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Ft.com

The precedent set by the restructuring of Greek sovereign debt risks leaving banks more exposed to future financial crises of other countries, according to Deutsche Bank chief executive Josef Ackermann,http://ftalphaville.ft.com/thecut/2011/11/09/735701/ackermann-warns-of-g...

 

A US federal judge on Tuesday ordered the convicted hedge fund titan Raj Rajaratnam to pay a $92.8m penalty, the largest ever assessed against a person in an SEC insider trading case, says NYT DealBook. Combined with the fines and forfeitures ordered last month when he was sentenced to 11 years in prison for insider trading, http://ftalphaville.ft.com/thecut/2011/11/09/735581/rajaratnam-ordered-t...

 

Chinese inflation fell sharply in October to 5.5 per cent year-on-year, the lowest in five months, the FT reports, clearing the path for a slight easing in monetary policy to support growth. It was the third straight month of slowing inflation and the biggest drop yet, http://ftalphaville.ft.com/thecut/2011/11/09/735571/chinese-inflation-fa...

 

 

 

Italy’s embattled prime minister pledged on Tuesday night that he would resign after parliament passes a new financial stability law that will implement fresh austerity measures demanded by the EU. The FT reports Giorgio Napolitano, http://ftalphaville.ft.com/thecut/2011/11/09/735551/berlusconi-agrees-to...

 

After years of frenzied debate and policy somersaults, Australia became one of the first large advanced economies outside Europe to charge companies for their greenhouse gas emissions on Tuesday, after its Senate finally approved legislation for a carbon tax, http://ftalphaville.ft.com/thecut/2011/11/08/735481/australia-passes-car...

 

Citigroup, JP Morgan Chase, BNP Paribas, Royal Bank of Scotland and HSBC could face the steepest capital surcharges of 2.5 percentage points, in provisional plans drawn up by global regulators, Bloomberg reported. http://ftalphaville.ft.com/thecut/2011/11/08/733221/global-banks-to-face...

 

Wall Street Bonuses are set to fall by an average 20 to 30 per cent this year, making it the weakest bonus season since the credit crunch, underscoring the malaise in the industry, the New York Times’ Dealbook reported, http://ftalphaville.ft.com/thecut/2011/11/08/733001/wall-street-bonuses-...

 

Société Générale, France’s second largest bank by market cap, reported a 31 per cent slump in third-quarter net profit on Tuesday, as higher provisions against Greek sovereign bonds and testy financial conditions blighted its corporate and investment banking division, http://ftalphaville.ft.com/thecut/2011/11/08/732961/socgen-profit-dives-...

 

Nicolas Sarkozy, French president, described Israeli prime minister Benjamin Netanyahu as a “liar” in a private conversation with President Barack Obama at last week’s G20 summit. Mr Obama also appeared to share some frustrations about the Israeli leader in comments, overheard by reporters, that could exacerbate the already frosty climate between the US president and Mr Netanyahu.http://www.ft.com/intl/cms/s/0/3af99210-0a2d-11e1-85ca-00144feabdc0.html...

 

Wsj.com

The investor exodus from Italian bonds, sparked by the dual political crises in Italy and Greece, raises the most dangerous scenario yet in the euro zone’s two-year-old debt crisis. Yields on 10-year Italian bonds rose as high as 6.73% on Tuesday, a high for the euro era, in the latest sign that investors are fast losing faith in the world’s third-biggest sovereign-bond market. Yields might have risen far higher in the past week but for heavy bond-buying by the European Central Bank, economists say. Reversing the capital flight could require both political change in Italy and massive international assistance. http://online.wsj.com/article/SB1000142405297020373350457702616164042611...

 

The United Nations’ nuclear agency said Iran has developed technologies needed to produce nuclear weapons, a finding that puts new pressure on the Obama administration to act more forcefully against Tehran. The International Atomic Energy Agency, in its first public airing of such charges, said Tuesday that Tehran appears to have conducted advanced research on a miniaturized warhead that could be delivered by medium-range missiles. The watchdog agency also cited evidence that Iran has worked to develop the uranium metal used for warheads and said it has conducted computer simulations of nuclear detonations. http://online.wsj.com/article/SB1000142405297020419070457702610320177015...

