October 11, 2011: Some News That Matters

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LMS Capital’s non-executive directors have proposed to wind down the London-listed private equity group’s portfolio and stop investments in a strategic U-turn triggered by pressure from Robert Rayne,http://ftalphaville.ft.com/thecut/2011/10/11/698426/lms-plans-to-wind-down-portfolio/A British Chambers of Commerce survey shows businesses have pared back their investment plans as sales and orders deteriorate. The BCC called the results of the survey of 6,700 businesses “disappointing and worrying”.David Kern, http://ftalphaville.ft.com/thecut/2011/10/11/698406/uk-businesses-pare-back-investment-plans/

Plans to build a new generation of nuclear power stations in the UK are expected to receive a green light today from the final report on lessons from the Fukushima disaster in Japan, the FT reports. The government asked Dr Mike Weightman, http://ftalphaville.ft.com/thecut/2011/10/11/698396/report-set-to-give-go-ahead-for-nuclear-reactors/

Walmart, the US retailer, has closed 13 stores in south-western China after police detained a number of store managers following allegations that employees labelled ordinary pork as organic, the FT reports. The http://ftalphaville.ft.com/thecut/2011/10/11/698371/china-detains-walmart-store-managers/

Global regulators insist the economic cost of implementing tough new rules on bank capital requirements will have only a tiny effect on global growth, with their latest estimate putting the impact at barely a tenth of the industry’s own projection, http://ftalphaville.ft.com/thecut/2011/10/11/698346/fsb-basel-stand-up-for-new-capital-rules/

The Chinese government will boost its stakes in the country’s largest banks, the FT reports, as it attempts to shore up slumping financial stocks and to restore investor confidence. Central Huijin, the domestic arm of China’s sovereign wealth fund, http://ftalphaville.ft.com/thecut/2011/10/11/698336/beijing-intervenes-to-help-stabilise-banks-2/

China engineered the biggest one-day appreciation of the renminbi in years on Monday, delivering a strong conciliatory message to American lawmakers who have been debating whether to punish Beijing for holding down the currency’s value, http://ftalphaville.ft.com/thecut/2011/10/10/698281/renminbi-stages-biggest-one-day-jump-in-six-years/

American retailers will this week lobby US officials in Beijing to speed up the processing of visas for Chinese tourists and business travellers, as they seek to tap affluent visitors from emerging markets at a time of weak domestic consumption growth, http://ftalphaville.ft.com/thecut/2011/10/10/698261/us-business-seeks-faster-visas-for-chinese/

Vladimir Putin travels to Beijing on Tuesday for a visit designed to breathe new life into the countries’ faltering relations and showcase the Russian prime minister’s commitment to an eastward tilt in Russian foreign policy, http://ftalphaville.ft.com/thecut/2011/10/10/698251/putin-prepares-for-chinese-charm-offensive/

European Union leaders have given themselves a deadline of two weeks to agree a comprehensive deal to tackle the eurozone debt crisis, a grand bargain senior European officials said would include a final decision on Greece’s bail-out and a new strategy to recapitalize Europe’s banking sector.  Herman Van Rompuy, the European Council president, said EU leaders would meet on October 23 to “finalise our comprehensive strategy”, allowing Europe to present its plan for restoring confidence in the euro to the G20 summit on November 3-4. http://www.ft.com/intl/cms/s/0/8356eb1a-f340-11e0-8383-00144feab49a.html#axzz1aLsYEiKt

The Chinese government will boost its stakes in the country’s largest banks, as it attempts to shore up slumping financial stocks and to restore investor confidence. Central Huijin, the domestic arm of China’s sovereign wealth fund, will purchase shares in Agricultural Bank of China, Bank of China, China Construction Bank and Industrial and Commercial Bank of China, the official Xinhua news agency announced on Monday. http://www.ft.com/intl/cms/s/0/2caa65ec-f329-11e0-8383-00144feab49a.html#axzz1aLsYEiKt

Asian stock markets were higher Tuesday, with Tokyo and Hong Kong tapping multi-week highs as regional banking stocks surged following a Franco-German pledge over the weekend to resolve Europe’s banking and sovereign debt problems. Chinese banking stocks were especially buoyant, underpinning both Shanghai and Hong Kong markets, after a unit of Beijing’s sovereign-wealth fund increased its stake in the lenders.  Hong Kong’s Hang Seng Index rose 3.3% after earlier rising 4.1% to a near three-week high, and China’s Shanghai Composite Index rose 0.7%. Japan’s Nikkei Stock Average climbed 2.2% to 8776.16, after crossing 8800 for the first time since Sept. 16, while Australia’s S&P/ASX 200 added 0.7%, South Korea’s Kospi Composite jumped 1.9% and India’s Sensex was up 1.1%. http://online.wsj.com/article/SB10001424052970203499704576623780353597282.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

