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Friday, November 20, 2009


Most Asian markets slide as tech shares decline
Technology shares across Asia dropped Friday after their U.S. counterparts got hammered. Japan's Nikkei 225 gave up 0.5%, China's Shanghai Composite slid 0.4% and Hong Kong's Hang Seng Index fell 0.8%. Australia's S&P/ASX 200 was down 1.3%, New Zealand's NZX 50 dropped 0.9% and Taiwan's Taiex lost 1%. South Korea's Kospi Composite and Singapore's Straits Times Index ended flat. The Wall Street Journal (20 Nov.)

Mortgages in trouble reach 14% in U.S.
About 14% of U.S. homeowners were either delinquent on their mortgage or in some stage of foreclosure during the third quarter, the Mortgage Bankers Association said. That is the highest rate since the group started collecting the data in 1972. Borrowers usually considered creditworthy and people with loans insured by the Federal Housing Administration are becoming a bigger proportion of the 7.4 million households with mortgage problems, the association said. Los Angeles Times (20 Nov.)

House Republican asks Geithner to resign:
U.S. Treasury Secretary Timothy Geithner faced a demand for his resignation at a meeting of the Joint Economic Committee. "Conservatives agree, as point person, you failed. Liberals are growing in that consensus as well," Rep. Kevin Brady, R-Texas, told Geithner. "For the sake of our jobs, will you step down from your post?" The request came as lawmakers from both parties expressed frustration at continuing bad news about unemployment and the economy. The Washington Post (20 Nov.)

Democrats embrace taxing rich to pay for health care
Although there are differences between the Senate and House approaches to overhauling the U.S. health care system, one common threat runs through both: They raise taxes on the wealthy to pay the bill. At the same time, measures backed by Democrats offer different ideas on who is considered rich and how much they should pay. Raising taxes for the affluent marks a big policy shift for Democrats. A few years ago, when the party was working to change its liberal image, Democrats shied away from even talking of tax increases. Los Angeles Times (20 Nov.)

Fed examines whether banks have enough capital to cover risks
As asset prices worldwide soar, the Federal Reserve is looking into whether major banks have the capital to withstand a significant reversal, sources said. Fed officials are looking into the capital cushions of JPMorgan Chase, Goldman Sachs and other banks to ensure they are able to cover risks they take. Supervisors are also assessing how much the banks know about the financial strength of their counterparties. Bloomberg (20 Nov.)

OECD raises expectation for global economic recovery
In its annual economic outlook, the Organization for Economic Co-operation and Development predicted that the global economic recovery will likely be stronger than previously forecast. However, governments need to deal with unemployment, sovereign debt and plans for withdrawing stimulus measures. "Preparing exit strategies cannot be put off. Many of the interventions, while appropriate during the crisis, would be harmful if they stayed in place for too long," said Jorgen Elmeskov, chief economist at the OECD. The Wall Street Journal (20 Nov.)

Deflation threat prompts BoJ to hold rate near zero
Hours after Japanese Deputy Prime Minister Naoto Kan cautioned about an increasing threat of deflation, the Bank of Japan boosted its assessment of the economy. Policymakers held Japan's overnight lending rate at 0.1%. "Given the bank's independence, the government can't ask the BoJ directly to cut rates or buy more bonds," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management. "That's why it's using this term 'deflation' to force the BoJ to step up its accommodative measures." Bloomberg (20 Nov.)

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