Markets Call For Debt Deals Now!

By Mike Conlon, ForexNews.com on Jul 20, 2011 12:45:00 GMT



There is major optimism that tomorrow’s meeting of EU Finance Ministers in Brussels is going to produce a sensible solution to the debt crisis in Europe which means that the politics of doing the unpopular have been cast aside. This could come in the form of the bond buying from the emergency lending facility, which would essentially be quantitative easing to help keep individual countries’ yields low and then allow them to buy back later.


This situation practically mirrors what is going on here in the US with the debt ceiling debate, as the markets will take any solution at this point. While I personally don’t believe it’s a good idea to raise taxes in this economic climate, fixing loopholes is not the same thing. If unemployment gets worse as a result, then let the leaders bear the blame.

But we have been down this road before, where the markets anticipate a deal because they are weary and because it makes perfect sense; and then the politicians defy logic. By the end of this week we should have more clarity, and the risk appetite in the market is reflecting that sentiment.

In the UK, the release of the BOE rate policy meeting minutes confirmed there was no change of stance, though some have noted that there may be lesser resolve for additional bond purchases.

In the US, existing home sales are due out later this morning and yesterdays housing starts numbers surprised to the upside, showing that the housing market may not be dead just yet.

So this all adds up to risk taking this morning, with stocks and oil higher, and gold giving back prices gains as it sheds some of its safe haven status.

In the forex market:

Aussie (AUD): The Aussie is mostly higher on risk themes despite an index of leading indicators number that came in slightly negative, showing a decline of .1%. More pressing was the release of the RBA minutes, which showed that Central bank might not move on rates for some time.

 Kiwi (NZD): The Kiwi is also mostly higher ahead of tomorrow’s release of consumer confidence figures. One item that has escaped attention is that the Chinese Yuan has appreciated the most in nearly 17 years (though still less than the weekly swings in Euro), which could be good for NZ exports.

Loonie (CAD): The Loonie continues to approach 2011 highs vs. USD after yesterday’s hawkish statement from the BOC at the rate decision. Today’s release of the monetary policy report may confirm that if not for global instability, rates might be higher. Oil back to $99 is also pushing Loonie.

Euro (EUR): It’s make-or-break time for the Euro this week as the entire globe is looking for a resolution to the debt crisis. The major impediment so far has been German political opposition, but as world opinion moves against them, they may be forced to bite the bullet. While no one expects the solution to emerge tomorrow from the meeting in Brussels, the market is optimistic that significant steps will be taken. (Click chart to enlarge)

Pound (GBP): The Pound is bouncing off of earlier lows as the indeed the BOE confirmed that they are willing to turn a blind eye to inflation (some say up to CPI gains of 5%!) in order to ride out the government austerity. Tomorrow’s retail sales figures will show whether or not the consumer in the UK is active, or if they are heading straight for stagflation. (Click chart to enlarge)

Swissie (CHF): The Swissie has been the most-favored safe haven currency of late so naturally it is giving back some of those gains as risk appetite has increased due to increased market optimism. Tomorrow’s trade balance figures will show whether or not a stronger currency has damaged the trade balance significantly.

Dollar (USD): The market is hoping that yesterday’s news on housing starts carries over to existing home sales figures due out later this morning. However, if the data begins to improve too much, then the market may assume that QE3 is off of the table which may cause some Dollar strength. What is more likely though is that good news will be received well by the stock market, which has been reporting great corporate earnings.

Yen (JPY): The Yen is mostly lower as safe haven demand has lessened. If the global economy can get past these two major debt hurdles, then it could be game on again for significant carry trades.

Markets are a forward-looking and discounting mechanism so gains we are seeing now are in anticipation of these debt problems getting fixed. This in and of itself does not mean that deals have been reached, however.

The politics surrounding all of these deals has been the major impediment so far, so the markets are saying just get it done. Uncertainty at this point is worse than bad policy and while the devil is in the details, the markets will decide later whether or not they approve. Let’s face it, I have very little confidence that any of these deals will be perfect, so just let the chips fall where they may.

If the markets do not see significant progress or agreements in principle to resolve these issues, then we could see this week’s gains vanish. For that is the problem with rising expectations; the letdowns hurt that much more!

To learn more about how you can take advantage of world events through the currency market, be sure to check out our currency trading courses!

To follow these events live with a free, real-time practice account, click here! Don’t miss out on the world’s fastest growing market!

New York to Open Gay-Marriage Era as Lottery Winners Celebrate

July 22, 2011, 4:54 PM EDT
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By Esmé E. Deprez

July 22 (Bloomberg) -- Two grooms and two brides now adorn mugs, rubber duckies and snow globes in the souvenir shop of the City Clerk’s office in Manhattan as New York state prepares to allow same-sex couples to marry.

The city received 823 lottery entries from couples for 764 spots available for marriage at clerks’ offices July 24, said Marc LaVorgna, a spokesman for Mayor Michael Bloomberg. To accommodate all of the couples who applied, the city increased the number of slots in Manhattan to 459 from 400, he said.

