from The Trader, thetrader.se
FT.com
UK shareholders have received their largest dividend pay-outs since the collapse of Lehman Brothers almost three years ago, in a sign that companies are increasingly confident about the health of their balance sheetshttp://ftalphaville.ft.com/thecut/2011/07/25/632461/commodities-boom-fuels-uk-dividends/
Vince Cable has urged the Bank of England to consider another dose of quantitative easing to tackle “a serious problem of weak demand”, the FT reports, in a sign of growing ministerial alarm about the state of the economy. The business secretary’s highly unusual venture into monetary policy caused surprise at the Treasury and will irritate the Bank http://ftalphaville.ft.com/thecut/2011/07/25/632441/cable-appeals-for-new-dose-of-easing/
Only two formal bids have been made for over 600 Lloyds Banking Group branches, Reuters says, citing a Sunday Times report. The bidders were NBNK and Co-Operative Financial Services. Virgin Money, the financial services arm of entrepreneur Richard Branson’s Virgin Group http://ftalphaville.ft.com/thecut/2011/07/25/632391/few-bids-reported-for-lloyds-branches/
Several European banks with large exposures to Greek sovereign debt have yet to sign up to a plan for private-sector bondholders to contribute €37bn to a second Greek rescue package, the FT says. The UK’s Royal Bank of Scotland, http://ftalphaville.ft.com/thecut/2011/07/25/632371/major-banks-hesitant-on-greek-package
European investment banks are expected to reveal deep cost cuts amid declining trading revenues and concern over their exposure to the region’s debt-laden economies, the FT reports. Employees at UBS are preparing for up to 5,000 job cuts across the group on Tuesday http://ftalphaville.ft.com/thecut/2011/07/25/632306/cost-cuts-loom-at-european-investment-banks/
US money market funds have sharply cut their exposure to banks in the eurozone over the past few weeks and reduced the availability of credit, even in stronger countries such as France, the FT reports. The money market funds, http://ftalphaville.ft.com/thecut/2011/07/25/632311/money-market-funds-cut-euro-bank-exposure/
Republicans and Democrats have begun work on different budget plans in an increasingly frantic search for a deal to raise the federal debt ceiling, the FT reports, as both sides acknowledged that failure to agree could rock global financial markets this week. Barack Obama met with congressional Democratic leaders at the White House on Sunday evening http://ftalphaville.ft.com/thecut/2011/07/25/632286/no-progress-on-us-debt-talks/
Tehran and Beijing are in talks about using a barter system to exchange Iranian oil for Chinese goods and services, the FT says, as US financial sanctions have blocked China from paying at least $20bn for oil imports. The US sanctions against Iran, http://ftalphaville.ft.com/thecut/2011/07/25/632271/china-and-iran-plan-oil-barter/
Angela Merkel, the German chancellor, is certain to face criticism from within the ranks of her government supporters in the German Bundestag over the latest financial rescue package for Greece and the eurozone –but not before September. Last week’s decision by the 17 eurozone leaders to extend the powers of their €440bn ($631bn) rescue fund – the European financial stability facility – has revived a bitter debate in Germany about the European Union becoming a “transfer union”, with Berlin acting as effective guarantor for the debts of its partners in the common currency. http://www.ft.com/intl/cms/s/0/697b62d0-b604-11e0-8bed-00144feabdc0.html#axzz1T5a3WeBn
George Osborne will on Monday hail an alliance between BP and India’s Reliance Industries as evidence that British companies “are competing with the best in the world”, as he looks for bright spots in a generally gloomy economic backdrop. Britain is now making the largest foreign investment in India,” Mr Osborne, chancellor of the exchequer, will say at a meeting with Pranab Mukherjee, his Indian counterpart. Talks in London are aimed at bolstering trade between the two countries. http://www.ft.com/intl/cms/s/0/5f2d447a-b617-11e0-8bed-00144feabdc0.html#axzz1T5a3WeBn
WSJ.com
Asian markets fell Monday, weighed by concerns over stalled negotiations on raising the U.S. debt ceiling, which spurred the safe-haven yen higher and pressured shares of Japan’s exporters. Japan’s Nikkei Stock Average was down 0.6%, Australia’s S&P/ASX 200 shed 0.8%, South Korea’s Kospi Composite fell 0.8% and New Zealand’s NZX-50 lost 0.3%. Dow Jones Industrial Average futures were down 114 points in screen trade. The yen’s strength against the dollar is “throwing cold water on Japanese manufacturers who had recovered quickly from the supply chain disruption” following the March 11 earthquake and tsunami, Tetsuya Miura, chief market analyst at Mizuho Securities said. “It’s hard for the market’s economic assessment to turn up.” http://online.wsj.com/article/SB10001424053111903999904576466823847545598.html?mod=WSJASIA_hpp_LEFTTopWhatNews
