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Thursday, December 3, 2009


Japan's Nikkei jumps 3.8% to lead Asian markets' gains
Shares of Japanese exporters climbed Thursday as concern eased about the strong yen. Japan's Nikkei 225 soared 3.8%, Australia's S&P/ASX 200 edged up 0.3% and South Korea's Kospi Composite added 1.5%. New Zealand's NZX 50 and Taiwan's Taiex inched up 0.1%, while Hong Kong's Hang Seng advanced 1.2%. China's Shanghai Composite slid 0.2%, while India's Sensex was up 0.9% and Singapore's Straits Times had added 0.2% in late trading. The Wall Street Journal (03 Dec.)

Fed is worried by real estate, cheered by holiday sales
The economy is "modestly" improving in most of the U.S., but falling home prices and a deepening crisis in commercial real estate present obstacles to any robust recovery, the Federal Reserve said in its Beige Book. The report states that consumer spending has increased moderately and used-car sales are doing well. The job market continues to be a problem, "with further layoffs, sluggish hiring and high levels of unemployment." The Washington Post (03 Dec.)

World still faces risk of double-dip recession, U.N. says
The world's economy faces the threat of a double-dip recession if governments shut down their stimulus programs too soon, the United Nations said in its annual report on economic prospects. The recovery is "far from robust," according to the report. The U.N. projected a 2.4% expansion for the global economy in 2010 if stimulus spending continues. Growth of 2.1% was forecast for the U.S. economy, significantly higher than the 1.5% increase projected by the International Monetary Fund. Reuters (02 Dec.)

Bank of America poised to repay $45 billion in state aid
Ken Lewis, Bank of America's outgoing CEO, said repayment of taxpayer funds the bank received during the financial crisis is representative of the company's strength. "It is a milestone indicating that public policy has succeeded in helping our industry and the economy begin to recover," Lewis said. "As banks replace Treasury investments with private capital, confidence in the financial system increases, taxpayers are made whole and government's unprecedented involvement in the private sector lessens," a Treasury representative said. The Washington Post (12/3)

*Too much risk you say? A Bernanke reappointment would make sure of it!
Analysis: Debt market might be rewarding risk too muchA spectacular performance of the debt market during the past 12 months might be setting up bonds for a reversal in the near future. High-yield debt has recently outperformed returns from the 1992 and 2003 debt rebounds by a huge margin. Some of the most extreme abuses of the bubble-era debt market are back. Covenant-light loans, the commercial equivalent of subprime home mortgages, are popping up. The bond market is again embracing "payment-in-kind" securities, which allow the issuance of debt to cover debt service. Barron's (subscription required) (02 Dec.)

*this should mean a decline in gas prices even further, righhhhht?
Technology triggers land rush for U.S. natural gas
Energy companies are scrambling to negotiate deals that would allow them to drill for natural gas in areas written off in the past. Technology has drastically reduced the cost of extracting gas bound up in shale rock, making huge reserves accessible and profitable for gas operators for the first time. "The United States is sitting on over 100 years of gas supply at the current rates of consumption," said BP CEO Tony Hayward. The Washington Post (03 Dec.)

*we are all wondering about GE's future and furthermore, WHY DOES IMMELT STILL HAVE A JOB?
Investors ask about GE's next act after NBC Universal sale
General Electric investors said they want to hear what CEO Jeffrey Immelt has in mind for the company's future after the widely anticipated sale of its 51% stake in NBC Universal to Comcast. For 2008, NBC Universal accounted for 9.3% of GE's revenue and 12% of its operating profit, according to Bloomberg data. Bloomberg (03 Dec.)

U.N. predicts China's economy will grow 8.8% in 2010
China's economic expansion will not return to the level enjoyed before the financial crisis, but it will reach 8.8% next year, the United Nations said in a report on the world economy. Investors in most emerging economies, along with those in developed countries, recoiled from the market when the credit crunch hit, but China is "bucking the trend," the U.N. said. Asia's developing economies will lead the world with the strongest growth next year, according to the report. (China) (03 Dec.)

*so China looking more and more like US everyday. And you don't really believe that this is all there is do you?
China's state-owned firms hit with $1.67B derivatives loss
By the end of October, businesses owned by the Chinese government had run up losses totaling $1.67 billion on financial derivatives, said the State-owned Assets Supervision and Administration Commission of the State Council. The 68 companies engaged in trading in financial derivatives valued at $18.3 billion, the commission said. China Daily (Beijing) (03 Dec.)

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