Bloomberg:
- Deutsche Bank(DB) Said to Weigh Share Sale Up to $11.4 Billion. Deutsche Bank AG has approached investment banks to assess their interest in managing a stock sale to raise as much as 9 billion euros ($11.4 billion), said three people with knowledge of the discussions. Germany’s biggest bank has yet to decide on the sale, said the people, who declined to be identified because the plans are confidential. The proceeds may be used to increase the bank’s stake in Deutsche Postbank AG and to meet rising regulatory capital requirements, the people said.
- Norway Buys Greek Debt as Sovereign Wealth Fund Sees No Default. Norway, which has amassed the world’s second-biggest sovereign wealth fund, says Greece won’t default on its debts. The Nordic nation’s $450 billion Government Pension Fund Global has stocked up on Greek debt, as well as bonds of Spain, Italy and Portugal. Finance Minister Sigbjoern Johnsen says he backs the strategy, which contributed to a 3.4 percent loss on European fixed income in the second quarter, compared with gains on bonds in Asia and the Americas. “The point is, do you expect these guys to default?” said Harvinder Sian, senior fixed-income strategist at Royal Bank of Scotland Group Plc, in an interview. “Norway has taken the view that they will not. The Greek holdings are particularly interesting because the consensus in the market is that they will at some point restructure or default.” Norway says its long-term perspective will protect it from losses. “One could say we are investing for infinity,” Johnsen said in an Aug. 27 interview.
- Greece May Need to Extend Loans Six Years to Avoid Default, JPMorgan Says. Greece may need to extend a 110- billion-euro ($140 billion) bailout from the European Union and the International Monetary Fund by an extra three to six years to avoid a default on its debt, JPMorgan Chase & Co said. “I don’t think they have a choice, really, given their deficit is so large,” said Pavan Wadhwa, head of European interest-rate strategy at JPMorgan in London. “Either other countries roll over the loans, effectively forgiving debt, or Greece restructures its debt and the market starts to freeze up again. They will need more help after the package expires if they were to avoid an outright default.”
- Credit-Default Index Falls as Labor Department Says Jobless Claims Dropped. A gauge of corporate credit risk in the U.S. fell to the lowest in more than four weeks after a government report showed applications for jobless benefits fell more than forecast last week. The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt or to speculate on creditworthiness, declined 2.2 basis points to a mid-price of 103.2 basis points as of 8:47 a.m. in New York, according to Markit Group Ltd. The index, which was trading at the lowest since Aug. 9, typically falls as investor confidence improves and rises as it deteriorates.
- Calpers After Scandal Embraces Risk for Pensioners Facing $240 Billion Gap.
- OPEC Trims 2011 Demand Forecast as Production Outside the Group Advances. The Organization of Petroleum Exporting Countries trimmed the outlook for demand for its members’ crude in 2011 as production from outside the group grows. OPEC, responsible for about 40 percent of global supplies, predicted in a monthly report today that the world will need 28.8 million barrels of oil a day from its 12 members next year. That’s about 100,000 barrels a day less than in last month’s report. “Mexico, Oman and Equatorial Guinea encountered minor upward revisions,” OPEC’s Vienna-based secretariat said in the report. Global consumption may weaken during the rest of this year because of “the severity of the economic crisis and its prolonged impact on the world economy.” OPEC forecast that producers outside the organization will bolster supplies next year by 360,000 barrels a day to average 52.42 million a day. The forecast for Mexico was boosted as the country slows output declines at older fields, while the outlook for Equatorial Guinea was raised as its Aseng and Alen fields start.
- Commodity Prices in China Dip on Investigation Talk, Securities Times Says. Commodity prices in China slumped after the Securities Times said regulators are investigating large positions in natural rubber futures, spurring concern that some traders may be forced to sell. Rubber prices on the Shanghai Futures Exchange plunged by the most in three months, with declines spilling over into copper, zinc, soybeans and sugar after the Securities Times report, which cited people it didn’t identify. An official at the Beijing-based China Securities Regulatory Commission, who didn’t wish to be identified, declined to comment. The Securities Times is affiliated with the state-run People’s Daily. “The market was in turmoil on rumors that a brokerage based in Zhejiang province is under investigation by the securities regulator because of alleged manipulation of the natural rubber market,” said Tommy Xiao, analyst at Shanghai JC Intelligence Co., by phone from Shanghai.
