Could a slow down hurt earnings for U.S. companies ?
Comments »Jim Rogers: Many Nations Will Have to Go Bankrupt
Economic Advisers Warn ECB Bond Buying is Convoluted and Risks Long Term Stability
The Bow Tie: 100% Chance of Crisis, Worse Than 2008
U.K. Growth Estimates Get Slashed Over EU Sovereign Debt Crisis
The U.K. will receive collateral damage as the debt crisis threatens to slow the whole of Europe.
Comments »French Banks Shiver Over Potential Losses From Italy
You thought Greece was bad for French banks;currently BNP and Credit Agricole have $416 billion in Italian exposure.
Comments »Worries Mount Over Italy Being Able to Form a Government That Can Implement Austerity
No leader has been found yet for the interim government in Italy. As yields soar the world waits to see if a stable enough government can be formed to implement harsh measures that Italy must face.
Comments »Lagarde Warns of a Lost Decade
“In our increasingly interconnected world, no country or region can go it alone,” Lagarde said in a speech to a forum in Beijing today. “There are dark clouds gathering in the global economy.” China and India echoed the call for cooperation in a separate statement.”
Comments »European Banks Unload Sovereign Debt
Ryanair Plans Launch of In-Flight Porn App
Ryanair is planning to screen porn on its flights.
Boss Michael O’Leary said he hopes to launch an in-flight web offer that mimics hotel room pay-TV services.
Passengers would be able to log into a Ryanair app using their iPads or smartphones. They could then pay to gamble, play games, watch a movie — or even view sex scenes.
Mr O’Leary told The Sun: “I’m not talking about having it on screens on the back of seats for everyone to see. It would be on handheld devices.
A spokesman said: “Nothing has been decided as yet.” But Bob Atkinson, of Travelsupermarket, said: “There may be a market for porn in hotels, but that’s in the privacy of a room. Anyone could see it on a plane. It’s wrong.”
AFP/GETTY IMAGES
President of Irish budget carrier Ryanair Michael O’Leary said he hops to launch an in-flight porn web offer.
To read more, go to The Sun.
Read more: http://trade.cc/esc
Comments »FLASH: Italian 10 yr Yields Now North of 6.75%
They are scheduled to have a bond auction on Thursday.
Comments »Deutsche Bank on Europe: ‘It’s Not Inconceivable That We Could Be In Full Crisis Mode By The End Of This Week’
“Such is the severity of the situation in Italy.
Here’s Deutsche Bank’s Colin Tan talking about the same thing that everyone else is talking about:
Its not inconceivable that we could be in full crisis mode by the end of this week. The situation with Italy feels increasingly like one that has little chance of materially improving until some
extreme pressure is put on someone to act. It may not come to a head this week but the signs are not good that we can avoid an extreme situation emerging soon.
The big problem: Berlusconi doesn’t seem like he’s in an urgent mood to make reforms, the ECB isn’t doing much, and China and Brazil have dropped out of the picture.
Hence we could get a big bustup: …”
Comments »Roubini: The Next MF Global Could Be Goldman Sachs
“Roubini was in fine form yesterday, scaring the bejeezus out of his followers on Twitter by saying that several huge financial institutions could collapse in the blink of an eye like MF Global.
These houses of cards, Roubini tweeted, include:
The problem, as Roubini has consistently warned, is the banks’ dependence on short-term financing to maintain their long-term asset leverage and run their businesses.
What killed MF Global, Lehman Brothers, Bear Stearns, AIG, and other huge financial firms, after all, was the sudden refusal of short-term lenders to continue lending money to the firms.”
Comments »Barrons.com Draws a Direct Link to Europe’s Crisis on U.S. Banks (video)
European Finance Ministers Say They Will Roll Out a Plan for a Juiced Up Sovereign Debt Crisis Fund
Top Banks May Face a 2.5% Surcharge From G20 Basel Regulation
“Citigroup Inc. (C), JPMorgan Chase & Co., BNP Paribas SA, Royal Bank of Scotland Group Plc, and HSBC Holdings Plc (HSBA) may face top capital surcharges of 2.5 percentage points, according to a provisional list prepared by global regulators and obtained by Bloomberg News.
The list was drawn up as part of plans by the Group of 20 nations to force banks whose failure could damage the global economy to boost their reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators. Bank of America Corp. (BAC),Barclays Plc (BARC) and Germany’s biggest bank Deutsche Bank AG (DBK) may face surcharges of 2 percentage points, according to the list.
“You’re saying by virtue of being a bigger bank, you’re going to have to pay for that,” Joseph R. Mason, a finance professor at Louisiana State University in Baton Rouge, said in a telephone interview. “You’re creating an incentive for big banks to hide even more risk to get the surcharge reduced.”
