News That Matters

By www.thetrader.se

Ft.com
Greek prime minister George Papandreou said the eurozone and International Monetary Fund must quickly approve a second bailout for his country to avoid its economic reform plans collapsing. Reuters says Mr Papandreou told FT Deutschland, ”If we don’t get a decision soon supporting the second Greek programme so that the country can begin its far-reaching reforms, http://ftalphaville.ft.com/thecut/2011/07/14/621996/papandreou-calls-for-quick-decision/

President Barack Obama on Wednesday walked out of the most rancorous session of top-level US budget talks to date, the FT says, after a clash with Republicans that will increase concerns about the ability of the White House and Congress to strike a deal on fiscal policy and increase the US borrowing limit. After rejecting a request by Eric Cantor, http://ftalphaville.ft.com/thecut/2011/07/14/621931/obama-walks-out-of-debt-meeting/

Morgan Stanley has denied a Fox Business Network report that the bank could cut thousands of jobs, Reuters reports. The Fox story cites a source with direct knowledge of the matter as saying the comany is ““running layoff scenarios into several thousand folks”. http://ftalphaville.ft.com/thecut/2011/07/14/621896/morgan-stanley-rejects-big-lay-off-report/

India was put on high alert after three explosions rocked Mumbai, killing at least 21 people, injuring more than 140 and sending the country’s financial capital into chaos, reports the FT. The Mumbai police said that the synchronised explosions appeared to be the work of terrorists and confirmed that there had been three bomb blasts at separate sites across the city. http://ftalphaville.ft.com/thecut/2011/07/13/621806/triple-bomb-attack-kills-21-in-mumbai/

Ben Bernanke has outlined extra stimulus options the US Federal Reserve could use if the economy remains weak, acknowledging a possible return to monetary easing, writes the FT. “The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, http://ftalphaville.ft.com/thecut/2011/07/13/621776/bernanke-sets-out-stimulus-options/

Well, it said it would. And it has. After US markets closed on Wednesday, Moody’s followed S&P’s lead and put the US’s Aaa rating on review for a possible downgrade, writes FT Alphaville. US Treasuries are treating the news with a priced-in shrug. http://ftalphaville.ft.com/thecut/2011/07/13/621766/moodys-puts-the-us-on-review-for-possible-downgrade-2/

Standard & Poor’s believes that the US Treasury, Federal Reserve and Congress might rescue a large financial group rather than allow it to fail like Lehman Brothers despite changes wrought by the Dodd-Frank act http://ftalphaville.ft.com/thecut/2011/07/13/620996/tbtf-not-dead-yet-says-sp/

The International Monetary Fund on Wednesday warned that the Greek sovereign debt burden risked spiralling out of control and that it would be “appropriate” for private bondholders to share in any restructuring. The IMF’s intervention, in a staff report published on Wednesday, comes as eurozone finance ministers have moved towards forcing private investors to accept a reduction in the value of their assets, a move regarded with great suspicion by the European Central Bank. http://www.ft.com/intl/cms/s/0/fdd18148-ad72-11e0-bc4f-00144feabdc0.html#axzz1RxQu9yVA

Wsj.com
Asian stock markets were lower Thursday and the U.S. dollar fell across the board, as sentiment was hurt after Moody's Investors Service warned of a possible downgrade of U.S. government debt.  Japan's Nikkei Stock Average fell 0.4%, Australia's S&P/ASX 200 slid 0.3%, South Korea's Kospi Composite lost 0.8% and New Zealand's NZX-50 fell 0.4%.  Dow Jones Industrial Average futures were down 22 points in screen trade. http://online.wsj.com/article/SB10001424052702303406104576444791588671036.html?mod=WSJ_hp_LEFTWhatsNewsCollection

