This page has been archived and commenting is disabled.

News That Matters

thetrader's picture




 

 

By www.thetrader.se

Ft.com

The arrest of more than 700 protesters on Saturday has drawn worldwide attention to Occupy Wall Street, a fledgling protest movement modelled on the Arab spring, protests in Greece, and demonstrations in the state of Wisconsin earlier this year, http://ftalphaville.ft.com/thecut/2011/10/03/690706/arrests-draw-attenti...

 

Eon, Germany’s largest utility, has recruited Goldman Sachs to run a sale of its gas distribution network in a move that could raise up to €2.5bn to help pay down its debts and further shift its focus away from Europe, http://ftalphaville.ft.com/thecut/2011/10/03/690676/goldman-to-run-eon-g...

 

Concern is growing in the Treasury over the “very, very great” risks to Britain if the euro breaks apart, the FT reports. “From the modelling we have done, the uncertainty [about the single currency] is already affecting the recovery and the risks [of a break-up] would be very, http://ftalphaville.ft.com/thecut/2011/10/03/690641/treasury-fears-effec...

 

Japan’s quarterly Tankan index of sentiment at large manufacturers rose to 2 in September from minus 9 in June, Bloomberg reports. The reading remains below the March quarter figure of 6, but a positive number means optimists outnumber pessimists. Japanese companies have been restoring operations after the quake and tsunami disrupted supply chains, http://ftalphaville.ft.com/thecut/2011/10/03/690596/japanese-manufacturi...

 

All news continue below.

 

 

Citigroup may shake up its top management in Japan following a regulatory investigation that found alleged problems with the bank’s disclosures when selling financial products, the WSJ says, citing people familiar with the matter. http://ftalphaville.ft.com/thecut/2011/10/03/690556/citigroup-considerin...

 

The US Congress is renewing a push to penalise China over its currency, the FT says, potentially forcing the White House to choose between angering its Democratic base and upsetting its delicately balanced relations with Beijing. The Senate is expected to vote on anti-China trade legislation on Monday, http://ftalphaville.ft.com/thecut/2011/10/03/690551/us-congress-presses-...

 

Greece will miss a deficit target set just months ago in a massive bailout package, Reuters reports, with a government draft budget figures released on Sunday targeting a deficit equivalent to 8.5 per cent of GDP instead of the 7.6 per cent target. http://ftalphaville.ft.com/thecut/2011/10/03/690511/greek-budget-savings...

 

Greece’s cabinet on Sunday approved large cuts in next year’s budget – including the immediate dismissal of thousands of public sector workers – under intensifying pressure from its international creditors. The cabinet met after Evangelos Venizelos, Greek finance minister, wrapped up negotiations with experts from the European Union, International Monetary Fund and European Central Bank – a group known as the troika – in the early hours of Sunday. http://www.ft.com/intl/cms/s/0/17955778-ed13-11e0-be97-00144feab49a.html...

 

Beijing has called on Burma to protect the rights of Chinese companies after construction was halted on the $3.6bn Myitsone dam, in a rare example of public disagreement between the two neighbours and close allies. “[China] demands its companies to strictly follow the law of the countries they operate in but also calls on the respective governments to protect Chinese companies’ legal rights and interests,” said Hong Lei, a spokesman for China’s foreign ministry. http://www.ft.com/intl/cms/s/0/bccaef18-ece7-11e0-be97-00144feab49a.html...

 

Wsj.com

Japan’s Nikkei Stock Average lost 2.0%, Australia’s S&P/ASX 200 fell 2.1%, and New Zealand’s NZX-50 dropped 0.9%. South Korean markets were closed for a holiday. Dow Jones Industrial Average futures fell 26 points in screen trade. The euro was weaker against the U.S. dollar as investors fretted over the slow progress made by European officials to resolve Greece’s debt woes and the economic crisis threatening the euro-zone periphery. http://online.wsj.com/article/SB1000142405297020452460457660769119027984...

 

President Barack Obama could send trade pacts with South Korea, Colombia and Panama to Congress for approval early this week, setting the stage for final passage of the agreements in mid-October after five years of political combat.  Together, the pacts could boost U.S. exports by $13 billion annually—the Korea pact alone is worth $11 billion—though there would also be more imports and a wider array of foreign services available in the U.S. http://online.wsj.com/article/SB1000142405297020379190457660711245263452...