Jo-Ann Shain and Mary Jo Kennedy of Brooklyn, who have been together 29 years, entered the 48-hour lottery after it was announced on July 19.

“At first we thought maybe it will be crazy, that it’ll be a zoo,” Shain, a 58-year old freelance medical editor, said in a telephone interview. “Then it occurred to us that we’ve waited so long, have fought so hard, it would be crazy not to be there on such a historic day.”

Shain said the couple plans to be married by a friend, who is a judge, outside the Manhattan clerk’s office as their 22- year old daughter, Aliya, looks on.

With 19.4 million residents, New York is the sixth and most populous U.S. state to grant same-sex couples the right to wed, a move championed by Governor Andrew Cuomo and approved by the Legislature in Albany on June 24, the last day of its session. The victory for gay-rights advocates, which made headlines around the world, more than doubled the number of Americans free to marry either gender to 35 million.

Record Day

The couples to be wed July 24 will mark the city’s most in one day, Bloomberg said this week. The previous record was set on Valentine’s Day in 2003, when 621 couples tied the knot.

As of yesterday, 3,145 couples had preregistered for marriage licenses, said Mark Botnick, a spokesman for the mayor. Of that, about 2,200 are estimated to be same-sex couples, he said.

Clerks’ offices in all five boroughs, which are normally closed on Sunday, will open from 8:30 a.m. to 4:30 p.m. at an additional estimated cost of $70,000, Botnick said. About 60 judges have volunteered to perform ceremonies, he said. The offices will remain open for two extra hours next week to handle the expected flood.

Three-Step Process

The Albany clerk’s office will provide licenses beginning at 12:01 a.m. on Sunday to 10 couples, according to the Empire State Pride Agenda. Clerks in Binghamton, Brighton, Brookhaven, Buffalo, Greenburgh, Ithaca, Niagara, North Hempstead, Oneonta, Rochester, Syracuse and Woodstock will also hold Sunday office hours, the Manhattan-based gay advocacy organization said.

All couples -- gay or straight -- face a three-step process to get married. They must obtain from a clerk a $35 marriage license, for which they can apply online or on site. Judges will be on hand to grant judicial waivers eliminating the state’s 24- hour waiting period. Couples may then have a clerk perform a civil marriage for $25 or hold a religious ceremony at another location.

Same-sex marriages in New York will be recognized in Connecticut, Iowa, Massachusetts, New Hampshire, Vermont and Washington, D.C., where the practice is legal, as well as in Maryland and Rhode Island, according to the mayor’s office.

Debate began at a U.S. Senate Judiciary Committee meeting on July 20 on the proposed Respect for Marriage Act, which would let the federal government extend benefits such as Social Security and health-insurance coverage to same-sex married couples. It would end the 1996 Defense of Marriage Act, which bans recognition of those unions. The proposal wouldn’t require states to legalize same-sex marriages.

Rabbi to Preside

Rabbi Sharon Kleinbaum of the Congregation Beth Simchat Torah in Manhattan’s Greenwich Village will marry people outside the Manhattan clerk’s office starting at 8:30 a.m. July 24. About 80 couples have signed up, with the final count depending on how many win the lottery, said Gabriel Blau, a congregation spokesman.

When Kleinbaum went to lobby for the marriage law’s passage in Albany, people pushed her and spat at her and said, “You are not a Jew,” Blau said.

Bloomberg plans to perform a marriage for John Feinblatt, his chief policy adviser, and Jonathan Mintz, the city’s commissioner for consumer affairs, at Gracie Mansion on July 24. The couple is the sole exception to the lottery.

The mayor is the founder and majority owner of Bloomberg News parent company Bloomberg LP.

--With assistance from Sarah Frier in New York and Victoria Pelham in Washington. Editors: Mark Schoifet, Stephen Merelman

To contact the reporter on this story: Esmé E. Deprez in New York at edeprez@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


http://www.businessweek.com/news/2011-07-22/new-york-to-open-gay-marriage-era-as-lottery-winners-celebrate.html

Management Tips from an 80-Year-Old Badass

Florida Marlins skipper Jack McKeon may not Twitter, but so what? This octogenarian knows his baseball and runs a tight ship

By Joel Stein

Illustration by John Ueland; McKeon: Otto Greule Jr/Getty Images; Field: Nick Laham/Getty Images

Not wearing a hearing aid is one of the many tricks Jack McKeon has learned during his six decades in baseball. “I used to be a very strong disciplinarian,” says McKeon, sitting in the Oakland Coliseum one recent afternoon as his players take batting practice. “Then I decided to back off a little bit. I don’t use the hearing aids because I don’t want to see a lot of things, and I don’t want to hear a lot of things.”

