News That Matters (July 19, 2011)

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All you need to know, for all news continue

Ft.com
US Senate leaders said the chamber will remain in session until agreement is reached over the US debt limit, Bloomberg reports, as President Barack Obama threatened to veto a proposal to require the government to balance its budget as part of a debt deal http://ftalphaville.ft.com/thecut/2011/07/19/626666/us-bipartisan-deal-still-elusive/

Gold burst through $1,600 an ounce for the first time as the eurozone’s escalating debt crisis sent fear through financial markets, the FT reports, taking the metal’s price to a nominal record. Markets turned up the pressure on European leaders ahead of a crunch summit on Thursday http://ftalphaville.ft.com/thecut/2011/07/19/626641/gold-soars-as-investors-head-for-safe-havens/

European leaders are looking at ways to keep Greek banks afloat as part of a new €115bn bail-out plan for Athens, the FT says. The plans could add as much as €20bn to an increasingly costly bail-out planhttp://ftalphaville.ft.com/thecut/2011/07/19/626481/european-bank-tax-discussed/

Despite house prices that remain comfortably below their 2007 peak and interest rates at record lows, first-time buyers still find UK house prices unaffordable, according to an analysis by Coutts, the private banking arm of RBS. Carl Astorri, http://ftalphaville.ft.com/thecut/2011/07/19/626441/first-home-buyers-still-struggling/

Companies are going out of business at a much faster rate than headline figures would suggest, the FT reports, with new data from Companies House raising questions about the anticipated pace of economic recovery. According to data from the Insolvency Service http://ftalphaville.ft.com/thecut/2011/07/19/626416/uk-business-failure-rate-higher-than-thought/

WSJ.com
Asian stock markets were mixed Tuesday, as investors stayed cautious due to ongoing debt jitters in Europe and the U.S., while utilities companies dragged the Tokyo market lower amid growing concerns of electricity shortages. Japan’s Nikkei Stock Average fell 0.5%, Australia’s S&P/ASX 200 was flat at 4475.8, South Korea’s Kospi Composite rose 0.2% and New Zealand’s NZX-50 fell 0.2%. Dow Jones Industrial Average futures were up 39 points in screen trade. In Tokyo, utilities stocks fell amid mounting concerns of electricity shortages after two power companies halted operations at their plants over the extended weekend. http://online.wsj.com/article/SB10001424052702303661904576454802137808760.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Leftist President-elect Ollanta Humala said he would retain the government’s current central bank president, who is known as a tough inflation fighter, a sign of continuity in economic policy that buoyed investors. Keeping Brown University-educated Julio Velarde, the first appointee to be announced by the government that takes over July 28, alleviates some of the uncertainties about Mr. Humala’s economic philosophy that have depressed financial markets and the broader economy for months, analysts said. http://online.wsj.com/article/SB10001424052702303661904576454292811338936.html?mod=WSJ_hp_LEFTWhatsNewsCollection

U.S. Secretary of State Hillary Clinton arrived in New Delhi Monday evening to hold strategic dialogue aimed at strengthening political and economic relations between India and the U.S. During her three-day visit to India, which comes a week after triple bomb blasts in India’s financial capital of Mumbai killed 18 people, Ms. Clinton is expected to hold discussions with Indian leaders on a host of bilateral, regional and international issues. They include, not surprisingly, counter-terrorism, the situation in Afghanistan and Pakistan, civil nuclear energy cooperation, economic progress, defense, trade and environment, U.S. and Indian officials said. http://blogs.wsj.com/indiarealtime/2011/07/19/can-hillary-clinton-jumpstart-india-u-s-relations/

Apple Inc. is getting closer to offering the iPhone through China’s largest mobile carrier, state-owned China Mobile Ltd., giving the company access to hundreds of millions of new customers. The effort is Apple’s latest move in the risky Chinese market, which could play a central role in the company’s growth plans. http://online.wsj.com/article/SB10001424052702304223804576447963332660164.html#ixzz1SWUp1DDm

The Financial Stability Board on Monday said large systemic banks should face an additional capital surcharge of the highest quality in order to prevent a new financial crisis, throwing its weight behind proposals made in June by global banking regulators to increase the resilience of the global financial system. http://online.wsj.com/article/SB10001424052702303661904576454150039990610.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

