BofA Cashes In Its China Chips (WSJ)
But Bank of America faces additional worries because of its 2008 acquisition of Countrywide Financial Corp., the troubled California lender that is the source of many bad mortgages now plaguing the bank. “No one really knows the capital hole that sits there,” said Mr. Miller, the bank analyst for FBR Capital Markets.
Citi CIO: There’s A Long Term Problem In Stocks (CNBC)
“The corporate sector continues to simply slash costs rather than focus on top-line growth,” he said. “If you carry on just cutting costs and cutting people, at some stage the growth will stop.”
Merkel To Voters: Germany Will Emerge Stronger (Bloomberg)
“Many are worried, but they don’t need to be because the currency is stable,” Merkel told a rally of her Christian Democratic Union yesterday in Schwerin, the state capital. “It’s our aim to come out of this stronger than we went into it, as we did during the banking crisis. I said that in 2009, and look at where the economy is in 2011. This can be achieved again.”
EU Seeks Action On Greek Deal (WSJ)
The European Commission said Tuesday negotiations have made progress this week in finding a resolution to Finland’s requirement for collateral from Greece in exchange for contributing to a second bailout for the Mediterranean country, but comments from other leaders signaled that there is no quick fix. “There was progress at the expert level just yesterday [Monday],” Commission President José Manuel Barroso said Tuesday at a press conference, adding that he hopes the final details will find consensus “very soon.”…Meanwhile, Richard Sulik, head of Slovakian Freedom and Solidarity Party, also known as SaS, told German newspaper Die Welt that Greece should default rather than receive additional financial support. Mr. Sulik is quoted as saying in an interview with the paper he “will do everything” to stop parliament approving the euro zone’s second rescue package for Greece, along with a proposed increase in the lending capacity of the euro zone’s chief bailout vehicle.
Hedge Funds Burned By August Market Heat (FT)
According to provisional estimates from consultancy Hedge Fund Research, the average hedge fund has lost 4.1 percent during August – making the month the industry’s fourth worst ever. Among the biggest losses are those at the $36 billion Paulson & Co. As of August 19, the firm’s flagship Advantage Plus fund was down 14 percent in the month, one investor revealed – taking the funds losses to just under 39 percent – around $4 billion – so far this year.
Italian Town Mints Own Money To Fight Austerity (Reuters)
Filettino, set in rugged hill country around 100 km (65 miles) east of Rome, is rebelling against a proposal to merge the governments of towns with fewer than 1,000 inhabitants to save money. Filettino has only around 550 people, but instead of merging with neighboring Trevi, mayor Luca Sellari is trying to go it alone and set up a “principality” along the lines of the famous republic of San Marino to the north. He has started minting Filettino’s own bank currency, the “Fiorito,” with his photo on the back, which he says is already being used by the townsfolk. “We aim to achieve real autonomy from Italy and we have the financial resources to do it,” Sellari said in an interview Continue reading »
