Saturday, March 6, 2010

Headlines Around the World $SPY

Headlines Around the World $SPY

China may raise the bank reserve ratio again in Mar according to Deutsche Bank - Such a move would mark the 3rd increase of the year; there are a record amount of bills maturing in Mar that will flood the banking system w/cash. Bloomberg

Spanish banks - There is growing worry around Spanish banks - Can Santander and BBVA outrun Spain’s downturn?” The WSJ wonders if the bank’s capital cushions can withstand a prolonged downturn. Some analysts worry about whether the Spanish banking system is underreporting problem loans in general. WSJ

The Euro’s “original sin” - While some are trying to blame the current European debt crisis on “Wall St”-
engineered swaps and other foreign machinations, the Journal argues that the problems were bourn at
home. “Greece hasn't met the deficit rule in any year except 2006. It has never been within 30 percentage
points of the debt ceiling. Greece has revised its deficit figures, always upward, every year since 1997,
often considerably”. WSJ

Euro may not survive the Greek crisis according to George Soros - Soros repeated comments he has
made in the past re the EU currency’s construction as being “flawed” b/c there is a “common central bank
but no common Treasury.” Bloomberg

UK pound falls amid worries of a hung parliament - The pound was under pressure on Monday as
traders focused on the prospect that the General Election will produce a hung parliament that fails to tackle
Britain's deficit. London Telegraph

Sovereign CDS - Ban called for “naked shorting” - There has been talk of an outright ban on so-called
“naked shorting” or investors using CDS to make bets about sovereign defaults, without the need to own an
underlying bond. This idea is likely to be debated by regulators and politicians linked to the G20 group of
industrialised nations in the months ahead. FT

China real estate market discussed in NYT article - The article says that China is in the middle of a real
estate boom but the question is whether it is near the end of a cycle that could threaten the world economy.
Chinese authorities are showing some signs of concern and are taking action to reign in the real estate
market. NYT

Health Care - Congressional Democrats are completing a revision of comprehensive health care legislation
that could garner enough Democratic votes to pass both chambers. Most likely through expedited budget
reconciliation procedures. “We are moving ahead with a version of the health care reform bill which we
believe has a good chance of passing both the House and the Senate,” said Majority Whip Richard J.
Durbin. CQ Politics

Financial regulatory reform - The WSJ says a deal is near in the Senate; top Senators from each party
were near a “breakthrough” on the legislation. The bill would create a new consumer protection division
within the Fed. There would be a new process created that would permit the gov’t to break up large, failing
financial companies. Dodd could introduce the bill this week and may hold a committee vote sometime this
month. WSJ

Iran - Another diplomatic victory as CAT has become the latest company to cut links w/Iran. The company
said it would bar its non-US subsidiaries from accepting orders for products that they knew were destined for
delivery to Iran. FT

Obama’s energy strategy comes under fire from all sides - The president is facing criticism over the
decision to drop plans to build a nuclear-waste vault in Nevada, for the decision to use the Clean Air Act to
regulate carbon emissions, and also for plans to build a wind-energy project that used in part Chinese
turbines. WSJ

"Don't go wobbly on us now, Ben Bernanke" - The West risks a slow grind into debt-deflation unless
central banks offset fiscal tightening with monetary stimulus to keep demand alive. Yet the Fed and the
European Central Bank are letting credit contract. Mervyn King, the Bank of England's Governor, seems
strangely alone in facing the implications of this for central banks. Yet the Fed has just raised the Discount
Rate. It is winding up liquidity operations, and preparing to reverse QE, even though the housing market has
tipped over again. London Telegraph

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