war has reached 1 million, the United Nations said today. An additional 2 million children inside Syria have been forced from their homes by fighting between President Bashar al-Assad’s troops and rebel forces, according to a statement from the United Nations Children’s Fund, known as Unicef, and the UN High Commissioner for Refugees.
- Oil Gains as U.S. Home Data Eases Concern on Stimulus. “The market rebounded after the release of the pretty-horrific July home numbers,” said Kyle Cooper, director of commodities research at IAF Advisors in Houston. “The housing data appears to have put fears of a quick end of stimulus to rest. Housing has been one of the stronger sectors of the economy recently.” WTI crude for October delivery increased $1.78, or 1.7 percent, to $106.81 a barrel at 1:39 p.m. on the New York Mercantile Exchange. Prices are down 0.6 percent this week. The volume of all futures traded was about 12 percent below the 100-day average. Brent oil for October settlement advanced $1.28, or 1.2 percent, to $111.18 a barrel on the London-based ICE Futures Europe exchange. Trading of futures was 6.5 percent above the 100-day average.
- Reinhart Says Emerging Markets Could Get ‘Ugly’ as Outflows Grow. Carmen Reinhart, a Harvard University economist and co-author of a history of debt crises, said emerging markets are deteriorating as the U.S. recovers and may worsen as global interest rates begin to increase. “It could get very ugly,” Reinhart said today in a Bloomberg Television interview with Sara Eisen from the Federal Reserve’s annual conference in Jackson Hole, Wyoming. “Emerging markets had a capital flow bonanza lasting several years, the golden boom years, and the probability of a banking crisis, the probability of a currency crash, the probability of a default, all increase afterward.”
- India’s Rupee Set for Worst Week Since 1993 on Fed Stimulus Risk. India’s rupee plunged 4.4 percent to a record this week in its worst performance since 1993 on signs the U.S. is getting closer to reducing stimulus that fueled demand for emerging-market assets. Federal Reserve policy makers were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to start reducing bond purchases later this year if the economy improves, with a few saying tapering might be needed soon, according to the minutes of their July meeting released Aug. 21. Global funds cut holdings of Indian debt by $9.9 billion since Bernanke first flagged possible paring on May 22, leaving the rupee vulnerable to the nation’s record current-account deficit.
- Record Bank Rally in Southern Europe May End on Economy. The longest rally in southern Europe’s banking stocks since the sovereign debt crisis began may prove unsustainable as the region’s economies lag behind a recovery in Germany and France. Economic woes in Italy and Spain persist, meaning banks will probably be forced to set aside more provisions as consumers and businesses fall into default. After a six-week increase in the shares of Italian banks, they are trading at 20.7 times projected earnings yesterday, up from 10.3 times profit a year ago, according to data compiled by Bloomberg.
- Junk Bonds Snap Seven-Week Winning Streak in Europe on Tapering. Junk (BEUH) debt investors lost money for the first time since June in Europe this week as bondholders anticipate the Federal Reserve slowing stimulus. High-yield notes from companies including Italian carmaker Fiat SpA and Portugal Telecom SGPS SA, the country’s biggest telecommunications company, lost investors an average 0.3 percent over the period, paring a 2.6 percent gain in the longest winning streak since Jan. 11, according to Bloomberg bond index data. Investment-grade (BERC) bonds also forfeited 0.3 percent, a second week of losses.
- Fed’s Lockhart Says He Wouldn’t Rule Out September Tapering. Federal Reserve Bank of Atlanta President Dennis Lockhart said he wouldn’t rule out a September move by the central bank to start tapering its bond-buying program as long as the economy’s performance justifies it. “I’m looking at the data as whether they are denying or undermining the outlook I have in my head” for moderate growth, Lockhart said in an interview today on Bloomberg Television with Michael McKee from Jackson Hole, Wyoming, where the Kansas City Fed is hosting a conference. “You can take a cautious first step,” which the Fed could conceivably do, he said.
- Economists in Jackson Hole Say QE Less Potent Than Fed Believes. The U.S. central bank’s bond buying is a less potent tool for stimulating growth than policy makers believe, two economists said in a paper released today at a Federal Reserve conference. The paper scrutinizes the stance of some Fed officials that so-called quantitative easing works through a “portfolio-balance channel” in which Fed asset purchases induce investors to rebalance their investments to boost a wide range of financial assets. The research was presented at an annual Kansas City Fed symposium in Jackson Hole, Wyoming.
