outlook

Analysis: Americans Shedding Debt, Becoming ‘Radically Different Consumers’

by on December 18, 2011

Huffington Post…

WASHINGTON (Reuters) – Americans are making progress in working down their heavy debt burden, but are struggling to break out of another funk holding back the economy: their deep pessimism. Some economists point to a big drop in household debt as a sign that American consumers – once considered the driving force of the world economy – are primed to return to more spendthrift ways. But standing in the way of a stronger recovery, and possibly President Barack Obama’s re-election as well, are unprecedented levels of concern that better days may not lie ahead. Research suggests that economic growth will suffer from a sinking feeling among consumers that their incomes will continue to lose ground to inflation. Even though households are digging themselves out of debt, the painful 2007-2009 recession could leave a lasting scar on their willingness to spend. “Given people’s expectations, the outlook going forward does not suggest much upside for consumption,” said Jeff Greenberg, an economist at Nomura in New York. “A lot of people will be radically different consumers.” Polls show record levels of pessimism about future income despite slow improvements in the economy. Indeed, Gallup surveys have found Americans are even gloomier about their finances now than they were during the recession’s darkest days. Americans should be feeling better. They have made big strides whittling down the mountain of debt left after the explosion of the housing bubble and the subsequent recession. Debt payments have already fallen to the smallest fraction of income since 1994. Households spent 11.09 percent of after-tax income servicing their debt in the third quarter. In 2007, that rate hit a record high 14 percent. Many borrowers have been helped by the Federal Reserve’s push to lower interest rates. Others are simply walking away from mortgages. PROTRACTED MALAISE Shaking the painful debt hangover is widely seen as crucial for getting the economy growing faster again. But it might not be enough. Derek Thompson, a salesman at a credit card company in Fort Lauderdale, Florida, recently refinanced his mortgage to lower his monthly payments. But given a sobering outlook for future income, he says he will use the extra money to pay off other debts rather than buy new stuff. Thompson needs to start paying off the $50,000 he borrowed to get a bachelor’s degree in criminal justice, and he plans to switch careers to get into law. At the same time, he fears he will take a pay cut due to a tough job market. “I want to wait until the financial situation straightens out a bit before I make any other changes,” he said. Thompson is far from alone in his unease over the economy. Americans’ median guess of how much their incomes would rise in the coming 12 months fell to 0.2 percent this month, the lowest in records going back to 1978, according to the Thomson Reuters/University of Michigan sentiment survey. That reading cratered in late 2008 after the collapse of U.S. investment bank Lehman Brothers. Views on wage gains never recovered, and now only 8 percent of Americans expect incomes to grow faster than inflation over the next year. Perhaps even more worrisome, views of future inflation-adjusted income have been moving lower since around 2003, a trend that was only exacerbated by the recent recession. That bodes poorly for growth. Research by JPMorgan economist Michael Feroli found inflation-adjusted income expectations might be the best single indicator for predicting future consumption. His crunching of real income expectations implicit in the University of Michigan survey found they correlated better with spending growth than changes in the stock market, wider measures of consumer sentiment or even the actual growth in people’s wages. This is scary not just because pessimism is so rampant, but because top policymakers like Obama and Fed Chairman Ben Bernanke have limited sway over the national mood. “People (need) to really believe that sustained strong growth is coming, which is like solving a problem by presuming its solution,” Feroli said. “It’s hard for the Fed to directly affect households’ psychology regarding their real income expectations.” Other recent research also points to the importance of expectations, suggesting that shifts in the collective mood may have been the driving force behind the ups and downs of the U.S. economy over the last six decades. Working together, economists from the University of British Columbia, City University of Hong Kong and the Dallas Federal Reserve Bank found positive turns in sentiment led to substantial pick-ups in investment and hours worked. The opposite held for a souring mood. It seems hard to imagine a quick turnaround in the current malaise. Feroli suggests that allowing a little extra inflation could prompt people to buy more homes and boost investment, perhaps leading to more growth and optimism. Others propose tax cuts or more government spending to get more money in people’s pockets. Both ideas face big hurdles, with lawmakers currently embracing austerity and central bankers at the Fed divided over how much inflation can be tolerated. Yet the national mood has shifted quickly before. In the early 1980s, after a tumultuous period marked by recession and high inflation, Americans suddenly began to believe in real wage gains as the Fed tamed prices and then-President Ronald Reagan cut taxes and boosted military spending. “It’s amazing how quickly it can turn around,” said Hersh Shefrin, an economist and professor of behavioral finance at California’s Santa Clara University. (Reporting By Jason Lange; Editing by Chizu Nomiyama; and Jan Paschal) Copyright 2011 Thomson Reuters. Click for Restrictions .

More:
Analysis: Americans Shedding Debt, Becoming ‘Radically Different Consumers’

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , , , ,

{ 0 comments }

Time Running Out For S&P 500 To End Positively, As Euro Crisis Looms

by on December 18, 2011

Huffington Post…

NEW YORK (Reuters) – With two weeks left in the trading year, the euro zone debt crisis will remain the primary impediment to pushing the S&P 500 index into positive territory for 2011. Uncertainty over progress in the region, along with the potential for credit rating downgrades on euro zone countries, have kept investors on edge and market volatility high. Even with a fairly busy U.S. economic calendar, which includes a batch of data on the housing market, the final reading on gross domestic product and durable goods orders, markets will focus on developments from Europe. “What everybody is going to look at is the same thing they’ve been looking at — every time a German official opens their mouth we get crushed,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. “I’m keeping my fingers crossed that Santa Claus is out there. But we’ve got to see something.” The benchmark S&P 500 index is down about 3 percent for the year and would need to climb above 1,257.64 in order to end higher for the year. A rally by stocks on Friday fizzled, and the market ended with only modest gains after the latest credit warning about possible downgrades of European nations. For the week, the Dow fell 2.7 percent, the S&P lost 2.9 percent and the Nasdaq was down 3.5 percent. Italy’s prime minister urged European policymakers on Friday to beware of dividing the continent in the effort to contain the debt crisis, warning against a “short-term hunger for rigor” in some countries, in a swipe at Germany. Stocks have been whipsawed as investors weigh the threat from the euro zone crisis against modest improvement in U.S. economic data and stocks that many regard as cheap. “There do appear to be some improving economic indicators domestically, but it’s hard to see how they win the day if Europe continues to be a big concern. It’s not like the valuations are at such bargain-basement prices that it becomes a one-way bet,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. As volumes begin to dry up and market moves become more exaggerated during the holiday period, the volatility may help lift the stock market into the plus column. CHANCE OF RALLY “Can you see an upside rally? Certainly, because you are going to have some asset managers in the end who are going to try and just push it so the market ends at the very least flat on the year, if not higher,” said Ken Polcari, managing director at ICAP Equities in New York. “If there is going to be a rally at all, it will happen on light volume because there will be fewer and fewer participants. When there is less volume, you do have the ability to have those exaggerated moves, but people will take advantage of that.” Volatility in individual shares could also be affected by corporate earnings preannouncements. There have been 97 negative earnings preannouncements issued by S&P 500 corporations for the fourth quarter, compared to 26 positive preannouncements, resulting in a negative-to-positive ratio of 3.7. That’s the highest in 10 years, according to Thomson Reuters data. Companies that have provided outlooks in recent weeks include DuPont , Intel Corp , United Technologies Corp and Texas Instruments Inc . Unexpected management shakeups could also be on the horizon and increase the tumult in stocks. Both Cablevision Systems Corp and the New York Times Co saw high-level executives suddenly leave their posts. But stock movements next week will ultimately be dictated by actions taken in Europe, with the light volume exacerbating market swings. “The only thing that is going to be of any interest is certainly the continuing headlines on Europe, whether or not they come any closer to what looks like a potential agreement,” said Polcari. “You may get a little bit of a push to the 1,250 to 1,270 range, but much beyond that I don’t see why it would go any higher unless you get some explosive announcement out of Europe.” (Reporting By Chuck Mikolajczak; Editing by Kenneth Barry) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read this article:
Time Running Out For S&P 500 To End Positively, As Euro Crisis Looms