U.K. business confidence weakened in the third quarter of 2011 as export orders slowed, according to a survey released by the British Chambers of Commerce on Tuesday. While a separate survey found that retail sales picked up in September, the British Retail Consortium said that was largely due to a boost for food and drink sales from a period of hot weather toward the end of the month and is unlikely to herald a sustained recovery.  Taken together, the surveys seem to back up Bank of England Gov. Mervyn King’s claim last week that the U.K. is in the grip of what could be its most serious financial crisis ever. Last Thursday the BOE reopened its asset purchase program, saying it would buy an additional £75 billion ($117 billion) in government bonds to stimulate the economy.http://online.wsj.com/article/SB10001424052970203633104576622991427144336.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

Legislation authorizing the issue of covered bonds by Australian financial institutions is assured of speedy parliamentary passage, with the opposition Liberal National Coalition supporting the move, which could mean a major expansion in local debt markets. “We welcome the government adopting our recommendation for covered bonds and we’ll be supporting the legislation when it comes to parliament,” Opposition Treasury spokesman Joe Hockey said. http://online.wsj.com/article/SB10001424052970203499704576623882522106182.html?mod=WSJASIA_hpp_LEFTTopWhatNews

Europe’s troubled financial sector showed further strains Monday as the sovereign-debt crisis claimed its first banking victim and banks in Austria and Greece showed signs of distress, increasing pressure on euro-zone governments to come up with a plan to restore confidence in their lenders. http://online.wsj.com/article/SB10001424052970203499704576622723763463828.html?mod=WSJEurope_hpp_LEFTTopStories

Japan’s current account surplus fell 64.3% year-on-year to 407.5 billion yen ($5.3 billion) in August, according to data released Tuesday by the country’s finance ministry. Analysts had been expecting a surplus of ¥446.9 billion, according to figures compiled by Dow Jones Newswires. The country’s trade deficit reached ¥694.7 billion in August. http://www.marketwatch.com/story/japans-aug-current-account-surplus-hits-4075b-2011-10-10

Apple Inc. said Monday that pre-orders of its newly announced iPhone 4S topped the 1 million mark in a single day — easily surpassing the previous record set by the iPhone 4 last summer. Apple first announced the iPhone 4S at a special event at its Cupertino, Calif., headquarters last Tuesday — one day before the death of co-founder and Chairman Steve Jobs. The company’s shares took a hit following the unveiling of the new device, which carries the same exterior design of the iPhone 4 but with a faster processor and new software capabilities http://www.marketwatch.com/story/apple-says-iphone-4s-pre-orders-break-record-2011-10-10

Three years after the collapse of Lehman Brothers touched off a tidal wave of bankruptcy filings, corporate failures may be about to pick up again, with some big-name companies among those struggling for survival. Companies in a range of businesses, including hair salons, restaurants, renewable energy, and the paper industry, have tumbled into Chapter 11 in the past few months. The weak economy, lackluster consumer spending, a shaky junk-bond market and increasingly tight lending practices are also threatening struggling companies in industries as diverse as shipping, tourism, media, energy and real estate. http://www.reuters.com/article/2011/10/11/us-bankruptcy-idUSTRE7995RH20111011

Asia’s trade volume will almost double by 2025 and will be the key driver of world trade growth despite current global economic headwinds, HSBC said in a report on Tuesday. Asia’s trade volume will grow 96 per cent to nearly $14 trillion by 2025, recording annual year-on-year growth of 4.8 per cent versus an estimated 3.8 per cent for global trade, the bank said in its latest quarterly Trade Connections report. By 2025, world trade is expected to increase 73 per cent from the current level, driven mainly by India, Vietnam, Indonesia and China, said the report. But HSBC said it found a dip in confidence among Asian importers and exporters about the trade outlook for the next six months, with 41 per cent expecting the global economy to decline. http://www.reuters.com/article/2011/10/11/us-hsbc-trade-idUSTRE79A02G20111011