 

U.K. financial-services firms became gloomier about their prospects and future profits in September following a difficult period for financial markets and looming regulatory changes, according to a survey published Monday.  A survey by the Confederation of British Industry, an employers’ group, and accountancy firm PricewaterhouseCoopers found financial-services firms expect growth in business volumes to slow over the next three months and income from fees, commissions and trading to fall. Firms don’t expect an increase in profits in the coming quarter and plan to lay off staff, the survey found.http://online.wsj.com/article/SB1000142405297020452460457660674190381817...

 

Marketwatch.com

Australia’s manufacturers endured another tough month in September with the sector contracting further and little sign of optimism ahead, according to a performance gauge published Monday.  The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index fell 1.0 point in September to 42.3, from its August level well below the 50 point mark that separates expansion from contraction. http://www.marketwatch.com/story/australias-september-pmi-loses-more-gro...

 

Reuters.com

Stocks slipped in Asia and the euro fell on anxiety the euro zone’s debt crisis will dampen global growth after the Greek government said it will miss a deficit target set just months ago in a massive bailout package. Spot gold added $9.29 an ounce to $1,632.24 by 11:08 EDT. Gold had posted a quarterly gain of 8 percent — its biggest this year, despite a drop of 11 percent for September, its largely monthly decline in three years. http://www.reuters.com/article/2011/10/03/us-markets-precious-idUSTRE78M...

 

Brent crude dropped $1.23 to $101.53 a barrel in the first day of trading for the fourth quarter, extending sharp losses from the previous three months. Brent tumbled more than 8 percent in the third quarter, the biggest percentage loss since the second quarter of 2010. U.S. crude fell to an intraday low of $77.90 a barrel, down $1.30 in early Asia trading. http://www.reuters.com/article/2011/10/02/us-markets-oil-idUSTRE77838320...

 

A new plan to curb global warming risks becoming a battleground between rich and poor nations and could struggle to get off the ground as negotiators battle over the fate of the ailing Kyoto climate pact. The 1997 Kyoto Protocol covers only emissions from rich nations that produce less than a third of mankind’s carbon pollution and its first phase is due to expire end-2012. Poorer nations want it extended, while many rich countries say a broader pact is needed to include all big polluters. http://www.reuters.com/article/2011/10/02/us-climate-deal-idUSTRE79103V2...

 

Investors are worried U.S. earnings growth may finally fall back to earth as turmoil in Europe and signs of a less robust Chinese economy hurt foreign support. The euro zone’s debt crisis and weakness inChina have fueled investor concern that the global economy could tip back into recession, possibly dampening U.S. earnings growth at a time when the U.S. economy is still struggling to gain ground. Overseas sales have helped U.S. companies beat earnings expectations in the last couple of years, with foreign sales totaling 30 percent on average for Standard & Poor’s 500 companies.http://www.reuters.com/article/2011/10/02/us-usa-stocks-weekahead-idUSTR...

 

China’s official news agency derided on Sunday U.S. lawmakers’ efforts to pressure Beijing over its currency policy as “expedient and shallow,” saying they were resorting to an old habit of deflecting blame on China. “This has become a common practice — whenever the (U.S.) economy is slow, whenever an election is nearing, voices in the United States pressing for the rise of the renminbi are all over,” Xinhua said in a commentary, referring to the yuan by its official name. http://www.reuters.com/article/2011/10/02/us-china-usa-yuan-idUSTRE7910L...

 

Bloomberg.com

Bank of France Governor Christian Noyer said he’s “open” to the idea of using borrowed money to enhance the capabilities of a European rescue fund as policy makers turn their focus to the next steps to contain the region’s sovereign-debt crisis. “It would be unrealistic to expect an increase in the EFSF itself,” Noyer said in a speech today in Tokyo, referring to the European Financial Stability Facility. “But I am personally open to any scheme that would allow existing commitments to be leveraged to provide greater intervention capacity.” http://www.bloomberg.com/news/2011-10-03/ecb-s-noyer-says-he-s-open-to-a...

 

Signs of stability in China’s manufacturing industry in September may ease concern the world’s second-largest economy will suffer a slump in economic expansion that escalates the risk of another global recession. The Purchasing Managers’ Index published Oct. 1 by the China Federation of Logistics and Purchasing rose for a second month, to 51.2, with export orders gaining and an inflation measure — factories’ input costs — moderating. A separate PMI from HSBC Holdings Plc and Markit Economics on Sept. 30 was unchanged from August, at 49.9. Readings above 50 signal expansion.http://www.bloomberg.com/news/2011-10-02/china-manufacturing-gain-negate...

