Photo: Fréderic via Flickr
Don’t blame yourself if you missed a few key things this week. Even with one eye on CNBC and the other on your Bloomberg terminal, it’s likely you’d only remember the details emerging from Penn State.News in the U.S., even after MF Global’s collapse, remained strictly in politics. Herman Cain and Rick Perry dominated headlines after one blundered during a debate and the other was hit by further harassment claims.
In an unexpected fall, German industrial production fell 2.7% in October. That missed forecasts for a decline of just 0.9%. At the same time factory orders dropped by 4.3% as demand from Euro-region peers slumped 12.1%. The country's central bank had originally predicted strong growth to end the year, but said that expectations were beginning to deteriorate.
After five months of surging inflation, the United Kingdom saw producer-price inflation slow to 5.7%. Though that is still higher than many economists would like to see, it is down from September's 6.3%. Commodity prices were rapidly eroding profits at the nation's retailers and super markets.
The European Union's European Commission lowered regional growth forecasts by 70% to just 0.5% for 2012. 'This forecast is in fact the last wake-up call,' the EU's Monetary Affairs Olli Rehn said. 'Growth has stalled in Europe, and there is a risk of a new recession.' At the same time, the commission estimated unemployment would stay at 9.5%.
Chinese export growth slowed during the month, though still up 15.9% year-over-year. Meanwhile, imports accelerated, growing by 28.7%. That healthy spurt reinforced analyst thoughts that, if anything, the country is headed towards a soft landing. Overall, the trade surplus narrowed to $17 billion for the month. Chinese solar panels also came under further scrutiny this and last week as American companies allege unfair competitive advantages.
After posting disappointing results off of its stake in the Industrial and Commercial Bank of China, along with slowing trading revenues, Goldman Sachs announced it would sell 2.4 billion share in the company. The proceeds will total between $1.1 and $1.5 billion, buttressing the firm. The Chinese government has been buying up stock in its banking sector as concerned investors flee to safe havens. Goldman first invested in ICBC in 2006.
Credit Suisse plans to reveal the names of wealthy American clients who have evaded taxes. Switzerland's second-largest bank began notifying clients suspected of tax evasion that it would turn over their names to the IRS. 'In connection with the IRS treaty request, the SFTA has issued an order directing Credit Suisse to submit responsive account information to the SFTA,' the letter said. 'This order is immediately executable and Credit Suisse as an information holder has no right to appeal.'
In a rare turn of events, manufacturing giant Caterpillar announced it planned to shift production from overseas locations to the U.S. The bell weather firm will move 1,000 jobs from Japan to a new plant, that's location has yet to be disclosed. The plant will produce small construction machinery. Caterpillar hopes to break ground on the site in the second half of 2012.
Ratings agency Moody's announced that it was putting Nomura on review for a possible downgrade, on the same day it lowered debt ratings for Daiwa Securities. If Nomura is downgraded, its debt will trade one-notch above junk status. The move will significantly increase borrowing costs for the financial giant. Nomura recently announced losses of 46.1 billion yen as trading and investment banking revenue slumped.
Amazon, in an about face, backed a bill that would allow the government to collect sales taxes online, even if an e-commerce retailer does not have a physical presence in a state. 'Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,' said Paul Misener, Amazon vice president, global public policy. 'It's a win-win resolution - and as analysts have noted, Amazon offers customers the best prices with or without sales tax.'
While other banks wind down and sell off proprietary trading desks, Citi announced last Monday that it would put $800 million of its own money into hedge funds and private equity it was managing. The proposed Volcker rule would restrict any bank from using more than 3% of its Tier 1 capital into the funds, which has turned others away.