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Monthly Archives: August 2012

Credit Quality in China Worsens as Government Tells Banks to Speed Up Loan Process


China’s banking regulator told lenders to push developers for faster home sales, citing signs that credit quality is worsening, a person with knowledge of the matter said.

The China Banking Regulatory Commission told lenders they should also demand more collateral, or tell developers to sell projects or stakes, if the banks predict they’ll have difficulty repaying loans due within 12 months, the person said, asking not to be identified because the instructions aren’t public.”

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Merkel: Germany ‘is in line’ With the ECB’s Approach to Bailing Out Sovereign Debt

Chancellor Angela Merkel backed the European Central Bank’s insistence on conditions for helping reduce borrowing costs in indebted countries, saying Germany is “in line” with the ECB’s approach to defending the euro.

“Obviously time is pressing” on stamping out the debt crisis, though “on many of these issues we feel we’re on the right track,” Merkel told reporters in Ottawa yesterday at a joint press conference with Canadian Prime Minister Stephen Harper. Euro-area policy makers “feel committed to do everything we can to maintain the common currency.”

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Germany and Italy Lead in Eurozone Exports, Exports Grow by 0.4% Despite Widespread Recession

“Euro-area exports rose for a second month in June, driven by a surge in shipments from Germany, as companies tapped into emerging markets to offset declining demand at home.

Exports from the 17-nation currency bloc advanced a seasonally adjusted 2.4 percent from May, when they gained 0.4 percent, the European Union’s statistics office in Luxembourg said today. Imports stagnated in the period and the trade surplus widened to 10.5 billion euros ($13 billion) from 6.8 billion euros.”

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The Euro Hits a Six Week High as Merkel Backs the ECB Bailout Plan

“The euro rose to a six-week high versus the yen as Germany signaled its support for aEuropean Central Bank approach to resolve the debt crisis.

The shared currency is set to complete five-day gains against all 16 of its major counterparts before German Chancellor Angela Merkel meets French President Francois Hollande on Aug. 23 and Greek Prime Minister Antonis Samaras a day later. The yen headed for its biggest weekly loss in almost two months versus the greenback as the extra yield investors receive from U.S. securities over Japanese debt climbed. Singapore’s dollar weakened as exports rose at a slower pace.

“We’re starting to see the early signs of some real progress being made in the euro area,” saidAndrew Salter, a currency strategist in Sydney at Australia & New Zealand Banking Group Ltd. (ANZ) “We do see the euro rebounding modestly over the next few months.”

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European Markets Rise on Spanish Yields Hitting Six Week Lows

“Stocks gained in Europe to a five- month high as Spain’s 10-year bond yield fell to the lowest level in six weeks. Platinum rose after violence escalated at a South African mine, while Brent crude snapped a four-day rally.

The Stoxx Europe 600 Index added 0.3 percent at 7:20 a.m. in New York, headed for an 11th week of gains. Standard & Poor’s 500 Index futures slid less than 0.1 percent after the gauge closed yesterday at a four-month high. Spain’s 10-year bond yield fell seven basis points to 6.45 percent, the lowest since July 5. Platinum rose 0.9 percent. Brent crude fell 1.2 percent.”

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Vulture Capitalists Are Hitting the $FB Bid

“A lot of people have been waiting,” he said. “Facebook was expected to go public a long time ago.”

Despite the sharp drop in Facebook’s market value during the past three months, the early investors can still reap huge windfalls by selling at the current price.

For instance, Thiel invested $500,000 in Facebook in 2004, the year CEO Mark Zuckerberg began the site in a Harvard dorm room.

After selling 16.8 million shares for $640 million at the time of the initial public offering in May, Thiel still owned nearly 28 million shares worth about $560 million at Thursday’s trading prices.

Accel Partners invested $12.7 million in Facebook in 2005. The firm sold nearly 58 million shares for $2.2 billion as part of Facebook’s IPO and still owned nearly 144 million shares worth about $2.9 billion.

