- Al-Qaeda’s Heirs. Osama bin Laden is dead. So is much of the influence his organization built with the attack on the World Trade Center in 2001. Al-Qaeda, however, lives on through a collection of like-minded Islamist militias holding territory and threatening to redraw the map in the Middle East and North Africa. Inspired by bin Laden’s jihad and hardened by battle, they have capitalized on the security and political vacuum left by the toppling of autocrats in the 2011 Arab Spring. They feed off the area’s sectarian and tribal conflicts, and are united by an ambition to bring new states with strict interpretations of Islamic law to the Arab world. The region’s governments are mired in a battle to fight them, while the U.S. and its allies struggle to form a response.
- Iraqi Forces Search Baghdad Homes as Residents Hoard Food. Iraqi forces searched homes in Sunni Muslim-dominated areas in Baghdad as they prepared to defend the capital from a possible attack by an al-Qaeda breakaway group that captured the biggest city in the north. Army and security forces looked for weapons yesterday and made residents sign papers confirming they don’t belong to armed groups or are providing any with shelter. Military spokesman Qassim Ata said yesterday that the government was conducting pre-emptive operations in the capital.
- Ukraine Says Russia Has 38,000 Troops on Border Amid ‘Invasion’. Russia has amassed as many as 38,000 soldiers on its borders with Ukraine and continues to supply arms and personnel to rebel forces in the eastern part of the country, Ukraine’s National Security Council chief said. Russia has moved about 16,000 troops to Ukraine’s eastern frontier and has another 22,000 in Crimea, the Black Sea peninsula that President Vladimir Putin annexed in March, Andriy Parubiy told reporters in the capital Kiev today. “The military invasion is continuing,” Parubiy said. “We are dealing with Russian occupiers and weapons and militants are being brought in.”
- Emerging Market Shares Fall While U.S. Stocks Fluctuate. Emerging market shares fell, while U.S. stocks fluctuated following last week’s drop as escalating violence in Iraq offset takeovers and growth in American industrial output. Treasuries reversed early gains and oil fell from a nine-month high. The MSCI Emerging Markets Index slipped 0.3 percent for a fourth straight loss.
- European Gas Jumps Most Since March as Russia Cuts Ukraine Flows. U.K. and Dutch natural gas prices climbed the most in more than three months as Russia’s pipeline-gas export monopoly OAO Gazprom (GAZP) cut shipments to Ukraine, threatening flows to the European Union. U.K. front-month gas jumped as much as 8.8 percent on ICE Futures Europe, the biggest increase since March 3, the first trading day after Russian President Vladimir Putin got approval from lawmakers to send troops into Ukraine’s Crimea region. Dutch prices rose 10 percent to their highest level since May 12, according to broker data compiled by Bloomberg.
- China Bigger Than U.S. With $14 Trillion in Company Debt. Chinese companies borrow more than their American counterparts as the world’s second-largest economy takes center stage in corporate-debt markets. Borrowers from China had $14.2 trillion in debt at the end of last year, exceeding than every other country including the U.S., which had $13.1 trillion in company obligations, according to a report dated June 15 by Standard & Poor’s. Needs of Chinese issuers will increase to $20 trillion through the end of 2018, a third of the $60 trillion in global funding needs.
- Puts Abandoned in Calmest Stock Market in Two Decades: Options. For 40 days, the S&P 500 Index has failed to post a gain or loss exceeding 1%, the longest stretch of calm since 1995. That's squashing demand for options that protect against turbulence. For every 100 bullish calls trading on the CBOE in the 10 days through June 11, 80 puts to sell changed hands, the fewest since January. The measure tracking options on individual equities and indexes shows traders abandoning bearish bets as the S&P 500 steadily climbs higher.
- Oil at $125 Seen as Iraq Chaos Brings Price Swings: Opening Line. Brent crude rose as high as $113.28 a barrel in London this morning as Iraq struggles to contain civil war and dismemberment. “Practically speaking, the country has broken apart,” he said. “Geographically we practically have to cross another country to get to Baghdad.”
