Sunday, September 30, 2012

Monday October 1 Housing and Economic stories


IMF Official: Greece Will Need Third Bailout - (  Greece will need a third bailout package from the euro zone, and the country's European creditors will have to find the money for it, according to a senior International Monetary Fund official. "Greece will require additional financing, which may take the form either of official-sector involvement or of additional loans, hopefully on more favorable terms," Thanos Catsambas, an IMF alternate executive director, who represents Greece at the Fund's board, said in an interview. Mr. Catsambas is an IMF veteran with experience of Fund programs in Europe, Asia, Latin America and the Middle East. 

Shadow Bankers Vanishing Leave China Victims Seeing Scams - ( To live out his retirement years, He Zhongkui was counting on steady income from an investment that promised interest payments five times higher than what he could earn in a Chinese bank. Now He, a 62-year-old former municipal official in Wenzhou who rides a rusty bicycle, is cutting back on food and gasoline, having found himself one of a growing number of victims of China’s nebulous world of shadow banking. A “friend,” who he said had been paying him 2,400 yuan($379) a month after He gave him one-third of his 600,000-yuan life savings to invest in real estate, suddenly disappeared. So did the payments and principal. “I called, but the number was no longer in existence,” said He, who worked for the Water Resources Bureau in Wenzhou, a city of 9 million people on China’s east coast. “I went to his home, but nobody was there. “I was even invited to his daughter’s wedding, for heaven’s sake. It was all a scam.” China’s slowest economic growth in three years and a slumping property market, where many so-called shadow-banking investments are parked, are squeezing millions of Chinese who have invested the money of friends and acquaintances chasing higher yields to honor those payments. 

Census: Middle class shrinks to an all-time low - ( The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow, new census data released Wednesday showed. Income inequality increased by 1.6 percent, the Census Bureau said in its annual report on poverty, income and health insurance. This was the biggest one-year increase in almost two decades and suggested that a trend in place since the late 1970s was picking up steam. As a snapshot of a nation recovering from one of its worst recessions ever, the census report had both shadows and highlights. Median household income declined $777, to $50,054 before taxes. But the poverty rate, which many experts had predicted would rise to rates unseen in nearly half a century, inched down a hair to 15 percent, a decline of about 100,000 people. 

Spain Calls Europe’s Bluff as Region’s Debt Crisis Eases - ( Europe's four-year old debt crisis seems to be in remission. Dutch votersbacked pro-euro parties in Wednesday's poll, the German Constitutional Court gave the go-ahead for the region's permanent bailout fund and the European Central Bank's (ECB) latest bond program seems to be working, even before it's begun. Yields on Spanish and Italian bonds have fallen, the euro is at its strongest in four months against the dollar and European stocks are trading at their highest in almost a month. The turnaround has been so dramatic that it's allowed Spain, one of the most badly affected countries, to suggest that it may not need aid after all.

Schaeuble Cautions Spain Against Aid Bid in Poke at France - (  German Finance Minister Wolfgang Schaeuble discouraged Spain from seeking a full international bailout, saying another request for outside aid risked a fresh round of financial-market turmoil. “I’m not in the camp that says ‘take the money,’” Schaeuble said in an interview in Berlin today when asked about French moves to press Spanish Prime Minister Mariano Rajoy’s government to ask for more aid. Spain “would be daft” to ask for a bailout on top of the 100 billion euros ($129 billion) for its banks if it didn’t need it. European policy makers are at odds over Spain as Rajoy stalls on whether to request more aid from the euro-area rescue funds and potentially win European Central Bank help to lower borrowing costs. France is pressing Spain to request help to contain the euro-area crisis almost three years after it emerged in Greece, three people familiar with negotiations said yesterday.

Thursday, September 27, 2012

Friday September 28 Housing and Economic stories


Greece faces more anti-austerity strikes, protests - ( A fresh wave of anti-austerity strikes hit Greece Wednesday as the leaders of the governing coalition struggled to finalize further spending cuts for the coming two years — without which the country will lose its vital rescue loans. State hospital doctors, school teachers and local authority employees walked off the job Wednesday to protest planned salary and funding cuts under a new €11.5 billion ($14.7 billion) austerity package. The three unions held a peaceful march to the Finance Ministry in central Athens carrying banners reading "No to the financial collapse of local authorities" and "We will not pay for the crisis, we did not create it." Among the 3,000-strong crowd were several mayors, including the capital's Giorgos Kaminis. Serving and retired military officers were due to hold a march in the afternoon as well, something almost unheard of in Greece.