China reported a raft of data that showed its economy continuing to expand quickly, easing immediate concerns about a possible slump in growth but raising the prospect of further tightening measures as the government continues its fight against inflation. "I think this [data report] does increase the chance that we'll have more rate hikes," said Royal Bank of Canada economist Brian Jackson. He expects another increase in the third quarter, but says there could even be more. http://online.wsj.com/article/SB10001424052702304223804576443493415667206.html?mod=WSJAsia_hpp_LEFTTopStories

Facebook Inc. has become Exhibit A for the skyrocketing valuations of closely held Web companies. The Palo Alto, Calif.-based social network was valued at $15 billion in October 2007 when Microsoft Corp. invested in the company. By this January, Facebook commanded a $50 billion price tag when Goldman Sachs Group Inc. led a $1.5 billion funding round in the company. Today, transactions of Facebook stock on private marketplaces value it at about $84 billion. Some people believe that if Facebook goes public next year, it will trade at a $100 billion valuation, more than the market capitalizations of Hewlett-Packard Co.  http://online.wsj.com/article/SB10001424052702304584404576442950773361780.html#ixzz1S3Fw3oeD

The European Union's banking "stress tests," designed to bolster confidence in the Continent's financial system, are facing a last-minute scramble as regulators adjust the exam's terms and bankers and politicians criticize the process and lobby for changes. The European Banking Authority, the pan-EU regulator that is conducting the exercise, plans to announce the test results on Friday. The tests measure the abilities of 91 major banks in 21 European countries to withstand a sharply deteriorating economic environment. Fighting over the tests, brewing for months, spilled into the open this week, just as the euro zone's 15-month financial crisis intensified with http://online.wsj.com/article/SB10001424052702304223804576444083536809992.html?mod=WSJASIA_hpp_LEFTTopWhatNews

New Zealand's gross domestic product came in well above expectations in the first quarter, causing the New Zealand dollar to strengthen sharply as the economy displayed resilience despite a devastating earthquake in the country's second-largest city in February. Statistics New Zealand said Thursday that seasonally adjusted gross domestic product expanded 0.8% quarter-to-quarter in the three months ended March  http://online.wsj.com/article/SB10001424052702303406104576444761453940554.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Singapore's economy contracted more than expected in the second quarter as manufacturing output fell and services sector growth moderated but many economists say the slowdown is just a "soft patch" and the outlook for the full year may remain unchanged. Gross domestic product for the three months to June 30 contracted 7.8% on a seasonally adjusted and annualized basis, compared with an upwardly revised 27.2% increase in the first quarter, according to advance estimates released by the Ministry of Trade and Industry released Thursday. That was significantly worse than the 0.8% contraction predicted by a Dow Jones poll of 13 economists. http://online.wsj.com/article/SB10001424052702303406104576444764237606434.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Reuters.com
Spot gold hit a record high above $1,589 on Thursday, buoyed by a sharp drop in the dollar after Moody's warned the U.S. may lose its top credit rating, the possibility of more Federal Reserve stimulus and Europe's deepening debt crisis. Spot gold rose to a record of $1,589.56 an ounce, before easing to $1,584.56 by 11:41 p.m.. Gold was on course for its ninth consecutive day of gains, matching a similar winning streak in 2006. http://www.reuters.com/article/2011/07/14/us-markets-precious-idUSTRE7592IU20110714

Oil paused on Thursday after Moody's placed the credit rating of top consumer the United States under review for a downgrade, putting the brakes on a rally sparked by the possibility of a new round of economic stimulus. U.S. crude for August added 2 cents to $98.07 a barrel by 0241 GMT, up almost 2 percent this week, while Brent advanced 12 cents to $118.90, about $8 below this year's peak near $127. http://www.reuters.com/article/2011/07/14/businesspro-us-markets-oil-idUSTRE7592LE20110714