- ECB Likely to Refrain From New Measures for Next Months. The European Central Bank is likely to refrain from any new stimulus package in coming months as it reviews lenders’ balance sheets, according to two euro-area central-bank officials familiar with current policy discussions. The effect of any ECB measures could be blunted by the reluctance of banks to increase lending during the assessment, the people said, asking not to be identified because the deliberations aren’t public. The health check is scheduled to end in October. An ECB spokesman said that the Governing Council discusses its policy stance every month.
- Bonds Liquidity Threat Is Revealed in Derivatives Explosion. The boom in fixed-income derivatives trading is exposing a hidden risk in debt markets around the world: the inability of investors to buy and sell bonds. While futures trading of 10-year Treasuries is close to an all-time high, bond-market volume for some maturities has fallen a third in the past year. In Japan’s $9.6 trillion debt market, the benchmark note didn’t trade until midday on two days last week. As a lack of liquidity in Italy caused transaction costs in the world’s third-largest sovereign bond market to jump last month, Lombard Odier Asset Management helped propel an eightfold surge in Italian futures by relying more on derivatives. The shift reflects an unintended consequence wrought by central banks, which have dropped interest rates close to zero and implemented policies such as buying debt to restore demand in economies crippled by the financial crisis. Inefficiencies in the $100 trillion market for bonds may make investors more vulnerable to losses when yields rise from historical lows. “Liquidity is becoming a serious issue,” Grant Peterkin, a money manager at Lombard Odier, which oversees $48 billion, said in a June 11 telephone interview from Geneva. The worry is that when investors try to exit their positions, “there may be some kind of squeeze.”
- BofA(BAC) Fined for Overbilling Ministers, Charities, School Workers. Bank of America Corp., the second-largest U.S. lender, agreed to an $8 million fine and returned almost $90 million to clients of its Merrill Lynch unit who were improperly charged fees over six years. About 6,800 retirement plans for charities, ministers and public-school workers and 41,000 for small businesses paid purchase charges for mutual funds when none was required from 2006 to 2011, according to the Financial Industry Regulatory Authority. While Merrill Lynch discovered the improper charges in 2006, it didn’t inform Finra until 2011, according to settlement papers released today.
- Iraq Government Loses Control of Another Key City. Forces
Led by a U.S.-Trained Iraqi Military Commander Give Way to Islamist
Fighters. Iraqi government forces led by a U.S.-trained commander lost
control
of another key northern Iraqi city to Sunni extremists on Monday,
triggering warnings from neighboring Turkey that the escalating violence
risked opening another front in sectarian fighting. The loss of
Tal Afar and the defeat of one of Iraq's top generals underlined the
fragility of Prime Minister Nouri al-Maliki's government and raised
fresh questions about its...
- Manhattan Seeing Surge in New Office Construction: Report. Manhattan is experiencing a surge in new office construction that is set to outpace previous years, but whether the economy will generate the office jobs to keep vacancy rates from rising remains a question, according to a new report. Manhattan will add 9 million square feet of new office space between 2013 and 2015, more than two-thirds of it located in three towers – One World Trade Center, 4 World Trade Center and 10 Hudson Yards, according to the report released by the New York Building Congress, an association promoting the construction industry. If realized, that would be the highest amount of new office space built in a three-year period since 1990. The report forecasts about 24.4 million square feet of new office space will be built between 2010 and 2019, up about 26% from the 19.4 million square feet added between 2000 and 2009.
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- Local Police Are Using Surveillance Tactics The Obama Administration Doesn't Want You To Know About.
- 15 Killed in Fresh Borno Village Market Attack. No fewer than 15 people, including traders, were killed, yesterday, when some suspected members of Boko Haram terrorists stormed a local market in Daku village in Askira Uba Local Government Area of Borno State and set ablaze several shops, houses, vehicles and motorcycles.
- Greenpeace loses $5.2 million on currency trading. Greenpeace International has acknowledged losing $5.2 million on a bet the euro would not strengthen against other currencies in 2013— but it did.
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