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , ,

{ 0 comments }

Bruce Judson: Restoring Capitalism: How the Banks Cripple SEC Enforcement

December 16, 2011

In an earlier column , I wrote about the intersection of equal justice under the law and capitalism. The idea of fair bargain is central to a capitalist economy: Both the buyer and seller in any transaction must believe they fully understand the nature of the good being bought or sold (i.e. no fraud is involved). Since no one is omniscient, the remedy for bargains that the buyer or seller believes are unfair is legal enforcement. At the same time, both parties to the transaction must believe wrongdoing by either party will be enforced with equal vigor. At the time, I referenced the SEC case against Citigroup and criticized the relatively small fine the SEC had imposed, suggesting it was evidence of a broader problem related to meaningful enforcement of the laws by the agency. As background, SEC settlements must be ratified by the court, and a central aspect of these SEC settlements is that defendants “ neither admit nor deny the allegations .” Rarely does the court fail to endorse an agreement proposed by the SEC, since it’s the prosecuting party. Subsequently, the proposed Citigroup agreement has received considerable attention, as U.S. District Judge Jed S. Rakoff rejected the settlement, calling it “neither reasonable, nor fair, nor adequate, nor in the public interest.” He both criticized the typical SEC “neither admit nor deny” form of settlement and called the SEC negotiated fine “pocket change” for Citigroup. Today, The Wall Street Journal indicated that the SEC enforcement division is expected to recommend to SEC commissioners that the Judge’s decision be appealed. These recent events beg a deeper look at the system of SEC enforcement. Why has the SEC apparently pursued such minimal settlements? The answers are surprising in that they reflect a wide discrepancy of views. I found three very different explanations. There is probably some truth in each of them. But they all indicate that we have a broken system that must be fixed so that capitalism can operate properly. First, the SEC enforcement division is underfunded and therefore lacks the resources to pursue a large number of complex trials. Critics say this reflects a deliberate effort by Congress, influenced by large financial institutions, to prevent punishment for malfeasance. This suggests yet another example of how our largest financial institutions are preventing actual capitalism from functioning, often in ways that are not obvious. Second, without the no admission of guilt clause, defendants would open themselves up to a stream of well-funded plaintiff actions based on admitted guilt and even risk bankruptcy. In essence, the proponents of this explanation suggest SEC fines are considered a cost of doing business, but if injured customers have an adequate chance of redress then the punishment will more closely relate to the injuries caused by the illegal actions involved and this worries the banks. Judge Rakoff’s opinion sharply criticized the settlement in this regard, indicating it “depriv[ed] the pubic of ever knowing the truth in a matter of obvious public importance.” Third, it can be explained by the revolving door , where former SEC enforcement officials are “ going to work for the very same firms they used to police .” Top SEC enforcement officials represent some the clearest examples of people who move out of government to high paying jobs in the private sector. This has a chilling effect on the efficacy of SEC efforts related to the largest, most powerful institutions. Clearly, we need to find a fair system that will both attract talent to the SEC but prevent this phenomenon. There are several implications to these different explanations for what is clearly a broken system. Without the deterrent effect of the credible threat of law enforcement, the financial services industry will continue its malfeasance. The additional deterrent effect of successful private lawsuits based on a pre-existing admission of guilt is lost when the SEC uses the no admission of guilt standard. This raises a central question: Is the SEC’s role in our society to punish and deter malfeasance, or is it to help victims more easily recover losses resulting from misconduct? If it is the latter, then finding the actual truth of guilt or innocence would serve a strong societal interest. Additionally, the knowledge that the SEC always settles suits will inevitably start to enter into the thinking of potential bad actors. Here again the deterrent effect is minimized. It becomes easy to imagine bad actors discussing an issue and saying, “What’s the worst that could happen? We will settle with the SEC for far less than we will make on this deal and the details will never become public.” Meanwhile, malfeasance by the financial sector has caused millions of people to suffer. Clear solutions to these problems exist. The Obama administration must insist on far more extensive funding for SEC enforcement. Then we need to remember the famous words of Justice Brandeis, who said, “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Perhaps, as recently discussed by The New York Times , it’s time to reconsider the maximum size and concentration of power in our financial institutions, which seem to consistently interfere with the fair operation of capitalism. This post originally appeared as part of the New Deal 2.0 project of the Roosevelt Institute.

Read the full article →

G20 seeks ways to boost jobs in face of gloomy outlook

September 27, 2011

By Leigh Thomas PARIS (Reuters) – G20 labor ministers meeting on Monday and Tuesday in Paris face the tricky task of trying to boost job creation in the face of a fast-deteriorating economic outlook without undermining already strained public finances. With a new global downturn brewing, the Group of 20 economic powers are still 20 million jobs short of returning to employment levels of before the 2008 financial crisis. But G20 countries face a worsening in the shortfall to some 40 million jobs from 2012 as governments seem to be failing to maintain a nascent recovery in the job market, the International Labor Organization and Organization for Economic Co-operation and Development wrote in a report published on Monday. The labor ministers were meeting under France’s G20 presidency to share notes on fighting unemployment ahead of a summit in early November of the group’s heads of state in Cannes. “Inequality is increasing. It doesn’t mean more growth, it means more instability,” President Nicolas Sarkozy said on Monday following the first day of talks. The employment outlook is darkening across G20 countries with the OECD forecasting earlier this month that annualized growth would average only 0.2 percent in the final quarter of the year across the Group of Seven most advanced economies. In light of the fragile employment situation, the ILO and OECD urged ministers to put job creation program squarely at the top of their agendas, even as governments’ finances come under increased scrutiny on financial markets. Countries with wiggle room in their budgets should not hesitate to step up spending on job-boosting program while those with strained finances should focus on the most cost-effective schemes, the OECD’s head of employment policy, Stefano Scarpetta, said. Hiring subsidies for the most vulnerable workers, apprenticeships for young people and shortened work-times could help soften the blow in a new economic downturn, Scarpetta said. “With a slowdown in the recovery pace, the short-term outlook of the labor market is not going to get any better,” he told journalists ahead of the G20 meeting. “It’s likely that unemployment will not decline significantly in the rest of the year and possibly going into 2012,” he added. Spain and South Africa are the G20 nations hardest-hit by unemployment, with jobless rates of 21.2 percent and 25.7 percent respectively. France, Turkey and the United States trail behind them with unemployment rates of between 9 and 10 percent. G20 ministers are to focus on youth employment because young workers were already the hardest hit in the last crisis. Young workers were among the first to lose their jobs in the last downturn and since then job opportunities have been lacking. As a result, youth unemployment levels are twice or three times as high as adult joblessness in all G20 countries. (Reporting by Leigh Thomas; Editing by Kim Coghill)

Read the full article →

Report: To Keep Their Jobs In PA Warehouse, Amazon Employees Work In Dizzying Heat

September 20, 2011

Some workers at Amazon.com’s Allentown, Pennsylvania warehouse are reportedly willing to contend with working at a brutal pace in dizzying heat so long as it means having a job. Only one out of 20 Allentown-based current or former Amazon employees interviewed by current or former Amazon employees interviewed by The Morning Call reported that the online retailer was a good place to work. During summer heat waves Amazon had paramedics on standby to treat any employees who couldn’t stand the heat, the paper reported. But many workers pushed through difficult working conditions after seeing what happened to other employees who didn’t meet expectations — they were fired and escorted out of the warehouse. Some employees worked 11-hour days during the holiday season and others were forced to maintain their productivity levels, even during the summer heat, the Morning Call reported. That might be what it takes to get the giant boost in sales Amazon saw last year. The company says otherwise. Amazon officials told The Morning Call in an emailed statement , “the safety and welfare of our employees is our No. 1 priority,” in response to complaints forwarded to the company by the paper. ( Read the entire story of alleged Amazon.com abuse here. ) But, this isn’t the first time Amazon has been in hot water over the company’s working conditions. Amazon required some employees to work seven days a week and scared others out of taking sick leave, according to a December 2008 report from The Times of London. With the unemployment rate hovering above 9 percent for months and more than 2 million Americans who have been jobless for 99 weeks, according to the Bureau of Labor Statistics , some of those interviewed by the paper said they felt lucky to have a job. The dismal jobs outlook means that it’s not uncommon for workers to avoid complaining about working in dizzying heat, according to Denise McDavid, director of the Contra Costa Builders Exchange. The Northern, California based company brought in Occupational Safety and Health Administration regulators during a May heat wave to educate employers on their obligations to their workers during a heat wave, according to CBS News . Amazon is one of few companies that’s been on a hiring spree in an uncertain economy. The company added close to 15,000 employees between the second quarter of 2010 and 2011 , TechFlash reported. Many of the new hires came from acquisitions of other distribution centers, which the company is set to continue in 2011, according to TechFlash. And the employee boost seems to be paying off. Amazon sales surged by 51 percent in the second quarter of 2011 , compared with the same period a year ago, according to TechFlash. Amazon also may have had a leg-up in sales because in many states online retailers are allowed to collect and remit sales tax , according to Reuters. The company reached an agreement to collect sales tax beginning September 2012 with California state legislators and the California Retail Association earlier this month. Read the entire story of alleged Amazon.com abuse here.

Read the full article →

Gloomy Forecast: IMF Cuts Estimate For U.S. Growth

September 20, 2011

WASHINGTON — The International Monetary Fund is sharply downgrading its outlook for the U.S. economy through 2012 because of weak growth and concern that Europe won’t be able to solve its debt crisis. The international lending organization expects the U.S. economy to grow just 1.5 percent this year and 1.8 percent in 2012. That’s down from its June forecast of 2.5 percent in 2011 and 2.7 percent next year. The IMF has also lowered its outlook for the 17 countries that use the euro. It predicts 1.6 percent growth this year and 1.1 percent next year, down from its June projections of 2 percent and 1.7 percent, respectively. The gloomier forecast for Europe is based on worries that Greece will default on its debt and destabilize the region.

