Daily Highlights: 8.9.2010

• Australian home-loan approvals decline 3.9% as rate increases cool demand.
• China buys $5.3B of Japanese bonds in June, set for annual record.
• China orders 2,087 steel mills and factories to close to meet efficiency goals.
• Clawbacks divide SEC; Aguilar pushes harder line for executives at accused firms.
• Euro slightly changes against dollar at $1.3274.
• Fed set to downgrade outlook for US; big new steps to boost growth unlikely: FT.
• German exports rise 3.8% in June, 28.5% higher versus previous year.
• Goldman Sachs cuts forecasts for Japan, US on waning stimulus, exports.
• India to ease foreign access to equity markets; to lure overseas retail investors.
• Most Asian stocks rise as profit speculation overshadows growth concerns.
• Rise in vital feed grain prompts fears for the costs of meat and poultry.
• Treasuries fall on speculation Federal Reserve will hold off on bond buys.
• US economic recovery running out of steam with 14.6M Americans looking for work.
• AIG swung to a $2.7B loss on charges related to a unit that is being sold.
• AstraZeneca reaches Seroquel liability agreement, to pay $198M to 17,500 claimants.
• Berkshire's Q2 falls 40%, as last year's derivative gains turned into losses.
• BofA weighs sale, other options for trading desk.
• BP believes well static kill, cementing successful.
• Brown & Brown announces the asset acquisition of Synergy Benefits, Inc.
• China Everbright Bank may raise $2.8B after cutting IPO price by 30%.
• CMS cuts long-term spending plan by $1B, lifts dividend 40%.
• Ford to get help from US, other govts around the world as it races to slash its debt.
• GM's Opel expects net profit in 2012.
• Goldman informs Financial Crisis Inquiry Commission that 25-35% of its revenue comes from derivatives-based businesses.
• Google buys social widget maker Slide Inc. Deal est. at $180M.
• HP issues preliminary Q3 EPS above prior guidance; sees Q4, revs in-line.
• Magna swung to Q2 profit of $293M as sales jumped 63%.
• Mexicana airline suspends some flights; says financial situation is seriously deteriorated.
• MetLife raises ~$3.6B via a public offering of 86.25M shares; secures another $3B through senior debt offerings.

Earnings Calendar: ABK, APPA, CNTY, CWEI, DISH, KWK, LINTA, MDR, ROX, SATS, TSN.

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Data provided by Egan-Jones Ratings and Analytics

Comments

[dan22]

Reflections on Australia's Housing Bubble

http://israelfinancialexpert.blogspot.com/2010/08/guest-post-reflections-on-australias.html

Since the growth in house prices has significantly outpaced the growth in incomes, it follows that rising debt levels have been the key contributor to rising house prices in Australia, since the only way to purchase something that you cannot afford through income is to borrow the difference. Chart 2 uses RBA data to plot the level of mortgage debt against HDI and GDP. 

Few people realise that the Australian Government’s October 2008 guarantee of bank funding and deposits was issued after the larger banks made it clear to the Government that they were facing extreme difficulty in rolling over their wholesale funding, meaning that they would have to immediately withdraw credit from the Australian economy and would eventually face insolvency. So while it might be true that Australia’s banks managed credit risk well, avoiding the excesses of the sub-prime lending prior to the onset of the GFC, their heavy offshore borrowing created a liquidity risk that also rendered them too-big-to-fail, eventually leading to the Government’s funding guarantee. Hence, whilst North American and European banks became insolvent on the asset side of their balance sheet, due to holding dodgy loans and derivatives, our banks also faced insolvency, except that it was on the liability side of their balance sheet (a more detailed discussion of this issue is provided in the book, The Great Crash of 2008).

http://israelfinancialexpert.blogspot.com/2010/08/guest-post-reflections-on-australias.html 

Reflections on Australia's Housing Bubble

[HitTheFan]

I found this comment somewhere, it makes zero sense to me....

Chinese industrial plays rallied after the government said Sunday it had ordered 2,087 companies in 18 sectors to shut down obsolete plants in a decision aimed at streamlining industries that were polluting, energy-intensive and had excess capacity.

"This is very good news for the steel and cement sectors, as it will foster the development of these industries," said Chen Jinren at Huatai Securities.'

....How the hell can anyone anywhere think this is good news?
The world has gone mad.

[FunkyMonkeyBoy]

The world gone mad? Nah, it's just gone in to propoganda overdrive. Black is white and white is black. Commonly seen when a corrupt ponzi system is about to implode and is being protected till the very last minute to ludicrous levels by the beneficiaries of the ponzi system.

Just keep your sanity and see the truth.