MORNING BRIEFS

Asian markets gain after another up-and-down session
Asian-Pacific markets mostly advanced Tuesday after another day of volatile trading. Australia's S&P/ASX 200 and New Zealand's NZX 50 added 0.4%, while South Korea's Kospi Composite dropped 0.5%. Hong Kong's Hang Seng Index gained 1.9%, Japan's Nikkei 225 inched up 0.2% and Taiwan's Taiex rose 1.3%. The Wall Street Journal (06 Oct.)

White House says bailout banks must cut bankers' pay
Kenneth Feinberg, the White House official tasked with regulating executive pay at banks that received state aid, plans to shift part of bankers' pay into stock that cannot be traded for several years, sources said. Feinberg will make the final determination this month for 175 highly paid executives at bailout banks. The White House wants to see compensation closely linked to performance, but pay in this form would also minimize risk-taking for short-term gain. The Wall Street Journal (06 Oct.)

Second year of falling holiday sales expected in U.S.
A second consecutive year of declining holiday sales awaits U.S. retailers, the National Retail Federation said. The industry group expects sales to fall 1% in November and December, dropping to $437.6 billion. If the forecast is correct, retailers will see the first back-to-back decline in holiday sales since the group started collecting the data in 1992. Reuters (06 Oct.)

IMF made crisis worse, report says
The International Monetary Fund was too optimistic in its forecasts and worsened the financial crisis in many countries, according to a report by the Center for Economic and Policy Research. The report analyzes agreements between the IMF and developing countries, finding that the IMF encouraged overoptimistic policies in 31 cases that caused a severer downturn when the economy deteriorated. "In many cases, the fund's pro-cyclical policies were based on overoptimistic assumptions about economic growth," the report states. The Guardian (London) (05 Oct.)

*This just makes me crazy. Wait until next year when everyone finds out how these Canadian bankers are just as good at lying as American bankers.Looney alright!
Canadian banks hire Wall Street investment bankers
Canadian banks have been hiring talent from U.S. investment banks, according to Bloomberg data. More than 700 investment bankers, analysts and traders from major U.S. institutions have joined Canadian banks. Canadian banks largely escaped the crisis and were named by the World Economic Forum this year as among the strongest in the world. Bloomberg (06 Oct.)

Analysis: Rally in corporate-bond market faces challenge
The rally in the corporate-bond market in Europe, the U.K. and the U.S. indicates investors' risk appetite has increased this year, but disappointing economic figures from the U.S. hit the market hard, according to this article. While it might have been only a blip, Richard Barley writes, there are other signs that investors are beginning to pull back. The Wall Street Journal (10/6)

For healthy banks, keep FDIC insurance low
Congress should reduce FDIC deposit insurance instead of propping it up to $250,000 until 2013, as proposed, writes Bob Pozen, a senior lecturer at Harvard Business School and author of "Too Big to Save? How to Fix the US Financial System." With a higher insurance guarantee, investors would "no longer have any incentive to scrutinize the financial condition of the bank," he writes. HarvardBusiness.org/Conversation Starter blog (10/5)

Australia raises key interest rate to 3.25%
The Australian central bank raised its key interest rate to 3.25% from 3%. It is the first time a Group of 20 central bank has raised its rate since the financial crisis began. "The move raises the chances that other banks will follow suit," said Frederic Neumann, a regional economist at HSBC in Hong Kong. The New York Times (06 Oct.)

Emerging markets to lead recovery, HSBC index shows
Emerging markets will lead the economic recovery, according to a purchasing managers' index by HSBC. The index increased to 55.3 in the third quarter, up from 50.7 in the second quarter. A reading of more than 50 indicates expansion, and this is the biggest jump for manufacturing and service output since the second quarter of 2008. Bloomberg (06 Oct.)