House Majority Leader Eric Cantor has backed out of the bipartisan budget talks over taxes
"We have, unfortunately, nothing but bad choices," he said. "What we're looking at is better burden-sharing. Right now more of the burden-sharing is being taken by the Greek people."
"The Germans have it right in the sense of saying we cannot continue this process whereby the burden is carried by fewer and fewer people," he said. "But the French and now the ECB, which holds a lot of this debt, say no. That's what happened with a year of inaction."
"The issue is nothing so far has been done to solve the two problems Greece has: One, excessive debt and second, an inability to grow," he said. "This problem is not going to go away. It's going to weigh on markets here and we're going to see the same set of headlines over and over again. We simply cannot continue to kick the can down the road, because we're coming to the end of the road in Greece."
Dow down over 200 points in late day trading as the dollar spiked following worries over the exacerbating Greek debt situation
The Index of Small Business Optimism fell 0.3 points in May to 90.9. This month marks the third monthly decline in a row. The proximate cause is the fact that 1 in 4 owners still report weak sales as their top business problem. Consumer spending is weak, especially for “services,” a sector dominated by small businesses. the index makes clear that optimism is moving in the wrong direction: a recession-level reading for an economy fighting its way through a recovery. Also, inflation is a growing concern now with 1 in 10 citing this as their most serious business problem meaning cost side pressures coming in the “back door,” not rising food prices at home.
[ nfib ]
“Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.”
“We’re still running over a trillion-dollar budget deficit this year, next year and most likely in 2013,” Roubini said in a speech in Singapore on June 11. “The risk is at some point, the bond market vigilantes are going to wake up in the U.S., like they did in Europe, pushing interest rates higher and crowding out the recovery.”
"To think that we can reduce that within the space of a year or two is not a realistic assumption," "That's much more than Greece, that's much more than almost any other developed country. We've got a problem and we have to get after it quickly."
- Nation's public debt, which is $14.3 trillion.
- Medicare, Medicaid and Social Security, which comes to close to $50 trillion
Citigroup confirmed a computer breach at Citi Account Online, giving hackers access to the data of hundreds of thousands of bank card customers.
- David Greenlaw, an analyst at Morgan Stanley.
- St. Louis Federal Reserve Bank President James Bullard
"If it were just U.S. markets, it might not cause too many problems, but we've got people participating in foreign markets who are probably not as tuned in to the U.S. political situation"
"With the weaker data, it's fine to tell the story that you think things are going to pick up, but then you are going to want to see some confirmation of that"
"Our most likely move next will be to tighten, but tightening to me means first to allow the run-off on the balance sheet. I would even sell a few assets, but I'm not sure the committee is willing to go that way"
"It would help us in the current environment because we have a super easy monetary policy, and this creates some worries that maybe we'll lose control of the situation, and end up with a lot of inflation," he said. "But if you explicitly stated a target then you would assuage some of those fears."
... It’s gonna be worse the next time around.", Jim Rogers, chief executive, Rogers Holdings
"The U.S. is the largest debtor nation in the history of the world," he said. "The debts are going through the roof. Would you keep lending money to somebody who's spending money and not doing anything about it? No you wouldn't."
"We’ve got troops in 150 countries around the world. They’re not doing us any good, they’re making enemies. They’re costing us a fortune,"
Besides Australia, they turned to stock markets in Britain, Taiwan, South Korea and Canada, according to data from the consulting firm Grant Thornton and Dealogic. The 10 companies that went public abroad in 2010 — and 75 from 2000 to 2009 — compares with only two United States companies choosing foreign exchanges from 1991 to 1999.
[ nytimes.com ]
118.02 USD / Oil prices jumped sharply on Wednesday after Opec fails to strike deal.
Re: Europe’s debate about whether to restructure Greek debt
“Given the sharp run down on inventories and only modest overall global production increases for the majority of crops, world prices are likely to remain high and volatile,” the FAO said on its biannual Food Outlook report.
“The US economy is recovering from both the worst financial crisis and the most severe housing bust since the Great Depression, and it faces additional headwinds ranging from the effects of the Japanese disaster to global pressures in commodity markets,” the Fed chairman said on Tuesday. “In this context, monetary policy cannot be a panacea.”
The $80 billion initiative, called ST OMO, made 28-day loans from March through December 2008, a period in which confidence in global credit markets collapsed after the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc.
Seems to be more PR than anything that will happen soon.
[ observer ] "We'll just have to learn how to adjust."
The Mortgage Bankers Association’s index of applications to buy a house dropped 12 percent in the week ended Nov. 6 to 220.9, the lowest level since Dec. 2000. The group’s refinancing gauge rose 11 percent as interest rates decreased, pushing the overall index up 3.2 percent.
