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Aug 7, 2011

Asian Stocks Fall But Some Pare Early Losses: WSJ

Asia Alert
from The Wall Street Journal
SINGAPORE—Asian shares were down but off early lows Monday, and the U.S. dollar was broadly weaker after Standard & Poor's historic downgrade of U.S. government debt triggered fresh concerns about the outlook for the world's largest economy and global growth.

Japan's Nikkei Stock Average fell 1.4%, Australia's S&P/ASX 200 was off 1% to a fresh two-year low, South Korea's Kospi Composite fell 0.6% and New Zealand's NZX-50 lost 3%. Hong Kong's Hang Seng Index opened down 2.7%. Singapore's Straits Times Index was down 2.5% to its lowest level since August 2010, while Taiwan's Taiex opened down 2%. Shanghai was down 1% at the open. Philippine shares were down 1.5%.

Cyclical and growth-sensitive stocks were lower across all markets; Sony fell 2.4% in Tokyo, Samsung Electronics lost 1.5% in Seoul and BHP Billiton fell 2% in Sydney.
The 10-year U.S. Treasury yield rose amid question marks about the U.S.'s credit worthiness, prompting investors to turn toward safe haven investments such as the Swiss franc and the Japanese yen.
Dow Jones Industrial Average futures tumbled more than 300 points in screen trade, and were recently off 215 points, which coincided with surging gold and slumping oil future prices, underscoring heightened worries among investors.

"Policy makers have to get their hands around the uniqueness of the current events. The crisis in the capital markets does not appear to be a function of current nominal or real interest rate levels, but appears to be more an issue of liquidity," Brown Brothers Harriman said in a note to clients.
"Like others, we had been concerned about the Lehman-like risks of a Greek default.... Compound this with marked weakness of the U.S. economy, a distracting debt ceiling debate, and now the downgrade and the worsening of the European debt crisis, and ... by a number of metrics, financial conditions are the worst since the Lehman debacle," it added.

Foreign-exchange trading was more subdued than many had expected as investors continued to digest the implications of S&P's action to strip the U.S. of its pristine triple-A rating. Early focus in currency markets was on the European Central Bank's emergency meeting, with traders expressing disappointment policy makers didn't spell out their intentions to buy bonds from heavily indebted Spain and Italy. Both countries have emerged as new flash points in the euro zone's latest crisis.

The euro was at $1.4319 from $1.4280 late Friday in New York, having climbed to $1.4429 earlier in choppy trade. The dollar was at Y78.15 from ¥78.48, while the euro was fetching ¥112.03 from ¥111.01. The dollar was at 0.7622 franc against the Swiss franc, from 0.7673 franc after hitting a new record low just below 0.7500 franc earlier. The dollar received modest support after the Group of Seven rich nations committed to taking coordinated steps to ensure liquidity and to ensure financial markets operate properly.
Commodity-linked currencies like the Australian dollar, which is often seen as barometer for risk in the region, were hit hard; the Australian dollar was trading at US$1.0423 from US$1.0391 earlier and US$1.0447 late Friday.
The 10-year Treasury yield increased to 2.579% from 2.563% at Friday's New York close, while the yield on two-year Treasurys fell to 0.268% from 0.292% late Friday, contrary to some predictions of a much more aggressive initial market reaction.

Worries about the global demand outlook hit oil prices, with the September Nymex crude oil futures recently down $2.48 at $84.40. Spot gold enjoyed a rush of safe-haven demand, and was fetching $1,688 per troy ounce, up $24.60 from New York trade.

Write to Shri Navaratnam at

Asia stocks fall after U.S. downgrade: MarketWatch - Asia Markets

By Sarah Turner, MarketWatch 

SYDNEY (MarketWatch) Asian shares dropped on Monday, with investors shaken after a U.S. government debt downgrade, but stocks moved off early lows amid signs that policy markers were willing to act to shore up global markets. 

Japan’s Nikkei Stock Average JP:100000018 0.00%  fell 1.4%, while the Australian S&P/ASX 200 index AU:XJO -0.90%  dropped 1.1%. 
ECB to intervene in European debt markets The European Central Bank signals it would buy up Spanish and Italian bonds on a large scale. 

