Friday, June 3, 2011
Syrian troops pound central town; at least 43 die
Syrian government troops pounded a central town with artillery and heavy machinegun fire Thursday, a day after authorities released hundreds of political prisoners and the president set up a committee for national dialogue in an effort to end a 10-week uprising against his regime, activists said.
The bombing of the town of Rastan in central Syria started on Tuesday and has killed at least 43 people so far, according to Rami Abdul-Rahman, director of the Syrian Observatory for Human Rights.
Another Syrian rights group, the Local Coordination Committees, which helps organize and document the country's protests, said the Rastan shelling killed several members of the same family early on Thursday when a shell hit Taam Tlass' home. It said two mosques and a major bakery were also damaged.
The group said that among those killed in Rastan was 4-year-old girl Marwa Hassan Shakhdo, who died on Wednesday.
The shelling of Rastan and nearby towns is part of a major clampdown Syria launched on Saturday in the central province of Homs, which has seen persistent protests against President Bashar Assad.
Since mid-March, when protests swept Syria inspired by uprisings across the Arab world, the regime has killed more than 1,100 people, according to human rights groups.
What began as street demonstrations calling for reforms and change evolved into demands for Assad's ouster in the face of the violent crackdown.
The Syrian opposition called for more protests on Friday, the Muslim day of prayer, to commemorate the nearly 30 children who have also been killed in the uprising.
The images of children who activists say were killed during the government crackdown have circulating widely among Syrians on YouTube, Facebook and opposition websites, shocking the public and stoking even more fury against a regime the opposition says has lost all legitimacy.
The government has tried to ease tension and end the 10-week revolt. On Wednesday, authorities released more than 500 prisoners, including some who took part in the latest demonstrations marking the most serious challenge to the Assad family's 40-year rule.
The release came after Assad issued an amnesty that was said to cover "all members of political movements," including the Muslim Brotherhood, which led an armed uprising against Assad's father in 1982. Membership in the party is punishable by death.
Syrian activists say 10,000 people have been rounded up since the protests began.
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Natural disasters sink Australian economy
The unprecedented flooding and storms that hit key exports such as coal and iron ore caused Australia's economy to shrink by 1.2 per cent in the first quarter of this year, compared with the last quarter of 2010, government data showed yesterday.
While Australia was the only wealthy country to avoid recession during the global economic crisis, the data points to a weak spot in an economy heavily reliant on Chinese demand for raw materials such as coal, Australia's biggest export.
It was the largest quarterly contraction in GDP since 1991, when Australia experienced its last recession. It is also the first time that GDP has fallen since the last quarter of 2008.
Flooding and cyclones slowed annual growth to 1 per cent through March 2011. That was down from 2.7 per cent in 2010. Lost production totalled A$12bn (£8bn), with A$6.7bn of that in the March quarter alone.
The Independent
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Rep. Paul to Fed: Tell Us Everything, or Else
The chairman of the House subcommittee that oversees the Federal Reserve demanded Tuesday that the Fed fully disclose details of billions -- perhaps trillions -- in secret emergency loans it made to almost every major bank in the U.S. and overseas during the financial crisis or face a congressional subpoena for the information.
In an interview with Fox Business, Rep. Ron Paul (R-Texas), chairman of the House Financial Services subcommittee on domestic monetary policy, said he wants to know “how much, when, where and why” from Fed officials when they testify about the loans at a subcommittee hearing Wednesday.
“We’re going to get to the bottom of what the Fed did during the big bailout a couple of years ago,” Paul said. “We have some precise questions. I imagine we won’t get all of them answered tomorrow because they’ll do a little bit of stonewalling, I’m sure.”
“If they don’t answer, they’ll hear from us,” he said. “We can use the subpoena power and say, ‘Look, you have to bring us the records.’ ”
FOX NEWS
Read more: http://www.foxbusiness.com/industries/2011/05/31/rep-paul-fed-tell/#ixzz1OEDeeCWy
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Dismal Jobs Report Fuels GOP Criticism of Administration on Economy
Capping off a dismal week in economic news, the Labor Department reported Friday that the pace of hiring slowed dramatically in May and the unemployment rate rose to 9.1 percent -- fueling Republican demands that the Obama administration change direction on its economic policy.
Employers hired just 54,000 new workers in May, the fewest in eight months. The numbers follow a string of other reports showing a slowdown in manufacturing and deepening slump in the housing market. The trendlines come at a bad time for President Obama, as the official field of 2012 Republican presidential candidates starts to take shape; the candidates are eager to make the economy a central plank in their campaigns.
"President Obama's policies made the recession worse and as a result more people are out of work," former Massachusetts Gov. Mitt Romney, who announced his jobs-centered White House bid Thursday, said after the report was released.
Republicans continued to hammer Obama with an infamous chart pushed by his administration during the 2009 stimulus debate which predicted unemployment would stay below 8 percent and that, by this time, the rate would be below 7 percent.
