News That Matters

By thetrader.se

Ft.com
Yahoo, which is weighing a sale of all or parts of its business, has attracted the attention of several buyout shops and strategic investors, including the private equity firm Silver Lake, NYT DealBook reports,http://ftalphaville.ft.com/thecut/2011/09/16/679026/yahoo-attracting-int...

Research in Motion has suffered a further setback in its attempts to lure customers away from rivals Apple and Google after again missing its earnings targets, the FT reports. Shares in the company plungedhttp://ftalphaville.ft.com/thecut/2011/09/16/678991/rim-shares-slump-20-...

The WSJ says a Chinese company, Beijing Jingdong Century Trading, is preparing for what could be the biggest internet IPO in the US. The company operates 360buy.com, a fast-growing site that sells a broad range of goods, http://ftalphaville.ft.com/thecut/2011/09/16/678981/chinese-companies-pl...

US authorities are scrutinising three of Israel’s largest banks over suspicions their Swiss outposts helped American clients evade taxes, Reuters reports, citing people briefed on the matter. The banks said to be under scrutiny by the US Department of Justice’s criminal tax division are Bank Hapoalim, http://ftalphaville.ft.com/thecut/2011/09/16/678966/us-looks-at-israeli-...

US Treasury secretary Timothy Geithner will discuss with European finance ministers the possibility of leveraging the eurozone’s bailout fund, Reuters reports. Mr Geithner will hold talks with EU ministers in Poland on Friday and will propose that the European Financial Stability Fund, http://ftalphaville.ft.com/thecut/2011/09/16/678926/geithner-to-discuss-...

A 31-year-old trader, Kweku Adoboli, has been arrested in London on suspicion of blowing a $2bn hole in its books, the FT reports. UBS warned that the discovery could push the group into a loss for the third quarter. http://ftalphaville.ft.com/thecut/2011/09/16/678911/ubs-trader-held-over...

Goldman Sachs is closing a well-known quant hedge fund, Global Alpha, after ringing up a hefty loss this year, reports Reuters. Goldman told investors in the roughly $1.6bn Global Alpha fund the news on Thursday, http://ftalphaville.ft.com/thecut/2011/09/16/678886/goldman-closes-globa...

The world’s main central banks took bold concerted action to pre-empt a looming dollar funding crisis in Europe, sparking a rally in eurozone bank shares and the euro, reports the FT. Five central banks including the European Central Bank, http://ftalphaville.ft.com/thecut/2011/09/15/678826/central-banks-act-to...

US banks have rushed to supply companies with leveraged loans for refinancing higher-yielding debt in recent weeks, the WSJ says. The leveraged loan market saw $36bn of activity in August. While that is half the monthly average, http://ftalphaville.ft.com/thecut/2011/09/15/678206/banks-return-to-leve...

European banks are rushing to use their gold to access much-needed dollar funding, the FT reports, in the latest sign of the growing liquidity crunch for the continent’s financial institutions. Gold dealers and analysts said that there had been a strong move to lend gold in the market in exchange for dollars in the past week, http://ftalphaville.ft.com/thecut/2011/09/15/677821/banks-use-gold-to-ge...

The global economy is facing a crisis of confidence worsened by “policy indecision and political dysfunction,” according to Christine Lagarde, managing director of the International Monetary Fund. Speaking in Washington, where the fund’s annual meetings are due to be held next week, Ms Lagarde said that short-term pressures on the balance sheets of European banks and US households risked creating a “vicious circle” of declining confidence. http://www.ft.com/intl/cms/s/0/08424218-dfb7-11e0-b1db-00144feabdc0.html...

Belgium edged towards a resolution of its political stalemate late on Wednesday, resolving a long-running dispute that has prevented the formation of a government since elections in June 2010. Negotiators from the eight political parties in talks to form a governing coalition reached an agreement on the linguistic status of Brussels suburbs, a highly-charged political issue that epitomises the depth of divisions between the Dutch-speaking north and Francophone south of the country. http://www.ft.com/intl/cms/s/0/3cf3dca4-df69-11e0-a19c-00144feabdc0.html...

