Reuters blog archive

from Global Markets Forum Dashboard:

Can the ECB’s plan turn the tide?

Our regular guest and central bank expert Sean Maloney, Chief Economist and Strategist of Finconomics joined us to discuss what lies ahead for the European Central Bank.

It seems that while markets remain unconvinced that the ECB’s plan will work, there is little else that the ECB can do other than wait:

“When you take the June and Sep measures together, they have put together a framework which for mine is second only to to the BOJ's QQE in terms of its potential concentrated easing power. The problem they have got is that circumstances forced them to forward load the well ahead of the timetable for implementation...and this has led to speculation they may do more...but there really isn’t much point until they get a chance to truly judge the impact of what they have already done.”

Instead, ECB watchers can expect more detail on the Asset Backed Securities purchase program:

from Jack Shafer:

How scandals play out in the press: White House security edition

Members of the Uniformed Division of the Secret Service patrol Pennsylvania Avenue outside the North Lawn of the White House in Washington

No bungling bureaucracy will last very long once insiders start anonymously dishing dirt to the press, a lesson currently being taught to Secret Service Director Julia Pierson. Anonymous sources from the Secret Service, its alumni, and insiders who have been read-in on current investigations are taking the agency apart brick-by-brick this month with their leaks to the Washington Post about the White House fence-jumper and the White House shooter.

Ever since Omar J. Gonzalez scaled the nearly 8-foot-high pointed fence, raced 70 yards to the White House front door, and entered untouched, the Post has been pants-ing the Secret Service at regular intervals. First a Secret Service spokesman told the paper on Sept. 20 that Gonzalez was unarmed and arrested just inside the front door. Uh-uh.

from Breakingviews:

Rob Cox: Flurry of ski M&A aims to control weather

By Rob Cox

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

The ski business is amid a flurry – not of snow, but of deals. At the center of the action is Vail Resorts, a $3 billion publicly traded operator in an industry traditionally dominated by family and local owners. The company is upending winter-sports convention in a variety of ways. Chief among them is trying to prove that it can control the weather with some corporate finance.

from Financial Regulatory Forum:

U.S. bank liquidity ratio rule: more lenient than proposed, but tougher than Basel

By Bora Yagiz, Compliance Complete

NEW YORK, Sept. 30, 2014 (Thomson Reuters Accelus) - Large banks may have to make small modifications to their asset mix, raise more equity and ramp up their operational systems in response to federal agencies’finalized rule on liquidity coverage ratio (LCR) . It is the first quantitative U.S. regulatory standard for defining liquidity and establishing a minimum level of liquidity, and is part of the enhanced prudential standard rules of the Dodd-Frank Act.

This rule put forth by three federal agencies concurrently –the Federal Reserve Bank, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC)-- is one of the two creations of Basel Committee on Banking Supervision on liquidity metrics, and flows from its revised liquidity framework. 

from Alison Frankel:

10th Circuit sticks up for class actions in $1.1 bln Dow opinion

When the U.S. Supreme Court issued its 2013 decision in Comcast v. Behrend, class action defendants practically rubbed their hands in glee. Comcast, as you know, held that plaintiffs must offer a classwide damages model in order to be certified to litigate as a class. The 5-4 decision was a followup punch to the court's 2011 opinion in Wal-Mart v. Dukes, which said that to be certified, plaintiffs must establish that their central allegation applies across the class and is "capable of classwide resolution." In combination, Wal-Mart and Comcast were expected to make it much easier for defendants to defeat certification of sprawling classes agglomerating claims by plaintiffs with different sorts of supposed injuries.

But if the Supreme Court majority was trying to knock out giant class actions, it hasn't entirely succeeded: Federal circuit courts keep patching up the cases and sending them back into the ring. In the latest example, the 10th U.S. Circuit Court of Appeals on Monday left intact a $1.1 billion price-fixing judgment against Dow Chemical, rejecting Dow's arguments that under Wal-Mart and Comcast, the trial judge should not have certified a class of purchasers of urethane products, which are used in mattress foam, insulation and sealants. The 10th Circuit panel, in an opinion written by Judge Robert Bacharach, said that even if Dow's supposed price-fixing impacted purchasers in different ways, the class raised common questions about Dow's liability for participating in an alleged conspiracy and about the conspiracy's effect on urethane prices.

from Morning Bid:

Crosscut Saw

Plenty of cross-currents to be aware of in the markets right now - many of which are pretty confusing and relate countervailing messages when it comes to where equities and other risky assets are headed. Stocks were heavy at the open on Monday and slowly got better throughout the day but energy stocks remained under pressure. The expectation of more unrest in Hong Kong certainly has contributed to the jitters, but the U.S. is a pretty resilient economy regardless of outside forces so it's while it's easy to blame China broadly, it's hard to apply too much of a causation (probably why equities recovered throughout the day).

The bond market might be the better signal for the worries in equities. Last week speculators increased their short position in two-year notes to their longest since 2007, and asset managers hold their biggest short position in five-year notes since 2011; taken together that's a clear sign of bearishness in the front end of the curve, reflecting expectations for a flattened yield curve as part of higher rates across the board. With the dollar continuing to strengthen, there's a bearish sense in the air when it comes to U.S. central bank policy, and that's something that again threatens to undermine equities -- witness the weakness again in energy names.

from Breakingviews:

PayPal forced to rev after eBay’s belated U-turn

By Rob Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

PayPal is compelled to accelerate after eBay’s belated U-turn. The $70 billion online auction company has for years resisted setting free its payments business, most recently digging in its heels against Carl Icahn’s demands to do so. Apple and Alibaba have created more urgency than investors, or Breakingviews, could. EBay squandered a big early advantage, but a spun-off PayPal may have a chance to play catch-up.

from Data Dive:

Housing prices line the road to recovery

It seems the political unrest in Hong Kong isn't just a headache for the Chinese. Uncertainty about Hong Kong's pro-democracy demonstrations caused U.S. stocks to fall yesterday, following the lead of their Asian and European counterparts, while the same unease pushed U.S. bond rates higher.

Just-released U.S. home price data for July also failed to meet expectations, with prices increasing 6.7 percent over July, 2013, figures — short of the 7.5 percent rise that analysts had predicted.

from Full Focus:

Images of September

Our top photos from the month of September.

from Reuters FYI:

The animal kingdom shrinks

A pair of black rhinoceros walk at the Imire Rhino and Wildlife Conservation Park near Marondera, east of Zimbabwe's capital Harare, September 22, 2014. REUTERS/Philimon Bulawayo

A pair of black rhinoceros walk at the Imire Rhino and Wildlife Conservation Park near Marondera, east of Zimbabwe's capital Harare, September 22, 2014. REUTERS/Philimon Bulawayo

Going, going, gone?

The world's wildlife population drops by an astonishing 52 percent between 1970 and 2010.