October 14, 2011: Some News That Matters


Mike Hammerton via Flickr

Raj Rajaratnam, the billionaire US hedge fund manager, was on Thursday sentenced to 11 years in prison, the longest term for insider trading in recent times, reports the FT. The prominent Wall Street financier was also ordered to pay a $10m fine, http://ftalphaville.ft.com/thecut/2011/10/14/702276/rajaratnam-sentenced-to-11-years-in-jail/JPMorgan Chase produced an uninspiring start to the bank earnings’ season, reporting flat year-on-year earnings after a torrid summer hit investment banking revenues and offset improvements in the consumer business, http://ftalphaville.ft.com/thecut/2011/10/14/702256/jpmorgan-fails-to-inspire-despite-accounting-creativity/

Google’s latest quarterly earnings soared above most analysts’ forecasts as the Internet search company rebounded to its highest growth rate since before the 2008 financial crisis and shrugged off recent signs of economic weakness, http://ftalphaville.ft.com/thecut/2011/10/14/702221/google-shares-soar-on-higher-earnings-mulls-itunes-rival/

Momentum is gathering behind the view that banks plan to shrink their way out of trouble – reducing risk-weighted assets, the denominator of capital ratios, rather than increasing equity, the numerator,http://ftalphaville.ft.com/thecut/2011/10/14/702201/european-banks-look-to-shed-assets-rather-than-raise-equity/

Emerging market countries are working on ways to contribute money rapidly to expand the effective firepower of the International Monetary Fund, with the aim of increasing its role in combating the euro zone sovereign debt crisis, http://ftalphaville.ft.com/thecut/2011/10/14/702186/eurozone-bazooka-may-get-bric-boost/

Standard & Poor’s has downgraded Spain’s sovereign debt rating, citing slowing growth and a weakening financial system, reports the FT. In an announcement late on Thursday, the rating agency knocked Spain’s rating down one notch from double A, http://ftalphaville.ft.com/thecut/2011/10/14/702166/sp-downgrades-spain-to-aa-from-aa-2/

China’s trade growth slumped last month as the world’s second-largest economy felt the impact of economic turmoil in its most important trading partners in Europe and the US, the FT reports. Exports increased by their slowest pace in seven months in September, http://ftalphaville.ft.com/thecut/2011/10/13/702086/china%e2%80%99s-trade-growth-slows/

Inflation in China moderated slightly last month in a sign that government attempts to rein in surging prices is taking effect. The headline consumer price index rose 6.1 per cent in September from a year earlier, down from Augusts’ 6.2 per cent rise, according to data released by China’s National Bureau of Statistics on Friday. http://www.ft.com/intl/cms/s/0/759f9e10-f613-11e0-bcc2-00144feab49a.html#axzz1adP6fOCc

Investors flocked to buy 30-year Treasury debt sold on Thursday, in a sign that some in the bond market expect the Federal Reserve’s Operation Twist will pull yields lower and boost prices in the coming months. Wall Street dealers share of the 30-year sale was their lowest since August of 2010, with near record demand from investors, in stark contrast to the poor reception for a 10-year sale on Wednesday.http://www.ft.com/intl/cms/s/0/ba2176d2-f5c1-11e0-bcc2-00144feab49a.html#axzz1adP6fOCc

All along Avenida Paulista this month, stickers with the words “On Strike” have been plastered on the banks, post offices and other government offices in the area. Strike season – the months before the New Year when workers across Brazil agitate for higher pay – is upon Latin America’s largest economy. But economists are questioning how long salaries can continue to rise in an economy in which productivity, particularly in manufacturing, is falling behind real wage increases. Declines in productivity make Brazilian goods less competitive, particularly against imports from countries such as China. http://www.ft.com/intl/cms/s/0/e5b13d86-f5b3-11e0-824e-00144feab49a.html#axzz1adP6fOCc

The west used to worry about an over-mighty Russia. A Russia in decline is the more threatening proposition. Events in a London courtroom offer an uncomfortable reminder that this is where things are heading under Vladimir Putin. Residents of Britain’s capital have a ringside seat at an extraordinary legal battle between two of Russia’s most famous, or, if you prefer, infamous oligarchs. It is a case destined to keep the city’s expensive lawyers in their silk-threaded suits for some considerable time. http://www.ft.com/intl/cms/s/0/02c361b8-f430-11e0-bdea-00144feab49a.html#axzz1adP6fOCc

