**Editor's Note: Christine Nielsen is in Interlaken, Switzerland, attending the Swiss Futures & Options Conference this week. Today's JLN Interest Rates newsletter was edited by Jim Kharouf, Sarah Rudolph and Nicole V. Rohr.
Bernanke: Fed Will Weigh Stimulus at Next Meeting
By Jeannine Aversa and Joshua Zumbrun, Bloomberg
Federal Reserve Chairman Ben S. Bernanke said policy makers will discuss the tools they could use to boost the recovery at their next meeting this month and stand ready to use them if necessary.
http://jlne.ws/oHF1ai
The good news from Chairman Bernanke's speech:
- In the financial sphere, our banking system and financial markets are significantly stronger and more stable.
- Credit availability has improved for many borrowers, though it remains tight in categories -- such as small business lending -- in which the balance sheets and income prospects of potential borrowers remain impaired.
- Structural reform is moving forward in the financial sector, with ambitious domestic and international efforts under way to enhance financial regulation and supervision, especially for the largest and systemically most important financial institutions.
- The business sector generally presents a more upbeat picture. Manufacturing production has risen nearly 15 percent since its trough, driven importantly by growth in exports.
- U.S. trade deficit has narrowed substantially relative to where it was before the crisis, reflecting in part the improved competitiveness of U.S. goods and services.
- Business investment in equipment and software has also continued to expand.
And the bad
- Recovery from the crisis has been much less robust than we had hoped.
- The recession was even deeper and the recovery weaker than we had previously thought.
- Aggregate output in the United States still has not returned to the level that it had attained before the crisis.
- Economic growth over the past two years has, for the most part, been at rates insufficient to achieve sustained reductions in the unemployment rate, which has recently been fluctuating a bit above 9 percent.
- Gross domestic product (GDP) estimated to have increased at an annual rate of less than 1 percent, on average, in the first and second quarters.
- One striking aspect of the recovery is the unusual weakness in household spending.
- But households are struggling with other important headwinds as well, including the persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high for many, notwithstanding that households, in the aggregate, have been saving more and borrowing less.
- Readings on consumer confidence have fallen substantially in recent months as people have become more pessimistic about both economic conditions and their own financial prospects.
- The housing sector has been a significant driver of recovery from most recessions in the United States since World War II, but this time -- with an overhang of distressed and foreclosed properties, tight credit conditions for builders and potential homebuyers, and ongoing concerns by both potential borrowers and lenders about continued house price declines -- the rate of new home construction has remained at less than one-third of its pre-crisis peak.
And the future
- State and local governments continue to tighten their belts by cutting spending and reducing payrolls in the face of ongoing budgetary pressures, and federal fiscal stimulus is being withdrawn.
- The absence of adequate demand from the private sector -- a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring.
- Without significant policy changes to address the increasing fiscal burdens that will be associated with the aging of the population and the ongoing rise in health-care costs, the finances of the federal government will spiral out of control in coming decades, risking severe economic and financial damage.
- Importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy.
Well, I wouldn't call that exactly uplifting and inspirational. Onward we go...
Jim Kharouf
Crisis Recovery Is ‘Much Less Robust’ Than Hoped, Bernanke Says
Full Text of Bernanke's remarks to the Economic Club of Minnesota in Minneapolis
Bloomberg
http://jlne.ws/pj8yIo
Bloomberg
http://jlne.ws/pj8yIo
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Lead Stories
Geithner calls for 'more forceful action' from Europe
AFP
US Treasury Secretary Timothy Geithner called Thursday for Europe to take stronger action to generate confidence that it can resolve its spreading debt and deficits problems.
"Europe needs to take more forceful action to generate confidence that it can and will resolve its crisis," Geithner said one day ahead of the G-7 meeting of finance ministers and central bankers in Marseille."
**JK - And what about the US?Roubini: Slowdown Brings Forward New Crisis
Bloomberg
Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC, said the current slowdown in the world economy has brought forward the timing of a new financial crisis.
**JK - Roubini, always the optimist.
Obama's Reported Mortgage Refinancing 'Stimulus' Won't Help
CBO casts doubt on mortgage refinancing plan
(Reuters) -- By suing 131 individuals in its effort to recover losses on $200 billion of mortgage debt that went sour, the federal agency overseeing mortgage giants Fannie Mae and Freddie mac is doing one thing that the U.S. government has largely left alone. It is trying to hold actual people, not just companies, responsible for their roles in the global financial crisis.
http://jlne.ws/oDY8y3
Six Steps That Could Boost Refinancing
By Nick Timiraos, WSJ.com
The Obama administration and the Federal Reserve are looking for ways to help more homeowners refinance.
