Volatile session leads to mixed markets across Asia
Shares in Japan and Hong Kong continued to fall, with Asian markets mixed Thursday. Japan's Nikkei 225 dropped 1.4%, Australia's S&P/ASX 200 gave up 0.7% and South Korea's Kospi Composite advanced 1.1%. Taiwan's Taiex declined 1.5%, China's Shanghai Composite climbed 0.5% and Hong Kong's Hang Seng Index slid 0.2%. New Zealand's NZX 50 added 0.2%, shares in the Philippines rose 0.9% and Singapore's Straits Times Index had dropped 0.8% in late trading. The Wall Street Journal (10 Dec.)
*government at its finest
Report: Ginnie Mae's taxpayer-backed guarantees fuel high-risk lending
A relatively unknown U.S. agency, the Government National Mortgage Association, has for years given taxpayer-backed guarantees to lenders that engaged in risky and often illegal practices. Commonly known as Ginnie Mae, the agency endorsed until last week the loans of Lend America, a company with a rising delinquency rate that permitted an executive convicted of mortgage fraud to continue running the company. Housing officials let Lend America sell more than $1 billion in mortgages in the form of Ginnie Mae-backed securities. The Washington Post (10 Dec.)
Some Democrats balk at parts of financial-overhaul bill
The idea of allowing states to impose bank rules that are tougher than federal ones ran into Democratic opposition in the U.S. House. A group of pro-business Democrats threatened to oppose legislation overhauling financial regulation because they are concerned about its impact on some financial companies. A leader of the New Democrat Coalition, Rep. Melissa Bean, D-Ill., proposed restricting the power of states to impose rules on national banks that are stronger than federal requirements. The New York Times (09 Dec.)
*Spain, Greece, Dubai, Italy, US....shall I go on?
Spain faces possible downgrade, fueling fears about Europe
Standard & Poor's cut its outlook on Spain's debt rated AA+ to negative but kept the rating unchanged. The move adds to concern that Greece's fiscal woes are spreading throughout Europe. Southern European nations and Ireland outpaced France, Germany and others on economic growth during the good times and are paying the price. "Those countries that had these high growth rates are now in trouble because much of that growth was financed by debt," said Paul De Grauwe, a professor of economics at Belgium's University of Leuven. The Wall Street Journal (10 Dec.)
*Remember 2008, when foreigners were told our banks were well capitalized and everything was hunky doory so you can invest in us? Wall Street reaches near AND far! IJIOTS.
Market is getting over "blind panic," Dubai official says
The global financial market is "softening" its reaction to debt problems in Dubai, United Arab Emirates, as it obtains facts, said Dubai Finance Director-General Abdul Rahman Al Saleh. "Of course, the reaction by the global markets was psychological, and came strongly. However, the reaction is now softening as investors became more informed about what happened," he said. Saleh indirectly said Dubai could have done a better job of explaining the situation. "Let me admit, in Dubai we are not good in publicizing what we are doing as much as we are in doing it," he said. Emirates Business 24/7 (United Arab Emirates)/Reuters (10 Dec.)
*I'm sure Wall Street will figure out a way to make sure the Chinese become just as in debt as our consumers.
China leaps ahead of U.S. as world's biggest consumer market
China's economy has been roaring through recovery, enjoying robust growth, and evidence of its prosperity no longer shows up only in foreign reserves. Visitors to the Guangzhou International Auto Show complained about having to wait months to buy one of the hottest models. This year, the Chinese have bought more cars than Americans. For many consumer products, ranging from desktop computers to washing machines, China is a bigger and more important market than the U.S. The New York Times (09 Dec.)