 

Six years after Yahoo! Inc. paid more than $1 billion to become the biggest investor in Alibaba Group Holding Ltd., it’s now a potential takeover target for the Chinese Internet company.  “We are very interested in Yahoo,” Alibaba Chairman Jack Ma said at a Stanford University event near Palo Alto, California, on Sept. 30. Talks have snagged over “political issues,” rather than financial ones, he said.http://www.bloomberg.com/news/2011-10-03/alibaba-group-turns-to-potentia...

 

Cnbc.com

Asian stocks outside of Japan may have slumped around 20 percent in the third quarter in their worst performance in three years, but there may be more pain to come with UBS expecting declines of up to 40 percent should Greece exit the euro zone, in what the bank describes as the “worst case scenario”. The event will send investors fleeing from risk into the traditional safe havens of gold and U.S. Treasurys, sending the U.S. dollar soaring and Asia ex-Japan equities plummeting to price-to book lows of 1x not seen since the 2008 global financial crisis, Kelvin Tay, chief investment strategist of UBS, told CNBC on Monday. http://www.cnbc.com/id/44752119

 

Cnn.com

Economists are convinced the euro will survive as a currency without losing any members … not even Greece. Of the 22 economists surveyed by CNNMoney, 17 are predicting that the euro will hold together, even though almost all of them believe Greece will default on its debt by the end of next year. Typically when a country is facing a sovereign debt crisis, it can devalue its own currency to make its goods more attractive in export markets and perhaps lower its debt burden. But the shared euro has prevented Greece and other troubled European economies such as Portugal, Ireland, Italy and Spain from turning to devaluation. It’s also one of the reasons the richer European countries such as Germany and France are scrambling to prevent a Greek default.http://money.cnn.com/2011/10/02/news/international/euro_breakup/index.ht...

 

Washingtonpost.com

The biggest quarterly increase ever in the Chicago Board Options Exchange Volatility Index pushed it above 40, a threshold exceeded only three percent of the time in 20 years and a level that has preceded stock rebounds. The VIX rose 160 percent to 42.96 in the third quarter as the Standard & Poor’s 500 Index fell 14 percent, the biggest retreat since 2008, according to data compiled by Bloomberg. Closes above 40 in the volatility measure have come before the equity gauge gained 3.2 percent in the next three months on average, data compiled by Bloomberg show. http://washpost.bloomberg.com/story?docId=1376-LSCK4R1A1I4H01-4H76M43M74...

 

BBC.co.uk

Eastman Kodak has said it has “no intention of filing for bankruptcy”. The struggling US camera and printing group’s comments came after it confirmed it had hired a law firm well-known for handling bankruptcy protection cases, Jones Day. Kodak said it was “not unusual for a company in transformation to explore all options”. Shares in the firm fell 54% on Friday as fears persist about its future. It has not made a profit since 2007. http://www.bbc.co.uk/news/business-15141421

 

Shell has declared a force majeure on some of its customers after a fire shut down its refinery in Singapore last week.  The fire affected its diesel fuel unit but forced Shell to shut its entire refinery, hurting its supplies.  The declaration of Force Majeure excuses a company from contractual agreements when an extraordinary event occurs which is beyond its control. The refinery is Shell’s biggest such operation globally. http://www.bbc.co.uk/news/business-15146474

 

Prime Minister David Cameron has warned that it would be “very bad” for the UK if the eurozone was to break up. Speaking to the BBC’s Andrew Marr Show, he said the debt crisis in the eurozone was “a threat not just to itself, but also a threat to the UK economy, and a threat to the world economy”. He reiterated that eurozone leaders had to take quick and decisive action. http://www.bbc.co.uk/news/business-15141423

 

Telegraph.co.uk

Banking crisis set to trigger new credit crunch. The global financial system is on the edge of a new credit crunch as the cost of insuring the bonds of banks across the world hits new highs, analysts have said.  Credit default swaps on lenders as far afield as China and Australia, countries that until recently seemed immune to the chaos, have doubled in the last two months to levels not seen since the financial crisis.http://www.telegraph.co.uk/finance/financialcrisis/8802846/Banking-crisi...

