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Ft.com
William Dudley, president of the New York Federal Reserve Bank, said the Fed could potentially do more to drive down mortgage rates to support the sector, says Reuters. Mr Dudley said another round of quantitative easing, http://ftalphaville.ft.com/thecut/2011/10/25/710786/another-fed-official...
David Cameron’s attempts to assert his authority over his party backfired on Monday, writes the FT, when more than 80 Conservative backbenchers defied their leader over membership of the European Union http://ftalphaville.ft.com/thecut/2011/10/25/710771/conservative-backben...
Swiss banks are likely to settle a US probe of offshore tax evasion by paying billions of dollars and handing over names of 5,000 to 10,000 Americans who have secret accounts, Bloomberg reports, citing two people familiar with the matter. http://ftalphaville.ft.com/thecut/2011/10/25/710746/swiss-banks-may-reve...
A leading London-based businessman accused of bribery in Bahrain linked to contracts with Alcoa, the US aluminium group, has been arrested by the UK’s Serious Fraud Office, the FT reports. Victor Dahdaleh, http://ftalphaville.ft.com/thecut/2011/10/25/710691/aluminium-magnate-ar...
European negotiators have asked Greek debt holders to accept a 60 per cent cut in the face value of their bonds, a hardline stance that far exceeds losses agreed in a deal between private investorshttp://ftalphaville.ft.com/thecut/2011/10/25/710671/efsf-negotiations/
Prices for billions of dollars in mortgage bonds fell to their lowest levels in six months on Monday as traders bet that new measures to help distressed homeowners would lead to a wave of early repayments,http://ftalphaville.ft.com/thecut/2011/10/25/710661/us-mortgage-bonds-fa...
Risk assets were strongly in positive territory as traders bet that European leaders were making progress on a plan to resolve the region’s debt crisis and after China data countered fears the world’s second-biggest economy faced a “hard landing”, http://ftalphaville.ft.com/thecut/2011/10/24/710636/risk-appetite-firms-...
Rick Perry is proposing to set a single 20 per cent tax rate for all US businesses and individuals in a high risk attempt by the Texas governor running for the White House to present a staunchly conservative fiscal policy prescription for the ailing US economy. Mr Perry, who has been struggling to gain momentum in the race for the Republican nomination to challenge Barack Obama in the 2012 presidential campaign – would allow Americans to choose between paying their current income tax rate and the new 20 per cent flat tax, the Texas governor wrote in an opinion piece for the Wall Street Journal on Tuesday. http://www.ft.com/intl/cms/s/0/82a9e9f4-feb4-11e0-a72c-00144feabdc0.html...
Wsj.com
Asian stock markets were mixed on Tuesday, as investors were reluctant to extend the previous session’s strong rally ahead of a crucial European leaders meeting on Wednesday aimed at drawing up a broad plan to contain the euro-zone debt crisis. Japan’s Nikkei Stock Average fell 0.3%, Australia’s S&P/ASX 200 was off 0.3%, South Korea’s Kospi Composite climbed 0.2%, and New Zealand’s NZX-50 added 0.4% as markets there resumed trading after Monday’s holiday. Dow Jones Industrial Average futures were off 15 points in screen trade. http://online.wsj.com/article/SB1000142405297020464450457665195414579712...
A top Federal Reserve official suggested Monday that the central bank could take further action to try to boost economic growth, including more securities purchases. “The Fed is doing—and will continue to do—everything in its power to promote jobs and price stability,” Federal Reserve Bank of New York President William Dudley said in remarks, adding, “I don’t think the Fed has run out of bullets.” Mr. Dudley, answering questions after speaking in New York, said the Fed might undertake more purchases of http://online.wsj.com/article/SB1000142405297020391180457665159194453529...
Moody’s Investors Service cut its debt rating on MF Global Holdings Ltd., citing the brokerage firm’s risk appetite and exposure to European sovereign debt. Monday afternoon’s move by the Moody’s Corp. unit left MF Global, based in New York and led by former New Jersey Gov. Jon Corzine, at Baa3, one notch above junk-bond status. MF Global shares fell 3.5%, or 13 cents, to $3.55 in New York Stock Exchange composite trading. http://online.wsj.com/article/SB1000142405297020391180457665146241432597...
