JERUSALEM — The Israeli military says it has sent two more warships to the Red Sea border with Egypt following warnings that militants are planning another attack on southern Israel from Egyptian soil.
Earlier this week, Israel’s military ordered more troops to the border following intelligence reports of an impending attack.
Israel’s home front minister said Tuesday that militants from the Gaza-based Islamic Jihad are in Egypt’s Sinai peninsula waiting to attack.
Gunmen who infiltrated Israel through the porous Egyptian Sinai border killed eight Israelis earlier this month.
The attack sparked calls to increase security on both sides of the frontier and created new tensions between Israel and Egypt.
No changes in security alignments were observed on the Egyptian side of the border.
Washington Post
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(Reuters) - Hiring by small businesses slowed in August and employers reduced hours, an independent survey showed on Sunday, suggesting the recent stock market turmoil may have dampened job creation.
Intuit, a payrolls processing company, said small businesses added 35,000 jobs after increasing employment by 40,000 in July.
The survey is based on responses from about 66,000 employers at businesses with fewer than 20 employees that use the Intuit Online Payroll system and covered the period from July 24 to August 23.
"There was plenty of bad news this month and the Intuit small business employment figures show this," said Susan Woodward, the economist who helped to develop the survey. "From this month's numbers, we don't see a new recession, but we don't see a robust recovery either."
A sharp drop in share prices after Standard & Poor's stripping the nation of its top AAA credit rating knocked down consumer and business confidence. Sentiment also soured as the sovereign debt crisis in Europe spread.
There are fears the month's stock market rout could make businesses hesitant to hire new workers.
The government will release its employment report for August on Friday, which will be gleaned for clues on whether the economy is sliding back into recession.
According to a Reuters survey, nonfarm payrolls probably increased 80,000 this month after July's 117,000 gain.
Three of the 62 economists polled predicted a contraction in nonfarm employment this month, citing the erosion of business confidence and a strike by 45,000 Verizon Communications workers during the payrolls survey period.
They cautioned, however, that a drop in August employment should not be interpreted as a sign the economy was back in recession. The economy grew at a 1 percent annual rate in the second quarter after expanding only 0.4 percent in the January to March period.
The average work week for small business employees fell 0.3 percent to 24.9 hours, according to the Intuit survey, while the average monthly salary eased 0.08 percent to $2,649.
"With a soft labor market, employers no longer need to pay more to get help," said Woodward.
This is a worrying trend for consumer spending, which accounts for more than two-thirds of U.S. economic activity. Consumer spending grew at an anemic 0.4 percent annual rate in the second quarter, slowing sharply from 2.1 percent in the first three months of 2011.
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The economic news from the US was universally appalling on Thursday, and to add to everything else, there is now growing evidence of another credit crunch in the European banking system.
Some of the weaker European banks in peripheral eurozone economies are again struggling to secure market funding, particularly dollar denominated funding, and are therefore once more being forced to throw themselves back on central bank lender of last resort support.
A banking crisis which transmogrified into an economic and sovereign debt crisis now shows every sign of transforming itself back into another banking crisis. There's a terrible circularity about it all which policymakers seem powerless to break. The outlook grows steadily grimmer.
Still, no matter. Stocks are cheap, right, and on the buy-on-the-dips philosophy, isn't now the time to be wading back in? Yes indeed. On most conventional yardsticks, including price earnings ratios, dividend yield and book value, shares do indeed look good value.
What is more, the corporate sector has in some respects never looked more financially robust. Costs have been cut and cash hoarded. On the face of it, there's enough balance sheet strength there for dividends to survive even the severest of economic winters.
The Telegraph
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http://www.telegraph.co.uk/finance/comment/jeremy-warner/8709692/Mind-the-gap-bonds-signal-a-depression.html
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NEW YORK (Reuters) - The FDIC and more than three dozen other investors on Monday lodged objections to Bank of America Corp's $8.5 billion settlement of claims over losses on mortgage-backed securities, joining a growing list of investors and regulators that are challenging the accord.
In its filing with the U.S. District Court in Manhattan, the FDIC said it is "the receiver of numerous banks and owner of many certificates" issued by many of the 530 mortgage pools of the former Countrywide Financial Corp that the settlement covers.
The FDIC, whose full name is the Federal Deposit Insurance Corp, said it is intervening because it does not have enough information to evaluate the settlement.
Other investors that objected on Monday included a variety of banks, insurers and investment funds. Among them are Jeffrey Gundlach's money management firm Doubleline Capital LP, and the banking unit of Wayne, New Jersey's Valley National Bancorp.