Asian stock markets were lower Friday after a downgrade of Spain’s long-term sovereign credit rating rekindled concerns about Europe’s debt woes, with exporters and resources stocks leading the region’s declines. Japan’s Nikkei Stock Average fell 0.7%, Australia’s S&P/ASX 200 slid 1.0%, South Korea’s Kospi Composite shed 0.6% and New Zealand’s NZX-50 lost 0.2%. Dow Jones Industrial Average futures were down 26 points in screen trade. http://online.wsj.com/article/SB10001424052970203914304576629810600131334.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

Fitch Ratings on Thursday slashed ratings on U.K. banks Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC after determining they are less likely to receive government support in future. RBS, 83%-owned by taxpayers, and Lloyds, 41%-state held, were both downgraded two notches to A from double A minus. Barclays PLC, which has never taken direct state support and is rated double A minus by Fitch, was put on rating-watch negative, meaning it might be downgraded. The two state-backed banks, along with 10 other British financial institutions,http://online.wsj.com/article/SB10001424052970204002304576628712806507904.html?mod=WSJ_hp_us_mostpop_read

Japan must do more to convince investors it has a plan to set its fiscal house in order, the International Monetary Fund said Thursday, as European sovereign debt woes threaten to bring unwanted attention to Tokyo’s own fiscal problems while the nation grapples with expensive post-disaster reconstruction. The IMF played down the threat from the strong yen; despite popular sentiment in Japan that the currency’s recent strength is adding salt to the nation’s wounds. http://online.wsj.com/article/SB10001424052970204774604576628803010655890.html?mod=WSJAsia_hpp_LEFTTopStories

The travails of the developed world are starting to hit fast-growing countries like China, Brazil and Indonesia, which are girding themselves to offset any economic and financial damage. From shrinking retail sales in Brazil to lower orders for manufacturers in South Africa to efforts by the Chinese government to boost the shares of its big banks, it is becoming clear that developing economies are feeling pressure from the slowdown in the West, putting global growth high on the Group of 20 agenda when financial officials meet this weekend in Paris.http://online.wsj.com/article/SB10001424052970204774604576628631676483052.html?mod=WSJEurope_hpp_LEFTTopStories

Confidence in the ability of European politicians to solve the euro-zone debt crisis gave way to a fresh round of uncertainty Thursday, with analysts presenting wildly differing estimates on how much new capital banks might need to withstand sovereign shocks. Bank bosses also continued to resist any forced recapitalizations, with Deutsche Bank AG Chief Executive Josef Ackermann saying it isn’t clear they will help solve the crisis. Heads of other major European banks, including France’s Société Générale SA, BNP Paribas SA and the U.K.’s Barclays PLC, have already argued that they can bolster their capital ratios through asset sales, retained earnings and by reducing capital-intensive assets and activities. http://online.wsj.com/article/SB10001424052970204002304576628761001448224.html?mod=WSJEurope_hpp_LEFTTopStories

Slovakia’s parliament has endorsed the amended rescue fund, in a repeat vote, allowing the European Financial Stability Facility to become operational. Slovakia was the last country in the 17-member euro zone to vote on the €440 billion ($606.8 billion) EFSF and the only country to repeat the endorsement vote, having rejected initially late Tuesday. The 114-lawmaker majority in the 150-seat parliament voted to approve the fund. http://online.wsj.com/article/SB10001424052970203914304576628503585960990.html?mod=WSJAsia_hpp_LEFTTopStories

Google Inc. said its sales grew at a faster pace in the recent quarter, even as other businesses work to combat weakness in the global economy. The Internet search giant posted a 26% rise in third-quarter profit from a year earlier, and logged a 33% jump in revenue, fuelled by record spending in online advertising. It was the fourth straight quarter in which Google’s revenue growth accelerated year over year, rising from 32% revenue growth in the second quarter and growth rates in the mid-20% range for earlier quarters. http://online.wsj.com/article/SB10001424052970203914304576629381407871182.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Boris Berezovsky, the Russian tycoon who is suing oligarch Roman Abramovich for $6 billion here, on Thursday testified that he received funds from a Soviet-born businessman who is wanted in Spain for alleged money laundering and organised-crime activities. The surprise admission sprang from a line of questioning from Mr. Abramovich’s lawyer concerning Mr. Berezovsky’s finances, which have been hit hard recently by a costly divorce settlement. The attorney, Jonathan Sumption, asked Mr. Berezovsky whether businessman Michael Cherney was bankrolling his lawsuit in exchange for a share of the damages. http://online.wsj.com/article/SB10001424052970204774604576629223631705048.html?mod=WSJEurope_hpp_LEFTTopStories

