China Considering Raising Yuan Exchange Rate by 1%

“China may widen the yuan’s trading band in the “next few weeks” as policy makers favor a more flexible exchange rate to combat inflation, according to Standard Chartered Plc.

The range may be widened to allow the currency to trade as much as 1 percent on either side of a daily fixing set by the People’s Bank of China, currency strategists Callum Henderson and Robert Minikinwrote in a research note today. It was last widened to 0.5 percent from 0.3 percent in May 2007. The yuan is allowed to swing as much as 3 percent on either side of reference rates versus the euro, yen and Hong Kong dollar.

“A wider trading band could create the conditions for modestly faster appreciation near-term to temper persistent inflation,” Henderson and Minikin wrote in the report. “Another big one-off revaluation looks unlikely, as officials have ruled this out and because the global economy is slowing.”

Government data due June 14 is expected to show inflation accelerated to 5.5 percent last month from 5.3 percent in April, according to the median forecast in a Bloomberg News survey of economists. That would be the fastest pace since July 2008. A stronger yuan helps limit price gains by making imports cheaper.”

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“Hong Kong banks may have succeeded where the government failed as rising mortgage rates curb home price gains and cut sales to the lowest level in two years, signaling the property market may have peaked.

HSBC Holdings Plc (5), which controls two of the city’s three- biggest banks by customers, is among lenders that accelerated mortgage rate increases in April as liquidity dried up. An index of home prices has stalled since March 20, while the number of sales in April fell 37.6 percent from a year earlier to the lowest in more than two years, according to the Land Registry.

The government has come under pressure to cool the property market, the world’s priciest according to Savills Plc, which had surged as much as 70 percent since the beginning of 2009 on record-low mortgage rates, an influx of buyers from other Chinese cities, and a lack of supply. Its toughest measures in November, including releasing more land and higher deposit requirements, had failed to contain what theHong Kong Monetary Authority warned was a “credit-fueled property bubble.”

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“The Reserve Bank of Australia left its benchmark interest rate unchanged for a sixth straight meeting and signaled little urgency to increase borrowing costs as a stronger currency helps contain inflation.

Central bank Governor Glenn Stevens today held the overnight cash rate target at 4.75 percent in Sydney, as forecast by 23 of 28 economists surveyed by Bloomberg News. In a statement after the decision, he said “inflation will be close to target over the next 12 months.”

The Australian dollar reversed earlier gains and investors slashed bets the RBA will raise rates in the third quarter. The nation recorded its weakest job growth since 1999 in the first four months of this year as manufacturing, services and construction lag behind a mining industrythat is expanding to meet Chinese demand for raw materials.”

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“The euro strengthened to a one-month high against the dollar after European Central Bank President Jean-Claude Trichet signaled he may back Greek debt rollovers. U.S. stock-index futures rallied, while oil declined.

The euro appreciated 0.6 percent versus the dollar at 7:25 a.m. in New York after gaining as much as 0.7 percent to $1.4683, the highest level since May 5. Australia’s dollar fell against 14 of its 16 major peers. The Stoxx Europe 600 Index added 0.1 percent. Standard & Poor’s 500 Index futures climbed 0.6 percent, indicating the gauge may rebound from a 2 1/2-month low, while the 10-year U.S. Treasury yield rose two basis points to 3.02 percent. Oil dropped 0.6 percent in New York.

The ECB isn’t opposed to private-sector creditors being asked to “maintain their level of outstanding credit,” Trichet said in Montrealyesterday, the first sign he endorsed measures to encourage investors to buy new Greek debt to replace maturing securities. Data indicating the U.S. economic recovery is losing steam helped erase more than $2.5 trillion from the market value of global equities since this year’s peak last month.”

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Losses From Wrong-Way Bet on Investment Bank’s Bonds Exceed $3.4 Billion

Bond-investing veteran Bill Gross buoyed his reputation during the 2008 financial crisis through well-timed bets on Treasurys and mortgage debt.

Now, new court documents show that he also took a bath in loading up on Lehman Brothers Holdings Inc. debt before the investment bank cratered that year.

