Thursday November 24 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Italian borrowing costs reach breaking point - (www.reuters.com) Italian borrowing costs reached breaking point Wednesday after Prime Minister Silvio Berlusconi's insistence on elections instead of an interim government opened the way to prolonged instability and delays to long-promised economic reforms. In a dramatic escalation of the euro zone debt crisis, Italian 10-year bond yields shot above the 7 percent level that is widely deemed unsustainable, reflecting an evaporation of investor confidence and prompting German Chancellor Angela Merkel to issue a call to arms. Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.

Late mortgage payments rise in 3rd qtr for first time since 2009; may show start of new trend - (www.washingtonpost.com) While lawmakers in Washington debated the debt ceiling and consumer confidence dropped, more homeowners in the U.S. were having a harder time making their mortgage payments. The rate that mortgage holders were late with their payments by 60 days or more rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion. The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011. The increase surprised TransUnion researchers, who previously forecast late payments, or delinquency, to fall for the quarter. “It’s much different than we’ve been talking about the last few quarters,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit.

Italy’s Political Crisis Ambushes Ireland After Greek Escape: Euro Credit - (www.bloomberg.com) After convincing investors and the European Central Bank that it’s not Greece, Ireland may find it harder to escape the fallout from Italian turmoil. Irish bonds have declined almost 3.6 percent since the end of September, eroding the highest returns in the world since June. Since falling to an eight-month low on Oct. 4, the yield on two-year Irish notes has jumped to about 75 basis points above its average of the past two months, according to data compiled by Bloomberg. Borrowing costs for Ireland, which announced additional austerity measures last week, have risen as Italian Prime Minister Silvio Berlusconi agreed to resign to win parliamentary approval of plans to cut the region’s second-biggest debt load and Greek premier George Papandreou tries to form a unity government under a new leader. “If the disaster scenario happens, I’m sure they’ll get hit with the same kind of contagion again,” said Haig Bathgate, chief investment officer at Turcan Connell, an Edinburgh-based manager of 1 billion pounds ($1.6 billion) for mainly wealthy clients.

Italy’s Political Woes Spell ‘Nightmare’ for BNP, Agricole - (www.bloomberg.com) BNP Paribas SA and Credit Agricole SA (ACA), France’s largest banks by assets, are finding that their pursuit of growth in neighboring Italy in the past decade has a downside: political risk. As the world’s biggest foreign holders of Italian public and private borrowings -- with $416.4 billion of such debt at the end of June -- French lenders face collateral damage from the political turmoil that sent Italy’s bond yields to euro-era records. Austerity measures to balance Italy’s budget are also threatening growth in an economy that has lagged behind the European average for more than a decade, and may hurt the French banks’ consumer businesses. “Italy was a dream investment for French banks,” said Christophe Nijdam, a bank analyst at AlphaValue in Paris. “Nobody could have imagined a sovereign crisis touching a G-7 economy at that time. But the political deadlock is turning the dream into a nightmare.” Prime Minister Silvio Berlusconi, who failed to muster an absolute majority in a routine ballot in Rome yesterday, agreed to resign after parliament approves the country’s austerity plans next week. Berlusconi’s move forces Italy to seek a new regime stable enough to convince investors the country can fund itself and implement painful budget-cutting measures.

Financial Alchemy Undercuts Capital Regime as European Banks Redefine Risk - (www.bloomberg.com) Banks in Europe are undercutting regulators’ demands that they boost capital by declaring assets they hold less risky today than they were yesterday. Banco Santander SA (SAN), Spain’s largest lender, and Banco Bilbao Vizcaya Argentaria SA (BBVA), the second-biggest, say they can go halfway to adding 13.6 billion euros ($18.8 billion) of capital by changing how they calculate risk-weightings, the probability of default lenders assign to loans, mortgages and derivatives. The practice, known as “risk-weighted asset optimization,” allows banks to boost capital ratios without cutting lending, selling assets or tapping shareholders. Regulators in Europe, seeking to stem the region’s sovereign-debt crisis, ordered banks last month to increase core capital to 9 percent of risk-weighted assets by the end of June. Lenders, facing a 106 billion-euro shortfall, are reluctant to plug the gap by cutting dividends or bonuses and are struggling to sell assets or raise cash in rights offerings. Politicians are trying to stop banks from the alternative, cutting back lending, because it could trigger a recession.

