DEBT FINANCING. Swatch Group ends partnership with Tiffany

Zurich (Reuters)-Swatch Group (UHR.VX) said that she ended her Alliance with Tiffany & Co (TIF.N), blame the jeweler U.S. to block the development of its watch joint venture and revive speculation that Tiffany could become a takeover target.
Sample group Chairman Nayla Hayek told Reuters in March that Tiffany Watch Co., established in 2007 to produce Swiss-made watches under the brand Tiffany, was not as successful as expected because the clocks were not well displayed in stores from Tiffany.
World's largest watchmaker "swatch Group and Tiffany Watch Co. Ltd will press for damages against Tiffany & Co., New York, in compensation for loss of future business in the long term planned," said in a statement on Monday.
Tiffany & Co. was not immediately available for comment.
The strategic alliance, signed for an initial period of 20 years, was designed to promote the development, production and worldwide distribution of Tiffany brand watches and watch various collections since then had been released.
Kepler Capital Markets analyst Jon Cox said he hoped that costs about 20 million Swiss francs (US $ $22,7 million) associated with terminating the venture, which was effectively controlled by the Swatch Group while Tiffany received a royalty.
"In addition, the movement will likely be renewed speculation of a takeover of Tiffany given Swatch Group watch deal was seen as a possible obstacle," he said.
Cox said that Swatch Group had lost its trademark single real gem. "(This) is disappointing and could lead to speculation of a joint venture elsewhere in the sector," he said, citing the diamond miner and retailer Harry Winston (HW.TO) as a possible partner.
Shares of Swatch Group were down 1.5 percent in 1104 GMT, outperforming an index STOXX Europe 600 Personal & Household goods weaker of 2.2%.SXQP.
Vontobel analyst René Weber said he estimated sales of Tiffany clock at about 30 million francs in 2010. "There was a potential 300-400 million francs," he said.
(US $ 1 = 0.883 Swiss francs)

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DEBT FINANCING. Bove sees no threat of Europe standard in u.s. banks

No "> (Reuters)-Rochdale securities analyst Richard Bove said fears of a possible impact of a European debt crisis on American banks were exaggerated, with only the Citigroup (C, N) and JP Morgan Chase (JPM.N) have significant exposure to the crisis.
"Assuming some developments for the worst cases, it seems that Citigroup and JP Morgan Chase are at risk for developments in Europe. No other American institution is, "Bove wrote in a note.
Citing the filings of international financial Statistics Yearbook, released by the International Monetary Fund for the year 2010, Bove said that Citigroup runs the greatest risk with exposure of $ 12.3 billion in $ 10.8 billion in Italy and Spain.
JP Morgan Chase runs the risk of write-downs on US $ 18.8 billion it lent to Ireland, 12.2 billion for Italy and Spain for $ 12 billion, according to the records.
The brokerage ruled out any risk of exposure is limited to the Goldman Sachs (GS.N) or Morgan Stanley (MS.N) and called the amount of exhibition "not significant".
Richard Bove "falls in stock prices database based on fears in this area (due to fear of the financial crisis in Europe) seem to be significantly exaggerated," he said.

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DEBT FINANCING. Stock futures drop sharply on eurozone concerns

NEW YORK (Reuters)-U.S. stock index futures fell sharply on Monday as fears of a credit rating downgrade of French banks and the lack of a solution to the problem of Greece's debt increased concerns about eurozone debt crisis.
France's largest banks are preparing for a credit rating downgrade likely Moody, sources close to the situation, said on Saturday, further complicating efforts to assure investors that they are riding out the financing market tensions.
Several sources said BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA) and Credit Agricole (CAGR.PA) were waiting for a decision "imminent" of rating agency, which first put them under review for possible downgrade on 15 June.
Adding to the gloom was the failure of the weekend meeting of Finance Ministers of the Group of Seven Industrialized Nations to come up with any new proposals to boost global growth.
Greece on Sunday slammed a new tax on real estate connect a 2011 budget hole, please international creditors and secure a new loan tranche as key concerns mounted in Europe throughout its euro-zone members.
"The European sovereign debt issue is increasingly a concern. .. Without any data today to brush off some of the issues, the market is entirely focused on this issue, "said Peter Cardillo, Chief Economist of Global Capital market Rockwell in New York.
& S P 500 futures fell 21.6 points and were below fair value, a formula that evaluates to the prices, taking into account interest rates, dividends and expiration time of the contract. Future of the Dow Jones industrial average fell 160 points and Nasdaq 100 Futures fell 36.5 points.
U.s. stocks closed lower on Friday, shaken by the resignation of Juergen Stark, a member of the Executive Board of the European Central Bank and the Council of the ECB, which added to concerns about the ability of policymakers to deal with the debt crisis in Europe.
The Federal Reserve of the United States was interrogated Capital One Financial Corp. (COF.N) to determine whether the acquisition of ING Groep N.V. (ING.AS) online us banking institution would create a "too big to fail," said the Wall Street Journal.
The newspaper also said Amazon.com Inc (AMZN.The) is in talks with publishers of books on the launch of a media library service similar to Netflix Inc (NFLX.The) for tablets and other digital books.
European stocks fell, led by banking stocks, while Japan's Nikkei average fell to a year N225. fresh 2-1/2, closing at low.

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DEBT FINANCING. French banks of Hammer of standard Greek nervousness, euro

PARIS (Reuters)-the growing fears of a Greek default sent a hurricane through heavily exposed French banks on Monday and hit the euro as investors ' confidence in the ability of the European monetary area to overcome a sovereign debt crisis ebbed.
Shares in Societe Generale, BNP Paribas and Credit Agricole fell by more than 10% amid expectations of an imminent downgrade by Moody's credit ratings Agency, mainly due to its exposure to Greek bonds.
The shock resignation of the Chief Economist of the European Central Bank Juergen Stark Friday and weekend comments by German politicians suggesting that Athens may have to default and be "suspended" in the euro zone, led the euro to a low-10 years against the yen and a 7-month low against the dollar.
"Europe is not just walking with one crisis to another. He is heading for a new before previous is resolved, "said Makoto Noji, senior strategist at SMBC Nikko Securities.
The storm forced SocGen French, the lender more success in recent weeks, announcing measures more drastic denied last week were under consideration, accelerating the disposal of assets and deepening cuts costs.
SocGen shares are now trading at a historic low of 15.55 euros, after losing more than two thirds in seven months. Since mid-2007 that the Bank saw 52 billion euros (US $ $71,3 billion) swept in their market value, which is today of 13.5 billion--less than spirits group Pernod Ricard or fashion house Christian Dior.
The Bank's Chief Executive, Frederic Oudea, said there was no ongoing discussions regarding possible state intervention French banks and the Bank of France Governor Christian Noyer ran out a statement saying that French banks were not at risk.
"No matter what the Greek scenario, and all measures that should be passed, French banks have the means to confront it," Noyer said.
French banks and insurers are not only the largest foreign holders of Greek Government bonds, both directly and through subsidiaries, but also the Greek top creditors of Italy, which is increasingly under fire from the market.
Moodys is also expected to downgrade the sovereign rating of Aa2 from Italy this week, Richard Kelly, head of European research rates and FX TD Securities, said, noting that both Fitch and Standard & Poors already had low ratings for Rome.
START A CLAIM
It was an ominous start to a week of high risk for the eurozone.
The Greece is due to resume suspended negotiations with international lenders on Wednesday in a plot of vital aid of 8 billion euros after announcing a new estate tax on Sunday to try to more a gap in his 2011 budget deficit.
EU Finance Ministers are struggling to resolve disputes over a bailout second planned for Athens, including a fight about Finnish requirements for security, time for a meeting in Poland on Friday.
This rescue package proposed was cast in doubt by Greece of repeated lack of budgetary targets agreed with the EU and the International Monetary Fund, as well as by persistent doubts about the extent of private sector participation in a swap overlay and bond debt.
The German Government tried to wipe down the market impact of a string of weekend comments and media leaks, suggesting that Berlin is now assuming that Greece will default and working to delimit Athens from the rest of the eurozone.
Vice Chancellor Philipp Roesler, who is the Minister of economy and increasingly leader Eurosceptical Junior coalition party Berlin, free Democrats (FDP), said that there could be any taboos to stabilize the euro.
"That includes, if necessary, an orderly bankruptcy of Greece, if the necessary tools are available," he was quoted as telling the newspaper Die Welt.
However, a spokesman for the Economics Ministry said on Monday, none of these instruments currently available, and a Government spokesman insisted that there was strong agreement between Roesler and Chancellor Angela Merkel in euro zone debt crisis.
"We want to stabilise the whole euro zone with all Member States," Government spokesman Steffen Seibert said a summary of news.
Asked about talk of a suspension or expulsion or voluntary departure of Greece in the euro zone, he said: "the legal position ultimately represents the these steps".
The European Commission also said that he was working on a scenario of a Greek default.
But Seibert of Germany added that if Athens failed to fulfil its commitments to tax the EU, the ECB and the IMF, which would automatically lead to non-payment of the next installment of the aid.
Vice Minister of Finance of Greece said on Monday that the Government had money to operate until next month, highlighting the urgent need of emergency loan next stay afloat.
"We have definitely maneuvering space within October" television channel, said Filippos Sachinidis Mega when asked how much longer the State would be able to pay wages and pensions.
Media commentators and analysts said that exit by high-ranking German on ECB in protest against the policy of buying securities of euro area countries weak still had sapped confidence in the single currency.
Morgan Stanley analysts "would suggest that reputation problems created by the loss of Stark, Weber's departure especially coming so soon after (former President of the German federal Bank Axel), will be useless to the euro," said in a note.
The European Commission gave a more optimistic forecast for economic growth next year than many private forecasters, rebuffing the fears of a recession induced by the US and European debt crisis.
The EU Executive said that the Bloc's economy was likely to grow by 1.9 per cent in 2012, more or less the same as this year.
"Member States facing pressures from the market must continue to deliver to achieve its fiscal targets and take additional measures if necessary", economic and Monetary Affairs Commissioner Olli Rehn said.
But in an apparent shift to Germany, said that those countries that have room for fiscal manoeuvre should use spending to support growth and employment, while sticking to their adjustment path.

