Daily Digest

Daily Digest 10/27 - More On The Currency War, Rare Earth Conundrums, Pension Crises

Wednesday, October 27, 2010, 9:41 AM
  • South Africa Wants Weak Rand To Aid Growth Despite G20
  • Chile Peso Ends 1.1% Weaker On Flurry Of Govt, Central Bank Comments
  • Brazil's Meirelles: Too soon for new inflows actions
  • Yen Drops on Concern Japan May Weaken Currency
  • Taiwan Dollar Retreats From Two-Year High on Intervention
  • Carney Says Bank Has Options If Currency Risks Growth (Canada)
  • Government Goes Soft On Capital Control (India)
  • Malaysia To Intervene If Ringgit "Disorderly" - Central Bank
  • U.S. Says China 'Must Move' On Currency Exchange Rate
  • Mortgages to Drop Below $1 Trillion to Low Since 1996
  • California Borrows $6.7 Billion Cash From JPMorgan-Led Group
  • Silver Subject to Price Manipulation, Chilton Says
  • Federal Reserve 'Terrified' of Deflation: El-Erian
  • Student Debt and the Class of 2009 (Interactive map)
  • Pittsburgh’s Pensions Crisis Nears Deadline
  • Germany Says Severely Hit By Rare Earth Scarcity
  • Race to Replace China in Rare Earth Supplies May Take Decade, Germany Says
  • Obama May Raise China Rare Earth Issue At G20

Nissan Exploring Alternative Sources of Rare Earths on China Restrictions

Our 'What Should I Do?' guide has steps to cook, see & stay warm in times of power outage

Economy

South Africa Wants Weak Rand To Aid Growth Despite G20

South Africa said on Tuesday that it would weaken its rand currency to boost economic growth, threatening a deal to refrain from competitive devaluations reached by the Group of 20 major nations just three days ago. The statement by South African presidency minister Collins Chabane appeared to mark a policy shift by President Jacob Zuma's government, which previously had resisted calls by labour unions to stimulate exports by weakening the rand

Chile Peso Ends 1.1% Weaker On Flurry Of Govt, Central Bank Comments

In addition, the central bank reiterated the prior session that it's "closely monitoring" the appreciating peso and can't rule out future intervention in the local currency market

Brazil's Meirelles: Too soon for new inflows actions

Brazil adopted a policy of sterilizing investment inflows into the economy -- issuing local notes that the central bank uses to pay investors from whom it buys dollars -- to try to keep its currency, the real, from appreciating too far or too fast while also adopting rules to stop investors from taking excessive risk in the credit markets.

Yen Drops on Concern Japan May Weaken Currency

Japan's currency has appreciated more than 5 percent against the dollar since authorities intervened in foreign- exchange markets for the first time in six years on Sept. 15. Finance Minister Yoshihiko Noda said on Oct. 23 the government stands ready to counter a rise in the yen if necessary. He also said Japan's currency policy hadn't changed after discussions about foreign-exchange markets at a Group of 20 nations meeting in Gyeongju, South Korea.

Taiwan Dollar Retreats From Two-Year High on Intervention

Taiwan’s dollar fell, after reaching a two-year high, on signs the central bank intervened to check appreciation that may hurt exports. The monetary authority bought the U.S. currency in the final minutes of trading, according to two traders familiar with the matter who declined to be identified.

Carney Says Bank Has Options If Currency Risks Growth (Canada)

Bank of Canada Governor Mark Carney said today Canada could conduct transactions in the market for the country’s currency if the exchange rate poses a serious risk to the economy.

Government Goes Soft On Capital Control (India)

“The current levels of capital inflows, which exceed financing requirements of our current account deficit, have put pressure on the rupee, resulting in its appreciation in the last few months. This has implications for our exports. We have faced a similar situation in the past and have overcome it without taking recourse to some of the more stringent policy measures that are by now well known to discerning analysts,” Mukherjee told the conference. At the same time, he said the central bank was keeping tabs on the rupee movement and might intervene, if needed.