Instead, the pace of hiring has weakened dramatically from the previous three months, when the economy added an average of 220,000 new jobs. Private companies hired only 83,000 new workers in May -- the fewest in nearly a year. Local governments cut 28,000 jobs last month, the most since November.
FOX NEWS
Read more: http://www.foxnews.com/politics/2011/06/03/employers-add-just-54000-jobs-in-may-unemployment-rate-rises-to-1-percent/#ixzz1OEKTwnQ9
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Horror for US Economy as Data Falls off Cliff
The last month has been a horror show for the U.S. economy, with economic data falling off a cliff, according to Mike Riddell, a fund manager at M&G Investments in London.
"It seems that almost every bit of data about the health of the US economy has disappointed expectations recently," said Riddell, in a note sent to CNBC on Wednesday.
"US house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed and Chicago Fed were all very disappointing."
"And that’s just in the last week and a bit," said Riddell.
Pointing to the dramatic turnaround in the Citigroup "Economic Surprise Index" for the United States, Riddell said the tumble in a matter of months to negative from positive is almost as bad as the situation before the collapse of Lehman Brothers in 2008.
"The correlation between the economic surprise index and Treasury yields is very close, so the lesson is that whatever your long term macro views are regarding hyper inflation vs. deflation or the risk of the US defaulting, the reality is that if you want to have a view about government bond prices, the best thing you can do is look at the economic data to see what’s actually going on," said Riddell.
"And right now, the economic data is suggesting that however measly you may think a 3 percent yield is on a 10-year Treasury, the yield should probably be a fair bit lower given what’s going on in the US economy," said Riddell.
"You’ve also got to wonder at what point the markets for risky assets start noticing, too."
"QE3 anybody?" asks Riddell.
Analysis: Bond market rally may signal dark times to come
(Reuters) - A torrent of terrible economic data has electrified the U.S. Treasury market, driving the key 10-year note's yield lower and prompting investors to predict a further plunge.
On Wednesday, the yield on the benchmark 10-year Treasury note fell below 3 percent, the first time since December, on further evidence the economic recovery is losing momentum -- and fast.
That may be good news to investors who are long the Treasuries market, but for those who have money in stocks, commodities or other higher-risk assets, it could spell big trouble ahead.
Neither is it good news for the large number of unemployed people in the United States whose hopes of a jobs-creating recovery could be dashed.
"It does look like we have a pretty weak rebound, even weaker than we had considered," said Jason Brady, a managing director for Thornburg Investment Management in Santa Fe, New Mexico.
The 10-year Treasury bond is one of the most widely watched securities as it sets the benchmark for almost every other interest rate in the U.S. economy, from the cost of financing corporate debt and mortgages to credit card balances.
Many investors previously expected yields to rise -- even spike -- with the end of the Federal Reserve's latest bond buying program nearing and the economy experiencing a self-sustaining recovery.
But weakening employment and troubled housing markets, unresolved debt problems in Europe and Japan's struggle to recover from the earthquake have money managers reversing course.
Dan Fuss, vice chairman of $150 billion Loomis Sayles, said on Wednesday he isn't ruling out a 2.50 percent yield on the 10-year Treasury note -- 44 basis points lower than the current 2.94 percent at New York close on Wednesday.
"I emphasize that I give it low odds, but it is possible," Fuss said.
It was only on February 9 that the 10-year's yield peaked at 3.78 percent.
Bret Barker, portfolio manager at $120 billion TCW in Los Angeles, said he too isn't ruling out 2.50 percent on the 10-year's yield, but sees a 2.75 percent yield as more plausible.
"We hit 2.50 percent when Lehman Brothers collapsed and just before QE2 began with fears of a double-dip recession and deflation," he said. "We assign a low probability to both deflation and a double dip."
The yield on the 10-year Treasury note hit an intraday low of 2.33 percent on October 8, 2010, ahead of the Fed's second round of bond purchases, also known as Quantitative Easing 2.
But that doesn't compare to levels following Lehman's implosion when the 10-year yield intraday low was 2.04 percent on December 18, 2008.
Sean Simko, senior portfolio manager at SEI Investments in Oaks, Pennsylvania which oversees $179 billion in assets, said Friday's non-farm payrolls report could extend the bond market's moves.
"If Friday's payroll number disappoints, we could have another leg down in yield. It could press below 2.90 percent."
More:
Finally: Moody's sounds alarm over U.S. debt limit and deficits
(Reuters) - Ratings agency Moody's warned on Thursday it would consider cutting the United States' coveted top-notch credit rating if the White House and Congress do not make progress by mid-July in talks to raise the debt limit.Treasury Secretary Timothy Geithner, seeking to convince Congress to increase his borrowing authority and prevent a government default, went to Capitol Hill to press his case in a 45-minute meeting with first-term lawmakers.
"I am confident that two things are going to happen this summer," Geithner told reporters after the meeting. "One is that we are going to avoid a default crisis and we are going to reach agreement on a long-term fiscal plan."