- College Leaders Wary of Obama Plan Linking College Aid to Rank. President Barack Obama’s proposal to tie federal student aid to college tuition and outcomes, intended to control costs and support low-income students, may have the opposite effect, some education leaders said. Colleges may be discouraged from accepting and giving aid to students from low-income families because of the risk that they might hurt the school’s rankings, which would include graduation rates, debt levels and future earnings, the officials said. Obama’s proposal, which is subject to congressional approval, is likely to encounter strong opposition from colleges whose students rely on federal financial aid to help cover their costs, educators said.
- NSA Analysts Intentionally Abused Spying Powers Multiple Times. Some National Security Agency analysts deliberately ignored restrictions on their authority to spy on Americans multiple times in the past decade, contradicting Obama administration officials’ and lawmakers’ statements that no willful violations occurred.
- U.S. to Review Claims Oil Companies Undercut Renewables. The U.S. Federal Trade Commission said it will examine allegations that oil companies may be undermining efforts to distribute renewable fuels. The FTC will “evaluate” concerns that oil companies are blocking the distribution of renewable fuels by requiring retailers to carry premium gasoline, commission chairwoman Edith Ramirez said in a letter released today by two U.S. lawmakers who had called for an inquiry.
- Bats, Direct Edge in Talks to Merge. Deal Would Create Second-Largest U.S. Stock-Market Operator. Electronic-exchange group BATS Global Markets Inc. is in advanced discussions to merge with rival stock-exchange company Direct Edge Holdings LLC, people familiar with the matter said, in a deal that would create the second-biggest U.S. stock-market operator ahead of Nasdaq OMX Group Inc. NDAQ +1.31%.
- Market Size + Complex Systems = More Glitches. The root cause of Thursday's Nasdaq Stock Market trading halt can be traced to a single word: complexity.
- Team involved in tracking Benghazi suspects pulling out, sources say. Two weeks after the Obama administration announced charges against suspects in the Benghazi attack, a large portion of the U.S. team that hunted the suspects and trained Libyans to help capture or kill them is leaving Libya permanently. Special operators in the region tell Fox News that while Benghazi targets have been identified for months, officials in Washington could "never pull the trigger." In fact, one source insists that much of the information on Benghazi suspects had been passed along to the White House after being vetted by the Department of Defense and the State Department -- and at least one recommendation for direct action on a Benghazi suspect was given to President Obama as recently as Aug. 7.
Zero Hedge:
- Precious Metals Spike. (graphs)
Reuters:
- Exxon(XOM) selling Iraqi oilfield stakes to Petro China, Pertamina: Iraq minister. Exxon Mobil is selling stakes it controls in Iraq's West Qurna-1 oilfield to China's Petro China and Indonesia's Pertamina, the country's oil minister confirmed on Friday. "25 percent to Petro China and 10 percent to Pertamina," Abdul Kareem Luaibi told Reuters on the sidelines of a ministerial meeting here. He added that the deal would be done "maybe after two to three weeks". Exxon Mobil has a 60 percent stake currently in the giant oilfield and is the operator. Company and industry sources said on Thursday that China and Indonesia were set to join Exxon Mobil's $50 billion project to develop the field.
- Copper closes higher on China demand growth prospects. Benchmark copper on the London Metal Exchange (LME) ended at $7,360 a tonne, up from a close of $7,320 on Thursday. The metal is trading down around 7 percent in the year to date, however.
- Brazil current account deficit swells in July; FDI falls. Brazil's current account deficit more than doubled in July from a year ago, central bank data showed on Friday, with the country increasingly unlikely to cover that gap this year with slackening direct investment from abroad.
- Adding uncertainty, U.S. Fed set for new cast of characters. A new chairman is just the beginning of what could be a big leadership change at the Federal Reserve next year, giving investors yet another reason to second-guess the U.S. central bank's plan to scale back its support for the economy.
- Lagarde calls for more crisis ‘lines of defence’. The world needs to build “further lines of defence” against a possible emerging markets crisis but the International Monetary Fund stands ready to provide financial support if needed, its managing director Christine Lagarde declared on Friday. Ms Lagarde’s remarks to the Kansas City Fed’s annual gathering in Jackson Hole, Wyoming, are a sign of growing concern among international policy makers about market turmoil in countries such as Brazil, India and Indonesia.
- UBS Chairman Says Europe Hasn't Solved Problems. UBS AG Chairman Axel Weber says structural reforms in euro area needed to foster growth. Planned European banking union in danger of being developed with too much haste, Weber said.
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