Japanese Finance Minister Yoshihiko Noda warned on Thursday that recent yen strength does not reflect economic fundamentals, escalating a verbal campaign to cool the rising yen although traders saw little immediate chance that authorities would intervene directly in the market. "The movement doesn't reflect fundamentals and has been one-sided," Noda told reporters on Thursday regarding the yen's recent surge. "It would be troublesome if it persists, and I will continue to closely watch markets." http://www.reuters.com/article/2011/07/14/us-japan-economy-noda-idUSTRE76D0C220110714

There is no alternative to raising the debt ceiling, and "heinous choices" about which bills would have to be paid first in the event of a default are a matter of due diligence, the White House said on Wednesday. "It's not solving the problem, it's dealing with the consequences of a catastrophic decision," White House spokesman Jay Carney said, referring to the idea of prioritizing payments should Congress not raise the debt ceiling by August 2. http://www.reuters.com/article/2011/07/14/us-usa-debt-whitehouse-contingency-idUSTRE76C53U20110714

Fitch Ratings on Wednesday downgraded Greece deeper into junk territory, citing the absence of a new and fully funded financing program for the country. Heightened uncertainty surrounding the role of private creditors in any future funding programs from the European Union and the International Monetary Fund also weighed on the decision, as well as Greece's weakening macroeconomic outlook, Fitch said. The ratings agency cut Greece's rating to CCC, a rating that implies a substantial risk of default, from B-plus. The new rating was removed from credit watch negative. http://www.reuters.com/article/2011/07/13/us-greece-ratings-fitch-idUSTRE76C4YZ20110713

Greek Prime Minister George Papandreou said the euro zone and International Monetary Fund must quickly approve a second bailout for his country to avoid its economic reform plans collapsing, a German newspaper reported. "The current mood doesn't help us to get through this crisis," Papandreou told the Financial Times Deutschland, in a brief preview of an interview to be published in the paper's Thursday's edition. http://uk.reuters.com/article/2011/07/13/uk-eurozone-greece-pm-idUKTRE76C4PX20110713

British companies cut their marketing budgets in the second quarter of 2011 for a third consecutive quarter, as firms focussed on cost cutting and protecting their margins in a tough economic climate. The survey of around 300 British-based companies for the IPA/BDO Bellwether report found 22 percent had cut spending compared with 20 percent that reported an increase. http://uk.reuters.com/article/2011/07/13/uk-britain-advertising-idUKTRE76C7E220110713

Bloomberg.com
President Barack Obama may summon congressional leaders to a Camp David summit this weekend after the latest round of White House negotiations on the deficit ended on a tense note and Moody’s Investors Service warned the stalemate could jeopardize the U.S.’s credit rating. Obama told the lawmakers they have until tomorrow to decide whether they can reach a deal to cut the deficit or settle for a way to raise the $14.3 trillion debt ceiling before U.S. borrowing authority expires Aug. 2, two Democratic officials said. http://www.bloomberg.com/news/2011-07-14/obama-said-to-consider-camp-david-summit-this-weekend-for-deficit-talks.html

Cnbc.com
An increase in layoffs may be the culprit behind the weak employment picture, rather than a decrease in hiring. Goldman Sachs economists, in a note, point to data from the Bureau of Labor Statistics that shows the lack of jobs growth in May was caused mainly by more layoffs, rather than a reduction in hiring. Monthly employment data released Friday was revised to show that a total of just 25,000 non farm payrolls were added in May, and that just 18,000 were added in June. http://www.cnbc.com/id/43740953

The federal budget deficit is on pace to break the $1 trillion mark for the third straight year, ratcheting up the pressure on the White House and Congress to reach a deal to rein in spending. The deficit totaled $971 billion for the first nine months of the budget year, the U.S. Treasury Department said Wednesday. Three years ago, that would have been a record high for the full year. http://www.cnbc.com/id/43743226

Americans are deeply pessimistic about the future as economic concerns rise and White House talks on raising the U.S. debt limit sputter, according to a Reuters/Ipsos poll released Wednesday. The number of Americans who believe the country is on the wrong track rose to 63 percent this month, up from 60 percent in June, with stubbornly high unemployment and prolonged gridlock in Washington dashing hopes of a swift economic recovery.  http://www.cnbc.com/id/43741074