Wsj.com
Asian stock markets surged Friday as financial stocks led a broad-based rally amid easing concerns over dollar-funding constraints for European banks following joint central bank action Thursday. Japan’s Nikkei Stock Average climbed 2.0%, Australia’s S&P/ASX 200 tacked on 1.9% and South Korea’s Kospi Composite tacked on 3.6%. Hong Kong’s Hang Seng Index added 2.1% and China’s Shanghai Composite was up 0.4%. Dow Jones Industrial Average futures were up 20 points in screen trade. http://online.wsj.com/article/SB1000142405311190392720457657358076419016...

Economists see a one in three chance the U.S. will slip into recession over the next twelve months and doubt any steps the Federal Reserve might take at its meeting next week can change that.  Those are the highest odds for a new downturn that the economists in the The Wall Street Journal survey have given since the start of the recovery—and up four percentage points from last month’s poll. Economic strains have escalated amid market turmoil, the stumbling job market and concern about European stability. http://online.wsj.com/article/SB1000142405311190449170457657278378313788...

A judge sided with Barclays PLC in a dispute over whether the British bank should have to pay Lehman Brothers Holdings Inc. hundreds of millions of dollars for employee bonuses the collapsed investment bank said it was owed. In a written decision late Wednesday, Judge James Peck of U.S. Bankruptcy Court in Manhattan reiterated a point he made at a hearing last week; that Lehman didn’t prove how its estate is damaged by the $500 million in bonus payments not being made. http://online.wsj.com/article/SB1000142405311190406060457657256209325889...

Singapore’s key non-oil exports rose unexpectedly in August on the back of sharp growth in select non-electronic product shipments, notably marine transport and disk media products, while export volumes in other sectors remained weak. The lackluster performance from exports outside of the non-electronic product sector suggests the Monetary Authority of Singapore could consider less restrictive policy at its October meeting if it doesn’t see broader signs of strong demand before then. Exports of goods made in Singapore rose 5.1% in August compared with a year earlier, after falling 2.8% in July, trade promotion agency International Enterprise Singapore said Friday. The median estimate of 10 economists in a Dow Jones Newswires poll was for August exports to contract 7.1% from a year

earlier.http://online.wsj.com/article/SB1000142405311190392720457657365104696085...

For the first time this week, European officials have formally begun to examine the possibility of joining to issue euro-zone bonds to address an ever-worsening financial crisis. Such bonds still appear a long way off: Germany and other euro-zone governments worry they would draw them deeper into the crisis. But there is a growing acceptance that joint-bond issues would cut borrowing costs for most members of the 17-nation monetary union, which collectively has lower public debt and lower deficits than the U.S. They could even resolve the euro-zone’s debt crisis, or at least provide breathing space to do so.http://online.wsj.com/article/SB1000142405311190392720457657278429348997...

Marketwatch.com
Citic Securities Co. (600030.SH), China’s largest securities firm by market value, plans to raise up to US$1.94 billion in a Hong Kong initial public offering ahead of listing on the Hong Kong stock exchange in October, a person familiar with the situation said Friday. The firm, which will start taking orders from institutional investors on Friday, plans to sell 995.3 million shares at an indicative price range of HK$12.84 to HK$15.2 a share, the person said. The price range also represents 8.64 to 10.23 times forecast 2011 earnings multiples before a greenshoe option. http://www.marketwatch.com/story/citic-securities-seeks-19-billion-hong-...

Crude-oil futures extended gains in electronic trading Friday, with investors encouraged by action taken by central banks designed to ease tightening credit conditions in the euro zone. Crude oil for October delivery added 32 cents, or 0.4%, to $89.72 a barrel on the New York Mercantile Exchange during Asian trading hours. Oil rose 0.6% in the North American session, as relatively encouraging euro-zone debt developments buoyed investor sentiment about the economic outlook and demand for energy. http://www.marketwatch.com/story/oil-futures-extend-gains-in-asian-tradi...

Bloomberg.com
New Zealand consumer confidence fell in September as turbulence in global equity markets outweighed a boost to sentiment from the start of the Rugby World Cup, according to ANZ National Bank Ltd. The ANZ National-Roy Morgan confidence index declined to 112.6 from 113.3 in August, the Auckland-based bank said in an e-mailed report. The gauge has gained from a two-year low of 101.4 reached in March and April. http://www.bloomberg.com/news/2011-09-16/new-zealand-september-consumer-...