As the U.S. neared a potential default or downgrade of its triple-A credit rating, many of the brightest financial minds on Wall Street were talking battle plans. But few of them have taken significant action. The main reason: No one knows exactly what to do. “If you don’t know what you’re going to do when the event happens, how do you make a trading decision?” said Alan De Rose, managing director of government trading and finance at Oppenheimer & Co. “That’s a very difficult position.” http://online.wsj.com/article/SB10001424053111904772304576466373207538638.html?mod=WSJEurope_hpp_LEFTTopStories
Spain is preparing plans to force new budget controls on its powerful regions to ensure it meets its ambitious budget-deficit targets, Finance Minister Elena Salgado said. In an interview late last week, Ms. Salgado struck a tough line with the regions that control one-third of spending in Spain. She said she wants regional finance chiefs to agree to new spending limits at a meeting Wednesday. Later, she said the government will draft legislation that would establish penalties for the regions that fail to meet their budget targets. http://online.wsj.com/article/SB10001424053111903591104576466192518918406.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews
Secretary of State Hillary Clinton reassured audiences in a key Asian financial center that the U.S. would find a solution to the political impasse over government deficits. In prepared remarks for a speech to Hong Kong businessmen, Mrs. Clinton said she is “confident that Congress will secure a deal on the debt ceiling,” and that the intense political wrangling is “how an open and democratic society ultimately comes together to reach the right solutions.” http://online.wsj.com/article/SB10001424053111904772304576466912563738194.html?mod=WSJAsia_hpp_LEFTTopStories
While the U.S. economy is struggling, U.S. corporations aren’t. A third of the way through the second-quarter reporting season, earnings at companies in the Standard & Poor’s 500-stock index are the highest in four years, according to S&P analyst Howard Silverblatt, who predicts the second half will be even stronger. Yet there is little indication that the strong results will jump-start the U.S. economy and get the millions of Americans idled by the recession back to work. http://online.wsj.com/article/SB10001424053111904772304576466003840674770.html?mod=WSJASIA_hpp_LEFTTopWhatNews
Why can’t Greece be more like Turkey? That’s what Greek Prime Minister George Papandreou asked his country’s legislators late last month as he tried to herd them into voting for an austerity package that was triggering riots. Mr. Papandreou was referring to the success that Turkey had in donning a hair shirt and recovering from a financial crisis in 2001. Now Greece is being asked by creditors to take the same kinds of austerity measures—but whether Greeks will go the distance, and whether they can recover the way Turkey did remains unclear. http://online.wsj.com/article/SB10001424053111903461104576460140383941706.html?mod=WSJASIA_hpp_LEFTTopWhatNews
Marketwatch.com
Gold futures hit a fresh record in electronic trading Monday, as U.S. debt-ceiling talks to avert a default continued, with no apparent progress toward a deal. Gold for August delivery gained $16.30, or 1.0% to $1,617.70 an ounce on the Comex division of the New York Mercantile Exchange during Asian trading hours. Last week gold reached a nominal record of $1,602.50 an ounce. Adjusted for inflation, gold would have to settle at around $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980. http://www.marketwatch.com/story/gold-climbs-as-us-debt-ceiling-talks-continue-2011-07-24
Benchmark U.S. crude-oil futures retreated in electronic trading Monday as the failure of Washington lawmakers to reach agreement on the country’s debt-ceiling over the weekend stoked fears about energy demand. Crude for September delivery lost 89 cents, or 0.9%, to $98.98 a barrel on the New York Mercantile Exchange during Asian trading hours. http://www.marketwatch.com/story/oil-futures-sink-amid-us-debt-jitters-2011-07-24
Reuters.com
House of Representatives Speaker John Boehner told fellow Republicans on Sunday that he is considering a balanced-budget amendment to the Constitution as part of a bill that would raise the debt ceiling, a source who heard his message said. That could be a sign that the Republican-controlled House and the Democratic-controlled Senate remain far apart in tense negotiations to avoid an August 2 default.http://www.reuters.com/article/2011/07/24/us-usa-debt-amendment-idUSTRE76N2W720110724
Bloomberg.com
