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Thursday, May 20, 2010

MORNING BRIEFS: very brief

Asian markets decline as sentiment remains fragile
Share markets across the Asian-Pacific region were down Thursday as investors continued to be concerned about the debt crisis in Europe. Japan's Nikkei 225 dropped 1.5%, Australia's S&P/ASX 200 slid 1.6% and China's Shanghai Composite gave up 1.2%. South Korea's Kospi Composite and Taiwan's Taiex fell 1.8%, while Hong Kong's Hang Seng Index shed 0.2%. New Zealand's NZX 50 slipped 0.3%, while India's Sensex was up 0.6% and Singapore's Straits Times Index was down 0.6% in afternoon trading. Political unrest and violence in Thailand shut down its financial market. The Wall Street Journal (20 May.)

*still think Obamas one of us? This isn't just sparking pubby outcry!
GE(GE), Goldman(GS) Rescue of Chicago Lender Sparks Republican Outcry.
The move by General Electric Co. and several Wall Street banks to salvage a Chicago lender with White House ties prompted Republicans to demand that the Obama administration answer questions about any role it may have played in the rescue. ShoreBank Corp., which needs about $200 million in additional capital to stave off regulators, also is receiving help from Goldman Sachs Group Inc.(GS), Citigroup Inc.(C), JPMorgan Chase & Co.(JPM) and Bank of America Corp.(BAC), the Chicago Tribune reported. Representative Spencer Bachus, the ranking Republican on the House Financial Services Committee, said they were doing so to gain favor with the administration. “Some believe that ShoreBank was really saved because of an assumption that high-ranking officials in the Obama administration favored a bailout of this failing institution with deep political ties,” Bachus, an Alabama lawmaker, said in a letter he sent to President Barack Obama. General Electric said yesterday it’s investing $20 million in the community bank, which is based on Chicago’s South Side and has long-standing ties to the president. After Obama was elected, former ShoreBank executive Robert Weissbourd served on the president-elect’s transition team. “There is no way a bank without ShoreBank’s political connections would receive this kind of attention,” Bachus said in a statement.

Creditors approve Dubai World's $23.5 billion debt restructuring
A seven-member committee representing 60% of Dubai World's bank debt approved in principle the terms of a $23.5 billion restructuring plan. After the settlement takes effect, the company's debt would consist of $4.4 billion with a five-year maturity and $10 billion due in eight years. Aidan Birkett, Dubai World's chief restructuring officer, said the deal received unanimous support from the committee. The National (Abu Dhabi, United Arab Emirates)/Reuters (20 May.)

Goldman Sachs Hands Clients Losses in ‘Top Trades’

May 19 (Bloomberg) -- Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse. Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar.

Idle Capacity in U.S. Economy Keeps Fed Asset Sales on Hold
May 20 (Bloomberg) -- The U.S. economy still has too much idle capacity and too little inflation for the Federal Reserve to start considering sales of $1.1 trillion in mortgage debt, central bank officials signaled at their meeting last month.
Most policy makers, meeting more than a week before the European debt crisis intensified, preferred deferring asset sales “for some time,” according to minutes released yesterday. A majority said such sales should wait until after interest rates are raised from a record low.

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