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DEBT FINANCING. Broadcom NetLogic to buy for $ 3.7 billion

NEW YORK (Reuters)-Wireless chipmaker Broadcom Corp. agreed to buy NetLogic Microsystems Inc for about $ 3.7 billion to extend its range of chipmaking technology to more advanced networks.
Broadcom will pay $ 50 per share for each share of NetLogic, a premium of 57 percent over Friday's close of US $ 31.91 NetLogic on Nasdaq. NetLogic shares increased by 51% in pre-market trading on Monday.
Broadcom expects the deal to add 10 cents per share to its earnings on a basis set in 2012.
The companies said the transaction was approved by their respective boards and is expected to close the first half of 2012.
Broadcom reiterated that it expects third-quarter revenue around the middle of the predetermined range of $ 1.9 billion to 2 billion with gross product margins flat to slightly higher.
Broadcom expects to have approximately $ 4.2 billion in cash on hand until the end of the third quarter of $ 3.8 billion at the end of the second quarter.
The companies will conduct a conference call with analysts and investors on 8:0 am EDT on Monday.

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DEBT FINANCING. United Kingdom to move forward with reform of Bank

London (Reuters)-Britain banks face some of the world's toughest regulations in the framework of the reforms outlined on Monday, involving the isolate its retail lending activities and store up to billion in extra capital at a cost of up to 7 billion pounds (US $ 11 billion).
Chancellor (Finance Minister) George Osborne said that he would have legislation on the basis of the proposals, intended to prevent a repeat of the financial crisis that led to two biggest creditors of Britain, Lloyds and Royal Bank of Scotland, being rescued with massive injections of government money.
"We're getting right up there with the Switzerland in terms of having the capital regime more costly," said Jane Coffey, a Fund Manager Royal London Asset Management. "It cannot restore the confidence of shareholders, but it will restore confidence to the holders of securities".
In its final report, the independent Commission on Banking (ICB) insisted banks own funds waiting at least 10% in its retail operations in the internal market.
He also set a reference that is larger than the other reforms with European banks a main requirement to absorb capital loss of between 17% and 20%-a level that only the Swiss also plan to introduce.
By comparison, new global regulation due to enter into force in 2019 asks banks to maintain a minimum of 7 percent in the capital of quality, or a percentage of most likely 9.5.
The ICB estimated gross annual cost of his proposals for banks of Great Britain in between 4 billion pounds and 7 billion and recommended that the reforms are completed until 2019, to take into account the current economic climate.
The British Government supported the report, saying it would help boost the economy and protect taxpayers.
"John Vickers (ICB) itself sets out a timetable and plan to stay with your calendar. So he says let's have all changes on the site until the end of this decade, "said Finance Minister Osborne.
"There are many changes involved, that is why it will take some time, but we will pass legislation in Parliament," he added.
Britain's banks form a powerful lobby group since financial services are estimated to contribute about 10 per cent for the economy of the United Kingdom.
"Big four" banks of Great Britain-Barclays and HSBC, as well as Lloyds and RBS-fought against excessively difficult new EU regulation and global reforms that will force them to raise capital.
"Banking industry ... is a very important component to the United Kingdom more than other countries, which is why the gold coating which regulatory regime is being implemented globally should be reasonable and not push us into a corner where the banking industry here is uncompetitive," said David Miller, Cheviot Asset Management Fund Manager.
REAL CONCERNS
The proposals will limit the extent to which a bank may use the money in its retail arm, to finance activities, thereby increasing its financing costs, which will probably hit their profits and possibly make it harder to borrow for investment banking firms.
"There are real concerns that empowerment can limit the ability of banks to grant loans to small businesses," said John Longworth, Director General of the British Chambers of Commerce.
Shares in Barclays, Lloyds and RBS lost 4.8 per cent, while HSBC shed 1.6 percent, echoing losses throughout Europe. The largest European banks index fell from 3.8%.
As anticipated, the ICB wants banks to place a "wrap" around their retail banking operations of the nucleus. Consumer small business deposits and loans must be within the cordon, but banks will have some flexibility on what else should be included.
Between 1 trillion pounds and 2 trillion worth of assets is likely to be held within the sealing ring.
British banks have total assets of £ 6 billion, four times the size of the GDP of the United Kingdom. Two of them-the Royal Bank of Scotland and Lloyds-had to be partially nationalised after the financial crisis and a third, Northern Rock, was fully nationalised.
Thus the Government, which now has holdings of 83% and 41% in the RBS and Lloyds respectively, configure the ICB last year to seek ways to ensure taxpayers do not have to bail out any more banks should occur future crises.
The British Bankers ' Association "any other reform measures approved by the UK authorities need to be carefully analysed and compared with those agreed internationally," he said.
"It is vital that the full impact of any new reforms will have on the economy, recovery and capacity of banks to support their customers in the United Kingdom is understood."
Others suggest that the proposals do not take into account any problems in retail operations.
"What we must bear in mind is that the problems that have occurred two or three years ago-Northern Rock, Alliance and Leicester, Bradford and Bingley-were not the result of investment banks, they were actually the result of problems in the retail banks," said Antony Thomson, President of Metro Bank.
"I don't know that retail bank empowerment will be a cure that everyone thinks can be."
(US $ 1 = 0.629 pound)

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DEBT FINANCING. McGraw-Hill to split into two listed companies

New YORK (Reuters)-McGraw-Hill Cos Inc (MHP.N) plans to split into two public companies, with a farm of his ratings Standard Poors index & and companies and the other holding their publishing units of textbooks.
The move, announced Monday, is a big step toward the dissolution and reorganization of mini-conglomerate that was requested by activist investors last month at a meeting with directors of McGraw-Hill.
Investors — Jana Partners LLC, a hedge fund and teacher pension fund — Ontario argued that split the company would increase its shareholder value.
A spokesman for Jana not immediately responded to a request for comment.
The company's shares rose 2.6% to $ 39.74 in Commerce before.
Terry McGraw, President and CEO of the company and a great-grandson of the founder, lead markets, McGraw-Hill, who will perform the & Standard Poors corporate credit rating from S P & business market index and S & P Capital IQ, which provides data and analytical tools on companies and markets.
The company said it began looking for a new CEO for education, McGraw-Hill, which will contain the books publication and education units. The current head of those undertakings is Robert Bahash, 66, a long time Chief Financial Officer of the Corporation who stepped on his current post last year after the Executive of education higher than the left.
The break-up will be structured as a tax-free spin-off of the business of education to the shareholders of McGraw-Hill, is expected to be completed by the end of 2012, the company said in a statement.
Companies of markets will take about $ 4 billion of revenue in 2011, and education companies will have about $ 2.4 billion in revenue, he said.
McGraw-Hill said will make significantly reduced from US $ 1 billion of corporate and administrative expenses and cost of technology.
Evercore and Goldman Sachs are advising on the spin-off.
The company said it would accelerate share repurchase for a total of $ 1 billion in 2011. He said it has bought back $541 million shares so far this year. (Reports by David Henry in New York, Jochelle Mendonca in Bangalore; Editing by Sriraj Kalluvila and John Wallace)