Malaysia To Intervene If Ringgit "Disorderly" Central Bank

Malaysia's central bank will intervene in currency markets if movements in the ringgit MYR= become "disorderly", its governor Zeti Akhtar Aziz said on Tuesday. The ringgit has risen 10.5 percent against the dollar this year as investors pump cash into higher yielding emerging market assets, making it Asia's third-best performer among the currencies monitored daily by Reuters.

U.S. Says China 'Must Move' On Currency Exchange Rate

THE White House underscored overnight its hope that China will re-evaluate its currency, which the US believes has been kept artificially low to favour Chinese exports. "China must move," spokesman Robert Gibbs said of Beijing's currency policy. "And that is communicated in our dealings with - with the Chinese Government, whether it is in a meeting with the President, whether that is with Secretary (Tim) Geithner or National Security Adviser Tom Donilon," Mr Gibbs told reporters. China's state media have accused the US of "double standards" and blamed the loose monetary policies of the world's biggest economy for triggering global currency tensions.

Mortgages to Drop Below $1 Trillion to Low Since 1996

Home lending in the U.S. will fall below $1 trillion next year to the lowest level since 1996, according to the Mortgage Bankers Association. Originations will decline to $996 billion in 2011, from a projected total of $1.4 trillion this year, the trade group said today in a statement released during its annual conference in Atlanta. Lending reached a record $3.8 trillion in 2003 as refinancing soared, with new loans remaining elevated over the next few years as home prices and sales boomed.

California Borrows $6.7 Billion Cash From JPMorgan-Led Group

California borrowed $6.7 billion from JPMorgan Chase & Co. and five other banks to pay delinquent bills that piled up during the state’s record-length budget impasse, Treasurer Bill Lockyer said. California, the largest U.S. issuer of municipal debt, agreed to pay 1.4 percent to the banks, which also include Goldman Sachs Group Inc., for the bridge loan, Lockyer said. He will repay the debt in about two weeks when he sells an estimated $10 billion of revenue anticipation notes, a short- term municipal bond the state offers when cash is low and repays from later tax collections.

Silver Subject to Price Manipulation, Chilton Says (posted by plato1965)

As an investigation of the silver market by the top U.S. commodity regulator entered a third year, a member of the Commodity Futures Trading Commission said today there have been “repeated attempts” to influence prices. “There have been fraudulent efforts to persuade and deviously control that price,” said Commissioner Bart Chilton at a hearing today in Washington, alleging there have been violations of the Commodity Exchange Act. “Any such violation of the law in this regard should be prosecuted,” he said.

Federal Reserve 'Terrified' of Deflation: El-Erian

The Federal Reserve will announce a new round of easing next week because it is “terrified” of deflation, said Mohamed El-Erian, chief executive officer of Pimco.

Student Debt and the Class of 2009 (Interactive map)

Pittsburgh’s Pensions Crisis Nears Deadline

Pennsylvania is demanding that Pittsburgh fund its pensions by at least 50 per cent by the end of the year or they will be turned over to the state for management. That would likely mean higher contributions from the city at a time when Pittsburgh, like the rest of the US, is struggling with the aftermath of a national recession.

Energy

Germany Says Severely Hit By Rare Earth Scarcity

Germany is severely hit by the global shortage of rare earths, and the government should guard against speculation in raw materials, Economy Minister Rainer Bruederle said on Tuesday.

Race to Replace China in Rare Earth Supplies May Take Decade, Germany Says

China’s decision to curb exports of rare earths is set to spark a global race for alternative sources that may still take a decade to secure sufficient supplies, the head of the German commodities agency said. More rigid environmental standards in the European Union and ethical questions over sourcing raw materials from developing nations mean there can be no quick fixes in finding viable alternatives to China, producer of more than 90 percent of the world’s rare earths, said Volker Steinbach, who heads the Hanover-based government agency.

Obama May Raise China Rare Earth Issue At G20

U.S. President Barack Obama could raise the issue of Chinese control of rare earth minerals with Beijing at the G20 meeting next month, the White House said on Tuesday. "I think we are likely to see (Chinese) President Hu (Jintao) on the trip at the G20," said White House spokesman Robert Gibbs. He said the president's national security and economic advisers were monitoring reports China may be exploiting its grip on rare earth metals, crucial in the making of everything from portable phones to wind turbines.