Losses on certain Lehman bonds traded by Mr. Gross’s firm, Pacific Investment Management Co., exceed $3.4 billion, according to a Wall Street Journal analysis of liquidation plans and investment disclosures filed in a federal bankruptcy court in New York.

Pimco is among the nation’s largest money managers for mainstream Americans, both through institutional clients, such as pension funds, and mutual funds held in 401(k) retirement accounts. That means the Lehman losses hit ordinary investors who had put their money into Pimco funds during the market boom.

FULL ARTICLE AT WSJ

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Carson Block, a gangster rap enthusiast who doesn’t like to give his exact address because he said he’s received death threats, is taking responsibility for billions of dollars in stock declines that have left everyone from John Paulson to Hank Greenberg nursing losses.

Sino-Forest Corp. (TRE), an operator of timber plantations backed by Paulson & Co., plunged 71 percent in two days last week after Block’s Muddy Waters Research said it was betting against the shares. Paulson, whose New York-based hedge fund earned $15 billion in a single year while Block was developing a company called Love Box Self Storage in Shanghai, may have lost $325 million on Toronto-traded Sino-Forest.

“There are going to be people who say, well, I caused this,” Block said in a telephone interview from Hong Kong. “In one sense, yes, had I not published on that date, then the money would not have been lost. But on the other hand, I really feel that this company is a cancer on the financial system, because it just keeps sucking in more money every year.”

Block made a name for himself with China MediaExpress Holdings Inc. (CCME) and Rino International Corp. (RINO), saying they manipulated financial statements. China MediaExpress counted former American International Group Inc. Chief Executive Officer Greenberg’s C.V. Starr & Co. as a top owner. The shares have slid 93 percent since Block’s February report. Rino said in November that its financial statements were unreliable, less than two weeks after Block published his statements, and is down 96 percent.

‘Shock Jock’ READ FULL ARTICLE

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The euro rose toward a one-month high against the dollar after European Central Bank President Jean- Claude Trichet indicated his willingness to sanction bond rollovers in Greece. Asian commodity stocks declined as copper snapped a two-day rally and oil fell before OPEC meets tomorrow.

The euro climbed 0.3 percent to $1.4612 as of 3 p.m. in Tokyo. The Australian dollar reversed gains after the central bank left interest rates unchanged. Gauges of materials and energy stocks the biggest drags on the MSCI Asia Pacific Index, which was little changed. Standard & Poor’s 500 Index futures added 0.3 percent, following a four-day slump in the measure. Euro Stoxx 50 Index futures slipped 0.5 percent. Copper sank 0.5 percent in London. Crude decreased 0.4 percent in New York.

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[youtube:http://www.youtube.com/watch?v=S28S5_NKmqI 450 300]

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“Consumers are struggling. The housing market is in worse shape than ever, and manufacturing is fading. Economic growth is far undershooting the upbeat expectations at the beginning of the year, even as global growth is slowing sharply. Now, amid new signs that job growth is cooling off, the first-quarter’s weakness is extending into the second quarter, and economists are once again ratcheting down their 2011 forecasts. Is the recovery in trouble?

It’s a wave of worry that’s giving investors agita. Stock prices have tanked more than  5 percent since early May, as economic data turned sour, and it looks like  the economy’s woes run deeper than expensive oil and Japanese supply disruptions. The growing fear is that troubles in consumer spending, housing and job creation could limit growth for some time. The fiscal stimulus and monetary support offered by policymakers — have not resulted in the level of economic growth that would create jobs, and it’s not likely that the government will open its checkbook again anytime soon…..”

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The bearded clam will give his double speak @ 3:45 at the International Monetary Conference

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Just watched this documentary courtesy of Netflix.  A great perspectives on the criminality of our recent financial crisis.

[youtube:http://www.youtube.com/watch?v=iFfTcAcGjcU&feature=related 450 300]

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“The outspoken municipal bond bear follows up with more evidence that the fiscal troubles in many states are far greater than we’ve been told.

FORTUNE — Meredith Whitney is issuing a fresh warning to mutual funds, banks, and politicians: The state of state finances is far worse than what you think, or at least than what you’ve been willing to tell the investors and taxpayers who will eventually carry the burden. In a new report released today to her clients, Whitney summons what appears to be the most comprehensive set of data ever assembled on state budgets and debt.

