News That Matters

By www.thetrader.se

Ft.com
The amount of unpaid debt on loans linked to packages of European commercial mortgages that thrived until the 2007-08 financial crisis could hit a record of €10bn by the end of the year, Standard & http://ftalphaville.ft.com/thecut/2012/03/02/906961/sp-warns-on-european-mortgage-backed-loans/

The Netherlands has been forced into a new round of budget cuts that could fracture its coalition government, after forecasts suggested the country’s budget deficit would hit 4.5 per cent in 2013, well above the 3 per cent limit set by the eurozone fiscal pact. http://ftalphaville.ft.com/thecut/2012/03/02/906711/dutch-forced-to-make-further-budget-cuts/

Fresh data suggest China is moderating its appetite for investing in US securities, a trend that could mean lower flows of cheap capital from Beijing and a possible rise in borrowing costs across the American economy, http://ftalphaville.ft.com/thecut/2012/03/02/906851/beijing-could-be-rapidly-diversifying-from-usts/

India’s government auctioned a 5 per cent stake in state-run Oil and Natural Gas Corporation on Thursday raising about $2.45bn, but only after a period of confusion in which the sale appeared to be under-subscribed, http://ftalphaville.ft.com/thecut/2012/03/02/906831/delhi-sells-ongc-stake-despite-glitches/

Eurozone members delayed approval of more than half of the €130bn bail-outfor Greece after demanding that Athens show more proof that it would implement hastily agreed spending cuts and reforms, says the FT. Finance ministers from the 17-country currency bloc meeting in Brussels signed off on funds to underpin a €206bn restructuring of privately held Greek debt. http://ftalphaville.ft.com/thecut/2012/03/02/906701/eurozone-delays-half-of-greek-bail-out-funds/

Japan’s consumer prices fell for a fourth month, Bloomberg reports, despite the Bank of Japan last month announcing a new 1 per cent inflation target. Consumer prices excluding fresh food dropped 0.1 per cent in January from a year earlier, http://ftalphaville.ft.com/thecut/2012/03/02/906691/japans-consumer-prices-decline/

Brazil has declared a fresh “currency war” on the US and Europe, the FT says, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country’s struggling manufacturers. http://ftalphaville.ft.com/thecut/2012/03/02/906671/brazil-declares-new-currency-war/

India’s Tata Group has confirmed it is examining a bid for Cable & Wireless Worldwide, potentially pitting it against a rival bid from Vodafone, reports the FT. Tata Communications, the internet data services division of the $83bn conglomerate, http://ftalphaville.ft.com/thecut/2012/03/01/906501/tata-considers-cash-offer-for-cww/

US crude imports have fallen to their lowest level for a decade as a result of weak demand and growth in domestic production, making the economy more resilient to oil price rises, the FT reports. The US imported 8.91m barrels a day of crude oil last year, http://ftalphaville.ft.com/thecut/2012/03/01/906471/us-crude-oil-imports-fall-to-12-year-low/

On the sandy plains east of Beijing, The World is in trouble. The property development was supposed to bring five continents, in the form of artificial islands, to scrubby farmland near the booming city of Tianjin. Instead, the project, which is about three times the size of New York’s Central Park, exemplifies both the excesses and more recent sharp downturn in China’s property market. Asia and North America’s villas and tower blocks are mostly finished, but only about 20 homes out of thousands of units are occupied. And with the developer running out of funds, construction has virtually ground to a halt, leaving Europe, Africa and South America in varying states of underdevelopment. http://www.ft.com/intl/cms/s/0/b3dafb54-638a-11e1-9686-00144feabdc0.html#axzz1nkNpHEL1

