Temat: Przeglad Prasy Swiatowej

warte do poczytania jak to wsennym miescie (60000tys mieszkancow) zarejestrowano pod jednym adresem 2000 firm. Budynke w ktorym zarejsetrowano te firmy wcale nie jestwielkim wierzowcem z migoczacymi reklamami lecz maly domek murowany o powierzchni 1700m, przeddomkiem ostrzzone trawniki, wszystko w jak najlepszym porzadku...............:)

[b] Tue Jun 28

Special Report: A little house of secrets on the Great Plains


SHELL GAMES: A Reuters Investigation



Articles in this series are exploring the extent and impact of corporate secrecy in the United States.

By Kelly Carr and Brian Grow

CHEYENNE, ATLANTA (Reuters) - The secretive business havens of Cyprus and the Cayman Islands face a potent rival: Cheyenne, Wyoming.

At a single address in this sleepy city of 60,000 people, more than 2,000 companies are registered. The building, 2710 Thomes Avenue, isn't a shimmering skyscraper filled with A-list corporations. It's a 1,700-square-foot brick house with a manicured lawn, a few blocks from the State Capitol.

Neighbors say they see little activity there besides regular mail deliveries and a woman who steps outside for smoke breaks. Inside, however, the walls of the main room are covered floor to ceiling with numbered mailboxes labeled as corporate "suites." A bulky copy machine sits in the kitchen. In the living room, a woman in a headset answers calls and sorts bushels of mail.

A Reuters investigation has found the house at 2710 Thomes Avenue serves as a little Cayman Island on the Great Plains. It is the headquarters for Wyoming Corporate Services, a business-incorporation specialist that establishes firms which can be used as "shell" companies, paper entities able to hide assets.

Wyoming Corporate Services will help clients create a company, and more: set up a bank account for it; add a lawyer as a corporate director to invoke attorney-client privilege; even appoint stand-in directors and officers as high as CEO. Among its offerings is a variety of shell known as a "shelf" company, which comes with years of regulatory filings behind it, lending a greater feeling of solidity.

"A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy," the company's website boasts. "A person you control... yet cannot be held accountable for its actions. Imagine the possibilities!"

Among the entities registered at 2710 Thomes, Reuters found, is a shelf company sheltering real-estate assets controlled by a jailed former prime minister of Ukraine, according to allegations made by a political rival in a federal court in California.

The owner of another shelf company at the address was indicted in April for allegedly helping online-poker operators evade a U.S. ban on Internet gambling. The owner of two other firms there was banned from government contracting in January for selling counterfeit truck parts to the Pentagon.

CASTING THE FIRST STONE

All the activity at 2710 Thomes is part of a little-noticed industry in the U.S.: the mass production of paper businesses. Scores of mass incorporators like Wyoming Corporate Services have set up shop. The hotbeds of the industry are three states with a light regulatory touch-Delaware, Wyoming and Nevada.

The pervasiveness of corporate secrecy on America's shores stands in stark contrast to Washington's message to the rest of the world. Since the September 11 attacks in 2001, the U.S. has been calling forcefully for greater transparency in global transactions, to lift the veil on shadowy money flows. During a debate in 2008, presidential candidate Barack Obama singled out Ugland House in the Cayman Islands, reportedly home to some 12,000 offshore corporations, as "either the biggest building or the biggest tax scam on record."

Yet on U.S. soil, similar activity is perfectly legal. The incorporation industry, overseen by officials in the 50 states, has few rules. Convicted felons can operate firms which create companies, and buy them with no background checks.

No states license mass incorporators, and only a few require them to formally register with state authorities. None collect the names and addresses of "beneficial owners," the individuals with a controlling interest in corporations, according to a 2009 report by the National Association of Secretaries of State, a group for state officials overseeing incorporation. Wyoming and Nevada allow the real owners of corporations to hide behind "nominee" officers and directors with no direct role in the business, often executives of the mass incorporator.

"In the U.S., (business incorporation) is completely unregulated," says Jason Sharman, a professor at Griffith University in Nathan, Australia, who is preparing a study for the World Bank on corporate formation worldwide. "Somalia has slightly higher standards than Wyoming and Nevada."

An estimated 2 million corporations and limited liability companies are created each year in the U.S., according to Senate investigators. The Treasury Department has singled out LLCs as particularly vulnerable to being used as shell companies, as they can be owned by anyone and managed anonymously. Delaware, Nevada and Wyoming had 688,000 LLCs on file in 2009, up from 624,000 in 2007.

Treasury and state banking regulators say banks have flagged billions of dollars in suspicious transactions involving U.S. shell companies in recent years. On June 10, a federal judge in Oregon ordered a company registered there to pay $60 million for defrauding a Ukrainian government agency through sham transactions involving shell companies. The civil lawsuit described a network of U.S.-registered shells connected to fraud in Eastern Europe and Afghanistan.

A growing niche in the shell business is shelf corporations. Like paper-only shells, which enable the secrecy-minded to hide real ownership of assets, shelf companies are set up by firms like Wyoming Corporate Services, then left "on the shelf" to season for years. They're then sold later to owners looking for a quick way to secure bank loans, bid on contracts, and project financial stability. To speed up business activity, shelf corporations can often be purchased with established bank accounts, credit histories and tax returns filed with the Internal Revenue Service.

"They just slot in your names, and you walk away with the company. Presto!" says Daniel E. Karson, executive managing director at investigative firm Kroll Inc. "The purpose is to conceal ownership."

On its website, Wyoming Corporate Services currently lists more than 700 shelf companies for sale in 37 states. The older they are, the more expensive, like Scotch whisky. Brookside Management Inc., formed in December 2004, sells for $5,995, while Knotty Management LLC, formed in May, costs just $645. In Delaware, incorporator Harvard Business Services markets First Family LLC, created in May 1997, for $10,000.

"If they're signing a large contract, they may not want it to look like they've just formed a company," said Brett Melson, director of U.S. sales at Harvard Business Services. But he added: "Unsavory characters can do a lot of bad things with the companies."

Shell and shelf companies do serve legitimate purposes. They provide a quick and cheap way for entrepreneurs to jump into business and create jobs. Businesses can use them to protect trade secrets. Politicians or other public figures may use a shell company to hold their home so that people with ill intent have a harder time locating them.

The state of Wyoming says it cracked down on incorporation services in 2009 after discovering that nearly 5,700 companies were registered to post-office boxes. New laws require companies to have a physical presence in the state through an owner or a registered agent, and make it a felony to submit false filings.

"What we want to have is good, quality legitimate businesses," said Patricia O'Brien, Wyoming's Deputy Secretary of State. "We don't regulate what the business itself does, but we are not recruiting businesses here that are questionable or illegal."

Wyoming Corporate Services is run by Gerald Pitts, its 54-year-old founder and president. On paper, he is a prolific businessman. Incorporation data provided by Westlaw, a unit of Thomson Reuters, show that Pitts is listed as a director, president or principal for at least 41 companies registered at 2710 Thomes Avenue.

Another 248 firms name Edge Financial Inc., another incorporation service, as their "manager." Gerald Pitts is the president of Edge Financial, according to records on file with the Wyoming secretary of state's office.

Companies registered at 2710 Thomes Avenue have been named in a dozen civil lawsuits alleging unpaid taxes, securities fraud and trademark infringement since 2007, a review of Westlaw data shows. State and federal tax authorities have filed liens against companies registered at the address seeking to collect more than $300,000 in unpaid taxes, according to Westlaw.

Pitts says Wyoming Corporate Services fully complies with the law and doesn't have any knowledge of how clients use the companies he registers. "However, we recognize that business entities (whether aged, shell or traditional) may be used for both good and ill," Pitts wrote in an email to Reuters. "WCS will always cooperate with law enforcement agencies who request information or assistance. WCS does not provide any product or service with the intent that it be used to violate the law."

THE UKRAINE CONNECTION

Gerald Pitts and his own incorporation firms have never been sued or sanctioned, according to federal and state court records. Wyoming officials said Wyoming Corporate Services operates legally. "If they do it by cubby holes and they are really representing each person, they meet the law," said O'Brien, the deputy secretary of state.

But clients of his have run into trouble.

Among those registered at the little house in Cheyenne are two small companies formed through Wyoming Corporate Services that sold knock-off truck parts to the U.S. Department of Defense, according to a Reuters review of two federal contracting databases and findings from an investigation by the Pentagon's Defense Logistics Agency. The owner of those firms, Atilla Kan, awaits sentencing on a 2007 conviction for wire fraud in a related matter.

Also linked to 2710 Thomes is former Ukrainian Prime Minister Pavlo Lazarenko, who was once ranked the eighth-most corrupt official in the world by watchdog group Transparency International. He is now serving an eight-year jail term in California for a 2004 conviction on money-laundering and extortion charges. According to court records, that scheme used shell companies and offshore bank accounts to hide stolen Ukrainian government funds.

Court records submitted in Lazarenko's criminal case and documents from a separate civil lawsuit, as well as interviews with lawyers familiar with the matter, indicate Lazarenko controls a shelf company incorporated in Cheyenne that owns an estimated $72 million in real estate in Ukraine through other companies.

The U.S. government continues to seek more than $250 million from bank accounts in Antigua, Barbuda, Guernsey and other countries that it says were controlled by Lazarenko and his associates, according to a forfeiture action filed by the Department of Justice.

The paper trail linking Lazarenko to the real estate in Ukraine is labyrinthine. At the heart of it is a shelf company called Capital Investments Group, registered at 2710 Thomes Avenue.

U.S. lawyers for a Ukrainian businessman named Gennady Korban submitted documents claiming that Lazarenko is the true owner of Capital Investments Group and other U.S. companies.

Lazarenko and Korban are rivals in Ukraine, and for years have traded allegations of corruption and assassination. An organization chart accompanying Korban's submission alleges Capital Investments Group owns 99.99 percent of a Ukrainian firm called OOO Capital Investments Group. That company, the chart claims, is the owner of another company, OOO Ukrainsky Tyutyun, where Pavlo Lazarenko is a director. Each of the firms and several others are used as corporate fronts to control properties in Dnepropetrovsk, Ukraine, the filing alleges.

Seven properties are named in the 2009 filing by Korban, including 55 Pushkin Street and 58 Komsomolskaya Street. The dossier on Capital Investments Group claims that other directors of the alleged front companies include Lazarenko's wife, son and mother-in-law.

