Frontrunning: August 20

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  • Caterpillar warns on global uncertainty (FT)
  • Only 3 years behind the curve as usual: Moody’s warns on California city defaults (FT)
  • Monti Says ‘Tragedy’ If Euro Became a Factor of Disruption (Bloomberg) - the same Monti whose disruptive comments recently enraged Germany?
  • China Home Prices Climb in More Cities Prompting Policy Concerns (Bloomberg)
  • China's Big Four boost new bank loans in Aug first half (Reuters)
  • EU Leaders Plan Shuttle Talks to Bolster Greece (Bloomberg)
  • US rule set to slash cars’ fuel use (FT)
  • Spain Seeks Commitment From Central Bank on Bond Buys (WSJ)... and preferably completely unconditional
  • Finnish Euro Doubts Hide Business Plea to Commit to Currency (Bloomberg)
  • Carlson Chief Steps Down To Take Best Buy's Top Job (WSJ)
  • German politicians say no leeway for Greece on reforms (Reuters)

Overnight Media Digest

WSJ

* Gu Kailai, the wife of ousted Communist Party official Bo Xilai, was found guilty and given a suspended death sentence on Monday for the murder of British businessman Neil Heywood. The judgment paves the way for an announcement on how the party plans to deal with Bo.

* Aetna has struck a deal to buy Coventry Health Care for $5.7 billion in cash and stock, a move that will make Aetna one of the largest providers of government-financed health care.

* General Motors is close to reaching an agreement with labor representatives to shorten the workdays at some of its German plants, a move to help stem financial losses in its European operations.

* The Chicago Mercantile Exchange Group plans to establish a European derivatives exchange and will submit its license application to the U.K.'s Financial Services Authority "within days."

* Lee Raymond, the brusque former chairman and chief executive of Exxon Mobil, will have the last say on James Dimon's role in the "London Whale" trading fiasco-an arrangement that presents risks for both men.

* Belize, a Central American nation with an economy the size of Pine Bluff, Arkansas, is running out of money to pay its debts. But the tiny country is playing hardball with its lenders.

* Novartis AG goes to India's Supreme Court on Wednesday to seek patent protection for its blockbuster cancer drug Glivec in a case that could deliver far-reaching ramifications for multinational pharmaceutical companies operating in India.

* Royal Dutch Shell is spending billions of dollars to drill the first oil wells in U.S. Arctic waters in 20 years, backed by an Obama administration eager to show it wasn't opposed to offshore exploration.

* Asian consumers have kept their countries' economies humming while exports to Europe and the U.S., long key sources of growth, have been a drag. Now there are signs consumer spending also is ticking down, which is bad news for one of the global economy's few bright spots.

* U.S. regulators are delaying rules that would allow hedge funds and other firms to solicit investors more broadly, a win for advocates who said hasty changes to solicitation rules could increase fraud.

* A federal court jury this week is set to begin tackling a question that has consumed the mobile-device market: Did Samsung Electronics Co rip off features of Apple Inc's iPhone and iPad? But there are actually many questions

 

FT

CALL TO LIMIT CHINA UK NUCLEAR SALE -

Chinese companies competing for one of the UK's biggest nuclear projects are unlikely to end up with a majority stake in any winning consortium.

ANTI-JAPANESE PROTESTS SWEEP CHINA

The biggest anti-Japan street protests in seven years flared across China on Sunday.

NORGES FUND PLANS TO TAKE ON MORE RISK

The world's largest sovereign wealth fund, the Norwegian oil fund, is planning to take on more risk.

CME PLANS EUROPE DERIVATIVES EXCHANGE

CME Group, the world's largest futures exchange operator, will on Monday unveil plans for a European derivatives market.

EARNINGS PROSPECTS IN EUROPE SCALED BACK

A disappointing second-quarter earnings season in Europe has prompted analysts to scale back their expectations for earnings growth for the rest of 2012.

CATERPILLAR WARNS ON GLOBAL UNCERTAINTY

The global economic outlook is more uncertain than at the start of the crisis in late 2008, according to Caterpillar .

HAY BECOME KEY US COMMODITY

Hay has become a key commodity in the U.S. agricultural market, with price gains in drought-stressed areas outpacing corn.

VIRGIN RAIL SEEKS REASONS FOR FRANCHISE LOSS

Virgin Rail is pushing the government to provide detailed feedback on why it lost the contest to run the UK's West Coast rail franchise.

TREASURY WEIGHS GERMAN 'MINI JOBS' SCHEME

British treasury ministers are considering the introduction of German-style "mini jobs", which exempt workers from tax and national insurance.

G4S TO WITHDRAW FROM PAKISTAN

G4S is set to pull out of Pakistan amid an increasingly hostile environment for foreign security companies.

 

Canada

THE GLOBE AND MAIL

* Corrections Canada faces years of big budget cuts even as its resources are stretched increasingly thin. The federal agency must trim $295 million in spending by 2015 as part of the Conservative government's deficit-reduction program.

Reports in the business section:

* General Motors of Canada Ltd is tackling a broad array of costs, making substantial changes to pension plans and health-care benefits for its salaried employees as it kicks off wage negotiations with its unionized workers.

NATIONAL POST

* It has little money or organization, but Quebec's Conservative party, which once ruled the province before falling into oblivion, is trying to make a comeback in the Sept. 4 election.

FINANCIAL POST

* With home-ownership rates headed for record levels and the federal government tightening lending rules to cool the market, the question now is whether we have reached the saturation point.

 

Russia

VEDOMOSTI

- Russia's central bank has authorized commercial banks to monitor from Oct. 1 the export transactions of their clients as a measure to establish pathways of illegal capital outflow.

- President Vladimir Putin has approved the merger of assets of Moscow airports land facilities to set up a state company, the daily reports.

- Russian authorities consider the two-year jail sentences handed down to three women from punk band Pussy Riot appropriate and not severe, the daily says.

KOMMERSANT

- Apple Inc. is planning to ensure direct computer supplies to Moscow and St Petersburg by 2013 through its subsidiary Apple-Rus, which has been recently registered in Russia.

IZVESTIA

- The Federation of Independent Trade Unions plans to initiate a bill to raise Russia's mininum monthly wage from 4,611 roubles ($140) to match the minimum subsistence level of 6,307 roubles ($200). Almost 13 percent of Russia's population is earning less than that, the daily says.

ROSSIISKAYA GAZETA

- Russia's economy will be able to survive a fall in oil prices $60 per barrel, though it could affect the value of the rouble and peoples' incomes, the daily says citing analysts.

MOSKOVSKY KOMSOMOLETS

- The growth of wholesale prices for petrol in Moscow over the last month will inevitably lead to a price hike for the fuel on the local market. Russia's oil producers prefer exporting oil to selling it to local consumers at the price monitored by the federal anti-monopoly watchdog, the daily says.