The meeting occurred just hours after Moody's Investors warned that slow-moving deficit talks led by Vice President Joe Biden, hindered by entrenched positions on both sides, had increased the odds of a short-lived default by Washington.
Moody's warning increases pressure on President Barack Obama and House of Representatives Speaker John Boehner, the top Republican in the U.S. Congress, to strike a deal soon or risk upsetting global financial markets.
MORE:
http://www.reuters.com/article/2011/06/03/us-usa-debt-idUSTRE74E1HD20110603?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Reader
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Google Gmail cyber attack: 'Chinese spies had months of access'
Chinese spies enjoyed months of access to the personal Google emails of senior US officials and human rights activists, according to a US computer security expert.The web giant sparked a renewed cyberspace espionage row after it published details of the attack and said it had traced the source to Jinan, in Shandong Province.
It did not directly accuse the Chinese government but appeared to hint strongly at its involvement, prompting angry denials from Beijing.
"Blaming these misdeeds on China is unacceptable," a foreign ministry spokesman said.
"Hacking is an international problem and China is also a victim. The claims of so-called support for hacking are completely unfounded and have ulterior motives."
The first details of the attack emerged in February on the blog of Mila Parkour, a pseudonymous computer security expert who found a "spear phishing" email on the systems of one of her clients.
The Telegraph
MORE:
http://www.telegraph.co.uk/technology/google/8553131/Google-Gmail-cyber-attack-Chinese-spies-had-months-of-access.html
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Money Market Funds Fall by More Than $21 Billion
Total money market mutual fund assets decreased by $21.86 billion to $2.726 trillion for the week ended Wednesday, June 1, the Investment Company Institute reported on Thursday.Taxable government funds decreased by $13.01 billion, taxable non-government funds decreased by $7.25 billion, and tax-exempt funds decreased by $1.60 billion.
Retail: Assets of retail money market funds decreased by $2.34 billion to $908.09 billion. Taxable government money market fund assets in the retail category decreased by $680 million to $167.63 billion, taxable non-government money market fund assets decreased by $970 million to $544.23 billion, and tax-exempt fund assets decreased by $700 million to $196.24 billion.
Institutional: Assets of institutional money market funds decreased by $19.52 billion to $1.818 trillion. Among institutional funds, taxable government money market fund assets decreased by $12.33 billion to $594.87 billion, taxable non-government money market fund assets decreased by $6.28 billion to $1.112 trillion, and tax-exempt fund assets decreased by $910 million to $111.18 billion.
ICI reports money market fund assets to the Federal Reserve each week. Revisions are due to data adjustments, reclassifications, and changes in the number of funds reporting. Historical weekly money market data back to January 2008 are available on the ICI website."
CNBC
http://www.cnbc.com//id/43258897
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Moody's sounds alarm over U.S. debt limit and deficits
(Reuters) - Moody's Investors Service said it may downgrade the debt ratings of Bank of America Corp (BAC.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N), citing concerns about waning U.S. political willingness to offer support for the largest banks.
The sweeping Dodd-Frank financial reform law is eliminating the certainty of U.S. governmental support that some "too big to fail" banks needed to survive the financial crisis, Moody's said on Thursday.
Lower ratings can translate into higher borrowing costs, which can have a big impact on a bank's bottom line. They can also force banks to post more collateral in derivative trades.
But the ratings agency acknowledged an overall improvement in the operations of Bank of America and Citigroup since the crisis. That recovery could compensate for the changing political environment and lessen the severity of any downgrade, Moody's said on Thursday.
The banks' shares fell initially after Moody's made its announcement, but turned positive by midday.
"If you factor in the credit improvement, basically it could be a wash. ... The headline was scary but if you read further, it's not that bad," said Alan Villalon, a senior bank analyst at Chicago-based Nuveen Investments, which owns bank shares.
Debt markets reacted more negatively, with costs for credit-default swaps on the banks rising. Bank of America CDS were most affected, with the price to protect $10 million (6 million pounds) of bonds over five years rising to $157,000 a year from $147,000 the day before, according to Markit.
But some of the banks' debt holders were unconcerned.
"It's old news and reactive to events that are very obvious ... it doesn't dissuade us from owning the debt of those banks," said Marshall Front, chairman of money manager Front Barnett Associates, which owns bonds of banks including Citigroup, Bank of America and Wells Fargo.
LOSING GOVERNMENT 'UPLIFT'
Moody's said on Thursday it placed the deposit, senior debt and senior subordinated debt ratings of the three banks under review for possible downgrades.
The banks' ratings are currently buoyed by "uplift" from government support of the banking system during the financial crisis, Moody's said.
MORE:
http://uk.reuters.com/article/2011/06/02/uk-credit-rating-idUKTRE75153T20110602?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Reuters%2FUKBusinessNews+%28News+%2F+UK+%2F+Business+News%29&utm_content=Google+Reader
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