News Posts

U.S. Stocks Rise on Bets of More Stimulus; Treasuries Pare Gains

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Speculation that the Fed will embark on a third round of asset purchases to stem off a recession grew after the Wall Street Journal reported that three former policy makers support the approach. More than $2 trillion was erased from the value of global equities in the past week, and Treasury yields set new lows for the year, amid concern the economic recovery is faltering. Service industries grew in July at the slowest pace since February 2010 as orders and employment cooled, Institute for Supply Management data showed today. Full article provided by Bloomberg @: http://www.businessweek.com/news/2011-08-03/u-s-stocks-rise-on-bets-of-more-stimulus-treasuries-pare-gains.html

Finacial Reform in Greece

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Speaking before Parliament’s plenary session, Finance Minister Evangelos Venizelos referred to the finance ministry’s draft bill stressing that “the scenery should change” and underlined that “this transitional period will have to be managed with prudence, professionalism, caution, consensus and a sense of responsibility.” “The months of August and September should be exemplary in terms of swiftness,” he said, responding to criticism by opposition parties regarding the procedures followed. “We are caught in an worldwide vortex and we have to utilise the opportunities created by us for us. We should be reliable as regards our obligations towards our lenders and meet … Read more

Deutsche Börse-NYSE Deal Moves Ahead

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BY ULRIKE DAUER FRANKFURT—German exchange operator Deutsche Börse AG Wednesday said more than 95% of shares had been tendered in favor of its planned tie-up with NYSE Euronext, removing a major potential obstacle to a deal that would create the world’s largest cash equities and derivatives-trading platform. The exchanges hope to complete the merger by the end of this year, but further hurdles remain. Regulatory approval in a number of jurisdictions is still required, and the European … Full article provided by the Wall Street Journal @: http://online.wsj.com/article/SB10001424053111903366504576485653685890450.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29  

China to Move Away from USD

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China, sitting on the world’s biggest foreign exchange reserves of about $US3.2 trillion ($2.98 trillion) as of the end of June, is the largest holder of US Treasuries. Xinhua’s comments came as China’s central bank said it would continue to diversify its foreign currency investments, signalling growing concerns in Beijing over the US debt crisis and economic downturn. “China’s foreign exchange reserves will continue following the principle of diversified investment, enhancing risk management,” People’s Bank of China governor Zhou Xiaochuan said in a statement. “Large fluctuations and uncertainty in the US Treasury bond market will affect the stability of international … Read more

Fitch keeps U.S. AAA rating, review ongoing

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(Reuters) – Fitch Ratings said on Tuesday the agreement to raise the borrowing capacity of the United States means the risk of a sovereign default is “extremely low” and commensurate with a AAA rating. However, Fitch pointed out that without significant changes in fiscal policy the U.S. debt to gross-domestic product ratio “will reach 100 percent by the end of 2012, and will continue to rise over the medium term – a profile that is not consistent with the United States retaining its AAA sovereign rating.” The firm said it expects to conclude its scheduled review of the U.S. sovereign … Read more

Italy under fire in widening euro debt crisis

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(Reuters) – Financial market pressure on Italyintensified on Tuesday, sucking Europe’s second biggest debtor nation deeper into the euro area danger zone and prompting Italian authorities to call emergency talks. Italian bond yields hit their highest level in the euro’s 11-year lifetime, ominously reaching the same level as Spain’s in a sign that Rome is overtaking Madrid as the main focus of investors’ concern about debt sustainability. Italy’s stock index fell to its lowest in more than 27 months, dragged down by banks with a heavy exposure to Italian debt. European shares hit a 9-month low amid worries that slowing … Read more

Congress averts default, downgrade fears haunt

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WASHINGTON (Reuters) – Congress buried the specter of a debt default by finally passing a deficit-cutting package on Tuesday, but the shadow lingered of a possible painful downgrade of the top-notch American credit rating. Just hours before the Treasury’s authority to borrow funds ran out, the Senate voted 74 to 26 to pass a hard-won compromise to lift the government’s $14.3 trillion debt ceiling enough to last beyond the November 2012 elections. President Barack Obama, who will seek a second term next year, was expected to immediately sign the deal into law, although without any White House ceremony. His signature … Read more

Does anyone have one of these laying around?

