11-12-10

GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN

IRAN

ISREAL

KOREA

 

SOVEREIGNS

 

Crunch time is fast approaching for the world economy Warner "If we don't do that...then I fear that the next 12 months will be an even more difficult and dangerous period than the one we've been through”   World economy faces 'difficult and dangerous times' warns Mervyn King Guardian   GREECE   SPAIN   GERMANY   FRANCE   UK The IMF is giving UK good fiscal advice  FT Wolf     IRELAND Irish contagion hits wider eurozone  FT Merkel digs in over cost of future bail-outs European Ministers Hold Ireland Debt Crisis Talks at G-20  BL Group of 20 leaders discussed Ireland’s debt crisis, which has driven bond yields to records and weakened the euro on concern the European Union will need to step in with a bailout. Ireland Default Predicted by Majority in Global Investor Poll  BL A majority of global investors predict Ireland will default on its sovereign debt, showing that weeks of efforts by the government of the onetime “Celtic Tiger” haven’t allayed concerns about its creditworthiness.   G-20 Backs Crisis Warning System as Ireland Concerns Grow  BL Group of 20 leaders agreed to develop early warning indicators to head off economic turmoil as emergency talks on Ireland’s debt reminded them the recovery from the global financial crisis remains fragile.   Ireland's cost of borrowing soars after dramatic sell-off Tele The sell-off was triggered by a cash-call estimated to be $1bn (£620m)... Jitters Persist  WSJ Ireland admits investors uneasy as bailout fears mount Reuters Ireland stares into the abyss Inde Ireland on Brink as `Beggar' for Aid BL Fixing personal debt crisis is 'beyond human intervention' Independent.ie JAPAN

ECB's Trichet Is Buyer of Only Resort as Debt Crisis Worsens BL

4- STATE & LOCAL GOVERNMENT

5- CENTRAL & EASTERN EUROPE

7- RISK REVERSAL

8- COMMERCIAL REAL ESTATE

9-RESIDENTIAL REAL ESTATE - PHASE II

Foreclosure Activity Falls 'Artificially' Due to Moratorium CNBC

14- CORPORATE BANKRUPTCIES

Deep-Six the Deficit Commission Report Baker

American Profligacy and American Power Foreign Affairs (R)
The Consequences of Fiscal Irresponsibility

US-South Korea fail to agree trade deal  FT

OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE

24-RETAIL SALES

26-GLOBAL OUTPUT GAP

31-FOOD PRICE PRESSURES

32-US STOCK MARKET VALUATIONS

G20 fails to reach deal on imbalances  FT

Pledge to resolve differences with IMF help

US defensive on dollar at G20  FT

History lessons for a world out of balance  FT

History suggests, among other things, that competitive devaluations and capital controls are the inevitable consequence of surplus countries failing to take any responsibility for global payments imbalances

How the G20 glasshouse is under attack  FT

At the very least a new pecking order appears to be forming.   This is reflected in shifting board representation in the International Monetary Fund and World Bank as developing countries take more votes and seats at the expense of the old powers. The shift is also exacerbated by Europe’s inability to act as one in either the G20 or these institutions, sidelining what should be a heavyweight player.  Instead it often seems lost in unseemly rearguard actions to preserve a fading status. In short, this G20 is far from united in its ambition to offer more coherent leadership to the world economy. Rather, it is at risk of being reduced to the sum of its feuding parts as structural trade imbalances, currency wars and very different views of each other’s relative economic prospects drive stakes into the enterprise.

Obama Presses Hu on Yuan as Trade Imbalances Divide G-20 BL

The eurozone’s stark lessons for the G20  FT Greenspan

 

Currency problems have now spread to the global financial system which, like the euro area, requires adherence to certain rules to sustain it. It is not only the well publicised friction between China and America – both may be right about each other – but also by the drive for competitive export advantage through currency manipulation in a world where a zero global current account balance permits none. Something has to give in this arena of zero-consolidated current account balances. 1- We should not wish to inhibit those market-determined capital flows that reflect the cross-border shifting of resources that enhances global productivity. These flows are the big determinants of desirable realignments of exchange rates over time. But we should discourage reserve accumulation whose sole purpose is to suppress exchange rates for competitive export advantage. This, of course, has been the market-distorting consequences of China’s accumulation of over $2,000bn of reserves since 2000. 2- What the G20 can initiate through the IMF is a set of rules that limits the accumulation of reserve assets and sterilisation of capital inflows. China may need an officially sanctioned extended adjustment period, and provisions may be required to deal with unsterilised capital inflows threatening smaller markets. But that would be far easier to monitor and control than a stability and growth pact that requires control of central government revenues and spending.   Delimiting a country’s ability to suppress its exchange rate (reserve accumulation limits) or to blunt the effect of unwanted capital inflows (sterilisation) may not fully dissuade a country bent on other protectionist forms.

Greenspan Urges G-20 Adoption of Reserve Limits BL

CURRENCY WARS

Geithner Says Dollar Drop Due to Reversal of Safe-Haven Flows BL

“We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy”

Emerging markets capital flows - how are the BRIC countries faring and coping? DB Research

Q3 EARNINGS

Cisco Shortfall Shows Risks in Government Spending Cuts  BL

MARKET & GOLD MANIPULATION

AUDIO / VIDEO

QUOTE OF THE WEEK

"It could unfold very, very quickly. Because deflation is a swing of poverty feedback, it can take awhile to build up. If you try to explain to people what's coming, because it doesn't happen instantly, they tend to go back to sleep. The thing they need to understand, however, is that when it does hit a tipping point, a kind of critical mass, then it can unfold exceptionally quickly. Then it's very much like having the rug pulled out from under your feet. So I tell people all the time, prepare now because it's better to be two years too early than five minutes too late. You can't play with this sort of thing. In September, 2008, we came within a few hours of the banking system seizing up, and that could easily happen again. People wouldn't get a lot of notice. For anyone who's not in the meeting room-it will be too late by the time they find out. My worry is that if there are an enormous number of people who just had the rug pulled out from under their feet, they're going to run around like headless chickens, and the human over-reaction to events will be really responsible for a large percentage of the impact. “ Automatic Earth

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