 

Market observers say German cities such as Frankfurt, Munich, Hamburg, Düsseldorf and Berlin are less affected by economic concerns and speculation about the fate of the euro zone than other markets across Europe. “Germany is the preferred choice for investors because of the size of its economy and property markets as well its geographic structure, with a fragmented market through five top cities and business centers, so there is a distributed risk profile,” says Peter Schreppel, chief executive of property-services company CB Richard Ellis Germany.http://online.wsj.com/article/SB1000142405297020373350457702591004584801...

 

Greek political leaders appeared to have clinched a deal on a new prime minister Tuesday, following two days of frantic discussions over who would lead the country and implement a new €130 billion ($179 billion) aid package. An announcement is expected late Wednesday, officials said. Socialist Prime Minister George Papandreou told his cabinet Tuesday that he was close to a deal with the opposition New Democracy party, and asked his ministers to prepare resignation letters. http://online.wsj.com/article/SB1000142405297020455420457702568151249855...

 

The Organization of the Petroleum Exporting Countries on Tuesday said it was troubled by recent signs of economic weakness, even as it raised its medium-term oil demand forecast and signaled that it assumes higher medium-term oil prices in light of recent social spending efforts unveiled by some key OPEC producers. In its closely-watched annual World Oil Outlook, OPEC upgraded its oil demand forecast by 1.9 million barrels a day through 2015 compared with its year-ago estimate, after being surprised by the pace of the economic recovery the past two years. But OPEC noted that the economic recovery remains “very fragile” and said there is still a real chance of another recession. http://online.wsj.com/article/SB1000142405297020419070457702578283566300...

 

South Korea’s unemployment rate fell in October as Asia’s fourth-largest economy added the most jobs since May 2010, government data showed Wednesday, underscoring the country’s resilience to the external uncertainties. The seasonally adjusted jobless rate was 3.1% in October compared with 3.2% in September, Statistics Korea said. The economy added 501,000 new jobs compared.http://online.wsj.com/article/SB1000142405297020455420457702682048793385...

 

Marketwatch.com

Japan’s current-account surplus ballooned in September, as the trade account swung to a surplus, the Ministry of Finance reported Wednesday. The current-account surplus widened to 1.585 trillion yen ($20.4 billion), compared to ¥407.5 billion in August. A survey of economists reported by Dow Jones Newswires had tipped the surplus to print at ¥1.5 trillion. The trade surplus hit ¥373 billion from a ¥695 billion deficit in the previous month. However, the gains still left the current-account surplus 21% below year-earlier levels, while the trade surplus was 59% less than it was in September 2010. http://www.marketwatch.com/story/japans-current-account-surplus-beats-fo...

 

Reuters.com

Asian shares rallied and the euro steadied on Wednesday after Italian Prime Minister Silvio Berlusconi said he would resign, raising hopes the debt-ridden country would proceed with reforms that may help keep the euro zone’s sovereign debt crisis from spreading. http://www.reuters.com/article/2011/11/09/us-markets-global-idUSTRE79N45...

 

Brent crude gained for a fifth day on Wednesday, to stand above $115 a barrel, as positive Chinese inflation data soothed fears of a sharp slowdown in the world’s second largest oil consumer. China’s annual inflation rate eased to 5.5 percent in October, a third straight month of decline from July’s three-year peak, and Premier Wen Jiabao said prices have fallen further since then. “The data is bullish for oil as it indicates that there will be no hard landing for the Chinese economy,” said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong. http://www.reuters.com/article/2011/11/09/us-markets-oil-idUSTRE7922QH20...