It may be too late for that. McKeon took over the last-place Florida Marlins on June 20, the day after then-manager Edwin Rodríguez quit. While Rodríguez wanted the Marlins to offer him a long-term contract, McKeon didn’t exactly need one. The 80-year-old’s appointment is almost without precedent in pro sports. In 2003 the Marlins hired a 72-year-old to take over a club filled with young, inexperienced players. That year, McKeon’s Marlins beat the New York Yankees in the World Series. Still, hiring a bona fide octogenarian is even harder to believe. The odds of McKeon winning the World Series this year (1 in 75, according to Vegas.com) are longer than the odds of him dying this year (1 in 15.5, according to Social Security’s actuarial tables).

While there are at least a dozen chief executive officers even older than McKeon—Hong Kong-based Run Run Shaw is, somewhat inexplicably, both a media mogul and 103 years old—none of them is running an outfit of men largely in their early 20s. Yet this management challenge doesn’t faze McKeon. “I got nine grandchildren, I’m in tune with what’s going on,” he says. “Maybe I’m not about to put my personal stuff on Facebook and all that crap, like the video stuff, whatever the hell they call it,” he explains, moving his thumbs as if he’s using a video-game console.

He doesn’t follow his players on Twitter, either. Marlins right fielder Logan Morrison recently posted, “McKeon asked me what I had going on tonite. Told him I was going home 2 play w/ Twitter. He replied ‘oh, what kind of dog is it?’ ” When I ask McKeon if he wants me to show him what his players are tweeting, he says: “No. I don’t care what they say. What do they say?” Then I show him Morrison’s tweets about his recent visit to Twitter headquarters, and McKeon makes a grumpy face. “I just want them to concentrate on baseball 100 percent once they enter that clubhouse. If he goes down to the minor leagues, he ain’t going to have any Twitter friends.”

Although affable, McKeon is known as a tough manager. During his first game this season, he benched his best player, shortstop Hanley Ramirez, for tardiness. He also pulled pitcher Randy Choate in the middle of a count. (“I’ve never had that happen before,” says Choate. “It worked.”) When he told his players they couldn’t hang out in the clubhouse during games, they knew he was serious; in 2003, McKeon locked the clubhouse doors and required players to hand him bathroom passes when they couldn’t hold it in any longer. He may be the only 80-year-old man who is willing and able to go three hours without peeing.

It’s taken McKeon decades to hone this management approach. “When you first start managing, you want the players to like you—so you let a lot of things slide,” he says. “You feel like these are veteran players and you need them on your side to help you.” However, McKeon eventually came to realize that “it doesn’t work that way. So when I come in, I try to establish me.” He’s learned that the best way to get personnel to buy into his detail-oriented program is by loosening them up—and playing to his own strengths. These days, one of McKeon’s signature bits is to call his players by the wrong name. When I ask him if this is really a bit, or if he actually has trouble telling Gaby Sanchez apart from Anibal Sanchez, he pauses and thinks. “They think, ‘He’s old. He forgot my name.’ So, s–t, I just go along with it.”

Britain’s Second-Quarter Economic Growth Probably Eased to 0.2%

July 23, 2011, 6:32 AM EDT
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By Fergal O’Brien and Mark Evans

July 23 (Bloomberg) -- Britain’s second-quarter economic growth probably slowed as weak consumer spending continued to restrain the recovery, economists said.

Gross domestic product rose 0.2 percent compared with a 0.5 percent increase in the first quarter, according to the median of 32 forecasts in a Bloomberg News survey. The Office for National Statistics will publish the data at 9:30 a.m. on July 26 in London.

Output was hit in the second quarter by supply disruptions stemming from the earthquake in Japan, while plants shut down and workers booked vacations to take advantage of consecutive four-day weekends in April to mark Easter and the royal wedding. Bank of England policy makers left their benchmark interest rate at a record low this month and warned that the current economic weakness may persist “for longer than previously thought.”

“The economy is likely to have eked out marginal growth at best in the second quarter, and there is a very real danger that it could have contracted modestly,” said Howard Archer, an economist at IHS Global Insight in London, who forecasts 0.1 percent growth. “Activity clearly took a significant hit in April from the extra public holiday, but the softness of the economy runs deeper than this.”

Manufacturing growth slowed in June, while expansion among services companies remained “below trend,” Markit Economics Ltd. said in reports this month. Consumer confidence fell as Britons grew more pessimistic about the outlook for the economy, Nationwide Building Society said on July 21.

Demand is being hit by government spending cuts while high inflation is eroding household incomes at the fastest pace since the 1970s. The economy has effectively stagnated since September, with the first quarter’s growth leaving the level of GDP no higher than it was in the third quarter of last year.

Four of the economists surveyed forecast a contraction in the second quarter, with Hetal Mehta at Daiwa Capital Markets Europe Ltd. projecting a 0.3 percent drop in GDP. At the other end of the range is Azad Zangana at Schroders Plc, with a forecast for growth of 0.4 percent.

--Editors: Andrew Atkinson, Eddie Buckle

To contact the reporters on this story: Fergal O’Brien in London at fobrien@bloomberg.net; Mark Evans in London at mevans8@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net