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DEBT FINANCING. HSBC launches sale of non-life insurance: sources

HONG KONG (Reuters)-HSBC Holdings Plc (HSBA.L fonts) (0005.HK) launched the sale of its non-life insurance company, told Reuters on Monday, a value of about $ 1 billion global Division and now part of the plan to strip off nonessential units.
HSBC, Europe's largest bank with a large presence across Asia, had sent a memorandum of information for potential buyers, with first round bids due by mid-October, said a source.
HSBC Operates non-life insurance companies in Britain, France, Hong Kong and Singapore. The operations of Hong Kong and Singapore only bring about $ 400 million in annual awards, said the source.
The non-life insurance companies of HSBC achieved pre-tax profit of about $ 1 billion in 2010, according to a presentation by HSBC in June.
"We don't comment on market rumors or speculation," said a spokesman for HSBC based in Hong Kong.
The sources refused to be identified as the sale process was not public.
Participation of HSBC 16 percent Ping An insurance (Group) Co China Ltd (2318.HK) (601318.SS) and 18 per cent in Viet Nam Bao, a financial institution in the internal market, were not part of the sale, said the source.
Investment banking arm of HSBC was running the sale process, the source added.
In may, HSBC announced non-essential business plans, which included reducing its network of 475 U.S. branches focus on international business customers U.S. and sale of various European retail banking businesses including those in Poland and in Russia.
(Reports by Denny Thomas; Additional reporting by Kelvin Soh; Edited by Michael Flaherty and Chris Lewis)

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DEBT FINANCING. Euro slumps to low against yen 10 years as Greece worries Mount

Tokyo (Reuters)-the euro hit a low of six months against the dollar and a trough of 10 years against the yen, dropping below key technical levels and option barriers on concerns that is swinging the eurozone support for Greece and the country can be forced to default on its debt.
The Australian dollar, sometimes seen as a barometer of the risk appetite of market players, fell more than 1 per cent to a low of three weeks, below its 200-day moving average as investors worry that the global economy will be dealt a heavy blow to deepen the debt woes of the euro area.
"The Outlook for Greece are almost completely unknown. Support for the country seems to be stirring. The market is starting to find that the worst could happen, "said Katsunori Kitakura, chief croupier Chuo Mitsui Trust and banking.
"It is as if policy makers are starting to prepare for this," Kitakura said.
The common currency fell as low as $ 1.3550, its lowest since the end of February, before stabilising around $ 1.3587, still below 0.5% on the day he dropped below $ 1.3655, a pullback of 61.2% of their rally to $ 1.4940 in May $ 1.2860 in January.
The euro dropped to around 104.90 yen, after having broken below big triggers option in 105 yen, as already weak sentiment hit further negative news flow from Europe at the weekend.
Fears about a Greek default soared after high-level political centre-right coalition of German Chancellor Angela Merkel started talking openly about the subject.
This came on top of surprise departure of Juergen Stark on the European Central Bank last week that highlighted the great divergence between top politicians on how to deal with the problem of debt in the region.
Markets also are preparing for possible downgrade ratings of France's leading banks, as well as the sovereign rating of Italy. Moody's warned, on 17 June, that he can cut the credit ratings of Italy in the next 90 days.
"Friday at the latest, is likely Italy will have its Aa2 rating from Moody's lowered ... Moody's rating of Italy is currently two notches below AAA, compared with three notches with Fitch and four slots with S & P, this can be seen as catch-up, "Richard Kelly, head of European rates and research of FX TD Securities wrote in a note.
In the short term, the euro could be exaggerated, trading well below the lower Bollinger bands, now at $ 1.3711. Its relative strength index 14 days fell below the 30 mark, which is considered oversold territory, for the first time in more than nine months.
Still, the euro seems vulnerable, especially against the yen after having fallen below its 2010 low about 105.50 Yen to hit its lowest in more than 10 years.
SWISS FRANC
The euro held little changed against the Swiss franc in franco 1.2055 franco, above the floor the Swiss central bank 1.20 set last week.
With the Swiss franc is no longer Safe Harbor due to sale of Swiss National Bank and the yen also persecuted by the authorities of the danger of Japan intervention, the dollar became the best performance among the major currencies.
The dollar index rose as high as 77,521, its highest point in more than six months.
Against the yen, the dollar was at 77.49, keeping close to an all-around high 77.88 a month on Friday.
"For now, your best bet is a higher dollar against most currencies, but particularly against the euro and commodity currencies," said Joseph Capurso, strategist, Commonwealth Bank in Sydney.
In fact, commodities, currencies were under pressure on Monday with the Australian dollar falling more than 1% for a three-week low around $ 1.0363, having fallen below its 200-day moving average of $ 1.0383.
While the Aussie recover its incursion briefly below average last month, a large amount of long positions built up over many months thanks to its vantage point of income for risk to relax more.
According to data from the U.S. financial watchdog, speculators, the Chicago Exchange maintained a large net long position of the Australian dollar around one of 4.8 billion dollars.
Trading was choppy with volumes can be thinner than usual, as several centers in Asia, including China, are closed for a holiday.

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DEBT FINANCING. Asian stocks fall, dollar gains in Europe woes

Singapore (Reuters)-Asian stocks slid on Monday and the euro fell to a low-10 years against the yen, after the resignation of a member of the Board of Governors German European Central Bank launch even more doubts about the capacity of the region to cope with the worsening of the sovereign debt crisis.
Copper and oil prices fell and the dollar gained, in General, as worries about the eurozone woes, combined with fears about flagging world growth to ensure no let up in the gloom that has dominated global markets for most of the last six weeks.
"People are very nervous about Greece and other countries in Europe, so that's why investors are fleeing to the dollar," said Tetsu Emori, Fund Manager based in Tokyo Astmax co. Ltd. "risk aversion".
Resignation of Juergen Stark Governing Board highlighted the internal divisions over its purchase program titles--one of the central bank's main weapons in the fight against the debt crisis, forcing down income of the country under pressure from the bond markets.
Japan's Nikkei fell 2.1% N225. to a low of six months, while the broader index of MSCI Asia Pacific shares outside of Japan fell 2.6% and Japan .miapj0000pus. Futures Index U.S. traded in Asia fell 0.9 percent.
"For the rest of the week, developments in the debt problems of the eurozone and movements in the euro probably will set the direction of the market," said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.
Wall Street shares fell on Friday, when the news broke Stark, with the index S & P 500.SPX falling 2.7% and European shares also fell more than 2%. .A SEA
Lipper Fund controller data, a service of Thomson Reuters, showed that a brief flirtation with stocks at the end of August waned, with less than a net $ 600 million that flows to us capital funds for the week ending 7 September, compared with a net flow of $ 6.3 billion in the previous week.
Index of MSCI All country-MIWD00000PUS. now 19% less than the whole high of 2011 in may, is not far the decline of 20 percent which is the definition of the golden rule of a bear market.
The image of the flow of Fund for emerging Asian equity markets was mixed. Citigroup analysts said in a note that China and Indonesia had seen modest net entries for the week of 7 September. The major outputs were of regional funds and cyclical markets of South Korea and Taiwan.
GREEK DEFAULT
Adding to the difficulties of the euro zone, major French banks were preparing to credit rating downgrades on worries about its exposure to sovereign debt, German politicians and senior centre-right coalition of Chancellor Angela Merkel started talking openly about a Greek default.
A growing number of policymakers, as well as market economists, believe it is only a matter of time before Greece, that keeps getting back on their budgetary targets after two bailouts I/IMF, will have as default.
"The Outlook for Greece are almost completely unknown. Support for the country seems to be stirring. The market is starting to find that the worst could happen, "said Katsunori Kitakura, chief croupier Chuo Mitsui Trust and banking.
The euro fell as low as $ 1.3550, its worst since the end of February and later negotiated approximately $ $1,3570, after a sharp slide at the end of last week. Against the yen, the single currency fell as much as about 104.90, its lowest since 2001.
Meanwhile, the dollar index.DXY, which monitors the dollar against a basket of major currencies, rose about 0.4% to near a high set one month on Friday.
U.S. oil dropped $ 85.96 $1,28 a barrel and Brent facilitated 89 cents to $111,77 that copper fell 0.9% at $ 8, 743.25 ton.
Both commodities are sensitive to the expectations of global industrial growth and demand here.
Currencies of major commodities producers were, in turn, under pressure, with the Australian dollar falling more than 1 percent to a three week low around $ 1.0363.
Gold, which has been striking a succession of records due to its traditional appeal as a safe haven at times of market volatility, fell 0.5 percent to about $ 1,848 the Jaguar as a stronger dollar has become more expensive for holders of other currencies.
Gold priced in euros, however, reached a record 373.30, 1 ounce.
Japanese Government securities controlled gains in u.s. Treasury bonds and German bunds as investors sought safer perceived public debt, with the benchmark 10-year JGB yield dropping below 1%.