Nissan Exploring Alternative Sources of Rare Earths on China Restrictions

While Nissan has sufficient stockpiles of rare earths, it is “very concerned” about the supply situation, Chief Operating Officer Toshiyuki Shiga told reporters in Yokohama today. Nissan will also try to reduce the amount of rare earths it uses in motors for hybrid cars and explore recycled materials, he said. Restrictions by China, which produces more than 90 percent of the world’s rare earths, have drawn criticism from U.S. lawmakers and officials in Japan and Germany. China reduced its second-half export quota for the minerals by 72 percent in July, the Ministry of Commerce said. It is now further restricting exports, according to industry participants.

7 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4066
Re: Daily Digest 10/27 - More On The Currency War, Rare ...
  • Just headlines:

 

Dollar printing feeding China inflation: minister

Vale May Scrap Brazilian Real Hedges as Currency War Escalates

The scary actual US government debt

Alaska reserve holds one-tenth of oil scientists had estimated, agency says and Alaska's untapped oil reserves estimate lowered by about 90 percent

BOJ Should Buy Government Bonds to Ease Yen Gain, Merrill's Kichikawa Says

Indonesia May Impose Controls as US Eases, Deutsche Bank Says

VW Leads Issuers Facing $1 Trillion Refinancing, Moody's Says

Carrizo Plans Notes Amid 'Daunting' Debt Wave: New Issue Alert

S&P downgrades Anglo bonds' value (Ireland)

LAUSD downsizes new borrowing (Los Angeles)

New Jersey's Christie to Fire 1500 Workers in 2011

Harrisburg city council close to hiring bankruptcy expert and Harrisburg city coffers on empty

Next New York Governor Will Face Early Budget Test

Romania's Government Faces No-Confidence Vote

Record-low mortgage rates will be gone in 2011: MBA

Irish Bondholders Suffer Pain Again as Budget Cuts Take Toll: Euro Credit

San Jose council, in split vote, moves to cut back on pension costs

Pittsburgh City Council approves pension bailout

Mortgage Defaults increase in California over Third Quarter

Portuguese Talks on 2011 Budget Reductions Break Down, Threatening Passage

Greek Bonds Tumble as Government Says Tax Revenue Falling Short

Employers in U.S. Start Bracing for Higher Tax Withholding

Jim Rogers Interview: Why History and Philosophy are so Important to the Decisions of Today (McAlvany)

ICN 10/25/10 Govt Is Watching You, States In Financial Trouble, Worldwide Land Grab (Video)

 

Poet's picture
Poet
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Posts: 1891
Pimco's Bill Gross Calls QE2 a Ponzi Scheme

Pimco's Bill Gross calls Quantitive Easing II a Ponzi scheme:

Run, Turkey, Run:
http://www.pimco.com/Pages/RunTurkeyRun.aspx

  • We are in a “liquidity trap,” where interest rates or trillions in asset purchases may not stimulate borrowing or lending because consumer demand is just not there.
  • The Fed’s announcement will likely signify the end of a great 30-year bull market in bonds and the necessity for bond managers and, yes, equity managers to adjust to a new environment.

His monthly articles are always entertaining, but this one is more harshly worded.

Poet

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest 10/27 - More On The Currency War, Rare ...

http://www.cnbc.com/id/39868154

Fund manager Jeremy Grantham, long a Federal Reserve critic, issued a blistering attack on Fed policies Wednesday, likening its strategy of low interest rates and monetary easing to a Halloween horror movie that is dangerous and destabilizing to the economy.

Night of the Living Fed.

"In almost every respect, adhering to a policy of low rates, employing quantitative easing, deliberately stimulating asset prices, ignoring the consequences of bubbles breaking, and displaying a complete refusal to learn from experience has left Fed policy as a large net negative to the production of a healthy, stable economy with strong employment," Grantham, chief investment officer of GMO, an investment management firm in Boston said.

Grantham's quarterly note to clients came with a mock horror movie image titled, "Night of the Living Fed: Something Unbelievably Terrifying." READ THE REST OF THE ARTICLE.

kinoshika's picture
kinoshika
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Re: Daily Digest 10/27 - More On The Currency War, Rare ...

