Bloomberg:
- John Paulson, the money manager whose wagers against the U.S. housing market helped him earn an estimated $3.7 billion last year, is now seeking to profit from Wall Street's search for capital to offset mortgage writedowns. Paulson plans to open a hedge fund by December that will invest as the world's biggest banks and brokers add to the $345 billion they've raised in the past year, according to two people with knowledge of the matter. The New York-based firm's credit funds rose as much as sixfold last year, helped by bets that rising defaults on subprime home loans would pummel the value of mortgage-backed securities. Rockefeller & Co., a New York investment firm, is also raising money to invest in insurers, banks and brokerages, according to James Chang, one of two portfolio managers of the Rockefeller Global Financial Services Recovery Fund LLC.
- Investors should add Fannie Mae(FNM) and Freddie Mac(FRE) mortgage bonds as increased purchases from mutual funds and foreign central banks make up for a drop in buying at the U.S. government-chartered companies, UBS AG said. The option-adjusted spread between yields on so-called agency mortgage securities and U.S. Treasury notes with maturities similar to their expected lives widened yesterday to 1.56 percentage points, near the two-decade high set in March, according to Lehman Brothers Holdings Inc. data.
- Volkswagen AG and PSA Peugeot Citroen, Europe's two biggest automakers, led a decline in the cost of protecting company debt from default to the lowest in a month after they reported earnings that beat analyst forecasts. The Markit iTraxx Europe index of 125 investment-grade companies fell 4 basis points to 91.75, the lowest since June 20, according to JPMorgan Chase & Co. The Markit iTraxx Crossover index of 50 companies with mostly high-risk, high- yield credit ratings fell 10 basis points to 516. The Markit CDX North America Investment Grade index of 125 companies in the U.S. and Canada decreased 4 basis points to 130, according to New York-based broker Phoenix Partners Group.
- Prices of high-risk, high-yield loans rose in the week ended yesterday as banking stocks rallied and crude oil prices fell from record levels. The average actively traded loan rose to 88.63 cents on the dollar, from 87.82 last week, according to Standard & Poor's LCD.
- Corn and soybeans plunged, extending declines from records reached in the past month, on speculation a rising dollar will reduce the allure of commodities as an investment hedge against inflation. ``Commodities were a bubble, and stocks were too cheap, and now we are seeing a shift in investments,'' said Greg Grow, the director of agribusiness for Archer Financial Services in Chicago. ``It could be a long time before commodity positions are completely unwound.'' The UBS Bloomberg Constant Maturity Commodity Index, made up of 26 commodities, fell as much as 1.6 percent today to the lowest in almost seven weeks on speculation rising interest rates will reduce investment demand for raw materials as a hedge against inflation. The gauge is down 11 percent since reaching a record 1,723.109 on July 3. ``Selling pressure has been seen from a general commodity sell-off led by crude oil and fund liquidation,'' which has triggered a cut of long positions in commodities, said Joel Karlin, commodity sales coordinator for Western Milling LLC in Goshen, California. ``The bloom is off the inflation story.''
- Crude oil futures fell $1.38/bbl. after a U.S. government report showed that fuel stockpiles increased as consumption tumbled to the lowest in more than a year. ``The 19.9 million barrel demand number is incredibly low and has to have the bulls worried.'' Demand has dropped for three straight weeks, the report showed. U.S. fuel consumption averaged 20.3 million barrels a day in the past four weeks, down 2.1 percent from a year earlier, the department said. ``This is another sign that demand is being hammered. You've reached a price level where there's a demand response.''
- The US dollar increased to a four-week high against the yen and strengthened versus the euro as a U.S. government rescue of Fannie Mae and Freddie Mac moved closer to congressional passage.
- Citigroup Inc. Chief Financial Officer Gary Crittenden said earnings will probably be strong enough to absorb any losses created when new accounting rules force it to move off-balance-sheet securities onto its books.
- The U.S. Congress may vote today on a rescue plan for Fannie Mae(FNM) and Freddie Mac(FRE) after lawmakers reached a deal on legislation aimed at alleviating the worst housing recession in a quarter century.
- FirstFed Financial Corp.(FED), the parent of First Federal Bank of California, had the biggest intraday increase in at least 24 years in New York trading after reporting some delinquent loans decreased in June from the previous month.
- EMC Corp.(EMC), the world's largest storage-computer maker, surged the most in more than three years after increasing its 2008 sales goal and reporting profit that exceeded analysts' estimates.
- AT&T Inc.(T), the largest U.S. telephone carrier, rose the most in seven months in New York trading after posting a 30 percent increase in profit and saying the new version of the iPhone is selling twice as fast as the original.
NY Times:
- Colombia’s Gains Are America’s, Too.
MiamiHerald.com:
- Direct-sales businesses are booming.
Lloyd’s List:
- Container shipping rates to Europe from
Financial Times:
- Europe Faces High Risk of Recession.
- Right here, right now - and maybe just for a while - its time to load up on US stocks relative to non-US equities.
Rzeczpospolita:
- Polish economic growth may slow to between 4% and 5% next year as the global slowdown reduces demand for the country’s exports, citing central banker Andrzej Slawinski. The government expects the economy to grow 5.5% this year.
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