news blog from Ebonie

A sharp recent drop in the Fed’s holdings of U.S. Treasuries for foreign central banks probably reflects the effort by many developing economies to stem rapid declines in their currencies, not some frightening move by the likes of China out of U.S. bonds. That’s the argument put forth by Marc Chandler at Brown Brothers Harriman, who notes the pullback of recent weeks appears to have been the most dramatic since the Asian financial crisis of the late 1990s. His reasoning makes sense: a September spike in the U.S. dollar was accompanied by steep plunges in the exchange rates of many emerging economies. Still, Chandler remains puzzled as to why the selling accelerated to a hefty $21 billion even as the dollar reversed course in the last week: This is the seventh consecutive weekly decline and over this period, custody holdings have fallen an average of about $12-$12.5 billion a week, making this past week quite large relative to trend. It likely reflects foreign central banks’ selling of Treasuries to intervene to support their currencies rather than a dumping of Treasuries to diversify reserves or as a protest to such low interest rates. Yet the difficulty with this hypothesis is that during the week through Wednesday, most emerging market currencies have generally risen against the dollar. This generalization holds true for East Asia which is suspected to use the Fed’s custodial services. For some of the run the dollar was appreciating in general, so private sector dollar buying offset the official selling, but now — over past week — it would seem like the central banks and the private sector have been on the same side selling dollars.  

* U.S. officials are pushing a plan that could help some “underwater” borrowers get refinancing assistance in the latest government bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market.* Amid the wild swings of the past few weeks, cracks are appearing deep in the workings of the stock market that some professional investors say are making the market treacherous to trade.* Russell Caswell’s $57-a-night motel, a magnet for hard-luck cases, police patrol cars and the occasional drug deal, is the unlikely prize in a high-stakes tug-of-war between conservative legal activists and the government.* Running pipelines may not sound as sexy as wildcatting for oil, but Richard Kinder has made a fortune showing how lucrative it can be.* Hedges haunt Morgan Stanley : The Wall Street firm still is trying to clean up a mess that shows the difficulty of putting the financial crisis behind it.* China’s economic growth slowed in the third quarter but remained at a relatively healthy pace, adding to evidence that the Chinese economy is headed for a soft landing.* Asian shares dropped amid receding hopes that euro-zone leaders will be able to substantially contain Europe’s debt crisis. The Nikkei fell 1.4 percent.* Wells Fargo & Co’s third-quarter earnings missed expectations as the bank’s loan growth wasn’t enough to make soaring deposits profitable.* Citigroup Inc.’s third quarter was a bright spot in what is shaping up as a lackluster earnings season for banks. But that didn’t keep investors from punishing financial stocks again.* As investors look toward a Sunday meeting of European leaders for a sweeping solution to Europe’s debt crisis, a spokesman for German Chancellor Angela Merkel on Monday warned against hoping that all the euro-zone’s debt woes would be resolved by then.* The International Trade Commission said Apple Inc didn’t violate HTC Corp’s patents for technology used in its mobile devices, a setback in the Taiwanese company’s patent fight with the iPhone maker.* International Business Machines Corp’s quarterly profit and sales rose amid growth in emerging markets, but the technology giant failed to dispel investors’ concerns about the health of technology spending.* Credit-card issuers, looking for ways to expand their business amid stiff competition, are knocking on familiar if potentially troublesome doors: those of subprime borrowers.* Anadarko Petroleum Co agreed to pay BP PLC $4 billion to settle all claims between the two companies arising from the Gulf of Mexico oil spill, a development that reduced uncertainty about the British oil giant’s ultimate liability for last year’s disaster.

* El Paso Corp Chief Executive Douglas Foshee does not plan to stay at Kinder Morgan Inc after the pipeline company acquires his employer, a Wall Street Journal report said.* Mattel Inc , the world’s largest toy company, is in talks to buy Hit Entertainment, the British owner of Thomas the Tank Engine, for a little over 500 million pounds ($788.9 million), the Wall Street Journal said, citing people familiar with the matter.* U.S. officials and big banks are working on a plan that would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, the Wall Street Journal reported.* The Irish government has spoken to Abu Dhabi’s Etihad Airways and International Airlines Group (IAG) about the possibility of buying the state’s 25 percent stake in Aer Lingus , state broadcaster RTE reported on Monday.* Bank of America Corp is selling its 49 percent stake in 4 World Financial Center in Manhattan to Brookfield Office Properties Inc., Bloomberg News reported, citing a person with knowledge of the situation.

* China trade surplus narrows, signaling slower growth* Vertex shares rally; semis also gain* Dow off 0.4 pct, S&P off 0.3 pct, Nasdaq up 0.6 pctBy Caroline ValetkevitchNEW YORK, Oct 13 (Reuters) - The Dow and S&P 500 slipped on Thursday after JPMorgan’s earnings and China’s soft trade data revived worries about the impact of slower growth on profits.The declines put an end to three straight days of gains that capped off a 12 percent increase in the S&P 500 since hitting a low on Oct. 4. The Nasdaq stayed in positive territory, helped by semiconductor shares.Some analysts said a pause was in store for the market, given the S&P 500’s recent advance. The benchmark S&P 500 has had its largest seven-day rise since March 2009 on growing optimism that European leaders will find a way to contain the region’s debt problems.JPMorgan Chase & Co , the second-largest U.S. bank, slid 4.8 percent to $31.60 and was the biggest drag on the Dow after reporting a drop in its third-quarter net profit. The news followed disappointing results from Alcoa on Tuesday.”It’s early, but it seems like after having a series of great corporate earnings in the face of not-such-great macro numbers, now maybe we’re seeing a little bit less robust corporate earnings,” said Eric Kuby, chief investment officer of North Star Investment Management Corp. in Chicago.Healthy U.S. profits have been among the biggest drivers for stocks since their March 2009 lows.The Dow Jones industrial average fell 40.72 points, or 0.35 percent, to end at 11,478.13. The Standard & Poor’s 500 Index shed 3.59 points, or 0.30 percent, to 1,203.66. But the Nasdaq Composite Index gained 15.51 points, or 0.60 percent, to close at 2,620.24.After the bell, shares of Google rose 5.4 percent to $589.07 after it reported revenue that exceeded Wall Street’s expectations.China’s trade surplus narrowed for a second straight month in September as both imports and exports were lower than expected, pointing to cooling domestic and global economic demand.In U.S. economic data, new claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.According to a Reuters poll, analysts have reined in their expectations for U.S. economic growth, though it is still expected to pick up a notch by year-end.JPMorgan, the first major U.S. bank to report earnings, said profits were hurt as the European debt crisis pushed investment banking clients to the sidelines. The KBW Bank index shed 2.9 percent while Bank of America Corp lost 5.5 percent to $6.22.Boosting the Nasdaq, Vertex Pharmaceuticals Inc climbed 9.1 percent to $43.88 after IMS Health said it was revising estimates of the number of prescriptions written in late September for Vertex’s hepatitis C drug..An index of semiconductors rose 2 percent.About 7 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq for the day, below the year’s daily average so far of about 8 billion.Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 3 to 2, and on the Nasdaq, decliners slightly outpaced advancers.