Wednesday, February 29, 2012

Analysis: Oil price rise raises specter of global recession

Analysis: Oil price rise raises specter of global recession
By Zaida Espana and Dmitry Zhdannikov

LONDON | Sun Feb 26, 2012 12:40pm EST

(Reuters) - A jump in energy prices is jamming the slow-turning cogs of an economic recovery in the West, but that may be nothing compared to the economic shock an Israeli attack on Iran would cause.

Oil rose to a 10-month high above $125 a barrel Friday, prompting responses from policymakers around the world including U.S. President Barack Obama, watching U.S. gasoline prices follow crude to push toward $4 a gallon in an election year.

Europe may have more to fear as its fragile economic growth falters and Greece, Italy and Spain look for alternative sources to the crude they currently import from Iran, where an EU oil embargo, intended to make Iran abandon what the West fears are efforts to develop nuclear weapons, comes into force in June.

Monday, February 27, 2012

Debt doomsday may come sooner than expected

Debt doomsday may come sooner than expected
By SEUNG MIN KIM | 2/24/12 3:17 PM EST

The federal government could hit the debt ceiling sooner than expected — and possibly around the November election — according to a report out Friday.

Lawmakers on Capitol Hill had hoped that last summer’s deal to end the nasty fight over lifting the debt ceiling would ensure the issue wouldn’t resurface until at least 2013.

But the Bipartisan Policy Center said Friday that the debt-limit doomsday could come earlier than that.
Analysts from the Bipartisan Policy Center projected that the United States will hit its $16.4 trillion debt ceiling between late November 2012 and early January 2013 due to lower-than-expected corporate tax revenues and the recent extension of the payroll tax holiday.

Read more:

Tuesday, February 21, 2012

Forbes: Bernanke 'Supreme Socialist'

Forbes: Bernanke 'Supreme Socialist'
Thursday, 16 Feb 2012 10:13 AM
By Forrest Jones

Federal Reserve Chairman Ben Bernanke is running the economy in such a heavy-handed manner that he more resembles a socialist strongman reminiscent of the Soviet Union than the head of the world's largest and most iconic of capitalist economies, former GOP presidential hopeful and publisher Steve Forbes writes.

By swelling the Fed's balance sheets via massive purchases of Treasurys and mortgage-backed securities from banks and by controlling interest rates and money supply with various monetary policy tools, Bernanke has become a "supreme socialist" who dictates how Americans manage their money.

"Our central bank tries to manipulate our economy in ways befitting a Soviet commissar. Take interest rates. Fixing the price of money is a form of price control, pure and simple," Forbes writes in a column in the magazine that bears his name.

Monday, February 20, 2012

Study: "Massive decline" in use of Facebook

Study: "Massive decline" in use of Facebook
By John Aravosis on 8/23/2011 11:12:00 AM

Greg Pouy summarizes a new GlobalWebIndex study of Internet usage worldwide. Greg's post is in French, but the study is in English.  Here are some of the key points:

1. The data suggests a "massive decline" in the use of the Facebook, particularly in English-speaking countries.
2. For 16 to 24 year olds, the Web, and especially social media, is their primary information source.
3. Instant messenger use is declining (I think this means the use of instant messaging software such as AOL, MSN, iChat etc).
4. eCommerce remains weak in Italian and Spain.
5. Strong development of eCommerce and social media in Turkey, China and Brazil.
6. The use of mobile Internet (I think they mean Internet access via cell phones, but possibly also tablets) is strong in both Asia and Latin America, while the usage itself tends to take place at home.
7. Many consumers are willing to pay for online content, but there are big differences between countries and age groups.
8. Microblogging (retweeting news via Twitter, for example) is growing significantly in Brazil, Russia, India and China.
9. People are still watching lots of TV, even people who are very active online.

Germany drawing up plans for Greece to leave the euro

Germany drawing up plans for Greece to leave the euro

Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control - with or without a second bailout.
By Bruno Waterfield, Brussels8:16PM GMT 18 Feb 2012

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

Thursday, February 16, 2012

Clinton in talks about possible move to World Bank

Clinton in talks about possible move to World Bank
By Lesley Wroughton
Thu Jun 9, 2011 7:13pm EDT

WASHINGTON (Reuters) - Secretary of State Hillary Clinton has been in discussions with the White House about leaving her job next year to become head of the World Bank, sources familiar with the discussions said on Thursday.

The former first lady and onetime political rival to President Barack Obama quickly became one of the most influential members of his Cabinet after she began her tenure at State in early 2009.

She has said publicly she did not plan to stay on at the State Department for more than four years. Associates say Clinton has expressed interest in having the World Bank job should the bank's current president, Robert Zoellick, leave at the end of his term, in the middle of 2012.

"Hillary Clinton wants the job," said one source who knows the secretary well.