Read the full article →

Oil downside risk rises as economic outlook darkens

September 20, 2011

By Christopher Johnson LONDON (Reuters) – A series of supply squeezes have helped keep oil strong this year but some of them have been short-term factors and could give way to longer-term weakness as the outlook for the world economy and global fuel demand dims. The uprising against Muammar Gaddafi in Libya, production problems in the UK and Norwegian North Sea, lower supplies from Russia, central Asia, Nigeria and Angola have all cut supplies, especially of high quality, light, low sulphur crude oil. More than 2 percent of global oil supply has been lost at a time of buoyant demand from emerging economies such as China, keeping the oil market, in the words of a Merrill Lynch report on Tuesday, as “tight as a drum.” Brent crude has stayed above $100 a barrel for most of the year and hit $127 in April, its highest since 2008. But as economic growth slows in the United States and debt crisis deepens in the euro zone oil demand may be slowing. And the economic downturn is coinciding with the removal of some of the supply issues that have been supporting the market as Libyan oil exports restart and North Sea maintenance ends. “The oil market is caught between bearish macro-economic factors and bullish micro-economic factors in the oil sector itself,” said Julian Lee, senior energy analyst at the Center for Global Energy Studies in London. Many analysts say the twin poles of “micro” strength in the oil market and “macro” weakness from a slowing global economy are strong enough to hold for some time, but others are convinced that a period of serious weakness may be imminent. FUTURES SWITCH “Regardless of the current strength of prompt prices, we think there is room for a downward correction in the coming weeks,” said Christophe Barret, global oil analyst at French Bank Credit Agricole. “The longer-term outlook appears weaker for oil prices. The economic environment remains very weak in Europe and the United States, renewing fears of a significant slowdown in the coming months,” Barret added. One sign of the changing attitude to oil prices can be seen in Brent futures, where spreads between nearby oil futures and forward contracts have switched in recent months with forward prices now at a substantial discount to prompt. While futures prices are not a prediction of where the market will go, they are a reflection of current concerns and a deep forward discount shows tightness is seen as temporary. A divergence between stock markets and oil prices could also be a warning signal. Since July, global equities have taken a dive with the MSCI World stock index losing around 15 percent, while Brent has fallen by only half of that. The last time there was a similar divergence, in 2008, it heralded both a sharp fall in oil prices and a deep recession. Copper, a good indicator of real industrial demand, has also taken a sharp tumble since July, leaving oil behind. $75 PER BARREL Chris Weafer, chief strategist at Russian investment company Troika Dialog, said valuations in the Russian stock market, sensitive to oil, are already pricing a substantial fall in the price of Urals crude, which is similar to Brent. “The current equity market level reflects Urals nearer to $75 per barrel,” Weafer said. The biggest single change to oil supply over the next year is likely to be the return of Libyan oil production, which was pumping at around 1.6 million barrels per day (bpd) before the uprising in the country took hold in February. Saudi Arabia and the Organization of the Petroleum Exporting Countries members have raised output to fill the gap left by Libya and will pump less as Libyan exports resume, OPEC Secretary General Abdullah al-Badri has said. But past experience suggests it is harder to cut output than increase it, especially when spot prices are slipping. Credit Suisse Private Banking commodities analyst Stefan Graber says even with lower oil production from the rest of OPEC, global oil demand may not be strong enough to absorb Libyan oil when it returns to the market “Moderating short-term momentum suggests that prices could extend their pullback in the days ahead,” Graber said. Ultimately, prices will reflect the pace of global oil demand growth, which has tended to be equivalent to around 90 percent of global economic growth minus 2 percentage points. Most forecasts of global GDP growth next year are between 3.5-4.0 percent, suggesting modest growth in oil consumption. But the most recent Reuters poll suggests the probability of a recession in the United States, euro zone and UK is now about one in three, dangerously close to where such predictions have been correct in the past. And if Europe can’t solve its debt and allows it to become a global financial crisis, as some bankers fear, oil could collapse. David Hufton, head of brokers PVM Oil Associates says: “If we come out of next weekend with another set of anemic announcements there is no prospect that oil prices, or any other risk assets, will hold at anything like current levels.” (Editing by James Jukwey)

Read the full article →

Natalie Pace: FAQs on the Standard & Poor’s Downgrade of the U.S. Credit Rating

August 7, 2011

Late Friday afternoon, August 5, 2011, when most people were off to Happy Hour, drowning their cares after a wild week of Dow Drops, Standard and Poor’s dropped a bomb. The U.S. Credit Rating was downgraded from AAA to AA+. The U.S. is no longer on CreditWatch, but the Outlook is Negative, meaning that if Congress does not make the requested budget savings of at least $4 trillion as soon as possible, the U.S. credit rating could be downgraded again. Below are FAQS and answers on the downgrade. Additionally, you’ll find links to the White House, the House of Representatives and the Senate below, so that you can email your elected officials and encourage (demand) that they stop the politics and get America’s fiscal house in order. Armed with the FAQs, you will be in a position to understand clearly that both sides of the aisle failed the American people. 1. What are “budget savings?” The credit rating agencies take “no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing,” according to both Moody’s and Standard & Poor’s. However, both agencies have been clear that the key to avoiding the downgrade was to implement $4 trillion in savings over the next ten years, which could be achieved from a mix of cuts and increased revenue — provided the cuts and taxes/revenue would not damage GDP growth. I wrote extensively on this topic on July 27, 2011, in my article, ” Debt Downgrade and Default: Uncovering the Bipartisan Truth.” Read this article at HuffingtonPost.com/Natalie-Pace . 2. What happens now? If Congress gets smart, goes back into negotiations immediately and comes up with a credible plan to implement budget savings of more than $4 trillion over the next 10 years, the world will have renewed faith in the world’s largest economy. If they don’t, GDP growth will slow, unemployment will remain high, interest rates will rise and companies that are linked closely to the U.S. government will also be downgraded, namely Fannie Mae, Freddie Mac, the ‘AAA’ rated Federal Home Loan Banks, and the ‘AAA’ rated Federal Farm Credit System Banks, the Army & Air Force Exchange Service, the Marine Corps Community Services, and the Navy Exchange Service Command. The stock market has already retreated, and the bond market could also retreat, further decimating the individual retirement plans of hundreds of millions of Americans, which have not fully recovered from the losses in the Great Recession. 3. Interest Rates. The U.S. will now have to pay higher interest rates on its debt. That means that the Debt Ceiling Deal is now a joke. Achieving $4 trillion in budget savings will require even more spending cuts and revenue generating (taxes). Interest will become an even bigger slice of the spending in Washington, making it even more difficult to balance the budget. 4. Stock Market. The S&P500 Index dropped 4.8% on August 4, 2011 (savvy investors were already anticipating the downgrade) and is down 12% since the high of April 29, 2011. Since the downgrade occurred after markets closed on Friday, there could be another slump when markets open on Monday, August 8, 2011. However, that does not necessarily predict a bear market. While the downgrade is bad news and the ramifications of the downgrade will be felt broadly and deeply in the months to come, that does not mean that selling your stocks on Monday is the best idea. (Keep reading this article to the end before you make your decisions.) If you bought into the NASDAQ when the markets opened after 9.11.01, your returns were, on average, 35% gains within four short months (by January 2002). If you sold, you locked in losses and sold low, when you could have made a much more profitable choice within a few short months. The downgrade of the U.S. credit rating is sad and shocking, but it is a message to Washington to get America’s fiscal house in order, not a death knell for the U.S. As Dr. Lawrence Yun, the chief economist at the National Association of Realtors reminds us, “Many big companies have huge cash reserves at this moment so the corporate [bond] rates may not move too much on the news.” In fact, if the dollar weakens, exports could actually benefit. Many U.S. corporations are getting a significant portion of their revenue from other countries. So, 3rd quarter earnings could be better than you might expect, even if growth is dampened by the downgrade. 5. Bond Market. The downgrade will be felt in the bond market — particularly in Treasury bills. Rising interest rates (as a result of credit downgrades) decrease the value of existing bonds. The prices for financing a home will go up (unless the Feds print a lot more money). Dr. Yun is not worried that higher interest rates will weigh down the housing market. He’s more concerned about underwriting standards, which in his view are “way too tight.” A senior executive of a major investment bank in New York City told me that corporate bonds will be affected, but he doesn’t anticipate a crash because bondholders are less emotional than stock owners. The Federal Open Market Committee meets on Tuesday, August 9, 2011, and their response may be to print more money and buy it up themselves (Quantitative Easing III?). In that case, the excess cash in the system means inflation. Low risk, cash positive hard assets become desirable in that scenario. The bottom line is that you need to check your bond portfolio with a forensic eye to credit risk, as well as inflation risk. There are two important articles on this topic in my May 2011 NataliePace.com ezine, volume 8, issue 5. Bonds are no longer safe across the board, and they can definitely lose principal value in today’s world. (I began issuing bond alerts in 2009.) 6. Should You Sell Into a Slide? Be very careful. You might think that getting your order in now will mean you are first in line, but executing a market order into a falling marketplace can be a disaster. If you are determined to sell on Monday, then consider placing a limit order, where you get to determine your sell price. It was a far more profitable idea to sell a few months after 9.11, than it was to try and stop losses when the markets opened on the 17th of September, 2011. The savvy investor has a Stock Shopping List handy for market corrections like this. And that person is always in the best seat to buy low, instead of selling low, when the markets slide. 7. Will the Markets Fall to Zero? No. Even if investors wanted to take the stock market to zero, they can’t. There are mechanisms that halt trading if the markets fall too far, too fast. There are three circuit breaker thresholds — 10%, 20%, and 30%. If there is a 10% (1200-point) drop in the Dow Jones Industrial Average before 2:00 p.m. ET, the market will stop trading for one-hour. If there is a 20% drop (2400-points) before 1:00 p.m., the market will stop for two hours. In the event of a 30% drop, regardless of the time, the market closes for the day. After 9.11, the stock market was closed all week, reopening on the following Monday, September 17, 2001. Under a new pilot framework established by the SEC, FINRA and the stock exchanges, there is a 5-minute “pause” that is triggered when certain individual stocks fall by more than 10% in a 5-minute period. 8. How long will stocks take to recover? The long-term recovery is highly correlated with GDP growth. If the U.S. economy starts growing again, stocks will rise. Before this debacle, the economy was predicted to have a relatively strong second half in terms of GDP growth, continuing into 2012 — a positive sign. If consumers are disgusted with Congress and worried about the economy, they may stop spending, which impacts corporate sales and profitability, which slows GDP growth. This will be an ongoing story, which I will continue to report on in my Hot News on Cool Stocks reports, twice a month. 9. What should you do? Contact your Congressman and the White House and demand that they come up with a bipartisan plan to implement more than $4 trillion in budget savings over the next 10-years, so that the U.S. can earn back its AAA rating and get back to the business of growing the economy and creating jobs. The politics must stop. Paying our bills, creating a sustainable plan for spending (including Medicare, Medical, Social Security and Defense — the Big Four) and reforming the tax code is a bipartisan approach that is recommended by the most respected economists in the world. http://house.gov/ http://senate.gov/ http://www.whitehouse.gov/ 10. Who’s to blame? According to Neil Cavuto (speaking on Cavuto on Business August 6, 2011), Senator Mitch McConnell said that he could have reached the $4 trillion mark if the Republicans had agreed to raise taxes, which he refused to do. There are widespread reports that the Obama Administration had agreed to support an increase in Medicare’s eligibility age, to means-test certain Medicare programs, to cut Medicaid benefits and to restructure the payments of Social Security benefits as part of a grand bargain with Republicans, if there was also a plan to increase revenue. Majority Senate Leader Harry Reid bragged that the new Debt Ceiling Deal would not be making any cuts to the entitlement programs. Both parties congratulated themselves on the Debt Ceiling Deal and tried to promote the idea that the deal had “averted fiscal calamity,” when in fact it had missed the $4 trillion in budget savings by almost $2 trillion. As we saw with the market drop on Thursday, Americans weren’t buying that. As we saw on Friday with the Standard and Poor’s downgrade, neither did the credit rating agencies. I have a very important call-in radio show on Wednesday, August 10, 2011 at 9:00 a.m. PT (noon ET). I will provide another market update at that time, and you will also have the opportunity to get your questions answered. Call into: (347) 215-7305. Log onto: BlogTalkRadio.com/NataliePace . About Natalie Pace: Natalie Pace is the author of You Vs. Wall Street and the founder and CEO of the Women’s Investment Network, LLC. She is a blogger on HuffingtonPost.com and a repeat guest on national television and radio shows such as Good Morning America, Fox News, CNBC, ABC-TV, Forbes.com, NPR and more. As a philanthropist, she has helped to raise more than two million for Los Angeles public schools and financial literacy. Follow her on Facebook.com/NWPace. For more information please visit NataliePace.com.