The most popular national political figure in America today is one who was rejected by her own party three years ago: Secretary of State Hillary Clinton. Nearly two-thirds of Americans hold a favorable view of her and one-third are suffering a form of buyer’s remorse, saying the U.S. would be better off now if she had become president in 2008 instead of Barack Obama. The finding in the latest Bloomberg National Poll shows a higher level of wishful thinking about a Hillary Clinton presidency than when a similar question was asked in July 2010. Then, a quarter of Americans held such a view.http://www.bloomberg.com/news/2011-09-16/clinton-popularity-prompts-some...

After six state election setbacks so far this year, German Chancellor Angela Merkel faces a final humiliation in Berlin as polls show the Pirate Party poised to ouster her coalition ally in the regional parliament. The rise of the Pirates to within reach of their first parliamentary seats in the city-state’s Sept. 18 elections caps a year in which voters punished Merkel’s coalition parties over their handling of the euro-area debt crisis. With her Christian Democrats and Free Democratic coalition partner now in open conflict over the euro’s future and financial aid to Greece, the chancellor’s 2013 bid for re-election with her current political ally may be in doubt. http://www.bloomberg.com/news/2011-09-15/merkel-faces-vote-as-pirates-pr...

Cnbc.com
Foreign direct investment (FDI) in China slowed slightly in the first eight months of 2011 from a year ago although economists said the outlook is still positive given the higher growth rate in the world’s second biggest economy. The country drew $77.6 billion between January and August this year, up 17.7 percent from a year ago, the Ministry of Commerce said in a statement issued on its website (www.mofcom.gov.cn) late on Thursday. That marked a slight slowdown from the 18.6 percent annual growth clocked in the January-July period and 18.1 percent in the first eight months of 2010.http://www.cnbc.com/id/44543594

France, Germany, and other euro zone countries want Greece to remain in the monetary union, “but there will be a price,” Christine LaGarde, managing director of the International Monetary Fund (IMF), told CNBC Thursday. Greece is making progress on reforms but needs to do more if it wants to get additional financing from European Union members or the IMF , she said. “It’s a question of keeping at it,” she noted, adding that after last year’s 5 percent deficit reduction, Greece has shown “reform fatigue” and the pace of making changes has slowed. She applauded Wednesday’s statementhttp://www.cnbc.com/id/44535130

Foxbusiness.com
European Central Bank Executive Board member Juergen Stark stuck to his position that personal reasons were behind his decision to resign from the central bank, but declined on Thursday to give details about the decision. The ECB on Friday had said that Stark was resigning for personal reasons, although sources told Reuters that the resignation was a protest against the bank’s policy of buying bonds to help troubled euro zone debtor states. “You will not hear anything more from me than last Friday…personal reasons,” Stark said in a question-and-answer session after a speech in Vienna when asked about his resignation. http://www.foxbusiness.com/markets/2011/09/15/ecbs-stark-insists-resigni...

Cnn.com
Staff at Royal Bank of Scotland’s UK investment banking and treasury divisions was warned this week of more job cuts to come, according to an internal memo obtained by CNN. The potential redundancies are part of the bank’s plan to trim tens of thousands of roles. Since receiving the biggest bail out in history, RBS has announced 27,500 layoffs worldwide — of which 21,200 are in the UK.http://edition.cnn.com/2011/09/16/business/uk-rbs-layoff-memo/index.html

Mortgage rates hit yet another record low this week amid ongoing economic concerns both at home and in Europe. The average rate for a 30-year, fixed-rate loan fell to 4.09% this week, its lowest level in 60 years, according to mortgage giant Freddie Mac. Last week, the 30-year fixed averaged 4.12%. The average rate for a 15-year fixed mortgage — a popular option among those who wish to refinance — sunk to 3.30%, down from 3.33% last week, Freddie reported. http://money.cnn.com/2011/09/15/real_estate/record_mortgage_rates/index....