OTHER STORIES:

Italy Seen Struggling to Attract Buyers for Treasury Bill, Bond Auctions - (www.bloomberg.com)

Financial Alchemy Foils Capital Rules in Europe - (www.bloomberg.com)

LCH Clearnet SA Boosts Deposit Needed for Trading Italian Government Bonds - (www.bloomberg.com)

Italy Should Request EFSF Aid If Needed, Schaeuble Said to Tell Lawmakers- (www.bloomberg.com)

Investor confidence in Italy collapses - (www.ft.com)

Don't Bank on ECB Rescuing Italy - (online.wsj.com)

Exit From Italian Debt Spurs Fears - (online.wsj.com)

China’s Inflation Eases to 5-Month Low - (www.bloomberg.com)

Italy Austerity Law That Must Pass Before Berlusconi Quits Not Yet Written - (www.bloomberg.com)

Italy’s Focus Shifts to Forming New Government - (www.bloomberg.com)

Slowing China Inflation Gives Scope for Stimulus as Industry Output Cools - (www.bloomberg.com)

Indian Trade Deficit Widens the Most Since at Least 1994, Pressuring Rupee - (www.bloomberg.com)

European Debt Crisis as Berlusconi’s Last Stand - (www.nytimes.com)

Republicans offer tax deal to break debt impasse; Democrats dismiss it - (www.washingtonpost.com)

Italy’s Political Woes Spell ‘Nightmare’ for BNP, Agricole - (www.bloomberg.com)

Corzine Downfall Is Teachable Moment for Japan: William Pesek - (www.bloomberg.com)

Wednesday November 23 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

UPDATE: Bonuses For MF Global US And UK Employees Processed Days Before Bankruptcy - (www.businessinsider.com) Employees of MF Global's British offices may have received their quarterly bonuses last Monday, just hours before MF Global filed for chapter 11 bankruptcy in New York, The Telegraph is reporting. It's an interesting development - because last Monday, Robert Preston at the BBC reported very early in the morning that London employees had been sent home. Maybe they were sent home with their bonuses? It is unclear whether US employees had also received bonuses, though this seems rather unlikely from MF Global's chaotic last hours that Monday morning. MF Global's bankruptcy was announced at around 10:30 a.m. EST last Monday - that was 2:30 p.m. London time. (England is usually five hours ahead of the US - but their daylight savings time occurs one week before the US, so London was only four hours ahead last Monday)

Italy bond yields soar; euro zone troubles deepen - (www.reuters.com) Italian government bond yields soared to near 15-year highs, putting the euro zone's third largest economy front and center of the region's debt crisis, despite scrambling efforts by policymakers to stem the growing contagion. Italy, the world's eighth largest economy, overtook Greece as the prime threat to the stability of the 17-country single currency zone, as finance ministers met to try to find ways of building a firewall around the two-year-old crisis. Italian 10-year bond yields rose to their highest since 1997 -- approaching levels regarded as unsustainable -- with political turmoil in Rome threatening to drag a fourth European economy after Greece, Ireland and Portugal into the debt mire. Jean-Claude Juncker, the chairman of Eurogroup finance ministers, said the European Central Bank would take part in monitoring Italy's promised economic reforms along with the European Commission and the International Monetary Fund, effectively putting the country under full surveillance.

Gloomy Outlook for China Exporters as Factory Closure Wave Looms - (www.reuters.com) Up to a third of Hong Kong's 50,000 or so factories in China could downsize or shut by the end of the year as exporters get hit by cost rises and darkening global demand for Chinese goods, a major Hong Kong industrial body said on Tuesday. The Federation of Hong Kong Industries, which represents around 3,000 industrialists running factories in China, said it expected orders in the second half of this year and the first half of 2012 to fall between 5-30 percent. The European debt crisis and a fragile U.S. economy have depressed this year's Christmas orders, Stanley Lau, deputy chairman of Hong Kong's leading industrial promotion body, told a news briefing. He said a consolidation was on the cards, with around a third of Hong Kong's 50,000 or so factories in China likely to scale down operations or close by year-end.