Read the full article →

U.S. Credit Downgrade Darkens Economic Outlook

August 6, 2011

NEW YORK — With the United States government now shorn of its top credit rating by Standard & Poor’s, experts are increasingly worried that the American economy is headed back into recession, while Europe appears vulnerable to another shock. The announcement that the rating agency had reduced the U.S. government’s AAA rating for the first time in history came after days of punishing declines in the stock market, and has now cast a shadow over economic prospects in the months ahead. A recent stream of indicators has provoked concern that the economy could be headed for another recession, with the growth rate slowing considerably, unemployment stubbornly elevated and the stock market swooning. Some experts say the downgrade could be the final trigger, making credit more expensive and sowing broad unease. “People will be pulling money out of equity markets, out of commodity markets, and putting it into cash — essentially, stuffing money in your mattress,” said Andrew Lo, a professor of finance at the MIT Sloan School of Management, in an interview Saturday. “This is the worst thing to have happened, given the weak economy we already have.” “Some straw has to break the camel’s back,” he added. “This may be the straw.” The psychological impact of the downgrade might cause stocks to fall Monday and could exacerbate the sovereign debt crisis in Europe, experts say. Over time, it could raise the interest rates on 10-year and 30-year Treasury debt, making it more expensive for the federal government to borrow money, further worsening the deficit. The downgrade could also push up the cost of loans that are tied to the Treasury rate, making it more expensive for Americans to get funds to buy a car or a house. The effects could reach Europe, where nations that share the euro currency are contending with a debt crisis that seems to deepen by the week. While S&P didn’t announce plans to reduce the ratings of European countries following its U.S. Treasury downgrade, experts said European downgrades might be inevitable, to maintain consistency in the rating system. That in turn could spark a new round of panic. S&P’s decision comes at a time of critical economic weakness, as the American economy seems increasingly vulnerable to another contraction just two years after the official end of the recession that began in December 2007. Gross domestic product grew at an annual rate of just 0.85 percent in the first half of the year, the government announced in July. Seen in relation to population growth, GDP actually shrank in the first three months of the year. After other data releases showed the manufacturing sector weakening and consumer spending drying up, the Dow Jones Industrial Average lost 513 points on Thursday, in the biggest one-day drop since the depths of the financial crisis. It remains unclear what the precise effects of S&P’s downgrade will be, or when they might materialize. Some experts believe the global economy will be able to absorb the downgrade without much turmoil. But others, like Lo, take a more pessimistic view. S&P laid blame for its decision to assign the AA+ rating directly on the political process in Washington. Even though lawmakers reached a decision on Aug. 2 to raise the government’s debt ceiling and avoid a potentially disastrous default, the deficit-reduction package that accompanied the deal won’t sufficiently improve the government’s fiscal health in the coming years, S&P said in a release Friday . A factor in that projection, S&P said, is that Republicans seem unwilling to allow the Bush-era tax cuts to expire. “The majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act,” S&P said. The ratings agency said political dysfunction provoked the downgrade, noting that Congress seems to lack the ability to aid the weakening economy. And now, as S&P acknowledged, the downgrade might introduce a new source of strain. “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,” the company said. “The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.” Although interest rates on long-term U.S. Treasury debt might rise as a result of the downgrade, rates on short-term debt could fall, as investors throw money at safe-haven assets. The yields on Treasury bills, which have the shortest lifespans of the government’s debt securities, could fall below zero, if investors turn to U.S. debt that is keeping its rating intact. Interest rate movement in bond markets, moreover, might be minimal at first. Investors’ attitudes about the economy influence their demand for Treasury debt; with the outlook grim, investors have been fleeing from risk, eager to lend money to the U.S. government and happy to accept low compensation. Yields on 10-year Treasury notes neared 2.4 percent, a low not seen since last fall, as the Federal Reserve was beginning a second massive economic stimulus. But over the next few years, yields on a variety of investments that are influenced by the Treasury rate might rise, implying that a whole range of assets would be treated as riskier. “When there’s more demand for credit, that’s when we’re likely to see a re-pricing of risk,” Mark Vitner, a senior economist at Wells Fargo, said Saturday. “In the very near term, our borrowing costs are going down, due entirely to economic weakness.” In the coming week, the downgrade could cause a period of selling, as investors shun risk. Stocks, commodities and the U.S. dollar might all take hits in the coming days, experts said. Over time, a downgrade could increase the federal government’s cost of borrowing by $100 billion a year, said Terry Belton, global head of fixed income strategy at JPMorgan Chase, in a conference call last week . As the federal government reduces spending, the fiscal health of states and localities could suffer. Many cities depend on states for aid, and some states in turn depend on the federal government. If those governments face increased strain over the coming years, their credit ratings could also be vulnerable. In a July report, S&P said there are certain ratings that “move in lockstep” with the U.S. sovereign rating. Those include home loans backed the federal government and the debt of government-related entities. The mortgage giants Fannie Mae and Freddie Mac might see their ratings docked. And more sovereign downgrades could follow, experts said. “If the U.S. Treasury is not AAA, it’s hard to justify anyone else being AAA,” said Matt Fabian, managing director of the Concord, Mass.-based Municipal Market Advisors, in an interview Saturday. “France, or Microsoft, or some of the muni issuers like Utah or North Carolina — it’s hard to see them as AAAs if the feds aren’t.” With a crisis building in Europe, sovereign downgrades on the continent could push markets to a breaking point, said Lo, of MIT. Borrowing costs for the economically weaker nations that share the euro have skyrocketed in recent weeks, with jittery investors fearful of widespread panic. On Thursday, a subtle implication in an announcement from the European Central Bank was enough to spark a temporary sell-off of Italian debt , and cause a plunge in the Italian stock market. If S&P does not downgrade other governments, the logic of its rating system might fall apart, Fabian said. “They would just be accelerating the demise of ratings,” he said in an interview late last month. “They are reducing the utility of their own product.”

