Monday, February 02, 2015

Today's Headlines

Posted by Gary .....at 3:02 PM
Bloomberg:
  • Ukraine Rebel Leader Calls for Mobilization After Talks Fail. A Ukrainian separatist leader ordered a military mobilization as the conflict with government forces escalated after peace talks failed to secure a truce. The call-up seeks to increase the rebel army to as many as 100,000 people, Alexander Zakharchenko, head of the self-declared Donetsk republic, said Monday, according to the separatist-run DAN news service. The new troops will be deployed against a Ukrainian military build-up in the south of the conflict zone so that “by spring, they’ll be meeting a different force,” he said, according to DAN.
  • Greece Standoff Sparks Ire Over Economic Risks. U.S. and British leaders are expressing frustration at Europe’s failure to stamp out financial distress in Greece and the risk it poses to the global economy. U.K. Chancellor of the Exchequer George Osborne, whose government faces voters in three months, became the latest critics, following comments by Britain’s central banker, Mark Carney, and U.S. President Barack Obama. “It’s clear that the standoff between Greece and the euro zone is fast becoming the biggest risk to the global economy,” Osborne said after meeting Greek Finance Minister Yanis Varoufakis in London. “It’s a rising threat to our economy at home.” 
  • Merkel Says Euro Area at Crossroads by Avoiding Tough Choices. German Chancellor Angela Merkel said the euro is at a crossroads and called on members of the currency union to settle on a common path to remain competitive with the rest of the world. “We have to come to an agreement that we all strive for this -- and really honestly strive for it,” Merkel told a group of students in Budapest, Hungary. “Otherwise there will continue to be very great tensions within the euro area.”
  • Russia’s Manufacturing at Weakest Since 2009 as Ruble Sinks. Russian manufacturing slipped to a 5 1/2-year low as the nation’s worst currency crisis since 1998 stokes inflation and weighs on businesses already facing a recession. The Purchasing Managers’ Index fell to 47.6 last month, the lowest since June 2009, from 48.9 in December, HSBC Holdings Plc said Monday in a statement, citing data compiled by Markit Economics. Readings below 50 indicate a deterioration in conditions. “Signs of contracting business activity became more visible,” said Alexander Morozov, HSBC’s chief economist for Russia and the Commonwealth of Independent States. “Meanwhile, price pressures intensified further, increasing the probability of a ‘bad equilibrium:’ high price growth amid falling demand.”
  • Banks’ $2.7 Trillion Debt Habit Will Be Curbed, Nouy Says. The days of European lenders being allowed to load up on government debt without having to account for risk are numbered, according to Daniele Nouy, the euro area’s top bank supervisor. A regulatory loophole that allows banks to apply a zero risk weight to much of their government debt holdings and avoid any capital charge should be closed, said Nouy, who heads the European Central Bank’s oversight arm. “It was confirmed during the crisis that there are no risk-free assets,” Nouy said in an interview in Frankfurt. “So there should be a risk weight, capital requirements for sovereign exposures.” Nouy said she sees movement toward closing the loophole. “It will happen.”  
  • Currency Warriors Shoot Blanks in Failing to Boost Economies. The big guns of the global currency war may be firing blanks. A dozen interest rate cuts already this year from Canada to India plus quantitative easing in the euro area have investors declaring the central bankers share the same goals: weaker exchange rates and faster inflation. The risk is a race to the bottom: a series of competitive devaluations in which nations turn increasingly aggressive in their efforts to seize share in international trade markets. That worry will form the backdrop when Group of 20 finance ministers and central bankers convene next week in Istanbul.  
  • Europe Stocks Erase Losses at End of Trading Day. European stocks ended the day little changed, erasing declines in the last 1 1/2 hour of trading. Futures on the Euro Stoxx 50 Index rose. The Stoxx Europe 600 Index advanced less than 0.1 percent to 367.28, after falling as much as 0.8 percent, as energy companies rallied the most in two weeks.
  • Oil Extends Gains From 6-Year Low; Strike Boosts Gasoline. Oil extended a surge from the lowest level in almost six years on speculation some investors are buying contracts to close out bearish bets. Gasoline rose as a refinery strike entered a second day. West Texas Intermediate futures gained as much as 4.8 percent while Brent increased as much as 5 percent before paring gains. Hedge funds and other speculators held the largest number of short contracts in WTI in four years. Oil rallied 8.3 percent on Friday as drillers pulled 94 rigs from U.S. fields last week, the most on record. Gasoline jumped to a five-week high.
  • Oil Companies Draw on Creative Financing to Stay Afloat After Prices Tumble. North America’s small and mid-sized energy companies are searching for creative ways to stay afloat as investors smell blood in the water from the almost 60 percent fall in the price of oil since June. Oil and natural gas companies are straining for solutions before cuts in credit lines and increases in lending rates hit home in April, when banks re-price the collateral used to secure revolving credit lines. Some are turning to more creative forms of financing as familiar sources of money dry up.
  • Specialist Doctors Head for Exit as U.S. Shifts Payments. The Obama administration’s push to transform the way the U.S. pays for health care is splitting the medical profession, as family doctors embrace changes that oncologists, neurologists and other specialists are concerned will cause turmoil. The government set a timetable last week to extinguish Medicare’s “fee-for-service” system, which rewards the quantity of care over quality. That’s adding to pressure on physicians who have been debating whether to join their local hospital, merge their practices into ever-bigger groups or get out of medicine.
Barron's:
ZeroHedge: 
Business Insider: 
@LOggOl:
Financial Times:
Telegraph:
Het Financieele Dagblad:
  • ECB QE Plan Won't Have Any Impact, Rabobank CFO Says. ECB QE is a dramatic step and won't lead to anything, citing Rabobank Chief Financial Officer Bert Bruggink in an interview.

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