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Tuesday, September 14, 2010


Asian markets are mixed as investors in Tokyo become cautious
Asian share markets were mixed Tuesday, as the ruling party in Japan held a vote to determine the prime minister. Japan's Nikkei 225 slid 0.2%, Australia's S&P/ASX 200 rose 0.5% and South Korea's Kospi Composite shed 0.1%. China's Shanghai Composite was unchanged, Hong Kong's Hang Seng Index inched up 0.1% and India's Sensex was up 0.7%. Taiwan's Taiex tacked on 0.2%, Singapore's Straits Times Index gave up 0.4% and Malaysia's Kuala Lumpur Composite climbed 0.8%. The Wall Street Journal (14 Sep.)

All U.S. taxpayers have a stake in Congress' tax-cut maneuvering
Every U.S. taxpayer will be affected by the outcome of debate in Congress regarding whether to extend Bush-era tax cuts and credits scheduled to expire this year. Congress has a few options available, including extending all of the measures, letting them expire or continuing them with change, such as limiting their benefit to middle-income families. The Christian Science Monitor has reviewed such proposals, which might not make it to a vote before November. The Politico (Washington) (13 Sep.)

Japan's yen rockets to a 15-year high against the U.S. dollar

The value of Japan's yen against the U.S. dollar has soared to its highest level since May 1995, as traders correctly anticipated that Prime Minister Naoto Kan would defeat challenger Ichiro Ozawa in an election. Foreign exchange experts said Kan is seen as less likely than Ozawa to intervene in the currency market, increasing the chance of further gain for the yen. Asahi Shimbun (Japan) (14 Sep.)

Analysis: Basel III's phase-in period might be too long:
The Basel Committee on Banking Supervision has given banks about eight years to comply with revamped capital rules, giving the sector enough time to recover and then reach a crisis point again, according to The Wall Street Journal. The lengthy phase-in period implies that finance ministers are concerned with the fragility of economies and financial institutions or that they have confidence that banks will voluntarily become more cautious. The Wall Street Journal (14 Sep.)

China will authorize CDS trading by year-end, an official says
Before the end of the year, China will allow the trading of credit default swaps, intended to help banks hedge risk, said Shi Wenchao, secretary general of the National Association of Financial Market Institutional Investors. The government will prohibit CDS trading on high-risk asset classes, such as subprime mortgages, and restrict the amount of leverage used. Bloomberg (14 Sep.)

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