Read the full article →

Debt Ceiling Standoff Is Hurting Consumer Confidence, Goldman Economist Says

July 21, 2011

Washington is struggling to reach a deal on the debt ceiling , and American consumer confidence is slipping. Do these facts have anything to do with each other? Andrew Tilton, an economist at Goldman Sachs, thinks so. In a note published Tuesday, Tilton wrote that a recent drop in the Reuters/University of Michigan Consumer Sentiment Index — a closely watched consumer confidence report — could be related to the ongoing debt ceiling gridlock. The Michigan index fell in July from 71.5 points to 63.8 points — a two-year low, Reuters noted. The drop took many by surprise — the index was expected to rise slightly in July, according to economists polled by Bloomberg News . Nor is Michigan the only polling body to find waning consumer confidence this summer. In June, a Gallup poll found that confidence was at a near-low point for the year after dropping nine points in the early part of the month. Around the same time, the Conference Board, which publishes the monthly Consumer Confidence Index, another major survey of consumer sentiment, measured a 3.2 point decline in consumer confidence for June . Tilton, the Goldman economist, wrote that the consumer confidence plunge happened around the same time as “an explosion of media coverage” of the debt ceiling standoff in June and July. For him, the coincidence is suggestive. “While it’s certainly possible that the drop in confidence reflects other factors… the extent, timing, and composition suggests that the uncertainty surrounding the debt ceiling is probably a contributing factor,” Tilton wrote. He’s not the first to suggest a relationship between flagging confidence and the debt ceiling negotiations. Last Friday, Bank of America economist Joshua Dennerlein also attributed the drop in the Reuters/University of Michigan index to the debt debate, as noted by the Associated Press . And Ward McCarthy, chief financial economist at Jefferies & Co., made a similar statement to Reuters . Yet numerous polls this summer have shown that Americans are more concerned with the health of the economy and the sluggish job market than with anything related to the federal budget deficit. A Gallup poll published this week found that the deficit came in third , behind the economy and unemployment, on a list of Americans’ greatest worries. A CBS/ New York Times poll in late June found that 53 percent of respondents were most concerned about the economy and jobs , compared with only 7 percent who were most concerned about the deficit. Of course, consumers don’t make their choices in a vacuum. Holly Wade, a senior policy analyst at the National Federation of Independent Businesses, and one of the producers of the monthly Small Business Economic Trends survey, told The Huffington Post that “political climate” is the second-most cited concern for small business owners. “Their first and foremost concern is a stable economy,” Wade said. “Then they can look forward to see how business conditions can go from there. Without some stability in D.C., everything continues to be up in the air.” Wade said that she believes the debt ceiling standoff “contributes to the problem” of falling confidence. But she noted that consumer sentiment among small business owners had already started to decline around February or March, well before the “explosion of media coverage” that Tilton’s report cites. Ken Goldstein, an economist at the Conference Board, dismissed the idea that debt ceiling anxieties are to blame for faltering confidence. Goldstein told The Huffington Post that for the average American, the debt ceiling debate “is both too esoteric and takes time away from figuring out who’s going to be on next week’s ‘Survivor.’” The recent drop in consumer confidence probably has more to do with the ailing jobs market — as demonstrated in June’s underwhelming employment report — than “the kabuki in D.C.,” Goldstein said. “After a lousy May, we only got 18,000 jobs in June,” he told The Huffington Post. “I suspect that trumps everything else that happens.” As of Wednesday, President Obama had signaled that he was willing to consider a short-term extension to the debt limit , but that Congress needed to agree on a way forward on a long-term solution. The bipartisan coalition of senators known as Gang of Six spent the day making the case for their $3.7 trillion deficit reduction plan on the Hill, Politico reported.

Read the full article →

Apple rolls out new macs, shares set record

July 20, 2011

By Poornima Gupta SAN FRANCISCO (Reuters) – Apple Inc shares flirted with a record $400 on Wednesday, a day after the world’s most valuable technology company posted blockbuster results and triggered a spate of brokerage upgrades. The stock set a lifetime high as a new $999 MacBook Air and $599 “Mac mini” go on sale, the latter rivaling some of the cheaper offerings from Dell Inc or Hewlett-Packard Co. Apple’s stock climbed 3.3 percent to $389.18, bringing the makers of the iPhone and iPad within shouting distance of Exxon Mobil’s market value of more than $400 billion despite the oil and gas producer raking in more than four times Apple’s annual revenue. In coming months, Apple is expected to roll out a new iPhone, which is likely to give the world’s most valuable technology company another shot in the arm and offer a challenge to rivals such as Google Inc and Research in Motion. The new phone could also propel Apple to leap past Exxon. “We expect Apple will become the largest market cap company on the planet when the stock hits approximately $445 which is only about 13 percent away from aftermarket levels,” said Gleacher & Co analyst Brian Marshall, adding that this is based on the assumption that Exxon shares remain flat. Apple shares rose to a high of $405 in after-hours trading on Tuesday after iPhone sales and strong Asian business helped Apple’s quarterly results beat Wall Street’s expectations. Sales of its iconic products far outpaced forecasts, helping drive a near doubling of revenue in the fiscal third quarter. “China is showing phenomenal strength for Apple and was up six-fold,” Wells Fargo analyst Jason Maynard said. “This remains a huge opportunity for Apple and, in our view, is a major differentiator for the company. Apple has been able to successfully monetize China where competitors have been challenged.” RESET BUTTON Bank of America Merrill Lynch and Wells Fargo raised their estimates on Apple’s yearly earnings by 10 and 13 percent. Caris & Co raised their price target to $600 from $500, while Brigantine Advisors raised their target on the stock to $450 from $400. “We find Apple’s valuation compelling, particularly based on the upside potential from revenue and earnings growth in the Mac/PC and iPhone segments and from gross margins,” Bank of America Merrill Lynch said in a note to clients. Apple moved 20.34 million iPhones during the quarter, which analysts say helped it vault past Nokia and Samsung Electronics to become the world’s biggest smartphone maker. While iPhones remain the flagship device, the company touted its new line of Intel-powered Macs on Wednesday and the latest version of its operating software, the multi-touch enabled Mac OS X Lion. Mac shipments have helped Apple make the top-three among PC vendors in the United States, the first time it has done so in years, according to research firm Gartner. Analysts worry that the success of the iPad will take away from not just Microsoft Windows PC sales, but also Apple’s Mac business, something the company dismisses. “It’s taking away from the PC. When we surveyed people who buy iPads, more of them were choosing it instead of a computer,” marketing chief Phil Schiller told Reuters. “More are choosing it instead of a Windows computer than choosing it instead of a Mac.” (Additional reporting by Jennifer Saba in New York, writing by Edwin Chan)

Read the full article →

Europe Acknowledges Greek Default May Be Necessary

July 12, 2011

BRUSSELS (Julien Toyer and Luke Baker) – European Union leaders are poised to hold an emergency summit after finance ministers acknowledged for the first time that some form of Greek default may be needed to cut Athens’ debts and stop contagion to Italy and Spain. “There will be an extra summit this Friday,” a senior euro zone diplomat told Reuters, suggesting policymakers have been seized with a new sense of urgency after markets started targeting Italian assets. A French government source said Paris was in favor, although the timing was not yet fixed, and in Spain, European Council President Herman Van Rompuy said he had not ruled out a meeting. Earlier, Germany’s finance minister had said a second Greek rescue package could wait until September after euro zone finance ministers effectively accepted that private creditor involvement meant a selective debt default was likely, despite the European Central Bank’s vehement opposition to such a move. “We have managed to break the knot, a very difficult knot,” Dutch Finance Minister Jan Kees de Jager told reporters. Asked about whether a selective default was now likely, he replied: “It is not excluded any more. Obviously the European Central Bank has stated in the statement that it did stick to its position, but the 17 (euro zone) ministers did not exclude it any more so we have more options, a broader scope.” Participants said a buy-back of Greek debt on the secondary market and a German proposal for a bond swap for longer maturities were under consideration after a complex French plan to roll over bonds made no headway. Both would likely be regarded by ratings agencies as a default, or at best a selective default, which although it would not necessarily cover all Greek debt and could be lifted quickly, would have major repercussions for financial markets. The Institute of International Finance, the lobby group representing private creditors, said the EU and IMF needed to deliver a plan for Greece, including a debt buyback, within days to avoid markets “spinning out of control. The increased likelihood of some form of default, and a lukewarm response from the IMF, hit European bank stocks and debt markets and propelled the euro sharply lower against the dollar although markets settled later. Ten-year bond yields in Italy, the euro zone’s third-largest economy, shot above six percent for the first time since 1997 but then subsided to around 5.7 percent, still at a level which bankers say will put heavy pressure on finances. Borrowing costs at an Italian 12-month bill sale surged to their highest since the 2008 financial crisis, putting a Thursday bond auction firmly in focus. There is now acute concern about contagion to Italy, where political tensions between Prime Minister Silvio Berlusconi and Finance Minister Giulio Tremonti have exacerbated concerns, and to Spain, the euro zone’s fourth largest economy. In Rome, Berlusconi tried to calm fears Italy could be swept into full-scale crisis, pledging to accelerate debt-cutting measures and run a primary surplus this year. Willem Buiter, chief economist at Citi and a former UK central banker, said there was a clear spread beyond Greece, Ireland and Portugal, the three nations bailed out so far. “We’re talking a game changer here, a systemic crisis,” he said. “This is existential for the euro area and the EU.” The euro fell to a four-month low against the dollar before recovering, in part because IMF Managing Director Christine Lagarde said the lender and its EU partners were not yet ready to discuss terms for a second Greek bailout. “Nothing should be taken for granted,” she told reporters in Washington. FUNDAMENTAL SHIFT While the finance ministers were not explicit about how they planned to tackle Greece’s debt, saying only that proposals would be discussed “shortly,” they acknowledged that the debt pile — at around 160 percent of GDP — had to be reduced. “We stress the need to make Greek debt more sustainable,” Jean-Claude Junker, the chairman of the Eurogroup of finance ministers, said after more than eight hours of talks on Monday. Economists regarded Junker’s words and the comments from other finance ministers as a fundamental shift. “The euro area now seems to be moving more explicitly toward debt relief via EFSF-funded purchases of secondary market debt,” JPMorgan economist David Mackie wrote in a research note, referring to the euro zone’s 440 billion euro emergency loan fund, which as it stands would not have enough resources to bail out Italy. “Greece will need debt relief at some point, but it is not clear it is much of a help now. More likely the shift toward debt relief is intended as an attempt to limit contagion.” The decision to call an extra leaders’ summit helped counter negative market reaction to an apparent absence of hurry, after German Finance Minister Wolfgang Schaeuble said there was time to wait on Greece, with no new tranche due until September. That lack of urgency prompted stern criticism from Greece’s prime minister but the finance ministers did hint at the prospect of more fundamental steps to come. “Ministers stand ready to adopt further measures that will improve the euro area’s systemic capacity to resist contagion risk, including enhancing the flexibility and the scope of the EFSF, lengthening the maturities of the loans and lowering the interest rates, including through a collateral arrangement where appropriate,” they said in a statement. There was no indication, though, that they had broken a stalemate over how to make banks, insurers and other funds share the cost of additional funding for Athens. A senior member of Germany’s governing coalition acknowledged, however, that a debt restructuring was coming. “We just need to ensure that it’s as orderly a process as possible,” he said, adding that it could come in the autumn. Germany, the Netherlands, Finland and others want the private sector to provide at least 30 billion euros in a new package for Greece that could total 110 billion euros. (Additional reporting by John O’Donnell, Leigh Thomas, Dan Flynn in Brussels, Silvia Westall in Vienna, Huw Jones in London, Stephen Brown in Berlin, Lesley Wroughton in Washington and Milan/Rome bureaus, editing by Mike Peacock) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Chinese Local Debt Might Be Half A Billion More Than Estimated: Moody’s

