UNITED NATIONS - President Barack Obama urged world leaders to put an end to the intolerance and violence that led to the recent killing of the U.S. ambassador in Libya and warned Iran he would do what it takes to prevent it from getting nuclear arms. Full Article | Video
An epic lack of foresight, accuracy and rationale... https://www.tfmetalsreport.com/comment/170246#comment-170246
MADRID - Protesters clashed with police in Spain's capital as the government prepares a new round of unpopular austerity measures for the 2013 budget that will be announced on Thursday. Full Article | Slideshow
By Philip Aldrick, Economics Editor
3:30PM BST 25 Sep 2012
Banks are as risky as they were before the financial crisis and are devising new ways of gaming the rules, the IMF warned in an analytical chapter of its Global Financial Stability Report.
To build a safer system, regulators need to “refine” policy further, including “a global-level discussion on the pros and cons for direct restrictions on certain business activities for banks, rather than just requiring them to hold more capital”, the IMF said.
It drew attention to the UK, where banks will have to ringfence their retail operations to protect them from investment bank risks, and the US, which has barred casino-style proprietary trading. Both plans may herald a move to formal bank break ups, it said.
While the US proposal is clear, the paper suggested Britain’s less explicit requirement may also convince lenders to spin off investment banking activities. “One outcome [of ringfencing] could be that some UK banks divest trading activities given the increased capital and liquidity costs,” it said.
Regulators need to consider break up plans more fully, the IMF said as it warned that “although the intentions of policymakers are clear and positive, the reforms have yet to effect a safer set of financial structures, in part because ... the intervention measures needed to deal with the prolonged crisis are delaying a ‘reboot’ of the system onto a safer path”....
Edelmina Flores thanks God and Hugo Chavez for her apartment in a new housing complex in the Venezuelan president’s home state of Barinas. She might also want to thank the Chinese government.
Since 2007, the China Development Bank has lent Venezuela $42.5 billion collateralized by revenue from the world’s largest oil reserves, according to data compiled by Bloomberg from announcements of deals by the Chavez government. That’s around 23 percent of all overseas loans by the state-run lender and more than the $29 billion the U.S. spent rebuilding Iraqbetween 2003 and 2006. At least $12 billion was promised in the past 15 months, when stagnant oil output and the highest borrowing costs among major emerging markets would’ve made raising capital more expensive.
The loans are fueling a surge in spending as Chavez hands out homes to the poor, stocks “socialist” supermarkets with appliances and builds a cross-country railroad -- all aimed at winning votes next month in his toughest election battle ever.
“If we didn’t have a president like the one we have, lots of families would be on the street,” said Flores, who used to live in a two-bedroom shack before being given a new home in December by Chavez’s brother, Governor Adan Chavez.
“Now I have a decent home for my three children,” Flores, 46, said in an Aug. 21 interview. “My president is the best.”
The loans give the Chinese influence over Chavez, who regularly speaks of recovering Venezuela’s sovereignty after decades of subjugation to the U.S. “empire.” In addition to securing large deliveries of oil, much of the money lent to Venezuela returns in the form of contracts to Chinese state-run companies whose global expansion is also being financed by the Beijing-based CDB, the world’s biggest policy lender....
President Barack Obama pledged in a speech to world leaders today that the U.S. will do what it takes to prevent Iran from building a nuclear weapon and warned that time for a diplomatic resolution “is not unlimited.”
While there is still a chance to negotiate, Obama told the annual meeting of the United Nations General Assembly in New York, a nuclear-armed Iran would imperil Israel, ignite a regional arms race and destabilize the global economy.
“Make no mistake: A nuclear-armed Iran is not a challenge that can be contained,” Obama said in a speech aimed at two distinct audiences: Mideast leaders, including those of new governments emerging from the Arab Spring, and U.S. voters who in six weeks choose between him and Republican Mitt Romney in the presidential election. “The United States will do what we must to prevent Iran from obtaining a nuclear weapon.”