Her conclusion is that the future deficits that need to be closed, either by new taxes or draconian cuts in social services, are far bigger than the official numbers show, and that debt levels, when all liabilities are counted, vastly exceed the official estimates.”

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Biggest losers over the past week, minimum market cap of $500 million

No. Ticker 1-week Return Industry Market Cap Sector
1 EXEL -24.73 Biotechnology 1,390,000,000 HEALTHCARE
2 XIDE -24.69 Industrial Electrical Equipment 601,630,000 INDUSTRIAL GOODS
3 ZUMZ -24.60 Apparel Stores 761,100,000 SERVICES
4 RLD -22.78 Movie Production, Theaters 1,300,000,000 SERVICES
5 BAP -21.18 Money Center Banks 8,070,000,000 FINANCIAL
6 TFM -19.98 Grocery Stores 1,600,000,000 SERVICES
7 VRA -19.72 Textile – Apparel Clothing 1,590,000,000 CONSUMER GOODS
8 IRE -19.53 Foreign Regional Banks 2,040,000,000 FINANCIAL
9 NOK -19.45 Communication Equipment 24,710,000,000 TECHNOLOGY
10 VNET -19.35 Application Software 640,190,000 TECHNOLOGY
11 BVN -19.35 Gold 10,670,000,000 BASIC MATERIALS
12 CIGX -18.55 Tobacco Products, Other 621,950,000 CONSUMER GOODS
13 PANL -18.24 Computer Peripherals 1,870,000,000 TECHNOLOGY
14 NWL -18.13 Housewares & Accessories 4,360,000,000 CONSUMER GOODS
15 CYBX -17.71 Medical Appliances & Equipment 797,880,000 HEALTHCARE
16 JOSB -16.80 Apparel Stores 1,330,000,000 SERVICES
17 OMX -16.37 Specialty Retail, Other 640,250,000 SERVICES
18 PRGS -16.21 Application Software 1,710,000,000 TECHNOLOGY
19 RLOC -16.20 Advertising Agencies 557,120,000 SERVICES
20 NOG -16.17 Oil & Gas Drilling & Exploration 1,080,000,000 BASIC MATERIALS
21 OAS -15.97 Oil & Gas Drilling & Exploration 2,510,000,000 BASIC MATERIALS
22 SFUN -15.84 Diversified Electronics 1,710,000,000 TECHNOLOGY
23 SOL -15.69 Solar 543,300,000 TECHNOLOGY
24 ETH -15.69 Home Furnishings & Fixtures 572,620,000 CONSUMER GOODS
25 SCCO -15.46 Copper 29,510,000,000 BASIC MATERIALS
26 SVU -15.18 Grocery Stores 1,910,000,000 SERVICES
27 JNPR -15.14 Networking & Communication Devices 17,230,000,000 TECHNOLOGY
28 MITI -14.79 Biotechnology 522,640,000 HEALTHCARE
29 LLNW -14.68 Internet Information Providers 601,180,000 SERVICES
30 SWFT -14.63 Trucks & Other Vehicles 1,700,000,000 CONSUMER GOODS
31 LZB -14.58 Home Furnishings & Fixtures 504,120,000 CONSUMER GOODS
32 SSI -14.43 Apparel Stores 551,180,000 SERVICES
33 DNN -14.41 Industrial Metals & Minerals 815,480,000 BASIC MATERIALS
34 PPC -14.37 Meat Products 868,650,000 CONSUMER GOODS
35 PODD -14.37 Medical Instruments & Supplies 877,910,000 HEALTHCARE
36 IPXL -14.28 Drugs – Generic 1,640,000,000 HEALTHCARE
37 EXK -14.03 Silver 770,040,000 BASIC MATERIALS
38 NTCT -13.94 Business Software & Services 876,830,000 TECHNOLOGY
39 FNSR -13.74 Networking & Communication Devices 1,900,000,000 TECHNOLOGY
40 GIII -13.55 Textile – Apparel Clothing 769,080,000 CONSUMER GOODS
41 LNG -13.49 Oil & Gas Drilling & Exploration 719,030,000 BASIC MATERIALS
42 WNR -13.45 Oil & Gas Refining & Marketing 1,460,000,000 BASIC MATERIALS
43 AVL -13.39 Industrial Metals & Minerals 654,040,000 INDUSTRIAL GOODS
44 NAK -13.37 Gold 1,100,000,000 BASIC MATERIALS
45 RF -13.32 Regional – Southeast Banks 7,990,000,000 FINANCIAL
46 LO -13.22 Tobacco Products, Other 15,480,000,000 CONSUMER GOODS
47 KOG -13.18 Oil & Gas Drilling & Exploration 1,160,000,000 BASIC MATERIALS
48 ODP -12.98 Specialty Retail, Other 1,070,000,000 SERVICES
49 CLWR -12.94 Wireless Communications 1,010,000,000 TECHNOLOGY
50 SIGA -12.93 Drug Manufacturers – Other 659,040,000 HEALTHCARE

