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Thursday, February 25, 2010


Most Asian markets decline, while Shanghai Composite gains
Concern about a downgrade of Greek debt weighed on stocks in the Asian-Pacific region Thursday. Japan's Nikkei 225 gave up 1%, Hong Kong's Hang Seng Index slid 0.5% and Taiwan's Taiex fell 1.4%. Australia's S&P/ASX 200 lost 1.2%, South Korea's Kospi Composite dropped 1.6% and China's Shanghai Composite bucked the trend by advancing 1.3%. India's Sensex had given up 0.1% and Singapore's Straits Times Index was down 0.6% in afternoon trading. The Wall Street Journal (25 Feb.)

Senate approval of jobs bill clears way for more stimulus action
Senate Democrats plan to bring a barrage of programs aimed at reviving the labor market, after a $15 billion jobs bill backed by Majority Leader Harry Reid, D-Nev., cleared with a 70-28 vote. After the approval, in which 13 Republicans voted in favor, Reid said the Senate will soon take up a measure promoting foreign travel to the U.S. Other measures include pro-business tax breaks, system upgrades for air-traffic control and extensions of jobless benefits. Los Angeles Times (25 Feb.)

European politicians look into cracking down on CDS market
Tougher regulation of the credit default swap market is being increasingly embraced by European officials. The German government said it is considering restricting the use of CDS contracts. Meanwhile, France is looking into implementing a CDS crackdown, said Finance Minister Christine Lagarde. Financial Times (tiered subscription model) (25 Feb.)

Report warns of consequences of focusing solely on capital rules
A report shows that another financial crisis could be in the works if regulators focus too heavily on increasing capital requirements for banks instead of forcing financial institutions to change the way they operate. Many banks likely did not have sufficient core Tier 1 capital to survive the financial crisis, researchers said, but increasing requirements would not resolve the issue. "The regulator is calling for bigger airbags, but airbags don't avert crashes -- what we need is better driving. We need to address how to stop banks failing rather than weighting the focus on softening any falls," said Simon Ashby, author of the report. Financial Times (tiered subscription model) (25 Feb.)

Expansion of Iraqi oil production could affect entire Middle East
Iraq, which has the world's third-largest oil reserves, plans to expand its oil production by 400% or more. If it succeeds, this fresh supply entering the energy market will have consequences throughout the Middle East and beyond, according to The Economist. But Iraq would have to overcome huge obstacles to implement its plan. "Iraq will have to pull off an unprecedented feat," The Economist notes. "In the history of the modern oil industry, no country has increased output with the speed the Iraqis envisage." The Economist (18 Feb.)

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