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It rose from September's figure of 9.8%. The number of unemployed people rose by 558,000 to 15.7 million.
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The dollar slid against high-yielding currencies, led by the Australian dollar, as China reported a surge in manufacturing and investors bet factory production in the U.S. accelerated. Oil, copper and gold climbed.
The so-called Aussie advanced versus 15 of the 16 most- traded currencies as of 10:12 a.m. in London, and the Swedish krona gained against all 16. Oil added 1 percent in New York while copper rose 0.7 percent in London and gold rallied 0.8 percent. Futures on the Standard & Poor’s 500 Index increased 0.7 percent, indicating the benchmark gauge for U.S. equities may rebound from its steepest weekly drop since May.
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Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply , while government bond yields have gently increased but stayed low and stable.
Let us sum up: traders are borrowing at negative 20 per cent rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade. Every investor who plays this risky game looks like a genius – even if they are just riding a huge bubble financed by a large negative cost of borrowing – as the total returns have been in the 50-70 per cent range since March.
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Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen, further pressuring the greenback after its biggest two- quarter rout in almost two decades.
Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show. That’s the highest percentage in any quarter with more than an $80 billion increase.
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Billionaire George Soros said on Saturday that he would invest $1 billion in clean energy technology as part of an effort to combat climate change.
The Hungarian-born U.S. investor also announced he would form and fund a new climate policy initiative with $10 million a year for 10 years. "Global warming is a political problem," Soros told a meeting of editors in the Danish capital where governments are scheduled to meet in December to try to hammer out a new global climate agreement to replace the 1997 Kyoto Protocol.
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U.S. housing prices may still fall more than 10 per cent, killing an incipient recovery, as demand from first-time home buyers fades, leading economist Nouriel Roubini said Thursday.
Mr. Roubini, one of the few economists who accurately predicted the magnitude of the financial crisis, said massive losses in commercial real estate loans will add to the problem, forcing banks to raise more capital. “The stress is moving from residential mortgages that are still in deep trouble, to commercial real estate, where they are just starting to recognize that they're going to have massive, massive losses,” Mr. Roubini of RGE Global Monitor told reporters after a presentation for a World Economic Forum report on the global financial system.
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The worst recession since the Great Depression has left a scorched landscape that will weigh on the labor market and the broader economy for years to come, according to economists in the latest Wall Street Journal forecasting survey.
The 48 surveyed economists expect the economy to bounce back from four quarters of contraction with 3.1% growth in gross domestic product at a seasonally adjusted annual rate in the just-ended third quarter. Expansion is seen continuing through the first half of 2010, though at a slower rate. But the massive downturn means the labor market will take years to heal. On average, the economists don't expect unemployment to fall below 6% until 2013; unemployment hit 9.8% in September.
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Mortgage rates for 30-year fixed U.S. home loans fell for the second consecutive week, pushing borrowing costs to near record lows.
The average U.S. 30-year rate dropped to 4.87 percent from 4.94 percent last week. The 15-year rate was 4.33 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement.
Falling rates helped boost home-loan applications last week to the highest level since May. The Mortgage Bankers Association’s index of applications to purchase a home or refinance rose 16 percent. Rates around 5 percent, slumping home prices and a government tax credit for first-time homebuyers are bolstering demand for housing.
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Mohamed El-Erian says economists are wrong to dismiss unemployment as merely a lagging indicator, a sign of where the economy has been. For the chief executive officer of Pacific Investment Management Co., the 26-year high jobless rate is also an omen of things to come.
“Today’s unemployment rate is much more than a lagging indicator,” said El-Erian, whose Newport, California-based Pimco manages the world’s largest bond fund, in an e-mail after the Labor Department report on Oct. 2. “It is also a signal of future pressures on consumption, housing and the country’s social safety net.”
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The US economy lost 263,000 jobs in September, which was more than had been expected, according to official non-farm payrolls figures. The jobless rate rose to a fresh 26-year high of 9.8% from August's figure of 9.7%. The number in employment has now fallen for 21 consecutive months.
There was more bad news from the Labor Department, which revised its figures for July and August to show 13,000 more jobs lost than previously reported. The economy as a whole is expected to have grown in the past three months, but recovery in the jobs market tends to lag behind the rest of the economy.
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An experimental vaccine prevented HIV infections for the first time, a breakthrough that has eluded scientists for a quarter century.
A U.S.-funded study involving more than 16,000 volunteers in Thailand found that a combination of ALVAC, made by Paris- based Sanofi-Aventis SA, and AIDSVAX, from VaxGen Inc., of South San Francisco, cut infections by 31.2 percent in the people who received it compared with those on a placebo, scientists said today in Bangkok. Neither vaccine had stopped the virus that causes AIDS when tested separately in previous studies.
[ PDF ] Sanofi-Aventis Press Release