Federal prosecutors successfully urged the court in late 2009 to disregard Korban's submissions, arguing that it would take too much time to vet his account and thus delay his resentencing after a lengthy appeal.

A few months later, in February 2010, Capital Investments Group sued Korban and others in federal court in Delaware. That lawsuit claims two properties in the Ukraine controlled by Capital Investments Group - 55 Pushkin Street and 58 Komsomolskaya Street - were stolen from it using forged documents.

The lawsuit says Capital Investments was formed in September 2005. It is registered at 2710 Thomes Avenue, and Gerald Pitts, the court documents say, is "President, Secretary, Chairman and director."

But Capital Investments Group doesn't disclose the name of its owners. Daniel Horowitz and Martin Garbus, attorneys for the company, have represented Pavlo Lazarenko in other U.S. and Ukrainian litigation. They declined to provide the owners' names, citing client confidentiality, and wouldn't comment on Lazarenko's links to CIG.

The U.S. Attorney's office in San Francisco declined to comment. Asked about his association with Lazarenko and Capital Investments Group, Gerald Pitts declined to provide information on specific clients. Pitts said he is aware of the Delaware lawsuit and "is cooperating fully with authorities in the matter."

POKER EMPIRE

Another man linked to 2710 Thomes is Ira N. Rubin. Prosecutors allege he created a Rube Goldberg-style network of shell and shelf corporations to further his scams.

In December 2006, the Federal Trade Commission sued Rubin for fraud in federal court in Tampa. Documents in the civil lawsuit allege Rubin used at least 18 different front companies to obscure his role as a credit-card processor for telemarketing scams.

These operations, the FTC alleged, offered subprime credit cards that charged an upfront fee debited from customers' bank accounts, but the cards were never delivered. The complaint also alleged Rubin processed payments for online gambling rings and pharmacy websites selling controlled substances.

One company in that network was Elite Funding Group Inc. It was registered at 2710 Thomes Avenue in August 2004 and offered for sale by Wyoming Corporate Services for $1,095. Gerald Pitts was listed in public documents as the original director, wrote an investigator hired by the FTC in a January 2007 report filed in federal court in Tampa. Pitts had resigned six months earlier as director and was replaced by Rubin, according to court records.

Rubin's maze-like network served as the back office for alleged consumer scams operating from Canada, the Philippines, Cyprus and the U.S., with names like Freedom Pharmacy and Fun Time Bingo. His companies took consumer bank account information obtained by the clients, charged the accounts via an electronic transactions network that enables direct debits, kept a portion of the proceeds, and forwarded the rest to the alleged fraudsters, according to documents in the FTC's civil lawsuit.

To minimize scrutiny, Rubin used at least 18 different firms to handle his operations. A firm called Global Marketing Group processed payments for telemarketers offering bogus credit cards, the FTC alleged. Elite Funding, the Wyoming shelf corporation, was a subsidiary of Global Marketing. Rubin used Elite to open bank accounts with Wells Fargo Bank which held more than $300,000 in proceeds from the payment processing, according to court records.

Just hours after Rubin was visited by a court-appointed receiver in the case in December 2006, $249,000 vanished from the Wells Fargo account. Rubin refused to say if he transferred the money, citing his 5th Amendment right against self-incrimination. At least $125,000 then made its way to a bank account in Chennai, India, and has never been recovered, according to documents in the civil lawsuit.

Why use a shelf company? "To hide who they are and what they are doing. In the case of Ira Rubin, he had a payment processing empire that worked on behalf of many different industries, all of which were engaged in illegal conduct," said James Davis, an attorney with the Federal Trade Commission. "It was to his benefit to make it as difficult as possible for law enforcement to connect these companies back to him."

In 2008, Rubin fled to Costa Rica to avoid arrest for contempt in the civil case. Authorities allege he went on to run another payment-processing operation from abroad: This March 10, he and 10 others were indicted in New York for allegedly running a massive scheme to hide payments made by U.S. customers to the three largest online-poker websites, in violation of a ban passed by Congress in 2006. He was extradited from Guatemala the same month. On June 8, a New York judge denied bail for Rubin. (link.reuters.com/jud42s)

Stuart Meissner, an attorney for Rubin, said his client was not available for comment. Pitts declined to comment.

AMERICAN LOOPHOLES

The loopholes in U.S. disclosure of bank-account and shell-company ownership have drawn fire.

The U.S. was declared "non-compliant" in four out of 40 categories monitored by the Financial Action Task Force, an international group fighting money laundering and terrorism finance, in a 2006 evaluation report, its most recent. Two of those ratings relate to scant information collected on the owners of corporations. The task force named Wyoming, Nevada and Delaware as secrecy havens. Only three states - Alaska, Arizona and Montana - require regular disclosure of corporate shareholders in some form, according to the 2009 report by the National Association of Secretaries of State.

Some lawmakers want tighter rules. Senator Carl Levin (D-Mich.), chairman of the Senate Homeland Security Committee's Permanent Subcommittee for Investigations, has introduced the Incorporation Transparency and Law Enforcement Assistance Act each year since 2008. The bill would require states to obtain and update information about the real owners of companies, and impose civil and criminal sanctions for filing false information.

"Criminals use U.S. shell companies to commit financial fraud, drug trafficking, even terrorist financing, in part because our states don't require anyone to name the owners of the companies they form," Levin said in an email to Reuters.

The bill has been beaten back by a coalition of state officials and business groups, citing concerns about the cost of implementing the new law and federal government infringement on state incorporation rights.

A leading opponent is the National Association of Secretaries of State. Kay Stimson, a spokeswoman, said in an email that the Levin bill "would have placed new burdens upon states and legitimate, law-abiding businesses-many of which are struggling to stay afloat during these difficult financial times-while continuing to provide lawbreakers with the means to evade the law."

An aide for Levin said the bill is expected to be re-introduced soon. The new bill will add provisions requiring incorporation agents who sell shelf companies to provide beneficial owner data, said a Senate aide familiar with it.

Secretaries of State.

Some lawmakers want tighter rules. Senator Carl Levin (D-Mich.), chairman of the Senate Homeland Security Committee's Permanent Subcommittee for Investigations, has introduced the Incorporation Transparency and Law Enforcement Assistance Act each year since 2008. The bill would require states to obtain and update information about the real owners of companies, and impose civil and criminal sanctions for filing false information.

"Criminals use U.S. shell companies to commit financial fraud, drug trafficking, even terrorist financing, in part because our states don't require anyone to name the owners of the companies they form," Levin said in an email to Reuters.

The bill has been beaten back by a coalition of state officials and business groups, citing concerns about the cost of implementing the new law and federal government infringement on state incorporation rights.

A leading opponent is the National Association of Secretaries of State. Kay Stimson, a spokeswoman, said in an email that the Levin bill "would have placed new burdens upon states and legitimate, law-abiding businesses-many of which are struggling to stay afloat during these difficult financial times-while continuing to provide lawbreakers with the means to evade the law."

An aide for Levin said the bill is expected to be re-introduced soon. The new bill will add provisions requiring incorporation agents who sell shelf companies to provide beneficial owner data, said a Senate aide familiar with it.

Norris' letter-fear of tipping off targets. "In the initial stages of investigation, when we encounter a domestic shell corporation, we know we can't subpoena the company that sold the corporation to the end users, because we don't want the target to find out they are being investigated," says FTC attorney James Davis.

Other U.S. agencies raise similar complaints about shells. The 2006 U.S. Money Laundering Threat Assessment, prepared by 16 federal agencies, devotes a chapter to the ways U.S. shell companies can be attractive vehicles to hide ill-gotten funds. It includes a chart to show why money launderers might like to create shells in Wyoming, Nevada or Delaware, which offer the highest levels of corporate anonymity.

The information in the chart is credited to the Web site of a firm called Corporations Today-an incorporation service run by Gerald Pitts in Cheyenne, Wyoming.

Temat: Przeglad Prasy Swiatowej

Tue Jun 28

Greek protests turn violent as EU warns of default


(Reuters) - Anti-austerity protests turned violent in Athens on Tuesday as the European Union warned Greek lawmakers the country faces immediate default unless they back an unpopular economic plan this week.



Hooded youths throwing stones and wielding sticks set fire to garbage bins and a telecoms truck outside parliament and riot police fired teargas to disperse them. Trade unions began a 48-hour strike against the EU/IMF-imposed measures.

Progress was meanwhile reported in talks to persuade European banks and insurers to voluntarily roll over maturing Greek debt as part of a planned second rescue package designed to give the euro zone country a breathing space.

But the EU's top economic official, Olli Rehn, stressed that any further assistance for the debt-crippled nation hinged on parliament adopting a raft of spending cuts, tax rises and privatizations in crucial votes on Wednesday and Thursday.

"The only way to avoid immediate default is for parliament to endorse the revised economic program ... They must be approved if the next tranche of financial assistance is to be released," he said in a statement.

"To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default," Rehn said, dismissing widespread reports that Brussels was working on a fallback plan to keep Greece afloat.

The blunt alternative was underscored by Bank of England Governor Mervyn King, who told British parliamentarians that policymakers were working on ways to limit the damage from a potential default on Greece's 340 billion euro debt pile.

"What we're doing is to say there is sufficient concern in the market about the possibility of default for us to think about contingency plans and the consequences of this event," King said.

He urged greater transparency about sovereign exposures to prevent a sudden, broad-based loss of confidence in European banks in the event of a Greek default, which could trigger a new credit crunch.

Trade unions promised to fill the streets of central Athens and surround parliament from Tuesday to try to prevent lawmakers approving the painful measures.

"We expect a dynamic and massive participation in the strike and the march to the center of Athens. We will have 48 hours of working people, unemployed, young people in the streets," ADEDY public sector union leader Spyros Papaspyros told Reuters.

Some 5,000 police have been drafted in, mostly to protect the colonnaded parliament building on Syntagma Square, focal point of weeks of mass demonstrations, some modeled on the encampment of unemployed Spanish "indignados" in Madrid. By the standards of past Greek political violence, Tuesday's clashes were relatively minor.

ROLLOVER PROGRESS

The EU and IMF have said Greece must enact both the five-year austerity plan, with 28.6 billion euros in savings, and key implementing laws for structural reforms and state asset sales to secure the next 12 billion euro slice of aid in July.