Olympus Used Gyrus Fees to Hide Losses - (www.bloomberg.com) Olympus Corp. (7733)’s admission that three of its top executives colluded to hide losses from investors fails to address the roles played by other officials, according to the company’s biggest overseas shareholder. The Japanese camera maker’s shares slumped 29 percent yesterday after it reversed weeks of denials that there was any wrongdoing in past acquisitions. The company fired Executive Vice President Hisashi Mori over his role in covering up the losses with former Chairman Tsuyoshi Kikukawa, who resigned last week, and said auditor Hideo Yamada would step down. Olympus’ biggest overseas shareholder is now demanding investor relations head Akihiro Nambu go too because of his role as a director of Gyrus Group Plc, the U.K. takeover target used to funnel more than $600 million in inflated advisory fees to a Cayman Islands fund. And after Nambu, the rest of the board must follow, said Josh Shores, a London-based principal for Southeastern Asset Management Inc.

European crisis hits US bank lending - (www.ft.com) The crisis in Europe has begun to spill over into US bank lending, according to the latest survey of loan officers by the US Federal Reserve.

Credit conditions have steadily eased since the end of the recession but that process almost ground to a halt in the last three months, with only five domestic banks out of 50 saying that they relaxed their standards for lending to large companies. Two banks had tightened conditions. There was also a sharper retrenchment by US branches of foreign banks: 23 per cent of such operations tightened their lending terms, raising their interest rate spreads and cutting back on the amount and period for which they are willing to lend. Of the foreign banks that tightened their lending conditions in the US, all nine pointed to a weaker economic outlook, while a majority said they had a lower tolerance for risk, that their own liquidity position was weaker, and that it was harder to sell loans on the secondary market.

OTHER STORIES:

Germany’s Weidmann Says ECB Can’t Bail Out Governments by Printing Money - (www.bloomberg.com)

European Banks Cutting Sovereign Bond Holdings Threatens to Worsen Crisis - (www.bloomberg.com)

EU Eyes December Start for Rescue Fund - (www.bloomberg.com)

ECB funding to Italian banks rises further in Oct - (www.bloomberg.com)

Drought-Damaged U.S. Corn Crop Pressuring Global Food Supply: Commodities - (www.bloomberg.com)

Italy’s debt costs soar as pressure builds on Berlusconi - (www.washingtonpost.com)

HSBC chief warns of Asia credit crunch - (www.ft.com)

Bond investors fear cliff risk as Italy teeters - (www.ft.com)

Berlusconi Lacks Majority in Budget Vote, Fueling Calls to Quit - (www.bloomberg.com)

Italian Vote Will Test Berlusconi’s Majority - (www.bloomberg.com)

Italian Parliament Vote Will Test Berlusconi’s Majority as Allies Defect - (www.bloomberg.com)

Papandreou, Samaras Move Toward Greek Unity Government as Progress Slows - (www.bloomberg.com)

Berlusconi Exit No Quick Fix for Italy's Woes - (www.reuters.com)

China Home Prices to Fall by 10%-30% Next Year, Impact GDP, Barclays Says - (www.bloomberg.com)

China Housing Prices Decline - (online.wsj.com)

Businesses Feel the Pinch as China Tightens Lending - (www.nytimes.com)

US wealth gap between young and old is widest ever - (www.boston.com)

Citi, JPMorgan May Face Basel Surcharges - (www.bloomberg.com)

Tuesday November 22 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Every Single MF Global Client With A Live Trade Is Getting A Margin Call Today - (www.businessinsider.com) I was an MF Global client for years. It originated from several years back, when I trading futures part-time, and the former boutique brokerage I used, Lind-Waldock, was taken over by global commodities broker Refco. Refco blew up some trades and went bankrupt. Then it was taken over by MF Global, which as we now know had its own way of blowing things up. Last week, my MF Global account was locked up all week. Couldn't transfer money out. Couldn't cover and exit trades. And as we now know, I wouldn't have gotten money out even if I tried. What's the bottom line this morning? It's still unclear, but as far as I can tell 75% of the money is missing from my transferred account -- allegedly locked up with the rest of the funds in the bankruptcy at MF Global Trustees.

Euro Finance Chiefs Focus on ‘Bazooka’ Fund as Political Turmoil Deepens - (www.bloomberg.com) European finance chiefs return to Brussels today on a mission to convince global leaders that they can shield countries such as Italy and Spain from the spreading debt crisis by bulking out their bailout fund. As political turmoil envelops governments in Athens and Rome, finance ministers from the 17-member euro area will work on the details of plans to increase the muscle of the European Financial Stability Facility. Leveraging the fund would aim to ramp up spending capacity to 1 trillion euros ($1.4 trillion). European leaders’ failure to resolve the two-year-old debt crisis threatens to drag down the global economy and trigger another financial downturn. World leaders at a Group of 20 meeting last week demanded euro governments do more to staunch the turmoil -- including fleshing out how an expanded EFSF would work -- before they commit fresh cash to the region.