Over-optimistic Fed may backtrack again on forecasts - ( Has the Federal Reserve watched the U.S. recession and painfully slow recovery through rose-colored glasses? A look at the U.S. central bank's economic forecasts over the past five years suggest it has. Since October 2007, when the Fed's policy committee began giving quarterly predictions for GDP growth and the jobless rate, the central bank has downgraded its nearer-term forecasts almost two-and-a-half times as often as it upgraded them. The gap between Wall Street's expectations for 2012 growth and the Fed's own current view points to yet another downgrade on Thursday, when policymakers wrap up a two-day meeting that has world financial markets rapt. The trend of back-pedaling shows how poorly the central bank has fared at reading the economic tea leaves, with the Fed's optimism a likely factor in policy decisions through the Great Recession and its fallout, economists say.

Moody’s Warns That U.S. May Face Debt Downgrade - ( Congressional leaders dug in their heels on Tuesday against any quick deal to resolve a looming fiscal disaster before the election, even as a major ratings agency warned that it would downgrade the government’s debt if no solution was found by year’s end. Democratic leaders have warned their own members to tone down any discussion of a short-term resolution to the “fiscal cliff,” betting that Republican fears over the January deadline will drive them to the negotiating table shortly after the November election.

Another 'yes, but' ruling - ( The ESM is not unconstitutional; a decision, the court said, of "true political import." However, DW's Daphne Grathwohl argues that the court's rulings are losing their importance. Once again judges at the German Constitutional Court in Karlsruhe issued a "yes, but" ruling. Yes, the European Stability Mechanism (ESM) conforms to the constitution - but some adjustments need to be made. The judges in Karlsruhe called for a limit to German liability of 190 billion euros and said higher payments could not be made without the approval by representatives of the German people. The judges also demanded more participatory rights for the German upper and lower houses of parliament. The ruling follows the logic of other decisions by the court on the euro rescue policies emanating from Brussels.

Spain's Prime Minister May Seek Help from ECB - (  The Prime Minister of Spain indicated Wednesday morning he may seek help from the European Central Bank in order to keep the country’s borrowing costs lower. According to a Finnish newspaper, Mariano Rajoy said, “In addition to growth, the only option I am considering is using the Central Bank’s announced mechanism." He told a second Finnish paper, “It is completely ruled out that we would ask for a bailout for the whole country.” 

Wednesday, September 26, 2012

Thursday September 27 Housing and Economic stories


As Low Rates Depress Savers, Governments Reap Benefits - ( A consumer complaint is ricocheting around the world: low interest rates are eating away at savings. Bill Taren, a retiree near Orlando, Fla., discovered in August that his credit union would pay only 0.4 percent annual interest on his saving account, even though inflation averaged 2.8 percent over the last year. So he and his wife decided to just stuff their money in the mattress, he says, because at least there “we can see the cash when we want.” Jeanne and André Bussière, in Annecy, France, have a stable pension and a bank account that pays 2 percent interest — “almost nothing,” they say — even though the consumer price index rose an average of 2.5 percent over the last year.

Big Banks Hide Risk Transforming Collateral for Traders - ( JPMorgan Chase & Co. (JPM) and Bank of America Corp. are helping clients find an extra $2.6 trillion to back derivatives trades amid signs that a shortage of quality collateral will erode efforts to safeguard the financial system. Starting next year, new rules designed to prevent another meltdown will force traders to post U.S. Treasury bonds or other top-rated holdings to guarantee more of their bets. The change takes effect as the $10.8 trillion market for Treasuries is already stretched thin by banks rebuilding balance sheets and investors seeking safety, leaving fewer bonds available to backstop the $648 trillion derivatives market. The solution: At least seven banks plan to let customers swap lower-rated securities that don’t meet standards in return for a loan of Treasuries or similar holdings that do qualify, a process dubbed “collateral transformation.” That’s raising concerns among investors, bank executives and academics that measures intended to avert risk are hiding it instead.

Germany Says 'Great Uncertainty' About US Debt - ( German Finance Minister Wolfgang Schaeuble questioned on Tuesday how the United States could deal with its high levels of government debt after November's presidential election. In a speech to the Bundestag lower house of parliament to open a debate on the 2013 German budget, Schaeuble said worries about U.S. debt were a burden for the global economy, hitting back at Washington which has criticized Europe for failing to get a grip on its own debt crisis. In private, German officials often express concern about U.S. debt levels and the inability of politicians there to reach a consensus on how to reduce it, but Schaeuble's public remarks underscore the extent of the worries in Germany.