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1923 Leica 0-series becomes world’s most expensive camera, fetches $1.89 million at auction from Engadget by Sean Hollister Just when we thought ancient wooden boxes were all the rage among camera collectors, a compact beauty has shattered our theories — this 1923 Leica 0-series just sold at auction for €1,320,000, or about 1.89 million in US money. Curiously enough, the exact same auction house reportedly sold the exact same camera four years ago: No. 107, the first Leica to be exported, allegedly for a patent application inspection in New York. In 2007, it fetched a relatively paltry €336,000, which was … Read more

Lawmakers to vote on last-minute debt deal

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(Reuters) – Congressional leaders rushed to line up Republican and Democratic votes on Monday for a White House-backed dealto raise the U.S. borrowing limit and avert an unprecedented debt default. With scars still fresh from the months-long debate over increasing the $14.3 trillion debt ceiling, a new battle was shaping over the incendiary topic of taxes. Votes were expected later in the day in the House of Representatives and Senate on a plan to cut at least $2.4 trillion over 10 years, form a new congressional committee to recommend a deficit-reduction package by late November, and raise the borrowing limit … Read more

The President Surrenders on Debt Ceiling – NYTimes.com

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The President Surrenders By PAUL KRUGMAN Published: July 31, 2011 A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong. For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the … Read more

‘t Help

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Economy Looking Weak, Data Revisions Don’t Help The economy is certainly weak. The latest report on GDP showed sub-par growth in the second quarter. Revisions to past data, which occur every summer, showed that the first quarter was even worse than we previously thought. Here’s a comparison of GDP growth rates, with “old” indicating the official data as released prior to today, and “revised” indicating the new view. I’ve highlighted the significant differences. Looking at past history, the recession was worse than we previously thought–not a surprise, really, when you think about the sharp decline in employment at the time. … Read more

Hedge Fund Regulation Is Backfiring: SAC Capital Edition

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Is SAC Capital going to escape hedge fund regulation? On Tuesday we learned that George Soros was returning all of the capital of outside investors to his fund, following a path laid down by legendary investors like Stanley Druckenmiller and Carl Icahn. By closing their funds to outside investors, these managers will be able to escape attempts to regulate them. They won’t be classified as hedge funds anymore. Despite their billions of dollars under management, they’ll simply be private investors or family funds. Today we learn that Steve Cohen, the founder of SAC Capital, is closing his flagship fund to … Read more

Debt fears lead to US downgrade – BUT DOES IT MATTER?

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Debt fears lead to US downgrade By Michael Mackenzie in New York Egan-Jones has become the first US rating agency to downgrade the country’s sovereign credit rating from triple A to double A plus as it focuses on the rapid rise in outstanding debt over the past five years.Egan-Jones was officially recognised in 2008 by the Securities and Exchange Commission and, unlike its larger rivals, generates revenue from institutional investors and not from issuers of debt. During the past decade it downgraded US carmakers and structured credit products before similar decisions by the big rating agencies. via Debt fears lead to … Read more

‘ hedge fund money

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  (Reuters) – Billionaire investor George Soros, whose stock-picking career has spanned nearly four decades, said he will manage money only for himself and his family as new regulations threaten to crimp the hedge fund industry he made famous. The octogenarian fund manager, known as much for earning $1 billion on a nervy currency bet as for giving away millions to support liberal causes, will return roughly $1 billion to outside investors most likely by the end of the year and turn Soros Fund Management into a family office. The sum represents only a small portion of the $25 billion … Read more

Obama crashed the Senate and House Web Servers

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You have to assume that the markets expect some kind of debt deal to happen.  The mild reaction to the dysfunctional government can only be interpreted as frustration about the timing and method of a debt ceiling deal, not the actual certainty of one being reached.  We will find a way not to default although it may take an enormous drop in the market to wake up the public against the dug-in intransigence of the Tea Party.  After all it wasn’t the Democrats that voted down the TARP precipitating the biggest one day slide in the Dow’s history but rather the … Read more