Without that, Athens would run out of money within weeks.

The premium investors charge for holding Greek and other peripheral euro zone debt rather than German bonds narrowed on news that German banks had agreed in principle to use a French proposal as a basis for negotiating private-sector participation in a Greek debt rollover.

The euro also hit a session high against the dollar, with fears of a Greek default offset by signs that European authorities and banks are making progress on a debt rollover.

Prime Minister George Papandreou's Socialists hold a narrow majority with 155 seats in the 300-member legislature, but a handful of lawmakers have defected and others are threatening to vote against some or all of the measures, putting the outcome in doubt.

New Finance Minister Evangelos Venizelos, a PASOK party heavyweight, has tried to woo wavering backbenchers by promising a renegotiation of the balance of the program toward promoting economic growth in September.

Rehn offered some encouragement to Greece on that front, saying he would support the government's plan to reform the tax system later this year to broaden the tax base, simplify the tax code and reduce tax rates in a fiscally neutral way.

If Greece approves the legislation, euro zone finance ministers meeting in Brussels on Sunday are likely to agree to release the next aid tranche, with the IMF following on July 5.

Attention will then switch to putting together a second rescue package for Greece of about the same magnitude as the initial 110 billion euro bailout agreed last year.

The new program would involve some 30 billion euros in private sector participation via a "voluntary" rollover of maturing debt, a similar sum from privatization revenues and an expected 55 billion euros in new official funding.

Euro zone banks and insurers are considering a French plan outlined by President Nicolas Sarkozy on Monday under which private bondholders would reinvest half of the proceeds of maturing Greek debt in new 30-year bonds paying 5.5 percent interest plus a bonus linked to Greece's GDP growth rate.

Of the other half, 30 percent would be cashed out and 20 percent would be invested in zero-coupon AAA securities with deferred interest that might be issued or guaranteed by the euro zone rescue fund, officials and banking sources said.

French banks have the largest foreign private sector exposure to Greece, followed by Germany.

Two sources close to the negotiations told Reuters that German banks had agreed to use the "French model" as a basis for talks with the German Finance Ministry on Thursday. German Deputy Finance Minister Joerg Asmussen also called the French plan a good basis for discussions.

Credit ratings agencies withheld comment pending details of the scheme.

Standard & Poor's said on Monday it was too soon to judge the ratings impact of the private debt rollover being put together for Greece, which it had not yet seen, but did not rule out avoiding a downgrade to default.

Asked if he could imagine a solution in which private creditors voluntarily contributed to a Greek rescue package without triggering an S&P downgrade, Moritz Kraemer, head of European sovereign ratings, told Austrian television:

"It is conceivable depending on the situation. That is why I say it is not possible at all to draw a final conclusion on this in the current situation."

In Berlin, visiting Chinese Prime Minister Wen Jiabao said Beijing had faith in the European economy and the euro and was optimistic that Europe could overcome its temporary challenge.

As in the past, he gave a vague commitment to buying euro zone debt without specifying countries or amounts.

Temat: Przeglad Prasy Swiatowej

Tue Jun 28

Exclusive: Up to 15 EU banks to fail stress test

(Reuters) - Up to one in six European banks is set to fail an EU-wide financial health check, according to euro zone sources close to the stress-testing, as officials scramble to set up backstops for those at risk.

The result, which the European Central Bank (ECB) and others hope will persuade investors that the EU is finally coming clean about the extent of its banks' problems, will put pressure on reluctant states to prop up lenders if they cannot raise money themselves.

Euro zone sources said the European Banking Authority is set to announce within weeks that between 10 and 15 of the 91 banks being scrutinized in the tests had failed, with casualties expected in Greece, Germany, Portugal and Spain.

The checks will provide the first picture of the health of the region's banks since a previous round a year ago was deemed too lax. In that round, Ireland's banks were all given a clean bill of health -- just months before their difficulties drove the country to seek an international bailout.

The new checks will measure how well the core capital that banks rely on to absorb losses such as unpaid loans holds up when exposed to an economic dip or fall in property prices.

They also gauge the impact on banks should the bonds they own issued by states such as Greece lose value. But the tests stop short of assessing the full impact of a country default including the likely resultant freeze in interbank lending.

In the drive for credibility, the European Banking Authority (EBA), which runs the tests and the ECB, which sets the macro economic scenarios, are pushing for more banks to fail than last year's seven.

"How many do we expect to fail? I would say 10 to 15," said one senior euro zone central banking source.

The EBA wants the number of banks that do not pass the tests to be around that level to show the examinations are serious, said a second source, adding that the authority did not want to push for more, for fear it could spark panic and intensify the euro zone's debt crisis.

"In order to demonstrate that it is credible, the EBA would need to show that the number of bank failures is significant, without being substantial," said the source. "A number in the teens is about right."

A spokeswoman for the EBA said testing was still under way and declined to comment on what she called speculation about the outcome.

TECHNICAL AND POLITICAL

The tests are technical, as well as political. While the EBA and ECB want to show up the failures, national regulators want to stop their banks appearing on the list, concerned they would look incompetent for having failed to spot such problems themselves.

EU authorities want to expose failures around the EU, said the second source, avoiding too many problems in weak countries, such as Spain, as that could prompt international lenders to shun the country and its banks.

"They are going to find a way of preventing one center ... from sticking out," said the source. "If it were to be Spain, it would be very bad news. Failing German banks in a stress tests would be much safer."

The EBA, which is due to announce the results in mid-July to coincide with a meeting of EU finance ministers, also faces pressure from governments wanting to avoid failures that may force them to come up with financial support.

A dispute with Germany for failing to apply the stress-test criteria as strictly as it should recently delayed the conclusion of the stress tests by some weeks, said one EU official.

"Every national regulator will be fighting for none of their banks to be on the list," said the source. "It's a mark of incompetence. It's a reputational issue and it's an issue of money."

High-level officials from European finance ministries are now working on how to help those given a failing grade.

Andrea Enria, head of the EBA, called on governments last week to put plans in place to help banks that fail or are shown to be vulnerable.

On Tuesday, a spokeswoman for the EBA emphasized that governments must not be slow to plug any capital holes exposed in the checks.

"It is important that concrete and decisive actions by the banks and authorities are taken following the results, including ensuring that credible capital plans ... are taken to address deficiencies."

Although the EBA is insisting on the publication of each bank's sovereign debt holdings by maturity as well as size, it is ultimately the number of banks to fail that will establish the credibility of the checks.

"If it was the same as last time -- when seven failed, next to nothing -- then no one would believe it," said one source. "But you cannot fail 50, or the banking system would collapse."

Temat: Przeglad Prasy Swiatowej

Tue Jun 28

Wall St extends gains for second day on Greece hopes


(Reuters) - Wall Street extended gains for a second day on Tuesday as hopes of a solution to the Greek debt problem spurred investor appetite for risky assets.

Buyers snapped


Buyers snapped up shares that had fallen sharply in the past week, mostly in commodities and technology.

"The fact that we won't be seeing the worst-case scenario is the catalyst for the market that is still very oversold," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

Earlier, worries about Greece's debt crisis and the risk of contagion had driven investors from stocks to safe-haven investments.

The S&P 500 stock index, which last week had fallen near its 200-day moving average, was off more than 5 percent since the start of May.

The S&P energy index .GSPE surged nearly 1.8 percent, the biggest gainer among S&P sectors. Halliburton Co (HAL.N) gained 3.7 percent to $47.92, while Chevron Corp (CVX.N) was up 1.2 percent at $100.09.

Brent crude futures also rose more than $3 on Tuesday, pushing oil above $109 a barrel as the dollar weakened and optimism grew that Greece would adopt an austerity program.

<O/R>

The Dow Jones industrial average markets/index?symbol=us%21dji">.DJI was up 113.42 points, or 0.94 percent, at 12,156.98. The Standard & Poor's 500 Index .SPX was up 11.30 points, or 0.88 percent, at 1,291.40. The Nasdaq Composite Index .IXIC was up 28.40 points, or 1.06 percent, at 2,716.68.

Dailey said about the S&P 500 stock index that 1,285 to 1,300 was a technical range being closely watched.

Greek lawmakers will vote Wednesday and Thursday on the measures, which must be passed to receive the next payment of

12 billion euros. If the government doesn't get the funds from the European Union and the International Monetary Fund, a Europe-wide crisis and potential credit market freeze could follow.

Also boosting sentiment, Germany's finance minister will meet the heads of the country's top insurers and banks on Thursday to discuss a French proposal for banks to roll over some Greek debt for 30 years.

In a sign of stabilization in the U.S. housing market, single-family home prices dipped modestly in April, the start of the spring buying season, according to the S&P/Case-Shiller index.

"Any evidence housing is improving or that stabilization is increasing is a very strong positive sign," said David Kotok, chief investment officer at Cumberland Advisors in Sarasota, Florida.

U.S. consumer confidence fell more than expected in June to the lowest point since November 2010 on concerns about the slack labor market and sputtering recovery.

Nike Inc (NKE.N) surged 6.9 percent to $87.26 a day after reporting fourth-quarter earnings that beat expectations, while orders suggested robust strength for the future.

Temat: Przeglad Prasy Swiatowej

Tue Jun 28

France's Lagarde elected new IMF chief


(Reuters) - French Finance Minister Christine Lagarde on Tuesday was elected the managing director of the International Monetary Fund, maintaining Europe's grasp on the top job at the global lender.



She begins her five-year term July 5 amid an escalating debt crisis in Europe and growing fears that Greece will default.

"The executive board, after considering all relevant information on the candidacies, proceeded to select Ms. Lagarde by consensus," the IMF said in a statement.



Lagarde, 55, is the first woman to lead the IMF, succeeding Dominique Strauss-Kahn, who resigned in May to defend himself against charges of sexual assault against a hotel maid in New York.

Lagarde's victory over Mexico's Central Bank Governor Agustin Carstens was assured after the United States made its support clear and emerging market economies China, Brazil and Russia did the same.

She will have to immediately deal with an IMF-European Union effort to keep debt-stricken Greece afloat and focus on potentially thorny IMF "spillover reports" that analyze the economic and policy actions of the world's major economies.