Chinese police “gunned down” several rioters after four people were killed in an attack on a police station in the northwestern region of Xinjiang, the state media reported, in what appeared to one of the most violent incidents in the mostly Muslim area since it was shaken by ethnic rioting in 2009. Two security personnel and two hostages were killed, and one other security officer was injured in the attack, which began around midday Monday in Hotan, a small, remote oasis city on the edge of the Taklamakan desert, the state-run Xinhua news agency said. The agency gave no details of how many attackers were killed or injured. http://online.wsj.com/article/SB10001424052702303661904576453511012413464.html?mod=WSJEUROPE_hpp_sections_world

Marketwatch.com
The minutes of the interest-rate meeting of the Reserve Bank of Australia, released Tuesday, showed that board members adopted a wait-and-see attitude to interest rates before the next reading on consumer inflation. The members said that they believed that they had time to assess the likely strength of inflationary pressures in Australia and that “it would be prudent to use that time.” The rate-setting board said that the next quarterly consumer inflation reading, due out at the end of July, http://www.marketwatch.com/story/australias-rba-says-inflation-reading-to-be-key-2011-07-18

Reuters.com
European governments and banks struggled to reconcile competing proposals for a second bailout of Greece on Monday, three days before leaders meet to prevent the crisis from spreading through the region. The euro zone summit scheduled for Thursday in Brussels is likely to agree on a rescue of Greece, supplementing a 110 billion euro ($154 billion) bailout launched in May last year, a French government spokeswoman said. http://www.reuters.com/article/2011/07/18/us-eurozone-debt-idUSTRE76H2GB20110718

The world economy should expand steadily this year and next thanks mainly to prospering emerging powers, a Reuters poll showed, but fiscal troubles lurking in Europe and potentially the United States risk blowing this view apart. The quarterly survey of more than 350 economists from all over the world showed a dimmer outlook for most of the rich-world Group of Seven economies since the last survey in April.http://www.reuters.com/article/2011/07/18/us-economy-global-poll-idUSTRE76H1FE20110718

Ratings agency Moody’s on Monday suggested the United States should eliminate its statutory limit on government debt to reduce uncertainty among bond holders. The United States is one of the few countries where Congress sets a ceiling on government debt, which creates “periodic uncertainty” over the government’s ability to meet its obligations, Moody’s said in a report. http://uk.reuters.com/article/2011/07/18/uk-usa-debt-moodys-idUKTRE76H0WJ20110718

America’s leading mortgage lenders vowed in March to end the dubious foreclosure practices that caused a bruising scandal last year. But a Reuters investigation finds that many are still taking the same shortcuts they promised to shun, from sketchy paperwork to the use of “robo-signers.” http://www.reuters.com/article/2011/07/19/us-foreclosure-banks-idUSTRE76H5XX20110719

Bloomberg.com
China’s tax revenue rose 29.6 percent to 5 trillion yuan ($773 billion) in the first half of the year, giving officials more room to maneuver as they grapple with swelling local-government debt. The gain, reportedby the Ministry of Finance on its website today, compared with a 32.4 percent increase in the first quarter from a year earlier. “Stable” economic growth and rising company profits helped to bolster revenue, with inflation also playing a role, the ministry said. The fiscal strength that encouraged Standard & Poor’s to raise China’s debt rating in December may help the nation to absorb any fallout from loans going bad after stimulus spending that began in 2008. http://www.bloomberg.com/news/2011-07-19/chinese-tax-revenue-surges-30-countering-risk-from-local-government-debt.html

India loses 14 trillion rupees ($314 billion) from tax evasion annually, depriving it of funds for investment in roads, ports and power, said Arun Kumar, author of “The Black Economy in India.” General government tax revenue totals an estimated 18 percent of gross domestic product, the lowest among the four BRIC nations, and down from an average 19 percent the past five years, International Monetary Fund data show. http://www.bloomberg.com/news/2011-07-18/india-government-sees-growth-imperiled-with-rising-greek-like-tax-evasion.html

Cnbc.com
Treasury Secretary Tim Geithner told CNBC Monday that he is certain that congressional leaders will strike a deal to raise the federal debt ceiling prior to the Aug. 2 deadline to avoid default. “Each side has said definitively that default is not an option,” he said, “They’re not going to play around with this.” “If the United States of America were to default it would be catastrophic for the American economy, for the American financial system, for the average American people, it would be a substantial unfair tax on all Americans and it would bring the world economy … to the edge of recession again,” he said. “There’s no alternative for Congress raising the debt limit and that’s why you’re seeing Republicans as well recognize that reality and take default off the table.” http://www.cnbc.com/id/43792737