 

The Qatari Royal family plans to spend up to $10bn (£6.4bn) buying stakes in gold producers through their sovereign wealth fund, The Daily Telegraph can disclose.  The fund is seeking to invest in a range of natural resources, but gaining access to physical gold is its top strategic priority. On Sunday, Qatar Holdings, which controls the wealth of the Middle East state’s royal family, confirmed it would invest about $1bn in European Goldfields, a London-listed miner currently developing the largest gold-mining project in Greece. http://www.telegraph.co.uk/finance/personalfinance/investing/gold/880279...

 

Guardian.co.uk

The Bank of England will agree this week to spend another £50bn of electronic money in a bid to boost bank lending and aid the recovery, City experts predict. The threat of a double-dip recession will force the bank’s monetary policy committee (MPC) to set aside fears about inflation to increase its programme of quantitative easing (QE) from £200bn, with the possibility of rising to £300bn if the economy fails to improve in 2012. http://www.guardian.co.uk/business/2011/oct/02/quantitative-easing-bank-...

 

Smh.com.au

Treasurer Wayne Swan says the government is open to the idea of reform to assist businesses hit by the high Australian dollar. Ahead of this week’s jobs forum in Canberra, manufacturing unions have called for tax breaks for mining and construction companies that use local products. Australian Manufacturing Workers’ Union spokesman Dave Oliver said the benefits of the mining boom should be spread to other industries. ‘‘We want to get more bounce out of the mining boom and get more local content into these resource projects,’’ he said, adding it was unacceptable that there was only 10 per cent local content in mining projects. http://www.smh.com.au/business/business-tax-reform-on–the-table-swan-20111003-1l4w6.html#ixzz1Zh0wmJUx

 

Theglobeandmail.com

Canada’s economy started the third quarter on a high note, easing fears of another recession. The economy grew 0.3 per cent in July, Statistics Canada said Friday, the most in seven months and an indication that the contraction in the previous quarter was not repeated. Economists say gross domestic product probably increased at a 1-per-cent or 2-per-cent annual pace in the July-to-September period, as industries that were sideswiped by the Japanese earthquake and wildfires in northern Alberta bounced back. http://www.theglobeandmail.com/report-on-business/economy/growth/gdp-exp...

 

Canadian consumers in the market for new vehicles are getting big bargains as sticker prices have dropped to 17-year lows and fuelled healthy sales increases, auto dealers said Friday. “Though it has made life tough at times for our members and manufacturers, in the end the consumer is the winner,” said Michael Hatch, chief economist of the Canadian Automobile Dealers Association. Canadian auto sales are expected to reach 1.6 million units in 2011 as prices are the same as in 1994 – a decline of more than 40 per cent when adjusting for inflation. http://www.theglobeandmail.com/report-on-business/canadian-auto-prices-a...

 

Xinhuanet.com

The output of China’s petrochemical industry rose 34.9 percent year-on-year to 6.4 trillion yuan (1 trillion U.S. dollars) in the first eight months of this year, according to China Petroleum and Chemical Industry Federation (CPCIF). Of the total output value, 2.02 trillion yuan came from the oil refining sector, while the chemical industry contributed 4.2 trillion yuan, up 30.6 percent and 37.1 percent year-on-year respectively, according to the CPCIF. All production indicators pointed to slower growth of the petrochemical industry from January to August. http://news.xinhuanet.com/english2010/china/2011-10/02/c_131171890.htm

 

Singapore’s Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam has said that he was worried about the increased risks of slowdown in economic growth for both the developed economies and the developing economies. Tharman, who was also minister for manpower, said in an interview carried by local daily Lianhe Zaobao on Monday that the growth in the developed economies such as the United States, Europe and Japan was likely to stall to a speed of no more than 1 percent for a period of time to come. http://news.xinhuanet.com/english2010/business/2011-10/03/c_131172627.ht...

 

Thehindu.com

China has become increasingly reliant on investment spending to deliver GDP growth, which reflects the way in which the exceptionally large credit stimulus was implemented after the Lehman crisis, financial services firm Citi’s Emerging Markets Macro and Strategy Outlook has said. According to the research note, this has caused an upward shift in China’s share of global commodities consumption.http://www.thehindubusinessline.com/industry-and-economy/economy/article...

 

The year 2012 will be a challenging one and it is hard to predict whether Gulf Cooperation Council (GCC) countries will enjoy a stable or a volatile economy if faced with a new crisis, a leading analyst has said. Middle East economies will be driven by reforms undertaken by GCC governments as well as their future growth strategy, said Mr Omar Al Juraifani, a leading economic and financial analyst.http://www.thehindubusinessline.com/industry-and-economy/economy/article...

