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Trading Now

Wednesday, August 5, 2009


*no kidding
Changes to accounting rules sway banks' balances
An accounting expert studied the earnings reports of financial firms and found that 45 posted higher earnings in the first quarter because of a recent change in accounting rules. Bank of New York Mellon and other large companies were able to post profits instead of losses because of the change. The Financial Accounting Standards Board is considering another change that could force financial institutions to take paper losses, reversing the paper gains. The Washington Post (05 Aug.)

*no job no pay no house
Report: Even prime borrowers are at risk of default
Even the highest-quality borrowers are being hurt by high unemployment and a prolonged housing slump, according to Standard & Poor's. Prime mortgages in delinquency or default when measured in dollar volume increased 13.8% between March and June. "Today's prime borrower is far more at risk than the prime borrower of any other cycle," said Michael Thompson, managing director of market, credit and risk strategies at S&P. Financial Times (tiered subscription model) (8/4)

Mall owner Simon Property Group posts reduced Q2 profit
Faced with bankrupt retail chains nationwide, Simon Property Group, the biggest mall owner in the U.S., reported a drop in second-quarter earnings and lowered its forecast for the rest of the year. "The economic and retail environments remain difficult," said CEO David Simon. Bankrupt retailers have resulted in more than 2 million square feet of vacant space this year, he said. Bloomberg (04 Aug.)

Australian service sector hit with sharp contraction
Indicating what could be a rocky recovery for Australia, the service sector contracted last month, after a solid expansion in June. The Australian Industry Group-Commonwealth Bank Performance of Services Index dropped by 6.1 points to 44.1 in July. A number of less than 50 indicates a contraction. "The [index] demonstrates that business conditions remain volatile and problematic," said Heather Ridout, CEO of the Australian Industry Group. Forbes/Reuters (04 Aug.)

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