Bank of New York Mellon Corp, the trustee handling the 530 trusts with $174 billion of unpaid principal balances, had negotiated the settlement with 22 institutional investors including the Federal Reserve Bank of New York, BlackRock Inc and Allianz SE's Pimco.
The June 29 accord was intended to resolve much of Bank of America's remaining legal liability tied to its 2008 purchase of Countrywide, once the nation's largest mortgage lender.
But dozens of investors who did not negotiate but would be bound by the accord have said the payout is too low, or that they lack enough information to know whether it is fair. Two state attorneys general, New York's Eric Schneiderman and Delaware's Beau Biden, also have expressed objections.
A New York state judge is scheduled to consider whether to approve the settlement on November 17, but some investors want the case handled in federal court.
Bank of America spokesman Lawrence Grayson said that bank believes the trustee acted reasonably, and that there are "compelling reasons" for the settlement to be approved. Bank of New York Mellon spokesman Kevin Heine did not immediately respond to an email request for comment.
Read more: http://www.foxbusiness.com/markets/2011/08/29/fdic-objects-to-bank-america-85-billion-mortgage-accord/#ixzz1WWh0EX1s
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JACKSON HOLE, Wyo.—After four years of fighting crises and pumping money into the financial system, the world's central bankers are concluding that the global economy is still in a precarious position and the policy apparatus is ill-equipped to help.
The mood here in the Grand Tetons, where central bankers and private economists from around the world gather each August, was distinctly gloomy.
The angst was underscored in a blunt speech by the International Monetary Fund's new managing director, Christine Lagarde. "We risk seeing the fragile recovery derailed," she said Saturday. Those risks have been aggravated, she said, by the public's sense that policy makers' response has been inadequate. "We are in a dangerous new phase," the former French finance minister said.
WSJ's Paul Vigna previews the day in markets activity, including how Asia reacted to Federal Reserve chairman Ben Bernanke's comments about the health of both the U.S. and the world economies. AP Photo/Reed Saxon
What Ms. Lagarde said publicly, several central bankers expressed privately. The central bankers' problems are compounded by internal divisions and current realities. Several U.S. Federal Reserve officials have doubts about how much more they can do to resuscitate a U.S. recovery that is falling short of Fed expectations. Most European Central Bank officials believe the solutions to Europe's sovereign-debt, governance and banking woes lie with elected leaders, not the ECB.
Economists at JPMorgan, in their weekly reprise of economic developments, blamed the recent global stock selloff on "a sense of policy paralysis in the U.S. and Europe, which has driven home the point that there is no cavalry to ride to the rescue."
"Fiscal policy has turned restrictive and an additional sharp tightening lies just ahead in the U.S., while monetary authorities have exhausted much of their ammunition," they said.
Officials on both sides of the Atlantic who orchestrated the response to the global financial crisis insist the world economy would have been worse had they not acted as they did. But it's clear that the remedies didn't deliver the recovery for which they hoped.
Finland has proposed that Greek state assets be transferred to a Luxembourg-based holding company and held as security for new loans to Athens, according to an internal document obtained by Reuters.
The proposal, drafted in June, remains a central plank of Finnish demands for collateral in return for providing more aid to Greece.
Senior euro zone officials held another conference call on Monday to try to resolve the collateral issue.
If Finland does not get its way, it may pull out of the Greek bailout, unleashing renewed trouble in financial markets.
Although small at around 1.4 billion euros, Finland's share of the new support for Greece is important because its triple-A credit rating adds weight to the 109 billion euro rescue agreed on July 21, the second bailout package Athens has received.
Demands from Helsinki for collateral have sparked requests from countries including Austria, the Netherlands, Slovenia and Slovakia for similar treatment, and threaten to spoil the euro zone's attempt to save Athens from default.
In the document, Finnish officials set out how the Greek government and its privatization agency would authorize the transfer of assets to a holding company based in Luxembourg that would be used as security for states providing assistance. To see the document, click here.
The privatization agency would own all the shares in the asset holding company, although the shares would be held in custody by a third party.
Since the holding company would be based in Luxembourg, it would operate under Luxembourg law.Such a move would prove controversial in Greece, where the government has strongly rejected suggestions of offering land or company shares as collateral for future loans. It would in effect mean Greece, which plans to raise 50 billion euros from privatization by 2015, losing sovereignty over its assets.
"The Privatisation Agency is managing the AHC (Asset Holding Company) and can use AHC in a flexible way as one vehicle to securitise, manage, develop and privatise assets," reads the Finnish plan, dated June 23 and obtained exclusively by Reuters.
CNBC
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