 

Bloomberg.com

Australian consumer confidence jumped in November as the central bank’s first interest-rate cut in 31 months lowered payments for mortgage holders, a private survey showed. The sentiment index climbed 6.3 percent to 103.4, the third straight monthly gain and the highest level since May, according to a Westpac Banking Corp. (WBC) and Melbourne Institute survey of 1,200 consumers taken Oct. 31-Nov. 6 and released today in Sydney. http://www.bloomberg.com/news/2011-11-08/australian-consumer-confidence-...

 

India’s Supreme Court will hear a petition today seeking to ban tourists from breeding grounds in the country’s main tiger reserves amid concerns that their presence is hastening the extinction of the endangered animals. The plea to bar visitors from tiger breeding areas is supported by the government-run National Tiger Conservation Authority, which points to official figures that say the wild- cat population in reserves was 1,706 at the end of 2010. Hotels and tour operators warn that the restrictions would lead to job losses and harm conservation efforts. http://www.bloomberg.com/news/2011-11-09/india-supreme-court-may-ban-tig...

 

A Bank of Japan (8301) board member warned that the government may see its borrowing costs jump unless it contains its growing debt burden and said officials can’t allow low bond yields make them complacent about fiscal policy. “An event where an increase in borrowing costs would significantly exacerbate public finances wouldn’t be completely unexpected,” Seiji Nakamura said today in a speech in Naha, Okinawa, southern Japan. ’’I think we have avoided addressing the problem and have a low sense of crisis because our country has been able to secure funds with lower borrowing costs despite a persistent increase in outstanding public debt.’’ http://www.bloomberg.com/news/2011-11-09/boj-official-urges-japan-to-res...

 

Cnbc.com

The head of the International Monetary Fund warned on Wednesday that Europe’s debt crisis risked plunging the global economy into a “lost decade” and said it was up to rich nations to shoulder the burden of restoring growth and confidence. http://www.cnbc.com/id/45217763

 

The sudden downturn in China’s property market is bad news for many global companies, but luxury German carmakers stand to benefit, at least in one city. In Wenzhou, where house prices have fallen sharply, a real estate developer said that from Wednesday it would throw in the keys to a BMW with each apartment at a new residential complex for the first 150 buyers. http://www.cnbc.com/id/45215937

 

A new report on still-falling home prices today highlights the fact that the lower those prices go, the more American borrowers fall into an negative equity position; that is, they owe more on their mortgages than their homes are worth. Most analysts will tell you that negative equity is the number one problem in the housing market today, even worse than foreclosures, because it causes foreclosures, stymies consumer spending and traps potential home buyers and sellers in place. http://www.cnbc.com/id/45209336

 

Cnn.com

Dailyfinance.com

Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter. The government-controlled company said Tuesday that it lost $7.6 billion in the third quarter. Low mortgage rates reduced profits and declining home prices caused more defaults on loans it had guaranteed. The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. Since then, a federal regulator has controlled their financial decisions. Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that figure could reach up $220 billion to support the companies through 2014 after subtracting dividend payments. http://srph.it/sLJTAS

Foxbusiness.com

A top Federal Reserve official said Tuesday he sees no need for additional stimulus programs from the central bank at present because fear earlier this year that the economy was “at risk of falling off a cliff” has “pretty much been dissipated.” But Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in an interview with FOX Business that the Fed stands ready to launch additional stimulus moves if the European debt crisis threatens the U.S. economy and financial system. http://www.foxbusiness.com/markets/2011/11/08/feds-plosser-additional-st...

 

USAtoday.com

Employers advertised more jobs in September than at any other point in the past three years, a hopeful sign that companies may step up hiring. Businesses and governments posted 3.35 million job openings, the Labor Department said Tuesday. That’s a 7% increase from August and the most since August 2008, one month before the financial crisis intensified. Even with the gain, there’s heavy competition for each job. Nearly 14 million people were out of work in September, which means an average 4.2 unemployed workers were competing for each opening. That’s slightly better than August, but it is still more than twice the 2 to 1 ratio that economists say is healthy. http://www.usatoday.com/money/economy/story/2011-11-08/Job-openings/5112...

