October 31, 2008

Markets, Economic News

8:42AM

Norris: Squeezing The Shorts [ANALYSIS] · Floyd Norris of The New York Times observes that in announcing a surprise 75% stake in Germany's Volkswagen on Monday, Porsche pulled off a clever new move: use derivatives to beat short-selling hedge funds at their own game. (NYT)

8:02AM

Regulators To Approve Derivatives Clearing House · U.S. regulators will reportedly approve a clearing house for the $55 trillion credit derivatives market in the next several weeks. Meanwhile, Depository Trust & Clearing Corp. said Friday it will help boost market transparency by releasing weekly data on derivatives trades linked to the top 1,000 companies and benchmark indexes. (CNBC, Bloomberg)

7:07AM

Levitt: Derivatives Necessary, Need Regulation [VIDEO] · Former Securities and Exchange Commissioner Arthur Levitt defends the use of derivatives, arguing they are a "legitimate tool" to bet against the future, but concedes more regulation and transparency is needed in the market. (Bloomberg: Video)

6:55AM

Consumer Spending Falls Most Since 2004 · The U.S. Commerce Department reported Friday that personal spending declined 0.3% in September, the steepest decline since June 2004, contributing to the worst quarterly performance in 28 years. (NYT)

5:28AM

Laeven: The Cost Of Crisis Resolution [OPINION] · International Monetary Fund economist Luc Laeven calculates that between 1970 and 2007 the fiscal cost of banking crises in industrialized economies averaged 15% of GDP, three times the U.S.'s $700 billion bailout plan, suggesting costs associated with the current credit crisis could rise appreciably. (VOX)

5:09AM

Islamic Banking Thrives As Wall Street Falters [ANALYSIS] · Islamic finance, which bans interest and trading in debt according to sharia law, has held steady despite a painful global credit crisis, spurring U.S. Treasury officials to examine its features for regulatory guidance. (Washington Post)

4:32AM

Treasury Halts Negotiations With Detroit Automakers · The U.S. Treasury is reportedly no longer negotiating with Detroit automakers about a possible capital infusion via its $700 billion Troubled Asset Relief Program, complicating prospects for a tie-up between struggling General Motors and Chrysler. (Detroit Free Press)

7:28AM

Bank of Japan Cuts Key Rate, Nikkei Plunges · The Bank of Japan lowered its key interest rate to 0.3% Friday, down from an already record low 0.5%, to help stave off a prolonged recession. The Nikkei 225 index plunged 5% after three of the eight board members dissented in favor of a larger cut. (Bloomberg)

4:06AM

E. Greenberg: Insurers Don’t Need Subsidies [OPINION] · Evan Greenberg, CEO of ACE Limited and chairman of the American Insurance Association, protests that U.S. insurers should not have to partake in the U.S. Treasury's Capital Purchase Program because they have yet to show they pose a systemic risk to the financial system. (WSJ)

8:40PM

IMF Extends $9B Loan To Pakistan · The International Monetary Fund reportedly agreed Friday to extend a $9 billion loan to Pakistan in an effort to help it meet foreign debt payments amid the global credit crisis. (CNBC)

8:17PM

Sarkozy: Strategic Fund To Start Within Weeks · French President Nicolas Sarkozy said late Thursday that his government will establish a strategic fund in three weeks' time to protect domestic industries battered by the financial crisis. The government could potentially inject $130 billion into the fund. (Reuters)

7:39PM

Barclays Chases $10B Capital Injection · Barclays is reportedly close to securing a $9.8 billion investment from the Qatar Investment Authority and an Abu Dhabi-based sovereign wealth fund in a move that would help it meet new U.K. capital benchmarks. The bank also discussed investment possibilities with Libya’s sovereign wealth fund. (FT)

2:44PM

Schwarzman: Regulation Is Not A Solution [VIDEO] · Stephen Schwarzman, head of private-equity giant Blackstone, said in an interview Thursday that the failure of "regulated" banks and brokerages in recent weeks underscores that more government regulation is not necessarily a solution to the crisis. (Fortune Video)

2:22PM

Lazard Chief Sees Significant New Losses Ahead · Lazard's CEO Bruce Wasserstein said Thursday the largest U.S. banks refuse to lend for an obvious reason: they know significant losses on bonds backed by credit card debt, commercial real estate loans and other assets loom ahead if the economy gets worse. (Fortune)

2:00PM

GM, Chrysler Merger Could Cost 74,000 Jobs · Grant Thornton estimated in a report Thursday that 74,000 employees could lose their jobs if General Motors and Chrysler receive financing approval for a merger. The accounting firm also said half of Chrysler's plants could be shuttered. (Bloomberg)