Wednesday, February 15, 2012

Oil rises above $101 as Middle East tensions rise

Oil rises above $101 as Middle East tensions rise
AP Business Writer

BANGKOK (AP) -- Oil rose above $101 a barrel Wednesday in Asia as escalating tensions in the Middle East outweighed lingering concerns about Greece's ability to implement austerity measures to resolve its debt crisis.

Benchmark crude was up 80 cents to $101.55 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 17 cents to finish at $100.74 per barrel in New York on Tuesday.

Brent crude was up 80 cents at $118.15 per barrel in London.

Tuesday, February 14, 2012

Greek economy spirals down as EU forces final catharsis

Greek economy spirals down as EU forces final catharsis
A Greek default and traumatic ejection from the euro moved a step closer last night after eurozone finance ministers cancelled a crucial meeting, accusing Athens of failing to flesh out austerity cuts.

By Ambrose Evans-Pritchard, in Athens8:33PM GMT 14 Feb 2012

The escalating brinkmanship came as fresh data showed that Greece's economy contracted by 6.8pc last year and at an accelerating 7pc rate in the last quarter, far worse than expected by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) "troika".

The country appears to be in a self-feeding downward spiral that is playing havoc with budget targets, leaving Greece with a Sisyphean task of ever deeper cuts.

Rating Action: Moody's adjusts ratings of 9 European sovereigns to capture downside risks

Rating Action: Moody's adjusts ratings of 9 European sovereigns to capture downside risks
Global Credit Research - 13 Feb 2012

London, 13 February 2012 -- As anticipated in November 2011, Moody's Investors Service has today adjusted the sovereign debt ratings of selected EU countries in order to reflect their susceptibility to the growing financial and macroeconomic risks emanating from the euro area crisis and how these risks exacerbate the affected countries' own specific challenges.

Moody's actions can be summarised as follows:

- Austria: outlook on Aaa rating changed to negative

- France: outlook on Aaa rating changed to negative

- Italy: downgraded to A3 from A2, negative outlook

- Malta: downgraded to A3 from A2, negative outlook

- Portugal: downgraded to Ba3 from Ba2, negative outlook

- Slovakia: downgraded to A2 from A1, negative outlook

- Slovenia: downgraded to A2 from A1, negative outlook

- Spain: downgraded to A3 from A1, negative outlook

- United Kingdom: outlook on Aaa rating changed to negative

Please see the individual country specific statements below for more detailed information relating to the rating rationale and the sensitivity analysis for each affected sovereign issuer.

The implications of these actions for directly and indirectly related ratings will be reported through separate press releases.

Monday, February 13, 2012

Obama budget to miss deficit goal

Obama budget to miss deficit goal
By Richard Wolf, USA TODAY

President Obama's proposed 2013 budget will forecast a $901 billion deficit for next year, falling far short of his goal to halve the deficit in four years.

The budget, an outline of which was released by the White House Friday night, will show a higher deficit this year than in 2011, up from $1.3 trillion to $1.33 trillion.

S&P downgrades 34 Italian banks

S&P downgrades 34 Italian banks

(Reuters) - Rating agency Standard & Poor's downgraded 34 Italian banks on Friday, including heavyweights UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI), citing a reduced ability to roll over their wholesale debt and expected weak profitability.

The move follows S&P's downgrade of Italy's sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries.

In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 -- out of 10 groups -- reflecting its more negative view on Italy's banking system.

"Italy's vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks' significantly diminished ability to roll over their wholesale debt," it said.

Friday, February 10, 2012

Greeks strike against IMF/EU austerity before crucial vote

Greeks strike against IMF/EU austerity before crucial vote

(Reuters) - Striking Greek workers denounced a new wave of austerity on Friday as a demand too far by the IMF and EU, but Finance Minister Evangelos Venizelos told the nation it had to decide within days whether to take the pain and stay in the euro or not.

Police fired teargas as black-masked protesters threw petrol bombs, stones and bottles in central Athens. The biggest police trade union said it would issue arrest warrants for Greece's international lenders for subverting democracy, and refused to "fight against our brothers."

As public rage seethed, the leader of the far-right LOAS party, the smallest of three parties backing Prime Minister Lucas Papademos, said he could not support the harsh austerity program.

Tuesday, February 07, 2012

Peak Oil Scare Fades as Shale, Deepwater Wells Gush Crude
By Joe Carroll Feb 6, 2012 1:15 PM ET

When Daniel Lacalle, in his early 20s, took a job with Spanish oil company Repsol YPF SA in 1991, friends chided him for entering a field with no future. "They all said, 'Why do you want to do that? Don't you know only 20 years of oil is left in the whole world?'" he recalls.

Two decades and four energy crises later, the U.S. Geological Survey estimates that more than 2 trillion barrels of untouched crude is still locked in the ground, enough to last more than 70 years at current rates of consumption. Technological advances enable companies to image, drill and shatter subterranean rocks with precision never dreamed of in decades past. Trillions of barrels of petroleum previously thought unreachable or nonexistent have been identified, mapped and in many cases bought and sold during the past half decade, from the boggy wastes of northern Alberta, to the arid mountain valleys of Patagonia, to Africa's Rift Valley.

