China Must Not Buy Euro Debt: Ex-Central Bank Adviser

China should refrain from buying European government bonds and cut dollar holdings in its foreign exchange reserves, Yu Yongding, a former adviser to China's central bank, said on Wednesday.

"We should not buy European bonds and there should be conditions for us to buy," Yu, an influential economist in the Chinese Academy of Social Sciences, said a lecture at the top government think-tank.

Yu did not elaborate on the conditions. With about a quarter of its $3.2 trillion foreign exchange reserves in euro, China has repeatedly voiced confidence in the euro zone, but Beijing has been reluctant to reveal, or even to confirm, concrete steps it would take to support Europe.

Yu's view may not present that of policymakers.

Chinese leaders have pledged their support for Europe, although Premier Wen Jiabao pushed for the troubled European Union to recognize it as a market economy.

Yu said China should cut its dollar-denominated assets in its reserves, the world's largest, because the dollar is set to weaken in the long run.

He added that the dollar may strengthen in short-term as a safe haven in a volatile market.

"We should reduce our holding of dollar-denominated assets in foreign exchange reserves," he said. "We have too much of such assets."

Yu repeated his calls for China to cut dollar holdings, arguing that it's unwise for the country to accumulate foreign exchange reserves and invest in U.S. Treasuries to get lower returns compared to that enjoyed by foreign investors in China.

CNBC

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Moody’s downgrades 3 of largest U.S. banks

Moody’s Corp cut the debt ratings of Bank of America Corp, Wells Fargo & Co and Citigroup Inc on Wednesday, saying the U.S. government is getting less comfortable with bailing out large troubled lenders.

The government is “more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled,” the ratings agency said.

Moody’s decision hit Bank of America hardest as it cut both the long-term and short-term debt of the holding company and long-term deposits at its lead bank. The ratings agency cut only the short-term debt of Citigroup and limited the Wells’ cut to its senior debt and to deposits at its lead bank.

Bank of America, the second-largest U.S. bank company, is struggling with billions of dollars of mortgage losses, litigation and stresses from the need to raise capital to meet new regulatory obligations.

The risk of contagion from one failing bank to other banks has “become less acute,” Moody’s noted, adding the Dodd-Frank financial reform law of 2010 has reduced the ties between financial institutions.

When investment bank Lehman Brothers unexpectedly failed in September 2008, its debt and counterparty obligations created shockwaves throughout the global financial system.

Moody’s said laws being written about “systemically important” U.S. banks pass the burden of losses to bondholders of individual banks and away from the U.S. government and taxpayers.

The ratings agency signaled its review of a possible downgrade of the banks in June.

Bank of America’s shares fell 4% to US$6.62 in afternoon New York Stock Exchange trading. Citigroup shares were down 27 cents, or about 1%, at US$26.64, and Wells Fargo shares slid 11 cents to US$24.56.

Moody’s downgraded Bank of America’s long-term senior debt rating to “Baa1″ from “A2″ and its short-term debt rating to “Prime 2″ from “Prime 1.”

Citigroup’s short-term rating was cut to “Prime 2″ from “Prime 1.” Moody’s affirmed the long-term ratings of the third-largest U.S. bank holding company at “A3,” and affirmed the short- and long-term ratings of its Citibank subsidiary at “A1″ and “Prime-1,” respectively.

Wells Fargo & Co’s long-term rating was cut to “A2″ from “A1″ and the rating on deposits at its Wells Fargo Bank unit was cut to “Aa3″ from “Aa2.”

Moody’s said the long-term outlook on the three banks’ ratings remains negative.

Bank of America said through a spokesman that the downgrade was due to forces beyond its control and asserted that it has a healthy liquidity cushion of US$400-billion. All of its planned borrowing needs have been prefunded for the rest of 2011, the spokesman said.