President Barack Obama, running out of time to strike a deal to raise the U.S. debt ceiling, had some bad news for House Speaker John Boehner on July 20. The tax overhaul they had been discussing to raise $800 billion in revenue over a decade had to be bigger, Obama told Boehner and House Majority Leader Eric Cantor during an evening meeting in the Oval Office. Obama’s new offer: $1.2 trillion.http://www.bloomberg.com/news/2011-07-23/obama-debt-limit-deal-with-boehner-upset-by-last-minute-gang-of-six-plan.html
The Philippines will go ahead with oil exploration in the South China Sea, challenging last week’s regional agreement with China aimed at lowering tensions over the disputed waters, Foreign Minister Albert F. del Rosario said. Hydrocarbon resources “well within” Philippine sovereignty are essential to the country’s energy strategy, Rosario said in an interview. U.S. Secretary of State Hillary Clinton yesterday warned that increased confrontations in the area are a threat to sea lanes that are “absolutely essential” to world trade. http://www.bloomberg.com/news/2011-07-24/clinton-calls-for-global-response-to-rising-s-china-sea-risks.html
Investor expectations of Australian inflation dropped to the least this year on prospects faltering growth will cool consumer-price gains, giving the central bank scope to extend its longest interest-rate pause since 2007. The so-called breakeven rate on 10-year inflation-linked notes fell nine basis points, or 0.09 percentage point, this month and touched 274 basis points, the least since November. The rate reached a four-year high at 306 on May 11. The one-year inflation swap rate touched 2.67 percent on July 20, the lowest in almost 15 months, and slid 61 basis points in the three months to June 30, the biggest quarterly drop since 2008. http://www.bloomberg.com/news/2011-07-25/inflation-bond-gauges-at-2011-low-as-economy-may-falter-australia-credit.html
The U.S. government may lose its AAA credit rating even if lawmakers reach a plan to avoid a default, said Mohamed A. El-Erian, whose Pacific Investment Management Co. is the world’s largest manager of bond funds. “In most likelihood, a last-minute political compromise will avoid a default but will leave the AAA rating extremely vulnerable,” El-Erian, the Newport Beach, California-based chief executive officer and co-chief investment officer at Pimco, wrote in an e-mail. “Stock markets around the globe will look to price in a greater uncertainty premium on account of political squabbles in the world’s largest economy and the increasing risk that it may lose its sacred AAA rating.” http://www.bloomberg.com/news/2011-07-24/u-s-vulnerable-to-downgrade-el-erian.html
U.K. house prices fell for a third month in July and are likely to continue on a “downward trend,” property researcher Hometrack Ltd. said. The average cost of a home slipped 0.1 percent from June and was down 3.9 percent from a year earlier, the London-based firm said in an e-mailed report today. London prices increased 0.3 percent on the month. In a separate report, Rightmove Plc, the U.K.’s biggest property website, said a growing proportion of consumers expect prices to stabilize over the next 12 months. http://www.bloomberg.com/news/2011-07-24/u-k-house-prices-decline-0-1-as-downward-trend-continues-hometrack-says.html
CNBC.com
China’s annual economic growth is likely to slow to 9.3 percent in the third quarter from 9.5 percent in the second quarter, with inflation staying stubbornly high, a think-tank said in forecasts published on Monday. The forecast by the National School of Development at Peking University pointed to a continued slowdown in the world’s second-largest economy, which grew at a 9.7 percent pace in the first quarter of this year.http://www.cnbc.com/id/43875617
Dailyfinance.com
Chinese officials have found five fake Apple stores in the southwestern city of Kunming, and ordered two of them to suspend business while they’re investigated, a local government website said Monday. Officials couldn’t do anything about the other three stores — which prominently displayed Apple signs and logos — because they did not find any fake Apple products for sale, according to a report by a local newspaper posted on the Kunming city government’s website. http://www.aolnews.com/story/china-officials-find-5-fake-apple-stores/1526145/
Foxbusiness.com
Australia’s producer price index rose 0.8% quarter-on-quarter in the three months to the end of June, the Australian Bureau of Statistics reported Monday. On an annual basis, PPI rose 3.4%. Economists surveyed byDow Jones Newswires had forecast a rise of 0.9% on quarter, and 3.5% on year. Australian dollar traded at $1.0832 Monday, compared with $1.0860 late Friday in North American trade. Australia’s consumer price index is due to be released on Wednesday. http://www.foxbusiness.com/2011/07/24/australias-second-quarter-producer-prices-up-08/#ixzz1T5fhgquN
Huffingtonpost.com