Banks were broadly lower in Asia on Monday, with Sumitomo Mitsui Financial Group Inc. JP:8316 -2.58% SMFG +0.51%  down 2.5% and Shinsei Bank Ltd. JP:8303 -3.26%   SKLKF +9.01%  lower by 4.4% in Tokyo.
As crude-oil futures traded below $85 a barrel, some energy stocks lost ground, with Australia’s Origin Energy Ltd. AU:ORG -0.44%   OGFGF -1.79%  losing 0.7% in Sydney, and JX Holdings Inc. JP:5020 -1.93%  down 2.1% in Tokyo.
Exporters were also pressured amid worries about future demand, with Samsung Electronics Co. SSNLF +78.57%   down 1.7% and in Seoul, and Honda Motor Co. shares JP:7267 -2.53%   HMC +0.94%  off 2.3% in Tokyo.
Last week, Japanese shares dropped more than 5% while Australian shares fell more than 7%, as investors fretted about whether the U.S. was heading for a double-dip recession.
The turbulent five-day period culminated with the Standard & Poor’s downgrade of U.S. sovereign debt to AA+ from AAA. Read more on S&P downgrade.
“While we had expected a downgrade, the decision is in some sense a step into the unknown,” said Michael Blythe, economist at Commonwealth Bank in Australia on Monday.
The extraordinary nature of the S&P move prompted financial and monetary officials from the Group of Seven major economies to release a statement late Sunday, saying they were “committed to addressing the tensions stemming from the current challenges on our fiscal deficits, debt and growth, and welcome the decisive actions taken in the U.S. and Europe.” Read report on G-7 statement after S&P’s U.S. downgrade.
Meanwhile, the European Central Bank said late Sunday that it “will actively implement” its bond-buying program, indicating it will likely buy Spanish and Italian government bonds. Read more on ECB statement.
Shane Oliver, head of investment strategy at AMP Capital said “while shares may remain rough for a while yet there are indications that policy makers may be swinging into action again.”
Sarah Turner is MarketWatch's bureau chief in Sydney.

The Australian Capital Circle: Fears of GFC MkII

Capital Circle Newsletter

Fears of GFC MkII
The economy is dominating the news amid fresh instability in the US and Europe.

Julia Gillard is in Canberra today. She'll do a media event later today on the Productivity Commission's aged care report.
Tony Abbott is on leave. Nationals Leader Warren Truss is Acting Opposition Leader. He's in Canberra today with no events scheduled.
Trepidation: All eyes will be on the markets today to see how investors react to the downgrading of the United States' credit rating. A new IMF report takes a fairly positive view of Australia's economy going forward. But it's unclear how the worsening financial problems in the US and Europe will affect investor confidence here.
Injunction: The future of Gillard government's Malaysian refugee swap hangs in the balance, after the High Court granted a temporary injunction against the expulsion of asylum-seekers under the policy. Refugee lawyer David Manne obtained the injunction, effective until 4.15pm today, to allow an urgent challenge against the policy. Immigration Minister Chris Bowen says the legal manoeuvring is unsurprising, and the government remains committed to the policy. Meanwhile, another boat has been intercepted by border protection authorities.
Reform: Aged care reform will be on the agenda today with the release of a Productivity Commission report on the sector. The Sydney Morning Herald reports the government will also announce details this week of a national insurance scheme to help the disabled. The renewed focus on non-carbon policy issues seems to have been fairly positive for Labor, with its finalised health deal receiving favourable coverage last week.
Waste: A scathing report has found the circumstances of indigenous Australians have har

The Australian Business Briefing: US crisis could lift funding costs

US crisis could lift funding costs
S&P 500 pit Blair Speedy THE downgrade of the US sovereign credit rating could push up the borrowing costs of major Australian corporations.
Dollar lower on US credit woes
aussie dollar opens half a cent lower THE Australian dollar was trading lower this morning, as Standard & Poor's warned of a one in three chance of a further credit downgrade for the US.
Margin calls force investors to sell
Margin lending Andrew Main SOME leveraged investors may find themselves with little choice but to sell because of margin calls.
Steady rates expected amid turmoil
reserve bank Blair Speedy THE fallout from the US debt crisis and the financial market volatility could prompt the Reserve Bank to keep interest rates on hold.
Once AAA lost, it's hard to get back
Peter Costello Susannah Moran FORMER Treasurer Peter Costello knows how hard it is to claw back a AAA sovereign rating once it's gone.
Aussie dollar will be a crisis measure
Aussie dollar Teresa Ooi and Susannah Moran THE Australian dollar will be a key barometer of financial markets' reaction to Standard & Poor's controversial US credit downgrade.
Rio warns against carbon tax
Tom Albanese Scott Murdoch RIO Tinto chief executive Tom Albanese has warned the government that the economy is too fragile to cope with the contentious carbon tax.
CBA tipped to deliver $6.8bn
cba Susannah Moran THE Commonwealth Bank is expected to announce a net profit of $6.8 billion when it reveals its full-year report on Wednesday.
Financial Markets
Queries on Nine's $3.6bn debt pile
Nine logo James Chessell and Nabila Ahmed IT was not the first time Nine Entertainment's coterie of lenders had gathered for a quarterly update from management.
Margin calls force investors to sell
We're a ship with broken moorings
Financial Markets Coverage
Mining & Energy
Tumbling prices tell a bleak story
Robin Bromby Robin Bromby ON a morning like this, as we wait for the bell to strike 10am and another trying day on the market begins, you can't do much more than absorb the cold, hard facts.
One in four MPs hold resource shares
Hedge funds key to Rio's Riversdale win
More Mining & Energy

From The Desk of Nick Nicolaas - Mining Interactive: Zeal Intelligence Weekly : Major Stock Buying Op" by Adam Hamilton

Dear Friends:

Adam Hamilton has posted his weekly Zeal Intelligence Newsletter on the Mining Interactive Website. 