The risk of recession in the euro zone is mounting, according to a closely watched business survey, signalling that a vicious cycle of fiscal austerity and economic contraction threatens even some of Europe’s biggest economies. The gloomy outlook comes as political differences among European leaders over how to handle the worsening debt crisis have given way to increasingly personal attacks.http://online.wsj.com/article/SB1000142405297020464450457665041099150250...
FedEx Corp.’s forecast for record holiday shipping this year shows that U.S. customers are buying more things online. But retailers still anticipate a soft holiday season, with the growth in shipping volume largely expected to come from shoppers scouring the Web for cheap deals. FedEx said Monday it expects to handle about 260 million shipments between Thanksgiving and Christmas, or 12% more than last year. The Memphis, Tenn., company attributed the bulk of its anticipated rise in volume to inexpensive, e-commerce shipments through its SmartPost residential service, in which postal carriers make final deliveries and packages are mostly lightweight. http://online.wsj.com/article/SB1000142405297020464450457665092081699264...
Marketwatch.com
The Reserve Bank of Australia believes the threat from inflation has lessened, but it needs to see confirmation in the third quarter consumer price index on Wednesday before it can move closer to an interest rate cut. RBA Deputy Governor Ric Battellino said Tuesday reduced inflation risks would give the central bank scope top cut interest rates “if needed.” Revisions to the CPI methodology announced in September and a weaker global growth outlook “have made the outlook for inflation less concerning,” he told a business conference. A survey of 19 economists by Dow Jones Newswires on Friday showed an expected rise in the consumer price index of 0.6% in the third quarter, compared with a rise of 0.9% in the prior quarter, and an expected 3.5% rise on the year. http://www.marketwatch.com/story/australias-cpi-to-show-if-its-safe-to-c...
Reserve Bank of Australia Deputy Governor Ric Battellino said Tuesday the wealth impacts for the economy from a boom in mining are still largely in the future. In response to questions from the floor at a business conference here, Battellino said the boom remains “ahead of us.” The remark is a reminder that the RBA hasn’t taken its eye off the impact the mining boom will have on the economy, even at a time of great uncertainty in the global economy, with European policy makers now in talks that will shape confidence globally for the period to come. A largely upbeat, yet still cautious Battellino, said Australian economic data has been better over recent weeks, predicting Asia’s growth will remain robust. http://www.marketwatch.com/story/australias-rba-much-of-mining-boom-stil...
Even as data Monday showed better-than-expected growth for China’s manufacturing sector, many analysts are concerned about a a potential hard landing for the Chinese economy. “Investors should prepare for both a hard landing and a yuan devaluation,” said Societe Generale strategist Albert Edwards, who sees the beginning of an era of slow growth in China. He points to the sharp drop in China’s foreign-exchange reserve accumulation in the recent quarter as a worrisome sign that liquidity is tightening. Reserves growth tends to be inflationary, Edwards said, likening it to China’s version of quantitative easing. http://www.marketwatch.com/story/chinas-economy-may-face-hard-landing-20...
The British parliament on Monday is set to hold a vote on a motion calling for a referendum on the country’s membership in the European Union. Around 70 Conservative members of parliament are seen as potentially defying the party leadership’s call to vote ‘no,’ the BBC reported, marking a test for Prime Minister David Cameron. The leadership of the Liberal Democrats, the Conservatives’ coalition partner, and the opposition Labour party have called on their own members to vote against the motion, which is expected to fail. http://www.marketwatch.com/story/uk-parliament-to-vote-on-eu-referendum-...
Reuters.com
Gold prices held steady on Tuesday, as investors wait for European leaders to work out a strategy to solve the euro zone debt crisis at a meeting on Wednesday, while resilient physical demand from Asia also lent support. Investors grew confident after a weekend European Union summit made some progress toward an agreement on how to contain the debt crisis, even though the final decision was deferred to a second summit on Wednesday. Spot gold was little changed at $1,650.99 an ounce by 0247 GMT, after rising 2 percent over the past two sessions. U.S. gold traded nearly flat at $1,652.90.http://www.reuters.com/article/2011/10/25/us-markets-precious-idUSTRE78M...