Federal Reserve Chairman Ben Bernanke on Wednesday said the United States would keep paying interest on government debt if Congress failed to reach a deal to lift the debt ceiling by Aug. 2. The central banker's comments offered the first public indication of how the Obama administration would prioritize its financial obligations after Aug. 2, when the U.S. Treasury says the government would run out of money to pay all its bills. http://www.cnbc.com/id/43741371

Nytimes.com
European leaders on Wednesday delayed a proposed summit meeting in an effort to bridge crucial differences over the role of private investors in a second Greek bailout.  In addition, the German chancellor, Angela Merkel, was crucial in resisting pressure for a meeting on Friday, arguing that it would be too early to deliver the comprehensive package of measures needed to restore stability to the euro zone, one official briefed on the discussion said. http://www.nytimes.com/2011/07/14/business/global/european-leaders-delay-summit-meeting-over-greece.html?_r=1&ref=global

Prices of goods imported to the United States fell in June for the first time in a year as oil and food expenses retreated, the Labor Department said Wednesday. The 0.5 percent fall in the import-price index followed a revised 0.1 percent gain in May, the figures showed. Economists projected a 0.6 percent decrease for June, according to the median estimate in a Bloomberg News survey. Prices excluding petroleum fell 0.2 percent, the first decline since July 2010. http://www.nytimes.com/2011/07/14/business/economy/import-prices-decline-for-first-time-in-a-year.html?ref=global

Foxbusiness.com
The Bank of Korea said Thursday it would keep its policy interest rate unchanged at 3.25%, in line with expectations. The central bank began raising the benchmark rate from a record-low 2.0% in July 2010. Separate polls of economists by Reuters and Dow Jones Newswires had predicted the bank would hold steady, although a majority of those polled by Reuters said Korea would make two more quarter-percentage-point rate hikes before 2012. Dow Jones Newswires said 9 out of 12 economists surveyed forecast a hike next month.  http://www.foxbusiness.com/2011/07/13/bank-korea-keeps-policy-rate-unchanged-at-325/#ixzz1S3KZeKFI

South Carolina (Reuters) - General Electric Co expects its manufacturing footprint in the United States to continue to grow this year on "tremendous demand" for core industrial products including gas turbines and jet engines. That comes even as sluggish growth at home means that some 60 percent of the largest U.S. conglomerate's forecast $145.26 billion 2011 revenue will come from abroad, Chief Executive Jeffrey Immelt told reporters on Wednesday. http://www.foxbusiness.com/industries/2011/07/13/as-ges-sales-leave-us-big-manufacturing-stays/#ixzz1S3KiKtXt

USAtoday.com
Foreclosure delays are likely to bring reprieves to 1 million financially troubled homeowners this year, but they threaten to further postpone the U.S. housing market's recovery, a report out today shows. Foreclosure actions — including default notices, auction sale notices and bank repossessions — will be filed on about 2 million homes this year, 1 million fewer than there should be based on the number of delinquent loans, says market researcher RealtyTrac. http://www.usatoday.com/money/economy/housing/2011-07-13-foreclosure-delays-housing_n.htm

Washingtonpost.com
At least 7,000 top-rated municipal credits would have their ratings cut if the U.S. government loses its Aaa grade, Moody’s Investors Service said. An “automatic” downgrade affecting $130 billion in municipal debt directly linked to the U.S. would occur if the federal level is reduced, Moody’s said yesterday in a report. Additionally, top-rated securities with no direct links to the national government will be reviewed for similar action. http://washpost.bloomberg.com/story?docId=1376-LOAGW36K50Y601-79GFBS0S0F982HTV67LGI4QHTB