The Middle East and North Africa were the focus for Obama in his UN speech, and he used the bulk of the address to talk about the attacks on U.S. diplomatic outposts triggered by an anti-Islam video made in the U.S. The deadliest was a Sept. 11 assault on the U.S. consulate in Benghazi, Libya, that killed Ambassador Chris Stevens and three other Americans.
The violence has opened a line of attack by Romney on Obama’s foreign policy, particularly his handling of relations with Israel and the threat posed by Iran’s nuclear ambitions. In an address to the Clinton Global Initiative in New York just before Obama spoke, Romney said the U.S. seems “at the mercy of events rather than shaping events.”........
Spanish Prime Minister Mariano Rajoy may be delaying a bailout request on a bet that renewed market tension will also force Italy to seek aid, strengthening his bargaining power and giving political cover.
Spain will have more leverage if it can fend off a rescue until Italy joins it in needing European Central Bank help to bring down the cost of servicing its debt, said Raphael Gallardo, head of macroeconomics at Rothschild Asset Management in Paris. The gap between Italian and Spanish yields widened to 68 basis points at 9:30 a.m. in Madrid from 65 points yesterday.
Spain “would be in better company and would suffer less stigma if it was to ask for a rescue at the same time as Italy,” said Gallardo, who helps manage 20 billion euros ($26 billion) of investments. “Italy needs further austerity efforts so those are probably more reachable with the support of the European Union and the ECB.”
To pull that off, Rajoy needs to tighten the gap between Spanish and Italian borrowing costs, reversing the trend that has pushed Spain’s yields above Italy’s since March. Investors have increasingly seen Rajoy as the next candidate for a bailout since he came to power in December, after a series of policy reversals and communication gaffes....
DUBAI - He is loathed in the West and weakened at home, but Iran's outspoken president Mahmoud Ahmadinejad seems intent on raising hackles one more time during his last official visit to the United Nations this week. Full Article | Related Story
MADRID - Violent protests in Madrid and growing talk of secession in wealthy Catalonia are piling pressure on Spanish Prime Minister Mariano Rajoy as he moves closer to asking Europe for rescue money. Full Article | Video
Exclusive: IMF, EU clash over Greece's bailout prospects
By Dina Kyriakidou and Lesley Wroughton
ATHENS/WASHINGTON | Wed Sep 26, 2012 9:27am EDT
ATHENS/WASHINGTON (Reuters) - Greece's international lenders are at loggerheads over how to solve Athens' debt crisis, threatening more trouble for the euro as the IMF demands European governments write off some of the Greek debt they hold.
Officials from Greece and the "troika" of European Union, European Central Bank and International Monetary Fund have told Reuters that tensions among them have increased of late as the Washington-based Fund has played tough.
It has been pushing to restructure debts Athens owes to public-sector foreign creditors. EU leaders prefer to give Greece more time to meet bailout goals.
While strains between Greece and its would-be saviors have been evident, as significant are frictions among the lenders.
"The problem is not between the IMF and Athens, it's between the IMF and the EU," one Greek official said, speaking like others on condition of anonymity. That view was confirmed by sources familiar with thinking in Brussels and Washington.
Already facing an electoral backlash over bailouts and austerity, and unsure what may be needed to defend the creaking public finances of heavyweights Spain and Italy, EU leaders do not relish IMF proposals that they swallow tens of billions of euros of losses on their holdings of Greek government bonds.
"Europe wants more time to see what will happen with Spain and Italy, perhaps even after the German election in 2013," the Greek official said. "The IMF wants Europe to come up with a comprehensive solution to its problems now."..............
Syrian rebels bomb army command in Damascus
By Samia Nakhoul and Oliver Holmes
BEIRUT | Wed Sep 26, 2012 9:38am EDT
BEIRUT (Reuters) - Syrian rebels bombed a military complex in Damascus on Wednesday, striking at the heart of President Bashar al-Assad's power and igniting a fire which gutted the army command headquarters.