 

While lawmakers in Washington debated the debt ceiling and consumer confidence dropped, more homeowners were having a harder time making their mortgage payments. The rate at which mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion. The credit reporting agency said 5.88% of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82% in the second quarter. The increase surprised TransUnion researchers, who had expected late payments, or delinquencies, to fall for the quarter. http://www.usatoday.com/money/economy/housing/story/2011-11-08/mortgage-...

 

Washingtonpost.com

India’s trade deficit widened the most in October in at least 17 years, adding pressure on the rupee, Asia’s worst performing currency this year. Merchandise exports rose 10.8 percent to $19.9 billion last month from a year earlier, Commerce Secretary Rahul Khullar told reporters in New Delhi yesterday. Imports gained 21.7 percent to $39.5 billion, causing a trade deficit of $19.6 billion. That’s the biggest shortfall since April 1994, according to data compiled by Bloomberg. India’s trade gap increased as merchandise shipments grew at the slowest pace in two years, dragged down by waning demand for engineering and petroleum products in Europe, Khullar said. The deficit may enlarge as higher oil costs boost the value of imports, said Hemendra Bhatia, chief currency strategist at Ahmedabad, India-based Vadilal Enterprises Ltd. http://washpost.bloomberg.com/story?docId=1376-LUC0S81A1I4H01-5L0HQRIC0B...

 

Telegraph.co.uk

Italy still at risk as Silvio Berlusconi delays departure. Silvio Berlusconi has given a “commitment to resign” but defied calls to step down immediately, prolonging a political deadlock that has pushed Italy’s borrowing costs to danger levels. Italy’s dogged prime minister told President Giorgio Napolitano that he would remain in charge until the Stability Act of austerity measures was passed. The time frame of the law’s passage is not set, raising the prospect of days or even weeks of uncertainty. http://www.telegraph.co.uk/finance/financialcrisis/8877848/Italy-still-a...

 

ECB stymied on debt crisis without fiscal union. Germany’s top banker has vehemently rejected demands from David Cameron and other world leaders for drastic action by the European Central Bank to stop the eurozone crisis spiralling out of control. Jens Weidmann, head of the Bundesbank and the ECB’s dominant governor, said that any move to leverage Europe’s €440bn rescue fund through central bank financing would be a “clear violation” of the ECB’s legal mandate. http://www.telegraph.co.uk/finance/financialcrisis/8877818/ECB-stymied-o...

 

Once Greece goes, the whole euro project will unravel. Robert Jenkins, a member of the Bank of England’s Financial Policy Committee, does a good job in setting out the potentially disastrous economic and financial consequences for Greece and the wider European Union if Greece is allowed to default via exiting the eurozone in this morning’s FT (£). That possibility was admitted for the first time by eurozone leaders at the Cannes summit last week. Obey or leave the club was their message. But, as Mr Jenkins explains, the consequences, not just for Greece but everyone else in the eurozone, would be potentially catastrophic. http://blogs.telegraph.co.uk/finance/jeremywarner/100013174/once-greece-...

 

Independent.co.uk

The manufacturing sector returned to modest growth in September, figures revealed today, but fears lingered over its health. Manufacturing output increased by 0.2% between August and September, the Office for National Statistics (ONS) said, after declining 0.3% in the previous month. It is the first time the sector has seen growth since May. But the overall index of production, which also includes mining and the oil and gas industries, was flat.  And economists said the manufacturing sector was still in bad shape after being hit by weak demand amid the eurozone debt crisis. http://www.independent.co.uk/news/business/news/manufacturing-returns-to...