Bloomberg.com
A near doubling in the Chinese economy’s reliance on credit over the past decade will prompt slower growth in coming years, risking diminished returns for investors, according to research by BlackRock Inc. China’s gross domestic product will rise at a 7 percent to 8 percent pace in the next few years, said analysts at the BlackRock Investment Institute, a London-based unit of the world’s biggest money manager, down from 10.5 percent in the past decade. One yuan of GDP now needs about 0.30 yuan of credit, compared with 0.17 yuan in 2002, a shift BlackRock describes as like a car getting less mileage per gallon of gas. http://www.bloomberg.com/news/2011-10-24/china-s-gdp-engine-gets-less-mi...
Oil India Ltd. (OINL) has held talks with Gabon’s national oil company for a partnership to buy Etablissements Maurel & Prom SA’s assets in the African nation, two people with direct knowledge of the matter said. India’s second-biggest state-run oil producer completed technical and financial assessments of the fields, which may be valued at more than $2 billion, the people said, asking not to be identified because the talks are private. Oil India and Gabon Oil Co. are yet to decide how much of the assets each will hold, the people said. http://www.bloomberg.com/news/2011-10-25/oil-india-said-to-hold-talks-wi...
Companies in the United Arab Emirates and China will be seeking the most bank funding over the next two to three years, driven by availability of credit in their markets, according to a report by Allen & Overy LLP. Businesses in the U.K. and Germany were the least likely to expect an increase in funding needs, the London-based law firm said in an e-mailed report today. More than half of those surveyed said they are more likely to tap Asia-Pacific markets for their financing over the next five years, fuelled by U.S. firms, the report said, adding that Chinese renminbi bond issuance beat euro volume for the first time in the third quarter of 2011. http://www.bloomberg.com/news/2011-10-24/china-u-a-e-companies-to-seek-m...
Cnbc.com
The China hard-landing debate is a classic tail risk story — an unlikely scenario, but if it materializes the consequences could be catastrophic. Because of their close trade links, Malaysia, Singapore, South Korea, Taiwan and Hong Kong would be among the first to feel the pain should China’s growth weaken dramatically. However, it would probably take a shock even bigger than what followed the 2008 Lehman Brothers bankruptcy to spread significant damage beyond Asia. http://www.cnbc.com/id/45025678
President Obama is taking action.” At least that’s what the blog on the WhiteHouse.gov says today in describing the president’s trip to Las Vegas. “We can’t wait to help homeowners,” it goes. That action consists of revamping an existing government refinance program through Fannie Mae and Freddie Mac for borrowers who owe more on their mortgages than their homes are worth, so-called “underwater” borrowers. There are an estimated 11 million of those nationwide according to CoreLogic. http://www.cnbc.com/id/45021347
The weak housing sector continues to pose a strong headwind to the U.S. economic recovery, and the Federal Reserve could potentially do more to drive down mortgage rates to support the sector, a top Federal Reserve official said on Monday. William Dudley, president of the New York Federal Reserve Bank, also warned about the risks of “spillover” effects from Europe’s debt Dudley’s comments marked the second time in a week that a Fed policy maker highlighted the possibility that the U.S. central bank could do more to support the housing market. http://www.cnbc.com/id/45018117
BBC.co.uk
China’s insurance regulator says market turmoil has affected the ability of some insurers to make payments to policyholders. Chen Wenhui, vice chairman of the China Insurance Regulatory Commission, made the remarks at a forum in Beijing. Insurers’ solvency ratios, the ability to make payments on policies, are falling due to market losses, he said. Mr Chen pledged to help insurers by guiding them through fund-raising in Hong Kong. http://www.bbc.co.uk/news/business-15441112
The Bank of Japan (BOJ) is collaborating with Thailand’s central bank to implement a loan programme to help Japanese firms affected by flooding in the country. The BOJ said it will offer government bonds as collateral to ensure that Baht loans are made available to firms. Excessive flooding has forced many Japanese manufacturers to shut their factories in Thailand. Thai authorities have said that floods may last another four to six weeks. http://www.bbc.co.uk/news/business-15441158
Telegraph.co.uk
Angela Merkel has appealed to German politicians to approve Europe’s rescue efforts ahead of a crucial vote that could torpedo the Brussels summit. The German Chancellor, who on Tuesday must secure the Bundestag’s approval before European bail-out plans can proceed, briefed politicians on plans to increase the firepower of the European Finance Stability Facility (EFSF) from €440bn (£383bn) to more than €1 trillion. She assured them that Germany would not have to stump up more cash because financial engineering would be used to boost the bail-out fund.http://www.telegraph.co.uk/finance/financialcrisis/8847024/Angela-Merkel...