President Barack Obama could create millions of jobs by attracting more foreign capital to the United States, helping entrepreneurs and being more aggressive in energy, business leaders said on Monday. In a new report, the chief executives of GE, Intel, Boeing and other companies also backed White House proposals to fix infrastructure like airports, railways and electricity grids and to expand broadband Internet networks as a way to boost hiring and speed up flagging growth. “If Washington can agree on anything, it should be this — and it should be now,” the President’s Council on Jobs and Competitiveness said in the report, to be presented to Obama at a meeting in Pittsburgh on Tuesday. http://www.reuters.com/article/2011/10/11/us-usa-jobs-whitehouse-idUSTRE79A07B20111011

Singapore policy makers will slow or end the appreciation of its currency, joining other central banks in the region seeking to bolster weakening growth without spurring further consumer-price gains, analysts said. The Monetary Authority of Singapore will reduce the degree of policy tightening at this week’s twice-yearly meeting by adjusting the exchange-rate band for the currency, according to 14 of 22 economists surveyed by Bloomberg News. Seven forecast an easing of monetary conditions. One said the central bank will maintain the currency’s appreciation after re-centering the band upward at itslast review in April to cool inflation. http://www.bloomberg.com/news/2011-10-11/singapore-central-bank-to-slow-currency-climb-to-aid-growth-survey-shows.html

Prime Minister Vladimir Putin may give Asia more weight in Russian foreign policy when he returns to the presidency next year, broadening a relationship with China and trying to bridge differences on gas exports. Putin, who will meet Chinese President Hu Jintao and counterpart Wen Jiabao on a two-day trip to Beijing that starts today, will take full control of foreign policy again after four years marked by improving ties with the U.S. under outgoing President Dmitry Medvedev. http://www.bloomberg.com/news/2011-10-10/putin-courts-china-as-russia-seeks-to-bridge-differences-on-gas.html

Emerging-market stocks are “cheap” and Pacific Investment Management Co. is buying in China after the nation’s shares tumbled this year, said Maria Gordon, an emerging-market equity-fund manager at Pimco.  “We are definitely fishing in the more cyclically distressed areas of the market where valuations are very, very cheap,” London-based Gordon said in an interview with Sara Eisen on Bloomberg Television yesterday. “We’re selectively accumulating positions” in China, Gordon said, adding that shares of Hong Kong-based insurer AIA Group Ltd. (1299) are poised for “a lot of capital appreciation.” http://www.bloomberg.com/news/2011-10-10/pimco-buys-in-china-sees-cheap-emerging-market-equities-1-.html

France and Belgium‘s decision to break up Dexia SA (DEXB) three years after bailing the lender out shows how European governments are being hampered in rescuing banks without jeopardizing sovereign credit ratings, analysts said. The two governments chose yesterday to preserve Brussels- and Paris-based Dexia’s consumer bank in Belgium and municipal lending unit in France because those operations were considered systemically and politically important, said people with knowledge of the matter who declined to be identified because the discussions are private. Dexia’s other assets will be sold to limit the cost of the bailout, the people said. http://www.bloomberg.com/news/2011-10-10/dexia-breakup-shows-constraints-on-indebted-states-saving-banks.html

Investors are increasing bearish trades around the world by the most in at least five years, convinced the lowest valuations since 2009 will prove no barrier to losses after $11 trillion was erased from equities. Borrowed shares, an indication of short selling, climbed to 11.6 per cent of stock last month from 9.5 per cent in July, the biggest increase since at least 2006, according to information compiled for Bloomberg by Data Explorers, a London-based research firm. Trades that profit when Chinese equities decline have reached a four-year high and bearish bets in the U.S. are the most since 2009, exchange data show. http://www.bloomberg.com/news/2011-10-10/short-selling-rising-most-since-2006-as-11-trillion-is-erased-from-stocks.html

Japan wants the Group of 20 finance leaders to discuss what more the group can do to help stabilise Europe’s debt crisis, Finance Minister Jun Azumi said on Tuesday, reiterating his call for further European efforts to restore market confidence. Azumi repeated Tokyo’s readiness to buy more euro zone bonds to support global efforts to stabilise markets, but only on condition that Europe comes up with a solid scheme to solve its debt crisis. http://www.cnbc.com/id/44854290

Want to add about $100 billion more annually to the US economy and lower the unemployment rate by more than a percentage point—all without spending a dime of taxpayer money? Fill America’s more than 3.2 million open jobs.  That’s the hidden story of America’s lousy jobs picture. Though there are more than 14 million unemployed, there are also 3.2 million job openings in America. While still just one opening for more than every four people looking for work, it begs the question of why there are any job openings at all given the huge number of unemployed. http://www.cnbc.com/id/44838614