A deal struck by European leaders providing debt relief to Greece has soothed fears of a fresh crisis, but the nation’s ailing troubles — and by extension those of the rest of the continent — seem far from over. The fundamental problems remain, experts say. Namely, the Greek economy is in a recession, and a program of deep spending cuts enforced by outside powers hinders its prospects for growth. “The problem with Greece and a lot of the periphery is they’re not growing,” said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman in New York. http://www.huffingtonpost.com/2011/07/22/greece-debt-crisis-financial-problems_n_907440.html
USAtoday.com
The “Food at Home” component of the recent consumer prices report surged almost 5% on an annual basis as grocers passed on to consumers the 12-month jump in corn, rice, sugar and oats. The measure, defined by the Bureau of Labor Statistics as “total expenditures for food at grocery stores,” rose 4.8% during the 12 months ending in June. That’s up from a 4.4% annual increase from May’s report. Plus, not counting the temporary spike in inflation during the aftermath of the credit crisis, this is the biggest price increase by grocers since 2004. http://www.usatoday.com/money/industries/food/2011-07-23-cnbc-dinner-table-inflation_n.htm
Unemployment rates rose in more than half of U.S. states in June, evidence that slower hiring is affecting many parts of the country. The Labor Department said Friday that unemployment rates in 28 states and Washington, D.C., increased last month. Rates declined in eight states and were flat in 14. That’s a change from May, when 24 states reported falling unemployment rates. http://www.usatoday.com/money/economy/2011-07-22-states-unemployment-june_n.htm
Telegraph.co.uk
America risks a major backlash from financial markets unless the outline of a deal to prevent a government default is agreed in the next 24 hours, US Treasury Secretary Tim Geithner has warned. Tensions were running high across Capitol Hill last night as the White House, as well as Republicans and Democrats in Congress, scrambled to reassure investors that the country’s $14.3 trillion (£8.8 trillion) debt ceiling will be lifted by August 2. http://www.telegraph.co.uk/finance/financialcrisis/8658500/Tim-Geithner-joins-warnings-of-market-meltdown-as-deal-goes-to-the-wire.html
British household finances have deteriorated to the lowest point since the depths of the recession, heightening concerns that the economy may be slipping back into a double-dip downturn. Markit’s monthly survey of consumers shows that the triple blows of rising fuel costs, the government’s fiscal squeeze and faltering global growth are all eating deep into spending power. The household finance index (HFI) dropped sharply to 34.4 in July, with 38pc feeling worse off than a month ago compared to just 6pc seeing an improvement. “The latest reading signalled that the rate of deterioration was just as severe as the survey-record seen in March 2009,” said Markit. http://www.telegraph.co.uk/finance/economics/8658476/UK-household-squeeze-at-its-worst-for-two-years.html
Markets could ultimately take the future of euro out of Europe’s hands. The British government did not decide to take sterling out of the ERM on September 16, 1992. It just happened. Indeed, not long before that fateful day, the Prime Minister, John Major, spoke of the pound potentially replacing the deutschmark as the strongest currency in the system. What forced us out was the overwhelming flood of sterling sales on the exchanges. Once it became obvious that the pound would have to leave, the potential volume of sales grew exponentially. Late in the day, the Bank of England gave up the attempt to keep the pound above the lower limit of its fluctuation band. http://www.telegraph.co.uk/finance/comment/rogerbootle/8658308/Markets-could-ultimately-take-the-future-of-euro-out-of-Europes-hands.html
Independent.co.uk
British business is caught in an investment freeze that threatens to slow the already fragile economy, a survey shows today. Fewer than a fifth of businesses plan to boost investment for growth in the next six months, according to the Lloyds TSB Commercial Business in Britain report. Weak domestic demand and rising costs have put pressure on profits and confidence among the 1,800 businesses surveyed, leading to a slight fall in investment appetite from January’s already weak figure, the twice-yearly survey reveals. John Maltby, managing director of Lloyds TSB Commercial, said: “With domestic demand in the doldrums, and confidence still muted, it is understandable that firms are worried about investing for the future. http://www.independent.co.uk/news/business/news/uk-recovery-under-threat-from-lack-of-investment-by-businesses-report-warns-2320049.html
Smh.com.au