"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," Treasury Secretary Timothy Geithner said in a statement.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Optimism before Greek vote lifts Asian stocks


(Reuters) - Asian shares rose, with Tokyo stocks hitting a seven-week high, and the euro clung to gains on Wednesday ahead of a vote in the Greek parliament that investors hope will approve an austerity program demanded by international lenders.



Optimism that the unpopular package of tax increases and spending cuts will be approved by legislators boosted demand for riskier assets on Tuesday, pushing world stocks up 1 percent and oil prices up more than 2 percent.

"There's some cautious optimism ahead of the Greek votes this week," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management in Tokyo.

"But we're also seeing a lot of month-end window dressing and portfolio tweaking by hedge fund managers ahead of the end of their first-half earnings report."

Japan's Nikkei .N225 rose 1 percent and MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS gained 0.9 percent, led by gains for the materials sector.

Sentiment was also buoyed by gains of more than 1 percent in U.S. markets overnight, though low volumes indicated underlying nervousness in the market. .N

The first vote on Greece's five-year austerity plan was due later on Wednesday, with further technical votes expected on Thursday.

The package, which has provoked violent demonstrations on the streets of Athens but won crucial political support on Tuesday, is needed to secure a new tranche of EU/IMF funds to prevent Greece becoming the first developed nation in more than 60 years to default on its debts.



RATE DIFFERENTIAL

The euro bought around $1.4355, having risen close to $1.44 in U.S. trading hours, well above this week's trough around $1.41.

"Traders should be careful of sharp euro volatility ahead of what promises to be a contentious vote that may decide whether Greece avoids default," said David Rodríguez, strategist at DailyFX.

The single currency was also supported by comments from European Central Bank President Jean-Claude Trichet that were interpreted as signaling a July interest rate rise.



Trichet told a news conference the ECB was in "very strong vigilance mode," a phrase that has regularly been used in the past to point to a rate rise at the next monthly meeting.

The ECB began tightening policy in April to head off inflationary pressures, widening the yield differential with the dollar as the U.S. Federal Reserve holds rates at a historic low near zero.

The flow of money back to equities and commodities reduced demand for safe-haven government debt, with Japanese government bonds falling, following a similar dip in U.S. Treasuries.

September 10-year JGB futures fell 0.30 point, while the benchmark 10-year yield rose 3 basis points to 1.115 percent.

U.S. crude oil was steady just below $93 a barrel, after rising sharply on Tuesday, and spot gold edged up to around $1,504 an ounce.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun
BofA near $8.5 billion settlement on securities


(Reuters) - Bank of America Corp is close to a deal to pay $8.5 billion to settle claims from a group of powerful investors that lost money on mortgage-backed securities, a person familiar with the matter said on Tuesday.



The deal could embolden investors holding mortgage-backed securities filled with now-toxic home loans to pursue claims against other large mortgage lenders such as Wells Fargo & Co and JPMorgan Chase & Co, analysts said.

A settlement, first reported by The Wall Street Journal, would be the largest in the banking industry to date. It would also require approval by Bank of America's board, which met on Tuesday to discuss it, according to the source.

"If you're an investor, you now know this is a potential lottery ticket, and the only way you lose is by not playing," said Matt McCormick, a portfolio manager at Cincinnati-based Bahl & Gaynor Investment Counsel. "You have to think this is the first settlement we'll be seeing in a long line."

After news of a possible settlement, shares rose as much as 3.5 percent from their $10.82 close but later eased to trade around $10.95 after-hours, up about 1 percent.

The largest U.S. bank by assets has been fighting claims by a group of 22 investors over the housing-related securities it packaged and sold before the financial crisis.

This investor group includes BlackRock Inc, MetLife Inc and the Federal Reserve Bank of New York, in a dispute dating back to the fall. It had threatened to take the matter to court, but both sides delayed a trial early this year to continue settlement negotiations.

Bank of America was not immediately available for comment. BlackRock declined to comment.

Bank of America's possible settlement extends beyond the case brought by the initial group of investors, and could resolve "significant parts" of its exposure to repurchase claims from private investors, the person familiar said.

The settlement would exceed the bank's earnings for the last three years, according to the company's 2010 annual report. It could also more than triple the $2.5 billion that Bank of America paid in 2008 for Countrywide Financial Corp, once the nation's largest mortgage lender.

"HAND-TO-HAND COMBAT"

Last Fall, Bank of America Chief Executive Brian Moynihan has said the bank would contest any repurchase claims, and described the process as "hand-to-hand combat."

But as the bank entered into settlement agreements with bond insurers and the two government-backed mortgage investment companies, Moynihan softened that stance, and said the bank would settle when fighting would offer little for shareholders.

In January, Bank of America announced $2.8 billion settlements with mortgage financiers Fannie Mae and Freddie Mac covering essentially all of their outstanding mortgage repurchase claims.

Three months later, the bank announced a $1.6 billion settlement with bond insurer Assured Guaranty Ltd, which had sought to hold the bank responsible for poor underwriting by Countrywide.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Oil steady on Greece bailout hopes and tighter supply

(Reuters) - Brent crude steadied on Wednesday, near $109 a barrel, on growing optimism that the debt crisis in Greece will be resolved, avoiding a contagion in Europe.


U.S. crude held near $93 after industry data showed tighter supply at the world's largest oil consumer.

ICE Brent crude for August rose 23 cents to $109.01 a barrel by 12:37 a.m. EDT. U.S. August crude was down 2 cents to $92.87 a barrel. Both contracts rose more than 2 percent on Tuesday.

"Any positive compromise within Europe, with Greece willing to make some sacrifices, will cause the euro and oil to rally," said Jeremy Friesen, a commodity strategist at Societe Generale.



Growing market confidence that the Greek parliament will approve the austerity programme, and that a French plan to rollover Greek sovereign bonds will help avert a default, lifted Asian stocks and the euro.

Greek lawmakers will vote Wednesday and Thursday on a five-year package of spending cuts, tax increases and privatization in order to secure the next 12 billion euro slice of aid in July.

Brent's premium to U.S. light sweet crude narrowed to $15 a barrel after rising above $17 on Tuesday.

"Investors are taking profits after big gains last night," Tetsu Emori, commodities fund manager at Astmax Investments in Tokyo, adding that once Brent breaks a short-term resistance at $110 a barrel, $115 should be easy to reach.



U.S. CRUDE STOCKS

Oil also gained support after industry data showed a larger-than-expected drop in crude stocks and a surprise fall gasoline inventories.

Investors are looking to government data due later on Wednesday for confirmation that oil supply is tightening in the United States.

Arlene, the first tropical storm of the North Atlantic hurricane season, churned through the southwestern Gulf of Mexico on Tuesday but looked set to spare Mexico's oilfields from a direct hit.

Yet, concerns about the release of emergency stocks from consumer countries, that caused oil to tumble 7 percent last week, hovered.

"There is still some heaviness in the market in relation to the increase in supply from strategic reserves," Societe Generale's Friesen said.

"The increase in reserves is mostly coming from the United States, which is the most oversupplied market in the world right now."

The country is expected to move away from global fundamentals where supply is expected to tighten in the second half of the year on strong demand, he said.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Stocks futures up ahead of Greece vote


(Reuters) - Stock index futures rose on Wednesday, putting Wall Street on track for a third day of gains as optimism grew that Greece's parliament would pass an austerity plan critical to avoiding a debt default.



The vote is expected over the next few hours, and anticipation of parliament's approval has sparked a two-session rally, helping to erase losses partly brought on by the crisis. But gains have come on anemic trading volume, suggesting that caution remained and further upside could be limited.

In a boost to passage of the austerity measures, one of three rebels in Prime Minister George Papandreou's ruling Socialist party changed heart and said he would support the plan, which is vital to getting bailout funds from the European Union and International Monetary Fund. For details, see [nL6E7HT08Q]

Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York, said it was unlikely stocks would spike after passage. "The market has rallied this week as confidence grew, and I think that most of the benefit has been priced in at this point," he said.

"There's also a concern about trading volume being so light on positive days," he added. "That confirms we're in a trading range, though not a significant downtrend."

S&P 500 futures added 6.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 54 points, and Nasdaq 100 futures rose 11.75 points.

U.S. crude oil advanced again, rising 1.2 percent on optimism over the Greece vote. Energy, a weak sector recently, has helped lead stocks higher this week.

Bank of America Corp (BAC.N) settled nearly claims related to Countrywide mortgage-related claims for $8.5 billion in cash. Shares of the Dow component rose 5.3 percent to $11.39 in premarket trading.

May pending home sales are scheduled for release at 10 a.m. <1400 GMT> and are seen rising 3.8 percent after a steep fall in the previous month. Positive housing data on Tuesday lifted optimism over the hobbled sector.

"We think sales will come in much higher than expected, and that could be something to move the markets upward today after the Greece vote," Pursche said.

BJ's Wholesale Club Inc (BJ.N) rose 4.8 percent to $50.40 premarket after agreeing to be bought by private equity firm Leonard Green & Partners and another group in a deal valued at about $2.8 billion.

General Mills Inc (GIS.N) forecast weaker-than-expected full-year earnings due to higher costs. Also, Family Dollar Stores Inc (FDO.N) posted lower-than-expected quarterly profit, and the stock fell 1.1 percent in light premarket trading.

Overseas, Japan's industrial production rose faster than expected, suggesting a rebound after the country's recent earthquake and tsunami.

U.S. stocks rose Tuesday, and the S&P is up more than 2 percent so far this week.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Euro rises on expectations Greek vote will pass


LONDON, June 29 - The euro rose to a two-week high against the dollar on Wednesday on expectations the Greek parliament will pass austerity measures needed for a further bailout although the stop-gap nature of the plan was seen limiting gains.



Hopes the vote would go through were boosted as Greek conservative opposition lawmaker Elsa Papadimitriou said she would vote in favor of an austerity plan despite her party's rejection of the measures.

This lifted the euro to $1.4449 on trading platform EBS, surpassing last week's high around $1.4442, with traders citing stops above $1.4450 and more above $1.4500.

"There has been a short squeeze in the euro, which was expected from any kind of positive news from Greece," said Adam Myers, senior currency strategist at Credit Agricole.

"But whether this will last or not is difficult to say. Investors will be more concerned about whether the Greeks can implement these tough austerity measures."

Traders said a positive outcome in the vote, which would allow international funding for Greece to be released and avoid a disorderly default, could push the euro toward $1.4500. Concerns remain, however, about whether Greece can implement the measures.