Mortgage rates have dropped—again—to their lowest levels in the last 50 years. A Freddie Mac survey showed that 30-year fixed-rate mortgages averaged 4.12% this week, down from 4.22% last week.
http://jlne.ws/mVyQCA
Treasurys Up; 10-Year Yield Near 2%
By CYNTHIA LIN, WSJ.com
NEW YORK—Treasurys bounced around in positive territory Thursday as nervous investors await two key policy speeches to shed light on how policy makers plan to revive the struggling economy. Analysts expected benchmark 10-year yields to teeter around 2% going into this afternoon's highly anticipated policy remarks, with Federal Reserve Chairman Ben Bernanke up first at 1:30 p.m. ET with his policy speech in Minnesota.
http://jlne.ws/ptN0Wh
Obama to Call for New Spending, Tax Cuts to Create JobsBy CAROL E. LEE, WSJ.com
President Barack Obama will use his speech Thursday night before a joint session of Congress to marshal a sense of urgency behind his jobs agenda and to try to open a new phase in the fight over proposals to fix the economy.
http://jlne.ws/pCwx8h
Obama to unveil crucial jobs planBBC News
President Barack Obama will outline his eagerly awaited jobs plan later in an effort to boost the flagging US economy -- and his re-election hopes.
http://jlne.ws/mRMkEL
MONEY MARKETS-Rate cut by Dec. fully priced after ECB meeting
By Marius Zaharia, Reuters
Euro zone interest rate futures extended gains on Thursday with investors piling up bets for a European Central Bank rate cut by the end of the year after the bank flagged downside risks to growth and tamed its language on inflation.
http://jlne.ws/pvLB0d
UPDATE: Euro Under Pressure As Trichet Sounds Cautious Tone
WSJ.com
By Jessica Mead Of DOW JONES NEWSWIRES
LONDON -- A more cautious tone from European Central Bank President Jean-Claude Trichet dented the euro Thursday but failed to spark a wholesale selloff of the single currency after he stopped short of hinting at future interest rate cuts.
http://jlne.ws/ndNB2S
Futures Fall as European Growth Outlook Weakens
NEW YORK (TheStreet) -- U.S. stock futures pointed to a lower open Thursday after the European Central Bank lowered it growth forecast for the eurozone and as investors awaited speeches by President Obama and Ben Bernanke.
http://jlne.ws/pThtHY
U.S. Federal Reserve Sept. Beige Book Summary (Text)
Bloomberg
The following is the summary text of the Federal Reserve Board’s Summary of Commentary.
Reports from the twelve Federal Reserve Districts indicated that economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity.
http://jlne.ws/pnHsNh
Fed In A Bind As Bond Market Builds Expectations
By Cynthia Lin Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The Federal Reserve is in a Catch-22: investors are rapidly building expectations that the central bank will announce new stimulus measures despite the fact that it may not be ready to introduce anything of the sort.
http://jlne.ws/oT4txV
Europe's Big Central Banks Hold Interest Rates Steady
NYTimes.com
LONDON — The European Central Bank left its benchmark interest rate unchanged Thursday, as signs of slowing growth in the euro area raise questions about whether rate hikes earlier this year were premature.
http://jlne.ws/oxRclW
Gold up on ECB Interest Rate Decision, Physical Buying
Gold Matters
Gold rose Thursday, rebounding from a 3 percent plunge the day before as bullion buyers made significant purchases and a decision by Europe's central bank to hold interest rates steady weakened the euro.
CFTC may grant more relief from swaps regulations
Reuters
The U.S. futures regulator looks set to grant the massive swaps market more relief from complying with new financial reforms until sometime in 2012 as the agency remains well behind in completing many of the largest and most contested rules.
MORTGAGE HIT RECORD LOWS STORIES
Mortgage rates hit record lows in Freddie Mac survey
latimes.com
Mortgage rates have plunged to all-time lows amid concerns the economy is stalling again, Freddie Mac said in its weekly survey.
Lenders were offering the 30-year fixed-rate home loan at an average rate of 4.12% this week, down from 4.22% last week, Freddie Mac said Thursday. The 15-year fixed loan was at 3.33%, down from 3.39%.
Obama's Reported Mortgage Refinancing 'Stimulus' Won't Help
Daniel Indiviglio - The Atlantic
Some reports indicate that he'll announce one stimulus measure that purports to cost taxpayers nothing. The administration may push Fannie and Freddie to allow more homeowners to refinance at current very low mortgage interest rates. The measure might sound good in theory but will ultimately amount to another failed attempt at healing the housing market and broader economy.
CBO casts doubt on mortgage refinancing plan
FT.com
But investors in mortgage-backed securities guaranteed by the US would lose about $13bn to $15bn from prepayments on securities yielding above-market rates, the economists say. The programme’s impact on economic output and the housing market would be small, they say. It would also have just a “minor” impact on future home prices.
Analysis: Mortgage cases target people, not just banksBy Jonathan Stempel(Reuters) -- By suing 131 individuals in its effort to recover losses on $200 billion of mortgage debt that went sour, the federal agency overseeing mortgage giants Fannie Mae and Freddie mac is doing one thing that the U.S. government has largely left alone. It is trying to hold actual people, not just companies, responsible for their roles in the global financial crisis.
http://jlne.ws/oDY8y3
Six Steps That Could Boost Refinancing
By Nick Timiraos, WSJ.com
The Obama administration and the Federal Reserve are looking for ways to help more homeowners refinance.
Mortgage rates have dropped—again—to their lowest levels in the last 50 years. A Freddie Mac survey showed that 30-year fixed-rate mortgages averaged 4.12% this week, down from 4.22% last week.
http://jlne.ws/mVyQCA
Rates increased at weekly Treasury auction
The Associated Press
Interest rates on short-term Treasury bills rose slightly in Tuesday's auction but still remained near historic lows.
The Treasury Department auctioned $29 billion in three-month bills at a discount rate of 0.030 percent, up from 0.015 percent last week. Another $27 billion in six-month bills was auctioned at a discount rate of 0.070 percent, up from 0.045 percent last week.
