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Trading Now

Thursday, September 24, 2009


*cut away ladies!
Coupons make big comeback among cash-strapped consumersOne of the hottest trends in retail is the robust revival of a marketing technique invented more than a century ago -- the paper coupon. The last time the popularity of coupons soared was at the end of a recession in 1992, when redemption reached 7.9 billion. After that, coupons went into a slump, but in the first half of this year, redemption jumped 23%. The New York Times (23 Sep.)

Japan's Aiful expects $3.4 billion loss
Japan's second-largest consumer-credit firm, Aiful, expects to take a $3.4 billion loss for the year ending March 31. The company said it will cut as many as 2,000 jobs, or 44% of its workforce. The Japanese government prohibited such lenders from charging high interest rates, some of which ran up to 29% on consumer loans, and Aiful has had to renegotiate some of its debt payments. Bloomberg (24 Sep.)

Most Asian markets fall after Dow drops in U.S.
Most Asian-Pacific markets dropped Thursday, though Japanese shares gained after a holiday, with the Nikkei 225 rising 1.7%. South Korea's Kospi Composite fell 1%, Hong Kong's Hang Seng Index decreased 2.5% and China's Shanghai Composite added 0.4%. Singapore's Straits Times Index and New Zealand's NZX 50 dipped 0.5%, while Taiwan's Taiex and Australia's ASX/S&P 200 dropped 0.7%. The Wall Street Journal (24 Sep.)

Fed's low-interest strategy a bonanza for U.S. carry trade
The already-surging carry trade is set to gain further momentum, driven by the weak U.S. dollar and the Federal Reserve's intention to keep its key interest rate close to zero, experts said. "The takeaway point from the Fed meeting is that interest rates in the U.S. will remain low into 2010, leaving the dollar as the perfect funding currency for carry trades," said Kathy Lien, director of currency research at Global Forex Trading. In recent weeks, the dollar carry trade has outstripped that of the Japanese yen. MarketWatch (23 Sep.)

Bank of England warns of dangers to recovery
The Bank of England warned that economic recovery in the U.K. could be weak. Keeping its key interest rate at a record-low 0.5%, the central bank is continuing its quantitative-easing policies but not expanding them. The Bank of England cited banking-system weaknesses, high levels of public debt in major economies and global imbalances as challenges for economic recovery. The Times (London) (24 Sep.)

Seeing improvement, U.K. home builders to raise capital: Three major U.K. house builders will tap the market to raise $1.85 billion total. Analysts said Barratt Homes, Redrow and Liberty International are likely to succeed in their fundraising because land prices have bottomed out, as well as home prices. A series of capital-raising efforts is expected, not only in the home-construction industry but also in other major sectors that are on course for recovery. The Times (London) (24 Sep.)

Credit card defaults reach record high in U.S.
U.S. defaults on credit cards rose to a record high in August, Moody's Investors Service said. The credit rating agency's charge-off index, which gauges credit card debt unlikely to be paid back, rose to 11.49% last month from 10.52% in July. "We continue to call for a recovery of the credit card sector to begin once industry average charge-offs peak in mid-2010 between 12% and 13%," Moody's said. Reuters (23 Sep.)

Japanese exports fall for 11th consecutive month
The Japanese Finance Ministry said exports declined for the 11th straight month in August. The sector fell 36% from the same month last year. July saw a year-on-year decline of 36.5%. Bloomberg (23 Sep.)

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