Italian benchmark bond yields fell below 5 per cent for the first time since August in a continuation of the big rally sparked by cheap European Central Bank loans to banks. Yields on 10-year Italian debt fell as low as 4.90 per cent, snapping at the heels of Spanish rates, which were 4.83 per cent. Both countries have benefited from the ECB’s longer-term refinancing operation, under which banks have taken about €1tn in the past three months. Much of this has been used to buy sovereign debt.http://www.ft.com/intl/cms/s/0/3a1e53b6-63b6-11e1-9686-00144feabdc0.html#axzz1nkNpHEL1

Wsj.com
Asian stock markets rose Friday after U.S. stocks advanced modestly, with investors picking up beaten-down cyclicals, led by financials while oil and coal companies got a boost from crude oil’s continued rise. Japan’s Nikkei Stock Average rose 0.7%, Australia’s S&P/ASX 200 advanced 0.3%, South Korea’s Kospi climbed 0.3% while Hong Kong’s Hang Seng Index rose 1.0%. China’s Shanghai Composite was up 0.9% but India’s Sensex was flat. Dow Jones Industrial Average futures were up two points in screen trade.http://online.wsj.com/article/SB10001424052970203753704577256380935867136.html?mod=WSJASIA_hpp_LEFTTopWhatNews

A new great game is afoot as recently uncovered stores of mineral resources in East Africa create competition between Brazilian, Japanese, Indian, Irish, Anglo-Australian and Chinese investors. Already a strategic region for China due to its 54 United Nations votes and location astride key trade routes, East Africa is about to become even more important to the world’s second-largest economy. The rapid economic growth that natural resource development stands to produce will likely fuel heightened commercial and diplomatic competition in coming years as more Chinese companies and businessmen enter the region and jockey for position. The prize: oil, gas and coal money that by 2020 could equal roughly 50% of the current GDP in Mozambique and more than 10% of GDP in other producer countries.http://blogs.wsj.com/chinarealtime/2012/03/02/benefits-for-china-in-new-east-african-resource-rush/

South Korea’s manufacturing activity expanded for the first time in seven months in February, backed by a rise in export orders, according to data released by HSBC Friday. The HSBC Purchasing Managers’ Index was at a seasonally adjusted 50.7 in February, rising above the neutral point of 50 for the first time since July 2011. In January, the index was at 49.2. A reading below 50 indicates contraction in manufacturing activity, while a reading above that signals expansion.http://online.wsj.com/article/SB10001424052970203986604577256061680410158.html?mod=WSJASIA_hpp_LEFTTopWhatNews

German officials are willing to support at least a temporary increase of the euro-zone’s rescue fund, in a sign that the country is yielding to international pressure to bolster Europe’s defenses against its debt crisis. Chancellor Angela Merkel has been reluctant, amid opposition in parliament and within her own center-right coalition, to consider a bigger contribution from Germany. But a cabinet member, and two of Ms. Merkel’s allies in parliament said they would consider measures to temporarily boost the firewall.http://online.wsj.com/article/SB10001424052970204571404577255612594880038.html?mod=WSJEurope_hpp_LEFTTopStories

A vast network of webcams ordered by Prime Minister Vladimir Putin began online testing in polling places across Russia this week, days ahead of what government officials say will be the country’s best observed, most transparent election ever. A live broadcast of Sunday’s voting and vote counting at 91,700 polling places is supposed to be available to anyone who registers online at www.webvybory2012.ru. The $447 million project was Mr. Putin’s answer to large street demonstrations in December demanding clean elections.http://online.wsj.com/article/SB10001424052970204571404577253282324442446.html?mod=WSJEurope_hpp_LEFTTopStories

Owners of insurance-like contracts designed to protect against potential losses on Greek sovereign debt won’t receive payouts, at least for now, even though the country took steps in its restructuring in recent days that could force private creditors to accept losses on the face value of their bonds, a committee of dealers and investors decided. Thursday’s decision marks the first time the panel of experts has held a vote on whether compensation is owed to holders of the credit-default swap protection on Greece. http://online.wsj.com/article/SB10001424052970203753704577255010585001948.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