No consensus on fixing housing woes
Josh Boak - POLITICO.com
And unless that market snaps back, any new extraordinary stimulus package to create jobs would fail, former Federal Reserve Chairman Alan Greenspan concluded.
“Until we can do that, it’s very hard for me to see how we get the unemployment down to an acceptable level,” Greenspan told a Washington audience last month.
__________________________________
Treasurys Up; 10-Year Yield Near 2%
By CYNTHIA LIN, WSJ.com
NEW YORK—Treasurys bounced around in positive territory Thursday as nervous investors await two key policy speeches to shed light on how policy makers plan to revive the struggling economy. Analysts expected benchmark 10-year yields to teeter around 2% going into this afternoon's highly anticipated policy remarks, with Federal Reserve Chairman Ben Bernanke up first at 1:30 p.m. ET with his policy speech in Minnesota.
http://jlne.ws/ptN0Wh
Obama to Call for New Spending, Tax Cuts to Create JobsBy CAROL E. LEE, WSJ.com
President Barack Obama will use his speech Thursday night before a joint session of Congress to marshal a sense of urgency behind his jobs agenda and to try to open a new phase in the fight over proposals to fix the economy.
http://jlne.ws/pCwx8h
Obama to unveil crucial jobs planBBC News
President Barack Obama will outline his eagerly awaited jobs plan later in an effort to boost the flagging US economy -- and his re-election hopes.
http://jlne.ws/mRMkEL
Executive-Level Exfoliation at Bank of America
American Public Media
Bank of America shook up its executive ranks in what the firm euphemistically calls “de-layering.” This meaningless bit of corporate jargon - de-layering - is wonderfully ridiculous and has been woefully underused in press releases. So I’m coining a better, newer, just as meaningless but more easily grasped term in the headline: executive-level exfoliation.
**JK - I guess it sounds slightly better than "wart removals" or "fungicide."
Bank of America Merrill Lynch Continues to Hire Senior Talent to Support Growth in Prime Brokerage Business
MarketWatch
Bank of America Merrill Lynch today announced that Michael Terry will join the company as global head of capital introductions, responsible for leading the expansion of the company's capital introduction efforts. Terry will be based in New York and report to Jon Yalmokas, head of U.S. prime brokerage sales.
http://jlne.ws/p3LVgD
http://jlne.ws/p3LVgD
**JK - Hiring, firing. BofA likes it shaken, not stirred.
World-Wide, Bad News You Can Take to Bank
ROBIN SIDEL, DAN FITZPATRICK and SUZANNE KAPNER - WSJ.com
A fresh round of bad news is battering banks, threatening to derail their fragile recovery and deal another blow to the unsteady world economy.
MONEY MARKETS-Rate cut by Dec. fully priced after ECB meeting
By Marius Zaharia, Reuters
Euro zone interest rate futures extended gains on Thursday with investors piling up bets for a European Central Bank rate cut by the end of the year after the bank flagged downside risks to growth and tamed its language on inflation.
http://jlne.ws/pvLB0d
UPDATE: Euro Under Pressure As Trichet Sounds Cautious Tone
WSJ.com
By Jessica Mead Of DOW JONES NEWSWIRES
LONDON -- A more cautious tone from European Central Bank President Jean-Claude Trichet dented the euro Thursday but failed to spark a wholesale selloff of the single currency after he stopped short of hinting at future interest rate cuts.
http://jlne.ws/ndNB2S
US Housing: Record Low Mortgage Rates, Rising Pessimism on Housing
CNBC
The numbers don't add up.
Mortgage giant Freddie Mac reports the rate on the 30-year fixed hit a new record low of 4.12 percent, at the exact moment that cohort Fannie Mae released its August housing survey showing ever more Americans are pessimistic about the housing market. 27 percent of those surveyed said home prices would drop further and 22 percent expect their financial situations to worsen over the next year. Those are the highest levels for both indicators since August of last year.
http://jlne.ws/nRXY8AFutures Fall as European Growth Outlook Weakens
NEW YORK (TheStreet) -- U.S. stock futures pointed to a lower open Thursday after the European Central Bank lowered it growth forecast for the eurozone and as investors awaited speeches by President Obama and Ben Bernanke.
http://jlne.ws/pThtHY
U.S. Federal Reserve Sept. Beige Book Summary (Text)
Bloomberg
The following is the summary text of the Federal Reserve Board’s Summary of Commentary.
Reports from the twelve Federal Reserve Districts indicated that economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity.
http://jlne.ws/pnHsNh
Fed In A Bind As Bond Market Builds Expectations
By Cynthia Lin Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The Federal Reserve is in a Catch-22: investors are rapidly building expectations that the central bank will announce new stimulus measures despite the fact that it may not be ready to introduce anything of the sort.
http://jlne.ws/oT4txV
Europe's Big Central Banks Hold Interest Rates Steady
NYTimes.com
LONDON — The European Central Bank left its benchmark interest rate unchanged Thursday, as signs of slowing growth in the euro area raise questions about whether rate hikes earlier this year were premature.
http://jlne.ws/oxRclW
Gold up on ECB Interest Rate Decision, Physical Buying
Gold Matters
Gold rose Thursday, rebounding from a 3 percent plunge the day before as bullion buyers made significant purchases and a decision by Europe's central bank to hold interest rates steady weakened the euro.