Slovak Prime Minister Iveta Radicova will put the future of her government on the line on Tuesday before lawmakers cast ballots on a euro zone rescue mechanism that one of her junior ruling parties looks set to shoot down. Slovakia is the last member the 17-member bloc yet to vote on a deal agreed by its leaders in July to boost the size and powers of the European Financial Stability Facility.http://www.foxbusiness.com/markets/2011/10/10/slovak-pm-to-put-government-on-line-ahead-efsf-vote/#ixzz1aRk1XwVS

Australian business confidence rebounded to -2 in September from -9 in August, according to a survey out Tuesday from National Australia Bank. The business conditions reading of the survey moved up to 2 in September, from -3 in August. National Australia Bank said that the turnaround in business confidence suggests that there is less concern about the impact of global influences on activity within business, while the depreciation of the Australian dollar likely helped alleviate some stress on businesses competing on the global market. http://www.foxbusiness.com/2011/10/10/australia-business-confidence-rebounds-survey/#ixzz1aRk8jGSZ

Investor demand for Australian bonds at government auctions fell to the weakest in more than three years as yields held below the cash rate for two months and amid signs the domestic economy remains resilient. Tenders in September drew bids worth 2.3 times the securities offered, the smallest average bid-to-cover ratio since January 2008, and compared with as high as 4.8 in April. Demand at sales of 10-year U.S. Treasuries averaged 3.2 this year, up from 3.09 in 2010 and heading for the strongest year since at least 1994, according to data compiled by Bloomberg. A Sept. 28 sale of Australia’s 2021 security drew the weakest demand for any of the nation’s auctions since January 2010. http://washpost.bloomberg.com/story?docId=1376-LSU5510UQVI901-0J6SIDDDSJHITE7VKF0JNJ6LIE

The UK will continue to see a big rise in the number of people living in poverty, a report by the Institute for Fiscal Studies (IFS) has warned. The study said 2.2 million children and two million working age adults were living in absolute poverty in 2009-10. It predicts that by 2012-13, this will rise by an extra 600,000 children and 800,000 adults of working age. http://www.bbc.co.uk/news/business-15238468

Germany is pushing behind the scenes for a “hard” default in Greece with losses of up to 60pc for banks and pension funds, risking a chain-reaction across southern Europe unless credible defences are established first. Officials in Berlin told The Telegraph it is “more likely than not” that investors will suffer fresh losses on holdings of Greek debt, beyond the 21pc haircut agreed in July. The exact level will depend on findings by the EU-IMF “Troika” in Athens. “A lot has happened since July. Greece has fallen back on its commitments, so we have to assume that the 21pc cut is no longer enough,” said one source. http://www.telegraph.co.uk/finance/financialcrisis/8819195/German-push-for-Greek-default-risks-EMU-wide-snowball.html

The Bank of England was forced to abandon part of its quantitative easing (QE) programme after city traders made government bonds too expensive for the Old Lady to buy. In a highly unusual move on Monday, the Bank of England refused to buy bonds with a maturity of 2017 and yield of 8.75pc after dealers drove up the price to £140.78 ahead of the auction. The Bank of England has never previously refused to buy government bonds as part of a reverse auction [a sales process whereby market makers and traders sell government gilts to the Bank of England]. http://www.telegraph.co.uk/finance/economics/8819296/Bank-of-England-abandons-part-of-QE-program-after-traders-make-bonds-too-expensive.html

Gold futures advanced the most in a week and silver jumped as the dollar’s decline spurred demand for precious metals as alternative assets. Gold futures for delivery in December rose 2.1 per cent to close at $US1,670.80 an ounce at 1:39 p.m. on the Comex in New York, the highest settlement price since Sept. 22 and the biggest gain since Oct. 3. The metal has climbed 18 per cent this year, reaching a record $US1,923.70 on Sept. 6. http://www.smh.com.au/business/markets/gold-and-silver-rise-as-greenback-falls-20111011-1lhyi.html#ixzz1aRr6VodC

Crude oil climbed to the highest level in two weeks as the leaders of Germany and France pledged to stem the European sovereign-debt crisis. Crude oil for November delivery rose $US2.65, or 3.2 per cent, to $US85.63 a barrel at 1:38 p.m. on the New York Mercantile Exchange. The contract touched $US86.09, the highest level since Sept. 21. Oil is down 6.3 per cent this year.http://www.smh.com.au/business/markets/oil-stronger-as-europe-stablises-20111011-1lhxd.html#ixzz1aRrBwNWw