July 5, 2011

China’s local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses that could threaten their credit ratings, Moody’s said on Tuesday. Addressing the estimate by China’s state auditor that its local governments have chalked up 10.7 trillion yuan of debt, Moody’s said it found more potential loans after accounting for discrepencies in figures given by various Chinese authorities. “The potential scale of the problem loans at Chinese banks may be closer to its stress case than its base case,” Moody’s said in a statement. In view of that, the non-performing loan ratio for Chinese banks could be as high as 8-12 percent, compared with 5-8 percent in the base case and 10-18 percent in the stress case. Unless China comes up with a “clear master plan” to clean up its pile of local government debt, the credit outlook for Chinese banks could turn negative, the ratings agency said. In a bid to assuage investor worries about the potential souring of its massive local government debt, different Chinese authorities including the state auditor, the bank regulator and the central bank have tried to assess the situation. But all three agencies have used different definitions and accounting methods to review the debt, resulting in a hodgepodge of official forecasts. Moody’s said it derived the additional 3.5 trillion yuan of debt after comparing the estimates of China’s state auditor with that of the bank regulator’s. The ratings agency said the Chinese state auditor likely omitted the 3.5 trillion yuan of debt from its assessment because they were not considered as real claims on local governments. “This indicates that these loans are most likely poorly documented and may pose the greatest risk of delinquency,” said Yvonne Zhang, a Moody’s analyst. Moody’s said it expects Beijing to “implement gradual discipline” over the stock of government debt, and that would involve the Chinese government leaving banks to manage a part of the problem loans on their own. (Reporting by Koh Gui Qing; Additional reporting by Kim Coghill in Singapore; Editing by Jacqueline Wong) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Greece Would Likely Default If It Followed French Banks’ Plan: S&P

July 4, 2011

ATHENS (Angeliki Koutantou) – Greece would likely be in default if it follows a debt rollover plan pushed by French banks, S&P warned on Monday, deepening the pain of a bailout that one European official said will cost Athens sovereignty and jobs. European politicians and bankers had expressed confidence last week that the French proposal would not trigger a default, but ratings agency Standard & Poor’s said it would involve losses to debt holders, most likely earning Greece a “selective default” rating. “It is our view that each of the two financing options described in the (French banks’) proposal would likely amount to a default under our criteria,” S&P said. French banks, major holders of Greek sovereign debt, proposed voluntarily renewing some of the bonds when they fall due, but on different terms. S&P cut Greece’s sovereign rating to “CCC” last month, from “B,” on a view that any restructuring of the country’s massive debt load would count as an effective default. The euro fell from around $1.4550 to a session low around $1.4510 after the latest S&P comment. Derivatives industry body ISDA said before the French proposal was released in late June that a voluntary agreement to roll over Greek debt would “typically” not trigger payments on credit default swaps. Greece was already facing an uphill struggle this week to start the process of selling off state-owned assets and reform its tax system to meet European Union and IMF conditions for bailing it out. The deep spending cuts required under the loan terms have sparked angry protests on the streets of Athens. Eurogroup Chairman Jean-Claude Juncker said Greece will lose sovereignty and jobs to meet those criteria, a comment that has enraged unions. Any suggestion of foreign intervention in running the country is an incendiary political issue that will make implementing reforms even tougher. Public-sector union ADEDY, which has launched crippling strikes and protests, reacted angrily to his comments. ADEDY President Spyros Papaspyros said Juncker was out of line: “Mr Juncker interferes in the internal affairs of a country, provokes European rules and is an embarrassment for the country whose government tolerates him.” Juncker’s comments could trigger more of the anti-austerity street protests that have roiled the country for months as Greece stays stuck in its worst recession since the 1970s with a youth unemployment rate of more than 40 percent. “The sovereignty of Greece will be massively limited,” Juncker told Germany’s Focus magazine in an interview released on Sunday. Teams of experts from around the euro zone would be heading to Athens, he said. “One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the euro zone,” Juncker said. EASIER SAID THAN DONE Greece last week passed austerity measures worth 28 billion euros ($40 billion) and promised to deliver 50 billion euros in sell-off revenues by 2015, including raising 5 billion euros by the end of this year alone. On the list are public utilities whose sale is sure to prompt public reaction. “Greece now needs to push faster fiscal adjustments and structural reforms,” said EFG Eurobank economist Platon Monokroussos. “On the privatization front, it is of essence the government delivers fast results to send a strong signal to financial markets.” That is easier said than done. The socialist government, which came to power on a social welfare platform, has yet to launch a single state sale in 18 months in power and must set up a privatization agency within weeks to meet its target. It must also start to sell state property, estimated at up to 300 billion euros but often entangled in legal complications. “The 50 billion euro target is not achievable,” said Constantinos Mihalos, head of the Athens Chamber of Commerce. “Share values are very low right now because of the recession.” At the same time, Greece needs to deliver on pledges to reform a chronically inefficient tax system that has relied too much on middle class salary earners and let wealthy tax evaders off the hook, producing disappointing revenues this year. Finance Minister Evangelos Venizelos told Reuters in an interview on Friday that Greece would tap for the first time private-sector expertise but tax offices around the country are notoriously resistant to any change. “A greater effort is needed to rein in tax evasion and broaden the tax base in a bid to bring the ratio of revenues to GDP closer to euro area average and reduce expenditure and waste in the broader public sector,” Monokroussos said. Investors have feared that default by Greece would send shockwaves through the world finance system with some commentators saying such an eventuality could call the whole euro zone into question. Another hurdle is the law on a uniform pay scale for the public sector, sure to cut further the salaries of civil servants who have already seen their pay reduced by an average 15 percent as a result of a wave of austerity measures to secure the 110-billion-euro bailout last year. On Saturday, euro zone finance ministers approved a 12 billion euro loan Greece needs to avert default. The IMF will meet on July 8 to approve the 12-billion euro loan tranche, which is expected to be handed over by July 15 and allow Greece to avoid the immediate threat of debt default. But the country still needs the second rescue package, which is also expected to total around 110 billion. EU officials will now look at how private creditors can be involved voluntarily so that rating agencies do not declare the rescue a “credit event.” (Additional reporting by Wayne Cole in Sydney) (Writing by Dina Kyriakidou and Emily Kaiser; Editing by Louise Ireland, Peter Millership and Neil Fullick) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Nearly 10 Percent Of European Insurers Fail Stress Tests: Regulator

July 4, 2011

LONDON (Myles Neligan) – Nearly 10 percent of European insurers would need to raise fresh capital in the event of a severe economic shock accompanied by a plunge in share prices, tumbling interest rates and a property market crash, European insurance regulator EIOPA said on Monday. Thirteen insurers would in that scenario rack up a collective 4.4 billion euro ($6.2 billion) capital shortfall relative to the minimum required under the European Union’s proposed Solvency II regime, the watchdog said as it unveiled the results of a stress test aimed at gauging the sector’s financial resilience. EIOPA did not name the companies, but said the small size of the shortfall compared with the sector’s 425 billion euro surplus before the stress tests are applied demonstrated the industry was financially robust overall. “This shows that overall the European insurance industry has a good shock absorber in its capital position,” EIOPA chairman Gabriel Bernardino told reporters. “Now each company will have an analysis of the areas where they are more exposed, and they can take action.” Bernardino said it was “not appropriate” to identify the companies facing a potential capital shortfall, as the Solvency II capital rules the stress tests are based on could change before they are introduced in 2013. “The take-away is that there isn’t going to be a rush to raise equity. The status quo will be maintained,” said Investec analyst Kevin Ryan. Insurers emerged from the 2008 financial crisis in better shape than banks, but a small number of failures in the sector has spurred regulators to scrutinize it more closely for fear a major insurance collapse could endanger the financial system. EIOPA’s banking counterpart, the EBA, will later this month publish the results of a stress test of European lenders which will name the institutions that are found to be financially weak. EIOPA also said six European insurers would face a collective capital shortfall of 2.5 billion euros in a separate shock scenario involving a surge in sovereign bond yields. However, the industry’s exposure to bonds issued by critically-indebted peripheral euro zone nations at risk of default is “manageable,” EIOPA’s Bernardino said. Allianz, Europe’s biggest insurer, said its Solvency II capital thresholds were determined by an internal model which was both more accurate and tougher than the approach adopted by EIOPA. “For all insurers working with internal models, own results will provide a clearer picture than the EIOPA figures,” an Allianz spokeswoman said. The stress tests “confirm the robustness of the European insurance market and its ability to withstand severe stress scenarios,” said CEA, the European insurers’ lobby group. ($1 = 0.705 Euros) (Reporting by Myles Neligan; Additional reporting by Arno Schuetze in Frankfurt; Editing by Jon Loades-Carter) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Week Ahead: Lots of Data Ahead of July 4th Holiday