"A 'yes' vote will see a big sigh of relief from short-term players but global macro investors are likely to continue to be extraordinarily wary of investing in the euro zone for a long time," said Maurice Pomery, managing director at Strategic Alpha, which advises banks and hedge funds on currencies.

"Greece is still facing massive headwinds and this deal is really only buying time. The medium-term outlook for the euro will depend on whether the government can implement the measures."

The Greek parliament's debate on the austerity package is scheduled to end at 1100 GMT but the vote may not be held until hours later. On Thursday it will vote on an implementation law spelling out the fiscal measures in more detail.

If the vote fails to pass, the euro could fall sharply, targeting this week's low around $1.4100.

EURO ZONE RATE OUTLOOK SUPPORTS

Sentiment toward the euro was also buoyed by comments on Tuesday by European Central Bank President Jean-Claude Trichet, which markets interpreted as signaling a July interest rate hike.

"If the Greece vote is passed there is some upside potential for the euro, though this is more based on weakness in the U.S. economy and expectations for a euro zone rate hike next week," said Mic Ingenuus, currency strategist at Nordea in Copenhagen.

The euro also hit a three-week high against the yen around 117.17 yen.

The euro gained 0.7 percent against the safe-haven Swiss franc to 1.2033 francs, taking it away from its record low around 1.1808 francs.

Wariness about the outlook for the euro remained evident in risk reversals, however, which continued to show strong demand for bets on the euro falling against the dollar. The 25-delta euro/dollar risk reversal traded around 2.85 in favor of euro puts, well above a level of around 1.75 in early June.

The euro's rebound saw the dollar index .DXY, which tracks the greenback's performance against a basket of major currencies, fall 0.4 percent to 74.729, off this week's peak of 75.987.

Oil prices firmed on optimism about Greece, lifting commodities currencies such as the Australian dollar from recent lows. The Aussie dollar firmed 0.8 percent to $1.0622, well above an 11-week trough just below $1.0400 plumbed on Monday.

Against the yen, the dollar was steady at 81.08 yen after falling to an Asian session low of 80.93 yen.

Late on Tuesday it rose to 81.26 as an increase in U.S. Treasury yields prompted flows into the U.S. currency but later edged down on sales by Japanese exporters and foreign margin traders, Tokyo dealers said.

"We've seen a typical risk-on situation with both the dollar and the yen put under selling pressure. In such a situation dollar/yen benefited from a rise in long-term Treasury yields," said Tohru Sasaki, the head of Japan rates and forex research at JPMorgan Chase Bank in Tokyo.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Gold rises after Greek vote, Obama's stimulus call


(Reuters) - Gold rose on Wednesday after the Greek parliament approved debt austerity measures, that fueled investor appetite for commodities and other riskier assets and boosted the euro against the dollar.



Also underpinning gold was President Barack Obama's call for new market stimulus including job creation measures, which are likely to further complicate talks with Republicans on an agreement to raise the U.S. debt ceiling.

"There is a lot of concern whether or not we can justify the debt ceiling and also talking about a stimulus program at the same time. That's going to continue to weaken the dollar and that's why we have the rise in gold," said Bruce Dunn, vice president of trading at bullion dealer Auramet.

Bullion's second straight day of gains partially offset weakness from risk aversion and technical selling. The metal is still down 3 percent in the last five sessions, as fears that debt-laden Greece may yet default dented gold's appeal as an inflation hedge.

Spot gold was last up 0.5 percent at $1,508.49 an ounce by 3:15 p.m. EDT, countering losses seen earlier in the week that took the price below $1,500.

U.S. August gold futures settled up $10.20 to $1,510.40, after trading between $1,500.8 and $1,513.80.

"You do see gold and silver go up when you get that kind of dollar weakness," said James Dailey, a portfolio manager with TEAM Asset Strategy Fund with $200 million of fund assets.

Inflows into exchange-traded funds backed by physical gold indicated investors have been buying gold, pushing up global ETF holdings of bullion by nearly half a million ounces in the last two weeks, according to Reuters data.

UNCERTAINTY SUPPORTS

Economic uncertainty should underpin gold prices in the longer run, given low interest rates in the United States, uncertainties in euro zone's fiscal situation, and worries over talks to raise the U.S. debt ceiling, analysts said.

Obama's call for new job-creation measures came on a day when the International Monetary Fund and the U.S. Treasury Department urged Washington to reach a deal soon. His push for new construction loans and an extension of a payroll tax cut could further alienate Republicans already incensed by Democratic demands for new tax revenue.

The United States would immediately have its top-notch credit rating slashed to "selective default," if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Platinum group metals rose for a second day due to concerns over power supply in South Africa, the world's top producer of platinum.

Spot platinum was last up 2 percent at $1,722.24 an ounce, and palladium rose 1.5 percent to

U.S. COMEX volume was below 100,000 lots for a second straight day, preliminary Reuters data showed, and open interest also fell to around 495,000 lots -- near a three-month low as investors focused on the resurgent equity markets. (Graphic: r.reuters.com/jyp42s)

Silver was up 2.5 percent at $34.72 an ounce.

Gold was largely lifted as part of the risk-on trade--buying equities and commodities in light of dollar weakness. Crude oil rallied over 3 percent and Wall Street extended gains for a third day, as Greek parliament favored a five-year austerity plan, clearing a major hurdle in the country's bid to avoid defaulting on its debt.

Gold, at times, rises in periods of greater investor aversion, but the Greek debt crisis, and its impact on the euro, have caused bullion to act less as a safe haven asset and more like a commodity. The 19-commodity Reuters-Jefferies CRB index .CRB rose sharply for a second day.

The euro rose 0.5 percent against the dollar, after Greece's parliament approved deeply unpopular austerity measures.

"You do see gold and silver go up when you get that kind of dollar weakness," said James Dailey, a portfolio manager with TEAM Asset Strategy Fund with $200 million of fund assets.

Inflows into exchange-traded funds backed by physical gold indicated investors have been buying gold, pushing up global ETF holdings of bullion by nearly half a million ounces in the last two weeks, according to Reuters data.

UNCERTAINTY SUPPORTS

Economic uncertainty should underpin gold prices in the longer run, given low interest rates in the United States, uncertainties in euro zone's fiscal situation, and worries over talks to raise the U.S. debt ceiling, analysts said.

Obama's call for new job-creation measures came on a day when the International Monetary Fund and the U.S. Treasury Department urged Washington to reach a deal soon. His push for new construction loans and an extension of a payroll tax cut could further alienate Republicans already incensed by Democratic demands for new tax revenue.

The United States would immediately have its top-notch credit rating slashed to "selective default," if it misses a debt payment on August 4, Standard & Poor's managing director John Chambers told Reuters.

Platinum group metals rose for a second day due to concerns over power supply in South Africa, the world's top producer of platinum.

Spot platinum was last up 2 percent at $1,722.24 an ounce, and palladium rose 1.5 percent to $747.47.

Temat: Przeglad Prasy Swiatowej

WED 29 Jun

Euro climbs, further gains rest on Greece vote


(Reuters) - The euro rose against the dollar on Wednesday after Greece approved austerity measures needed to avoid a default, but whether its government can implement them could cap gains for the currency.



Greek Prime Minister George Papandreou won a parliamentary majority in favor of a five-year austerity plan, clearing a major hurdle in Greece's bid to win access to international funding.

Expectations for a positive outcome buoyed the euro this week and pushed it to a two-week high of $1.4449 on trading platform EBS earlier in the session.

Greece's government must now win approval on Thursday for legislation detailing specific implementation measures for the 28-billion-euro austerity package.

If approved, European Finance ministers will meet on July 3 to approve the next bailout tranche and discuss options to ensure continued financing for the country.

"Thankfully, investors are not operating in a vacuum because the bond rollover plan proposed by France has received widespread approval and support by the markets," said Kathy Lien, director of currency research at GFT Forex in New York.

"Getting rating agencies to feel the same way will be the main challenge but crafting the second bailout package will not be easy either because even if there is enough participation in the rollover, Greece will still be asked to find buyers of 50 billion euros worth of state owned assets."

The euro was last at $1.4428, up 0.4 percent, with traders citing an options barrier with offers to sell at $1.4450. It jumped 0.8 percent to 1.2048 Swiss francs, moving away from a record low around 1.1808 set on Monday.

The European Union and International Monetary Fund have insisted Greece pass both bills before disbursing the next 12-billion-euro tranche of Greece's bailout program.

The dollar fell 0.3 percent to 80.84 yen, while it lost 0.5 percent against a basket of currencies .DXY, reaching 74.678.

The euro could find some support from interest-rate differentials as the European Central Bank is widely expected to raise rates in early July.

Recent comments from ECB President Jean-Claude Trichet underscore that the ECB is still on course to hike rates next week, according to Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

"The recent string of U.S. economic data has been relatively soft, and there is some downside risk to next week's U.S. employment data."

ADP's private payrolls data and the Labor Department's nonfarm payrolls report will be released on Wednesday and Friday next week, respectively. Both could sway market sentiment.

The Greek vote may offer a better opportunity to be long euros by early-mid next week, Chandler said.

"However, over the slightly longer-term, the European debt crisis is far from resolved, and the problems in Spain and Italy need to be monitored closely," he said.

Temat: Przeglad Prasy Swiatowej

THU 30 Jun

U.S. caught China buying more debt than disclosed


(Reuters) - The rules of Treasury auctions may not sound like the stuff of high-stakes diplomacy. But a little-noticed 2009 change in how Washington sells its debt sheds new light on America's delicate balancing act with its biggest creditor, China.



When the Treasury Department revamped its rules for participating in government bond auctions two years ago, officials said they were simply modernizing outdated procedures.

The real reason for the change, a Reuters investigation has found, was more serious: The Treasury had concluded that China was buying much more in U.S. government debt than was being disclosed, potentially in violation of auction rules, and it wanted to bring those purchases into the open - all without ruffling feathers in Beijing.

Treasury officials then worked to keep the reason for the auction-rule change quiet, with the acting assistant Treasury secretary for financial markets instructing subordinates to not mention any specific creditor's role in the matter, according to an email seen by Reuters. Inquiries made at the time by the main trade organization for Treasury dealers elicited the explanation that the change was a "technical modernization," according to a document seen by Reuters. There was no mention of China.