Copper rose to the highest in almost two weeks after the leaders of France and Germany pledged a plan to stem Europe’s debt crisis in three weeks. Copper futures for December delivery climbed 2.9 per cent to close at $US3.368 a pound at 1:12 p.m. on the Comex in New York. Earlier, the price reached $US3.391, the highest since Sept. 28. The metal rose for a fourth straight session, the longest rally since late August. http://www.smh.com.au/business/markets/copper-climbs-to-twoweek-high-20111011-1lhxc.html#ixzz1aRrH1c00

The United States has 10 times more affluent households than China or India, research shows, undermining arguments the global economy can be sustained by consumption in emerging markets.  A survey of affluent households around the world — defined as having wealth of more than $100,000 — by research firm TNS found 80 per cent of such people live in Western countries. While the number of affluent households in China and India is three million each, the U.S. has more than 31 million, the survey shows. http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/us-affluent-classes-dwarf-china-and-india/article2194467/

Greece’s Finance Minister Evangelos Venizelos says parliament must approve a new package of economic austerity measures before the country receives its next 8 billion euro (S$13.9 billion) rescue loan instalment . Mr Venizelos said on Monday a key review by international debt inspectors was essentially concluded earlier in the day, with remaining ‘technical details’ to be wrapped up on Tuesday. http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_721985.html

Cambodia slashed economic growth forecast this year to 6 per cent due to the worst flood devastation and uncertainty of the economies of the United States and the European countries, said Cambodian minister of finance Keat Chhon on Tuesday. “Originally, we predicted 7 per cent growth this year, but due to the worst floods and uncertainty of the economies of the United States and the European countries, which have affected our product exports, we revise our growth forecast to 6 per cent this year,” he said at the 2011 Trade and Investment Conference: Global Challenges, Cambodia’s Responses.http://news.xinhuanet.com/english2010/business/2011-10/11/c_131184689.htm

Brazil announced a series of diplomatic measures here on Monday to protect its domestic market and promote its products abroad to face increasing competition due to the global economic crisis. Brazilian Foreign Minister Antonio Patriota said government officials would meet with business leaders to discuss the barriers imposed by some countries on the Brazilian products. Patriota made the announcement during a seminar in the foreign ministry to celebrate the 10th anniversary of the General Coordination of Disputes (CGC), which is responsible for the lawsuits brought before the World Trade organisation (WTO). http://news.xinhuanet.com/english2010/business/2011-10/11/c_131184596.htm

South Korea’s producer price grew at a slower pace in September than a month earlier amid falling energy and food prices, the central bank said Tuesday. The producer price index (PPI), a barometer of future consumer price inflation, gained 5.7 per cent in September from a year earlier, slower than a 6.6 per cent on-year advance in August, the Bank of Korea (BOK) said in a statement. The September growth was slower than the previous month, but the producer prices kept an on-year rise for the 22th straight month. From a month before, producer prices edged up 0.1 per cent in September, down from a 0.3 per cent on-month rise in August. http://news.xinhuanet.com/english2010/business/2011-10/11/c_131184454.htm

Singapore President Tony Tan Keng Yam has said it is going to be tougher for Singapore to have high growth rate as the city state moves closer to the income level of the developed countries, but it can still achieve growth of 3-5 per cent in the coming years. Tan said such growth rate will be enough to achieve a better life for all Singaporeans, according to local daily Business Report on Tuesday. “High rates of growth will become more challenging as we grapple with the limits of our land area and population size, and as our income level reaches that of developed countries,” Tan said at the opening of the republic’s 12th parliament. http://www.cs.com.cn/english/ei/201110/t20111011_3082110.html

The Chinese Academy of Social Sciences (CASS), a major government think tank, on Monday cut China’s growth estimate for 2011 to 9.4 per cent from a previous forecast of 9.6 per cent.  CASS attributed the slowdown partly to the country’s intense economic restructuring that allowed the economy to depend less on government stimulus. In its latest report on macro economy, the think tank forecast that investments in fixed assets will grow 23.8 per cent this year and consumption 17 per cent. Imports will climb 26.2 per cent while exports will gain 21.8 per cent, which is set to trigger a third consecutive fall in China’s trade surplus. http://www.cs.com.cn/english/ei/201110/t20111011_3082105.html