Slowing economic growth, spiraling unemployment and overspending by its powerful regional governments could make Spain the latest ailing euro-zone country to miss its budget target this year. The Socialist government of Prime Minister José Luis Rodríguez Zapatero won praise last year for measures that let it cut a budget deficit equal to around 11% of gross domestic product in 2009 to just over 9% in 2010. These steps, plus politically difficult overhauls of Spain’s labour market and pensions system, helped shore up investor confidence, setting the country apart from its fiscally frail peers.http://online.wsj.com/article/SB10001424052970204774604576629144153332626.html?mod=WSJEurope_hpp_LEFTTopStories

European banks such as BNP Paribas SA, Dexia SA and Deutsche Bank AG have flummoxed investors who are trying to divine the lenders’ capacity to absorb losses on Greek debt and other shaky holdings. One reason that hasn’t gotten much attention: a hodgepodge of accounting treatments, all blessed by auditors, applied in different ways across Europe. Another reason results in part from differences among national regulatory requirements. http://online.wsj.com/article/SB10001424052970204774604576629043222385356.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

The Obama administration and a federal housing regulator are considering a program to draw private investment back into the government-dominated mortgage market by having Fannie Mae and Freddie Mac sell slices of securities that wouldn’t carry a federal guarantee but would pay a higher interest rate than current mortgage-backed bonds. No decisions have been made, but officials believe a small pilot program could be rolled out sometime next year, according to people familiar with the matter. http://online.wsj.com/article/SB10001424052970204774604576629313337793024.html?mod=WSJ_hp_LEFTWhatsNewsCollection

November Brent crude for edged up 14 cents to $111.25 a barrel by 0420 GMT, after gaining nearly 5 per cent this week, ahead of the contract expiry at the end of Friday. U.S. crude rose 21 cents to $84.44. Brent’s premium to U.S. crude rose to a record of $27.26 a barrel earlier on Friday, up from a previous high of $27.23 on September 6. Brent crude rose further above $111 on Friday, heading for a second-straight weekly increase, as investors looked to more data from top oil consumers United States and China for cues on economic health and fuel demand. http://www.reuters.com/article/2011/10/14/us-markets-oil-idUSTRE7922QH20111014

Spot gold was little changed at $1,665.59 an ounce by 0301 GMT (11:01 p.m. ET), on course for a rise of 1.7 per cent from a week earlier, its biggest weekly rise since early September in the run-up to a record above $1,920. U.S. gold traded flat at $1,667.90 an ounce in thin volume. The dollar index .DXY edged higher while the euro further eased from a one-month high hit on Wednesday at Spain’s downgrade. http://www.reuters.com/article/2011/10/14/us-markets-precious-idUSTRE78M11C20111014

Republican presidential candidate Herman Cain’s 9-9-9 tax plan stems from basic economic principles and didn’t need a professor to develop it, said the suburban Cleveland investment adviser who did. Rich Lowrie of Gates Mills, Ohio, who is Cain’s senior economic adviser, developed the plan with Cain based on “pro- growth economics” and in consultation with economists including Arthur Laffer and Stephen Moore, whom he calls friends. http://www.bloomberg.com/news/2011-10-13/cain-s-economic-adviser-says-9-9-9-plan-didn-t-take-an-economist-to-create.html

Bangalore, India‘s Silicon Valley, will open the first section of a $1.7 billion metro railway next week as the city tackles congestion that has dented investment and made it the world’s second-worst for parking. A three-car train will run on a 6.7-kilometer (4.2 mile) elevated track on the maiden trip on Oct. 20, according to the Bangalore Metro Rail Corp. The network will stretch to 42 kilometers by 2013. http://www.bloomberg.com/news/2011-10-13/india-s-silicon-valley-adds-rail-as-jams-threaten-tech-grip.html