Washingtonpost.com
The Philippine central bank may ask lenders to set aside more capital to cover non-deliverable currency forwards to temper gains in the peso and reduce the risk of market losses, a proposal circulated among bankers says. The monetary authority’s supervision unit is soliciting comments from lenders on a plan to impose a 187.5 percent market risk weight on NDFs, according to the draft guideline obtained by Bloomberg News and received by at least three bankers who asked not to be identified. That means banks will have to set aside capital equal to almost double their exposure. “We’re still at the stage of soliciting comments from banks,” Deputy Governor Nestor Espenilla, who heads the supervision unit, said in a mobile-phone text message today. http://washpost.bloomberg.com/story?docId=1376-LRK3MN07SXKX01-7T74JM9F87...

BBC.co.uk

US factory output rose for a second straight month in August, but the rate of growth slowed slightly in comparison with July, official figures have shown. Factory output last month increased by 0.5% compared with 0.6% in July, said the Federal Reserve data. Car output was the big riser, adding 2.6% as supplies from Japan return to normal following March’s tsunami. Overall industrial production, which includes the energy sector, rose 0.2%, weaker than July’s 0.9% rise. http://www.bbc.co.uk/news/business-14939625

The European Commission has predicted that economic growth in the eurozone will come “to a virtual standstill” in the second half of 2011. It halved its forecast for July to September to growth of just 0.2%, while the forecast for the last three months of the year is down from 0.4% to 0.1%. The commission blamed financial market problems over the summer as well as weakening demand from outside Europe. http://www.bbc.co.uk/news/business-14930126

Telegraph.co.uk
Christine Lagarde has criticised some countries for “pushing too hard” to reduce their deficits, fuelling fears that the UK is cutting too much and too fast. The new managing director of the International Monetary Fund (IMF) said countries should be ready to change their austerity plans if growth falters, without naming which nations she was talking about. The UK and Germany are the two most obvious examples of countries who are undertaking a programme of cuts, even though their deficits are not as bad as other eurozone nations such as Greece and Italy.http://www.telegraph.co.uk/finance/financialcrisis/8766381/Christine-Lag...

Financial crisis: central banks do not take this kind of action unless something is up. Well, bang goes the theory that third anniversaries are generally quiet affairs. You know — nice meal out but no need for a big do. Not if you’re a central banker, apparently. Three years to the day since Lehman Brothers went under, taking the global economy with it, the Bank of England and its counterparts in America, Europe, Japan and Switzerland went and put on a proper show.  Their promise to lend truckloads of dollars to any bank finding itself a bit short of the greenback may have calmed the febrile markets – for one day at least. But that sort of pre-emptive action can’t help but give you the jitters. http://www.telegraph.co.uk/finance/financialcrisis/8767072/Financial-cri...

Independent.co.uk
There is still no sign of any relief for the US jobs market as the latest weekly unemployment figures showed an unexpectedly big jump in new people claiming benefit. A total of 428,000 people joined the jobless rolls last week, 11,000 more than the previous week and 10,000 more than economists had predicted. The figures are far above the 400,000 level at which economists believe the unemployment can start to decline. The jobless rate in the world’s largest economy is currently 9.1 per cent, crimping the economic recovery. http://www.independent.co.uk/news/business/news/no-respite-as-430000-joi...

Inflation expectations have risen to a three-year high, according to the latest quarterly survey from the Bank of England. The median public inflation expectation for the next 12 months rose to 4.2 per cent, compared with 3.9 per cent in the previous poll in May. This is the highest level since August 2008. Long-term expectations are up too. Asked to give inflation expectations in five years time the median answer was 3.5 per cent, rising from 3.2 per cent in May. http://www.independent.co.uk/news/business/news/inflation-expectations-s...

City veterans called for a ban of Exchange Traded Funds (ETFs) yesterday as the UBS rogue trading scandal put a spotlight on to the financial market’s latest money-spinning wheeze. ETFs have become increasingly popular, and until recently were the only place trading desks were hiring. Yet they have also been dogged by criticism from some in the City and faced scrutiny both in London and on a European and global level, and regulators have been threatening to derail their recent spectacular rise. http://www.independent.co.uk/news/business/news/calls-for-etf-ban-in-wak...