The U.S. auto industry, led by Chrysler Group LLC, reported vehicle sales accelerated in February to their fastest pace in four years, suggesting the U.S. economy is continuing to pick up steam and consumers are undaunted by rising gasoline prices.The annualized pace of sales climbed last month to 15.1 million vehicles, according to Autodata Corp., a level the industry hasn’t seen since February 2008, before the start of the financial meltdown and subsequent recession. All told, auto makers sold 1,149,396 cars and light trucks last month, up 15.7% from a year ago, Autodata said.http://online.wsj.com/article/SB10001424052970203753704577255111983285798.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

An Australian charged in the U.S. with participating in a scheme to export sensitive technology to Iran says he was unaware the equipment was destined for Tehran until he was warned by Australia’s spy agency. A federal grand jury in the District of Columbia has indicted David Levick, 50 years old and general manager Sydney-based electronics company ICM Components Inc., for conspiracy to defraud the U.S. and both the International Emergency Economic Powers Act, or IEEPA, and Arms Export Control Act as well as four counts of illegally exporting the equipment that could be used for a range of military purposes including missiles, drones and torpedoes.http://online.wsj.com/article/SB10001424052970203986604577255990069005780.html?mod=WSJAsia_hpp_LEFTTopStories

Reuters.com
Brent crude futures fell below $126 on Friday, coming off an 11-month high, as fears of a supply disruption from Saudi Arabia eased and traders focused on lower demand for oil over the next few weeks as the Northern Hemisphere winter draws to a close. Front-month Brent slipped 64 cents to $125.56 a barrel by 0457 GMT, after settling up $3.54 at $126.20 in the previous session, its highest since April 8, 2011. Brent topped $128 a barrel in late post-settlement trade on Thursday, reaching levels not seen since July 2008, when the growing economic crisis drove oil to record peaks of more than $147 a barrel. U.S. oil edged down 38 cents to $108.46 a barrel after settling $1.77 higher at $108.84.http://www.reuters.com/article/2012/03/02/us-markets-oil-idUSTRE81C0T620120302

Gold edged higher on Friday as buyers slowly returned to the market, lured by Wednesday’s plunge of 5 percent, although bullion is still looking at its worst week since December. Spot gold inched up 0.2 percent to $1,720.09 an ounce by 0334 GMT, on course for a weekly decline of 3.4 percent, its biggest one-week fall since mid-December. U.S. gold was little changed at $1,721.50. Technical analysis suggested that spot gold could face resistance at $1,726 during the day, said Reuters market analyst Wang Tao. Holdings in gold-backed exchange-traded funds gained 238,674 ounces to a record high of 70.76 million ounces, suggesting investors remained keen on gold. http://www.reuters.com/article/2012/03/02/us-markets-precious-idUSTRE80T1QZ20120302

Bank of Japan Governor Masaaki Shirakawa said on Friday he expects consumer prices to gradually rise in the coming years as the economy recovers with support from a pickup in global demand. “We will continue with monetary easing until consumer inflation of 1 percent is in sight,” Shirakawa told a parliamentary committee, adding that price rises driven by temporary factors such as a spike in crude oil costs alone will not trigger a reversal of the current stance on an easy monetary policy.http://www.reuters.com/article/2012/03/02/us-japan-economy-idUSTRE82105320120302

Federal Reserve Chairman Ben Bernanke and other top officials of the U.S. central bank on Thursday highlighted risks to the economic recovery despite recent signs of strength, but offered few hints that any additional monetary stimulus might be needed. Bernanke told lawmakers there was reason to be suspicious of the recent decline in unemployment given the weakness of economic growth. http://www.reuters.com/article/2012/03/01/us-usa-fed-idUSTRE81S17720120301