BBC.co.uk
UK unemployment fell 26,000 in the three months to May to 2.45 million, official figures show. The unemployment rate was 7.7%, according to the Office for National Statistics (ONS), down from 7.8% in the previous quarter. However, the number of people claiming Jobseeker's Allowance in June rose by 24,500 to 1.52 million - the biggest such increase in two years. It follows an upwardly-revised 22,500 rise in the claimant count for May. http://www.bbc.co.uk/news/business-14135227

Telegraph.co.uk
UK debt set to pass 100pc of GDP, says watchdog, Britain's public sector debt is still on an "unsustainable" upwards path, the Office for Budget Responsibility (OBR) has warned, meaning a massive £22bn tax rise would be needed on top of the current austerity push to shrink it to its pre-crisis level. http://www.telegraph.co.uk/finance/economics/8634300/UK-debt-set-to-pass-100pc-of-GDP-says-watchdog.html

A shortage of homes to let has forced rent levels higher and further increased the squeeze on cash-strapped consumers, according to research.  The Association of Residential Lettings Agents (Arla) found 56pc of its members reported that rents had risen over the past six months, compared with 53pc three months ago. Some 42pc reported that tenants were struggling to pay rents, in line with the previous quarter, with about the same proportion haggling with landlords. http://www.telegraph.co.uk/finance/personalfinance/consumertips/8634299/Rents-rise-as-homes-remain-in-short-supply.html

UK land values show housebuilders focusing on affluent areas. There is a growing disparity in the value of development land in the UK as housebuilders focus activity on areas with affluent potential buyers, according to research by Savills  http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/8635917/UK-land-values-show-housebuilders-focusing-on-affluent-areas.html

Smh.com.au
Retailer shares have dropped sharply after top department store David Jones warned of an "unprecedented" worsening in trading conditions and said there was no relief in sight for the sector. David Jones said its second half profit was set to drop by 9 to 12 per cent, sending its shares 15 per cent lower and dragging down all retailers as investors feared the problems were not unique to the company. http://www.smh.com.au/business/unprecedented-slump--retail-gloom-grows-20110714-1hf5w.html#ixzz1S3NHeyu7

Home prices are predicted to fall over the next 12 months after a sharp decline in the expected value of Victorian houses dragged the national forecast lower, says a new report. The National Australia Bank residential property index, which predicts houses prices, rents and real estate market conditions over the coming year, said national home prices would drop by 1.4 per cent in the 12 months from June, reversing an earlier prediction that home values would rise 0.6 per cent in the 12 months from last March.  http://www.smh.com.au/business/house-prices-to-fall-over-next-year-survey-20110714-1hf1a.html#ixzz1S3NTAgwH

Cs.com.cn
The Ministry of Finance said on Thursday that the country's fiscal revenue rose 31.2 percent year-on-year to 5.69 trillion yuan (875.5 billion U.S. dollars) in the first half of this year. In June alone, fiscal revenue reached 1.01 trillion yuan, up 27.6 percent from a year earlier, the ministry said in a statement on its website. The ministry attributed the fast growth of revenue in the first six months mainly to the country's economic growth and higher prices. http://news.xinhuanet.com/english2010/china/2011-07/14/c_13984374.htm

The European Commission said Wednesday that Greece remains in the eye of storm of the debt crisis, urging the country to reinforce its economic adjustment program. "Despite the utmost resolve of policymakers and a string of ambitious and far-reaching policy measures, some euro-area sovereigns continue to face acute challenges. Greece in particular remains in the eye of the storm," the Commission said in a quarterly report of the euro area. The report said Greece, Ireland and Portugal have all taken significant steps towards fiscal consolidation but they must continue to pursue vigorous fiscal and broader structural reforms, especially Greece. http://news.xinhuanet.com/english2010/business/2011-07/14/c_13983320.htm