Nytimes.com
Germany has long sat at the center of the European economy, but Europe is no longer as central to Germany as it used to be. German companies, instead of concentrating their investment overwhelmingly on countries like France and Italy, are sending a growing proportion of their euros to places like Poland, Russia, Brazil and especially China, which is already the largest market for Volkswagen and could soon be for Mercedes and BMW. http://www.nytimes.com/2011/07/19/business/global/Germany-Europes-Powerhouse-Drifts-East.html?_r=1&ref=global

Foxbusiness.com
Goldman Sachs has cut its forecast for U.S. second-quarter growth to 1.5 percent from 2 percent, citing weak consumer spending. The downgrade follows last week’s raft of weak reports on retail sales, manufacturing and consumer sentiment, which have raised concerns that some of the factors impeding growth are no longer of a temporary nature, as previously thought. A combination of bad weather and high commodity prices slowed economic activity in the first three months of 2011. But growth in the second quarter was also dealt a blow by supply chain disruptions from Japan following the March earthquake.http://www.foxbusiness.com/markets/2011/07/18/goldman-cuts-2q-us-economic-growth-output/#ixzz1SWa0LqEt

Telegraph.co.uk
Portugal’s new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a “colossal” €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists. Yields on two-year Portuguese debt rose to a fresh record of 20.3pc on Monday, reflecting fears by investors that the country would struggle to pull itself out of downward spiral without some form of debt restructuring. http://www.telegraph.co.uk/finance/financialcrisis/8646189/Portugals-Prime-Minister-Pedro-Passos-Coelho-discovers-colossal-budget-hole.html

Shares in Britain’s largest banks hit 12-month lows as investors took fright at the results of Friday’s European banking industry stress tests. Barclays‘ shares closed down 7pc at 207.65p, while shares in partially state-owned lenders Lloyds Banking Group and Royal Bank of Scotland ended the trading session down more than 6pc. Even shares in Standard Chartered, which did not take part in the exercise, and HSBC, which did but passed with flying colours, were hit, closing the day down 0.8pc and 1.5pc respectively. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8645926/UK-banks-hit-12-month-lows-following-European-stress-tests.html

Australian investment banking group Macquarie, once dubbed the “millionaires’ factory”, may be forced to cut thousands of jobs after its shares slumped to a two-year low. Macquarie’s shares have fallen by around 17pc since June 1, in part because the group appears to be losing market share to competitors. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8645864/Macquarie-urged-to-cut-1000-jobs-as-shares-slump.html

House asking prices have fallen for the first time this year as the number of unsold properties on estate agents’ books reaches record levels, a report revealed today. The average asking price for a home dropped 1.6pc, or £3,797, to £236,597 in July, bringing to an end a run of six months of rises, according to property website Rightmove. Greater competition to attract buyers amid “muted demand” has prompted the largest July fall since 2008 when asking prices fell 1.8pc. http://www.telegraph.co.uk/finance/personalfinance/8644814/Unsold-properties-on-estate-agents-books-hit-record-high.html

Guardian.co.uk
The president of the World Bank, Robert Zoellick, blamed Barack Obama has for the deadlock in global trade talks and called on the White House to show the leadership that would bring almost a decade of fruitless negotiations to a successful conclusion. Amid growing concern that a complete failure in the stymied Doha round could result in a new era of protectionism, Zoellick accused the United States of peddling “excuses” when officials in Washington called the World Trade Organisation’s (WTO) talks structurally flawed. http://www.guardian.co.uk/business/2011/jul/18/world-bank-chief-blames-barack-obama-doha

Straitstimes.com
SINGAPORE’S exports grew weakly in June, confirming that the Singapore economy has slowed down in the second quarter of this year. Singapore’s non-oil domestic exports grew by just 1.1 per cent, dragged down by electronics exports which shrank 17 per cent. But non-electronics exports grew by 12 per cent, led by ships and boats, thus buffering the drop in electronics on export figures. China continued to grow as an important market for Singapore’s exports, with exports to China rising by 12 per cent last month. http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_692135.html

Theglobeandmail.com
Iran warned India it would stop supplying oil from Aug. 1 if a payments dispute is not resolved, the semi-official Fars news agency reported, a move likely to harm the two countries’ annual $12-billion (U.S.) trade. “Iran might stop giving permission to export its oil to India from Aug. 1 if the dispute over receiving payments from India is not resolved,” an unnamed oil official told Fars on Monday.http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_692135.htm