Outlook grim for middle-income workers, report says - ( Middle-income workers have endured a “lost decade” of stagnant wages and are teetering on the brink of another, the consequence of both the recent recession and a long series of policy choices that have eroded their leverage in the job market, according to a report. In its 12th edition of the “State of Working America,” the Economic Policy Institute, a liberal research organization, points out that inflation-adjusted pay has slipped for most workers — including college graduates — over the past decade. With the nation’s unemployment rate at 8.1 percent and projected to remain unusually high for several years, there will be little pressure for employers to increase pay for many workers, the report added.

The French are having serious regrets about electing François Hollande - ( France is mired in a stagnating economy. The private sector is under pressure, auto manufacturing is heading into a depression. Unemployment hit a 13-year high of 10.2%, leaving over 3 million people out of work. Youth unemployment of 22.7%, bad as it is, belies the catastrophic jobs situation for young people in ghetto-like enclaves, such as the northern suburbs of Paris. Gasoline and diesel prices are hovering near record highs. So there are a lot of very unhappy campers. In a BVA poll, 55% of the respondents were dissatisfied with President François Hollande’s efforts to tackle the economic crisis.

Tuesday, September 25, 2012

Wednesday September 26 Housing and Economic stories


Gavin Newsom: Eminent Domain 'Threats' Should Be Investigated By Justice Department - (  California Lieutenant Governor Gavin Newsom says he wants the U.S Department of Justice to investigate "threats" against local communities considering using eminent domain to seize and restructure poorly performing mortgages to benefit cash-strapped homeowners. Newsom sent a letter on Monday to U.S. Attorney General Eric Holder asking federal prosecutors to investigate any attempts by Wall Street investors and government agencies to "boycott" California communities that are considering such moves. "I am most disturbed by threats leveled by the mortgage industry and some in the federal government who have coercively urged local governments to reject consideration" of eminent domain," he wrote in a letter, a copy of which was provided to Reuters.

Top court ruling leaves Oregon's residential real estate market in limbo - ( In a ruling the Oregon Supreme Court will soon review, the Oregon Court of Appeals on July 18 issued a major decision.The case, Niday v. Mortgage Electronic Registration Systems Inc., et al, held that MERS, when acting as a nominee for a named lender, is not a beneficiary under Oregon law. The practical effect of the holding is that any trust deed naming MERS the beneficiary may not be foreclosed in the name of MERS by the more expedient nonjudicial method. A little context is in order.

Former SEC Official Aided Targets, Documents Show- (  A former regional enforcement official at the Securities and Exchange Commission who was sanctioned in May over alleged conflicts of interest in the multi-billion dollar Allen Stanford Ponzi case has a history of such allegations, according to documents obtained by CNBC. Former Associate Regional Director of Enforcement Spencer Barasch became a symbol of the so-called “revolving door” at the SEC — where staffers leave for the private sector and cash in on their contacts — following a 2010 investigation by the SEC Inspector General into the agency’s handling of the Stanford case. The investigation found Barasch repeatedly derailed inquiries into the Stanford Financial Group while serving as Director of Enforcement in the SEC’s Fort Worth Regional Office

Too Big To Jail: Wall Street Executives Unlikely To Face Criminal Charges, Source Says - (  A last-ditch effort by federal and state law enforcement authorities to hold Wall Street accountable for nearly bringing down the U.S. economy is unlikely to lead to any criminal charges against big bank executives, according to a source close to the investigation. Barring a "hail mary pass," said the source, who spoke on the condition of anonymity because the investigation is still ongoing, the members of a task force President Barack Obama formed in January to investigate fraud in the residential mortgage bond industry will instead most likely bring civil lawsuits against some of the banks involved, though it isn't clear when these cases might come.

Car of the Future? Why GM Loses $49,000 on Every Volt - (  General Motors Co sold a record number of Chevrolet Volt sedans in August - but that probably isn't a good thing for the automaker's bottom line. Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

Monday, September 24, 2012

Tuesday September 25 Housing and Economic stories


Germans trust pragmatic top judge to walk euro tightrope - ( Angela Merkel may be the most powerful woman in Europe, but this week the chancellor's plans to save the euro lie in the hands of Andreas Vosskuhle, the supreme court judge known asGermany's most powerful man. In a ruling with global ramifications, the Constitutional Court is expected on Wednesday to allow an EU bailout fund and budget pact, although most legal experts expect it to impose conditions to show that parliament controls Germany's budget. Wednesday's verdict will test the authority of the court, and of Vosskuhle, its youngest ever president at 48, a pragmatist who must balance the issue's weighty theoretical questions with its tremendous real world consequences.