The Free Syrian Army, the main rebel force fighting to overthrow Assad, claimed responsibility for the attack in central Damascus which it said killed dozens of people.
An armed forces statement said no military leaders were hurt and only a number of guards were wounded in the blasts, which shook the whole city at around 7 a.m. (0400 GMT) before regular working hours.
It was the biggest attack in Damascus since July 18 when a blast killed several senior security officials, including Assad's brother-in-law, the defense minister and a general.
Wednesday's attack took place as international leaders met at the United Nations, where deadlock between world powers over Syria has blocked any global response to the conflict which activists say has killed 27,000 people, forced a quarter of a million refugees to flee the country and left 2.5 million people in need of help.
The uprising, which erupted in March last year as mainly peaceful protests for reform, has become an armed insurgency pitting mainly Sunni Muslim rebels against Assad, from the Alawite faith which is close to Shi'ite Islam.
Shi'ite Iran supports Assad while regional Sunni powers have backed the rebels. One Sunni leader, the Emir of Qatar, told the United Nations that Arab countries should intervene "to stop the bloodshed", but few Arab states are likely to back his call.
U.N. special envoy to Syria Lakhdar Brahimi said Syria's crisis was "extremely bad and getting worse."
The Syrian Observatory for Human Rights, which monitors the violence through a network of activists in the country, said 240 people were killed in Syria on Tuesday. Most were civilians but the death toll included 54 members of Assad's security forces.
FLAMES ENGULF MILITARY BUILDING
Internet footage of Wednesday's fire at the General Staff Command Building showed flames engulfing its upper floors.
"The attack in Damascus once again proves that, with sufficient planning and co-ordination, the opposition appears to retain the ability to strike at the heart of regime," said David Hartwell, Middle East analyst at IHS Jane's..........
Exclusive: Vitol trades Iranian fuel oil, skirting sanctions
By Luke Pachymuthu, Randy Fabi and Chen Aizhu
SINGAPORE/BEIJING | Wed Sep 26, 2012 9:16am EDT
SINGAPORE/BEIJING (Reuters) - Vitol, the world's largest oil trader, is buying and selling Iranian fuel oil, undermining Western efforts to choke the flow of petrodollars to Tehran and put pressure on Iran's suspected nuclear weapons program.
Vitol last month bought 2 million barrels of fuel oil, used for power generation, from Iran and offered it to Chinese traders, Reuters established in interviews with 10 oil trading, industry and shipping sources in Southeast Asia, China and the Middle East. A spokesman for Vitol declined to comment.
Swiss-based Vitol is not obliged to comply with a ban imposed in July by the European Union on trading oil with Iran because Switzerland decided not to match EU and U.S. sanctions against Tehran.
The company earlier in the year stopped trading Iranian crude oil from its main European offices before the July 1 EU embargo deadline. But the trading sources said it has continued to deal in Iranian fuel oil from the Middle East.
The tale of the cargo of Iranian fuel oil involves tanker tracking systems being switched off, two ship-to-ship transfers, and blending of the oil with fuel from another source to alter the cargo's physical specification.
Privately-held Vitol SA is led by its long-time CEO Ian Taylor, a Briton. Taylor was among leading donors to Britain's ruling Conservative Party named in March by the Prime Minister's office as having dined with David Cameron at his private apartment in Downing Street amid the fall-out from a "cash for access" party funding scandal. Britain is a vociferous critic of Tehran's nuclear program and a leading advocate of the EU sanctions.
Vitol has said previously it is in compliance with sanctions against Iran, but has declined to say whether or not it would follow the strict EU regulations rather than Switzerland's.....