Stagnation is probably the best many of the world’s biggest developed economies can hope for over the next year, with several facing a significant chance of recession, Reuters polls of around 350 economists showed on Thursday.  After a promising start, 2011 has turned into an enormous disappointment for major rich world economies, which have been hobbled by a noxious combination of austerity, debt crises, natural disaster and political impasse. http://www.cnbc.com/id/44897849

Republican presidential hopeful Rick Perry wants to dramatically increase oil and gas exploration and in the process create more than a million jobs, the candidate told Larry Kudlow Thursday. “We’re sitting on a treasure trove of energy in this country,” Perry said. “There’s 300 years worth of reserves underneath the land of America and that’s how we are going to get America working again.” http://www.cnbc.com/id/44894575

Singapore cut its 2011 growth forecast Friday and warned the economy may slow further next year, prompting the city-state to slow the appreciation of its currency to protect exports. Gross domestic product will likely expand about 5 per cent this year, less than the government’s previous forecast of growth between 5 per cent and 6 per cent, the Trade and Industry Ministry said. The central bank, known as the Monetary Authority of Singapore, warned that Singapore’s economy could grow less than 3 per cent next year as global demand for the country’s exports weakens. Singapore’s dependence on exports for growth is among the highest of any nation in Asia. http://srph.it/qgj2zw

After 26 days of protests in New York’s financial centre, the Occupy Wall Street movement has raised over $150,000 in donations, according to Pete Dutro, a member of the protest’s financial arm. This massive fundraising was made through donations via mail, two websites — occupywallst.org and nycga.cc — and in person to members of what the movement calls its “Finance Working Group.” http://money.cnn.com/2011/10/13/news/economy/occupy_wall_street_money/index.htm?cnn=yes

Gap plans to close stores in the U.S., while expanding in China. The struggling retailer, which runs the Gap, Old Navy and Banana Republic chains, detailed plans on Thursday to close 189 locations, or 21% of its namesake Gap stores in the U.S., by the end of 2013. At the same time, the largest U.S. clothing chain said it plans to triple the number of Gap stores in China from about 15 by the end of the year to roughly 45 by the end of next year. http://www.usatoday.com/money/industries/retail/story/2011-10-13/gap-closings-china-expansion/50764116/1

More U.S. homes are entering the foreclosure process, but they’re taking longer to be sold or repossessed by lenders. The number of U.S. homes that received a first-time default notice during the July to September quarter increased 14% from the second quarter, RealtyTrac said Thursday. That increase signals banks are moving more aggressively now against borrowers who have fallen behind on their mortgage payments than they have since industry wide foreclosure processing problems emerged last fall. Those problems resulted in a sharp drop in foreclosure activity.http://www.usatoday.com/money/economy/housing/story/2011-10-13/foreclosure-notices-3Q/50751464/1

The US trade deficit with the rest of the world narrowed in August to the smallest gap in four months, official figures have shown. The trade gap narrowed to $45.61bn (£29.1bn), from a revised $45.63bn in July, the Commerce Department said. However, the politically sensitive trade gap with China widened to a record high. US imports and exports both slowed in the month as the weakening in the global economy took hold. http://www.bbc.co.uk/news/business-15296499

The International Monetary Fund (IMF) has cut its growth forecasts for Asia over worries about euro zone debt and new fears for the US economy. The IMF said risks for Asia were “decidedly tilted to the downside” because of these concerns over its two major export zones. It said gross domestic product (GDP) growth across Asia would average 6.3% in 2011, and 6.7% in 2012.  In April, it had predicted close to 7% growth in both years. http://www.bbc.co.uk/news/business-15285447

Eight leading European economic institutes have forecast a steep slowdown for Germany’s economy. The eight think-tanks make a twice-yearly aggregate forecast of German growth. Six months ago they predicted 2% growth for next year, but they have now cut that to 0.8%, blaming the debt crisis in the euro zone. Slow growth in Germany makes it much harder for the rest of Europe to avoid a return to recession. http://www.bbc.co.uk/news/business-15291553