It wasn’t known how many of those shares could have been sold Thursday, and whether any of them were.

Because those investors had put up little compared with the shares’ value today, “you can understand why they would want to take some of their money off the table now,” Maher said. “But at the same time, you have to wonder if they’re thinking that Facebook isn’t much of a bargain anymore.”

Hamadeh believes the venture capitalists who invested in Facebook realize it’s a “fool’s game” to wait for a better price on the stock.

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What To Do When Every Market Is Manipulated

“What to Do When Every Market Is Manipulated

Hint: cut the strings

 If you don’t know who the sucker at the card table is, it’s you.

~ old gambler’s saying

What do the following have in common?

LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?

The answer is that every single thing in that list is an example of market rigging, fraud, or both.”

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The Current Recovery is the Weakest Since WW2

“WASHINGTON (AP) — The recession that ended three years ago this summer has been followed by the feeblest economic recovery since the Great Depression.

Since World War II, 10 U.S. recessions have been followed by a recovery that lasted at least three years. An Associated Press analysis shows that by just about any measure, the one that began in June 2009 is the weakest.

The ugliness goes well beyond unemployment, which at 8.3 percent is the highest this long after a recession ended.”

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Market Update

U.S. equities rally on no bad news. Hopes are high on Spain receiving bailout money.

The S&P is poking its head above 1405 for the first time, and it seems like we will stick a close above this key resistance level.

Gold is up 0.75% or $12 and oil has begun to rally above $95 per barrel.

Spain is up 4% on their closing bell while Italy is up nearly 2%. Spain and Italy’s performance hs helped out the rest of Europe’s markets.

Treasuries on both sides of the pond have continued their rallies. The dollar remains strong.

Market update

3 D heat map

European markets



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Gapping Up and Down This Morning

Gapping up

CCRT +57.4%, EA +13.8%, CSTR +8.5%, CSCO +5.8%, PETM +5.6%, NTAP +5.5%,

SINA +5.2%, DANG +2.6%, EMC +2.2%, JNPR +1.4%, NFLX +1.2%, HOTT +1%,

INSM +3.6%, ANF +0.8% ,  GME +5.6% , VQ +14.4%, CCRT +57.4%, PPHM +8%

Gapping down 

A -7.6%, AMAT -5.9%, NYMT -4.9%, LTD -0.4%,  GNC -4.4%,  CRH -1.1% , SPLS -1.1% ,

SBAC -0.7%, MCP -10.4%,  FB -2.4%, DANG -3%, WMT -2.8%, PRGO -2.2%,

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The Global Economy Gets Downgraded to the Twilight Zone

“Morgan Stanley’s Joachim Fels and the rest of the The Global Macro Analyst team have cut their global growth forecast in a note dramatically titled Into The Twilight Zone.

The gist is that everyone in the world is struggling right now.

Emerging markets, which used to keep growing solidly during times of slowdown, are sputtering. And developed markets keep shooting themselves in the foot.

The global economy has sunk deeper into the twilight zone that divides sustainable recovery from renewed recession. We have sharply cut our growth forecasts (in many cases, again) for most countries and regions around the globe over the past three weeks.”

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Wal-Mart’s Lackluster Quarter Dims Optimism On U.S. Consumers -$WMT

“Wal-Mart stores stretch nationwide, from the rural South to the Eastern seaboard, offering a snapshot of Americans shopping habits. Worryingly, the retailer’s latest quarter adds only static to that picture and does little to lift hopes that American spending can stay robust.

Sales at the world’s largest retailer missed Wall Street estimates. Other metrics are lighter than hoped. Together, they suggest that Americans are indeed cutting back and carefully planning every purchase. Other economic indicators, by contrast, had seemed to reflect a stronger-than-expected U.S. consumer. Consumption remains the most crucial driver of growth in this country.”

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