Dow Jones
The International Swaps and Derivatives Association has begun a process to update rules governing when buyers of swap protection against a debt default should be entitled to compensation, taking into account recent market developments that have renewed criticism of so-called credit-default swaps.
Senate Moves Toward Tackling Debt Ceiling
WSJ.com
Senate lawmakers could begin a process later Thursday that would trigger a further $500 billion increase in the country's debt ceiling, a senior Democratic leadership aide said.
http://jlne.ws/q25LRe
Events
Valuation and Pricing Methodologies of Debt Instruments - Auction Rate Securities
Sept. 1, 2011
Madison Street Capital (MSC) Is Lead Presenter In This Financial Research Associates Webinar Segment
http://jlne.ws/pxF2sq
FIA Treasury & Rates Forum
Sept. 14, 2011
FIA Program On Growing Role Of Treasury Futures - New York City
http://jlne.ws/fQFQXP
SEFCON II
Oct. 3, 2011
WMBAA To Examine Role And Operation Of Swap Execution Facilities Under Dodd-Frank
http://jlne.ws/pY4N7S
MarketsWiki Questions: Exploring Financial Technology
October 5, 2011, 4:30 p.m. - 6 p.m., IIT Stuart School of Business
http://jlne.ws/oHRGmC
Economic News
Fannie Mae Releases August Consumer Indicators
Exchanges, Clearing Houses & MTFs
LCH.Clearnet at centre of bid battleBy Jeremy Grant, FT.com
In 1888, the Financial Times reported in one of its first editions the creation of the London Produce Clearing House, warning that it would turn the city's produce markets into "one vast gambling house". Well over a century later London's main clearing house LCH.Clearnet -- which traces its roots back to the LPCH through the former London Clearing House -- is firmly established as one of the most critical pieces of market infrastructure in Europe. But the clearer is now at the centre of a bidding war...
http://jlne.ws/qG1eVp
Firms & Banks
FOREX - Euro tumbles versus dollar after ECB, Fed comments
*Euro falls more than 1 percent, breaches $1.39 support
*ECB's Trichet "intensified downside risks" to growth
*Fed Bernanke offers no new details on easing options
By Wanfeng Zhou
NEW YORK, Sept 8 (Reuters) -- The euro fell to a two-month low against the dollar on Thursday after the European Central Bank signaled a pause in its interest-rate tightening cycle that began just five months ago.
http://jlne.ws/qBeYyk
IntercontinentalExchange Announces New $300 Million Share Repurchase AuthorizationPress Release
ATLANTA, Sept. 8, 2011 /PRNewswire via COMTEX/ -- IntercontinentalExchange, a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its Board of Directors has authorized a new share repurchase plan for the company's common stock in the amount of $300 million.
http://jlne.ws/rsYezK
GE to "vigorously contest" mortgage lawsuit(Reuters) -- General Electric Co (GE.N) said it would "vigorously contest" a lawsuit by the Federal Housing Finance Agency, which said the conglomerate's former WMC unit made inaccurate statements about the sale of two residential mortgage-backed securities.
http://jlne.ws/rt0mbU
Morgan Stanley Sees 'Concerted Easing' From ECB, Fed, BOE at G-7 MeetingBy Jeffrey Black, Bloomberg
The European Central Bank, the Federal Reserve and the Bank of Japan may take concerted action to tackle weak growth and falling equity prices as soon as this week's Group of Seven meeting, according to Morgan Stanley.
http://jlne.ws/pdUt56
Bank Regulators to Unveil 'Living Will' Plan
U.S. banking regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure.
By Reuters
WASHINGTON - U.S. regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure.
http://jlne.ws/nudeXj
Dutch Pension Fund ABP Sues Deutsche Bank Over Securities
Events
Valuation and Pricing Methodologies of Debt Instruments - Auction Rate Securities
Sept. 1, 2011
Madison Street Capital (MSC) Is Lead Presenter In This Financial Research Associates Webinar Segment
http://jlne.ws/pxF2sq
FIA Treasury & Rates Forum
Sept. 14, 2011
FIA Program On Growing Role Of Treasury Futures - New York City
http://jlne.ws/fQFQXP
SEFCON II
Oct. 3, 2011
WMBAA To Examine Role And Operation Of Swap Execution Facilities Under Dodd-Frank
http://jlne.ws/pY4N7S
MarketsWiki Questions: Exploring Financial Technology
October 5, 2011, 4:30 p.m. - 6 p.m., IIT Stuart School of Business
http://jlne.ws/oHRGmC
Economic News
Fannie Mae Releases August Consumer Indicators
Press Release
Americans' pessimism about the economy, home prices, and household finances are deepening, according to findings from Fannie Mae's August National Housing Survey. More than three quarters of Americans (78 percent) say the economy is on the wrong track and only 16 percent think the economy is on the right track (compared to 70 percent wrong track and 23 percent right track in July). Twenty-seven percent of Americans believe home prices will go down and 22 percent of Americans polled expect their financial situation to worsen over the next year - the highest levels of pessimism for both indicators since August 2010. http://jlne.ws/o5ECqC
How Mortgage Refinancing Could Help Spur EconomyNPR
Christopher Mayer, an economist at Columbia University, talks to Steve Inskeep about his top fix for the economy. Mayer thinks homeowners with mortgages through Fannie Mae or Freddie Mac should be able to refinance their homes at lower interest rates regardless of their credit score.