U.S. manufacturing cooled in February and consumer spending was flat for a third straight month in January, suggesting the economy lost more steam early this year than expected. “Things aren’t so rosy in the garden and the consumer is still facing significant headwinds,” said Ray Attrill, a currency strategist at BNP Paribas in New York. Other reports on Thursday were more upbeat, with new claims for jobless benefits last week hovering near four-year lows and retailers and automakers enjoying brisker February sales.http://www.reuters.com/article/2012/03/01/us-usa-economy-idUSTRE7BM0AB20120301

The probability of a sharp global slowdown has eased due to recent policy measures adopted in the euro zone to tackle its debt crisis, the International Monetary Fund said on Thursday, but it warned risks to world growth remain “squarely to the downside.” In a report to G20 finance ministers in Mexico over the weekend and only published on Thursday, the IMF said the euro zone should act decisively on multiple fronts to successfully resolve its sovereign debt crisis.http://www.reuters.com/article/2012/03/01/us-imf-g-idUSTRE8201GO20120301

Bloomberg.com
As the world’s largest national congress meets in Beijing to prepare for new leadership, likely successor Xi Jinping will inherit a roadblock to growth dating back almost to the era of Mao Zedong: the one-child policy.  Implemented in 1979 to alleviate poverty, the restriction on family size will cut the number of 15- to 24-year-olds, the mainstay of factories that drove growth for two decades, by 27 percent to 164 million by 2025, the United Nations estimates. In the same time, investment that fueled more than half of last year’s 9.2 percent expansionwill be constrained by soaring pension and health-care costs as those over the age of 65 surge 78 percent to 195 million. http://www.bloomberg.com/news/2012-03-01/china-one-child-policy-is-poisoned-chalice-for-xi-s-new-leadership-regime.html

Asia’s job markets are holding up even as the European crisis hurts exports, auguring stability in domestic demand that reduces the case for the region’s central banks to add monetary stimulus. Two-thirds of Asian employers surveyed by Hays Plc, the U.K.’s biggest recruitment firm, said they plan to raise salaries by at least 3 percent this year, while 54 percent anticipate giving bonuses to more than half of their workers. Singapore’s unemployment rate fell to a 14-year low of 2 percent in 2011, Hong Kong’s January rate matched levels not seen since 1998, while South Korea’s is near the lowest since early 2008. http://www.bloomberg.com/news/2012-03-02/asia-s-strong-job-market-may-limit-policy-easing.html

USAtoday.com
The average rate on the 30-year mortgage edged down this week to hover again above record lows. Cheaper rates have spurred modest improvements in the battered housing market, but not enough to signal a recovery. Mortgage buyer Freddie Mac says the rate on the 30-year home loan fell to 3.9% from 3.95% the previous week. That’s slightly above the 3.87% average rate hit two weeks ago, which was the lowest since long-term mortgages began in the 1950s.http://www.usatoday.com/money/economy/housing/story/2012-03-01/mortgage-rates-construction-spending/53315720/1

Washingtonpost.com
Bill Gross’s Pimco Total Return Fund, the world’s biggest mutual fund, attracted $835 million of investor deposits in February as performance rebounded. The new money marked a second month of assets going into the fund, after three straight months of redemptions from Pimco Total Return, according to data compiled by Chicago-based Morningstar Inc. Investors pulled about $3 billion from the fund in the three months ended Dec. 31, bringing withdrawals last year to $5 billion, Morningstar said. http://washpost.bloomberg.com/Story?docId=1376-M087KC1A74E901-68JMI4UB4QP9MV5R0KBGOFFE6R

BBC.co.uk
The unemployment rate in the eurozone continued to rise in January, hitting another record high. The jobless rate in the 17 countries that use the euro rose to 10.7% in January, while December’s figure was revised up from 10.4% to 10.6%. There are now 16.9 million people out of work in the bloc, Eurostat said. In Italy, the unemployment rate rose to 9.2% in January, the highest since monthly records began, the national statistics agency Istat said. http://www.bbc.co.uk/news/business-17219160