 

Economictimes.com

A large chunk of growth in bank credit in the first five months of the current financial year has come from home loans-18.3% at Rs 18,060 crore-followed by increase in credit to exporters and to retail trade. The biggest drop in outstanding credit has been in agri loans, which are seasonal in nature, followed by credit to wholesale trade.  According to data released by RBI on Friday, non-food credit grew by 2.5% between March 25 and August 25 2011. Of this amount, credit to industry grew by 5.8% or Rs 93,569 crore. http://economictimes.indiatimes.com/personal-finance/loan-centre/home-lo...

 

Yonhapnews.co.kr

South Korean lenders are expected to reap record profits this year on the back of a rise in loan interest rates and stronger-than-expected results in the third quarter, data showed Monday.

The combined net profit of eight local financial services groups and banks, including top players Woori Finance Holdings Co. and KB Financial Group Inc., are expected to reach around 3.2 trillion won (US$2.7 billion) in the July-September period, according to brokerages’ forecasts compiled by FnGuide, a financial information provider. Local banks have been posting solid profits this year. Their net profit totaled 4.5 trillion won and 5.5 trillion won in the first quarter and second quarter, respectively. http://english.yonhapnews.co.kr/business/2011/10/03/43/0503000000AEN2011...

 

Themoscowtimes.com

President Dmitry Medvedev has defended his decision to shelve his political ambitions in favor of Prime Minister Vladimir Putin, saying Putin deserved to become the next president because he is “the most authoritative politician” in the country.  Speaking to the directors of Russia’s top three television channels, Channel One, Rossia and NTV, Medvedev said the decision to swap jobs with Putin was made for the sake of Russians’ welfare.  “What is your ambition in making this decision?” asked long-serving Channel One head Konstantin Ernst.  “To bring benefit to my country and my people,” Medvedev replied.http://www.themoscowtimes.com/news/article/medvedev-says-putin-is-more-p...

Tehrantimes.com

Iran’s minister of industry, mine and trade, Mehdi Ghazanfari, is scheduled to attend the second Developing Eight Countries (D-8) Ministerial Meeting on Industry, which is to be held during 4-6 October 2011, in Istanbul, Turkey, an official said.  IRNA news agency quoted on Saturday the deputy minister Hamid Safdel as saying that the Iranian minister will head a high ranking delegation of officials and industry managers in the meeting. http://tehrantimes.com/index.php/economy-and-business/3088-iran-to-atten...

 

Thetrader.se

What if things were so easy, lower interest rates, fix the unemployment, and voilá, the Economy is fixed. Some thoughts for those who still think that lower interest rates will lead to lower unemployment. By World Complex. Observing the change is easy (if we disregard Keynesian axioms). Deducing the nature of the change is more difficult.  One observation that leaps out at me is this. Real interest rates fell to an extreme low in August 2005, followed by an extreme high in October 2006. They fill to an extreme low in June 2008, and rose to an extreme high in November 2008. In the first case, there were no dire effects on unemployment. But the second time around, we got a bifurcation. http://www.thetrader.se/2011/10/02/unemployment-and-interest-rates/

 

Quick recap of the Q3 performance. As we see it was a very bad quarter with much damage done to all indices. Let’s see what Index will be the first to revisit those March 09 lows, China, Nikkei or why not the CAC? By DShort; The 3rd quarter saw wretched performances in all of the world markets in this series. The best quarterly performer, the Nikkei 225, lost 10.3% of its value, followed by the SENSEX, which was down 11%. At the other extreme the DAX, CAC 40 and Hang Seng all lost about 25% of their value. The middle ground was occupied by the Shanghai, FTSE and S&P 500, which lost 14%, 14.4% and 15.9% respectively. Let’s hope next month sees some improvement. Certainly a bounce is due. But the ongoing stresses in Euro land, the nasty bear market in China, and ECRI recession call in the U.S. suggest a cautious outlook. http://www.thetrader.se/2011/10/02/comparison-charts-on-the-way-to-march...

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 10/03/2011 - 07:05 | 1732497 fredquimby
fredquimby's picture

"Concern is growing in the Treasury over the “very, very great” risks to Britain if the euro breaks apart, the FT reports"

 

"Concern is also growing over the very, very, great risks to the world when the USD breaks apart" Fred reports.

Do NOT follow this link or you will be banned from the site!