Amec, the British engineering company, has declared that it intends to start work again in Libya as soon as possible. Samir Brikho, the chief executive, said: “We are very involved now in discussions with the Libyan government. We evacuated 50 ex-pats in the first weeks … and we are now ready to move them back.” Foreign firms evacuated expatriate employees from the energy-rich north African country as it descended into civil war in late February. http://www.telegraph.co.uk/finance/newsbysector/industry/8846809/Amec-re...
Independent.co.uk
Sir Mervyn King will be called to account before Parliament today for the decision of the Monetary Policy Committee (MPC) to inject £75bn into the British economy at a time when inflation is running more than double the Bank of England’s target. The Bank’s Governor will give evidence to the Treasury Select Committee on the Bank’s decision to restart its programme of Quantitative Easing.http://www.independent.co.uk/news/business/news/banks-governor-to-face-g...
Guardian.co.uk
Bankers’ pay should be radically overhauled, according to one of the Bank of England’s most senior policymakers, who has called for a closer link between bonuses and the risks taken by banks. Andy Haldane, the Bank of England’s executive director for financial stability, argued that if the performance of bankers had been measured against loans rather than share prices, there would have been a dramatic reduction in their pay levels in the past two decades. http://www.guardian.co.uk/business/2011/oct/24/official-calls-bankers-pa...
The European Central Bank is almost certain to cut interest rates next week after startling evidence that the sovereign debt crisis may have pushed the eurozone into recession. With uncertainty crippling economic activity and investment, it emerged on Monday in Berlin that the eurozone’s main bailout fund, the €440bn (£383bn) EFSF, is likely to have its firepower boosted to €1tn-€1.5tn at Wednesday’s second summit this week. http://www.guardian.co.uk/business/2011/oct/24/debt-crisis-eurozone-rece...
Smh.com.au
Oil traded near the highest close in almost 12 weeks in New York as investors bet that signals of economic growth indicate fuel demand will increase. Brent’s premium to U.S. prices narrowed for a third day. Crude oil for December delivery was at $91.38 a barrel, up 11 cents, in electronic trading on the New York Mercantile Exchange at 1:24 p.m. Sydney time. The contract yesterday increased $3.87 to $91.27, the highest close since Aug. 3. http://www.smh.com.au/business/oil-trades-near-12week-high-on-economy-20...
Industrial metals in London jumped the most in three years, led by copper and nickel, as European governments moved closer to containing the region’s debt crisis and manufacturing rebounded in China, the world’s top consumer. http://www.smh.com.au/business/markets/industrial-metals-surge-most-in-t...
Theglobeandmail.com
Private-sector economists will deliver some bad – although not unexpected – news when they meet with federal Finance Minister Jim Flaherty on Tuesday: The government’s numbers are too rosy, and some are questioning whether Ottawa will meet its timeline for erasing the deficit. The government first released its 2011 budget in March, but it chose not to update its assumptions when it re-released the budget in June after the federal election. However, months of economic havoc – including debt troubles in Europe and a credit downgrade in the United States – are adding up to a gloomier economic picture.http://www.theglobeandmail.com/report-on-business/economy/economists-to-...