Old Debts Dog Europe's Banks - (online.wsj.com) European banks are sitting on heaps of exotic mortgage products and other risky assets that predate the financial crisis, adding to pressure on lenders that also are holding large quantities of euro-zone government debt. Four years after instruments like "collateralized debt obligations" and "leveraged loans" became dirty words because of the massive losses they inflicted on holders, European banks still own tens of billions of euros of such assets. They also have sizable portfolios of U.S. commercial real-estate loans and subprime mortgages that could remain under pressure until the global economy recovers.

Italy Yield Surge Sets Berlusconi on Bailout Path - (www.bloomberg.com) Italy’s record bond yields are sending the nation down the same path taken by Greece, Portugal and Ireland in the days before they were forced to seek rescues. Italy’s 10-year notes traded above 5.5 percent for 40 days before breaching the 6 percent mark on Oct. 28 and reaching as much as 6.68 percent today. The bailed-out nations followed a similar trajectory, consistently averaging above 6 percent for about a month before crossing the 6.5 percent barrier. After that, it took an average of 16 days for yields to pass the unsustainable 7 percent level. “The trend appears worryingly similar,” said Riccardo Barbieri, chief European economist at Mizuho International Plc in London. “Clearly, the longer it lasts, the worse it gets.”

Eurozone crisis piles pressure on credit default swaps - (www.ft.com) Credit default swaps – the insurance-like derivatives instruments once labelled “financial weapons of mass destruction” – are now themselves under attack. Vilified by regulators after the financial crisis, the $26,000bn market is already slowly being moved towards central clearing, which will see the CDS more tightly controlled. At the same time, however, the swaps have come under renewed pressure in Europe, where politicians say they have contributed to the region’s dramatic debt crisis. These new developments have left many users of CDS scratching their heads. “We need clarity from European leaders and regulators on the CDS market before it freezes,” says Simon Thorp, chief investment officer of fixed income at Avoca Capital. “At the moment huge questions remain.” CDS are used by banks, hedge funds and asset managers as a way of hedging their vast exposures of loans and bonds, or managing counterparty risk. Importantly, such CDS differ from insurance contracts in that users do not have to own the underlying bonds that are being “referenced” by the derivatives – meaning the swaps can also be used to make outright bets on a company or country’s creditworthiness.

OTHER STORIES:

EFSF limps over the line, books "over EUR3bn" - (www.reuters.com)

IMF’s Christine Lagarde Says East Europe Faces Risk of Liquidity Squeeze - (www.bloomberg.com)

German Gold Reserves ‘Untouchable’ for EFSF, Roesler Says - (www.bloomberg.com)

For Markets in Europe, the Focus of Fear Moves to Italy - (www.nytimes.com)

Papandreou to Step Down in Accord on Unity Government - (www.bloomberg.com)

EU Seeks Time on Rescue-Fund Boost, Demands Budget Cuts in Greece, Italy - (www.bloomberg.com)

France Unveils $9.6 Billion in Taxes, Spending Cuts to Defend AAA Rating - (www.bloomberg.com)

China Frauds May Fit Panics, Crashes Model, Societe Generale’s Grice Says - (www.bloomberg.com)

Euro zone Sept retail sales fall more than forecast - (www.reuters.com)

China to inject over $158 billion into money market: report - (www.reuters.com)

Allies increase pressure on Berlusconi - (www.ft.com)

Fed Says Fewer Banks Eased Business-Loan Terms Last Quarter - (www.bloomberg.com)

Rosengren Says Federal Reserve Should Act to Bring Down Unemployment Rate - (www.bloomberg.com)

BP's failed Argentina deal renews investor fears - (www.reuters.com)

Thailand Flooding Cripples Hard-Drive Suppliers - (www.nytimes.com)

Rethink the notion of risk-free assets - (www.ft.com)