June 24, 2011

Most investors next week will undoubtedly be looking forward to the long July Fourth holiday weekend. Everyone could use a breather after weeks of bad economic news and stock market losses. Nevertheless, a good bit of economic data will be released. The ISM Manufacturing Index for June is due Friday and it may be the most significant report all week. The ISM index is the most widely watched factory report and it follows closely in the wake of disappointing regional manufacturing data. Economists expect the index to fall to 51.8 in June from 53.5 in May. For months manufacturing had been a lone bright spot on an otherwise grim economic landscape. But that may be changing; the regional data was impacted by bad weather across many regions of the U.S. — notably tornadoes and flooding in the Midwest — which disrupted supply chains. Three Federal Reserve District Bank surveys of manufacturing are due ahead of the ISM report and they should give a preview of what’s to come on a national scale. The Dallas Fed’s Texas Manufacturing Outlook is due Monday and it may offer the most optimistic view. The Richmond Fed’s Survey of Manufacturing is due Tuesday and the Kansas City Fed Manufacturing Survey is due Thursday. The Chicago Purchasing Managers index, used to gauge demand for goods made in factories, is due on Thursday. Consumer spending and personal income data for May are due on Monday. Meanwhile, more bad news is expected from the housing sector. The S&P/Case-Shiller Home Price Index for April is due Tuesday and the numbers are expected to show a continued decline in home values. Pending home sale data for May is due Wednesday. The U.S. housing sector has been just as stubborn as the labor market in its refusal to participate in a recovery. Consumer confidence has been rocked as homeowners see the value of their homes decline and with it the equity that provided a cushion against financial emergencies. Speaking of consumer confidence, the Conference Board’s Consumer Confidence Index will be released Tuesday and the final take on the Reuters/University of Michigan Consumer Sentiment Index is due Friday. The only hope for an increase in these indexes stems from a slight drop in gas prices as oil prices have dipped in recent weeks to around $90 a barrel from over $110 a barrel in the spring. Car makers on Friday will release figures on June sales of North America-produced motor vehicles.

Read the full article →

Economic Uncertainty Hampers Construction Outlook

June 15, 2011

Rising construction material costs and continued economic uncertainty are two of many factors tempering the construction outlook through year-end, according FMI

Read the full article →

U.S. Hotel Transaction Volume Rises

June 14, 2011

Year-over-year hospitality sector sales prices accelerated for the sixth consecutive quarter in 1Q11, according to

Read the full article →

Hiring Prospects Improve Abroad, Hold Steady In America

June 14, 2011

NEW YORK (Nick Zieminski) – Hiring prospects for the coming quarter have improved in most large economies from three months ago, while holding steady in the United States, according to a quarterly survey of employers by ManpowerGroup Inc (MAN.N). After two or more years of making do with minimal staff levels, employers are seeing enough demand for their products and services that they now need to start adding jobs, Manpower found. Fewer employers are sitting on the fence. “As demand starts to tick up, you’re going to see more incremental hiring,” Manpower Chief Executive Jeff Joerres said. “Most of the excess capacity has been filled in, so you’re getting more hiring on the margin. That’s what we’re hearing from our clients.” Job prospects improved in 20 of 39 countries and territories where Manpower conducts its survey compared with the previous quarter. Hiring intentions were flat in four other economies, including the United States, and worsened in 15. When compared with the third quarter of last year, the job outlook improved in 24 economies and worsened in nine, including China, where employment growth appears to be reaching a plateau, according to Manpower. In the United States, the net employment outlook was a seasonally adjusted plus-8, unchanged from the two preceding quarters. It marked seven consecutive quarters of positive hiring outlooks, the global employment services company said. The U.S. net employment outlook — which subtracts employers who plan to cut jobs from those who plan to add them — is above levels of a year ago, when its reading was plus-6. The index dipped into negative territory in 2009, when recession meant job cutters outnumbered those adding jobs. The percentage of U.S. employers who said they planned no change to their staffing levels fell below 70 percent for the first time in two years. Employers continue to squeeze more out of existing workers, but fewer of them have the luxury to continue delay adding jobs, Manpower said. Its survey results follow a much weaker-than-expected U.S. May jobs report, which showed just 54,000 nonfarm payrolls added last month, while the unemployment rate rose to 9.1 percent. Other U.S. economic data have also pointed to a slowdown in recent weeks, including weaker-than-expected retail sales results and data on factory production. Despite the evidence of an economic soft patch, the U.S. unemployment rate will dip by the end of the third quarter, Joerres forecast. “You’re going to see more hiring,” Joerres said. “I’m confident of that.” Manpower interviewed 18,000 U.S. hiring managers for its survey, a predictor of labor trends that dates back to 1962. BULLISH IN BEIJING, NOT IN MADRID Manpower’s U.S. survey results are part of a much wider, global poll of 63,000 hiring managers, which found that job prospects remain strongest in Asia, where employers are much more likely to add jobs than in the Americas or in Europe. China’s hiring outlook improved sequentially, but is below year-ago levels. India’s index dipped from the second quarter, but its reading is the highest of all the countries surveyed, with a net 46 percent of employers looking to add workers in the next three months. India’s wholesale and retail trade sector is showing the strongest outlook in the survey’s six-year history there, reflecting a fast-growing consumer economy, the survey found. “You’re seeing in the Chinese and Indian market that hiring will be very good,” Joerres said. Japanese employers will continue hiring at a modest pace, according the survey, with the greatest demand in construction, after a devastating earthquake and tsunami in March. Similarly to last quarter, the weakest forecasts globally are in Greece, Spain, Ireland and Italy. Greece’s outlook improved from the last quarter, but prospects worsened in the other countries feeling the effects of a sovereign debt crisis. Portugal is not included in Manpower’s survey. Eastern European economies generally showed improving jobs prospects, helped by manufacturing and construction, while strong finance and business services are lifting Germany’s outlook. In the Americas, job seekers have the best chance of landing work in Argentina, Costa Rica and in Brazil, which especially needs construction, manufacturing and finance workers. Manpower provides temporary workers and other staffing-related services in 80 countries and territories. Based in Milwaukee, it generates most of its sales and profits outside the United States. Its rivals include Switzerland’s Adecco SA (ADEN.VX) and Randstad Holding NV (RAND.AS) of the Netherlands. (Editing by Andre Grenon) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Two Areas Dominate Debate Over Financial Reform’s Implementation

June 12, 2011

WASHINGTON (Kevin Drawbaugh) – Global inconsistencies and industry resistance are clouding the outlook for world financial regulation reform in two key areas — swaps oversight and bank capital, both set for debate this week. More than two years since the devastating 2008 banking crisis, regulators from Washington and London to Brussels and Singapore are tightening the screws on high finance, with large Wall Street firms already moving to comply with new laws. Yet regulators’ efforts are moving on different schedules and along sometimes diverging tracks, with much at stake for global giants such as JPMorgan Chase, Bank of America, HSBC Holdings and Goldman Sachs. The lack of an international regulatory framework is a big issue. It allows banks to play nations off against each other by threatening to move their business elsewhere, while underscoring basic logistical challenges. How, for example, can national agencies police banks that are transnational? Such questions are not new, but on few fronts are they more problematic at the moment than in policing the $600 trillion off-exchange swaps markets, and in forcing banks to hold more capital on their books to better handle future crises. Both initiatives threaten existing business models and profits in the financial industry, which is working hard to protect itself behind a time-tested veil of talking points about unintended consequences and saving jobs. In the United States, that means pushing back — largely at the implementation level now that 2010′s Dodd-Frank reforms are the law of the land — against scores of new swaps rules. In Europe, the swaps crackdown is also being contested, as is an effort that is being coordinated in Switzerland to raise the capital standards of the world’s largest banks. Against this backdrop, the U.S. Commodity Futures Trading Commission will meet on Tuesday to focus on swaps rules. “LEGAL UNCERTAINTY” “There is some legal uncertainty surrounding July 16 and derivatives contracts,” including swaps, said Brian Gardner, policy analyst at financial group Keefe Bruyette & Woods. New swaps rules mandated by Dodd-Frank are supposed to take effect on July 16, but many still have not been finalized and probably will not be completed in time. Will pre-Dodd-Frank rules end on July 16? What should swaps markets do? Answers to these questions have already been provided by the U.S. Securities and Exchange Commission. “The CFTC is acutely aware of the issue and may signal on Tuesday how it intends to address the problem,” Gardner said. CFTC Chairman Gary Gensler will testify on swaps before a U.S. Senate panel on Wednesday, with European Union ambassadors meeting the same day to explore a political deal on swaps. Concerns were spreading last week among policymakers of transatlantic divergence and delay on swaps oversight. Failing to rein in swaps could expose the world economy to a replay of 2008, when credit default swaps played a central role in crises at Bear Stearns, Lehman Brothers and AIG. “At the end of the day, I don’t know how much this stuff matters because there are so many ways to go out and take a lot of risk with derivatives,” said Simon Johnson, business professor at the Massachusetts Institute of Technology and author of “13 Bankers,” a recent book about the crisis. The broad issue of international regulatory reform will be discussed on Thursday by a U.S. House of Representatives panel, with the heads of major regulatory agencies testifying, among them Federal Deposit Insurance Corp Chairman Sheila Bair. Bair’s agency is scheduled to meet on Tuesday to finalize new Dodd-Frank rules limiting bank holding companies from holding less capital than their federally insured bank units. Plenty of discussion, but few decisions, are expected next week on another topic — restricting commodity market speculation. A European Commission conference on this is set to begin on Tuesday in Brussels. (By Kevin Drawbaugh, editing by Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Single-Tenant Investors Ready to Shoulder Risk

June 9, 2011

A shortage of single-tenant properties listed with credit tenants and a swelling buyer pool are expected to drive investors to seek more opportunistic plays in the coming months, according to