Straitstimes.com
On a year-on-year basis, Singapore’s manufacturing output increased 12.8 per cent in September 2011. Excluding biomedical manufacturing, output declined 12.5 per cent. On a seasonally adjusted month-on-month basis, manufacturing output declined 0.7 per cent in September 2011. Excluding biomedical manufacturing, output declined 2.3 per cent.http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_726971...
Xinhuanet.com
South Korea planned to closely watch Chinese economy’s potential risk factors given the nation’s heavy dependence on the world’s No.2 economy, the central bank said Tuesday. “The government and the central bank shared the view that Chinese economy sustained its annual growth rate of over 9 percent in the third quarter, but the world’s second-largest economy is facing potential risk factors such as a distress in the non- banking sector and the possible plunge in housing prices,” the Bank of Korea (BOK) and the Ministry of Strategy and Finance said in a joint statement after holding a macroeconomic policy consultation meeting. http://news.xinhuanet.com/english2010/china/2011-10/25/c_131210975.htm
The reformation of China’s resource tax will not impact China’s domestic prices for oil and natural gas, the Ministry of Finance (MOF) and the State Administration of Taxation said Monday. China’s pricing mechanism for oil products is mainly based on the international oil price trend, which would not be influenced by the adjustment of the sales-based tax rates, the two departments said in a joint statement issued on the MOF website. The domestic oil price is more likely to be influenced by global factors, including international speculation, the exchange rate of the U.S.dollar, and supply and demand in the global market, the statement said. http://news.xinhuanet.com/english2010/china/2011-10/25/c_122193146.htm
China’s ratio of current account surplus to its GDP will narrow to around 4 percent this year, the nation’s central bank governor Zhou Xiaochuan said Monday. The ratio was 5.2 percent in 2010 and 2.8 percent in the first half of this year, Zhou said at a financial forum held by the country’s Internet postal Sina.com. The decline in the ratio indicated further improvement in China’s international balance of payments, he said. But he added that the surplus in the country’s international balance of payments might still be “relatively large” this year. http://news.xinhuanet.com/english2010/china/2011-10/24/c_131209834.htm
Brazilian President Dilma Rousseff signed on Monday a bill to renew the license of the Free Economic Zone of Manaus for another 50 years to boost the development of the Amazon Rainforest region. The bill, which is a campaign promise of Rousseff, still needs to be approved by the House of Representatives and the Senate. The current license expires in 2023. Besides the renewal, the bill also foresees the expansion of the free economic zone, which will comprise the entire metro area of the Amazonas state’s capital city, Manaus. http://news.xinhuanet.com/english2010/business/2011-10/25/c_131211288.ht...
Malaysia’s national debt rose by 12 percent to 407 billion ringgit (129.7 billion U.S. dollars) last year from 362.39 billion ringgit (115.48 billion U.S. dollars) in 2009, according to the auditor-general’s report released on Monday. The audit report said the ratio of federal government debt to gross domestic product last year was 53.1 percent, exceeding 50 percent for the second year. The government’s expenditure in 2010 was at 525.93 billion ringgit (167.6 billion U.S. dollars) while its revenue was 519.99 billion ringgit (165.7 billion U.S. dollars), according to the report, resulting in a 5.95 billion ringgit (1.89 billion U.S. dollars) in budget shortfall. http://news.xinhuanet.com/english2010/business/2011-10/24/c_131210007.ht...
Economictimes.com
India’s widening fiscal deficit has triggered fresh worries about the possibility of a ratings downgrade of the nation by a leading ratings agency. Though no ratings agency has officially hinted at this outcome yet, the market is rife with speculation that India is vulnerable to a ratings downgrade amid the slowdown in the economy. A section of the market feels such a move could happen if the RBI raises policy rates on Tuesday for the thirteenth time since February 2010. http://economictimes.indiatimes.com/markets/stocks/market-news/widening-...
It may be a case of too little too late. The government is moving to provide some relief to small home loan borrowers by providing a 1% interest subsidy for loans upto Rs 15 lakh, provided the cost of the property does not exceed Rs 25 lakh. The proposal, which is expected to be approved by the Union Cabinet on Tuesday, is aimed at providing some cheer to households saddled with high inflation and rising EMIs (equated monthly installments). http://economictimes.indiatimes.com/personal-finance/loan-centre/home-lo...