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DEBT FINANCING. Blatant shock extends German euro fracture

BERLIN (Reuters) - The surprise exit of Germany's top official at the ECB has ripped a hole in Chancellor Angela Merkel's strategy of tackling Europe's debt crisis with closer integration, raising new doubts about the euro project at home and widening divisions in her party and coalition.
Juergen Stark's premature departure from the European Central Bank because of his opposition to its controversial bond-buying program was described by German policymakers and editorial writers as a "wake-up call" for Germany.
It comes roughly seven months after Axel Weber, another monetary hawk in the post-war German tradition, abruptly resigned his post as head of the Bundesbank and withdrew his candidacy for the top post at the ECB.
That decision shocked the German policy establishment, but at the time many saw it as a one-off move by an impulsive man who had clashed loudly and publicly with President Jean-Claude Trichet over the extraordinary measures taken by the ECB to safeguard the single currency.
The resignation of Stark, a loyal, dedicated central banker who had kept his doubts about ECB policies to himself, tells a very different story, and has unleashed a wave of anxiety across Germany about the direction of 12-year-old single currency bloc.
Taken together, the departures are seen by many as indications of a southern European takeover of the ECB's policy-setting council, a worry sharpened by the looming presidency of Italian Mario Draghi, who takes Trichet's place in November.
Former Bundesbanker Edgar Meister called at the weekend for changes to the ECB's one-country, one-vote rule, saying it was "unbelievable" that a country such as Germany that was shouldering the biggest burden in the crisis could be overruled by central bankers from smaller countries that have already been rescued or are at risk of a bailout.
Norbert Barthle, a senior lawmaker from Merkel's Christian Democrats (CDU) who sits on parliament's budget committee, told Reuters that Stark's exit was "a rejection of the policies that the ECB has pursued and a clear signal that the situation in the broader euro zone has reached a really critical point."
"MORE EUROPE" STRATEGY
The implications for Merkel and Berlin's approach to the euro zone crisis are profound.
Criticized for focusing too much on domestic politics and failing to provide clear leadership in the bloc, Merkel shifted her approach this summer and began demanding "more Europe" as the solution to the bloc's deepening crisis.
She made clear last week in a speech to the Bundestag, the lower house of parliament, that changes to the EU's Lisbon Treaty to bring about closer fiscal integration between the euro zone's 17 member states should no longer be taboo.
After Stark's resignation, the domestic hurdles to that goal have risen substantially.
Julian Callow, an economist at Barclays Capital, said the political effect of Stark's resignation "could complicate Germany's involvement in additional bailout programs."
Merkel received a boost last week when the Constitutional Court rejected lawsuits seeking to retroactively block Berlin's participation in bailouts of Greece, Ireland and Portugal, albeit while giving parliament more say in future bailout moves.
But after Stark, her drive to secure a conservative majority in parliament for a bigger, bolder euro zone rescue facility on September 29 may have become more difficult again.
Merkel still seems likely to deliver that, but subsequent Bundestag votes on a second aid package for Greece and the launch of a permanent bailout fund -- the European Stability Mechanism (ESM) -- present a huge challenge to her leadership.
The Free Democrats (FDP), junior partners in her ruling coalition, are considering asking their 66,000 members whether to support the ESM. If a majority vote against, the leadership will be obliged to adopt that position as FDP policy.
Merkel's other coalition partner, the Bavarian Christian Social Union (CSU), is also agitating -- to boot Greece out of the euro zone.
A CSU policy paper obtained by Reuters over the weekend states that countries that do not respect rules on budgetary discipline should "expect to have to leave the currency union."
DEFAULT MORE LIKELY
A Greek exit from the euro zone still seems remote, and in any case, German officials say in private, such a decision would ultimately be for the government in Athens to take.
But a default no longer seems out of the question. The FDP economy minister, Philipp Roesler, said in an article published on Sunday that an orderly bankruptcy of Greece was no longer a taboo and demanded automatic sanctions for heavily indebted countries that did not meet their obligations.
Despite Greek Prime Minister George Papandreou's pledge on Saturday to do all in his power to avert bankruptcy, it is no longer a given that inspectors from the EU, IMF and ECB will sign off on the next aid payment after leaving Greece in a huff over missed deficit targets this month.
A German Finance Ministry source told Reuters at the weekend that Berlin's working hypothesis now was that Greece would ultimately default on its 340 billion euro debt mountain.
In a possible sign that markets are being prepared for this, French central banker Christian Noyer, speaking on Friday after a G7 finance ministers' meeting in Marseille, said Greek debt did not represent a threat to any bank outside of Greece.
Barthle, the budget expert in Merkel's party, told Reuters: "The problems in Greece are not getting smaller, they are getting bigger, and will create significant problems for the bloc ...
"I am eager to see what the troika report says. The way things are looking, you can't rule out a restructuring of Greece's debt any more."
Would a default force Greece out of the euro zone? A senior European banker told Reuters that one would have to follow the other, even if there is no legal mechanism for a country to leave the bloc.
But senior sources in Berlin and Brussels said all would be done to avoid such a humiliating setback for the currency union.
The focus instead appears to be on ensuring national parliaments approve new powers for the bloc's rescue mechanism -- the European Financial Stability Facility (EFSF) -- as soon as possible.
Only after that would the EFSF be really in a position to minimize the damage from a Greek default by providing credits to stricken member states and banks across Europe.
Given the time needed to win EFSF approval in all 17 euro states, the chances seem good that EU, IMF and ECB inspectors will nod through the latest Greek aid tranche within weeks.
But Merkel's real test will come in an eventual parliamentary vote on the permanent ESM.
The vote is already shaping up as a referendum on her leadership; if she fails to secure a majority from within the ruling coalition, the pressure to call an election from the opposition and parts of her own party will be huge.
"The resignation of Juergen Stark is a devastating signal for Angela Merkel," the conservative daily Die Welt said on Sunday. "Life is only going to get more difficult for her."

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DEBT FINANCING. Analysis: electric car hype hiding a quiet revolution

