Spanish bad bank loans soar to fresh high - (www.telegraph.co.uk) Spanish bad bank loans soared to a fresh high in June, with almost 10pc of households and companies now behind on their payments. Bad debts climbed to 9.42pc of total lending, the Bank of Spain said on Friday, the highest since records began in 1962. The data showed that €164.4bn of loans were more than three months past their repayment deadlines.A month earlier, the bad loan rate was 8.96pc.
Insight: Goldman independent research arm dies, shunned by clients - (www.reuters.com) Goldman Sachs Group Inc has given up trying to sell research from independent analysts to its institutional clients, after spending millions of dollars on distribution only to find that big money managers had little interest. The bank has laid off or reassigned the dozen or so employees at its Hudson Street Services unit, which offered data and independent research to investors. Goldman also sold its minority stakes in most firms that were producing the research, generating an overall profit in the process.
Lack of Bond Liquidity Hurting European Investors, Fitch Says - (www.bloomberg.com) Investors are concerned about a lack of liquidity in Europe’s corporate bond market as banks cut back on trading and fund managers hold on to securities for longer. Two-thirds of participants in a Fitch Ratings survey published today reported reduced corporate bond liquidity since the start of the euro crisis. The same is true in the U.S., where trading volumes averaged $9.97 billion last month, 8 percent lower than in July 2011, according to data from the Financial Industry Regulatory Authority. “It’s something that’s not going away and if it’s already taking place in the U.S., where the market’s much more liquid and mature than Europe, then we’re in trouble,” said Adriaan Klop, a fund manager at Bryan Garnier Asset Management Ltd. in Paris.
New rules expose bigger funding gaps for public pensions - (www.washingtonpost.com) Already-strapped state and local governments are coming under increasing pressure to reduce pension benefits or increase taxpayer contributions that help pay for them because of new rules that would require them to report those obligations more honestly, advocates say. The latest rules come on line from the bond-rating firm Moody’s at the end of this month. They are projected to triple the gap between what states and municipalities report they have in their funds and what they have promised to pay out to retirees. That hole would stand at $2.2 trillion. For the worst-off cities, the new pension debt calculations could mean bond rating downgrades and increased borrowing costs when localities try to raise money for new projects, Moody’s has warned.
Drought Sparks Battle Over Ethanol Quotas – (www.cnbc.com) Three big intertwined but rival agribusinesses — corn farmers, meat and poultry producers, and biofuel refineries — are in a political fight to protect their interests as a drought ravages corn producers and industrial consumers alike. At issue is whether to suspend a five-year-old federal mandate requiring more ethanol in gasoline each year, a policy that has diverted almost half of the domestic corn supply from animal feedlots to ethanol refineries, driven up corn prices and plantings and created a desperate competition for corn as drought grips the nation’s farm belt. Meat producers are demanding that the Obama administration waive the ethanol quota to ease rising feed prices. But ethanol producers worry that the loss of the quota will undermine the ethanol industry and do little for corn farmers but drive down the price of their stunted harvest.