Over the next 12-24 months India could attract a massive $80 billion in foreign direct investment (FDI), according to a research report by Morgan Stanley. India received $48-billion FDI in the last two years. “The findings show that global companies see real opportunity in India and that their investment appetite is increasing, notwithstanding continuing negative perceptions around infrastructure bottlenecks,” said Ridham Desai, head of India Research at Morgan Stanley. The startling number came out of a survey of 176 of the firm’s internationally-based research analyst teams that cover 1,766 global companies. These teams determined the likely India investment opportunity recognised by the companies they covered. The survey did not involve direct interaction with the companies.http://economictimes.indiatimes.com/news/economy/finance/india-to-attrac...
In a bid to attract foreign investment in the road building programme, Highways Minister C P Joshi is likely to invite Chinese investors to participate in the country’s mega road projects, each entailing an investment of about Rs 4,900 crore (USD 1 billion). Joshi is in China and would address the second Asia-Europe Meeting (ASEM) of Transport Ministers at Chengdu, China, tomorrow.
“The government is serious on attracting foreign investment particularly in mega projects of about USD 1 billion (about Rs 4,900 crore) each and the Highways Minister Joshi would hold meetings with Chinese investors,” a Road Ministry official said. http://economictimes.indiatimes.com/news/economy/infrastructure/india-to...
Yonhapnews.co.kr
South Korea’s domestic car market is expected to shrink for the first time in four years in 2012 mainly due to the economic slowdown and rise in household debt, an automotive think tank said Tuesday.
The Korea Automotive Research Institute (KARI) said sales may contract 1.1 percent to 1.58 million vehicles next year from this year’s estimate of 1.60 million units. The dip will the first time since 2008 that the domestic market fell from the previous year, the institute said. http://english.yonhapnews.co.kr/business/2011/10/25/72/0501000000AEN2011...
Themoscowtimes.com
International credit rating agency Moody’s lowered its outlook on the Russian banking system Monday to negative on the back of global economic fears. Addressing the credit conditions in the market for the next 10 to 18 months, the report suggested that the poor performance of the world economy coupled with the adverse effects of the sovereign debt crisis in Europe will cause a contraction in liquidity, slow credit growth and pressure on asset quality. http://www.themoscowtimes.com/business/article/moodys-downgrades-russian...
Tehrantimes.com
Iran’s economic growth rate reached 4 percent in the last Iranian calendar year (ended March 20, 2011), Finance and Economic Affairs Minister Shamseddin Hosseini said here on Monday. The country’s non-oil economic growth in the year that ended in March 2010 hit 4.2 percent, the finance minister said in July, adding that the figure would certainly be higher than 4.2 percent when the statistics on the growth of exports, market capitalization, and domestic production are taken into consideration. http://www.tehrantimes.com/index.php/economy-and-business/3898-irans-eco...
Thetrader.se
Among the effects of the recent and now renewed credit strains in the global economy is that investors have lost touch with relative magnitudes. For example, a billion dollars effectively represents about $3.20 for every adult and child in the U.S., while a trillion dollars represents about $3,200 dollars per person. From our standpoint, among the most important research coordination that government provides comes from the National Institutes of Health (NIH), which funds basic medical research in cancer, diabetes, multiple sclerosis, Alzheimer’s, autism, and other conditions, and where the total annual budget is about $31 billion annually (roughly $100 per American). http://www.thetrader.se/2011/10/24/penny-wise-and-euro-foolish/
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I also think that they could do more in this situation and I hope that the things will be ok very soon. Cazare Bran
The European crisis is being mismanaged by bankster puppets. The markets are based on lies and manipulation--massaging perceptions is job one--reality is supposed to mimic carefully crafted illusions. Those that offer head games to placate the banks and casinos are enemies of truth.
I smell a growing attempt at totalitarian worldwide control. A crisis is a terrible thing to waste---prophetic