The incident calls into question just how clear a handle the Treasury has had on who is buying U.S. debt. Chinese entities hold at least $1.115 trillion in U.S. government debt, and are thought to account for roughly 26 percent of the paper issued by Washington, according to U.S. government data released on June 15.

China's vast Treasury holdings are both a lifeline and a vulnerability for Washington - if the Chinese sold their Treasuries all at once, it could undermine U.S. markets and the economy by driving interest rates higher very quickly. Scenarios of this sort have been discussed in Washington defense-policy circles for at least a year now. Not knowing the full extent of these holdings would make it even more difficult to assess China's political leverage over U.S. finances.

The Treasury has long said that it has a diversified base of investors and isn't overly reliant on any single buyer to digest new U.S. Treasury issuance. Evidence that China was actually buying more than disclosed would cast doubt on those assurances.

THE 'GUARANTEED' BID

The United States sells its debt to investors through auctions that are held weekly - sometimes four times per week - by the Treasury's Bureau of the Public Debt, in batches ranging from $13 billion to $35 billion at a time. Investors can buy the bonds directly from the Treasury at auctions, or through any of the 20 elite "primary dealers," Wall Street firms authorized to bid on behalf of customers. The Treasury limits the amount any single bidder can purchase to 35 percent of a given auction. Anyone who bought more than 35 percent of a particular batch of Treasury securities at a single auction would have a controlling stake in that batch.

By the beginning of 2009, China, which uses multiple firms to buy U.S. Treasuries, was regularly doing deals that had the effect of hiding billions of dollars of purchases in each auction, according to interviews with traders at primary dealers and documents viewed by Reuters.

Using a method of purchases known as "guaranteed bidding," China was forging gentleman's agreements with primary dealers to purchase a certain amount of Treasury securities on offer at an auction without being reported as bidders in that auction, according to the people interviewed. After setting the amount of Treasuries the guaranteed bidder wanted to buy, the dealer would then buy that amount in the auction, technically on its own behalf.

To the government officials observing the auction, it would look like the dealer was buying the securities with the intent of adding them to its own balance sheet. This technicality does not preclude selling them later in the secondary market, but does influence the outcome of bidding in the auction, by obscuring the ultimate buyer. In fact, the dealer would simply pass the bonds on immediately to the anonymous, guaranteed bidder at the auction price, as soon as they were issued, according to the people interviewed.

The practice kept the true size of China's holdings hidden from U.S. view, according to Treasury dealers interviewed, and may have allowed China at times to buy controlling stakes - more than 35 percent - in some of the securities the Treasury issued.

The Treasury department, too, came to believe that China was breaching the 35 percent limit, according to internal documents viewed by Reuters, though the documents do not indicate whether the Treasury was able to verify definitively that this occurred.

Guaranteed bidding wasn't illegal, but breaking the 35 percent limit would be. The Uniform Offering Circular - a document governing Treasury auctions - says anyone who wins more than 35 percent of a single auction will have his purchase reduced to the 35 percent limit. Those caught breaking

auction rules can be barred from future auctions, and may be referred to the Securities and Exchange Commission or the Justice Department.

The Treasury Department generally does not comment on specific investors but a source in the department said China was not the only Treasury buyer striking guaranteed bidding deals.

People familiar with the matter named Russia as being among the guaranteed bidders. But Russia's total Treasury holdings, while significant, represent 2.8 percent of outstanding U.S. debt, versus one-fourth for China's.

CHANGING THE RULE

Traders at primary dealers did not have the same diplomatic concerns about the level of Chinese buying. But they did have reasons to dislike guaranteed bidding, and they began clamoring for a change. One trader said in an interview he first brought the issue to the attention of Treasury officials in 2007.

Some primary dealers began expressing concern that the deals were opaque in a way akin to the Salomon Brothers Treasury trading scandal in the early 1990s. In that case, traders from the securities firm submitted false bids under other bidders' names in Treasury auctions in order to more closely control the results, and their bids altered the auction prices. The idea that unseen bidders were again influencing auction prices raised similar concerns among traders.

There were also commercial concerns: Dealers say that knowing that the practice was going on at other firms made them less confident they could see and understand overall patterns of buying in the Treasury market. Such visibility can be one of the greatest benefits of being a primary dealer, since the service itself often doesn't pull in big profits directly.

Some traders at primary dealers say they simply refused to do the deals and ended up turning away customers, including China. That irked sales colleagues who were promising clients guaranteed bidding deals.

At the beginning of 2009, Treasury officials began discussing the issue of guaranteed bidders, with a focus on China's behavior, internal documents seen by Reuters show. The culmination of their efforts was a change to the Uniform Offering Circular published on June 1, 2009 that eliminated the provision allowing guaranteed bidding.

Treasury Secretary Timothy Geithner was in Beijing that day meeting with Chinese government officials on his first formal visit to China since taking up his cabinet post. There is no evidence he discussed the rule change with Chinese officials there.

A spokeswoman for the Treasury Department said: "We regularly review and update our auction rules to ensure the continued integrity of the auction process. The auction change made in June 2009 eliminated some ambiguity in auction rules and increased transparency, which ultimately benefits taxpayers and investors."

The rule change had an immediate impact.

In the first auctions conducted after guaranteed bidding was banned, a key metric rose sharply: the percentage of so-called indirect bidders, those who placed their auction bids through primary dealers. Indirect bidders are seen as a proxy measure for foreign central bank buying, because foreign central banks most often bid through primary dealers. With the elimination of the guaranteed bidder provision, far more buyers were put in this class in reports to the Treasury Department.

The seven-year U.S. Treasury note, which was sold in sizes of between $22 billion and $28 billion once a month from February 2009 to September 2009, had an average indirect bid percentage of 33 percent from February through May. But from June to September the average indirect bid rose to 63 percent.

Temat: Przeglad Prasy Swiatowej

SUN 3 Jul

Greek sovereignty to be massively limited: Juncker


(Reuters) - Greece faces severe restrictions on its sovereignty and must privatize state assets on a scale similar to the sell off of East German firms in the 1990s after communism fell, Eurogroup chairman Jean-Claude Juncker said.



In an interview published after euro zone finance ministers in the Eurogroup approved a further 12 billion euro ($17.43 billion) installment of Greece's bailout, Juncker said he was optimistic that measures agreed with Athens would help to resolve the country's problems.

"The sovereignty of Greece will be massively limited," he told Germany's Focus magazine in the interview released on Sunday, adding that teams of experts from around the euro zone would heading to Greece.

"For the forthcoming wave of privatizations they will need, for example, a solution based on a model of Germany's 'Treuhand agency'," Juncker added, referring to the privatization agency that sold off 14,000 East German firms between 1990 and 1994.

The Greek parliament voted on Thursday to set up a privatization agency under austerity plans agreed with the European Union and IMF which have provoked violent protests on the streets of Athens.

Greeks are acutely sensitive to any infringement of their sovereignty or suggestions of foreign "commissars" getting involved in running the country.

"One cannot be allowed to insult the Greeks. But one has to help them. They have said they are ready to accept expertise from the euro zone," Juncker said.

Athens must sell off five billion euros in state assets this year alone or risk missing targets set under its EU/IMF program, which could cut off its funding needed to keep the government running and avoid a debt default.

A repeat of Germany's Treuhand experience may prove bitter for Greeks, who are already suffering soaring unemployment as a recession drags into its third year.

Once the world's biggest holding company, Treuhand was supposed to sell off state property at a profit but closed its books with a huge deficit and a legacy of bitterness among the legions of workers whose jobs it destroyed.

Four million Germans were employed by Treuhand-owned companies in 1990 but only about 1.5 million jobs were left in 1994 when the agency closed.

Instead of reaping profits to be distributed to all east Germans, as it was designed to do, it ran up debts of 270 billion marks ($172 billion) in the fire sale of assets.

"NOT FULLY FUNCTIONAL"

Juncker, also Luxembourg's Prime Minister, first floated the idea of a Treuhand-style agency for Greece in May. He said then he believed Greece could raise considerably more than the 50 billion euros in asset sales.

"The current package of measures, which Athens has agreed to, will bring a solution to the Greek question," he said in the

Focus interview. However, he added that the Greek tax collection system was "not fully functional."



On Saturday, euro zone finance ministers agreed that the fifth tranche of the 110-billion-euro bailout agreed with Greece in May 2010 would be paid by July 15, as long as the IMF's board signs off on the disbursement. The IMF is expected to meet on July 8 to approve it.

The payment will allow Greece to avoid the immediate threat of default, but the country still needs a second rescue package, which is also expected also to total around 110 billion euros and which will now probably be finalized only in September.

Juncker said the Greek crisis had been largely caused by itself. "Between 1999 and 2010 wages rose 106.6 percent even though the economy did not grow at the same pace. The wage policies were completely out of control and not based on (gains in) productivity," he said.

Temat: Przeglad Prasy Swiatowej

SUN 10 Jul

China June import growth weakest in 20 months


(Reuters) - China's import growth fell sharply to its slowest pace in 20 months in June in further evidence of the broad impact of monetary tightening on the economy, while a wider trade surplus suggested capital inflows will remain a challenge for authorities.



The substantial drop in June import growth, which decelerated to a 19.3 percent annual pace from May's 28.4 percent, is bound to heighten investor concerns about how swiftly the world's second-largest economy is slowing.

But, coming a day after data showed June inflation hit a 3-year peak, analysts took the jump in the trade surplus as a sign that China might have to raise rates further, both to rein in prices and to combat capital inflows.

"The trade surplus surged in June," said Liu Li-Gang, an economist with ANZ. "We would interpret this to mean the moderation in export and import growth is not big enough to prevent the government from tightening further."

"The big trade surplus means PBOC will continue to experience large capital inflows. The PBOC will have to address this inflow problem, so it's unlikely they will pause monetary policy."

A slew of indicators in the past few weeks have pointed to a moderation in the heady pace of China's growth, from purchasing manager surveys of new orders to Taiwan's exports to the mainland.

But the People's Bank of China has made clear inflation remains a priority for policy. Most analysts agree the resultant growth from that policy mix will be slower than the near double-digit pace of the past few years but there is little risk of a hard landing.

The government is due to announce second-quarter economic growth data on Wednesday.

