Frontrunning: January 31

  • Victory for Merkel Over Fiscal Treaty (FT)
  • Everyone wants a mediterranean colony: China's NDRC Delegation Visit Greece to Boost Economic Ties (Xinhua)
  • As Florida votes, Romney seems in driver's seat (Reuters)
  • Greece’s Papademos Seek On Debt Deal by End of Week (Reuters)
  • Banks Set to Double Crisis Loans From ECB (FT) - as Zero Hedge predicted two weeks ago
  • S&P: Doubling Sales Tax Won’t Help Japan Enough (Bloomberg)
  • Toshiba cuts outlook after Q3 profit tumbles (Reuters)
  • Blackrock’s Doll says Fed’s QE3 is Unlikely, In Contrast to Pimco’s Gross (Bloomberg)
  • Asia Is Not Facing ‘Hot Money’ Risk: IMF’s Singh (CNBC)
  • Australian Economy a Pillar of Strength, PM Says (Herald Sun)
  • Obama: U.S. May Explore Free Trade With Georgia (Bloomberg)

Overnight Press Digest


* The Federal Trade Commission intensified its crackdown on the booming debt-collection industry, announcing a $2.5 million settlement with a company for allegedly coercing borrowers into paying debts they no longer legally owed.

The settlement with Asset Acceptance Capital Corp, one of the nation's largest buyers of soured consumer debts, is the second-biggest penalty ever levied by the FTC against a debt collector.

* Avon Products Inc fired its vice chairman in connection with probes into possible bribery overseas and improper disclosures to Wall Street analysts in the United States, as the company's investigation into possible corruption overseas reaches higher into the ranks of its executives.

* Carnival Corp estimated on Monday that the wreck involving its Costa Concordia cruise ship off Italy's coast will lower net income by $155 million to $175 million in fiscal 2012.

Passenger bookings fell in January, but the cruise-ship operator added that it doesn't expect the accident to have a significant impact on its business in the long term.

* Banks in the United States kept credit fairly tight in the final months of 2011 even as demand for loans increased, putting a brake on the slow economic recovery.

* Kweku Adoboli, the UBS trader accused of making unauthorized transactions that cost the lender as much as $2.3 billion, pleaded not guilty to fraud and false accounting, clearing the way for an autumn trial that could prove embarrassing for Switzerland's largest bank.

* Leaders of 25 European Union governments agreed Monday night on what some billed as a historic pact to move to closer fiscal union and signed off on the details of a permanent bailout fund for the euro zone -- yet Greece's looming debt restructuring threw a shadow over the summit.

The leaders discussed Greece but provided no further clarity on the eventual outcome of an issue that was creating increasing nervousness in financial markets Monday.

* State attorneys general have until Friday to join a potential national settlement of alleged foreclosure abuses, according to a document reviewed by The Wall Street Journal.

The deadline, set by negotiators trying to pull together an agreement with the federal government, states, and five major banks, is the latest sign that the finish line is in sight for what has been a bruising, yearlong haul.


* The Federal Trade Commission signaled on Monday that it would continue to crack down on debt collectors who harass consumers for money they may not even be legally obligated to pay.

In the second-largest penalty ever levied on a debt collector, the FTC said that Asset Acceptance, one of the nation's largest debt collection companies, had agreed to pay a $2.5 million civil penalty to settle charges that the company deceived consumers when trying to collect old debts.

* A former UBS trader, Kweku Adoboli, pleaded not guilty on Monday to charges of fraud and false accounting that led to a $2.3 billion trading loss at UBS last year.

Standing in a glass-walled box in a London court, Adoboli, 31, pleaded not guilty to each of the four counts. He faces up to 10 years in prison if found guilty of the two counts of falsifying accounts and two counts of fraud by abuse of position.

* After years of studying the Indian market, Starbucks Coffee said on Monday that it would open its first store here by September through a 50-50 joint venture with Tata Global Beverages, a unit of the largest business group in India.