BERLIN (Reuters) - Electric cars and hybrids may be capturing headlines and the imagination of green-leaning consumers around the world as one automaker after another announces plans to push into the brave new world of fossil fuel-free mobility.
But away from the spotlight, carmakers have been quietly delivering significant cuts in CO2 emissions with some re-engineering of internal combustion engines, technology advances, weight reduction and aerodynamic improvements.
Increasingly stringent fuel economy standards in Europe and the United States that were mandated due to climate change concerns have been the main catalyst. Yet with rising fuel prices and a waxing awareness of global warming, consumers have also been clamoring for more fuel-efficient vehicles.
"Carmakers have finally gotten the message and have made a good start in making cuts in CO2 emissions but only after they were forced to," said Dorothee Saar, an industry analyst at the German Environmental Aid Association (DUH) in Berlin ahead of the Frankfurt international car show starting on Tuesday.
"Before 2008 they had only voluntary targets that were largely ignored. They're moving forward now because they know if they don't cut emissions they'll pay heavy fines. They're doing better but there is still a lot of untapped potential."
In the European Union, CO2 emissions fell 3.7 percent last year to 140 grams per kilometer after dropping 5.1 percent in 2009. Average emissions are down from 186 grams in 1995. The EU is on track to meet a 130 grams target by 2015 set in 2008 in the face of heavy resistance. The limit will be 98 grams in 2020.
In the United States, notorious around the world for its gas guzzlers, the Obama administration announced plans in August to raise fuel economy requirements by 53 percent by 2025. The proposal requires companies to reach an average fuel efficiency across their U.S. fleets of 54.5 miles per gallon by 2025.
"The industry has done what they have agreed to with the CO2 reduction goals but the problem is that they are aiming at moving targets," said Philippe Houchois, car industry analyst at UBS in London. "The CO2 targets get tougher all the time.
"Everyone has made good progress because they have to with the regulations," he added. "There are no obvious laggards. But as the requirements continue to move, they are going to have to have sell more electric cars to be able to meet the targets."
ELECTRIC CARS
That is an important reason why many carmakers are turning to electric cars even if they now only represent a tiny slice of the global business -- where about 50 million cars are sold each year. Until now only a few thousand have been electric.
Even hybrids represent only a small slice of the pie so far. Out of an estimated one billion vehicles on the roads worldwide, only 47 million alternative vehicles are running as hybrids, on hydrogen or electric power, according to a recent report by the Low Carbon Vehicle Partnership.
Electric cars, a key part of a low-carbon economy, have been on the minds of consumers with a green consciousness for years. Green will be a major theme at the Frankfurt Car Show with an entire building -- Hall 4 -- devoted to electric mobility.
"Never before have the stars of the Frankfurt Car Show been so revolutionary, so green, so efficient, so quiet and so super clean as in 2011," wrote Bild am Sonntag newspaper on Sunday.
But there are still many hurdles preventing electric cars from becoming a more common sight on the roads -- in particular high battery costs, limited range and infrastructure.
Tesla Motors made a splash in 2004 with its battery-powered Roadster while Mitsubishi's i MiEV and Nissan's Leaf followed. Nissan with its French partner Renault has sold 8,500 Leaf cars since it was launched in December 2010.
Plug-in hybrids, such as the Chevrolet Volt -- also known as the Opel Ampera -- entered markets in late 2010. Ford will introduce its C-MAX Energi plug-in hybrid in 2013. Toyota has said it will begin selling a Prius-based plug-in hybrid in 2012. Daimler and BMW have been field testing electric cars.
But battery-powered vehicles will likely remain only a small niche as long as batteries make the car prices prohibitively expensive. Why would anyone in their right mind pay more for a car that might run out of power in the middle of nowhere?
"The limitations of the electric cars right now are all well known," said Houchois. "They will not be replacing combustion engines anytime soon. A lot of people aren't going to replace their cars with electric cars. The industry is reluctant too. Every electric car you sell is a combustion car you don't sell."
Analysts and industry officials expect it to take another three to five years at least for battery technology and infrastructure to improve to a point that "range anxiety" disappears and electric cars can hope for market shares in the low single digits. The Boston Consulting Group forecast there will be just 1.5 million fully electric cars worldwide in 2020.
Cars are responsible for about 10 percent of the world's greenhouse gas emissions, which most scientist believe are responsible for climate change that could lead to rising sea levels, more powerful storms, droughts and floods.
Governments are thus under pressure to reduce greenhouse gas emissions. Many have ramped up spending, devoting billions to develop electric cars, batteries and recharging infrastructures. Many offer tax credits and other incentives for electric cars, which if recharged with renewable energy have zero emissions.
The German government, for example, in May set a goal of having have one million electric vehicles on the road by 2020 and doubled federal research spending on electric vehicles to 2 billion euros over the next two years.
CUTTING EMISSIONS
So with the heat on, it is no wonder that the automobile manufacturers have focused on cutting emissions.
BMW, for instance, got an early start even before EU fuel efficiency standards were mandated. The Munich carmaker launched its "efficient dynamics" program to cut emissions in 2007. Its overall fleet average in 2006 was 186 grams of CO2 per km but was cut to 148 grams by 2010.
It was not any single major breakthrough that helped reduce emissions by some 20 percent in four years but rather a series of small, unremarkable changes to the engine, the aerodynamics and components along with the introduction of a stop-start button, air vent control and brake energy regeneration.
BMW officials are proud to point out that, despite the reduced emissions, engine performance was maintained with a fleet average in Germany of 139 kilowatts (or 188 PS).
The German dream of building a "3-liter car" -- a vehicle that can travel 100 km on 3 liters of fuel -- has gone from a far-fetched fantasy to near reality. BMW's 2012 116d model with 116 PS needs 3.8 liters per 100 km and emits 99 grams of CO2 -- down from its 2011 model with 4.5 liters and 118 grams.
Technology advances have helped carmakers reduce emissions without sacrificing performance. Helping make engines more efficient are suppliers like Honeywell, whose turbo-chargers increase the air entering engines. Alex Ismail, CEO of Honeywell Transportation Systems, said turbo-chargers can boost fuel economy by 20 percent for petrol cars and 40 percent for diesel.
"Tightening fuel economy and emission standards worldwide, coupled with consumer demand for affordable and more fuel efficient vehicles have automakers looking to increase turbo charging," Ismail told Reuters via email in response to a query.
"Despite the buzz around electric vehicles, it's clear that automakers are looking primarily at turbo charged engines to help quickly green their fleets and meet the regulatory targets."

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DEBT FINANCING. Improves the State of mind of Japan major manufacturers, outlook darkens

Tokyo (Reuters)-major Japanese manufacturers turned positive in the third quarter as output recovered quickly after the March 11 earthquake and tsunami, but scaled back forecasts for the months ahead, due to the strength of the yen and an impending global slowdown, a survey of the Finance Ministry showed.
The research comes before the vote of the Bank of Japan's tankan quarterly due on October 3, a key central bank in the conduct of monetary policy.
"Three months ago, companies were overly pessimistic but this pessimism has decreased thanks to a quick recovery in supply chains disrupted by the earthquake of March," said Junko Nishioka, Chief Economist of RBS Securities in Tokyo.
"But the downward revision in large manufacturers forecast for October-December and a further slowdown expected for the next quarter are clear evidence of blow of the yen have appreciated beyond their assumptions.
Nishioka "This suggests that the companies will be similarly cautious about the prospects of Japan's tankan survey from the Bank of Japan due next month, keep up the pressure on the BOJ to keep an easy policy," he said.
The sentiment index for large manufacturers improving more 10.3 in July-September less 23.3 in April-June, the joint research of the Ministry of finance and of economic and Social Research Institute showed on Monday.
Companies also rose its capital spending forecasts for the fiscal year to March 2012 an increase of 5.4 per cent, an increase of 4.9% seen in the previous quarterly survey.
In another sign of improving conditions for business Japanese wholesale prices that reflect the input costs increased by 2.6% in the year to August, below the median forecast for a 2.7% rise and down from July.
However, predictions for the sentiment index investigation of common Finance Ministry in the fourth quarter were scaled back beyond 13.6 of 17.4 in the last survey.
The March earthquake and the tsunami that wiped out entire communities along the coast of Northeast Japan and 20,000 dead, hit the third largest economy in its second recession in three years.
Economists expect the economy to continue growing in this 03:15 of consecutive quarters of contraction, but outlook is still ahead seems increasingly blurred due to the strong yen and faltering global economic growth.
The BOJ eased monetary policy in its review of the rate in August 4 because advisers wanted to show the determination of the seat to head off various risks that lay ahead for the economy, showed the minutes of the meeting.
The central bank held off on further policy loosening at a subsequent meeting in September, saving his little ammunition for later with the yen stabilising after spiking to a record level against the dollar on August 19.
A group of seven meeting over the weekend offered little in terms of coordinated action that could help sustain economic growth while much of the developed world grapples with excessive debt accumulated during the financial crisis of 2008-2009.
Index of business sentiment of Japan measures the percentage of companies that expect the business environment to improve from the previous quarter decreased the percentage who expected it to worsen.

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DEBT FINANCING. World Bank to invest in new hedge funds

London (Reuters)-the World Bank is investing in a hedge fund to help banks reduce the capital that new rules will force them to set aside against loans to small businesses in emerging markets, the Financial Times reported on Monday.
The International Finance Corp., the private sector lending arm of the World Bank, is putting $ 100 million in a new Fund created by Christofferson Robb & Co, based in London and New York.
The founders of the company's New York are raising more $ 300 million (189 million pounds) of private investors.
The hedge fund will put money to cover unexpected losses in exchange for a cut of a bank. The Fund's money will decrease the Bank requirements under the Basel rules and reduce the impact of stricter rules planned
The FT said the IFC Fund will work mainly with major international banks and will encourage an extra $ 2.5 billion to $ 4 billion of loans to developing countries.
The banks involved will need to recycle the money released by the "launch titles bilateral synthetic capital" that the Fund creates back to developing markets.