"Betting against human ingenuity has been a mistake," says Lacalle, who today helps oversee $1.3 billion as a portfolio manager at Ecofin Ltd. in London. "The resource base is absolutely enormous, so much so that we will not run out of oil in my lifetime, your lifetime, our children's lifetimes or our grandchildren's lifetimes."

STOCK Act irks Wall St.’s tipsters, looks to stem Congressional "Insider Trading "

STOCK Act irks Wall St.’s tipsters, looks to stem Congressional "Insider Trading "
By Kevin Bogardus - 02/06/12 08:34 PM ET

The lucrative market for political intelligence that runs from Washington to Wall Street could be more fully exposed by insider-trading legislation that is moving quickly through Congress.

Lobbyists and operatives are bristling at a provision in the Stop Trading on Congressional Knowledge (STOCK) Act that would require many traders of political intelligence to register for the first time under the Lobbying Disclosure Act (LDA).

Observers say the intelligence trade is rapidly growing into a multimillion-dollar industry, powered by clients at hedge funds and other financial firms that can turn a tidy profit on the inside dope about the workings of Congress.
“They don’t want to impact the outcome. They want to know how it is going to play,” said a person who works in the industry. “You can trade it on either side.”

The disclosure provisions in the STOCK Act could put a crimp in the industry by revealing for the first time the true extent of the practice — and who’s engaged in it.

Lowest Non-Holiday Market Volume In Past Decade

Lowest Non-Holiday Market Volume In Past Decade
Submitted by Tyler Durden on 02/06/2012 16:14 -0500

Equity Markets New York Stock Exchange

We are struggling for superlatives (or whatever the antonym for superlatives is). Today's NYSE volume is as low as we could find on Bloomberg data. It is the lowest non-holiday trading day volume in over a decade. This is 26% below last year's post-Superbowl trading day volume. ES, the e-mini S&P 500 future contract, which has tended to be the most liquid and heavily traded instrument reflective of the equity markets, traded around 1.19mm contracts versus a 50-day average of 1.83mm (down 35%) and also we were struggling to find a non-holiday trading day with lower volumes (lower even than on the Thanksgiving Friday of last year's volume). Using our trusty Birinyi ruler and extrapolating the trend since the March 2009 crisis lows, we see No-Volume-Day (NV-Day) as being celebrated on the NYSE in September 2015 (we assume valuations are being adjusted on financials and exchanges as we speak).

Monday, February 06, 2012

Record global sales of junk bonds

Record global sales of junk bonds
By Nicole Bullock in New York and Robin Wigglesworth in London
Companies sold record amounts of junk bonds globally last week in the latest sign of relentless demand for low-rated corporate debt this year.

Schaeffler, the private German precision engineering company, was among the recent issuers, debuting in the capital markets with the biggest euro junk bond in nearly six months as well as debt denominated in US dollars.

Junk bond issuance totalled a record $19.6bn last week, including a sizeable chunk of debt that European companies sold in the US, according to Dealogic, the data tracker.

Market Charts Suggest light at the end of the Tunnel

Market Charts Suggest light at the end of the Tunnel ,but no Volume Confirmation yet

Greece takes step closer to default

Greece takes step closer to default
By Kerin Hope in Athens, Alex Barker in Brussels and Quentin Peel in Munich

Lucas Papademos, the Greek premier, failed to make party leaders accept harsh terms in return for a second €130bn bail-out, pushing Athens closer to a disorderly default as early as next month.

Greek television reported that Mr Papademos has set a deadline of midday on Monday for the three leaders to let him know whether they agree in principle with the proposed austerity measures, before he meets them again later in the day.

Saturday, February 04, 2012

Labor Market: shrinkage. shrinkage

Labor Market: shrinkage. shrinkage

You know what i said at 308 eastern? we want a million jobs an hour. that's what we want. what we got looked like a good report. i said let's get the calculator out and i did. so did my sources and big blogs many people read like zero hedge. the labor force participation rate if you look at nonseasonally adjusted, a fresh low going back to april of '83. if you look at seasonally adjusted a fresh low participation rate going back to december of '81. what does that mean in english? shrinkage. shrinkage. 1.2 million people are now not considered unemployed anymore. they just have left the system. we need to concentrate on the internals and eventually we want to watch the fixed income market to see if some of this sets in as people do their ciphering. back to you.

Wednesday, February 01, 2012

S&P Warns of Cuts; Another US Downgrade Coming?

S&P Warns of Cuts; Another US Downgrade Coming? 
Published: Tuesday, 31 Jan 2012 | 9:09 AM ET
By: Antonia van de Velde
CNBC Associate Editor

Concerns over the size of United States debt reared their head once again as ratings agency Standard & Poor’s warned that health care costs for a number of highly-rated Group of 20 countries, including the U.S., could hurt growth prospects and harm their sovereign creditworthiness from the middle of this decade.