Top Interest Rate Headlines 10-05-2011: IMF: Chances of Recession Rising for Europe

IMF: Chances of Recession Rising for Europe
BY RIVA FROYMOVICH AND IAN TALLEY, WSJ.com
The International Monetary Fund could create a special financing tool to buy bonds in private markets as a way to help stem the euro zone's debt crisis, a senior IMF official said Wednesday.
http://jlne.ws/p0crgD
SIFMA Supports Legislation Making Current Tax Rates on Savings, Investing Permanent
Washington, DC, October 5, 2011—SIFMA today issued the following statement from Kenneth E Bentsen, Jr., executive vice president, public policy and advocacy, after the introduction of The Tax Hike Prevention & Business Certainty Act in both the House of Representatives and Senate by Rep. Peter Roskam (Ill.) and Sen. Mike Crapo (Idaho) to make permanent the current tax rates on capital gains and dividends.
http://jlne.ws/oN8wZt

Bernanke Issues Warning, Urges Action on Economy
BY JON HILSENRATH AND LUCA DI LEO, WSJ.com
Federal Reserve Chairman Ben Bernanke warned the U.S. economic recovery was "close to faltering," and said Congress and the White House had a "shared responsibility" with the central bank to respond.
http://jlne.ws/qkwfCw

IMF Sees Latin America Facing a Range of Challenges from Global Crisis
Press Release
http://jlne.ws/qyYhu2

OTC Derivatives Clearing and the Buy Side in the US: Rough Ride Ahead
Press Release
The overhauling of the OTC derivatives market in the form of the Dodd-Frank Act (DFA) has brought about a sea change in the clearing environment. The legislation is expected to ensure greater transparency and accountability in the system. However, the move from bilateral to counterparty clearing will require a great deal of resources on the part of market participants, especially the buy side.
http://jlne.ws/nZRjNP

Central Bank of Kenya Ups Rate 400bps to 11.00%
Central Bank News
The Central Bank of Kenya upped its benchmark lending rate by 400 basis points to 11.00% from 7.00% previously.  The central bank Governor, Njuguna Ndung'u, said: "The Committee decided to raise the CBR by 400 basis points to 11.0 percent. In addition, the MPC will be meeting every first week of the month until further notice," and said the CBK "will revise the CBR further if inflation and exchange rate volatility do not abate." also noting: "inflationary pressure has continued to increase and both the weakening of the shilling and its volatility poses additional threats."
http://jlne.ws/qe8C0Z

Soros Insider-Trading Conviction Reviewed
By Heather Smith, Bloomberg
Billionaire investor George Soros’s fight against his 2002 insider-trading conviction in France, over the sale of Societe Generale SA shares, may end tomorrow when the European Court of Human Rights rules on his appeal.
http://jlne.ws/oQprTn

Plunging business activity fuels euro recession fears
By Mark Felsenthal and Jonathan Cable, Reuters
The euro zone's services sector shrank for the first time in two years in September as new orders dried up, stoking fears that the region's economy could be heading back into recession.
http://jlne.ws/pPubSD

Private Sector Adds 91,000 Jobs
By Mark Felsenthal and Jonathan Cable, Reuters
The euro zone's services sector shrank for the first time in two years in September as new orders dried up, stoking fears that the region's economy could be heading back into recession.
http://jlne.ws/oREMMS

Dexia GG revival risks setting dangerous precedent
Market participants warned on Wednesday that the decision to guarantee Dexia's debt could set a dangerous precedent and force more state intervention into European banks at a time when sovereigns can ill afford it.
http://jlne.ws/n1TmIX

UK: Bigger boom, deeper bust, earlier recovery
The present is grim and the future is terrifying. But at least the distant past looks a bit brighter. That is the message from new estimates of Britain's GDP, released this morning. The statisticians made minor changes to the recent past but substantially rewrote earlier economic history. GDP in the first and second quarters was revised down a notch: the annual change to the second quarter is now a measly 0.6%, revised from 0.7%. But there were more chunky revisions to figures for 2007-10. In short: the economy was stronger going into recession, fell harder, and recovered earlier (and a bit more strongly) than previously thought.