- SEC Says Prince, Rubin Knew of Losses on Assets at Suit's Focus. Charles O. “Chuck” Prince and Robert Rubin were among Citigroup Inc. officials who knew 2007 losses were mounting on mortgage assets that U.S. regulators have faulted the bank for not disclosing, a court filing shows. Prince, the bank’s chief executive officer at the time, and Rubin, who was then chairman, knew the highest-rated segments of subprime mortgage-backed securities were the source of about $200 million in new losses in October 2007, the Securities and Exchange Commission said yesterday in a filing at federal court in Washington.
- Jobless Claims in U.S. Decreased 27,000 to 451,000 Last Week. Applications for U.S. unemployment benefits declined more than forecast last week, easing concern that employers will accelerate firings as the world’s largest economy cools. For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said.
- McDonald's(MCD) August Sales Rise 4.9%, Missing Estimates. McDonald’s Corp., the world’s largest restaurant chain, said comparable-store sales climbed 4.9 percent last month from a year earlier, missing analyst estimates, as growth in demand came up short in Europe. Analysts projected global sales would advance 5 percent, the median of three estimates compiled by Bloomberg. Sales at restaurants open at least 13 months rose 2.2 percent in Europe. Analysts estimated a 4 percent increase. European sales were hurt by slow demand in France, the chain said. The region’s performance was the weakest since February 2009. McDonald’s posted a 4.6 percent increase in the U.S. and a 7.8 percent gain in Asia, Africa and the Middle East.
- Global Housing Rebound Loses Momentum, OECD Says: Chart of the Day. The housing market’s recovery from its collapse two years ago is flagging worldwide, according to the Organization for Economic Cooperation and Development.
- Iran is Developing Secret Uranium-Enrichment Site, Dissident Group Claims. Iran is developing a secret uranium enrichment site near Qazvin, 120 miles west of Tehran, a dissident group said today, citing satellite images of the area. The facility is called Behjatad-Abyek and is code-named 311, according to the Iran Policy Committee, which supports the anti-regime People’s Mujahedeen of Iran. “This is certainly part of the secret weapons program,” said Alireza Jafarzadeh, who presented the photos at a Washington press conference. “It’s just moved underground, in tunnels, hidden from the outside world.” The Iranian government has spent $100 million on the mountainous site, where the photos, taken as far back as 2008 and as recently as last month, show excavation and tunneling, the group said. Jafarzadeh said intelligence information the group obtained indicates the facility could accommodate thousands of enrichment centrifuges, and construction at the site will be finished this year.
Wall Street Journal:
- Intel(INTC) Chief Chips Away at Plan Beyond PCs. Intel Corp. Chief Executive Paul Otellini is making acquisitions to compete beyond PCs. Mr. Otellini pulled off three deals this summer aimed at building Intel's business outside computing, where its microprocessor chips dominate. The urgency to do so became clearer late last month, when turbulent conditions in the personal computer market made Intel trim its third-quarter projections.
- Health Outlays Still Seen Rising. The health-care overhaul enacted last spring won't significantly change national health spending over the next decade compared with projections before the law was passed, according to government figures released Thursday. The report by federal number-crunchers casts fresh doubt on Democrats' argument that the health-care law would curb the sharp increase in costs over the long term, the second setback this week for one of the party's biggest legislative achievements. The Wall Street Journal reported Wednesday that insurance companies have proposed rate increases ranging from 1% to 9% nationwide that they attribute specifically to new health-law coverage mandates.
- Some Investors Support Currency Split As Confidence In Euro-Zone Weakens. Weakening confidence in the euro zone economy has led to some stock market investors saying the euro should be split into two currencies representing the financially stronger and weaker nations, a survey shows Thursday.
- iSuppli: Oversupply of LCD-TV Panels Worsened in 2Q. Shipments of large liquid-crystal display panels in the first half of the year vastly exceeded sales of televisions, monitors and notebook computers in which they are used, according to iSuppli Corp., adding to a glut of inventory that has hurt LCD-panel prices.