http://jlne.ws/nplVmo
Boston Fed: Local real estate fundamentals remain weak
Boston Business Journal by Eric Convey
The Federal Reserve Bank of Boston remain less-than-optimisitc when it comes to the local residential and commericial real estate communities, according to its latest economic analysis, also known as the Beige Book.
http://jlne.ws/qpkXbC
Republicans push tax reform in U.S. deficit panelReuters
By Richard Cowan and Kevin Drawbaugh
WASHINGTON -- Republicans put tax reform squarely onto the agenda of the U.S. Congress' deficit-cutting "super committee" Thursday at its first meeting, with members also stressing the need to boost job creation.
http://jlne.ws/noTxHa
Debt Panel Must Revise Social Programs, Taxes, Members SayBy Heidi Przybyla and Richard Rubin, Bloomberg
Congress's debt-cutting supercommittee must focus on revising social programs such as Medicare and revamping the U.S. tax code in seeking to cut at least $1.5 trillion from the federal budget deficit, members said during the panel's first meeting.
http://jlne.ws/n3VDUz
How Mortgage Refinancing Could Help Spur EconomyNPR
Christopher Mayer, an economist at Columbia University, talks to Steve Inskeep about his top fix for the economy. Mayer thinks homeowners with mortgages through Fannie Mae or Freddie Mac should be able to refinance their homes at lower interest rates regardless of their credit score.
http://jlne.ws/nplVmo
Boston Fed: Local real estate fundamentals remain weak
Boston Business Journal by Eric Convey
The Federal Reserve Bank of Boston remain less-than-optimisitc when it comes to the local residential and commericial real estate communities, according to its latest economic analysis, also known as the Beige Book.
http://jlne.ws/qpkXbC
Republicans push tax reform in U.S. deficit panelReuters
By Richard Cowan and Kevin Drawbaugh
WASHINGTON -- Republicans put tax reform squarely onto the agenda of the U.S. Congress' deficit-cutting "super committee" Thursday at its first meeting, with members also stressing the need to boost job creation.
http://jlne.ws/noTxHa
Debt Panel Must Revise Social Programs, Taxes, Members SayBy Heidi Przybyla and Richard Rubin, Bloomberg
Congress's debt-cutting supercommittee must focus on revising social programs such as Medicare and revamping the U.S. tax code in seeking to cut at least $1.5 trillion from the federal budget deficit, members said during the panel's first meeting.
http://jlne.ws/n3VDUz
Major US Banks Were Forced Into New Round Of Stress Tests
Business Insider
Months before global stock markets were roiled by volatility in August, U.S. financial regulators asked major banks to test how their balance sheets would fare under extremely adverse conditions and present plans for raising emergency capital if the need arose, say people familiar with the matter.
http://jlne.ws/neMHZV
PRECIOUS METALS: Comex Gold Climbs 2.5% Amid Weaker Stocks--Comex December gold up $44.10, or 2.4%, at $1,861.70 a troy ounce
--Traders return to gold as equities weaken
--Risk sentiment erodes ahead of Bernanke, Obama speeches
NEW YORK (Dow Jones) -- Gold shook off recent losses to rally 2.5% as traders watched weaker equity markets and exercised caution ahead of speeches Thursday by U.S. officials.
http://jlne.ws/oM2tf9
Gold extends gains as caution reignsBy Emiko Terazono, FT.com
Gold prices extended their gains as sentiment remained cautious ahead of speeches by President Barack Obama, who will lay out his job-creation proposals, and Ben Bernanke, Federal Reserve chairman, on the US economy.
http://jlne.ws/oNZZCr
PRECIOUS METALS: Comex Gold Climbs 2.5% Amid Weaker Stocks--Comex December gold up $44.10, or 2.4%, at $1,861.70 a troy ounce
--Traders return to gold as equities weaken
--Risk sentiment erodes ahead of Bernanke, Obama speeches
NEW YORK (Dow Jones) -- Gold shook off recent losses to rally 2.5% as traders watched weaker equity markets and exercised caution ahead of speeches Thursday by U.S. officials.
http://jlne.ws/oM2tf9
Gold extends gains as caution reignsBy Emiko Terazono, FT.com
Gold prices extended their gains as sentiment remained cautious ahead of speeches by President Barack Obama, who will lay out his job-creation proposals, and Ben Bernanke, Federal Reserve chairman, on the US economy.
http://jlne.ws/oNZZCr
Exchanges, Clearing Houses & MTFs
LCH.Clearnet at centre of bid battleBy Jeremy Grant, FT.com
In 1888, the Financial Times reported in one of its first editions the creation of the London Produce Clearing House, warning that it would turn the city's produce markets into "one vast gambling house". Well over a century later London's main clearing house LCH.Clearnet -- which traces its roots back to the LPCH through the former London Clearing House -- is firmly established as one of the most critical pieces of market infrastructure in Europe. But the clearer is now at the centre of a bidding war...
http://jlne.ws/qG1eVp
Firms & Banks
Bank of America layoffs could reach 30,000
CharlotteObserver
As they work to complete the first phase of a major efficiency program, Bank of America Corp. executives are discussing plans that could slash the companywide workforce by as many as 25,000 to 30,000 jobs, sources familiar with the matter said.