Comments »U.S. Seeks to Lower Tariffs on Environmental Goods and Services; China Calls the Push Too Ambitious
“Rejecting criticism by China that the Obama administration’s goals for this week’s Asia-Pacific Economic Cooperation summit are too ambitious, U.S. Trade Representative Ron Kirk said the U.S. will “push the envelope” to promote trade in renewable energy technology.
Kirk is seeking an agreement with 20 other APEC nations to lower tariffs on environmental goods and services, a move supported by companies such as General Electric Co. (GE) and Applied Materials Inc. (AMAT) The U.S. has pushed for free trade in those products as part of the stalled Doha Round of World Trade Organization talks.
“I understand China may be uncomfortable with it,” Kirk said yesterday in an interview in Washington. “We’re always going to try to push the envelope and encourage our partners to be more assertive, more forward-thinking. We don’t serve the interests of American entrepreneurs and innovators if we go in and always see the floor as the highest level of ambition.”
Comments »Italian 10 year thrown into flaming barrel of garbage
Now closing in on 6.66%. Superstitious, no?
Comments »CHINA BUBBLE POPPED? Businesses Feel the Pinch with Tightened Lending
GUANGZHOU, China — David Huan had big dreams last spring for his business, a factory in central China that turns out picture frames ranging from glossy wood to the gilded and baroque: new equipment, expanded production and an additional 400 to 600 workers atop the 400 he already employs.
Colin Beere for The New York Times
Helen Huang, the owner of a company producing chrome-plated paperweights, turned to a neighborhood lending pool last year.
The demand was there, he said on a recent afternoon. But his bankers weren’t. They balked at lending him money to buy equipment — and today his export-oriented business is about where it was six months ago.
“I feel like I’m walking in place,” he said.
He has lots of company. While many businesses in the United States struggle to stay afloat and workers collect unemployment checks, China has the opposite problem: an economy, pumped up by expansive lending by state-controlled banks, that is growing too fast to keep inflation and speculation in check.
Beijing’s solution has been to create an artificial shortage of credit. The central government has set stringent though undisclosed limits on how much money each bank can lend, clamped down on real estate speculation by limiting the number of mortgages allowed for each citizen and begun cracking down on many forms of semilegal and illegal lending. After months of steady tightening, the controls have finally begun to bite into inflation, business growth, real estate prices and lending.
Overall lending by Chinese banks jumped 32.5 percent in 2009 in inflation-adjusted terms. That growth slowed to 13.3 percent in 2010 and then 7.3 percent in the first three quarter of this year. Lending to small businesses has grown several percentage points faster each year. But there are so many of them and they are expanding so quickly that competition for these loans is especially fierce and difficult, said Nicholas R. Lardy, an economist at the Peter G. Peterson Institute for International Economics in Washington.
The policy makers’ principal goal is to tamp down inflation, which has played a repeated role in triggering social unrest, including during the 1989 Tiananmen Square protests. Despite a goal of limiting inflation to no more than 4 percent a year, prices have stubbornly remained about 6 percent higher this autumn than a year ago for consumers based on official gauges — and up to twice that by the estimate of many private economists.
The worst of the credit crunch this year has compelled at least a few business people to flee the country or even commit suicide. They did so after borrowing money at usurious rates of up to 5 percent a month — an 80 percent annual rate — from loan sharks or neighborhood lending pools and then finding that their speculative investments with the money did not pay off.
But the credit crunch is far broader. In more than a dozen recent interviews at the Canton Fair here, the country’s largest export trade fair, every business owner or sales manager described increasing difficulties in borrowing money — as well as strategies that banks and borrowers alike are using to cushion the impact of the new lending restrictions.
Some banks are requiring lenders to personally guarantee corporate loans and put up considerably more land and factory equipment as collateral. Others lend money only if borrower agrees to redeposit up to half of the loan in the same bank at a much lower interest rate. The practical effect is that the borrower pays a much higher interest rate than the official, heavily regulated interest rate for loans, usually 7 or 8 percent.
“If the bank lends you 1 million, they ask for 500,000 back as a deposit,” said Elaine Yan, the import and export manager at the Wuxi Zontai International Corporation, a trading company specializing in brightly colored shower curtains and bath mats. The company has opted not to borrow money at all, meeting its modest financing needs through retained profits.
Daunted by such terms, Helen Huang, the owner of a company producing chrome-plated paperweights, turned to a neighborhood lending pool last year. The $3.1 million she borrowed helped finance a $7.9 million land purchase so her company, the Shijiazhuang Harmony Import and Export Company, could build a new factory.
U.S. 10 year yield down .089, inside 2%
Apparently, the bond market is spooked.
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