- Apple(AAPL) Eases App-Development Restrictions. Apple Inc. relaxed restrictions on developers of applications for its iPhones and iPads, opening up its popular App Store to products written with Adobe Systems Inc.'s(ADBE) Flash or using Google Inc.'s advertising technology.
- ECB: Lending Outlook Uncertain. Improved money-market conditions in the euro zone over the summer haven't made up for the disruption caused by the financial crisis and may prove short-lived, the European Central Bank said Thursday. "The coming months will clarify whether the resumption of [interbank] lending in July ... heralds a more sustained return to normality," the ECB said in its monthly report for September.
- Tax Contradictions. Obama Says the Economy Needs a Tax Cut - and a Tax Increase.
- US Falls Down Competitiveness League Table. The United States fell two places to fourth position behind Switzerland, Sweden and Singapore in this year's World Economic Forum's "Global Competitiveness Report."
Business Insider:
Zero Hedge:
- Trichet's "Quantum Leap" About to Create Tremors in Europe. More fireworks out of Europe, following in the footsteps of the disclosure about Deutsche Bank's dramatic underfunding and need to raise capital, is JC Trichet's stunning announcement that Eurozone members that break the region's rules on public finances should be excluded temporarily from Europe’s political decision-making, according to the FT.
- Union Accuses China of Illegal Clean Energy Subsidies. The union filed a legal case with the Obama administration on Thursday morning, accusing of violating rules by subsidizing exports of clean energy equipment to the United States.
- States Fight Obamacare. Opposition to the new health reform law is continuing to grow in the states - just as Congress prepares for its final pre-election legislative session. Colorado, for instance, just placed an initiative on the ballot that would, if passed, block many aspects of Obamacare - including the requirement that individuals purchase health insurance. A similar measure was overwhelmingly approved by voters in Missouri last month. And several states recently announced that they don't believe they have the authority to enforce the new law. With actions like these, the message to Washington is clear: If Congress doesn't repeal Obamacare, the states just might do it themselves. The health reform law remains unpopular. The August Kaiser Health Tracking poll found that 45 percent of Americans disapprove of the new law. Among likely voters, the numbers are even worse. The most recent Rasmussen Reports survey found that 56 percent favor repealing health care reform. State officials across the country have heard their constituents - and acted accordingly. This fall, voters in Arizona and Oklahoma will consider ballot initiatives similar to the ones in Colorado and Missouri. Lawmakers in Florida tried to put a measure invalidating the individual mandate on the ballot, but their effort was struck down by the state Supreme Court. These measures have an excellent chance of passing.
Rasmussen Reports:
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 23% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-seven percent (47%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -24 (see trends). Today's Approval Index rating is the lowest yet recorded for this president. Overall Job Approval matches the lowest recorded number, and the number who Strongly Disapprove matches the highest yet recorded.
- Warren Delay Has Wall Street Wondering. What’s taking so long? That is what some on Wall Street are asking about the lack of a nominee from the White House for the Consumer Financial Protection Bureau, the new financial watchdog agency created by the Wall Street reform bill. President Barack Obama signed the Dodd-Frank bill into law nearly two months ago, touting creation of the CFPB as one of its biggest provisions. The agency will have sweeping authority to oversee consumer financial products from mortgages to credit cards, putting it at the center of the entire banking industry.
Financial Times:
- The ECB stepped up its bond-buying program, buying between 100 million euros and 300 million euros of Greek, Portuguese and Irish bonds this week, citing traders.
- Goldman Sachs fined £17.5m by FSA over failure to report US fraud inquiry. Goldman Sachs has been handed a multi-million pound fine from the Financial Services Authority (FSA) for failing to tell the UK regulator that it was under investigation for fraud in America.
- European Central Bank Chief Economist Juergen Stark said that German banks need more capital, citing participants of a meeting in Berlin. Stark made the remarks to members of the parliamentary party of Chancellor Angela Merkel's Chritian Democrats. Savings banks and state-owned landesbanks are particularly at risk, Stark said.
Xinhua:
- China's economic growth is expected to slow, citing central bank adviser Xia Bin.