Sept. 26, 2012, 4:01 a.m. EDT
By matt[at]mattlynn[dot]co[dot]uk (Matthew Lynn)
LONDON (MarketWatch) — In the next few days and weeks, there is one simple question everyone in the markets is going to want to know the answer to: When is the Spanish Prime Minister Mariano Rajoy going to press the bailout button?
In the summer, the president of the European Central Bank, Mario Draghi, announced he would do “whatever it takes” to save the euro. And it turned out that he meant it. Stretching the definition of preserving price stability in ways that even former Federal Reserve Chairman Alan Greenspan — who one might argue defined his job as keeping the stock market happy — might have found overambitious, Draghi has taken it upon himself to keep bond yields in the highly indebted peripheral euro-zone countries under control.
In practice, that means the ECB will step into the markets and buy the bonds of the peripheral countries directly — in unlimited quantities, if necessary. There is a catch, however: It won’t happen until the country involved formally requests assistance.
Ever since the ECB’s announcement, the markets have been expecting the Spanish premier to make the call. But when is it going to happen? This Thursday? Next week? Next month? No one quite knows.
In fact, Spain is engaged in a complicated dance with the markets. In game theory it is know as “chicken.” And it rarely ends happily.
Investors, naturally enough, want the Spanish to go ahead and.....
Submitted by Tyler Durden on 09/26/2012 - 08:57
Desperate North Korea has exported more than 2 tons to gold hungry China over the past year to earn US $100 million. Even in tough times during the Kim Il-sung and Kim Jong-il regimes, North Korea refused to let go of its precious gold reserves. Chosun media reports that “a mysterious agency known as Room 39, which manages Kim Jong-un's money, and the People's Armed Forces are spearheading exports of gold, said an informed source in China. "They are selling not only gold that was produced since December last year, when Kim Jong-un came to power, but also gold from the country's reserves and bought from its people." This is a sign of the desperation of the North Korean regime and also signals China’s intent to vastly increase the People’s Bank of China’s gold reserves.
Submitted by Tyler Durden on 09/26/2012 - 09:37
Over a month ago, when discussing the implications of the South African miner strike that will not end until all local mining companies' income statements are crippled after succumbing to wage hike demands, we said "Expect more South African mines to shutter, as gold production in the world's third largest gold producer grinds to a halt, and the local workers grasp they had the leverage all along. Should the South African example spread to other countries, then expect the price of gold to soar regardless of how much printing the central planners engage in the coming weeks and month." Today, we find out just what the final tally is , as this too prediction is proven correct: "Strikes at South African gold mines have shut about 39 percent of capacity, including at AngloGold (AGG) Ashanti Ltd. and Gold Fields Ltd. (GFI), as unofficial walkouts spread across the country in demand of above-inflation pay increases." And boom: "AngloGold, the world’s third-largest gold producer, today said all of its South African mines have been halted. Gold Fields Ltd. also lost a metric ton, or about 32,000 ounces, of production after strikes at its KDC and Beatrix operations." That's ok, Bernanke will just print more gold.
September 25, 2012 7:29 pm
By Martin Wolf
Should Germany leave the euro?
It is, after all, the big country with an obvious exit option. The question becomes more pertinent after the decision by Angela Merkel, Germany’s conservative chancellor, to support Mario Draghi, president of the European Central Bank, against Jens Weidmann, her appointee as head of the Bundesbank, over plans to buy bonds of governments in difficulty.
The president of the Bundesbank, Germany’s most respected institution, has now become a spokesman for conservative German eurosceptics. The ECB, Germans realise, will not remain a reincarnated Bundesbank. Once again, we are reminded that the eurozone is set to be a miserable marriage. Might a separation, however disruptive, be better?
If we are to address that question from a German perspective, we must distinguish false arguments from valid ones. As Paul de Grauwe, the Belgian economist, now at the London School of Economics, shows in a recent co-authored article, it is easy to find examples of the former.
This paper asks whether the accumulation of net claims within the European System of Central Banks means that Germany would lose a great deal if the eurozone were to break up. Its response is: no.