/spam/

plato1965's picture
plato1965
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Joined: Feb 18 2009
Posts: 615
Re: Daily Digest 10/27 - More On The Currency War, Rare ...

 

 There and back again...  the Hobbit.  (Bilbo Bagehot..  Mervyn Baggins ?? )  

 http://www.bankofengland.co.uk/publications/news/2010/082.htm

 http://en.wikipedia.org/wiki/The_Hobbit

idoctor's picture
idoctor
Status: Diamond Member (Offline)
Joined: Oct 4 2008
Posts: 1731
Re: Daily Digest 10/27 - More On The Currency War, Rare ...

WASHINGTON (AP) -- Wells Fargo admitted Wednesday it made mistakes in the paperwork for thousands of foreclosure cases and promised to fix them.

The San Francisco-based bank said it plans to refile documents in 55,000 of the cases by mid-November. The company said not all those cases included errors but didn't say how many thousands did.

Wells Fargo described the mistakes as technical and said it has no plans to halt the foreclosure process, though filing new paperwork will cause some delays.

"We don't believe that there are instances in which the foreclosures would not have occurred otherwise," said Teri Schrettenbrunner, a Wells Fargo spokeswoman. The documents are being refiled in the 23 states where a judge's approval is needed to complete a foreclosure.

Wells Fargo & Co.'s CEO, John Stumpf, has declined to join Bank of America Corp., Ally Financial Inc.'s GMAC Mortgage and other banks in suspending foreclosures because of flawed paperwork that surfaced at several large banks.

On a conference call with investors this month, Stumpf said the bank is "confident that our practices, procedures and documentation" are accurate.

Depositions of two Wells Fargo employees have called the company's foreclosure practices into question. A Fort Mill, S.C.-based Wells employee said in a deposition taken last March that she signed between 300 and 500 foreclosure documents per day,

In another deposition taken in May, another Wells employee said he verified only the dates on up to 150 foreclosure documents he signed daily and relied on co-workers to ensure that other information was correct.

Bank of America is scheduled to meet Thursday with state officials investigating allegations the bank rushed the foreclosure process without properly reviewing documents.

A person briefed on the matter confirmed the parties will have a preliminary discussion about issues related to the foreclosure documents. The person did not give details about the meeting or who will participate. The person, who spoke on condition of anonymity, was not authorized to speak publicly.

Bank of America, based in Charlotte, N.C., said in a statement: "We have been cooperating with the attorneys general and continue to have dialogue and share information with these important stakeholders."

The bank resumed foreclosures this week after halting them temporarily to resubmit documents with a new process designed to correct any mistakes such as misspelled names or incorrect numbers.

Attorneys general in all 50 states and the District of Columbia are jointly investigating whether paperwork and legal procedures were handled properly in hundreds of thousands of cases.

Bloomberg News reported earlier in the day that state attorneys general were scheduled to meet with lenders this week on the foreclosure-document probe and had conference calls with several lenders, also known as loan servicers.

Iowa Attorney General Tom Miller is leading the multistate probe. Geoff Greenwood, a spokesman for Miller, confirmed that a meeting is scheduled for Thursday. He declined to comment on which banks are expected to attend.

Besides state regulators, banking regulators including the Federal Reserve are examining whether mortgage companies cut corners on their own procedures when they moved to foreclose on people's homes.

Despite the problems, the Obama administration maintains there is no need to halt foreclosures in all 50 states.

On Wednesday, Phyllis Caldwell, chief of the Treasury Department's homeownership preservation office, told a financial bailout watchdog panel that there was no evidence of risk to the financial system from the documents scandal -- or from efforts by mortgage investors to force banks to buy back problem loans.

AP Business Writer Marcy Gordon contributed to this report.

dbworld's picture
dbworld
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Posts: 10
Re: Daily Digest 10/27 - More On The Currency War, Rare ...

Is 3 Month Libor rate increasing a red flag?  This article says it increased for the Euro. I remember the last time LIBOR rose, was the flash crash. Is this significant ?

http://imarketnews.com/?q=node/21452

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