Economictimes.com
India may no longer be the preferred destination for call centre work from the United Kingdom as a trend to shift back work by UK companies to their home country is gaining momentum. A high UK jobless rate and a need to better connect with their customers, coupled with rising costs in India, are driving firms such as Aviva, BT and Santander to move work back home. http://economictimes.indiatimes.com/tech/ites/india-may-no-longer-be-outsourcing-hub-as-uk-companies-such-as-aviva-bt-santander-move-work-to-home-country/articleshow/9217220.cms

With the purpose of providing quick information to the public and concerned stakeholders, the Reserve Bank will henceforth come out with weekly and forthnighty data on Reserve Money and Money Supply.  These data were earlier being released first through the Weekly Statistical Supplement on Fridays. "With a view to providing quicker information, the RBI has has decided to disseminate the data relating to Reserve Money on every Wednesday and data relating to Money Supply (M3) on every alternate Wednesday, or the following working day in case of a holiday, through a press release. http://economictimes.indiatimes.com/news/economy/policy/rbi-to-bring-out-weekly-data-on-reserve-money/articleshow/9213827.cms

Yohnapnews.co.kr
South Korea's industrial electricity sales increased steadily in June, fueled by a rise in demand from the machinery equipment, oil refining and automotive sectors, a government report showed Thursday. Industrial electricity demand rose 9.1 percent on-year to 21.0 billion kilowatt-hours last month, with growth numbers moving up from a gain of 8.5 percent tallied in May, the report by the Ministry of Knowledge Economy said. http://english.yonhapnews.co.kr/business/2011/07/14/0501000000AEN20110714003000320.HTML

Themoscowtimes.com
Belarus may sell stakes in seven companies to Russian investors after accepting bailout funds linked to the government's ceding of assets. Talks with potential buyers — including state-run Russian Technologies and Gazprom — are advancing after some delays, Belarussian Prime Minister Mikhail Myasnikovich said. The former Soviet republic may sell stakes in its gas pipelines, two refineries, a chemical plant, mobile telephone operator, automaker and electronics maker, he said. "The negotiations could be more dynamic," Myasnikovich told reporters Tuesday in Moscow. http://www.themoscowtimes.com/business/article/minsk-negotiating-state-asset-sales/440491.html

Fin24.com
Industrial action in South Africa’s oil sector that is threatening refineries and fuel supplies intensified on Wednesday after a small but influential union said it would join other labour groups already on strike. Tens of thousands of workers in the petroleum, chemical and pharmaceutical industries stopped working from Monday, demanding 13% wage increases, about triple the inflation rate, and above the 4% to 7% offered by employers. http://www.fin24.com/Economy/Fuel-strike-bites-as-new-union-joins-in-20110713

Comments

[uformula]

I really like this article...I've seen it posted twice now with different news bits.  I find it very imformative....articles that really do matter.  Good Job.

[nowhereman]

Of course the Chair Satan will insist that interest on the debt would be paid.  And who pray tell would that interest be paid?  Why the Federal Reserve Bank of course.

If the Fed is abolished, and the government were to take back control of the money supply, wouldn't this be totally unnecessary?  Why don't people see this?  How can a government owe interest on it's own money?   If the government, which has the constitutional right to print money, why would it charge interest to itself?

Abolish the Fed and the problem disappears!

[lolmao500]

News that matter?

http://www.nationalreview.com/corner/271732/2-billion-daniel-foster

“How much does the Biden plan actually cut from next year’s discretionary spending budget?” the Kentucky Republican asked the room.

Obama’s Office of Management and Budget Director Jacob Lew told him, “$2 billion.”

Not like the 2 trillion over 10 years they said it was.... more like 20 billion over 10 years...

http://www.chicagotribune.com/business/breaking/chi-sp-to-us-any-missed-...

S&P indicates any missed payments could trigger downgrade

Standard & Poor's has privately told U.S. lawmakers and top business groups that it might cut the U.S. credit rating if the government fails to make any of its expected payments -- including Social Security checks -- even if it makes all its debt payments, the Wall Street Journal reported citing people familiar with the matter.