First, Germany has accumulated net claims on the rest of the world – and on other members of the eurozone – not because of internal central bank accounting, but because it has large current account surpluses. Germans have been running two businesses: exporting goods, at which they are excellent, and importing financial claims, at which they are not. In brief, Germany’s surpluses have exposed Germans to...
Last updated:September 25, 2012 6:47 pm
By Brooke Masters, Chief Regulation Correspondent
Government regulation of a cornerstone of financial markets has moved closer after a British banking body agreed to surrender its decades-long role in overseeing Libor, the scandal-riven global benchmark for borrowing costs.
The British Bankers' Association formally voted to cede its role last week, more than four years after questions were first raised about whether banks were lying in their submissions to the setting that governs $350tn in contracts worldwide.
The move came at the request of UK officials who plan to announce a new regulatory structure for the rate-setting process as part of a package of reforms due to be announced on Friday, two people familiar with the process said. The rates serve as benchmarks for everything from US home mortgages to complex derivatives transactions worth billions of dollars.
Martin Wheatley, managing director of the Financial Services Authority, has been leading a review of the rates aimed at restoring confidence after Barclays paid £290m to settle allegations that it had tried to manipulate Libor and Euribor, a similar interbank rate set in Brussels.
More than a dozen other banks and financial institutions are being probed on three continents for similar manipulation allegations. UBS has said it has received partial immunity for working with investigators, and Royal Bank of Scotland has said it expects to reach a settlement eventually.....
Sept. 26, 2012, 4:21 p.m. EDT
By grobb[at]marketwatch[dot]com (Greg Robb), MarketWatch
WASHINGTON (MarketWatch) — The Federal Reserve’s next move will be to outright buy Treasurys, most likely at its meeting in early December, Fed watchers said Wednesday.
Earlier this month, the Fed launched the third round of asset purchases - an open ended $40 billion per-month of mortgage-backed securities.
The Fed is already buying $45 billion of Treasurys under Operation Twist. But these purchases, which are offset by sales of shorter-term securities, are set to stop at the end of the year.
The move to outright purchases of Treasurys has become conventional wisdom among Fed watchers.
“I think Bernanke more or less told us...they would move to outright buying of Treasurys,” said Mike Moran, chief economist at Daiwa Securities USA.
“Only $40 billion of MBS may not be enough,” agreed Paul Ashworth, chief U.S. economist at Capital Economics.
Uncertainty over the fiscal cliff could alter the start date, he said.
The Fed statement announcing QE3 said it will “undertake additional asset purchases” if the labor market fails to show substantial improvement.
Charles Evans, the president of the Chicago Fed Bank, on Wednesday said he supported adding new bond-buying to make up the difference when Operation Twist ends, according to Reuters....
U.S.-led "war on drugs" questioned at U.N.
By Brian Winter
UNITED NATIONS | Wed Sep 26, 2012 6:02pm EDT
UNITED NATIONS (Reuters) - The presidents of Mexico, Colombia and Guatemala all called for a vigorous global debate of anti-narcotics laws at the United Nations on Wednesday, raising new questions about the wisdom of the four-decade-old, U.S.-led "war on drugs."
Although none of the leaders explicitly called for narcotics to be legalized, they suggested at the U.N. General Assembly that they would welcome wholesale changes to policies that have shown scant evidence of limiting drug flows while contributing to massive violence throughout Latin America.
"It is our duty to determine - on an objective scientific basis - if we are doing the best we can or if there are better options to combat this scourge," Colombian President Juan Manuel Santos said.
Mexican President Felipe Calderon, who leaves office on December 1 after spending much of his presidency locked in a bloody battle with drug-smuggling gangs, called on the United Nations to lead a global debate over a less "prohibitionist" approach to drugs.