Investors Corner Fed - ( For some investors, bad news is good news. The U.S. economy added 96,000 jobs last month, the government said on Friday. That is fewer than Wall Street analysts were expecting and the latest sign of a sluggish recovery, some economists said. Yet the prices of everything from stocks and gold to Treasury and mortgage debt rose. The rallies reflect near certainty among investors that the Fed will announce additional monetary easing as soon as Thursday, when a scheduled two-day policy meeting ends. The reaction shows how markets have come to depend on central bank stimulus since the financial crisis, and underscores the high stakes for the Fed and its chairman, Ben Bernanke.

Euro zone may collapse if states reject reforms - German trade association - ( The euro zone could break up if people living in crisis-stricken southern European countries do not accept structural reforms in the coming years, the head of Germany's BGA trade association said on Monday. Anton Boerner also dismissed concerns that Germany, Europe's largest economy, could sink into recession in 2012 and said he expected German exports to increase both this year and next. "If people do not say yes (to structural reforms), then the euro will not be able to exist in its current form," Boerner told Reuters in an interview.

Euro Zone Will Pay ‘Terrible Price’ - ( A “terrible price” will be paid for the euro zone crisis eventually, whether the European Central Bank (ECB) embarks on mass bond purchases or not, Jim Rogers, investor and co-founder of the Quantum Fund with George Soros, told CNBC Monday. Rogers said: “These guys have been saying the same old garbage for a long time. It’s not a game-changer – it’s good for the market for maybe a month. The debt keeps going higher and higher and eventually we’ll all going to pay a terrible price.”

Not Looking, but Still Wanting to Work  - ( Most of the Americans who are “not in the labor force” are categorized as such because they are retired, stay-at-home parents or otherwise not interested in holding a job. But there are also a lot of people who really want to work but have decided not to bother looking for jobs because they think the job market is too discouraging or because they are too busy with training, family responsibilities and so forth. This group of people who want to work but aren’t looking are sometimes referred to as the shadow unemployed. Their share of the not-in-labor-force population has generally been rising since the recession began almost five years ago:

Sunday, September 23, 2012

Monday September 24 Housing and Economic stories


Mortgage debt relief may bring new pain: a tax bill - ( A special exemption on principal reduction and other aid from banks, in place since 2007, is set to expire at year's end. Some lawmakers are seeking an extension. Struggling homeowners who obtain reductions in their mortgage debt face a new obstacle starting next year — a bill for taxes on that aid.  A special exemption of as much as $2 million per household in principal reduction and other aid from banks, in place since 2007, is set to expire at year's end.  It is one of a number of similarly expiring tax provisions — most notably the President George W. Bush-era tax cuts — and the large automatic government spending reductions looming at the same time that are referred to as the fiscal cliff. Housing advocates and lawmakers are worried that the exemption will disappear just as thousands of homeowners are receiving large amounts of mortgage debt relief from the nation's five largest banks as part of a national settlement of foreclosure abuse investigations.

German media warns unlimited ECB aid could ruin euro - ( Germany's conservative newspapers on Friday accused ECB chief Mario Draghi of writing a "blank cheque" to troubled euro zone states that could put the entire currency at risk, with top-selling Bild warning his policies could make the euro "kaputt". The Italian president of the European Central Bank unveiled a new plan on Thursday to lower the borrowing costs of euro zone states like Spain and Italy by buying their bonds. Germany's central bank opposes the ECB's move. Chancellor Angela Merkel has supported Draghi while insisting Bundesbank chief Jens Weidmann's public criticism of the bond-buying has been useful too. For the country's conservative newspapers, many of which have taken an increasingly euro-sceptic stance as the three-year-old euro zone debt crisis wears on, Draghi's latest measures went too far.