* The Treasury Department is investigating a report that Freddie Mac, the mortgage giant, bet against homeowners' ability to refinance their loans even as it was making it more difficult for them to do so, Jay Carney, a White House spokesman, said on Monday.

* All but two European Union countries agreed Monday to new and tougher measures to enforce budget discipline in the euro zone, but the bloc still showed few signs of producing a comprehensive solution for the sovereign debt crisis or a credible plan to revive fragile economies across Europe's weakened Mediterranean tier.

* A Japanese auto supplier, the Yazaki Corp, agreed to pay one of the largest ever antitrust fines, and four of its executives will serve up to two years in prison for price-fixing and bid-rigging, the Justice Department said on Monday.

Yazaki, based in Tokyo, agreed to a $470 million fine for engaging in three conspiracies that began as long ago as 2000 and continued until 2010, when the government's investigation into the matter began.

* Gannett on Monday reported a 33 percent drop in fourth-quarter net income, saying profits were weighed down by reorganization costs and other charges.

The media company, which publishes USA Today and owns a network of broadcast, digital and other publishing properties, said it earned $116.9 million, or 49 cents a share, in the three months ended Dec. 25. That was down from earnings of $174.1 million, or 72 cents a share, in the period a year earlier.

European economic highlights:

  • Eurozone Unemployment Rate 10.40% - in line with expectations. Consensus 10.40%. Previous 10.30%. Revised 10.40%.
  • Germany Retail Sales for December -1.4% m/m -0.9% y/y – lower than expected. Consensus 0.8% m/m 0.9% y/y. Previous -1.0% m/m 0.8% y/y. Revised -1.0% m/m 0.9% y/y.
  • Germany Unemployment Change for January -34K – lower than expected. Consensus -10K. Previous -22K. Revised -25K.
  • Germany Unemployment Rate s.a. for January 6.70% - lower than expected. Consensus 6.80%. Previous 6.80%.
  • France Producer Prices for December -0.1% m/m 4.7% y/y – in line with expectations. Consensus -0.1% m/m 4.7% y/y. Previous 0.4% m/m 5.6% y/y.
  • France Consumer Spending for December -0.7% m/m -3.1% y/y – lower than expected. Consensus 0.2% m/m -2.1% y/y. Previous -0.1% m/m -2.1% y/y. Revised 0.1% m/m -1.9% y/y.
  • Italy Unemployment Rate s.a. for December 8.90% - higher than expected. Consensus 8.70%. Previous 8.60%. Revised 8.80%.
  • Italy PPI for December 0.1% m/m 4.0% y/y – higher than expected. Consensus -0.1% m/m 3.7% y/y. Previous 0.2% m/m 4.5% y/y. Revised 0.3% m/m 4.7% y/y.
  • Norway Credit Indicator Growth for December 6.7% y/y – higher than expected. Consensus 6.5%. Previous 6.6%.
  • Norway Retail sales - vol s.a. for December -0.3% m/m 2.6% y/y – lower than expected. Consensus 0.2% m/m 2.3% y/y. Previous 0.1% m/m 0.9% y/y.
  • Switzerland UBS Consumption Indicator for December 0.92. Previous 0.81. Revised 0.78.
  • UK GfK Consumer Confidence Survey for January -29 – higher than expected. Consensus -32. Previous -33.
  • UK Net Consumer Credit for December -0.4B – lower than expected. Consensus 0.4B. Previous 0.4B.
  • UK Net Lending Sec. on Dwellings for December 0.7B – lower than expected. Consensus 0.8B. Previous 0.6B.
  • UK Mortgage Approvals for December 52.9K – lower than expected. Consensus 54.0K. Previous 52.9K. Revised 52.6K.
  • UK M4 Money Supply for December -14.5% m/m -2.5% y/y. Previous -0.6% m/m -2.6% y/y. Revised -0.5% m/m -2.5% y/y.
  • UK M4 Ex OFCs 3M Annualised for December -0.8%. Previous 3.70%. Revised 3.2%.



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