6 Likely Social Security Changes

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6 Likely Social Security Changes Philip Moeller, On Monday July 25, 2011, 12:53 pm EDT Washington’s current soap opera, As the Debt Ceiling Turns, is winding down to its season finale. Grand plans for a “big deal,” including changes to Social Security and Medicare, have given way to face-saving efforts to permit the country to issue new debt and still allow the political parties to claim the high ground as they gear up for 2012 election campaigns. So, for the time being, retirees can breathe a bit easier about changes to their key benefits. Even though nearly every “reform” plan … Read more

Trading the markets can be a humbling experience- even for John Paulson

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Reuters – A humbled John Paulson told investors on Thursday he was “too aggressive” with some of the stock bets in his flagship funds and he is trimming back some of his riskiest holdings.The hedge fund manager told clients in a conference call that he was dialing back the risk by moving away from bank holdings with heavy mortgage exposure.The investor call came after a tumultuous first half of the year for Paulson, whose flagship Paulson Advantage fund lost about 12 percent. A related fund called Advantage Plus was off 18 percent. via Exclusive: Paulson says bets were too aggressive … Read more

How do you know anything is real?

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I found this shocking post.  I know that Gucci bags and Mont Blanc pens, Rolex’s and Marmot jackets are all counterfeited but who would ever think to fake an entire store? Visit to a fake Apple store in China Mark Frauenfelderat 10:44 AM Wednesday, Jul 20, 2011 Jessica found three fake Apple stores in China and took photos. It’s not clear whether the products were genuine or knockoffs. They looked like Apple products. It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue t-shirts … Read more

Money keeps pouring in!

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 “Investors remain committed to hedge funds despite volatility in many markets”  Hedge fund flows as measured by the  GlobeOp Capital Movement Index were positive 1.36% in June.                 Barclays Hedge Index *June-11 (-1.28%) *YTD (-1.48%)                 Dow Jones Credit Suisse Core Hedge Fund Index Performance Summary

Buffett Ready To Bid Debt Ceiling Adieu

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Provided by Yahoo! Finance   Legendary investor Warren Buffett said the U.S. should do away with the debt ceiling, the issue that has recently roiled global equity markets as speculation has intensified that if Congress does not raise the debt ceiling, the “AAA” credit rating held by the U.S. for almost 90 years could be in danger. Buffett wasn’t the first to float the idea of nixing the debt ceiling. Moody’s Investors Service’s did the same in a report published on Monday. Buffett’s Berkshire Hathaway is exposed to the U.S. economy through its equity investments, so it’s not surprising Buffett … Read more

Senate group offers $3.75 trillion deficit cuts

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  By Richard Cowan WASHINGTON | Tue Jul 19, 2011 1:40pm EDT WASHINGTON (Reuters) – A bipartisan group of senators on Tuesday revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the country’s credit limit by August 2. Senate Budget Committee Chairman Kent Conrad, one of the six Democratic and Republican senators who have been working since last December on a deficit-reduction plan, said the proposed $3.75 trillion in savings over 10 years contains $1.2 trillion in new revenues. The so-called Gang of Six briefed about half of the 100-member Senate … Read more

Politicians Creating Crisis

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Politicians Creating Crisis     As the economy improves and Companies post record profits, the market remains suppressed, Gold is at an all time high and the doom and gloom talk continues. The only real chance of a global slowdown is from politicians addressing their agenda and not the issues. From the USA to Europe we are seeing more and more political posturing and less constructive progress. There are to many Government officials in Europe and the USA that presume they are qualified at some level to speak on the national and international financial system, the fact is most are … Read more

Chinese Debt Bomb

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China’s Treasury Holdings Make U.S. Woes Its Own Wu Hong/European Pressphoto Agency A container crane in eastern China. Buying Treasuries has bolstered China’s export economy. By DAVID BARBOZA Published: July 18, 2011   SHANGHAI — However grim Washington’s debt and deficit negotiations may seem to Americans, the impasse is nearly as disturbing for China. Multimedia America’s Foreign Creditors As the United States’ biggest foreign creditor — holding an estimated $1.5 trillion in American government debt — China has been a vocal critic of what it considers Washington’s politicized profligacy. “We hope that the U.S. government adopts responsible policies and measures … Read more