Economist Sinn Rattles Merkel Laboring to Save Euro - (  Dressed in his customary gray three- piece suit at a conference in Frankfurt on June 15, Hans-Werner Sinn folds his hands and listens without expression as a series of speakers criticize his economic theories. Willem Buiter, chief economist at Citigroup Inc., goes so far as to decry them as “nonsense.” Taking his turn at the microphone shortly afterward, the 64-year-old president of the Munich-based Ifo Institute for Economic Research says he regrets it when investment bankers such as Buiter “lose their composure.” He then lays out once more his argument that Germany is paying more than it thinks for Greece’s fiscal recklessness and that the struggling southern European nation should long ago have left the euro zone, Bloomberg Markets magazine reports in its October special issue on the 50 Most Influential people in global finance.

Mario Draghi promised a bazooka but produces a pea-shooter - ( Mario Draghi has promised to do whatever it takes to save the euro. Was the bond-buying initiative the European Central Bank president announced today enough, as he claimed, to "backstop" European monetary union? If, like me, you have come to see the single currency as unsustainable in its present form, both politically and economically, then plainly not. But, as with previous ECB initiatives, Mr Draghi has at least managed to buy a bit more time. The endgame has been pushed further, possibly quite a lot further, into the future. Markets responded accordingly. Without the conditional bond-buying programme agreed by the ECB governing council today, the show would certainly have been over by Christmas, with either Spain or Italy blowing it up in frustration. We can forget poor little Greece, which in its pride still manfully soldiers on with a project which condemns the country to permanent depression. Whether it leaves or stays no longer makes much difference to anyone else. Most of the preparation for its exit has already been done.

Forget four years ago: We're worse off than in 2011 - ( The problem is it's unlikely we will get to that magic number anytime soon. Compared to where we were a year ago, the economy is headed in the wrong direction. Here's the trend: Over the past six months, the economy has added an average of 97,000 jobs a month. At this time a year ago, the six-month average was 136,000, meaning the economy was growing 40% faster than it is today. For the whole year, the economy has added an average of 139,000 jobs a month. That's better, but still worse than a year ago when that figure was 143,000. What's more, those numbers come from the survey of employers. When the Labor Department asks individuals about their employment status, the situation looks a good deal worse. According to that survey, which many say does a better job of capturing new businesses and the self-employed, six-month average employment gains drop to a measly 6,000 jobs, or nearly one-sixth fewer than we were adding a year ago.

Thursday, September 20, 2012

Friday September 21 Housing and Economic stories


Greek unemployment surges to 24.4 percent in June, police step up protests - ( Thousands of police marched through Athens on Thursday, chanting “thieves, thieves” and carrying black flags, to oppose planned pay cuts under a huge new austerity package meant to save Greece from defaulting on its mountain of debt. The 4,000 protesters, who also included firefighters and coast guard officers, lit flares, blared spray-can horns, and set up mock gallows outside parliament. The peaceful anti-government demonstration came amid deepening social gloom as official figures showed Greece’s unemployment rate surged to 24.4 percent in June, including more than 1.2 million people out of work, many of them youths.

Prepare For The Coming Housing Collapse Part Two - (  The supply of repossessed properties for sale has been intentionally constricted by the servicing banks, the GSEs and by HUD.  So buyers have been forced to turn more to short sale listings as well as to non-distressed properties.  Remember, many are all-cash investors who have been lured from Canada, California and just about every other state for several years by the collapsed prices in Phoenix. That is why short sale listings plunged from 11,000 in January 2011 to under roughly 1,000 in July 2012 .  This has pushed the average price-per-square-foot for distressed and non-distressed homes up from their lows of 2011.  Leif Swanson also informed me that the average price-per-square-foot for short sales in July was $76.  That hardly seems like the stuff of a roaring housing market.  This was actually lower than the average price-per-square-foot for repossessed home sales.  Leif explained to me that the short sellers don’t care, don’t maintain their homes and sell them “as is.” Does this mean that the Phoenix market has actually bottomed?  No way.  At some point, the banks will have to unload their REOs onto the market.  Much more important is the shadow inventory of seriously delinquent underwater properties about which I have written extensively.  We’ll take another look at this important overhang briefly.

Investors yank $3.7 billion out of stocks - ( According to the preliminary data that is frequently revised, investors yanked more than $14 billion out of the stock market in August, the most since April.
While investors have been fleeing U.S. stock mutual funds, they've been plowing into bonds, which are considered safe haven investments. In fact, bond funds raked in $6.6 billion last week, according to ICI data, and attracted more than $29 billion throughout August.

