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Monthly Archives: September 2012

Gapping Up and Down This Morning

Gapping up

LEN +5.7%, SCCO +5.1%, KTOS +3.1%, CTB +5.3%, RDWR +1.4%, RHT +2.3%,

TIVO +7.2%, HEB +6% , MET +2.4%,  SVNT +1.6%

Gapping down

QCOR -19.3%, ASMI -5.2%, FB -4.4%, AG -3.7%, GOLD -3.4%, RIO -2.7%,

X -2.2%, SLV -2.2%, MT -2.1%, ASML -1.9%, RIG -1.6%, SI -1.1%, BAX -1.4%,

MU -2.5%, RF -1.6%,  WLT -2.6% ,  AKS -4.8%,  FNSR -6.8%

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The Euro Declines as Debt Talks Stumble, More Weakness Expected as Loose Monetary Policy is Expected

“The euro declined for a fifth day against the yen after a gauge of German business confidence unexpectedly dropped in September, adding to concern the debt crisis is clouding the region’s economic outlook.

The 17-nation currency fell to the lowest in more than a week versus the dollar after German Chancellor Angela Merkel and French President Francois Hollande clashed over the weekend on a timetable to introduce joint oversight of euro-area banks. The yen strengthened versus all its major counterparts as Asian and European stocks slid, boosting demand for safer assets. The Australian dollar weakened on speculation growth in China, its biggest trading partner, is worsening.

“The data in the euro area is not good and the European Central Bank will need to keep policy loose, which will weigh on the currency,” said Raghav Subbarao, a foreign-exchange strategist at Barclays Plc in London. “The run-up in the euro looked overstretched and most people are turning more cautious at these levels.”

Full article

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Spain Begins to Worry Markets as They Have Failed to Ask for Help, Germany Upset

“Germany’s governing coalition showed growing exasperation with Spain, as a senior ally of Chancellor Angela Merkel said Prime Minister Mariano Rajoy must stop prevaricating and decide whether Spain needs a full rescue.

“He must spell out what the situation is,” Michael Meister, the chief whip and finance spokesman for Merkel’s Christian Democratic Union, said in an interview in Berlin today. The fact he’s not doing so shows “Rajoy evidently has a communications problem. If he needs help he must say so.”

Meister’s comments underscore Europe’s crisis-fighting stalemate amid discord over a banking union, Greece’s ongoing debate on how to meet bailout commitments and foot-dragging by Spain on a possible aid bid. European Union President Herman Van Rompuy warned today against “a tendency of losing the sense of urgency” in fighting the debt crisis three years after it erupted in Greece.

German patience is running out with Spain as it plays for time after European Central Bank President Mario Draghi offered help to lower borrowing costs in return for strict conditions.”

Full article

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The Aussie Dollar Spells Hard Landing for China as Iron Markets Melt

“From the end of 2008 through July, no major currency appreciated as much as Australia’s dollar, thanks to booming shipments of iron ore and other commodities to China. Since then, it’s the worst performer as the engine of world growth slows.

The so-called Aussie depreciated 1.6 percent in the past month, the biggest decline among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. Traders are betting Australia’s central bank will cut interest rates to boost growth, dragging down the currency even though the Standard & Poor’s GSCI Index of commodities has risen about 18 percent from its low this year in June.

This reversal shows the dangers for an economy tied too closely to another. China, which buys 28 percent of Australia’s exports, said industrial output grew at the slowest pace in three years last month as Europe’s debt crisis cut sales of Chinese goods. Polls show Prime Minister Julia Gillard’s governingLabor Party is under pressure before elections due next year.”

Full article

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U.S. Markets Set to Open Lower on Stalled EU Debt Talks and Pessimism Among Asian Manufacturers


U.S. stock-index futures dropped as Germany and France differed on when to introduce a banking union for the euro-area and a report showed optimism among Chinese manufacturers fell, adding to concern of an economic slowdown.”

Full article

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Scrutiny on High Frequency Traders

Technological change is as disruptive in financial markets as in any other. It creates new business models and threatens the profitability of established players, just as in the high street.

The rise of high frequency trading, powered by computer algorithms, is a case in point. Over the past five years, this has come to dominate trading, accounting for 60-80 per cent of volume, depending on the market. The high frequency traders have chased away the traditional market makers, and in doing so have substituted good liquidity for bad, according to some critics.

Read the rest here.

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What Does it Mean to Be Poor?

I think it’s hard to disagree that the poor could stop being poor–at least as the US currently defines poverty–if they behaved differently; it’s basically numerically impossible to fall under the poverty line if you finish high school, wait to have children until you get married, and both work full time.  On the other hand, as I wrote a while back, I think this ignores the evidence that when you are poor–“which is to say”, noted George Orwell of unemployed coal miners, “when you are underfed, harassed, bored, and miserable”–it is actually much harder to make those choices than Bryan seems to imagine.  Which is why the poor of Orwell’s England also struggled with things like obesity and dental decay from consuming too much sugar and not enough vegetables; it is hard to get interested in dieting if a sugar high is the nicest thing that ever happens to you.

There’s also what I’d call the implicit left view, which is that, as Jesus said, “The poor, you will always have with you.”  This Noah Smith post on poverty in Japan seems to encapsulate it pretty well.  In response to Caplan, Smith argues out that about 16% of the Japanese seem to be poor, even though they are notoriously crime free, averse to single parenthood, and not big drinkers or drug users.  These are people who work, but need to scrimp on things like food, and eschew vacations, in order to afford even more necessary items such as medical care and school uniforms.  “Poverty in a prosperous society usually does not mean living in rags on a dirt floor,” Tokyo social welfare professor Masami Iwata told the New York Times. “These are people with cellphones and cars, but they are cut off from the rest of society.”

Read the rest here.

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US Transport Stocks Signal Deeper Slowdown

Hot off the desk of Captain Obvious:

A downturn in US transportation stocks is indicating a deeper slowdown in the global economy and suggesting that the broader market rally has more to do with central bank action than fundamental strength from corporate America.

The rest of the article is worth a read, here.

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Riots Break Out at FOXCONN Slave Factory

Reports early Monday from China suggest that a mass disturbance or riots may have broken out at a Foxconn factory in the Chinese city of Taiyuan.
It is still unclear what exactly happened, but posts on China’s popular twitter-like service, Weibo, from users in the area show photographs and video of large numbers of police in and around the factory – many in riot gear – blocking off throngs of people.
Other photos show debris strewn around the Foxconn compound and in one case, an overturned guard tower.
According to popular tech blog engadget, the disturbance kicked off after Foxconn security guards allegedly hit a worker around 10 p.m. on Sunday.


Full Article

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Exclusive: North Korea Plans Agriculture Reforms

(Reuters) – North Korea plans to allow farmers to keep more of their produce in an attempt to boost agricultural output, a source with close ties to Pyongyang and Beijing said, in a move that could boost supplies, help cap rising food prices and ease malnutrition.

Read the rest here.

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