Fed Easing Seen As Ineffective By 75% In Global Poll Favoring ECB (Bloomberg)
Global investors doubt the Federal Reserve’s plan to buy more Treasury securities will boost the U.S. economy or bring down unemployment and say they believe the government is pursuing a weak-dollar policy, a poll shows. Three-quarters of those surveyed say the central bank’s securities purchases -- or quantitative easing -- will have little or no effect on joblessness, according to the latest quarterly Bloomberg Global Poll of 1,030 investors, analysts and traders who are Bloomberg subscribers. More than half say the Fed’s action won’t increase U.S. growth over the next year. Lower unemployment “is a long way off,” Jonathan Mackay, a poll participant and senior fixed-income strategist for Morgan Stanley Smith Barney LLC in New York, said in an e-mail. Global investors do think the Fed will have some success in lifting inflation, another goal. Half expect inflation to rise modestly as a result of the central bank’s actions. One in five say the Fed will get more than it’s hoping for and that inflation will increase to dangerous levels.
EU 'Ready To Help' Amid Bond Sell-Off (WSJ)
"We have all the necessary instruments," European Commission President Jose Manuel Barroso told reporters in South Korea, where he was attending the summit of the Group of 20 industrialized and emerging nations. "The EU is ready to support Ireland." He declined to speculate on whether the EU's new €440 billion sovereign rescue fund would be needed.
Jeremy Grantham: Be In Cash, Wait For Stocks To Fall (CNBC)
“Cash has a virtue that people don’t appreciate fully, and that is its 'optionality,' ” said Grantham, who is chairman of Grantham Mayo Van Otterloo, a Boston-based asset management firm, and a respected voice in the financial world. “If anything crashes and burns in value—say the US stock market—if you have no resources, it doesn’t help you," he explained. "If the bond market crashes, and you have not resources, it doesn’t help you. What cash is is an available resource."
Talks With Banks Begin for Troubled Assets (NYT)
“You’re going to see over the next five years, more financial asset liquidations than you’ve seen in the sum total of the last 100 years,” said Peter L. Briger Jr., who oversees $12.7 billion of credit-related private equity and hedge fund investments as co-chairman of the Fortress Investment Group. “If you’re in the market for financial services garbage collection, there’s plenty to do right now.”
Geithner: We Won't Weaken The Dollar To Spur Growth (Reuters)
"The U.S. will never do that," Geithner said in response to a suggestion by former Federal Reserve Chairman Alan Greenspan that Washington was pursuing a policy of weakening the dollar. "We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy," he said, adding that it was "not an effective strategy" for any country.
G-20 Nations Wrangle Over Strengthening Vow on Currencies (Bloomberg)
Obama and his Chinese counterpart Hu Jintao spent “the bulk” of an 80-minute meeting in Seoul discussing exchange rates before sitting down with other leaders to begin their summit tonight. Canadian Prime Minister Stephen Harper said he’s “not so sure” an agreement will be reached by the end of proceedings in the South Korean capital tomorrow.
Deficit Panel Pushes Cuts (WSJ)
The preliminary plan in its current form would end or cap a wide range of breaks relied on by the middle class—including the deduction for home-mortgage interest. It would tax capital gains and dividends at the higher rates now levied on wage income. To compensate, one version of the plan would dramatically lower and simplify individual rates, to 9%, 15% and 24%. For businesses, the controversial plan would significantly lower the corporate tax rate—from a current top rate of 35% to as low as 26%—but also eliminate a number of deductions. It would make permanent the research and development tax credit.
RBC Expands Hong Kong Presence (WSJ)
The bank has doubled the size of its Hong Kong trading floor, a top executive at its investment banking arm said, the latest step in an expansion by Canada's largest bank by assets outside of its home market. Earlier this week RBC said it had acquired 50 professionals from Fortis Wealth Management Hong Kong Ltd. Last month RBC bought British fund manager BlueBay Asset Management for £963 million ($1.55 billion).
Blackstone’s Schwarzman Renews Criticism of Banking Rules (Dealbook)
“When you have an access that goes up and down” and “it’s money good in any case,” he said, “to have that market, sometimes it’s not a deep market, crash that asset, and destroy the capital of the banking system and create a panic, seems to me to be on its face completely unwise, but we’re still doing it.”