Asian markets mostly lower
Markets were mostly lower in Asia on Wednesday. Japan's Nikkei 225 Index was off 0.3%, South Korea's Kospi Composite Index was down 0.6%, Australia's S&P/ASX 200 Index was 0.3% lower, Hong Kong's Hang Seng Index decreased 0.6% and China's Shanghai Composite Index was down 0.2%. Taiwan's Taiex also was off 0.7%. The Wall Street Journal (21 Oct.)
*and you're surprised by this?
Volcker's advice on fixing U.S. banks is ignored at the White House
Former Federal Reserve Chairman Paul Volcker was an early supporter of Barack Obama's presidential campaign and was named head of the President's Economic Recovery Advisory Board. But that hasn't been enough to get White House support for the tough reforms that Volcker wants enacted to fix what's wrong with the nation's banks. Volcker wants to prevent banks from owning and trading risky securities, and he proposes that the industry be divided into two separate parts: mainstream commercial banking and investment banking. The New York Times (20 Oct.)
*And you're even more surprised by this?
Barofsky says TARP has increased moral hazard in markets
Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the rescue plan has increased moral hazard in the financial markets. TARP injected capital into financial institutions at the center of the crisis and clearly influenced market behavior, he said. Barofsky said the program may have helped the financial system avoid collapsing, but it will likely reinforce the belief that the government will intervene to prevent banks and other systemically important firms from failing. Reuters (21 Oct.)
OPEC says speculators are causing oil-price jump
The Organization of the Petroleum Exporting Countries says speculators are to blame for the recent rise in the price of oil to more than $80 per barrel. OPEC Secretary-General Abdullah al-Badri said there is no economic justification for the price increase, and so it seems to be the result of financial trading. "There is no shortage of oil supply. We have floating storage of 125 million barrels," al-Badri said. The Times (London) (21 Oct.)
Countries linked to China will exit stimulus first, analyst says: Countries with close economic links to China are the most likely to exit economic-stimulus measures and loose-money policies first, said Tim Condon, chief Asian economist for ING Groep. Condon cited Australia, which recently increased interest rates, as a good example as it is "locked at the hip" with China in commodities trade. South Korea is likely to be next, Condon said, as it is also closely tied to China's growing exports -- and the pace of that growth will determine exit strategies throughout the region, Condon explained. Bloomberg (21 Oct.)
*the best scam of earnings is that all these CEOs claim they expect 2010 not they WILL. CAT at $60 is a downright crime. Short this stock right back down to $30 will ya?
Analysis: Business-to-business spending will be up in 2010
The earnings results of an increasing number of companies indicate that the outlook for business-to-business spending is improving. Heavy-equipment maker Caterpillar and hydraulic-parts producer Parker Hannifin are the latest members of a growing chorus of companies that see corporate customers making more purchases in 2010. Business spending on equipment, software and materials made up 9.5% of U.S. economic demand in the second quarter. The Wall Street Journal (21 Oct.)
*Mexico not doing so well. Will Brazil be the next latin american mexico?
Mexico sells first World Bank-backed catastrophe bonds
Mexico has sold $290 million of catastrophe bonds in the first use of a World Bank program aimed at helping nations access capital markets to cope with natural disasters. The MultiCat program reduces the expense of selling the bonds, the World Bank said in a statement. "We are working with member countries to help them manage catastrophe risk," said Issam Abousleiman, head of banking products at the World Bank Treasury. Bloomberg (20 Oct.)
*gotta love it
California sues State Street, alleging $56.6M fraud
State Street cheated California's two biggest pension funds out of at least $56.6 million through excessive charges in connection with a series of foreign-exchange trades, according to accusations in documents unsealed by a Superior Court judge in Sacramento. California Attorney General Jerry Brown is seeking $200 million for improper charges and penalties in the lawsuit. "This is just the latest example of how clever financial traders violate laws and rip off the public trust," Brown said. The New York Times (20 Oct.)
*now everyone will know what I have known for a couple of years: that the stock market is the biggest ponzi scheme on the planet making old bernie jail bird boy madoff look like finster baby.
Sources: SEC is set to severely restrict dark-pool trading
The Securities and Exchange Commission is preparing to propose a rule that would slash the volume of a company's stock that can be traded on dark pools daily from 5% of its total shares to 0.25%, Bloomberg News reports, quoting two people familiar with the regulator's work on the issue. The rule would significantly reduce share volume on dark pools, the off-exchange trading platforms that are used primarily by large institutional investors. "If you were to limit the dark pools to that small amount of trading, it will be much harder to find a counterparty," said Dirk Hoffmann-Becking, a Sanford C. Bernstein & Co. analyst in London. Bloomberg (20 Oct.)