Guatemala's President Otto Perez Molina echoed Calderon's call and went even further, saying that "the basic premise of our war against drugs has proved to have serious shortcomings."
The speeches, which were a few hours apart, constituted some of the most public challenges to date of anti-drug policies that have been mostly unchanged since the 1970s.
Mexico and Colombia are two of Washington's firmest allies in Latin America and both work closely with U.S. anti-drug efforts. While the subject of legalization was discussed at an Americas-wide summit in Colombia attended by U.S. President Barack Obama earlier this year, raising the once-taboo subject at the 193-nation meeting in New York amounts to an escalation of the debate.
Obama has ruled out any major changes to drug laws, but some U.S. diplomats privately concede that the consensus around Latin America is clearly swinging against the status quo, and that some degree of change is imminent....
Ahmadinejad denounces "uncivilized Zionists," urges new order
By Louis Charbonneau and Arshad Mohammed
UNITED NATIONS | Wed Sep 26, 2012 5:30pm EDT
UNITED NATIONS (Reuters) - Iran's president said on Wednesday his country was under constant threat of military action from "uncivilized Zionists" and called for a new world order not dominated by Western powers in the service of "the devil."
In his eighth and likely final address to the U.N. General Assembly's annual gathering of world leaders, Mahmoud Ahmadinejad painted a gloomy picture of a world driven by greed rather than morality.
"The current abysmal situation of the world and the bitter incidents of history are due mainly to the wrong management of the world and the self-proclaimed centers of power who have entrusted themselves to the devil," Ahmadinejad said.
Iran's president did not reiterate his comments to journalists in New York on Monday that Israel has no roots in the Middle East and would be "eliminated."
However, he complained that nations were being forced to accept a new era of hegemony and added, in a clear reference to Israel: "Continued threat by the uncivilized Zionists to resort to military action against our great nation is a clear example of this bitter reality."
On Tuesday, in his address to the General Assembly, U.S. President Barack Obama said he would do whatever it takes to prevent Iran from getting nuclear arms, adding that there is not an unlimited amount of time to solve the matter via diplomacy.
Israel and the United States have both refused to rule out the possibility of an armed strike on Iran's nuclear facilities, which the West suspects aim to produce atomic bombs but which Tehran says are for solely peaceful purposes.
Israeli Prime Minister Benjamin Netanyahu, who is due to speak at the United Nations on Thursday, has criticized Obama's position that sanctions and diplomacy should be given more time to stop Iran from acquiring nuclear weapons....
Sudan and South Sudan reach deal to restart oil exports
By Ulf Laessing
ADDIS ABABA | Wed Sep 26, 2012 6:32pm EDT
ADDIS ABABA (Reuters) - Sudan and South Sudan reached a border security agreement on Wednesday that will allow the resumption of southern oil exports through the north, spokesmen for both sides said.
The leaders of the African neighbors reached a breakthrough after four days of talks in the Ethiopian capital, Addis Ababa, both delegations said.
Sudanese President Omar Hassan al-Bashir and his South Sudanese counterpart Salva Kiir had met six times since Sunday to iron out a pact key to reviving their economies after their armies came close to all-out war along a disputed frontier in April.
The African Union worked to broker the agreement and the U.N. Security Council had warned of sanctions against both states if no deal is done.
Ethiopia's government, hosting the talks, had arranged for a news conference on Wednesday afternoon, only to postpone it because of last-minute haggling after three weeks of negotiations between delegations.
It was hoped that the deal would provide for a demilitarized buffer zone along the border, according to diplomats and delegation sources.
The United Nations had set a September 22 deadline for a deal but informally extended it until the end of the Addis Ababa summit.
Last month the sides reached an interim deal to restart oil exports from the landlocked South through the north to Red Sea ports after the South shut down its wells in a row over transit fees.
While the security deal should provide both nations with the oil revenues needed to stave off economic collapse, they have yet to sort out several other conflicts left over from South Sudan's secession in July 2011....