"Imports were below expectations," noted David Cohen, an economist at Action Economics in Singapore. "We are perhaps seeing some reflection of loss of momentum in China's growth. After all, there has been tightening in policy.

"The numbers are consistent with decelerating growth, with the soft landing that many people are looking for."

Last week, the central bank raised interest rates for the third time this year, underlying the government's confidence in the economy's ability to cope with tighter monetary policy.

Sunday's data showed June exports rose 17.9 percent from a year ago, slowing from a 19.4 percent rise in May and pointing to the weakness in overseas demand that has seen exports and new orders soften across most of Asia.

Exports hit a record high of $162 billion in June, while imports for the month were $139.7 billion. That left the country with a trade surplus of $22.3 billion in June, compared with $13.1 billion in May.

The median forecast of economists polled by Reuters was for exports to rise 18.7 percent and imports to grow 25.0 percent, resulting in a trade surplus of $16.3 billion.

On a calendar-adjusted basis, exports expanded 16.4 percent in June from a year earlier, while imports jumped 19.2 percent, the customs agency said.

Exports rose 3.1 percent in June from May, while imports fell 3 percent month-on-month. On a calendar-adjusted basis, June exports rose 4.2 percent from May, while imports fell 2.6 percent from May.

POLICY PAUSE COMING?

China's inflation data has become its most closely-watched indicator in recent months as investors look for clues on whether Beijing is about to shift its policy stance after nine months of steady tightening.

The consumer price index for June rose 6.4 percent from a year earlier, slightly above economists' forecasts for a 6.3 percent increase, with sharp rises recorded in food, consumer goods and property.

Worryingly, there were signs that inflation pressures were spreading and may persist even if global commodity prices continue to fall. Non-food prices climbed 3 percent in their biggest jump since records began in 2002.

Analysts are concerned that record pork prices, a key driver of China's food inflation in recent months, are also unlikely to ease anytime soon -- a view shared by pork producers due to a pig shortage.

China has raised rates five times since October, alongside nine increases in the required reserve ratio for banks. Several economists think Beijing has already fired its pre-emptive shot at inflation and is near the end of its policy tightening.

Indeed, China's stock market has risen and onshore swaps too have increasingly priced in chances that policy rates have peaked.

A slim majority of analysts surveyed by Reuters this week thought China would raise rates once more this year before standing pat until June 2012.

REBALANCING

At the same time, Beijing has repeatedly vowed to restructure its economy, cutting its reliance on exports and investment, and promoting domestic consumption in their place. As a result, import growth has become a bellwether for the strength of Chinese demand.

A slowdown in China's export growth had been anticipated in response to the slowing U.S. economy and as factory growth in Asia and Europe slid to multi-month lows in June.

"For the second half of the year, we expect exports to continue to fall due to the impact from the European debt crisis, Japan's earthquake and other factors," said Tang Jianwei, an economist at Bank of Communications in Shanghai.

The surplus in June was the highest in seven months. China's trade surpluses have fueled criticism from key trade partners who accuse Beijing of giving its exporters an unfair boost with a cheap currency.

Despite the latest data, China's trade surplus is on track to narrow for a third straight year from last year's $183 billion as the government tries to rebalance the economy in favor of domestic consumption, cutting reliance on exports.

"The trade surplus will be maintained in the second half of the year, but domestic demand is still relatively strong. So we are expecting a full-year surplus of $100 billion," Tang added.

Temat: Przeglad Prasy Swiatowej

SUN 10 Jul

Up to 15 years needed to fix Greece - German president

(Reuters) - Greece will need a lot longer to resolve its debt problems than many people in Europe are now acknowledging, German President Christian Wulff said in an interview to be aired on Sunday.



Wulff, a former leader in Chancellor Angela Merkel's conservative Christian Democrats and now Germany's ceremonial head of state, told ZDF television that there was a need for "an overall concept" for resolving Europe's debt crisis.

"It can't be something that will suffice for a three month period but rather has to offer solutions to the problem that to cover the next 10 to 15 years," Wulff said.

"And Greece will need a lot more time period than one in Europe is currently willing to acknowledge," said Wulff, whose office carries only limited executive power.

Wulff also said that banks and ratings agencies should be held more accountable for their role in the European debt crisis.

He said he public has watched banks and ratings agencies "play their game and earn more and more money but don't take part in an appropriate way on resolving the problem." Wulff said that was unacceptable and has enraged the public.

"The primacy of politics must be re-conquered," he said. "We need a restructuring of the banking landscape, we need different structures for ratings agencies, and we obviously need more sanctions mechanisms."

Temat: Przeglad Prasy Swiatowej

SUN 10 Jul

Italy Becoming a Bigger Priority for Euro Zone

The New York Times

LONDON — With fears growing that Italy could become the latest victim of the euro zone’s sovereign debt crisis, and with plans for a second Greek bailout deadlocked, top European officials are to meet on Monday to wrestle with the mounting threats to the currency union.

Euro zone finance ministers had previously scheduled two days of talks to begin on Monday afternoon in Brussels. Over the weekend, a meeting of more senior officials was also set for Monday morning.

A spokesman for Herman Van Rompuy, the president of the European Council, denied that the senior officials would discuss the market’s fears about the precarious state of Italy’s finances. But another official, who requested anonymity because he was not authorized to speak publicly, said Italy would most likely be on the agenda.

On Friday, the spread of 10-year Italian government bond yields over their German equivalents widened to 236 basis points, the most since the introduction of the euro, and the country’s blue-chip stock market index, the FTSE MIB, fell by 3.5 percent. Investors were unnerved by evidence of a growing divide between the Italian prime minister, Silvio Berlusconi, and the finance minister, Giulio Tremonti.

Meanwhile, the impasse over plans to involve the private sector in a second Greek bailout seemed certain to dominate the broader meeting of finance ministers later Monday.

Some officials of euro zone governments now believe that any bailout plan calling for a substantial but voluntary contribution from private investors in Greek debt would still be declared a selective default by the bond rating agencies Moody’s, Standard & Poor’s and Fitch. If even voluntary contributions would trigger such an event, these officials believe, then more radical options may as well be considered — including forcing banks and other private investors to take part.

Speaking Sunday at a conference in Aix-en-Provence, France, the president of the European Central Bank, Jean-Claude Trichet, said Europe was at the “epicenter” of a debt crisis that concerns the entire developed world. He urged euro zone officials to do the “maximum” in terms of governance reforms, Bloomberg News reported.

The special session of top European officials was to start around 8:30 a.m. Monday, when a scheduled meeting between Mr. Van Rompuy and the president of the European Commission, José Manuel Barroso, would be extended to include Mr.Trichet as well as the European commissioner for economic and monetary affairs, Olli Rehn, and Jean-Claude Juncker, the finance minister for Luxembourg, who presides over Eurogroup, the meetings of finance ministers from the 17 countries using the euro.

Vittorio Grilli, the director general of the Italian treasury, was also scheduled to attend. But Dirk De Backer, a spokesman for Mr. Van Rompuy, said Mr. Grilli would be there in his capacity as head of the euro zone’s Economic and Financial Committee and not to discuss his country’s economic situation.

“There is absolutely no crisis meeting,” Mr. De Backer said. “This is a coordination meeting to prepare for the Eurogroup. It is not the aim or purpose to talk about Italy.”

Some officials played down the significance of the meeting, pointing out that Germany – the biggest economy in the European Union — will not be represented and that Mr. Van Rompuy and Mr. Barroso will not take part in the later gathering of euro zone finance ministers.



Italy has a debt equal to 120 percent of annual gross domestic product, one of the highest in the euro zone. The market selloff last week was sparked by tensions between Mr. Berlusconi and Mr. Tremonti. Mr. Tremonti, the country’s long-serving finance minister, has been praised for his handling of the economy during the financial crisis and, in particular, for keeping control of the budget deficit — one reason why Italy has, up to now, escaped the significant market pressures that have been brought to bear on Greece, Ireland and Portugal.

His reluctance to endorse the tax cuts Mr. Berlusconi desires has put an acute strain on relations between the two men.

Last winter, investors drove Italy’s borrowing costs higher amid concerns over its heavy debt load, but the attack was short-lived. Now, as the government stumbles in approving a new austerity plan and economic growth shows few signs of accelerating, investors have turned a laser-like focus back toward the country.



The euro zone has already been shaken by the fiscal troubles of Greece, Portugal and Ireland, which account for a relatively small portion of the euro zone’s G.D.P. The Italian economy is more than twice as large as those of the three countries combined. If investors drove Italy’s borrowing costs to unsustainable levels, it would imperil the entire European monetary union.



Few think that is something that will happen overnight. But if Mr. Berlusconi continues to fuel an uncertain political environment, and if Mr. Tremonti winds up a political victim, Italy would be hard-pressed to escape the contagion.

Financial markets are alarmed at European officials’ continuing failure to come to grips with the crisis in Greece which, though it represents only around 2 percent of the euro zone economy, still poses a potent risk of contagion.

A second Greek rescue, worth an estimated €85 billion, has been held up by a dispute over the extent of private sector involvement. Negotiations over a complex French proposal to roll over debt have been derailed by a declaration from Standard & Poor’s that this would probably constitute a selective default.

European officials are increasingly coming to the view that their objectives — of achieving a private sector contribution that is voluntary and substantial, but which is not judged a selective default — are irreconcilable.

While some see this as evidence that the E.C.B is correct to be skeptical about private sector involvement, several countries — including Germany, the Netherlands and Austria — remain insistent that the banks and insurers that hold Greek debt should pick up part of the tab for a second bailout.

After Standard & Poor’s verdict last week, Germany appears to be pushing for its original idea: that investors swap the Greek bonds they now hold for new debt with longer maturities.

Martin Kotthaus, a spokesman for the German Finance Ministry, said Friday that if the French proposal would trigger a default, “then we can go back to the model that we had proposed,” The Associated Press reported.

Temat: Przeglad Prasy Swiatowej

Tue Jul 12

Moody's cuts Ireland to junk, warns of second bailout


(Reuters) - Moody's Investors Service on Tuesday cut Ireland's credit rating to junk status, saying the country will likely need further official financing before it can return to international capital markets.



Chances that European policy makers will force the private sector to share the burden of future bailouts also weighed on Moody's decision, as the agency believes that decision may drive borrowing costs higher for weaker euro zone members.