Dodd-Frank Must End

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Dodd-Frank Must End       US House Republican lawmakers, a few days before the Dodd-Frank financial regulatory overhaul turns 1 anni, blasted the law in a press conference Friday, giving it failing grades on several scores. The lawmakers, standing next to a poster board that proclaimed “Annual Report Card,” used a Red marker to grade the law “F” in 5 categories, including its impact on strengthening the economy, streamlining financial rules and stabilizing the housing market. The law is “sets the US on a collision course with economic mediocrity,” said Rep. Scott Garrett (R., NJ). The lawmaker argued that … Read more

Will The U.S. Default Before Greece?

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    Will The U.S. Default Before Greece? By Dirk Van Dijk on July 18, 2011 | More Posts By Dirk Van Dijk | Zacks.com    I thought this was an interesting article on default and earnings by Van Dijk “The fundamental backing for the market continues to be solid. It is important to keep your eyes on the prize. There’s lots of news out there, and much of it is more dramatic than earnings results, but rarely does it have more significance for your portfolio. Earnings are, and are going to remain, the single most important thing for the … Read more

Debt Limit and Wall St.

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Last Update: July 15, 2011 04:08 ET   Debt Limit and Wall St Paul A. Ebeling, Jnr.     Wall Street not concerned about US debt ceiling hassle or default In Washington DC, the fight over to raise or not to raise the US federal debt limit grows stranger by the day. The White House says the limit must be raised by August 2nd, or the government will not be able to pay its bills, possibly including US bonds held around the World. But as the deadline nears, US stocks and bonds, if they could talk, are saying So What! … Read more

ConocoPhillips Splitting Up

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ConocoPhillips Splitting Up By Zacks Investment Research on July 15, 2011 | More Posts By Zacks Investment Research | Zacks.com   ConocoPhillips (NYSE:COP) has surprised the market with its decision to split its operations into two. The third biggest U.S. integrated oil company plans to separate its upstream oil and gas exploration and production unit from its downstream refining division into two standalone, publicly traded corporations. The spin-off, which is subject to market conditions, regulatory approvals and the receipt of a U.S. Internal Revenue Service ruling that endorses its planned tax-free status, is expected to take effect in the first … Read more

Indonesia May Ban Mining Exports

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Indonesia May Ban Mining Exports     Disturbing news today from Indonesia is that the country is considering a ban on mineral exports that would have a severe impact to a number of the regions biggest mining companies. Indonesian miners may face a massive sell off if the law is passed. Freeport McMoRan Copper & Gold in Papua, Newmont Mining on the islands of Sulawesi and Sumbawa and Australia’s BHP Billiton are also at risk under the new laws. The government is drafting a mining regulation that in the next three years could see the export of raw minerals banned, … Read more

‘ Against Double Recession -Bloomberg

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Buffett Says ‘Bet Heavily’ Against Double Recession (Bloomberg) — Warren Buffett, chief executive officer of Berkshire Hathaway Inc., talks about the debt ceiling debate and the U.S. economy.     Buffett, speaking with Betty Liu on Bloomberg Television’s “In the Loop,” also discusses his views on acquisitions, the labor market and Todd Combs. (Source: Bloomberg)   I pay a lot of attention to what Buffett says about the economy because he is the most connected man in America.  If you look at an interlocking network diagram of corporate boards, all roads lead back to Warren Buffett.  There’s little that goes on in … Read more

Chilling Warning from Shilling!

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20% Drop in Housing to Cause Recession in 2012, Says Gary Shilling By Peter Gorenstein     Stocks rallied Wednesday after Federal Reserve Chairman Ben Bernanke suggested the central bank would go ahead with another round of stimulus — aka quantitative easing — if the economy continues to slump. In this scenario, the Federal Reserve would once again purchase assets to keep interest rates low in an attempt to support the economy and prop up asset prices. So far, the Fed’s actions have done more good for asset prices like stocks (see: S&P 500 chart since 2009) while doing less … Read more