Firms, Markets Will Sidestep European Tax On Trading
By Jacob Bunge, DOW JONES NEWSWIRES
Banks, trading firms and exchanges will find ways to circumvent a tax on trading being pushed by European nations, according to a senior executive at one of the industry's most influential electronic trading groups.
http://jlne.ws/opqquA

CDS numbers count against banking system
By David Oakley and Tracy Alloway, Financial Times
Sometimes a number tells the story best. On Tuesday that number seemed to be eurozone bank credit default swaps, or CDS, which show the region’s financial system is closer to breakdown than at any time in recent years.
http://jlne.ws/n1Okfx

Bank Default Swaps Increase in Europe as Bigger Losses on Greek Bonds Loom
Bloomberg
Credit-default swaps insuring bank debt surged after European lawmakers signaled lenders may have to take bigger losses on holdings of Greek debt.
http://jlne.ws/psX7v7

U.S. Treasury Secretary Geithner To Attend G-20 Meeting Of Finance Ministers In Paris, France, October 14-15, 2011
Press Release
The U.S. Department of the Treasury today announced that Treasury Secretary Tim Geithner will travel to Paris, France to attend the G-20 Meeting of Finance Ministers and Central Bank Governors on October 14-15, 2011. The Secretary will meet with his international counterparts to discuss the need for a reinvigorated global effort to support growth, jobs and financial stability. Additional details regarding Secretary Geithner’s schedule will be made available over the coming days.
http://jlne.ws/nFPYYJ

UBS loss throws light on ‘synthetic’ problem
By Tracy Alloway and Izabella Kaminska, Financial Times
The revelation of a $2.3bn trading loss at UBS’s Delta One desk has thrust a big banking business into an unflattering spotlight. At its heart, Delta One is about banks creating – and profiting off of – bespoke synthetic exposures for their clients. That can mean Delta One is involved in everything from exchange traded funds aimed at retail and institutional investors, to “synthetic prime” brokerages acting on behalf of hedge fund customers.
http://jlne.ws/mTZmjg

Morgan Stanley Bet the Farm in Ukraine Before Fed Bailout by U.S. Taxpayer
Bloomberg
Iowa native Justin Bruch marveled at the opportunity when Morgan Stanley (MS) called in late 2007 to recruit him for an unusual assignment. The New York bank, flush with $7.5 billion in fiscal 2006 profit -- the biggest in its history -- was going to be farming 11 parcels on the steppes of Ukraine . The commodities team wanted Bruch, a redhead with meaty hands who'd been farming all his life, to ...
http://jlne.ws/rlV1tb

Deutsche Bank Abandons Profit Goal, Cuts Jobs
BusinessWeek
Deutsche Bank AG scrapped its profit forecast and announced 500 job cuts and further writedowns of Greek bond holdings amid a "significant and unabated slowdown in client activity" in the wake of Europe's debt crisis.
http://jlne.ws/njvodl

Deutsche Bank To Axe 500 Jobs In Corporate Banking And Securities, Mostly Outside Of Germany
Business Insider
Deutsche Bank announced today that it will eliminate 500 positions in the bank's corporate banking and securities corporate division. Today the German bank said in its release that the main reason for the layoffs is the uncertain economic environment stemming from the ongoing eurozone crisis.
http://jlne.ws/o8HxDS

Gross Favors Safe Sovereigns With Risk of Recession Rising
BusinessWeek
Bill Gross, the manager of the world's biggest bond fund, said that he favors investing in so- called safe sovereign debt of nations that have the ability to raise monetary stimulus as the risk of recession increases.
http://jlne.ws/qQrLG6

Bernanke criticises China over currency
By Alan Beattie in Washington and Kathrin Hille in Beijing, Financial Times
The chairman of the US Federal Reserve has accused China of damaging prospects for a global economic recovery through its deliberate intervention in the currency market to hold down the value of the renminbi.
http://jlne.ws/pRImX2