Moynihan Tries to Keep BofA Intact
Bloomberg
On the afternoon of Aug. 23, Gary G. Lynch, the global chief of legal, compliance, and regulatory relations for Bank of America Corp. (BAC), was attending a meeting in Washington when the floor heaved.
Analysis: BofA shake-up a crucial test for CEO Moynihan
Reuters
Bank of America Corp (BAC.N) Chief Executive Brian Moynihan is running out of time to fix the largest U.S. bank.
http://jlne.ws/qLIC9aFOREX - Euro tumbles versus dollar after ECB, Fed comments
*Euro falls more than 1 percent, breaches $1.39 support
*ECB's Trichet "intensified downside risks" to growth
*Fed Bernanke offers no new details on easing options
By Wanfeng Zhou
NEW YORK, Sept 8 (Reuters) -- The euro fell to a two-month low against the dollar on Thursday after the European Central Bank signaled a pause in its interest-rate tightening cycle that began just five months ago.
http://jlne.ws/qBeYyk
IntercontinentalExchange Announces New $300 Million Share Repurchase AuthorizationPress Release
ATLANTA, Sept. 8, 2011 /PRNewswire via COMTEX/ -- IntercontinentalExchange, a leading operator of regulated global futures exchanges, clearing houses and over-the-counter (OTC) markets, announced that its Board of Directors has authorized a new share repurchase plan for the company's common stock in the amount of $300 million.
http://jlne.ws/rsYezK
GE to "vigorously contest" mortgage lawsuit(Reuters) -- General Electric Co (GE.N) said it would "vigorously contest" a lawsuit by the Federal Housing Finance Agency, which said the conglomerate's former WMC unit made inaccurate statements about the sale of two residential mortgage-backed securities.
http://jlne.ws/rt0mbU
Morgan Stanley Sees 'Concerted Easing' From ECB, Fed, BOE at G-7 MeetingBy Jeffrey Black, Bloomberg
The European Central Bank, the Federal Reserve and the Bank of Japan may take concerted action to tackle weak growth and falling equity prices as soon as this week's Group of Seven meeting, according to Morgan Stanley.
http://jlne.ws/pdUt56
Bank Regulators to Unveil 'Living Will' Plan
U.S. banking regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure.
By Reuters
WASHINGTON - U.S. regulators are set to vote next week on a final rule governing the plans large banks must draft on how they can be liquidated if they are heading toward failure.
http://jlne.ws/nudeXj
Dutch Pension Fund ABP Sues Deutsche Bank Over Securities
Bloomberg
Stichting Pensioenfonds ABP, Europe’s second-biggest pension fund, sued Deutsche Bank AG (DBK) for fraud, claiming it bought residential mortgage-backed securities relying on the bank’s allegedly false and misleading statements.
http://jlne.ws/oRb8xH
Auctions & Statistics
Treasurys Hold Gains After Bernanke Remarks
BY CYNTHIA LIN, WSJ.com
NEW YORK -- U.S. Treasurys held on to modest gains Thursday after Federal Reserve Chairman Ben Bernanke's remarks reiterated that the central bank stands ready to act to help spur economic growth.
http://jlne.ws/ptN0Wh
Rates increased at weekly Treasury auctionWashington (AP) -- Interest rates on short-term Treasury bills rose slightly in Tuesday's auction but still remained near historic lows.
http://jlne.ws/o97Jsv
Deutsche Börse Adds Global Treasury Auction Data to Machine-Readable News Feed
"AlphaFlash Global Treasury Feed" makes data available from 12 countries
High Frequency Traders
Deutsche Börse has added global treasury auction data to its algorithmic news feed "AlphaFlash". The global treasury data package provides key treasury auction data from 12 countries directly from the source in a low latency, machine readable format.
http://jlne.ws/pdMjSb
Spain Changes Bonds on Sept 15 Auction, Won't Sell April 2021 BondDOW JONES NEWSWIRES
The Spanish Treasury Thursday changed the series of bonds it will auction Sept. 15, following a preliminary announcement it made Monday.
http://jlne.ws/rgNtpf
Regulators
Libor inquiry looks at criminal angle
By Brooke Masters in London and Kara Scannell in New York, FT.com
The US investigation into alleged manipulation of interbank lending rates is focusing on possible violations of a commodities law that has previously been used to send financial executives to prison.
http://jlne.ws/oZCUAp
Auctions & Statistics
Treasurys Hold Gains After Bernanke Remarks
BY CYNTHIA LIN, WSJ.com
NEW YORK -- U.S. Treasurys held on to modest gains Thursday after Federal Reserve Chairman Ben Bernanke's remarks reiterated that the central bank stands ready to act to help spur economic growth.
http://jlne.ws/ptN0Wh
Rates increased at weekly Treasury auctionWashington (AP) -- Interest rates on short-term Treasury bills rose slightly in Tuesday's auction but still remained near historic lows.
http://jlne.ws/o97Jsv
Deutsche Börse Adds Global Treasury Auction Data to Machine-Readable News Feed
"AlphaFlash Global Treasury Feed" makes data available from 12 countries
High Frequency Traders
Deutsche Börse has added global treasury auction data to its algorithmic news feed "AlphaFlash". The global treasury data package provides key treasury auction data from 12 countries directly from the source in a low latency, machine readable format.
http://jlne.ws/pdMjSb
Spain Changes Bonds on Sept 15 Auction, Won't Sell April 2021 BondDOW JONES NEWSWIRES
The Spanish Treasury Thursday changed the series of bonds it will auction Sept. 15, following a preliminary announcement it made Monday.
http://jlne.ws/rgNtpf
Regulators
Libor inquiry looks at criminal angle
By Brooke Masters in London and Kara Scannell in New York, FT.com
The US investigation into alleged manipulation of interbank lending rates is focusing on possible violations of a commodities law that has previously been used to send financial executives to prison.
http://jlne.ws/oZCUAp
FINRA fines 5 brokerage firms for improper fees
BusinessWeek
The Financial Industry Regulatory Authority on Wednesday said that it fined five broker-dealers for understating commissions charged to customers by calling part of those charges fees for handling transactions.