Citigroup said in a statement that Moody’s downgrade affects less than 1% of its funding. The decision will not affect its funding needs, it said.
Finantial Post

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A MASSIVE WAVE OF FORECLOSURE IS COMING

A MASSIVE WAVE IS COMING!!!

 

U.S. homes that received a default notice jumped 33% in August from July. This is a HUGE one month increase! In fact, it is the largest one month gain in 4 years with 78,880 properties receiving a default notice. Why the big jump? In the past few months, several key court decisions have been made that basically gave the banks the green light to continue sending out default notices to borrowers who are in default. Sounds crazy, right.

California, which has become the Mecca for foreclosure litigation attorneys, saw their default notices increase by 55% in the past month. Indiana climbed 46% and the state of New Jersey, where last month a judge ruled that banks could resume uncontested foreclosure actions, saw an increase of 42%.

 

Who is taking the hit? Bank of America, the largest mortgage holder in the U.S., B of A saw (ready for this?) a 200% increase in 1 month for default notices that they sent to borrowers. WOW, talk about a foreclosure pipeline.

 

The Data

 

• Average loan in foreclosure is delinquent for a RECORD 600 days!
• 1.9 million loans are at least 90 days late and are NOT currently in foreclosure. In fact, of those that are NOT in foreclosure, nearly 800,000 have not made a payment in more than a year. Again, these are people who are not even in the foreclosure process yet. 
• There are 300% more foreclosure filings than sales.
• 4.1 million homes are more than 90 days late, this is 800% higher than before the housing crisis began.
• 6.9 million loans are delinquent by 30 days or more.

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Curency Killers..Dollar, Euro going down

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PM to meet Obama amid effort to avert UN ‘train wreck'

Prime Minister Binyamin Netanyahu departed early Wednesday morning to do battle against recognition of a Palestinian state at the UN, with his first stop being a meeting in New York with US President Barack Obama just a few hours after arrival.

Before leaving, Netanyahu told Likud MKs and mayors meeting in the Knesset that “We don’t want peace just on paper, but a lasting peace. For that we need to stand up for our interests. It’s much easier to give in to pressure, not stand up, and get applauded by the world that doesn’t understand what we have been through. We are determined to protect our interests and stand up for our truth.”

The Netanyahu-Obama meeting, the eighth between the two leaders since they both took office in early 2009, takes place four months after a meeting in May at the White House during which administration officials reportedly fumed at Netanyahu for what they perceived as his lecturing of the president over Obama’s call for Israeli-Palestinian negotiations to begin on the basis of the pre-1967 lines, with mutually-agreed land swaps.

Though Netanyahu came out strongly against that proposal at the time, in the intervening months he has rolled back his position and agreed in principle to accept – with reservations – the pre-1967 lines with mutual swaps as part of the formula for renewing talks. That agreement was based on the condition that the Palestinians agree that the parameters would also include recognition of Israel as the state of the Jewish people.

This idea is still serving as the basis for attempts by the Quartet to find a formula to restart the negotiations and thereby take much of the “sting” out of any resolution on statehood that the PA brings to either the Security Council or the UN.

Quartet envoys were scheduled to meet Tuesday afternoon in New York for the third consecutive day to discuss the matter. Among other ideas that are being bandied about to restart negotiations are for the Palestinians to delay a vote on the matter in the Security Council or General Assembly for six months, and for Israel to declare another settlement construction freeze.

Ironically, Netanyahu’s meeting with Obama comes as the US president is being pummeled by Republican presidential candidates over his treatment of Israel, a week after his Middle East positions had a part to play in the loss of a safe Democratic seat in a very Jewish district in New York, but as Netanyahu is saying that coordination with the administration is the best it has been since the beginning of the Obama term.

In a sign of the closeness of the cooperation, US Envoy to Israel Dan Shapiro flew on the prime minister’s plane to New York, something US ambassadors have not done since Martin Indyk used to fly on Ehud Barak’s plane when he was prime minister.

