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Monday, January 11, 2010


Beijing's changes lift Shanghai stocks as Asian markets gain
China approved a number of market-reform initiatives, helping to boost stocks in Shanghai on Monday. China's Shanghai Composite, Hong Kong's Hang Seng and Taiwan's Taiex added 0.5%. Australia's S&P/ASX 200 climbed 0.8%, South Korea's Kospi Composite inched down 0.1% and New Zealand's NZX 50 shed 0.2%. India's Sensex and Singapore's Straits Times were up 0.3% in afternoon trading. The Wall Street Journal (11 Jan.)

*you think???
Critics, employees likely will be upset about Wall Street bonuses
Wall Street banks and securities firms are bracing themselves for criticism that this year's bonuses are too big, as well as employees' unhappiness about bonuses made up of more stock and less cash than before. "This big bonus season ... is going to offend the American people. It offends me," said Christina Romer, head of the White House Council of Economic Advisers. At the same time, some financial workers said getting bonuses in stock, which often comes with restrictions on when it can be sold, could leave them short on cash. The Wall Street Journal (11 Jan.)

*remember when PIMCO started buying RMBS in October of 07 and then again in October of 08? Want to guess what happened to PIMCOs portfolio? LOSER! And thats what these IJIOTS will experience as well just you wait and see.
Commercial real-estate sector attracts wave of money
Private equity firms, foreign banks and a Chinese sovereign-wealth fund are among investors pouring money into the commercial real estate sector. The increasing interest is an indication that the market is stabilizing, but market participants cautioned about investors' strategies. They said the opportunistic investments could be derailed by interest rate increases. Financial Times (tiered subscription model) (1/11)

*at least we are not alone and expect the Eurozone to get worse over time just like we did.
Eurozone unemployment climbs to highest level since 1998
Unemployment in the eurozone has reached 10%, the highest rate in 11 years, according to Eurostat. More than 15 million workers are unemployed, with 102,000 laid off in November. The highest unemployment is in Spain, where the rate is more than 19%. Deutsche Welle/BK/Agence France Presse/Reuters (08 Jan.)

*too bad no one's listening
FSB's Draghi cautions banks about taking on new risks
Mario Draghi, head of the Financial Stability Board, said financial markets are in a better shape than what was forecast last year, but he warned that bankers should be careful about excessive risk-taking as the economic recovery remains fragile. "Bankers should be aware of the fragilities in the system," he said. "They should have in mind that there are many fragile sides to this beginning of the recovery." Draghi attributed much of the economic improvement to stimulus measures. Bloomberg (11 Jan.)

Commentary: Stock market's performance points to softening economy
The performance of equities is pointing to a faltering U.S. economy and sagging corporate earnings in the third quarter, writes Paul Lim, a senior editor at Money magazine. In the past, stock indexes started rising about six months before a recession's end. In 2009, the trend upward began in March. Jeffrey Kleintop, chief market strategist at LPL Financial, said he anticipates that "somewhere between January and June, the rally will probably peter out." The New York Times (09 Jan.)

Analysis: Markets' addiction to stimulus has to stop
Governments must do something about the dependence of markets on cheap or free stimulus money, according to this Economist analysis. Markets are propped up by low interest rates, fiscal deficits and high asset prices, but the combination cannot be sustained. Asset prices are less than their historic peaks, but they could fall a long way if government policies holding them up are taken away. The Economist (07 Jan.)

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