Bloomberg
Former Finra Chief Counsel Linda Riefberg joined law firm Fried, Frank, Harris, Shriver & Jacobson LLP’s enforcement and investigations practice in New York.
http://jlne.ws/puXnJY
Senate panel backs U.S. bank regulator nominees
http://jlne.ws/puXnJY
Senate panel backs U.S. bank regulator nominees
Reuters
The Senate Banking Committee on Thursday approved the nominations of several financial regulatory nominees who will play key roles in implementing the 2010 Dodd-Frank financial oversight law.
http://jlne.ws/okwEyV
Securities trade group seeks more study of Dodd-FrankNEW YORK, Sept 6 (Reuters) -- More than a year after the passage of the Dodd-Frank financial reform law, a major Wall Street lobbying group is urging regulators to take more time to study the effect of the rules they plan to impose.
http://jlne.ws/ppaIn6
OTC
Antioquia Gold Inc. Commences Trading on the U.S.-OTCQX
Press Release
CALGARY, ALBERTA, Sep 08, 2011 (MARKETWIRE via COMTEX) -- Antioquia Gold Inc. ("Antioquia" or the "Company") (otcqx:AGDXF) is pleased to announce that the Company's shares commenced trading today on the OTCQX, the U.S. Over-The-Counter (OTC) market's highest tier, under the symbol AGDXF.
http://jlne.ws/nAhhVC
State Street launches swaps clearing operationBy Jeremy Grant in London, FT.com
State Street Corporation, the financial services group, is to launch a swaps clearing service in a sign that market participants are starting to build new businesses to take advantage of sweeping reform of the over-the-counter (OTC) derivatives markets.
http://jlne.ws/qsO97f
INX Heads Back to NASDAQTexas TechPulse
Dallas-based INX, the provider of data center and IP communications services and products, is headed back to the NASDAQ Global Market, the firm said Thursday. The firm -- which had been regulated to over-the-counter trading in June after a delisting -- said that its application to list its common stock on the NASDAQ was approved, and it will begin trading Monday, September 12th, under the symbol INXI.
http://jlne.ws/qKr67f
Global News
BOE Keeps Rate Unchanged
By ALEX BRITTAIN, WSJ.com
LONDON-- The Bank of England kept its key interest rate and its asset-purchase program unchanged Thursday amid increasingly grim signals on the state of the economy.
http://jlne.ws/o9CBt9
Gloom descends but MPC holds fire
BBC News
The MPC has decided to hold on to its ammunition this month. But even if they had not seen today's gloomy new forecasts from the OECD, we can be pretty confident that another round of emergency cash injections for the economy -- quantitative easing -- was discussed at the latest meeting of the Bank of England's policy committee, which concluded today.
http://jlne.ws/pBF6zU
Tombini Signals More Brazil Interest Rate Cuts on Lengthy Global Slowdown
By Matthew Bristow and Alexander Ragir, Bloomberg
Brazil’s central bank signaled that it may cut borrowing costs further on expectations the global economic slowdown will help inflation slow in line with its target next year, according to the minutes of its last meeting. http://jlne.ws/oACL8t
Trichet signals end to ECB rate hikesBy William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- Jean-Claude Trichet on Thursday signaled that the European Central Bank's July interest-rate hike was its last, economists said, as inflation pressures moderate and downside risks to the economic outlook intensify.
http://jlne.ws/nGDWTk
Roubini Slams Trichet For Making The Biggest Mistake in ECB HistoryJoe Weisenthal, Business Insider
Nouriel Roubini tweets: "I was just interviewed on CNBC: The ECB has to reverse this week its biggest mistake ever, the rate hike that sharply worsened the EZ crisis."
http://jlne.ws/ogylTO
HFT 'to shake up Europe options market'By Philip Stafford, FT.com
High frequency trading is set to shake up the opaque European options trading market in more or less the same way it has transferred cash equities in recent years, a new report has found.
http://jlne.ws/p0em92
Mexico annual inflation slows in AugustBusiness Recorder
MEXICO CITY: Mexico's annual inflation rate slowed in August, giving room for the central bank to lower interest rates in an economy seen as losing momentum.
http://jlne.ws/ovODtt
IMF Pushing A Few, Big Measures To Fix Greek Finances- SourcesBy Matthew Dalton
Of DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)-- The International Monetary Fund is seeking a few large policy reforms to help close Greece's budget gap, measures that would probably require a contentious vote in the Greek parliament to be enacted, officials familiar with the situation said.
http://jlne.ws/mQbvVS
Greek economy suffers, government rules out euro zone exitBy Harry Papachristou
(Reuters) -- Greece ruled out quitting the euro on Thursday, shrugging off warnings by its biggest creditor Germany and yet another set of bad economic figures showing it is struggling under the weight of EU/IMF austerity.