Telegraph.co.uk
The eurozone’s manufacturing sector contracted for the seventh straight month in February, with factories in the bloc’s struggling indebted states facing some of the toughest conditions on record, a business survey showed on Thursday.  It looks increasingly possible that the 17-member eurozone is stuck in a mild recession, as new orders continued to fall and backlogs of work dry up, even in the region’s most healthy economy Germany. Markit’s Eurozone Manufacturing Purchasing Managers’ Index (PMI) rose to 49.0 last month from January’s 48.8, in line with a flash reading but has now been below the 50 mark that divides growth from contraction since July. http://www.telegraph.co.uk/finance/financialcrisis/9115206/Eurozone-manufacturing-contracts-for-seventh-month.html

China is planning an investment blitz to unlock its vast reserves of shale gas, convinced it can match the energy revolution under way in the US and meet a significant part of its fast-growing fuel needs.  The resources ministry said on Thursday that preliminary surveys showed the country had explorable shale-gas reserves of 25.1 trillion cubic metres, in theory enough to meet China’s gas needs for the next two centuries. This is slightly lower than earlier figures but well ahead of the reduced US estimates of 13.6 trillion cubic metres, down from 23 trillion in earlier studies. The fields are mostly in Sichuan or in sparsely populated regions in the interior.http://www.telegraph.co.uk/finance/china-business/9117072/China-claims-worlds-biggest-shale-gas-reserves.html

Guardian.co.uk
The euro‘s tough new German-penned economic rulebook will be immediately tested by spiralling budget deficits in the Netherlands and Spain, raising the prospect of swingeing fines on the two countries, it emerged at an EU summit. As eurozone leaders finally launched a second, €130bn (£108bn) bailout of Greece, EU chiefs, with the exception of David Cameron and the Czech prime minister, prepared to sign the new rulebook – the fiscal pact – on Friday morning. The rules are the main part of an attempt to get the eurozone’s soaring debt levels under control. http://www.guardian.co.uk/business/2012/mar/01/spain-netherlands-eurozone-budget-deficit-fines

Cs.com.cn
China will boost the clean-up of thousands of millions of local government’s debt in 2012, so to guard against possible defaults that would hurt its banks, China Banking Regulatory Commission (CBRC) said Thursday. The country will focus on cleaning up old loans made to local government financing vehicles (LGFV) while tightening new debt issues and raising cash to debt coverage ratios, according to a statement on CBRC`s website. The CBRC will strictly control the use of LGFV loans, while giving priority to key projects that are under construction, it said. http://www.cs.com.cn/english/ei/201203/t20120302_3265651.html

HSBC said on Thursday that its China Manufacturing Purchasing Managers’ Index (PMI) in February reached a four-month high, signaling broad stabilization of output, in spite of new export business decreases at fastest rate since June 2011. The statistics released by the banking giant showed that the PMI, a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy, registered 49.6 in February, up from 48.8 in the preceding month. Companies reported a continued decrease in total new order intakes during the month, while the pace of reduction in new work was only modest, said HSBC.http://www.cs.com.cn/english/ei/201203/t20120302_3265575.html
Thehindu.com
Reversing a declining trend during the past few months, India’s exports registered a 10.1 per cent growth in January at $25.34 billion with the demand from the Western markets remaining weak. The exports growth rate was a marginal increase over December 2011. The shipments had grown by 6.7 per cent year-on-year in December 2011. Imports grew at a faster rate of 20.25 per cent to $40.1 billion, leaving a trade deficit of $14.76 billion, according to official data released by the Commerce Ministry here on Thursday.  From a peak of 82 per cent in July 2011, export growth has slipped to 44.25 per cent in August 2011, 36.36 per cent in September 2011 and 10.8 per cent in October last year. But, for the cumulative April-January period, exports aggregated to $242.79 billion showing a healthy growth of 23.47 per cent.  Imports during the 10-month period stood at $391.45 billion, an increase of 29.4 per cent. The trade gap aggregated to $148.66 billion.http://www.thehindu.com/business/article2950160.ece