 

Guardian.co.uk

UK workers can expect wage increases to lag more than two percentage points behind the rate of inflation for at least another year, but will fare slightly better than western Europe as a whole, research shows. Salary data from HR service provider Mercer – which analyses the pay plans of 329 multinational organisations operating in 69 countries in Europe, the Middle East and Africa – reveals UK companies expect to offer employees base-pay rises of 3% in 2012, compared with 2.7% across western Europé http://www.guardian.co.uk/money/2011/nov/08/pay-below-inflation

 

Smh.com.au

The number of home loans rose for the sixth straight month in September, with more gains expected to flow through following the recent cut to interest rates. The number of home loans rose 2.2 per cent in September, seasonally adjusted, following a 1.2 per cent rise in August, according to the Australian Bureau of Statistics, beating economists’ expectations. The market had expected a 1.5 per cent rise. “Overall it’s a fairly good set of numbers for the month,” said ANZ real estate economist David Cannington. “Considering a lot of the uncertainty and household caution we saw in September.” http://www.smh.com.au/business/home-loans-continue-to-rise-20111109-1n6d...

 

Gold inched up on Wednesday on fears the euro zone debt crisis could engulf Italy, despite news that Prime Minister Silvio Berlusconi would resign, which was initially seen as clearing the way for a new leader to act more aggressively to tackle the country’s debt problems. Berlusconi said he would leave office after parliament approved a budget law that included reforms demanded by Europe as Italy’s failure to fix its debt problems would have a far bigger impact on the euro zone than difficulties in Greece. Gold added 0.41 per cent to $US1792.19 an ounce, but was off Tuesday’s high of $US1802.60, its strongest since late September, as investors were cautious over Europe’s efforts to keep its debt crisis from spreading. http://www.smh.com.au/business/markets/gold-edges-up-italys-debt-worries...

 

Xinhuanet.com

China’s fixed-asset investment rose 24.9 percent year-on-year in the first 10 months of the year to 24.1365 trillion yuan (3.8 trillion U.S.dollars), the National Bureau of Statistics (NBS) said Wednesday. http://news.xinhuanet.com/english2010/china/2011-11/09/c_131237354.htm

 

China’s industrial value-added output grew 13.2 percent year-on-year in the first ten months of this year, the National Bureau of Statistics said on Wednesday. http://news.xinhuanet.com/english2010/china/2011-11/09/c_131237355.htm

 

China’s retail sales grew 17.2 percent year-on-year to reach 1.65 trillion yuan (about 262.6 billion U.S. dollars) in October, the National Bureau of Statistics said on Wednesdayhttp://news.xinhuanet.com/english2010/china/2011-11/09/c_131237353.htm

 

New jobs are on offer. And there are 1.8 million of them. As part of a government plan, 2 million qualified social workers will be employed on the mainland by the end of 2015, said a Ministry of Civil Affairs official on Tuesday. To ensure that happens, the government intends to adopt payment guidelines and other motivation policies. http://news.xinhuanet.com/english2010/china/2011-11/09/c_131237350.htm

 

China’s Producer Price Index (PPI), a main gauge of inflation at the wholesale level, eased to a growth of five percent in October year-on-year, the national statistic agency said on Wednesday. The reading was 1.5 percentage points lower than a growth of 6.5 percent in September, according to the data released by the the National Bureau of Statistics (NBS). The decline is bigger, as the index for October was previously estimated at between 5.7 percent and 6 percent, according to the Xinhua macro-economic data survey. http://news.xinhuanet.com/english2010/china/2011-11/09/c_131237211.htm

 

Cs.com

Greek main opposition leader Antonis Samaras rejected on Tuesday of European Union’s (EU) demand that Greek political leaders sign a written commitment to fully implement bailout package sealed last month. “This is an issue of national dignity. I have repeatedly explained why, in order to protect the Greek economy and the European common currency, the implementation of the October 26 agreement has become inevitable. I will not allow anyone to doubt my word,” said Samaras in a statement released by his office. http://www.cs.com.cn/english/ei/201111/t20111109_3121823.html

 