The new draft Telecom Policy, unveiled by Communications Minister Kapil Sibal, on Monday set a target of 600 million high-speed internet connections by 2020.  The new policy went to the extent of likening the broadband connectivity to basic necessities like health and education and proposes to work towards a ‘Right to Broadband’ for every citizen. The policy has also called for providing, by 2015, ‘Broadband on Demand’ services, which would enable affordable, across-the-country, round-the-clock and high-speed internet connectivity to the users. http://www.thehindu.com/news/national/article2526550.ece

The US has likely dodged a recession for now, even though it’s too early to sound the all- clear for the economy.  A string of stronger-than-projected statistics — capped by the news on October 7 of a 103,000 rise in payrolls last month –has prompted economists at Goldman Sachs Group Inc. and Macroeconomic Advisers LLC to raise their growth forecasts for third quarter growth to 2.5% from about 2%.  That’s nearly double the second quarter’s 1.3% rate and would be the fastest growth in a year. “The US economy doesn’t look like it’s double-dipping at all,” said Allen Sinai, president of Decision Economics Inc. in New York. http://economictimes.indiatimes.com/news/international-business/forecasts-hint-that-us-may-dodge-recession/articleshow/10307047.cms

After many foreign investment banks and multilateral bodies have cut their India growth forecast for FY12, ratings firm Crisil is the latest to join the league. It has lowered India’s growth forecast for FY12 to 7.6% from its earlier estimate of 7.7-8.0 % released in May this year, on concerns over a slowdown in advanced economies. In the past few months, Morgan Stanley, Citi and Goldman Sachs, besides IMF andADB, have scaled down their GDP forecasts for the year. Crisil has said it has scaled down its forecast in view of the deteriorating global economic scenario and the grim investment climate in India on account of the policy environment. http://economictimes.indiatimes.com/news/economy/indicators/crisil-lowers-india-growth-forecast-to-7-6-for-fy12/articleshow/10308117.cms

India and the Czech Republic Monday agreed to liberalise business visa regime and expand bilateral trade to $2 billion in 2012 from the current year’s estimate of $1.3 billion.
Commerce and Industry Minister Anand Sharma held talks here with Czech Republic Minister of Trade and Industry Martin Kocourek, who is leading a 50-member high-level business delegation to India.http://economictimes.indiatimes.com/news/economy/foreign-trade/india-czech-republic-target-2-billion-trade-in-2012/articleshow/10301556.cms

South Korea’s central bank is expected to freeze its benchmark interest rate for October as a dimmer global economic outlook overshadows inflation concerns, a poll showed Tuesday. All 17 economists forecast that the Bank of Korea (BOK) will leave the benchmark seven-day repo rate unchanged at 3.25 per cent for the fourth straight month on Thursday, according to the survey by Yonhap Infomax, the financial news arm of Yonhap News Agency. Analysts said growing external economic risks like a faltering U.S. economy and Europe’s debt crisis will prompt BOK policymakers to freeze the key rate this month amid slowed inflation growth. http://english.yonhapnews.co.kr/business/2011/10/11/20/0503000000AEN20111011004000320F.HTML

Those Arab members of the organisation of Petroleum Exporting Countries which have increased their oil output in recent months to compensate Libya’s production cut, should reduce their output because the global market is oversupplied, Iran OPEC governor said. Mohammad-Ali Khatibi told the Mehr news agency on Monday that secretary general of OPEC has offered the Arab members of OPEC to cut their oil output, because the gradual return of Libyan oil production was bolstering oil supplies.  He warned that global demand may fall as the economic slowdown in the Europe spreads to United States Asian markets. http://www.tehrantimes.com/index.php/economy-and-business/3404-opecs-arab-producers-must-cut-output-iran

What better way to put today into perspective than the following chart by Zero Hedge. Seems low volume holidays when the bond market is closed is a great opportunity to put a nasty short squeeze on. Today was tough but in 2008 it was about 4 times tougher with an 11% ramp. Sentiment trader is also reporting today is the first day in the history of the SPY that it rose 3% or more on its lightest volume in a month. http://www.thetrader.se/2011/10/10/market-recap/

On October 7, 2011 beginning at 12:03:39.950, a massive surge of quotes in SPY, IWM, DIA and other market index ETFs, along with many symbols in the Dow Jones Industrial Average, caused an overload in CQS that lasted several seconds. This, in spite of a 25% increase in CQS capacity just 3 days earlier to a whopping 1.25 million quotes/second. During this event, Nasdaq quotes into CQS became delayed at least 800 milliseconds (800,000 microseconds). Other exchange quotes feeding into CQS also became delayed. http://www.thetrader.se/2011/10/10/hft-no-longer-bound-by-trade-through-rules/

This post originally appeared at The Trader.

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