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DEBT FINANCING. FED examines the business online banking ING: Capital One-WSJ

No "> (Reuters)-The U.S. Federal Reserve was interrogated Capital One Financial Corp. to know if the acquisition of online banking business of ING Groep NV U.S. would create an institution" too big to fail, "said the Wall Street Journal.
Capital one was pressed by the Edf in a letter dated 29 August for details about "the nature and dollar volume" of financial activities in that both companies are involved, told the newspaper.
Fed officials requests a Capital to describe any of the markets where the Bank and ING Direct USA are market makers and to report information about exposure to counterparties, told the newspaper.
The Fed refused to comment on the newspaper.
Capital one spokeswoman Tatiana Stead told Reuters: "our response confirms that we are not engaged in the type or level of activities that raise systemic risk issues that the Act of Dodd-Frank sought to address".
"Furthermore, after this merger still will represent only 1.5% of the deposit market, well below the larger institutions," Stead said in a statement.
Following the financial reform act of Dodd-Frank last year, the Fed now must consider whether specific merger and acquisition would increase the overall risk to the financial system.
The Federal Reserve could not immediately be reached for comment by Reuters outside us regular office hours.
In June, Capital One has agreed to buy the business of online database of U.S. ING Direct of ING Groep in a stock and cash deal valued at $ 9 billion.
ING had to sell the business, one of the jewels of its franchise of retail banking services, as part of an agreement with the European Commission following his Dutch Government aid October 2008.

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DEBT FINANCING. Database rules "anti-American" says JPMorgan CEO: FT

London (Reuters)-the United States should consider pulling the global regulators group Basel, Jamie Dimon, CEO of JP Morgan Chase, said in an interview with the Financial Times.
Dimon said he was favourable to force banks to have more capital, but argued that moves to impose an additional fee on the largest global banks was too far, particularly for creditors in the U.S..
He was quoted as describing the new international bank capital rules as "anti-American".
"I'm very close to thinking that the USA should no longer be in Basel. I would not have agreed to the rules that are blatantly anti-American, "he said in the interview.
"Our regulators must go there and say: ' If it is not in the interest of the United States, we are not doing '."
Capital rules of Basel III are designed to increase the security of the financial system, causing banks to build up risk capital-absorbing "core" tier one "at least 7% of risk-weighted assets. The largest, including JPMorgan, must reach 9.5 percent.
Dimon also criticized liquidity rules, arguing that obligations as high liquidity regulations covered that seen but with discount mortgage-mortgage-backed Government in the United States were unfair.
He added that other details hit investment banking core activity for u.s. banks more difficult because of the threat posed by Asian banks, in particular, could take U.S. market share due to the combination of u.s. national and global rules.
"I think any American President, the Secretary of the Treasury, regulator or other leader would want strong and healthy global financial companies and don't think that we should somehow give up this position in the world and that it would be good for your country".

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DEBT FINANCING. Crucial austerity package Italy enters the final stretch

Rome (Reuters)-Italy's often revised package of 54 billion austerity enters the final stretch on Monday, when the cuts designed to balance the budget by 2013 will go before the lower House of Parliament, with due approval later in the week.
The package, which was approved by the Senate last week, goes to the Chamber of Deputies, as economy Minister Giulio Tremonti prepares to unveil new measures to promote growth.
The program goes to the lower House includes a 1% increase in value-added tax, pension adjustment rules and a special contribution of 3% on incomes over € 300,000 ($ 422,000), as well as cuts in government spending.
However, struggles between different factions and clear divisions between Tremonti and Prime Minister Silvio Berlusconi led to the package being chopped and changed so frequently that its credibility was badly damaged.
Italy, the third largest economy in the euro zone has moved firmly to the center of the crisis in the past two months as turbulent coalition of centre-right Berlusconi has dithered on measures to stimulate growth and reduce its huge debt pile.
Last week, Italian bond yields, which have been contained by intervention of the European Central Bank last month, spiked sharply after ECB Board Member Juergen Stark resigned over his opposition to the policy.
The ECB's purchase of Italian obligations has been the only thing preventing the spiral out of control, as doubts the market has grown over whether Italy can keep control of your debt pile of 1.9 trillion euros of borrowing costs in Rome.
The ECB has demanded that Rome take urgent action to cut a pile of debt equivalent to 120 percent of gross domestic product, second only to Greece in the euro zone.
In an attempt to show his will, the Cabinet also came out in a planned constitutional amendment that would bind Governments to balanced budgets running from 2014 onwards unless an exception was sanctioned by a vote in Parliament.
But the amendment, which would prevent governments run a deficit, is largely symbolic for now, because it probably would take years to implement.
PLANS TO STIMULATE GROWTH
Most are imminent plans by Tremonti introduce measures to promote growth after the austerity package becomes law.
According to the press, the plans for promoting growth includes revenue from the auctions of new licenses for the fourth generation broadband internet and incentives for investments in the South, where unemployment is higher than in the rest of the country.
They also include plans to use more European Union funds to help growth.
The debt crisis led to more calls for Berlusconi to resign for the good of the country.
Emma Marcegaglia, head of the employers ' Federation Confindustria, made a suggestion pointed out that the Government should depart could address problems that were putting the future of Italy at risk.
Pierferdinando Casini, leader of the small opposition party UDC, called Berlusconi to resign and make way for a Government of national unity to lead the country until the next scheduled national election in 2013.
Berlusconi and his key aides rejected both calls, saying that the Government would remain in Office until the end of the legislature, as planned.
Berlusconi faces fresh charges connected with a prostitution scandal two years ago.
Magistrates in Naples has been investigating allegations that he paid around 750,000 euros to a southern Italian businessman to hush up a case of prostitution goes back to 2009, adding an extra distraction to attempts to address the debt crisis.
He is not accused of any wrongdoing in the case, that the magistrates are treating as a case of extortion, but runs the risk of damaging his already permanent assaulted as potentially embarrassing revelations appear in the press.
Berlusconi had been due to be questioned by magistrates as a witness on Tuesday, but prosecutors said that he will not be able to make the appointment because he has to go to Brussels for a meeting of the EU.

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DEBT FINANCING. Bartz resigns from Yahoo Board

NEW YORK (Reuters)-Carol Bartz, who was fired as CEO of Yahoo Inc last week, resigned from the Board of Directors.
"In September 9, 2011, Carol Bartz resigned from the Board of Directors of Yahoo! Inc., effective immediately," Charles Sipkins, a spokesman for the Council wrote in an email on Sunday.
The news was reported for the first time on Sunday in The Wall Street Journal.
Bartz was abruptly fired from his job as CEO on Tuesday. She had said that she intended to remain in the company's Board of Directors, an Internet statement that came into conflict with that, a company spokesman who said Bartz would have to give up his board seat.
After being fired, Bartz inflammatory gave an interview in which she characterized the Yahoo Board as "doofuses" which "fucked me about" Fortune magazine.

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DEBT FINANCING. Greece beat new property tax to reduce the deficit

Thessaloniki, Greece (AP)-Greece on Sunday slammed a new tax on real estate connect a 2011 budget hole, please international creditors and secure a new loan tranche as key concerns mounted in Europe throughout its euro-zone members.
Inspectors from the EU and the IMF are due in Athens this week to hear how the Government intend to overcome delays and lost before approving budget targets a portion of 8 billion of its rescue of 110 billion, key to the survival of Greece.
Finance Minister Evangelos Venizelos, said the Cabinet agreed the measure to raise about 2 billion missing from government coffers and to achieve the objective of the 2011 budget deficit, estimated at around 8.1%.
"It is the only measure that can be applied immediately and produce results quickly because it does not depend on the tax collection mechanism," he told reporters, adding that the tax would be charged through electricity bills.
Prime Minister George Papandreou, who chaired the informal cabinet meeting in Thessaloniki on Sunday, said in a speech late Saturday night, he was determined to do whatever it takes to save Greece from bankruptcy and keep it in the euro.
He was answering renewed talk in capitals of Greece will meet the bailout plan and stay in euro block may be wavering.
EU inspectors and IMF repeatedly said Greece to avoid more tax measures suffocating economy and concentrate on structural reforms and spending cuts, including shrinking the public sector large and inefficient.
Yannis Revithis, head of the Association of Realtors in Athens, "property of taxation is the easiest solution for the revenue," said the Greek TV. "But the real estate market cannot accommodate any more taxes".
The tax will vary between half and 10 euros per square metre of construction and will be in force for two years, said Venizelos.
Inspectors, known as the troika, interrupted a visit on day 2 of September, after a row over the size of the deficit and cause. Athens blamed it on a larger than expected recession and Venizelos said on Sunday the economy would shrink by about 5.3 percent this year.
But the troika said it was only a small part of the reason and called for urgent steps in privatisation, shutting down the State organizations and reducing the number of civil servants.
(Written by Dina Kyriakidou; Edited by David Cowell)