http://jlne.ws/rlUHnj
Russia's Q2 GDP growth confirmed at 3.4 pct(Reuters) -- Russia's gross domestic product rose by 3.4 percent in the second quarter, year-on-year, down from 4.1 percent in the first three months of the year, the Federal Statistics Office confirmed its earlier data on Thursday.
http://jlne.ws/pglZmU
Securities trade group seeks more study of Dodd-FrankNEW YORK, Sept 6 (Reuters) -- More than a year after the passage of the Dodd-Frank financial reform law, a major Wall Street lobbying group is urging regulators to take more time to study the effect of the rules they plan to impose.
http://jlne.ws/ppaIn6
OTC
Antioquia Gold Inc. Commences Trading on the U.S.-OTCQX
Press Release
CALGARY, ALBERTA, Sep 08, 2011 (MARKETWIRE via COMTEX) -- Antioquia Gold Inc. ("Antioquia" or the "Company") (otcqx:AGDXF) is pleased to announce that the Company's shares commenced trading today on the OTCQX, the U.S. Over-The-Counter (OTC) market's highest tier, under the symbol AGDXF.
http://jlne.ws/nAhhVC
State Street launches swaps clearing operationBy Jeremy Grant in London, FT.com
State Street Corporation, the financial services group, is to launch a swaps clearing service in a sign that market participants are starting to build new businesses to take advantage of sweeping reform of the over-the-counter (OTC) derivatives markets.
http://jlne.ws/qsO97f
INX Heads Back to NASDAQTexas TechPulse
Dallas-based INX, the provider of data center and IP communications services and products, is headed back to the NASDAQ Global Market, the firm said Thursday. The firm -- which had been regulated to over-the-counter trading in June after a delisting -- said that its application to list its common stock on the NASDAQ was approved, and it will begin trading Monday, September 12th, under the symbol INXI.
http://jlne.ws/qKr67f
Global News
BOE Keeps Rate Unchanged
By ALEX BRITTAIN, WSJ.com
LONDON-- The Bank of England kept its key interest rate and its asset-purchase program unchanged Thursday amid increasingly grim signals on the state of the economy.
http://jlne.ws/o9CBt9
Gloom descends but MPC holds fire
BBC News
The MPC has decided to hold on to its ammunition this month. But even if they had not seen today's gloomy new forecasts from the OECD, we can be pretty confident that another round of emergency cash injections for the economy -- quantitative easing -- was discussed at the latest meeting of the Bank of England's policy committee, which concluded today.
http://jlne.ws/pBF6zU
Tombini Signals More Brazil Interest Rate Cuts on Lengthy Global Slowdown
By Matthew Bristow and Alexander Ragir, Bloomberg
Brazil’s central bank signaled that it may cut borrowing costs further on expectations the global economic slowdown will help inflation slow in line with its target next year, according to the minutes of its last meeting. http://jlne.ws/oACL8t
Trichet signals end to ECB rate hikesBy William L. Watts, MarketWatch
FRANKFURT (MarketWatch) -- Jean-Claude Trichet on Thursday signaled that the European Central Bank's July interest-rate hike was its last, economists said, as inflation pressures moderate and downside risks to the economic outlook intensify.
http://jlne.ws/nGDWTk
Roubini Slams Trichet For Making The Biggest Mistake in ECB HistoryJoe Weisenthal, Business Insider
Nouriel Roubini tweets: "I was just interviewed on CNBC: The ECB has to reverse this week its biggest mistake ever, the rate hike that sharply worsened the EZ crisis."
http://jlne.ws/ogylTO
HFT 'to shake up Europe options market'By Philip Stafford, FT.com
High frequency trading is set to shake up the opaque European options trading market in more or less the same way it has transferred cash equities in recent years, a new report has found.
http://jlne.ws/p0em92
Mexico annual inflation slows in AugustBusiness Recorder
MEXICO CITY: Mexico's annual inflation rate slowed in August, giving room for the central bank to lower interest rates in an economy seen as losing momentum.
http://jlne.ws/ovODtt
IMF Pushing A Few, Big Measures To Fix Greek Finances- SourcesBy Matthew Dalton
Of DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)-- The International Monetary Fund is seeking a few large policy reforms to help close Greece's budget gap, measures that would probably require a contentious vote in the Greek parliament to be enacted, officials familiar with the situation said.
http://jlne.ws/mQbvVS
Greek economy suffers, government rules out euro zone exitBy Harry Papachristou
(Reuters) -- Greece ruled out quitting the euro on Thursday, shrugging off warnings by its biggest creditor Germany and yet another set of bad economic figures showing it is struggling under the weight of EU/IMF austerity.
http://jlne.ws/rlUHnj
Russia's Q2 GDP growth confirmed at 3.4 pct(Reuters) -- Russia's gross domestic product rose by 3.4 percent in the second quarter, year-on-year, down from 4.1 percent in the first three months of the year, the Federal Statistics Office confirmed its earlier data on Thursday.
http://jlne.ws/pglZmU
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Copyright 2011 John J. Lothian & Company, Inc. All Rights Reserved.
Futures and options trading involve risk. Past results are no indication of future performance.
Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any web site or newsletter content.
Copyright 2011 John J. Lothian & Company, Inc. All Rights Reserved.