The UK’s trade deficit narrowed in August as the export of goods hit a record high, official figures have shown. The overall deficit for goods and services was £1.9bn in August, compared with £2.3bn in July. Total exports of goods hit £25.5bn, following a 0.6% rise, while imports of goods declined by 0.7% to £33.3bn. Analysts said the stronger exports may boost the economic growth figures for the July to September quarter. The UK’s surplus on trade in services remained at £5.9bn, with both exports and imports rising by 0.3%. http://www.bbc.co.uk/news/business-15287582

Ill-judged regulation of the financial services sector by the European Union could damage UK growth, the CBI warned on Thursday night.  John Cridland, director-general of the business group, said that a number of proposed regulations from Brussels would hold back London’s leading business sectors. In a strongly worded speech at the CBI’s London dinner, he said: “The likely effect of many of Brussels’ current proposals will be to damage the UK’s prospects for growth. Nowhere is this more acutely the case than for professional and financial services, which are being bombarded with unwarranted regulation.” http://www.telegraph.co.uk/finance/economics/8825352/EU-financial-regulation-could-harm-UK-growth-CBI-warns.html

Uncertainty about home price direction has set the tone ahead of the crucial spring auction season, according to data released today. The Westpac-Melbourne Institute quarterly house price expectation index fell to 9 in October, from a reading of 15.3 in the three months to July – it lowest level since May 2009, a doubts about the strength of the housing market linger. Within the national measure, 38.7 per cent of respondents polled in the Westpac-Melbourne institute confidence index see home prices rising in the next 12 months, while 31.5 per cent saw them unchanged. Almost one-third, or 29.8 per cent predicted falls over the next the year http://www.smh.com.au/business/uncertainty-clouds-start-of-spring-auction-season-20111014-1lorg.html#ixzz1ajL6p42U

Copper shed three per cent on Thursday after softer-than-expected Chinese trade data underscored concerns the metal-consuming giant’s may be unable to sustain its growth trend in a slowing global economy. The data, which showed the country’s trade surplus narrowed for a second straight month in September as both imports and exports slowed, pulled copper down from a two-week high above $US7,500 a tonne. The data followed a Financial Times report on Wednesday that said China’s inventory of copper was much higher than had been widely perceived.http://www.smh.com.au/business/markets/copper-slumps-on-china-worries-20111014-1lnr4.html#ixzz1ajLBGHwZ

A slowdown in China’s trade growth is raising fears that the engine of the global economy is cooling, and dragging on Canada’s already sluggish economy.  Exports from China increased at the slowest pace in seven months in September, as demand from major trading partners Europe and the United States waned and a stronger Chinese currency pinched manufacturers. The pace of import growth also slowed sharply, heightening concerns that demand for materials from resource-rich nations such as Canada will decline. http://www.theglobeandmail.com/report-on-business/international-news/asian-pacific/canada-to-feel-bite-of-chinese-trade-slowdown/article2199811/

The Swiss Bourse has opened an investigation into banking giant Credit Suisse over possible trading violations, it announced on its website on Thursday. The investigation was into ‘possible breaches of the obligations regarding the disclosure of management transactions’, said a statement from SIX Exchange Regulation, the regulatory arm of the SIX Swiss Exchange.http://www.straitstimes.com/BreakingNews/Money/Story/STIStory_722896.html

Brazilian Finance Minister Guido Mantega said Thursday that the country will regain momentum of higher economic growth in the 4th quarter this year following poor performances in the previous two quarters. Mantega, who is in Paris for Friday’s G20 finance ministers’ meeting, also said the Brazilian economy will manage an overall growth of 3.5 to 4 per cent this year. Brazil registered a 1.2-per cent GDP expansion in the first quarter, but the growth rate lowered to 0.8 per cent in the following quarter. The GDP grew 3.6 per cent in the first half of the year, compared with the same period of last year.http://news.xinhuanet.com/english2010/business/2011-10/14/c_131190907.htm

The Russian Central Bank said Thursday that its international gold and currency reserves have dropped to 510.4 billion U.S. dollars, the lowest level since April 8. For the last week, the reserves declined 1.2 per cent, according to local media reports. Local experts believe the bank’s attempts to soften the ruble’s depreciation resulted in a fall in reserves of 5.17 per cent during September. From January to September, the bank’s currency reserves added 31 billion dollars http://news.xinhuanet.com/english2010/business/2011-10/13/c_131190046.htm