Zeal Intelligence Weekly

Regards from The Netherlands

G-7 ministers to talk early Monday on market stability after US rating downgrade, report says: The Washington Post Today's Headlines | Business

The Washington Post

Origins of the debt showdown
How the GOP created a majority and gave itself a “leverage moment” in the epic clash over the debt deal.

Navy SEALs among 30 U.S. dead in copter crash
U.S. officials confirm that the dead included 22 SEALs from the elite SEAL Team 6 unit that carried out the mission to kill Osama bin Laden.
(By Kevin Sieff and Greg Jaffe)

Parties trade blame for downgrade
The historic downgrade of the U.S. credit rating by Standard & Poor’s generated on Saturday the exact partisan clashes in Washington that S&P had said led to its decision in the first place.
(By Zachary A. Goldfarb)

Maryland family’s journey into heartache
Bill Giddings drove 700 miles from his Laurel home to the heart of Georgia after his daughter Lauren, a recent law school graduate, was killed in Macon. He thought he was there to identify her, but authorities in Macon “kept beating around the bush.”
(By Paul Duggan)

45,000 Verizon workers go on strike after contract talks fail
NEW YORK — Unions representing tens of thousands of Verizon Communications Inc. workers have called a strike after failing to reach an agreement with the company on a new labor contract.
(By Associated Press)

Catholic hospitals supported Obama's health care law, but now object to covering birth control
WASHINGTON — They defied the bishops to support President Barack Obama’s health care overhaul. Now Catholic hospitals are dismayed the law may force them to cover birth control free of charge to their employees.
( Associated Press Associated Press , AP)

As Obama seeks distance from downgrade of US credit rating, politicians trade salvos of blame
WASHINGTON — President Barack Obama sought to distance himself Saturday from the bad news of the nation’s first-ever credit-rating downgrade, but lawmakers and presidential candidates showed no such reticence — trading salvos over who’s at fault and why.
( Associated Press Associated Press , AP)

As Obama seeks distance from downgrade of US credit rating, politicians trade salvos of blame
WASHINGTON — President Barack Obama sought to distance himself Saturday from the bad news of the nation’s first-ever credit-rating downgrade, but lawmakers and presidential candidates showed no such reticence — trading salvos over who’s at fault and why.
( Associated Press Associated Press , AP)

Lobbying Virginia assembly — and giving candidates millions
Groups that lobby state’s General Assembly have donated millions of dollars to legislative candidates running in November’s general-election campaign.
( by Anita Kumar , The Washington Post)

Former Bain Capital executive identified as mystery $1 million donor to pro-Romney PAC
WASHINGTON — A once-mysterious donor who gave $1 million to a pro-Mitt Romney political action committee in April contributed the maximum amount to Romney’s presidential campaign three weeks later, an Associated Press review found.
( Associated Press Associated Press , AP)

Ask Amy: Husband hijacks wife’s best-laid plans
Her now-retired husband booked them on an overseas trip without consulting her. She had already committed to a number of charitable events during that time, but has resentfully agreed to go.
(, The Washington Post)

Miss Manners: Father-in-law’s instruction may not be what it seems
Reader takes umbrage at in-law’s comment that her job is “to make sure everything runs smoothly at home” so her husband can concentrate on the family business.
(, The Washington Post)

Bride’s sister feels excluded from the ceremony
A big fancy wedding at a spectacular location, a lot of expense — and the bride’s family is not being asked to participate.
(, The Washington Post)

Soul-searching at D.C.’s Theater J
Incident over Peace Cafe at D.C.’s Theater J is further evidence of the corrosive turn that the dialogues over matters related to Israel have taken of late in U.S. and at Jewish institutions.
( by Peter Marks , The Washington Post)

Brendan Hansen wins 200 breaststroke in comeback at US nationals; Franklin wins 100 free
STANFORD, Calif. — Brendan Hansen isn’t scared of the 200-meter breaststroke anymore.
( Associated Press Associated Press , AP)

TV and radio listings for Aug. 7

(, The Washington Post)

Radek Stepanek and Gael Monfils to meet in Legg Mason final
WASHINGTON — Donald Young clearly knew he fell short. After a wonderful week in which he reached his first ATP semifinal, Young had little chance against Radek Stepanek of the Czech Republic.
( Associated Press Associated Press , AP)