Woodward's new book details debt ceiling fiasco - ( "The Price of Politics," due out Sept. 11 by Simon & Schuster, details the tension-laced partisan battles over raising the nation's borrowing capacity. Failure to raise the so-called debt ceiling would have spurred a massive U.S. default on loans, shut down the federal government and shaken confidence in financial markets around the world. Some economists have said the political stalemate caused so much uncertainty in the financial marketsthat it helped dampen economic growth last year.

Vietnam Risks Biggest East Asia IMF Rescue Since 1990s: Economy - ( Vietnam risks becoming the biggest East Asian economy to seek an International Monetary Fund rescue loan since the region’s financial crisis more than a decade ago as it moves to support a faltering banking system. The nation may need IMF aid to recapitalize banks and must act quickly to clean up bad debt or risk “prolonged stagnation,” the National Assembly’s economic committee said in a Sept. 4 report published on its website yesterday. The financial system needs an injection of 250 trillion dong ($12 billion) to 300 trillion dong, according to the 298-page report that included recommendations to address economic risks.

Wednesday, September 19, 2012

Thursday September 20 Housing and Economic stories


San Jose Cops Rush Disability Retirement Bids as Rules Tighten - ( Police officers and firefighters in San Jose, California, are rushing to join a program that lets them claim disability and retire in their 30s and 40s -- and that allows them to get tax-free pensions while taking new jobs elsewhere. The benefit also allows retired police and fire employees in California’s third-largest city to change their pensions to claim the tax break. “It’s certainly double-dipping,” said Mayor Chuck Reed, 64. “Disability retirement should be for people who are seriously injured and can’t work. Those people obviously can still work and apparently weren’t seriously injured.”

The Untold Story Of How Clinton's Budget Destroyed The American Economy - (www.businessinsider.comHowever, in the New York PostCharlie Gasparino uses the occasion to remind everyone that the seeds of our current economic malaise were planted during the Clinton years. Basically, it was under Clinton that Fannie and Freddie really began blowing the housing bubble, issuing epic amounts of mortgage-backed debt. The story that Gasparino tells is basically: Liberal Bill Clinton thought he could use government to make everyone a homeowner and so naturally this ended in disaster. Gasparino specifically cites the controversial Community Reinvestment Act, a popular conservative bogeyman: How did they do this? Through rigorous enforcement of housing mandates such as the Community Reinvestment Act, and by prodding mortgage giants Fannie Mae and Freddie Mac to make loans to people with lower credit scores (and to buy loans that had been made by banks and, later, “innovators” like Countrywide). The Housing Department was Fannie and Freddie’s top regulator — and under Cuomo the mortgage giants were forced to start ramping up programs to issue more subprime loans to the riskiest of borrowers.

ECB Plan Said to Pledge Unlimited, Sterilized Bond-Buying - ( European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said. The euro jumped half a cent on the report and traded at $1.2611 at 5:40 p.m. in Frankfurt. European stocks advanced. An ECB spokesman referred to an Aug. 20 statement in which the Frankfurt-based central bank said it was misleading to report on decisions that haven’t been taken yet.

Prisoners Fear Freedom in Crisis-Hit Europe - ( The cost of freedom under austerity is weighing on ex-prisoners who struggle with financial instability on release from jail and become more likely to re-offend, continuing a vicious circle of crime and punishment — just as prisons approach full capacity across Britain and the rest of Europe, charities told CNBC. According to reports from nationwide prison organizations, the majority of ex-offenders struggle to cope with debt, housing costs, unemployment, and austerity on release from prison. They told CNBC that these financial factors are borne out by the rate of recidivism — or relapse into crime — that has reached record highs in 2012 with 90 percent of prisoners already having previous convictions, according to the Ministry of Justice.

Deere Issues Record Debt as Profit Falters: Corporate Finance - ( Deere & Co. is selling more debt than at any time in its history, exploiting demand from investors who are charging unprecedented low interest rates even as the world’s largest maker of farm equipment said it won’t be as profitable as forecast. A $1 billion offering from Deere’s finance unit of three- and five-year notes at its lowest coupons brings its 2012 issuance to $7.35 billion, exceeding the total in any previous year, according to data compiled by Bloomberg. Average yields on the company’s bonds fell even after Deere said net income in the year ending Oct. 31 will be $250 million less than a May estimate. Deere is boosting debt sales as it contends with slowing revenue in Asia and Latin America that threatens to undermine Chief Executive Officer Sam Allen’s goal of reaping at least half its revenue from outside the U.S. and Canada by 2018. Equity investors are paying the least for the Moline, Illinois- based tractor maker’s sales since November 2009.