South Korean Ambassador to Iran Park Jae-Hyun said trade volume between Tehran and Seoul has reached 10 billion U.S. dollars in the first half of 2011, the English language satellite Press TV reported on Thursday. The volume of trade between Iran and South Korea was 12 billion U.S. dollars last year; Park was quoted as saying on Wednesday. South Korea attaches great importance to the Iranian market and is determined to broaden its economic and trade relations with the Islamic Republic, said the envoy. http://news.xinhuanet.com/english2010/business/2011-10/13/c_131189960.htm

The Singapore economy grew by 5.9 per cent in the third quarter, according to advance estimates released by the Ministry of Trade and Industry on Friday. On a seasonally adjusted quarter-on-quarter annualized basis, the economy grew by 1.3 per cent to avoid a technical recession, which is defined as two consecutive quarters of quarter-on-quarter contraction. It contracted by 6.3 per cent on a seasonally adjusted quarter-on-quarter annualized basis in the second quarter. The ministry said that the strength of the biomedical sector helped lift manufacturing growth to 13.2 per cent year on year and thereby helped the overall economy. The other sectors were relatively weak, with construction growing by just 0.4 per cent and services expanding by 3.6 per cent, respectively.http://www.cs.com.cn/english/ei/201110/t20111014_3087488.html

China’s business climate index, a major measure of macro-economic outlook, fell in the third quarter while entrepreneur confidence further weakened over the previous quarter, the National Bureau of Statistics (NBS) said Thursday. The quarterly business climate index, based on a survey of about 20,000 Chinese firms, dipped 2.2 points form the previous quarter to 133.4 in the third quarter, the NBS said in a statement on its website. The survey showed 90 per cent of the enterprises interviewed believed production and the operational situation in the third quarter was better than or the same as in the second quarter. http://www.cs.com.cn/english/ei/201110/t20111014_3087277.html

The People’s Bank of China (PBOC) issued three central bank notes and repurchased some bank notes, the central bank may reclaim about 9 billion yuan from the money market, ending the previous net injection for 12 weeks. The central issued three-months bank notes for 7 billion yuan through the open market at the interest 3.1618 per cent. Meanwhile, the central bank restarts operation of three-year central bank notes for 20 billion yuan with interest 3.97 per cent. Analysts said, the main reason for the central bank’s reclamation is the change of liquidity in the money market.http://www.cs.com.cn/english/ei/201110/t20111014_3087065.html

The Petroleum and Natural Gas Ministry has allocated 7.23 million standard cubic metres a day (mscmd) of natural gas from the field of Oil and Natural Gas Corporation (ONGC) to power and fertiliser firms, including Reliance Power, NTPC and National Fertilizers. “The Ministry has issued orders for allocating the gas ONGC plans to produce from the nominated fields on the West and the East Coast. In all, 19 units have been allocated natural gas,” a senior official said. http://www.thehindu.com/business/article2534573.ece

Swedish transport major Volvo on Thursday announced that it planned to invest Rs.400 core over four years in its Indian arm, Volvo Buses India Pvt. Ltd. Volvo Bus Corporation President and CEO Hakan Karlsson said the Indian subsidiary planned to increase output at its plant at Hoskote near Bangalore from 1,000 buses of over 12 tonnes to 2,500 units annually by 2015. Mr. Karlsson and the top management of the company are in India to participate in the celebrations to mark the tenth anniversary of the company’s entry into the country.http://www.thehindu.com/business/companies/article2535146.ece

The Reserve Bank of India (RBI) has opposed the creation of a $20 billion sovereign wealth fund, for acquisition of energy assets overseas, out of foreign exchange reserves and wants the government to create the corpus for it from the Budget. A Group of Ministers headed by Finance Minister Pranab Mukherjee on Thursday deliberated on the possible ways of creating a fund on the lines of ones that exist in countries like China. “Various things were discussed but no view has emerged,” Oil Minister S. Jaipal Reddy said after the 75-minute meeting.http://www.thehindu.com/business/Economy/article2534859.ece

Power plants in India are rapidly running out of coal and some have already stopped generation, plunging vast parts of the country into darkness and interrupting industrial output in many regions. The dark spell is expected to continue for 4-5 days. With floods, strikes and the Telangana agitation crippling mining operations, half of India’s 85,000 mw of thermal power capacity is running on ‘super critical’ fuel stocks, or enough coal to produce electricity for less than four days. Another 12% of the capacity is operating on coal stocks that will last for less than a week.http://economictimes.indiatimes.com/news/news-by-industry/energy/power/coal-crunch-may-trip-power-plants-including-those-of-ntpc/articleshow/10346396.cms