The move by the Pakistan Government to prune the negative list has received widespread applause from both sides of the border with the Central Government and India Inc welcoming the decision aimed at normalising trade relations between the two nations. However, there is a note of caution. Notifying the list will have to be accompanied by measures such as putting in place a liberal visa regime, opening of bank branches, enhancing road and rail communication, enabling operation of mobile phones on both sides and removing non-tariff barriers. Union Commerce and Industry Minister Anand Sharma said it was one of the biggest confidence-building measures initiated to normalise relations between the two countries.http://www.thehindu.com/news/national/article2949726.ece

Economictimes.com
India’s biggest-ever divestment transaction narrowly escaped disaster as Life Insurance Corporation stepped in dramatically at the last minute and rescued the floundering Rs 12,400-croreauction of shares of ONGC, which was seen as a test case for more such deals.  Foreign investors and sovereign funds shunned the issue as they were miffed by the government’s move to sell shares at a premium over the prevailing market price, and the uncertainty over the extent to which ONGC would have to subsidise the losses of oil marketing companies.http://economictimes.indiatimes.com/news/economy/finance/disinvestment-disaster-government-forces-lic-to-cover-up-at-ongc-investors-bid-for-rs-400-crore/articleshow/12103549.cms

The number of foreign immigrants living in India is steadily declining, but India continues to be among the 10 countries with the highest in-migration in the world. At the same time, India sends the fourth largest number of emigrants to other countries. In 2010, there were 5.4 million foreign-born people living in India, according to new estimates released by the PopulationDivision of the United Nations Department of Economic and Social Affairs. These numbers make India home to the ninth largest number of foreign-born people in the world.http://economictimes.indiatimes.com/news/politics/nation/india-among-top-10-in-number-of-immigrants-in-the-world/articleshow/12107926.cms

Themoscowtimes.com
The Obama administration is pressing Congress to throw out the Soviet-era Jackson-Vanik amendment to restrict trade with Russia, making a plea on behalf of U.S. farmers and manufacturers. The United States will seek to repeal the law “as soon as possible” to give American exporters the same benefits as their overseas competitors, U.S. Trade Representative Ron Kirk told the House Ways and Means Committee on Wednesday. The legislation, passed in 1974, barred favorable U.S. trade with the Soviet Union to punish the nation for blocking emigration for its Jews citizens. Annual waivers have been allowed and widely used since 1993, two years after the communist government collapsed.http://www.themoscowtimes.com/business/article/white-house-sees-repeal-of-jackson-vanik-yielding-jobs/453958.html#ixzz1nwE4Tesi
Thetrader.se
While the LTRO is saving the banks, people of Southern Europe are pulling money out of the local system and moving it to Northern safety. From Spiegel; More and more people in southern euro-zone countries are moving their money north amid fears of losing their savings in the crisis. The capital flight makes things difficult for banks back home, but experts say there are no legal measures to stop it. Any steps would probably come too late, they say, and might even endanger the European project. http://www.thetrader.se/2012/03/01/money-on-the-run-in-southern-europe/

Comments

[disabledvet]

"money flowing north." yet another reason not to have non-existent banking regulations completely co-opted accounting firms and ratings agencies. has anything changed other than "there's a lot less leverage availible"? i mean i'm really struggling with seeing a housing recovery for another 100 years in the USA--especially with land prices up 25 percent yoy. how/why does a real estate developer afford the property upon which he's going to build in the first place without some sort of "reset of prices" nationwide such that credit can begin flowing again "in the right (large) amount"?

[ebworthen]

Good stuff, thank you.

[BeetleBailey]

Uh.....I need to re-take the Evelyn Wood Speeding Reading Course.....dammit man!

[sodazed]

Erm, and the bad news?