Guardian.co.uk
Online retailers have survived a collapse in consumer confidence and unprecedented squeeze on family incomes to register a 13.7% growth rate over the last year, according to official figures. Internet sales climbed above the £500m mark in August, providing the only bright spot in an otherwise gloomy picture of emptying high streets and cost-conscious consumers. http://www.guardian.co.uk/business/2011/sep/15/high-street-sales-suffer-...

Smh.com.au
Gold dropped to the lowest in almost three weeks on signs that European banks will have enough cash through year-end, easing concern that the region’s debt crisis will worsen. Gold futures for December delivery fell $US45.10, or 2.5 per cent, to close at $US1,781.40 an ounce at 1:56 p.m. on the Comex in New York. Earlier, the price touched $US1,775, the lowest since Aug. 26. The precious metal has climbed 25 per cent this year, reaching a record $US1,923.70 on Sept. 6. http://www.smh.com.au/business/markets/gold-retreats-on-easing-euro-zone...

Theglobeandmail.com
Straitstimes.com
US President Barack Obama said on Thursday his jobs plan could boost growth by 2.0 per cent and shave one per cent off the unemployment rate, for the first time citing estimates of the bill’s impact. The White House been wary of making predictions for the American Jobs Act in the knowledge that its forecasts for Mr Obama’s 2009 stimulus plan turned out to be too rosy, handing his foes a potent political weapon. http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_713508.htm...

The Indonesian government is planning to introduce a fiscal stimulus to spur growth in the Southeast Asia’s largest economy next year as uncertainties in the global economy may drag down the country’s economy, local media reported here on Friday. “We learned in 2008 that we need to boost Indonesia’s economic growth with stimulus. In order to mitigate negative conditions that could affect Indonesia, we have to react to protect,” Finance Minister Agus Martowardojo told members of the House of Representatives’ Commission XI overseeing financial affairs on Thursday.http://news.xinhuanet.com/english2010/business/2011-09/16/c_131142457.ht...

Swedish Prime Minister Frederik Reinfeldt Thursday called on the Swedish people to prepare for the difficult economic situation while addressing the parliament about the state of the country. “We do not know how prolonged or deep the crisis will be. What we do know is that the global trend is very serious. We know that growth is subdued, unemployment will rise and scope for reform will be affected,” Reinfeldt said. “We must be prepared in the event that the uncertainties around the world are prolonged, or increase in severity,” he continued. http://news.xinhuanet.com/english2010/business/2011-09/16/c_131141221.ht...

The price of houses in Spain fell by 6.8 percent in the second quarter of 2011, according to figures published on Thursday. According to the Housing Price Index compiled by the Spanish National Institute of Statistics (INE) , the fall in prices was 2.7 percent more than the 4.1 percent drop in prices at the start of the year and means that the cost of housing in Spain has now fallen for 13 consecutive quarters. The first fall in prices was registered between April and June of 2008 (0.3 percent), while the steepest fall took place a year later, when housing prices fell by 7.7 percent. http://news.xinhuanet.com/english2010/business/2011-09/15/c_131140847.ht...

Xinhuanet.com
The annual transaction volume of Shanghai’s financial markets is expected to reach 1,000 trillion yuan (160 trillion U.S. dollars) by 2015, Shanghai’s top financial services official said Thursday. Transaction of Shanghai’s financial markets, including the Shanghai Stock Exchange, inter-bank bond market, Shanghai Futures Exchange, Shanghai Gold Exchange, reached 188 trillion yuan in the first half this year, up 7 percent compared with the same period last year, said Fang Xinghai, head of Shanghai’s financial services office. http://news.xinhuanet.com/english2010/china/2011-09/15/c_131141185.htm

Cs.com.cn
The cement prices had been falling since the June. The average cement price hit 414.03 yuan per tonne in August from the 434.79 yuan per tonne in June, according to the Digital Cement, a researcher based in Beijing. The cement prices keep falling in September. The current price is about 409.84 yuan per tonne. Regardless of unusual price rise in some southern provinces like Hunan, Hubei and Chongqing, analysts still worry about the later market situation of the cement. http://www.cs.com.cn/english/ei/201109/t20110915_3057071.html