Monday November 21 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

MF Bankruptcy Causes Biggest Foreign Bank Liquidity Scramble To 'Fed Safety' Ever - (www.zerohedge.com) When Lehman filed for bankruptcy in that fateful week of September 2008, one thing caught everyone's attention: the epic surge in the Fed Reverse Repos originated by "foreign official and international accounts": essentially cash placed at the Fed by foreign institutions in exchange for collateral, primarily in the form of Treasurys, as well as other securities. This is nothing but an immediate cash parking in a 'safe place', which withdraws overall liquidity from the market, and as has been noted elsewhere, serves as an indirect gauge of banking system funding stress. In the week of September 24, this number soared from $46.6 to $93.7 billion, a $44 billion increase, or the single biggest jump in the history of the series. Well, as the chart below demonstrates, what happened with MF Global caught foreign banks, which as we have noted over the past several weeks have been dumping US Treasury and MBS paper, entirely by surprise as they scrambled to withdraw the last traces of available liquidity from the market, and to place as much of it as possible within the safety (and we use the term loosely) of the Fed. In the just released H.4.1 update, foreign Reverse Repos with the Fed soared from $81.3 billion to $124.5 billion, the most ever, and a weekly surge of $43.2 billion, the second largest ever, second only to the Lehman collapse.

Most of the Unemployed No Longer Receive Benefits - (www.nytimes.com) The jobs crisis has left so many people out of work for so long that most of America's unemployed are no longer receiving unemployment benefits. Early last year, 75 percent were receiving checks. The figure is now 48 percent — a shift that points to a growing crisis of long-term unemployment. Nearly one-third of America's 14 million unemployed have had no job for a year or more. Congress is expected to decide by year's end whether to continue providing emergency unemployment benefits for up to 99 weeks in the hardest-hit states. If the emergency benefits expire, the proportion of the unemployed receiving aid would fall further. The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four. Yet for a growing share of the unemployed, a vote in Congress to extend the benefits to 99 weeks is irrelevant. They've had no job for more than 99 weeks. They're no longer eligible for benefits.

How Occupy Wall Street Cost Me My Job - (www.gawker.com) Joining the Occupy Wall Street protests has its dangers. You could get pepper-sprayed or end up in handcuffs. Or, as Brooklyn-based journalist Caitlin Curran explains, your boss could see a photo of you holding up a sign at a protest and fire you the next day. It all started with an article on The Atlantic's web site. Conor Friedersdorf's piece "Occupy Wall Street's Greatest Strength Is Neutering It," echoed what many people are wondering about the movement: what are they fighting for?

Debunking the "paid back the TARP" myth - (www.nakedcapitalism.com) This Institute for New Economic Thinking interview with economist Ed Kane discusses how systemic risk should be measured. Kane argues that taxpayer are essentially disadvantaged bank shareholders, getting the downside and none of the bennies, like dividends or capital gains. He argues that banks should be paying taxpayers for the privilege of having them and their counterparties rescued, and that is over $300 billion a year.’ And that isn’t the only freebie banks are getting. For instance, the near zero interest rates are tantamount to a tax on savers (when per above, the banks should be making payments). Some have estimated the cost to savers is over $350 billion a year.

America ignores long-term unemployment at its peril - (www.telegraph.co.uk) 80,000 jobs were created in October, and the tally for August and September was revised upwards by a total of 102,000. According to the Bureau of Labor, people have been hired at a rate of 125,000 a month for the last year. There was a decline, too, in the long-term unemployed – a group you belong to in the US if you’ve been without work for more than six months. That figure fell 366,000 to 5.9m. But don’t expect Americans to be celebrating. That’s not only because October’s figures don’t immediately change an extremely difficult jobs market. 13.9m people are still unemployed and a further 8.9m are having to settle for part-time work. It runs deeper. The high level of unemployment America has had since the financial crisis is a wound to its self-esteem. This is a country that built itself on being able to offer work to those who can’t find it where they’re from. And if they do have it, there's always been the promise of better paid and more interesting work on offer in the US. I was talking to a businessman this week who had built a company that now employs more than 20,000 people. The mention of the unemployment rate prompted an almost physical reaction in him as if a bad smell had entered the room. And nowhere is the assault on the US psyche stronger than in the scale of long-term unemployed this downturn has created.

OTHER STORIES:

Greek 1-Year Bond Yield Hits 205% - (globaleconomicanalysis.blogspot.com)

Sad proof of Europe's fallout - (www.nytimes.com)

Why Wall Street Can't Handle the Truth - (online.wsj.com)

Volatile, but nearly running in place - (www.nytimes.com)

Bank of America Drops Debit Card Fee. Is Occupy Wall Street Working? - (www.dailyfinance.com)

Global Wealth Distribution - (www.ritholtz.com)

Secret of the Flat Tax: Middle Class Pays More So Rich Pay Less - (www.cepr.net)

Rich Class fighting 99%, winning big-time - (www.marketwatch.com)