Juninho's goal, Beckham's 2 assists lead Galaxy over FC Dallas 3-1
CARSON, Calif. — Juninho scored the go-ahead goal in the 62nd minute and David Beckham had two assists as the Los Angeles Galaxy beat FC Dallas 3-1 on Saturday night.
( Associated Press Associated Press , AP)

MLS Capsules
KANSAS CITY, Kan. — Mauro Rosales and Lamar Neagle scored less than two minutes apart at the close of the second half, giving Seattle Sounders a 2-1 win Saturday night and snapping Sporting Kansas City’s 14-match unbeaten streak.
( Associated Press Associated Press , AP)

Syrian troops storm towns killing at least 4
BEIRUT — Syrian forces attacked a central town and stormed parts of an eastern city, killing at least four people in fresh fighting as President Bashar Assad’s government struggled to crush a five-month-old uprising, activists said.
( Associated Press Associated Press , AP)

Amid mounting protests, Israel sets up special committee to deal with soaring cost of living
JERUSALEM — Israel on Sunday formed a panel of government ministers and some of the country’s leading economic experts to draw up a plan to reduce the soaring cost of living, marking new efforts to defuse demonstrations over prices that drew over a quarter-million people onto the streets the night before.
( Associated Press Associated Press , AP)

North China port braces for typhoon Muifa
BEIJING — China’s northern port of Qingdao braced Sunday for the arrival of Typhoon Muifa, which earlier pounded the commercial capital of Shanghai with high winds and heavy rain, leaving at least one person missing.
( Associated Press Associated Press , AP)

Riot hits London after police shooting
A gritty north London neighborhood exploded in anger Saturday night after a young man was shot.
( Associated Press Associated Press , AP)

Officials: Militant attack on 2 homes in central Iraq kills 6
BAGHDAD — Officials say six civilians have been killed and 14 others injured by bombs planted near two homes in central Iraq.
( Associated Press Associated Press , AP)

ComPost Live with Alexandra Petri
The Compost, written by Alexandra Petri, offers a lighter take on the news and political in(s)anity of the day.
(, vForum)

Opinion Focus with Eugene Robinson
Washington Post columnist Eugene Robinson discusses his recent columns and the latest news in a live Q&A.
(, vForum)

Debt Ceiling drama: Why Jonathan Capehart thinks your voice needs to be heard
In his Post-Partisan blog post today, Opinion writer Jonathan Capehart said that "Folks should be marching on the Capitol" in protest of the way the debt issue is being handled. Do you agree?
(, vForum)

Chatological Humor: Monthly with Moron
Gene Weingarten takes polls and chats about his recent columns.
(, vForum)

ComPost Live with Alexandra Petri
The Compost, written by Alexandra Petri, offers a lighter take on the news and political in(s)anity of the day.
(, vForum)

Ariane 5 rocket launched from French Guiana, carries 2 telecom satellites into orbit
SAN JUAN, Puerto Rico — The European space consortium Arianespace has launched two television broadcasting satellites into orbit from its Guiana Space Center in South America.
( Associated Press Associated Press , AP)

The Web Is 20 Years Old Today

( by ,

Daily Crunch: Movement

( by ,

Lessons HealthTech Startups Can Take From ZocDoc

( by ,

Tencent Vs. Sina: A Look At Who’s Winning The Battle For China’s Tweets [Infographic]

( by ,

G-7 ministers to talk early Monday on market stability after US rating downgrade, report says
TOKYO — Financial ministers from the Group of Seven leading economies are to hold a teleconference Monday to discuss world market stability.
( Associated Press Associated Press , AP)

Stocks drop as Mideast markets open following US credit rating cut; Dubai sheds over 5 percent
DUBAI, United Arab Emirates — Stocks are tumbling across the Middle East as most of the region’s markets open for their first day of business following a historic downgrade of the United States’ credit rating.
( Associated Press Associated Press , AP)

After S&P downgrade of US, Israeli stock market delays opening on fears of steep plunge
JERUSALEM — The Tel Aviv Stock Exchange has delayed the start of the week’s first session after pre-opening trade showed the benchmark index dropping more than 6 percent following the downgrading of the United States’ debt rating.
( Associated Press Associated Press , AP)

45,000 Verizon workers go on strike after contract talks fail
NEW YORK — Unions representing tens of thousands of Verizon Communications Inc. workers have called a strike after failing to reach an agreement with the company on a new labor contract.
( Associated Press Associated Press , AP)

Review: Wall Street Scanner
The new app is great for investors who want to keep a close eye on their stocks throughout the day.
(, The Washington Post)

NYT: Morning Business News:Mideast Markets Tumble After US Credit Downgrade.


Mideast Markets Tumble After US Credit Downgrade
5:48 AM ET
UAE Supports Peg, Oman Says No Alternative to U.S. Debt
5:39 AM ET
Iraq Electricity Minister Fired Over $1.7B Deals