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Developing…

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“MEMPHIS, Tenn., June 6, 2011 /PRNewswire/ — International Paper (NYSE:IP – News) today announced that it has proposed to acquire all of the outstanding shares of Temple-Inland (NYSE:TIN –News) for $30.60 per share in cash.  Under the terms of the proposal, the offer represents a 44% premium to Temple-Inland’s price as of noon EDT, June 6th, 2011 ($21.21). International Paper’s offer, which is backed by committed financing from UBS Investment Bank, is contingent on appropriate documentation and regulatory approval, which International Paper believes can be obtained.

(Logo: http://photos.prnewswire.com/prnh/20020701/IPLOGO )

International Paper first communicated its proposal verbally to the chairman of Temple-Inland on May 17th, 2011.  Subsequently, there has been a call, a face-to-face meeting between the two sides and two letters of correspondence from the chairman of International Paper to the chairman of Temple-Inland. International Paper was informed in a letter from Temple-Inland’s chairman dated June 4, 2011 that the Board of Temple-Inland has unanimously rejected International Paper’s proposal. In response, International Paper today sent a letter to Temple-Inland expressing its continued interest in pursuing an acquisition (the full text of that letter is below).”

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“BOSTON (MarketWatch) — Shares of Exelixis Inc. EXEL -19.19% sank 19% to $8.85 in afternoon trading Monday after the company released data from a Phase II clinical trial for its cancer-fighting agent cabozantinib that showed six drug-related deaths, or about 1% of the patients enrolled in the study. Exelixis has been testing the product for the treatment of various cancers of the lung, breast, liver, prostate, skin, and ovaries.”

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More from everyone’s favorite tit.

SAN FERNANDO, Calif. — Former New York Mets and Philadelphia Phillies outfielder Lenny Dykstra has been charged with car theft and drug possession.

The Los Angeles County district attorney’s office says Dykstra and two other men were charged Monday with grand theft auto, identity theft and other crimes. He faces up to 12 years in prison if convicted.

Prosecutors claim Dykstra, his accountant and a friend leased three high-end cars from a Southern California dealership this year by providing phony information and claiming credit through a phony business.

Police who arrested Dykstra at his Los Angeles home in April allegedly found cocaine, Ecstasy and synthetic human growth hormone.

Dykstra tells the Daily News of New York that he’s not guilty. It’s not immediately clear whether he has an attorney.

Dykstra’s charged with federal bankruptcy fraud in an earlier case.

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Forgot to post this on the first…

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“America’s efforts to carry out nation-building in Iraq and Afghanistan could end up wasting billions of taxpayer dollars once the U.S. military pulls out of both countries.

An examination of projects by the Commission on Wartime Contracting (CWC) has found that in many instances the U.S. has embarked on infrastructure development which neither the Iraqis nor Afghans will be able to operate, for varying reasons, once the withdrawal is complete.

In Afghanistan, the potential waste from unsustainable projects could exceed $11 billion for just the construction of facilities for the national security forces. This year’s proposed U.S. budget to support the Afghan National Security Forces (ANSF) is $13 billion, including $5 billion just for clothing, equipment and salaries. Can the Afghan government take over these expenses? Not likely, considering that Afghanistan’s entire gross domestic product for FY 2011 is about $16 billion. The International Monetary Fund estimates that the Afghan government will not be able pay the annual costs of the ANSF for at least another 12 years……”

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