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IMF: May Intervene In Secondary Bond Markets Alongside EFSF - (online.wsj.com) The International Monetary Fund could intervene in secondary bond markets alongside the euro-zone's bailout fund and expects the size of Greece's second rescue package to be modified, an IMF official said Wednesday. The Washington-based group would create a special purpose vehicle to buy bonds under stress in secondary and primary markets, said Antonio Borges, director of the IMF's European department. The move would aid countries such as Spain and Italy, which face rising costs for financing in capital markets. But, Borges said they have a problem of market confidence rather than solvency, which interventions could mend. The IMF's involvement in euro-zone secondary bond market purchases would give an "additional element of credibility because of the conditionality the IMF requires," said Borges. Euro-zone leaders agreed earlier this year that the powers of their bailout vehicle, the European Financial Stability Facility, should be expanded and allowed to intervene in secondary bond markets. All national parliaments have agreed, except Slovakia and the Netherlands, which are expected to approve the terms later this month. The European Central Bank can only intervene in secondary bond markets. Borges also said the EFSF should use its resources to persuade investors to return to markets. One option is to incentivize investors with asset protection guarantees from euro-zone governments.
Morgan Bet Farm in Ukraine Before Bailout - (www.bloomberg.com) Mamontenko says he wasn’t affiliated with intermediaries and coordinated prices with Morgan Stanley officials. He says he had a good relationship with the bank. Leaning over a dark-wood table in his Finbank office in Odessa, he says the market panic following Lehman’s September 2008 collapse caused the bank to bow out. “The biggest problem was the financial crisis,” says Mamontenko, his white shirt open to reveal a tanned chest with a thick chain and a gold cross. “That spoiled everything. Without that, we’d be farming 200,000 hectares now.” By the end of the 2008 harvest, Morgan Stanley was cutting its far-flung investments as fast as it had been making them. Mack reduced leverage -- a measure of how extensively a firm is using borrowed money to enhance returns on shareholders’ capital -- to 11 times by the end of March 2009 from almost 28 times a year earlier, according to bank figures.
In Europe, Signs of 2nd Recession With Wide Reach - (www.nytimes.com) The European debt problems that have roiled global financial markets for the last 18 months are showing signs of turning into a far deeper challenge: Europe’s second recession in three years. Greece, Ireland, Portugal and Spain are already in downturns or fighting to avoid them, as high unemployment and austerity belt-tightening take their toll. But in the last few weeks, even prosperous Germany and France, the Continent’s powerhouses, have started to be dragged down, hurt by the ebbing of business orders from indebted countries in the rest of Europe. European stocks continued their latest plunge on Tuesday, as the German financial giant Deutsche Bank, buffeted by the debt crisis, reduced its profit forecast for the year. Investors were also jolted by news that the French-Belgian investment bank Dexia might be the region’s first large bank to need a government rescue as a result of the current debt crisis.
Spain Regions Rush to Sell $1.3 Billion of Property as Debt Pressure Grows - (www.bloomberg.com) Catalonia and Andalusia, two of Spain’s largest and most indebtedregions, are trying to sell $1.3 billion of real estate by the end of the year as the country tries to slash its budget deficit and keep borrowing costs from ballooning. “We put the cream of the crop in the portfolios to ensure the sales are completed,” Jacint Boixasa, director of assets for Catalonia, said in interview in Barcelona. “Our target is to sell 550 million euros ($742 million) of real estate by year- end, which is relatively little time.” Spanish regions, which control more than a third of public spending, will play a pivotal role in the nation’s effort to cut its deficit to 6 percent of gross domestic product this year from 9.2 percent in 2010 as the country tries to avoid following Greece, Ireland and Portugal in requiring a bailout. In August, Moody’s Investors Service put Spain’s credit rating on review for a downgrade, citing the worsening finances in the regions. Catalonia is trying to find buyers for 37 properties including the Barcelona stock market on Paseo de Gracia, Spain’s fourth-most expensive commercial street, as well as the Catalan Agriculture Ministry on Gran Via. Jones Lang LaSalle and Madrid- based real-estate consultant Aguirre Newman are advising the government on the sales.
Dexia Moves Debt Crisis From EU Periphery to Core - (www.bloomberg.com) Less than three months after Dexia SA (DEXB) got a clean bill of health in European Union stress tests, France and Belgium are considering a second bailout, moving the banking crisis from the continent’s periphery to its heartland. “We’re seeing a practical example of contagion playing out,” said Jean-Pierre Lambert, an analyst at Keefe Bruyette & Woods in London, referring to Dexia’s “material exposure” to the debt of countries on the EU’s rim. “Investors aren’t quite sure what the sovereign debt losses will be, nor where the share price should be. They are concerned about the risks and reduce their funding.” Dexia rose 6.7 percent to 1.08 euros by 12:15 p.m. in Brussels trading as European stocks advanced on speculation policy makers are examining measures to shield banks from the sovereign debt crisis. Dexia dropped 22 percent yesterday even after both the French and Belgian governments, which bailed out Dexia in 2008, pledged to support the bank.
U.K. Economy Grows Less Than Estimated - (www.bloomberg.com)
Finland Saves Face With Greek Collateral Deal - (www.bloomberg.com)
India’s Budget-Deficit Target May Be ‘Difficult’ to Meet, Mukherjee Says - (www.bloomberg.com)
ADP Estimates U.S. Companies Added 91,000 Jobs in September - (www.bloomberg.com)
Bernanke Signals Political Pressure Wouldn’t Halt More Monetary Easing - (www.bloomberg.com)
U.S. Dividends at Three-Year Low Mean Payout Pressure Builds as Cash Rises - (www.bloomberg.com)
Merkel Says Euro Bonds No Endgame for EU Woes - (www.bloomberg.com)
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