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Thursday, January 7, 2010


Most Asian markets fall after uninspiring Wall Street performance
Shares in China quickly fell Thursday as the central bank made a move to tighten money-market liquidity. Japan's Nikkei 225 and Australia's S&P/ASX 200 gave up 0.5%, while Hong Kong's Hang Seng fell 0.7%. South Korea's Kospi Composite dropped 1.3%, Taiwan's Taiex declined 1.1% and China's Shanghai Composite fell 1.9%. In late trading, Singapore's Straits Times was down 0.7% and India's Sensex had given up 0.5%. The Wall Street Journal (07 Jan.)

ECB indicates EU will not rescue Greece
Juergen Stark, chief economist at the European Central Bank and a member of its inner council, said Greece's financial issues do not meet the treaty terms required to trigger an EU rescue. Under the terms, rescues are limited to nations that face substantial challenges "beyond their control." "The treaties set out a 'no bailout' clause, and the rules will be respected. This is crucial for guaranteeing the future of a monetary union among sovereign states with national budgets. Markets are deluding themselves if they think that the other member states will at a certain point dip their hands into their wallets to save Greece," Stark told Italian newspaper Il Sole 24 Ore. Telegraph (London) (06 Jan.)

*but everything is ok right?
Companies, banks rush to capitalize on U.S. bond market
The U.S. bond market experienced its second-largest day of fundraising Tuesday as eight companies borrowed a combined $24.1 billion from investors, according to Thomson Reuters. On Feb. 18, $24.6 billion was raised. "The good news is that treasurers feel in much better shape than this time last year. The bad news is they believe the funding environment is going to get more difficult further into the year," said Mark Bamford of Barclays Capital. Financial Times (tiered subscription model) (07 Jan.)

*I guess not!
Chapter 11 commercial bankruptcies spiked 50% in 2009
Chapter 11 business bankruptcies in the U.S. jumped 50% last year compared with 2008, according to Automated Access to Court Electronic Records. Petitions for Chapter 11 to reorganize or liquidate topped 15,000. Filings for Chapter 7 liquidation were up 38%. In 2009, 207 publicly traded companies filed for bankruptcy, the third-highest number since 1980, according to Bloomberg (06 Jan.)

*Congress sucks. Stop raising taxes, we are all taxed enough. Start creating jobs!
Congress close to reviving "carried-interest" tax proposal
Managers of private-equity and hedge funds in the U.S. could see their federal income taxes more than double as Congress moves toward adopting a "carried-interest" tax. A measure passed in the House would tax a fund manager's carried interest, the percentage of a fund's profit that goes to the manager, as salary rather than capital gains. The measure moves next to the Senate Finance Committee, where it might be taken up as part of a broad overhaul of the tax system. The Wall Street Journal (07 Jan.)

*awe...tisk tisk...banks are nothing but wendy whiners..unnecessary? Yeah righhht!
Some banks say capital requirements are unnecessary burden
Banking regulators are requiring many financial institutions to set aside more capital to cover mortgage bonds that have soured over the course of the crisis and economic downturn. Some banks are arguing, however, that their bonds will eventually be profitable and that the additional capital requirements are unnecessary and will hinder lending. The Wall Street Journal (1/7)

Bills aim to prevent stripping of tax credits from bonds
Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee, introduced bills that would prevent the stripping and selling of tax credits from qualified school construction bonds, qualified zone academy bonds and new clean renewable energy bonds. Meanwhile, prompted by municipal-market participants, attorneys at the Treasury and the Internal Revenue Service are drafting stripping rules for that market. The Bond Buyer (free content) (1/7)

*I like it. Why should London have all the fun of insuring risk? Not to mention the amounts of money for NY tax coffers.
Paterson unveils plans for international insurance exchange
Gov. David A. Paterson said his state of New York intends to create an international insurance exchange. The new exchange would be modeled after Lloyd's of London and would be aimed at creating more jobs in the state, as well as bolstering New York's stature as a global financial center. The exchange would specialize in insuring complex risks. The New York Times (1/6)

East Africa's free-trade area scheduled to open this summer
Goods are set to start moving freely between five East African countries this summer, when the agreement creating the East African Community takes effect. The members of the free-trade area are Burundi, Kenya, Rwanda, Tanzania and Uganda. Economists see the move as an opportunity for the region to build its manufacturing base and compete with China as a producer of low-cost goods. The big winner initially is expected to be Kenya, which has the area's strongest manufacturing, banking and retail. The Economist (30 Dec.)

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