Reserve Bank of India governor Duvvuri Subbarao has dashed hopes that he may pause from raising interest rates again on October 25 as he reiterated his commitment to tame prices even if it hurts growth.  “Had we not raised the rates, how much would have been the inflation? Despite so much tightening, inflation runs as high as 9.8% as of August,” Subbarao told reporters after RBI’s board meet in the Pink City. “We have to weigh growth, inflation and http://economictimes.indiatimes.com/news/economy/policy/rbi-governor-duvvuri-subbarao-says-no-rate-hike-pause-for-now-and-signals-priority-is-to-check-price-rise/articleshow/10346167.cms

The government declared an all-out war on fake gasoline on Friday, significantly increasing fines for people selling unauthorised products and giving investigative jurisdiction to government officials. The crackdown starts with changing the commonly used name for such fuel, mostly chemical mixtures, from alternative fuel to fake, according to the Ministry of Knowledge Economy.http://english.yonhapnews.co.kr/business/2011/10/14/47/0501000000AEN20111014001900320F.HTML

Johannesburg – South Africa is not in a position to play a role in assisting the euro zone out of its debt crisis, Reserve Bank governor Gill Marcus said. “My own approach would be that it needs the Group of 20 as a whole to look at what needs to be done, because it is not for us to plug gaps,” Marcus was quoted as saying in Business Day on Thursday.  “There has to be a coherent strategy, a coordinated approach and they have got to take the decisions. We can’t solve (the problems of) Spain or Italy. It is their job.” http://www.fin24.com/Economy/Marcus-SA-cant-bailout-eurozone-20111013

Iran crude oil price in September reached 105.54 dollar, up 0.64 dollar in comparison to August, according to the OPEC’s Monthly Oil Market Report. The average price of Iran’s heavy crude since the beginning of 2011 to end of September hit 105.8 dollars per barrel, which witnessed a 31.2 dollars growth compared to the same period of 2010, the report added. The OPEC Reference Basket was volatile in September, moving within a wider range of around $102-$112/b as market sentiment was dominated by economic uncertainties around the globe, particularly in Europe, due to Greece’s debt problems and the fears of contagion to other countries. On a monthly basis, the OPEC Reference Basket rose $1.29 or 1.2% in September to average $107.61/b. http://tehrantimes.com/index.php/economy-and-business/3497-iran-september-oil-price-hit-record-high-opec

Trade between India and Dubai is expanding at an unprecedented pace, and as one of the largest marine terminal operators in the region, DP World is a major facilitator and contributor to this growth. That’s the message from Mohammed Al Muallem, senior vice-president and managing director, DP World, UAE Region to the 7th India Shipping Summit held in Mumbai this week. Muallem said: “Dubai, with its superior supply chain infrastructure, is the preferred commercial gateway to the UAE and other GCC markets. Indian exporters and importers have been among DP World’s most valued business partners and will remain so for a long time to come.” http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2011/October/business_October229.xml&section=business

As our readers know, we have covered the HFT space extensively during the past time. More and more people are acknowledging the HFT phenomenon, and now we get sporadic articles in the mainstream media popping up. Below from FT. At one point during the day no fewer than 6.1m data messages per second were being pinged around US trading venues, according to industry data complier MarketDataPeaks.com. That was nearly 600,000 messages per second higher than the previous record, which had only stood since August, as global markets convulsed amid US and European growth and debt fears. http://www.thetrader.se/2011/10/13/trading-at-the-speed-of-light/

Silvio is getting more desperate by the day it seems. Italian people are suffering under the mountain of debt, youth unemployment is at very high levels, and politics still run by one man. With the inevitable default/big haircut in Greece, focus will shift once again to Italy. Today we get increasingly desperate news from Silvio such as “there is no alternative than keeping Silvio” etc. Beside giving Italy talk shows with beautiful ladies, what has Silvio actually done? The Economist report from earlier this year, great reading on the Italian mess here. What about that debt under Silvio?http://www.thetrader.se/2011/10/13/grande-silvio/

This post originally appeared at TheTrader.

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