Xinhuanet.com
The world’s biggest dairy company Tuesday announced an expansion of its production in China with an agreement to invest 260 million yuan (40 million U.S. dollars) in its third Chinese dairy farm. New Zealand-based Fonterra, a farmer-owned cooperative, said the agreement with the government of Yutian County, Hebei Province, was the next step in its strategy to build a high-quality and sustainable fresh milk supply for the Chinese market. http://news.xinhuanet.com/english2010/business/2011-07/19/c_13994705.htm

Venezuela will introduce a new law on prices to curb its soaring inflation, Vice President Elias Jaua said Monday. “The regulations aim to set fair prices and limit profit margins according to the income of the population and the companies,” Jaua told a press conference. Jaua said the new law will not affect the private sector, but “the consultation with private companies does not reduce the competence of the national executive of setting prices.” http://news.xinhuanet.com/english2010/business/2011-07/19/c_13994642.htm

Global aid for trade commitments have reached some 40 billion U.S. dollars in 2009, a 60-percent increase from the 2002-05 baseline period, said a World Trade Organization (WTO) report on Monday. According to the report launched by the Geneva-based WTO, disbursements in purpose of aid for trade have been increasing at a constant growth rate of above 10 percent each year since 2006, reaching some 29 billion dollars in 2009, the report said, drawing a conclusion that “past commitments are being met.” http://news.xinhuanet.com/english2010/business/2011-07/19/c_13993203.htm

Thehindu.com
Tata Group Chairman Ratan Tata has cautioned that “self-imposed fiscal prudence” to tackle inflation, mainly in India and China, could cause another global slowdown. Addressing shareholders of group firm Tata Motors in the Annual Report for 2010-11, Mr. Tata said, “Inflation is indeed a lurking enemy of healthy growth and needs to be controlled.” Yet, there was a need to strike a balance between controlling inflation and driving economic growth failing which there could be another global slowdown, he said. http://www.thehindu.com/business/Economy/article2243090.ece

The Tummalappalle uranium mine in the Cuddapah district of Andhra Pradesh has the potential to become the largest uranium mine in the world, according to the Department of Atomic Energy. The earlier estimated reserves at the mine were 14,000 tonnes, but it has since been revised to 49,000 tonnes, said Dr Srikumar Banerjee, Secretary, Department of Atomic Energy, on Monday, during an interaction with the media at a function to mark the start of construction of two nuclear-power reactors at Rawatbhata in Rajasthan. http://www.thehindubusinessline.com/industry-and-economy/article2248276.ece?homepage=true

Economictimes.com
Rising inflationary pressure has forced Indian consumers to cut down spends during the second quarter of 2011, despite optimism about job prospects and the state of personal finances, according to a survey by the Nielsen Company. Though Indian consumers continue to remain the most optimistic globally, their confidence level slipped by 5 points to 126 index points in the second quarter of 2011 from 131 points in the previous quarter. As per the Nielsen Global Online Survey , 56 per cent of the Indians surveyed said it was a good time to buy things they wanted, compared to 61 per cent in the previous quarter.http://economictimes.indiatimes.com/news/economy/indicators/indian-consumer-confidence-declines-in-q2-of-2011-nielsen/articleshow/9270264.cms

Yohnapnews.co.kr
The number of South Korean corporate bankruptcies fell to the lowest level in four months in June as companies’ funding situations remained in good shape, the central bank said Tuesday. The number of companies that went belly-up totaled 109 in June, down 14 from the previous month, according to the Bank of Korea (BOK). The June reading marked the lowest level since a record low of 99 tallied in February.http://english.yonhapnews.co.kr/business/2011/07/19/33/0503000000AEN20110719004100320F.HTML

Khaleejtimes.com
Even after hitting a record high of above $1,600 per ounce on Monday, prospects are that gold price is poised to continue its breathtaking rally to scale loftier heights ranging from $2,000 to $5,000 over the coming few years. The yellow metal, which has time and again rewarded its investors looking for safe havens in times of volatility and uncertainty in the global market, is now set for an 11^th straight year of gains driven by central-bank buying, weaker currencies and increased demand from emerging-market investors on the backdrop of looming debt crises in the world’s biggest economy and the eurozone.http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2011/July/business_July328.xml&section=business