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DEBT FINANCING. Euro seen under pressure on the lack of support from G7

LONDON | Sun September 11, 2011 10:13 EST
London (Reuters)-the euro and the currencies linked to growth may fall on Monday, hit by a lack of concrete measures by the Group of seven finance chiefs to face the growth faltering, the growing euro zone debt crisis or exchange rate volatility.
The dollar, Yen and, to a lesser extent, the Swiss franc are set to go ahead with more investors seeking safe-haven currencies on the back of growing stress in the financial market.
That will increase the risk of more intervention by Japanese authorities and Swiss soil.
The flight to safety must orient the main government bonds such as German Bunds and British gilts superiors, leading to wider spreads on the peripheral of euro zone debt, while European banking actions can facilitate mounting worries about contagion engulfing major economies, such as Italy and Spain.
Finance Ministers and Central Bank Presidents of the Group of Seven Industrialized Nations have pledged to respond in a concerted issue to a global slowdown. However, they offered no specific steps and differed in emphasis on Europe's debt crisis.
That probably will offer little consolation to investors who were expecting some sort of coordinated policy response of G7 policymakers at a time when the stock markets have been global growth and Quedo in show increasing signs of slippage.
"As this is far from any commitment to undertake coordinated action in foreign exchange markets, investors tend to react with disappointment when trading resumes on Monday," said Mansoor Mohi-uddin, head of foreign exchange strategy at UBS.
He hoped the Japan to stay under observation for intervention.
Japan's Finance Minister, Jun Azumi, said he met with little resistance to another intervention in the G7 meeting. Japan last intervened in the currency market on August 4 to bring down the yen to a record level against the dollar.
"We hope that the authorities of Japan will act unilaterally if the dollar/Yen again tests its post-war low of 75.95 yen. So we think investors should instead maintain favouring the dollar now when seeking safe-haven currencies, "said Mohi-uddin of UBS.
The dollar index, which measures performance against a basket of six currencies including the euro, Yen and sterling, rose to its highest point in six months on 77,276 on Friday.
In a bullish signal, it closed above its moving average of 55-77.01 week. The resistance was seen at the base of the Ichimoku cloud around weekly 78.05, while strong resistance was the 38.2% retracement of fall of the index of an elevation of 88.71 in June 7, 2010 to a low of 72,696 in May 4, 2011, which comes in 78.80.
The dollar is set for strong gains against the euro, which last week fell to its lowest in six months, to about $ 1.3627. The euro Posted its biggest weekly fall since mid-August last year, with many looking for it test 1.35 in the short term.
EURO ON THE DESCENT
The euro also fell sharply against the Japanese yen of safe-haven on Friday, falling to its lowest in nearly a decade. He finished the week at 105.85 yen and a break below the psychologically key level 105.00 could see him fall toward the 100 yen in the coming weeks, analysts said.
Howard Wheeldon, strategist of BCG Capital Partners, said the weekend's developments provided little confidence to investors in the eurozone, and next week will see increased volatility in stock markets.
That could hurt the euro more in the coming days.
The euro was sold last week, after the European Central Bank President, Jean-Claude Trichet went on the monetary policy stance of a belligerent bias to a more neutral.
The shock resignation of Member Juergen Stark, which highlighted sharp divisions within the central bank on its purchases of government bonds on the secondary market and concerns that Greece cannot protect its latest help plot against the IMF/European Union, the Governing Council also added to the woes of the euro.
Investors will also probably be shaken by a weekend report of Der Speigel magazine that the German Finance Ministry was looking at scenarios that included Greece leaving the euro.
Indeed, the latest data from the Commodity Futures Trading Commission showed speculators added to your bets low against the euro on the week of September 6.
"With $ $1,40 going last week, I think that the euro could fall to $ 1.35 in the coming days," said Michael Derks, Chief Strategist at FXPRO. "The dollar will perform the currency they will earn from safe-haven inflows due to risks of intervention in yen and the line in the sand that was drawn up on the Swiss franc by the Swiss National Bank".
On the charts, short term, support was seen at $ 1.3426, a low blow on 14 February and where the euro began its shift to a high of 17 months in $ 1.4939 reached on 4 May.

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DEBT FINANCING. Lagarde of the IMF: report $ $273,2 billion Bank misleading hole

IMF Managing Director Christine Lagarde holds a news briefing at the headquarters of the International Monetary Fund in Washington, July 6, 2011.
Credit: Reuters/Kevin Lamarque

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DEBT FINANCING. Analysis: the ECB's Stark Output reaches eurozone unstable at worst moment

PARIS (Reuters)-the resignation of high-ranking German on European Central Bank could hardly have been worse for the euro zone policymakers as they grope for a solution to the crisis deeper in the history of 12 years of the single currency.
The ECB is an institution which has maintained the zone euro afloat in the sovereign debt crisis and avoid a collapse of the bond market. The European Union has no common tax authority or the federal Government and talks to many dissonant voices.
Juergen Stark departure of the Executive Council of the ECB in despair with the purchasing policy of government bonds to prevent the spread of the crisis comes as policymakers in Berlin and beyond are preparing for the growing possibility of a Greek default.
It seems bound to complicate the next round of crisis management, because he has injected the poison of Interstate policy, as well as the ideological division in independent central bank.
"It is the ECB is holding the show together, so anything that weakens the ECB is bad news," said an employee I involved in the management of financial crises.
Stark output will further sap the credibility of the ECB with conservative financial establishment of Germany, which saw the purchase link as an irregular form of financing of public debt and among the voters in Europe's largest economy.
This could make a larger eurozone fiscal integration politically more difficult to achieve at a time when Chancellor Angela Merkel is coming to realize that a great leap forward in economic governance is needed to preserve the single currency.
Runs the risk of importing a North-South Division, between creditor countries virtuoso self-styled and peripheral States seen as wasteful and unreliable, the central bank.
At worst, Stark departure may restrict the ability of the ECB to act decisively in the coming months, when the debt crisis enters a stage even more dangerous.
PARALYZED
"This comes at a very, very bad and is certainly serious," said Jean Pisani-Ferry, Director of the economic think-tank Bruegel in Brussels.
"If the ECB is handcuffed in their ability to buy Italian and Spanish titles and at the same time, we must make a real restructuring of debts of Greece, with a good haircut, we risk a clash of contagion spreading to other countries. If the ECB is hamstrung by lack of consensus, which is the risk ".
A growing number of policymakers, as well as market economists, believe it is only a matter of time before Greece, that keeps getting back on their budgetary targets, will have as default.
A source in the G7 this weekend meeting of Finance Chiefs in Marseille, said the EU troika, the ECB and IMF inspectors, which suspended last week for talks with Athens, probably would find a formula in its progress report to allow the next installment of 8 billion euros (US $ 11 million) of aid to be paid in October.
That would keep Greece going for another couple of months until the European Parliament approves new powers for the EFSF give Rescue Fund preventive lines of credit to Member States of the eurozone, to buy securities in the secondary market and lending money to recapitalise banks.
The source said that the German Finance Ministry was increasingly convinced that Greece will not be able to avoid default for much longer, so making the debtor weaker eurozone and limit contagion is crucial.
Even though the EFSF has their new powers, you will need the unanimous agreement of the euro zone 17, the Member States to use them, with the German Parliament, having gained only a greater supervisory role on those decisions. Political obstacles abound.
Markets may run up to the euro area bond yields again in anticipation of ECB purchase and delivery obligations of the EFSF inexperienced, traders say.
The ECB has bought so far a total of 135 billion euros worth of titles Italian, Spanish, Greece, Ireland and Portugal.
The Rescue Fund may find themselves short of fire in a crisis. It will have approximately 380 billion in uncommitted funds. Italy alone has 1.9 trillion euro of outstanding government bonds, of which 45 per cent are held by foreigners.
TOUGHER LINE
The replacement of Stark in the ECB's Board by German Junior Finance Minister more pragmatic Joerg Asmussen, the experienced crisis manager proposed by Berlin on Saturday, can reduce ideological tensions in the central bank.
But it can also force the incoming ECB President Mario Draghi, who succeeds Jean-Claude Trichet on November 1, to take a harder line by ending with purchases of titles and adheres to the core mandate of fighting inflation.
Draghi has warned Governments, including his native Italy, that purchase of continuous connection cannot be granted.
"The next step will be increased pressure on the ECB to keep their hands clean. Stark is the German school that sees this type of intervention so bad in principle, "said Josef Janning, research director at the European policy centre in Brussels.
"Its likely successor will be less Orthodox and more of a political crisis manager. But Stark could use their new freedom to speak out. That could make things more complicated for Merkel and Draghi, "said the German political scientist.
Stark's resignation could also affect international confidence in the ECB and the euro zone at a crucial moment.
"Politics was never completely absent from the ECB but this has now been strengthened. This awakens the idea that the ECB is still a structure that amalgamates national institutions and views, not mainly individuals belonging to its Board of Directors, "said Pisani-Ferry.
"You have to think about this appearance of New York. It seems as if these people still cannot sit around the same table and find out things. "
(US $ 1 = € 0.729)
(Additional reporting by Annika Breidthardt in Marseille and Luke Baker in Brussels; Edited by Kevin Liffey)
(This story corrects debt figure in Italian number 19 to $ 1.9 trillion euros, not billions)

