09/26/2012 The global financial system remains “overly complex” as reforms bog down in the post-recession economic slump, the IMF warned in a report Tuesday.

Subprime Crisis Diagram. Courtesy of Farcaster/CC-BY-SA-3.0

And central banks’ record-low interest rates may be creating future problems by encouraging excessive risk taking, the very behavior that reforms are trying to curb, the International Monetary Fund said in its latest Global Financial Stability Report.

The IMF said that financial systems were little changed five years after the start of the US subprime mortgage crisis that plunged the global economy into recession.

“The data suggest that financial systems are still overly complex… and the too-important-to-fail issues are unresolved,” the IMF report said.”

Full report

(Reuters) – Europe is in the midst of another crisis: not debt, but grapes. Yields are sharply lower, down nearly 40 percent in some of parts of Portugal, which means winemakers will have fewer grapes to blend and, in the end, fewer bottles to offer.

Read the rest here.

Germany and its two closest allies in the eurozone appeared to step back on Tuesday from a key agreement that would free Spain and Ireland of billions in debt incurred through bailing out their banks.

Read the rest here.

” I think i’m turning Japanese …i really think so.” Bond holders take notice….

Full article

Check out just how far we came and fell back since 2008.

Full chart porn 

“Europe’s permanent rescue fund will invest the core of its assets in AA or higher-rated debt issued by governments, central banks, euro-area agencies and international institutions, with the power to diversify into bank debt as it grows, its draft investment guidelines say.

The European Stability Mechanism, set to go into operation next month, will keep at least 15 percent of its maximum lending volume — or 75 billion euros ($97 billion) out of an ultimate 500 billion euros — in “assets of the highest creditworthiness,” according to the guidelines obtained by Bloomberg News.”

Full article

In other words Spain has a lot of debt to cover and are probably looking for a colossal amount of aid.

Full article 

(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.

“European banks pledged last year to cut more than $1.2 trillion of assets to help them weather the sovereign-debt crisis. Since then they’ve grown only fatter.

Lenders in the euro area increased assets by 7 percent to 34.4 trillion euros ($45 trillion) in the year ended July 31, according to data compiled by the European Central Bank. BNP Paribas SA (BNP), Banco Santander (SAN) SA, and UniCredit (UCG) SpA, the biggest banks in France, Spain and Italy, all expanded their balance sheets in the 12 months through the end of June.”

Full article

“Spanish banks, already hooked on cheap European Central Bank loans, are haemorrhagingdeposits as the government debates whether to seek a bailout.

Households and companies drained 26 billion euros ($34 billion) from Spanish bank accounts in July, driving the ratio of loans to deposits among lenders to 187 percent from 183 percent in December and 182 percent a year earlier, according to data compiled by the Bank of Spain. Shrinking deposits undermine the ability of banks to support economic growth by lending to companies and consumers.”

Full article

“Singapore’s exports fell more than economists estimated in August as shipments of electronics dropped and companies sold fewer goods to Europe. The country’s currency weakened.

Non-oil domestic exports slid 10.6 percent from a year earlier, after a revised 5.7 percent increase in July, the trade promotion agency said in a statement today. The decline, the first since March, exceeded all 15 estimates in a Bloomberg News survey, where the median was for a 4 percent drop.

Europe’s protracted debt crisis, a U.S. jobless rate stuck above 8 percent and a slowdown in China are damping demand for Asian goods and commodities, prompting Hong Kong’s Trade Development Council to cut the island’s export forecast today. The weakening global outlook has prompted Singapore’s government to trim its 2012 economic growth forecast and may put pressure on the central bank to ease its monetary policy stance.”

Full article

“Chinese Premier Wen Jiabao said the nation has room for fiscal and monetary measures to support growth and will meet this year’s economic goals, triggering gains in Asian stocks.

“Be it monetary or fiscal, we still have ample strength,” Wen said at the World Economic Forumin Tianjin yesterday. A fiscal stabilization fund of 100 billion yuan ($16 billion) is available for “preemptive” measures, he said.

Morgan Stanley today became at least the fifth bank to estimate that China’s economic growth this year will be 7.5 percent, the same as Wen’s target and the weakest pace in 22 years, afterimports slid in August and industrial production cooled. While the premier’s comments encouraged investors, the government may limit stimulus to restrain inflation and bad loans and avoid undoing a campaign to cool the housing market.

“The government has fiscal and monetary war chests to revive growth but there does not seem to be much appetite to roll out a large-scale stimulus package,” said Wang Qinwei, a London-based economist with Capital Economics Ltd. who previously worked at the People’s Bank of China.”

Full article

Lots of folks both here and abroad say liquidity is tight unless you are already privileged with padded bank accounts and assets.

Maybe to stimulate the economy the liquidity in the system should trickle down.

Full article

Interesting commentary on the ECB and their new bond buying plan.

Hey you never know! Let’s all hope the odds are just like lotto.

Full article

“As fear that the euro will unravel rises, Spaniards are pulling their cash out of banks and leaving the country, according to The New York Times.

One of the most worrisome trends is that the educated and entrepreneurial professionals have started withdrawing their money.

“No doubt there is a little bit of panic,” Jose Garcia Montalvo, an economist in Barcelona told The Times. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”

Read more

(Reuters) – Moody’s Investors Service has changed to negative from stable its outlook on the Aaa long-term issuer rating of the European Union (EU).

Read the rest here.

(Reuters) – A contraction in China’s factory sector activity intensified in August as both output and new orders dropped while manufacturers cut prices to compete for business, a survey showed on Monday.

Read the rest here.

“What they’re going through seems like the Greece situation a couple of years ago, and there are concerns that if it’s not addressed soon enough, it could move further to the same vicious cycle,” Thanos Papasavvas, strategist at Investec Asset Management, told CNBC Europe’s “Squawk Box” Wednesday.

Read the rest here.

Asian stocks rose, reversing earlier losses, as economic reports from China, Japan, South Korea and New Zealand fueled speculation that central banks will boost stimulus measures.

Read the rest here.

“Ukraine is broadening its business ties with China as President Viktor Yanukovych sidesteps the conditions traditional partners such as Russia and the European Union are demanding to provide loans and investment.

Currency-swap and loan deals agreed since June may reach as much as $9 billion, raising China’s standing in Europe’s biggest iron-ore and corn exporter as the fastest-growing major global economy seeks to secure materials and food supplies.”

Full article