"The prospect of any form of private sector participation in debt relief is negative for holders of distressed sovereign debt. This is a key factor in Moody's ongoing assessment of debt-burdened euro area sovereigns," the ratings agency said in a statement.

Moody's cut Ireland's ratings by one notch to Ba1 from Baa3 and kept a negative outlook on the rating, which means further downgrades are likely in the next 12 to 18 months.

The downgrade is the first time Ireland has experienced a junk status rating. Both Standard & Poor's and Fitch Ratings have Ireland at BBB-plus, three notches above junk status.

The cut came well after European bond markets were closed, on a day when the yield spread for Irish government 10-year debt had narrowed slightly against its German equivalent.

Spreads had narrowed modestly to 1,080 basis points from Monday's recent high of 1,102 bps over the German benchmark.

Earlier on Tuesday, the bonds of other indebted euro zone countries like Greece and Portugal recouped losses and rallied as talk of central bank buying of some lower-rated debt and the prospect of a new European Union crisis meeting prompted profit-taking in benchmark German Bunds.

In its statement, Moody's said: "The key driver for today's rating action is the growing possibility that following the end of the current EU/IMF support program at year-end 2013 Ireland is likely to need further rounds of official financing before it can return to the private market."

"We've had a lot of downgrades recently and this one-notcher doesn't seem to be the proverbial straw that breaks the camel's back," said Chris Rupkey, managing director and chief financial economist at Bank Of Tokyo/Mitsubishi UFJ in New York.

"The market may have bigger fish to fry here and is waiting for the (European Union) bank stress tests later in the week and the EU finance meeting on Friday which is looking at the widening of the crisis," he said.

Moody's said that while Ireland is showing a strong commitment to a fiscal consolidation plan and has delivered so far on its objectives, the continued weakness in the Irish economy means the risks to implementing the full program "remain significant.

A further downgrade in Ireland's rating would be considered if the government can't meet its fiscal consolidation goals.

"A further deterioration in the country's economic outlook would also exert downward pressure on the rating, as would further market disruption resulting from a disorderly Greek default," the firm said.

Greek sovereign 10-year spreads closed Tuesday at 1,418 bps, down from 1,455.4 bps on Monday.

"Although Ireland's Ba1 rating indicates a much lower risk of restructuring than Greece's Caa1 rating, the increased possibility of private sector participation has the effect of further discouraging future private sector lending and increases the likelihood that Ireland will be unable to regain market access on sustainable terms in the near future," Moody's said.

Ireland's credit rating remains six notches above Greece and one notch above Portugal on the Moody's scale. Italy is eight notches above Ireland at Aa2.

Temat: Przeglad Prasy Swiatowej

Tue Jul 12

Euro zone crisis hits euro, stocks for third day


(Reuters) - The euro and stocks fell for a third day on Tuesday as moves by officials to stem the European debt crisis failed to allay concerns that the risk was spreading to Italy and Spain.



Gold rallied to near its all-time high and U.S. bond prices rose as worries about contagion pushed investors into safe-haven assets.

"Caution is clearly warranted given all the possible outcomes of these events," said Gibson Smith, co-chief executive officer of fixed income at Janus Capital Group in Denver.

Investors have been worried about the potential effect on the global economy, especially as the U.S. recovery has struggled to pick up speed.

In a bid to keep Italy and Spain from the same fate as Portugal and Ireland, euro zone finance ministers on Monday promised cheaper loans, longer maturities and a more flexible rescue fund.

But they set no deadline and Dutch Finance Minister Jan Kees de Jager said a selective default for Greece was no longer being excluded.

Fears about Italy have accelerated concerns over the impact of the debt crisis because the country is the euro zone's third-largest economy.



Adding to pressure on the euro, late in the U.S. session, Moody's cut Ireland's credit rating to junk status.

"The market has woke up to the fact that there's a much larger problem (than Greece). That's what precipitated the large fall (in the euro)," said Adam Myers, senior FX strategist at Credit Agricole CIB. "I very much doubt the European Central Bank, let alone the IMF, can bail out a country the size of Italy."

On Wall Street, stocks ended lower after a volatile session, as the fiscal problems in Europe and a weak start to technology earnings kept investors from buying.

The Dow Jones industrial average markets/index?symbol=us%21dji">.DJI fell 58.88 points, or 0.47 percent, to end at 12,446.88. The Standard & Poor's 500 Index .SPX was down 5.85 points, or 0.44 percent, at 1,313.64. The Nasdaq Composite Index .IXIC lost 20.71 points, or 0.74 percent, at 2,781.91.

Earlier, European stocks hit a four-month low and closed down for a third straight day. Shares also tumbled overnight in Asia on fears about the European debt crisis.

The pan-European FTSEurofirst 300 finance/markets/index?symbol=gb%21FTPP">.FTEU3 closed down 0.54 percent at 1,091.72, off its session lows.

The MSCI world equity index .MIWD00000PUS fell 0.8 percent.

The euro fell to its lowest level against the dollar in four months and hit another record low against the Swiss franc.

Ireland's rating cut gave investors more evidence to suggest the euro zone problems are far from over. The ratings agency said the country will likely need additional rounds of financing before it can return to capital markets.

The euro fell as low as $1.3835, a four-month low, but it was last down 0.4 percent at $1.3974.

Providing some support to markets, traders cited rumors that the European Central Bank was buying peripheral bonds for the first time in three months, with Portugal the suspected target.

The crisis kept bond prices higher. The benchmark 10-year Treasury note last traded up 4/32 in price with a yield of 2.91 percent, down 1.4 basis points from late Monday.

U.S. Treasuries briefly turned flat after minutes released from the Federal Reserve's last policy meeting on June 21-22 hinted that policy makers left the door open for more stimulus if U.S. growth were too slow to reduce unemployment.

Spot gold was up 1 percent at $1,568.89 an ounce. U.S. COMEX August gold futures settled up $13.10 at $1,562.30, after trading between $1,541.10 and $1,574.30.

Gold in euros rose for a third day, climbing 1.5 percent to hit a record above 1,123 euros.

"With the euro zone debt crisis and the U.S. debt ceiling talks, there is a tremendous flight to quality. Gold is the commodity to invest in because the currencies aren't doing well," said Mihir Dange, COMEX gold options floor trader for Arbitrage LLC.

Oil prices also ended higher ahead of inventory reports, after trading lower early in the session.

On the New York Mercantile Exchange, crude for August delivery settled at $97.43 a barrel, gaining $2.28, or 2.4 percent.

In London, ICE Brent crude for August delivery recovered from two straight days of losses and settled at $117.75 a barrel, up 51 cents, or 0.44 percent.

(Additional reporting by Neal Armstrong, Steve Slater and Naomi Tajitsu in London and Julie Haviv,

Temat: Przeglad Prasy Swiatowej

WED 13 Jul

China's Growth Is Steady Amid Inflation Battle

(THE WALL STREET JOURNAL)
BEIJING—China reported surprisingly robust economic growth for the second quarter, a day after Premier Wen Jiabao signaled the continuation of anti-inflation policies that have fueled concerns about the potential for a slowdown.

Gross domestic product in the world's No. 2 economy expanded 9.5% in the April-June quarter from the same period a year ago, the National Bureau of Statistics reported early Wednesday in Beijing. That was slightly slower than the 9.7% in the first quarter, but slightly higher than economists' expectations.

Measured against output in the first quarter, China's GDP growth actually accelerated slightly in the April-June period, the statistics bureau said. The agency also said that a key gauge of industrial production rebounded unexpectedly in June, rising 15.1% from a year earlier compared with 13.3% in May. Economists had expected that measure to slow.

Beijing has been struggling to balance its fight against inflation, which has fueled public discontent and potentially dangerous bubbles in housing prices, against fears that the economy—a major driver of global growth—could slow too sharply.

After a series of government tightening measures, including five interest-rate increases since October, some analysts have speculated that the government might signal an easing of the economic brakes in the second half of the year.

Mr. Wen said on Tuesday that the "overall direction of policy" will remain unchanged. His comments came as the central bank reported a jump in new bank lending last month that underscored the continuing pressures driving inflation.

In his statement Tuesday, issued after a series of meetings with other officials on the economic situation, Mr. Wen nodded to concerns about a slowdown, saying the government seeks to avoid "big fluctuations" in economic growth, and aims to ensure that "lagging effects" of monetary policy don't have a big impact down the road.

But the thrust of Mr. Wen's statement was continued concern about inflation. He reiterated several measures to cool prices, including controlling the money supply, encouraging the production of agricultural goods and increasing the supply of pork, for which prices have recently jumped. He also pledged to keep implementing restrictions on the property sector, which have already started to bring down prices in major cities.

The People's Bank of China said Tuesday that financial institutions issued 633.9 billion yuan of new loans in the local currency in June, or about $98 billion, up 15% from the May figure and above economists' expectations of 595 billion yuan. A flood of bank lending has been one factor driving up consumer prices, which rose 6.4% in June, their fastest pace in three years.

Economists generally expect that the central bank is done raising interest rates this year. But they expect the PBOC to continue increasing the share of deposits that banks must set aside, rather than lend. Many economists have said further rate increases can't be ruled out, especially if inflation defies expectations that it will start declining in July.

The central bank data on Tuesday also showed that China accumulated $152.8 billion of foreign-exchange reserves in the second quarter, bringing its total stock to $3.198 trillion. The central bank purchases foreign exchange that enters the country by printing new yuan, adding to the money supply. Economists with Japanese securities firm Nomura said the forex purchases in the second quarter would compel the central bank to raise required reserve levels again to "mop up" the added liquidity.

Though a considerable increase, the April-June figure was down from nearly $200 billion in both this year's first quarter and the 2010 fourth quarter.

UBS economist Wang Tao said the slowdown in foreign-reserve accumulation was likely due to less inflows of speculative capital. She estimated those fell to around $24 billion, from around $90 billion in the past two quarters. China often frets about the destabilizing impact of such inflows, and may be seen as a silver lining for Beijing amid the economic slowdown.

Last week, People's Bank of China adviser Li Daokui joked on his personal microblog that China "ought to thank" foreigners for being so bearish on the Chinese economy, as this had reduced fund inflows.

—Liu Li and Eliot Gao contributed to this article.
Write to Aaron Back at aaron.back@dowjones.com