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STORIES:
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.
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