Australian banks have little exposure to sovereign debt in countries with the biggest debt problems, while a strengthened funding base makes them more resilient to any global credit shocks, a top central banker says. Speaking to a property conference, Reserve Bank assistant governor Malcolm Edey today said the more cautious attitude to borrowing shown by Australian households and businesses would ultimately be good for financial stability. http://www.smh.com.au/business/australian-banks-in-good-shape-rba-20110725-1hwll.html#ixzz1T5jTTnFj
Theglobeandmail.com
Thousands of protesters angry about Spain’s economic woes once again filled Madrid’s downtown Sol square early Sunday after many had marched for weeks from cities across Spain. Five columns of marchers converged on the square where some had camped out in for three weeks in May. That protest struck a chord with sympathizers throughout Spain and Europe where similar camps were set up.http://www.theglobeandmail.com/report-on-business/international-news/european/thousands-of-protesters-angry-at-unemployment-march-in-spain/article2107868/
Xinhuanet.com
China’s top banking regulator announced Sunday that it has given the nod to the establishment of a regional bank in the Tibet Autonomous Region, with initial capital adding up to 1.5 billion yuan (233 million U.S. dollars). The bank will be registered in Lhasa, the region’s capital, and funded by 15 institutions, including the regional government, domestic banking institutions and several leading enterprises, the China Banking Regulatory Commission (CBRC) said in a statement posted on its website. http://news.xinhuanet.com/english2010/china/2011-07/24/c_131006417.htm
China’s first evaluative report on economic quality in the western region predicted that the region’s economy will grow by 13 percent, higher than the nation’s average. The report was published during the Western Region Economic Development Forum held in Beijing on Sunday. As a part of an annual research report on economic development in the western regions of China, the Western Blue Book 2011 has reviewed and analyzed economic growth in western areas since the implementation of the country’s strategy on the development of western regions in 2000. http://news.xinhuanet.com/english2010/china/2011-07/24/c_131006102.htm
German Chancellor Angela Merkel on Friday expressed confidence in Greece’s getting over the debt crisis, saying that her country and other eurozone members has “historic duty” to defend the euro. Speaking at a pre-holiday press conference, Merkel said she is confident that the debt-gripped Greece would finally walk out of the shadow of financial woes, and Europe would become stronger after the worst crisis in euro’s 12-year history. http://news.xinhuanet.com/english2010/business/2011-07/23/c_131003406.htm
Thehindu.com
Looking to strengthen ties with the United Kingdom in the financial sector, Finance Minister Pranab Mukherjee leaves for London on Sunday to take part in a ministerial-level meeting being held on Monday. Accompanied by Department of Economic Affairs Secretary R. Gopalan, Chief Economic Advisor Kaushik Basu and Sebi Chairman U K Sinha, Mr. Mukherjee will attend the fourth chapter of the ministerial.level India-U.K. Economic and Financial Dialogue. http://www.thehindu.com/business/Economy/article2290131.ece
Economictimes.com
Reserve Bank of India GovernorD Subbarao may brush aside the ‘analytically bewildering’ economic data to raise policy rates for the 11th time in 17 months to curb prices. But the number-crunching economist in him may prevail, to utter a few words of caution on the slowing economy and indicate that he may be ready for a pause in raising interest rates if inflation slows. All the 15 treasurers and economists polled by ET are forecasting a 25-basis point rise. http://economictimes.indiatimes.com/news/economy/policy/rbi-may-implement-another-rate-increase-of-25-bps-to-curb-prices/articleshow/9351547.cms
The proposedFood Security Act has the potential to stoke global food prices and significantly increase the country’s food subsidy bill, officials and experts say. The government plans to introduce a legislation which aims to ensure food security for 75% of the rural households and 50% of the urban areas and includes both below poverty line and above poverty line families. http://economictimes.indiatimes.com/news/economy/policy/food-security-law-could-push-up-world-prices-widen-subsidy-bill/articleshow/9353459.cms
Khaleejtimes.com
Two decades ago, India’s Prime Minister Manmohan Singh unleashed radical free-market reforms that were a watershed moment in the transformation and rise of the South Asian giant. “We shall make the future happen,” declared Singh, who was then finance minister, in presenting his landmark budget on July 24, 1991, that opened up India’s markets and cut through the country’s infamous red tape. “Let the whole world hear it loud and clear — India is now wide awake.” http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/