Bill Gates says being a billionaire is overrated - (www.dailymail.co.uk)

Ferrari sees 'one of best years' despite downturn for the peasants - (www.google.com)

Accounting error: Ireland's debt €3.6bn lower than thought - (www.rte.ie)

Sunday November 20 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

You Won't Believe How MF Global Screwed Their Clients In Their Final Days Before Going Bankrupt - (www.businessinsider.com) Some incredibly galling behavior on the part of MF Global as exposed by Reuters' Matthew Goldstein: It appears that 10 days ago, with speculation swirling that the Jon Corzine-led firm would soon file for bankruptcy, a good number of customers started to put in requests to pull their money from the New York-based outfit. But instead of simply wiring that money back to their customers, it seems MF Global tried to buy some time for itself by sending that money back via snail mail in the form of an old-fashioned check. This proved to be hugely significant, as the checks have, in many cases, ultimately bounced, now that the company is bankrupt.

Thousands Rally in Rome, Pressing Italy’s Berlusconi to Resign Amid Crisis - (www.bloomberg.com) Tens of thousands of Italians gathered in Rome to call on Prime Minister Silvio Berlusconi to resign, as defections eroded his parliamentary majority at a time when the country’s borrowing costs are at a euro-era high. Hundreds of buses and 14 special trains brought thousands of supporters of the opposition Democratic Party to the rally in front of the Basilica of St. John Lateran to hear calls for the premier to go. Demonstrators shouted “Shame”” and “Get Out” in the square that’s home to the first church built in Rome. The premier, who generally spends his weekends at his home in Milan, remained in Rome in consultation with his top advisers after several lawmakers said they planned to abandon his People of Liberty party, threatening to leave him without a majority in Parliament before a key vote. Calls will increase for Berlusconi to resign if he loses the ballot to rubberstamp the 2010 budget report, likely to be held on Nov. 8.

ECB debates ending Italy bond buys if reforms don't come - (www.reuters.com) The European Central Bank often discusses the possibility ending the purchase of Italian government bonds if it concludes Italy is not adopting promised reforms, ECB Governing Council Member Yves Mersch said. "If we observe that our interventions are undermined by a lack of efforts by national governments then we have to pose ourselves the problem of the incentive effect," Mersch said according to extracts of an interview with Italian daily La Stampa to be published on Sunday.

Sad Proof of Europe’s Fallout - (www.nytimes.com) WHO are you going to believe — me, or your own lying eyes? That old line from the Marx Brothers came to mind last week as MF Global, the brokerage firm run by Jon S. Corzine, was felled by over-the-top leverage and bad derivative bets on debt-weakened European countries. Suddenly, all of those claims that American financial institutions have little to no exposure to Europe rang hollow. You can understand why Wall Street wants to play down the threats from Europe. Its profits depend on the market’s confidence in the products it sells — and on the belief that the firms that sell those products will be around tomorrow. But MF Global provides two lessons. The first is that our financial institutions are not impervious to Euro-shocks. The second is that when those problems reach our shores, they usually ride in on a wave of derivatives.

Second Iraq War Veteran Hurt In Occupy Oakland Protests - (www.businessinsider.com) The second Iraq war veteran to be injured in the Oakland protests, Kayvan Sabeghi, was hurt Thursday morning and is in stable condition in a local hospital. The Associated Press reports that Sabeghi, 32, was walking home from the march Thursday when he was beaten by police and charged with resisting arrest (via Huffington Post). Sabeghi's partner in a brewery, Esther Goodstal, told the AP, "I saw he had bruises all over his body, and that's not right. No one should treat another human being like this." The Oakland police spokesman did not return a call seeking comment.

OTHER STORIES:

Papandreou’s Unity Government Bid Hits Resistance as Crisis Talks Begin - (www.bloomberg.com)

Greece needs coalition to protect euro membership - (www.reuters.com)

Greece’s Papandreou vows to form unity coalition as frustration festers in Athens - (www.washingtonpost.com)

Greek opposition refuses to join coalition - (www.ft.com)

Uncertainty as Greek Leader Tries to Form Unity Coalition - (www.nytimes.com)

$4 Trillion Debt Deal Possible With Tax-Spending Measures, Lawmakers Say - (www.bloomberg.com)

MF Global Said to Be Subject of Probe by Federal Bureau of Investigation - (www.bloomberg.com)

Berkshire Earnings Decline 24% on Derivatives - (www.bloomberg.com)