The Obama-Netanyahu meeting is expected to focus on the Palestinian statehood bid at the UN, with both the US and Israel having the shared interest of trying to keep the Palestinians from getting nine positive votes on the 15-member council, so the US would not have to use its veto to shoot down the measure.

That effort received a boost Tuesday when Nigeria’s President Goodluck Jonathan told Defense Minister Ehud Barak during a meeting that his country would abstain if the measure came to a vote in the Security Council.

At this point Israel believes the other countries who may be convinced to either vote against or abstain on the measure in the Security Council are, in addition to the US, Britain, France, Germany, Portugal, Bosnia- Herzegovina, Colombia, and Gabon. The other countries on the council are India, Brazil, South Africa, Lebanon, China and Russia.

Netanyahu will meet with the heads of state of a number of these countries before Friday when Abbas is expected to formally request to UN Secretary-General Ban Kimoon that the issue be taken up by the Security Council.

Netanyahu is expected to meet Portuguese Prime Minister Pedro Passos Coelho on Wednesday, as well as French President Nicolas Sarkozy.

Netanyahu is also expected to meet Ban on Wednesday.

The meeting between Barak and Jonathan was set up about a week ago, and – according to a statement put out by Barak’s office – was coordinated both with Netanyahu and the US.

In addition to discussing the Palestinian issue, the statement said the two also discussed the “challenges of international terrorism and ways the two countries can cooperate in this area.” Nigeria, one of Israel’s closest friends in Africa, has been plagued over the last number of years by radical Islamic terrorism.
Jerusalem Post
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US faces new shutdown threat as budget talks stall

US lawmakers said Tuesday a new budget stalemate over funding for disaster relief could lead to a government shutdown if an agreement is not reached by the end of the fiscal year September 30.

The latest bone of contention comes over aid for recovery for states hit by Hurricane Irene and subsequent flooding.

Republicans have said any new relief funds should be offset by cuts in other services, and also want some of the funds to be put into the 2012 fiscal year which begins October 1.

Senate Majority Leader Harry Reid, a Democrat, said he was not persuaded by comments from some Republicans that they would avert a shutdown, saying the Republican-led House of Representatives may take a hard line.

"I'm not that sure (that a shutdown will be averted), because the Tea Party-driven House of Representatives has been so unreasonable in the past, I don't know why they should suddenly be reasonable," Reid said.

The Senate has approved the release of $6.9 billion for disaster relief included in the budgets for fiscal 2011 and 2012.

But in the House, the Republican leadership is working toward approval of $1 billion for the current year and $2.6 billion for fiscal 2012.

House Majority Leader Eric Cantor said the Senate leadership is the cause of the stalemate.

"There is nothing but politics involved if Harry Reid wants to go and play these games," Cantor said. "We are delivering the monies that are needed. We are twice what is requested from the emergency standpoint." He noted that President Barack Obama has requested $500 million in emergency funds.

Cantor said that if the government is forced to curtail services, "it will be on Leader Reid's shoulders, because he's the one playing politics with it. No one wants to stand in the way of disaster relief monies that are needed."

Reid said lawmakers should keep working to avert a shutdown despite a planned recess next week.

"We are not going to back down. Remember, the government doesn't shut down on Thursday or Friday," he said.

"If they want to stay into next week, that's fine. We can do that. Next week, we can work all next week. Government doesn't shut down until -- I think it's a week from Saturday."

The latest stalemate comes just weeks after a bruising political debate overbudget cuts and the raising of the US debt ceiling, with a shutdown narrowly averted after the White House and lawmakers agreed to create a "supercommittee" to examine deep cuts.
Breitbart

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Agreement with Russia, Turkey on power plant construction: Iran min

Tehran, Sept 21, IRNA – Energy Minister Madjid Namjou said Iran has reached an agreement with Russia and Turkey on making investments in construction of power plants in the country.

Namjou said the Russian and Turkish sides will also share technical experiences with the Islamic Republic of Iran to build those power plants.




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