Read the full article →

Video: Paul on Debt Ceiling, Spending: Political Capital With Al Hunt

June 4, 2011

June 3 (Bloomberg) — Republican presidential candidate Ron Paul talks with Bloomberg’s Al Hunt about the U.S. debt ceiling, U.S. troop withdrawals from Afghanistan, Pakistan and Libya, and Federal Reserve monetary policy. Bloomberg’s Rich Miller and Hans Nichols discuss the state of the U.S. economy and the Fed’s quantitative easing program. Julie Davis talks about the debate over the debt ceiling and a documentary on Sarah Palin to premiere in Iowa next month. Commentators Margaret Carlson and Amity Shlaes discuss the outlook for former Massachusetts Governor Mitt Romney as a Republican presidential nominee. (Source: Bloomberg)

Read the full article →

Video: Alpert Sees Global Economic Forces Behind U.S. Jobs Data

June 3, 2011

June 3 (Bloomberg) — Dan Alpert, managing partner at Westwood Capital Management, David Semmens, U.S. economist at Standard Chartered Bank, and Michael Purves, chief market strategist and head of derivatives research at BGC Financial LP, talk about today’s May U.S. jobs report and the outlook for the labor market. They speak with Pimm Fox on Bloomberg Television’s “Taking Stock.” Duke Lane, president of Lane Packing Co., and Fort Worth, Texas, Mayor Mike Moncrief also speak. (Source: Bloomberg)

Read the full article →

Video: Sargen Says Outlook for Stocks Hinges on July Earnings

June 3, 2011

June 3 (Bloomberg) — Nicholas Sargen, chief investment officer at Fort Washington Investment Advisors, talks about the outlook for U.S. stocks. Sargen also discusses today’s U.S. jobs report for May, U.S. corporate earnings and his investment strategy. He speaks with Carol Massar, Adam Johnson and Sheila Dharmarajan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Read the full article →

Economic data for the Asian region raise uncertainty about the outlook for the region

June 3, 2011

Economic data for the Asian region raise uncertainty about the outlook for the region

Read the full article →

Commercial Real Estate Demand Grows as Markets Stabilize

June 2, 2011

Demand for commercial real estate is on the rise due to the improving economy and job creation, according to the National Associati read more

Read the full article →

Restaurant Industry Outlook Remains Positive

June 2, 2011

Buoyed by positive same-store sales and solid optimism among restaurant operators for continued growth, the outlook for the restaurant industry remained positive in April. The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.9 in April, essentially unchanged from a level of 101.0 in March. In addition, April represented…

Read the full article →

Slow Housing Recovery Impacts Retail Sector

June 1, 2011

Single-family housing’s slow recovery is resulting in weak retail demand , according to Cassidy Turley’s

Read the full article →

Moody’s Downgrades Greece to Caa1 from B1; Outlook Negative

June 1, 2011

Moody’s Downgrades Greece to Caa1 from B1; Outlook Negative

Read the full article →

Video: SocGen’s Martin Sees `Bumpy’ Six Months for China Stocks

May 30, 2011

May 30 (Bloomberg) — Todd Martin, Asia equity strategist at Societe Generale SA, talks about the outlook for China stocks. Martin speaks in Hong Kong with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

Read the full article →

British Pound to Decline as Interest Rate Hike Outlook Withers

May 28, 2011

British Pound to Decline as Interest Rate Hike Outlook Withers

Read the full article →

Video: Stephenson Expects Corn, Soybean, Cotton Prices to Rise

May 27, 2011

May 27 (Bloomberg) — John Stephenson, senior vice president and portfolio manager at First Asset Investment Management Inc., talks about the outlook for agricultural commodity prices. He speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

Read the full article →

Video: Cinetic’s Sloss Is `Bullish’ on Future of Film Industry

May 27, 2011

May 27 (Bloomberg) — John Sloss, founder of Cinetic Media, talks about the state of the motion picture industry and the outlook for films. He speaks with Tom Keene on Bloomberg Television’s “Surveillance Midday.” (Source: Bloomberg)

Read the full article →

Video: Bernard Says He Has Asked Patrick to Stay With IndyCar

May 27, 2011

May 27 (Bloomberg) — Randy Bernard, chief executive officer of IndyCar, talks with Bloomberg’s Michele Steele about the state of the racing series, its business model and the likelihood of driver Danica Patrick’s continued participation. Bernard also discusses the outlook for a new television contract for the Indianapolis 500 after the 2012 race. This year’s race takes place May 29 at the Indianapolis Motor Speedway. (Source: Bloomberg)

Read the full article →

Video: Jim Bianco Says Fed QE3 Can `Definitely Be on the Table’

May 27, 2011

May 27 (Bloomberg) — Jim Bianco, president of Bianco Research LLC, discusses the outlook for Federal Reserve monetary policy and the U.S. stock market. Bianco speaks with Betty Liu, Domininc Chu and Jon Erlichman on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

Read the full article →

Video: Hindery Sees a `Very Fragile Bubble’ in Social Media

May 27, 2011

May 27 (Bloomberg) — Leo Hindery, managing director at InterMedia Partners LP, talks about Liberty Media’s $1 billion bid for Barnes & Noble Inc. and the outlook for social media stocks. Hindery, speaking with Betty Liu on Bloomberg Television’s “In the Loop,” also discusses unemployment in the U.S. (Source: Bloomberg)

Read the full article →

Video: Peabody Sees `Very Low’ Chance of Goldman Being Indicted: Video

May 27, 2011

May 27 (Bloomberg) — Charles Peabody, an analyst at Portales Partners LLC, talks about regulatory scrutiny facing Goldman Sachs Group Inc. and the outlook for the investment bank’s credit rating and the performance. Bonds of Goldman Sachs have lost 0.9 percent in May as Chairman and Chief Executive Officer Lloyd C. Blankfein faces criticism over business practices and a U.S. Senate report last month accused the firm of misleading clients. Peabody speaks with Deirdre Bolton on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Read the full article →

Video: Tyrangiel Says USPS Using `Junk Mail’ to Boost Revenue

May 27, 2011

May 27 (Bloomberg) — Bloomberg Businessweek editor Josh Tyrangiel talks about the magazine’s cover story this week on the outlook for the U.S. Postal Service. Tyrangiel speaks with Matt Miller on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

Read the full article →

Video: Bevan Recommends Food Retail Industry, Utility Companies

May 27, 2011

May 27 (Bloomberg) — James Bevan, chief investment officer at CCLA Investment Management Ltd., talks about the outlook for commodities and investment strategy. He speaks with Mark Barton on Bloomberg Television’s “On The Move.”

Read the full article →

Video: Gardner Says U.K. House Prices Hit by ‘Stagnant’ Economy: Video

May 27, 2011

May 27 (Bloomberg) –- Robert Gardner, chief economist at Nationwide Building Society, talks about the outlook for the U.K. housing market. He speaks with Owen Thomas on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Read the full article →

Video: Nabarro Says No Periphery Nations in Europe Will Default

May 27, 2011

May 27 (Bloomberg) — Willem-Mark Nabarro, head of European equities at Exane BNP Paribas, talks about the possibility of a Greek debt default and the outlook for stocks. He speaks from Singapore with Linzie Janis on Bloomberg Television’s “First Look.”

Read the full article →

Video: RBC’s Trinh Says Yen May Weaken to 83 Against Dollar

May 27, 2011

May 27 (Bloomberg) — Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong, talks about the outlook for global currencies. Trinh also discusses central banks’ monetary policies and Greece’s debt problems. She speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

Read the full article →

Video: Barings’s Do Likes China Consumer, Health-Care Stocks

May 27, 2011

May 27 (Bloomberg) — Khiem Do, head of multi-asset strategy at Baring Asset Management Ltd. in Hong Kong, talks about the outlook for China stocks and his investment strategy. Do also discusses U.S. stocks and the U.S and European economies. He speaks with Susan Li on Bloomberg Television’s “First Up.” (Source: Bloomberg)

Read the full article →

Oil Finds Support but Durable Goods Data Threatens, Gold Outlook Clouded

May 25, 2011

Oil Finds Support but Durable Goods Data Threatens, Gold Outlook Clouded

Read the full article →

Focus on UK preliminary GDP amid downside pressures over the outlook

May 25, 2011

Focus on UK preliminary GDP amid downside pressures over the outlook

Read the full article →

Euro Outlook Remains Bearish, New Zealand Dollar Offers Range Opportunity

May 25, 2011

Euro Outlook Remains Bearish, New Zealand Dollar Offers Range Opportunity

Read the full article →

Euro Outlook Remains Bearish, New Zealand Dollar Offers Range Opportunity

May 25, 2011

Euro Outlook Remains Bearish, New Zealand Dollar Offers Range Opportunity

Read the full article →

U.S. Dollar Outlook Remains Bullish As Index Preserves Upward Trend

May 25, 2011

U.S. Dollar Outlook Remains Bullish As Index Preserves Upward Trend

Read the full article →

Dollar Hits Two Month Highs but Rate Outlook Still Critically Missing

May 25, 2011

Dollar Hits Two Month Highs but Rate Outlook Still Critically Missing

Read the full article →

Video: Yu Sees Dollar Gains on Further Euro Zone Challenges

May 22, 2011

May 23 (Bloomberg) — Geoffrey Yu, a currency strategist at UBS AG, talks about the outlook for the dollar and Federal Reserve monetary policy.¶¶ He also discusses the impact of the European debt crisis on the euro and his top trade. Yu speaks with Bloomberg’s Oliver Joy.

Read the full article →

← Previous Entries