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DEBT FINANCING. Ex-BP chief Hayward to exit tray TNK-BP: report

London (Reuters)-the former BP (BP.Head of L) Tony Hayward is studying the possibility to resign from the Board of Directors of Russian oil joint venture TNK-BP, but has yet to inform the British oil company of any decision, said a spokesman for the company.
The announcement followed the return of the Hayward to the business of oil last week, when his investment vehicle Vallares (VLRS.L) announced an agreement to acquire Turkish General energy Manager.
Enlarged group will likely be large enough to insert the FTSE index of 100 blue-chip London-listed companies.
A BP spokesman, responding to a report in the Sunday Telegraph, said he had been aware for some time that Hayward should consider their future in the Board of Directors of the TNK-BP spokeswoman said they were leaving the plate from Hayward, joint venture, he would be replaced by another Director appointed for BP.
In an interview with the Sunday Telegraph, Hayward said he has no plans to relinquish any TNK-BP (TNBP.MM) or the Board of Directors of Glencore (GLEN.L). However, the book cited people close to Hayward as saying that he was expected to inform BP of its intention in the coming weeks.
The newspaper added that Hayward did not believe that he would have time to devote to TNK-BP.
Hayward exit as BP Chief Executive after its Macondo blown-out also caused the worst ever oil spill in the United States. As part of the crisis, Hayward was vilified by much of the American press to a string of comments, including when he said that he wanted to return to his "life".
The news comes as Britain's Prime Minister, David Cameron, travels to Russia for a visit focused on business and commerce. Cameron will travel with more than 20 business executives, including BP Chief Executive Bob Dudley.
BP has been engaged in a fight with its partners in TNK-BP, which claimed billions of losses due to the failure of BP plan to establish a parallel joint venture with the State-controlled Rosneft.
Last week, dressed in black special forces stormed the Moscow offices of BP and searched for documents related to the business of Rosneft failed.

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DEBT FINANCING. French banks braced downgrade credit rating: fonts

PARIS (Reuters)-top of France, banks are preparing for a credit downgrade from Moody's rating likely, sources close to the situation, said on Saturday, further complicating its efforts to ensure that investors are riding out the financing market tensions.
Several sources said Saturday that BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA) and Credit Agricole (CAGR.PA) were waiting for a decision "imminent" of rating agency, which first put them under review for possible downgrade on 15 June.
Moody at the time had quoted French banks exposure to debt economy-structures of Greece as the reason behind the review, which was due to last three months. Outside commentators said they were ready for a ratings downgrade because of increasing borrowing costs before the sovereign debt crisis.
"The decision is imminent," said a source in Paris. "Will probably be a downgrade but is not yet certain".
Creditors of France-two of which own local banks in Greece-have the highest overall exposure database for Greece, according to the Bank for international settlements. They began to take writedowns on their farms of Greek sovereign debt as part of a new rescue package, but some say not aggressively enough.
Greece pledged on Saturday to stay the course of austerity and avoid bankruptcy as anger over the country's failure to meet budgetary targets in their rescue EU/IMF reached the boiling point.
The three French banks and Moodys refused to comment for this story. The Agency announced in June it was considering the possibility of cutting the BNP and Credit Agricole by a notch and SocGen for up to two notches because of the level of State aid received in the past.
The long-term debt Ratings of Moody's of BNP, SocGen and Credit Agricole are respectively and Aa1, Aa2, Aa2 by assigning all high-grade financial soundness.
A downgrade, although well-flagged, it would be another reminder of market sentiment to deteriorate as investors off economic slowdown in Europe, stricter capital requirements on banks and the drama unfolds in Greece and in the euro area.
Turbulence of sovereign debt has crushed the stock prices of European banks since the beginning of summer and pushed up the cost of borrowing, especially money markets of the US dollar.
French banks, seen as particularly dependent on short-term financing, are among the hardest hit. SocGen shares fell 57 percent since the end of June and are flirting with levels not seen since March 2009, when Europe was in recession.
SocGen, Credit Agricole and BNP-which together held archrival about 6 billion euros (US $ 8 billion) of Greek sovereign debt at end-March-recently tried to reassure investors in their positions of finance, giving additional disclosures of liquidity, but that failed to halt the sell-off.
Some say that the only way out is for Europe to recapitalise its battered banking sector to better absorb the losses of sovereign debt and to meet more stringent capital requirements. IMF Chief Christine Lagarde has been a vocal proponent of such a measure.
(Additional reporting by Matthieu Protard; Edited by Ruth Pitchford)

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DEBT FINANCING. Imports of commodities shows China's economy resilient

SHANGHAI (Reuters)-key imports of goods from China, including oil, copper and iron ore, all rose in August from the previous month, adding to evidence that the demand in the world's second largest economy was still going strong, despite the economic turmoil in the West.
The wave of purchases of industrial raw materials and oil suggests that Chinese companies are still confident about the domestic economy and that they probably would see any price corrections as a rare opportunity to restocking-a move that should offer strong support to commodity prices.
With inflation of China have pulled back in August from a high of three years, market observers also expect the central bank to postpone the new strengthening measures, which could in turn relieve the credit crunch and potentially draw producers and traders to import more raw materials.
China imported 21.04 million tonnes of crude oil in August, up 1.8% of 20.66 million in the previous month, according to Reuters calculations using the numbers from July to the magazine.
Although oil demand implicit in August fell to the lowest rate for this year, plant maintenance and accidents were the main reasons behind the dip and traders generally expect that seeks to improve from September.
"August-arrival gross loads were loaded mainly in June and July, when oil prices fluctuated greatly," said a trader from crude oil.
Data of the General Administration of Customs also showed the iron ore imports from China in August jumped 33 percent a year ago to a high of five months of 59.09 million tonnes, thanks to the production of robust steel industry.
However, analysts have warned that steel production would decelerate in the coming months amid a slowdown in seasonal demand.
Despite slowing export growth due to the economic malaise in the United States and in Europe, China's economy continued to grow at an enviable rate of more than 9%, thanks in part to the construction of the Government of more than 10 million homes as well as feverish investment in Western provinces and lagging middle.
These two factors led Chinese factories to produce near a quantity record for steel, cement plants to ramp up production and metal foundries to expand capacity-strengthening the country's voracious appetite for a number of commodities.
COPPER DEMAND FOR THIRD MONTH
Imports of unwrought copper to China, the world's no. 1 metal, published monthly a third gain of 11.0%-the highest since March-to 340,398 tonnes in August, as buyers took advantage of lower prices abroad.
Compared to the previous year, however, copper imports remain below 10.3 per cent, with shipments of year-to-date down to 20.5%.
Fu Bin Jinrui Futures analyst, said that China had maintained by purchasing special copper in recent weeks as arbitration continued to surface, a trend which will support import figures for September and October.
Imports of unwrought aluminium had smaller monthly earnings of 0.8 per cent, but decreased by 2.3% year ago.
Soy was the only laggard of all commodities, falling 15.7% compared to the previous month to 4.5 million tonnes as high prices abroad led Crushers rotate national deliveries.
In the midst of economic doom and gloom in the eurozone and United States, investors have wondered whether China, one of the main buyers, would be able to avoid a hard landing.
However, a series of economic data released in recent months has suggested that domestic demand was holding up relatively well, although the global economic growth has facilitated.
Statistics released on Friday showed only moderate slightly for 13.5 per cent in August from the previous year, while the fixed capital investment, the main driver of economic growth of the country, rose 25.0% in January-August period of one year before the industrial production.
(Additional reporting by Judy Hua, Polly Yam and Ruby Lian; Edited by Raju Gopalakrishnan)

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