Thehindu.com
Food inflation declined marginally but was still high at 9.47 per cent for the week ended September 3, with prices of all items, barring pulses and wheat, rising on an annual basis. Food inflation, as measured on the basis of the Wholesale Price Index (WPI), stood at 9.55 per cent in the previous week. The rate of price rise of food items was 15.16 per cent in the corresponding week of 2010. As per data released by the government today, prices of pulses fell by 2.45 per cent year-on-year, while wheat became cheaper by 2.03 per cent during the week ended September 3. http://www.thehindu.com/business/Economy/article2455542.ece

In a significant policy shift, the Central Government on Thursday decided to allow corporates to raise external commercial borrowings (ECBs) in yuan (Renminbi) equivalent to $1 billion, a move that will help companies trading with China. “For the first time we are allowing yuan (Renminbi), (equivalent of $1 billion) as an acceptable currency under the ECB, basically for infra and capital goods,” Department of Economic Affairs Secretary R. Gopalan told reporters after a meeting of the high-level Coordination Committee on ECBs. http://www.thehindu.com/business/article2456467.ece

Economictimes.com
India and China looked headed for a diplomatic row after China asked countries to refrain from oil exploration in maritime areas offered by Vietnam in the South China Sea and India dismissing Beijing’s territorial claim over the area. “I would like to reaffirm that China enjoys indisputable sovereignty over the South China Sea and the island. China’s stand is based on historical facts and international law,” Chinese Foreign Ministry Spokesperson Jiang Yu told a media briefing in Beijing without directly referring to India. http://economictimes.indiatimes.com/news/politics/nation/south-china-sea...

Planning Commission Deputy Chairman Montek Singh Ahluwalia today said investment in infrastructure during 11th Plan period (2007-12) is likely to be 10 per cent shot of the USD 500-billion target.
“In the 11th Plan (2007-2012), we think our investments will probably be a little short of USD 500 billion. I would not be surprised if it is 10 per cent or even 12 per cent short,” Ahluwalia said at the India Infrastructure Summit organised by Ficci. http://economictimes.indiatimes.com/news/economy/infrastructure/11th-pla...

Yonhapnews.co.kr
South Koreans’ borrowing from financial firms grew by the most in more than four years in the second quarter mainly due to lenders’ efforts to expand household loans, the central bank said Friday.
Borrowing by Korean households and nonprofit organizations grew by 20.9 trillion won (US$18.9 billion) to 728.5 trillion won in the April-June period, sharply up from a 7.2 trillion won gain three months earlier, according to the Bank of Korea (BOK). The second-quarter data marked the largest expansion since the 29.4 trillion won growth tallied in the fourth quarter of 2006, it added.http://english.yonhapnews.co.kr/business/2011/09/16/85/0503000000AEN2011...

Khaleejtimes.com
The launch of the Gulf single currency, which had been delayed following the withdrawal of the UAE and Oman, is on track, Saudi Arabia’s Central Bank Governor Muhammad Al Jasser said. Al Jasser said on the sidelines of a meeting of Arab central bank governors in Doha that the economic conditions in the Gulf are “excellent” for forming a monetary union and that a plan to launch a Gulf single currency was on track. http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2011/Sep...

Thetrader.se
Much has been written on the UBS Rogue Trader theme today. We will hear more on this story in during the coming days. One thing is for sure. To blow up, if that even is true, 2 Bln USD is quite hard to accomplish. One needs to have some rather big positions. Those kind of positions are almost impossible to accumulate in the Equities Market. Below is a good recap of some of the stories today. Guest Post by Morelivers on UBS and the alleged Rogue Trader. http://www.thetrader.se/2011/09/15/ubs-and-the-alegged-rogue-trader-suma...

In order to “loose” 2 bln USD, you need to take quite big positions. While UBS is not saying anything, the “bet” must be in a fairly liquid product, and if not “hidden” below the desk, it is almost impossible to loose it on Equities Trading. Maybe the trade was an extremely big Vega position on the CHF/EUR. A long Vega position seemed like a rather intelligent trade only some days ago, before the SNB announced to “peg” the CHF. http://www.thetrader.se/2011/09/15/ubs-big-trade/

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