Thehindu.com

With a consistent rise in the number of Indian travellers, Australia has become a popular destination recently. Reflecting this, short-term arrivals from India to Australia are forecast to increase by 10.4 per cent in 2011, according to Celia Ho, Regional Manager (South and Southeast Asia), Tourism Victoria, the Victorian Government’s lead tourism agency. With strong research, policy, strategy and aviation platforms, Tourism Victoria was building a framework for greater commercial reach. With seed investment and infrastructure, the agency was enabling the industry to venture into new territories, she said.http://www.thehindu.com/business/article2609714.ece

 

Despite retail prices of petrol ruling high, the Centre plans to go ahead with the proposal to deregulate diesel and LPG prices, which will reflect the behaviour of the international crude prices. “We cannot, for long, protect the domestic consumers from the impact of what is happening internationally,” said C. Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council here on Tuesday. http://www.thehindu.com/business/Economy/article2609711.ece

 

Economictimes.com

Moody’s Investor Service on Wednesday downgraded its outlook for India’s banking system to “negative” from “stable”, as it warned of slowing growth at home and overseas hitting asset quality, capitalization and profitability.  A curbing of economic growth and increased borrowing by the government will drain funds from the private credit market, the ratings agency said in a statement, pressuring lenders in Asia’s third-largest economy. http://economictimes.indiatimes.com/news/news-by-industry/banking/financ...

 

Car sales in India fell 23.8 per cent in October, the biggest monthly fall since December 2000, an industry body said on Wednesday, as high interest rates and vehicle costs drove down demand for the fourth consecutive month. Demand for cars in India, world’s second-fastest growing auto market after China, shrank in July for the first time in nearly three years, and monthly sales have fallen since.http://economictimes.indiatimes.com/news/news-by-industry/auto/automobil...

 

Chief minister Mayawati is likely to soon push for reorganization of Uttar Pradesh, splitting the sprawling state into four parts. The move is being seen by her supporters as a masterstroke ahead of the 2012 assembly polls. Well-placed BSP sources said Mayawati was planning to make the pitch to carve four new states out of the country’s largest state which, with its 75 districts, is larger than many countries. As per the blueprint, the eastern part of the state with 32 districts will form a new state of Poorvanchal; the 22 western districts will be grouped together as Harit Pradesh; Bundelkhand will take seven districts while the remaining 14 will fall in central UP, the fourth state. http://economictimes.indiatimes.com/news/politics/nation/uttar-pradesh-t...

 

Yonhapnews.co.kr

South Korea’s central bank is widely expected to leave the key interest rate unchanged for the fifth straight month in November due to cloudy outlooks for the eurozone debt crisis and moderated inflation growth, a poll showed Wednesday. All 20 economists polled projected that the Bank of Korea (BOK) will freeze the benchmark seven-day repo rate at 3.25 percent on Friday, according to the survey by Yonhap Infomax, the financial news arm of Yonhap News Agency. http://english.yonhapnews.co.kr/business/2011/11/09/2/0503000000AEN20111...

Thetrader.se

Markets are trading in another no volume, no action fashion. We are getting the creepy feeling, like the calm before the storm. The news ticker is still full of news regarding Berlusconi, Greece, Italy, Debt, but nobody really seems to care today. What are ordinary people doing then? Pulling cash out of the system. We know the Greeks have been doing that for quite some time, but what about the Italians? With Italian bond markets in a chaotic status, where the 10 year is continuing it’s parabolic move towards the 7% level, there sure must be people wondering what to do with the money in the banks. Don’t forget, the Italian bond market is the world’s third largest, and a run on the banks would cause trouble well beyond Italy. As pointed out, it feels very calm…. http://www.thetrader.se/2011/11/08/run-for-your-money/

 

If a picture is worth a thousand words, this chart needs little additional explanation — except perhaps for those who are puzzled by the Jackson Hole callout. The reference is to Chairman Bernanke’s speech at the Fed’s 2010 annual symposium in Jackson Hole, Wyoming. Bernanke strongly hinted about the forthcoming Federal Reserve intervention that was subsequently initiated in November of 2010, namely, the second round of quantitative easing, aka QE2. http://www.thetrader.se/2011/11/08/fed-intervention-and-the-market/

 


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