Daily Archives: May 21, 2010

President Obama Gets Financial Reform While World Markets Fall on Worries about China, Greece, Thailand

President Obama is closer to signing Financial Industry Reform as four senate Republicans join the Democrats to allow the cloture vote which send the senate bill for a final vote on Friday:

In the US, financial regulatory reform cleared its last big hurdle in the Senate as four Republicans joined Democrats in voting to bring the protracted debate to a close, clearing the way for a final vote.

The Senate bill would have to be merged with House legislation before it can be signed by President Barack Obama. Large US banks warned that proposed changes in the Senate bill – including provisions forcing them to spin off swaps desks and banning them from proprietary trading – were contributing to the market turmoil. Some US regulators privately supported that analysis.

In Germany, The Angela Merkel Government  banned so-called short selling on Wednesday:

Angela Merkel, Germany’s chancellor, fanned fears of further political intervention in the markets after Berlin’s unilateral ban on naked short selling – the practice of selling securities such as shares and bonds that are not owned or borrowed.

“We need the financial industry to be honest with us,” she told a conference in Berlin. “If we don’t get honesty, then we might not do the right thing technically but we will do the right thing politically.”

Wolfgang Schäuble, her finance minister, defended Germany’s sudden move. “If you want to drain a swamp, you don’t ask the frogs for an objective assessment of the situation,” he told reporters.

David Cameron, the UK’s new prime minister, is expected to stress the need for international co-ordination when he meets Ms Merkel on Friday. The unilateral ban was described by one British official as “crackers”.

These actions along with fears of Greece upheaval due to reform in  order to receive their bailouts from IMF and European Union, the three weeks of violence including a government crack down on opposition Bangkok Thailand and uncertainty on China send the world markets reeling on Thursday:

The S&P 500 fell 3.9 per cent, bringing its losses since late April to 12 per cent and pushing it into “correction” territory.

Most Asian stocks, which this week slumped to their lowest levels in nearly nine months, continued to suffer on Friday. In Tokyo, the Nikkei 225 index dropped 2.45 per cent to 9,784.54, while Sydney’s S&P/ASX 200 index declined 0.26 per cent to 4,305.40. The Shanghai Composite, the worst-performing market in the region this year, rebounded 1.08 per cent to 2,583.52. The Hong Kong market was closed for a public holiday.

“The lack of clarity from the politicians has shattered confidence,” said David Owen, chief European financial economist at Jefferies.

At close in New York, the S&P 500 index was down 3.9 per cent to 1,071.59, the Dow Jones Industrial Average fell 3.6 per cent to 10,068.01 and the Nasdaq Composite index lost 4.1 per cent to 2,204.01.

Financial Times has the rest of the story.

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Here We Go Again: Mexico’s Calderon Blasts America This Time in A Join Session of Congress

Talking About wearing out your welcome Mexico’s President Felipe Calderon criticize United States policies this time during a joint session of Congress. The Mexican President chastise the US on the War on Drugs including weapons (supposedly came  from the US) after the US remove the ban on assault weapons:

In a speech to a joint session of Congress, Calderon described efforts to fight organized crime in Mexico, where 23,000 people have been killed in drug violence since he came to power in late 2006 and launched an army offensive.

Despite the fact the US has million of dollars to help Mexico to fight the drug cartel:

In a speech to a joint session of Congress, Calderon described efforts to fight organized crime in Mexico, where 23,000 people have been killed in drug violence since he came to power in late 2006 and launched an army offensive.

Washington is also aiding Mexico’s battle against drug gangs with a 2007 pledge of $1.4 billion for equipment and police training to help fight the cartels that ship some $40 billion worth of illegal drugs north each year.

The drug violence has become a major political test for Calderon and a growing worry for Washington and foreign investors as violence has spread across the southwest border.

“There is one issue where Mexico needs your cooperation. And that is stopping the flow of assault weapons and other deadly arms across the border,” Calderon said to a standing ovation from U.S. lawmakers.

Calderon said the increase in violence in Mexico had coincided with the 2004 lifting of a U.S. assault weapons ban.

The 10-year ban on the sale of assault weapons to civilians expired without being extended by Congress. U.S. Attorney General Eric Holder has said the administration favors reinstituting the ban, though guns rights groups oppose it.

Calderon said he respects Americans’ Second Amendment right to bear arms but said many of the guns are getting into the hands of criminals.

“I would ask Congress to help us, with respect, and to understand how important it is for us that you enforce current laws to stem the supply of these weapons to criminals and consider reinstating the assault weapons ban,” he said

Calderon speech was well receive by Democrats with a standing ovation while the GOP  denounced the remarks:

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Though Calderon’s request received applause and a standing ovation from mainly Democratic lawmakers, Republicans criticized the Mexican leader for discussing U.S. laws.

“It was inappropriate for President Calderon to lecture Americans on our own state and federal laws,” said Senator John Cornyn, a member of the Republican leadership. “Moreover, the Second Amendment is not a subject open for diplomatic negotiation, with Mexico or any other nation.”

On Immigration, The Mexican President is calling for Immigration reform:

On immigration — a common theme during his visit to Washington — Calderon said his country was trying to improve economic conditions so Mexicans would not feel the need to leave their country in order to succeed.

He said Mexico expected more than 4 percent growth this year, even though data released on Thursday showed the economy shrank quarter-on-quarter in the first quarter of this year.

Millions of people are still crossing the U.S. border illegally to seek work. An estimated 10.8 million illegal immigrants live in the United States, most of them from Mexico and Central America.

Calderon repeated his opposition to a new Arizona law that requires police to check the immigration status of anyone they suspect is in the country illegally.

“We must find together a better way to face and fix this common problem,” he said.

Reuters

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