Senate Rejects House Spending Measure as Shutdown Looms

  In an article published in the Wall Street Journal of today the story of the showdown between
Democrats and Republicans continues:
"The Senate rejected a last-minute spending measure approved over the weekend by the House, tossing the fight back into the lap of House Speaker John Boehner with just hours to go until federal agencies begin cutting off services and furloughing workers.
The vote was 54-46 along party lines to reject a one-year delay of the health law, which was attached to a plan to fund the government through Dec. 15. The quick rejection left the nation on the brink of a partial government shutdown when the new fiscal year begins on Tuesday.
Senate Republican leaders were polling their members to find out whether they would support a one-week extension of funding. It is just one of several options being advanced. They were also polling members about the separate bill passed by the House to keep paying military personnel even if there is a shutdown.
With time running out, some of the more veteran House Republicans began calling on GOP leaders to drop the fight over the spending bill and shift the battle to a different front.

"We have tried robustly on the spending bill and it hasn't borne fruit," said Rep. Doug Lamborn (R., Colo.), now in his fourth term. He said Republicans could use other tactics to fight over the new health law, but "for this week we may have to give up."

"I would certainly discourage the Republican leadership from launching another volley back over to the Senate," Rep. Charlie Dent (R., Pa.) said on CNN. He said that "now that we've sent over two volleys to the U.S. Senate and they've rejected both, I think now it's imperative that we just fund the government."

Senate Republican leaders were polling their members to find out whether they would support a one-week extension of funding. It is just one of several options being advanced. They were also polling members about the separate bill passed by the House to keep paying military personnel even if there is a shutdown.

Argentina increases trade with China

Argentina is making room for China in its trade, decreasing, as a consequence, purchases from Brazilian companies. Argentine imports from the Asian country grew 64% between 2010 and 2013, driven by government orders of capital goods. Last month, a Chinese company defeated Brazilian contractors in Argentina’s current major public work, a deal of $4 billion. Both in the case of public works and in imports, the key for the Chinese breakthrough is lower-cost financing. 

Valor Economico

Valor International

Obama To Republicans:Back away from Government shutdown

In the middle of the showdon between Republicans and Democrats over a short-term budget resolution, President Barack Obama called on House Republicans, to set aside the short term
politics.

"He urged Republican lawmakers to back away from plans to attach amendments to a short-term resolution, such as stripping funding for his health-care law.

"We certainly don't allow domestic policy differences, on issues that are unrelated to the budget, to endanger not only our economy but the world economy," Mr. Obama said.

Mr. Obama's remarks came after both Republicans and Democrats dug in for a last-ditch battle in a budget fight that has brought the nation within hours of the first partial government shutdown in almost two decades".

Source: The Wall Street Journal

Berlusconi:L'esperienza di governo è finita

«La nostra esperienza di governo è finita» È ultimativo Silvio Berlusconi al termine della riunione coi suoi a Palazzo Grazioli, dove ha anche chiarito di aver «deciso lui» di chiedere ai ministri del Pdl di rassegnare le dimissioni dal governo.
Fine dei cinque mesi dell'esecutivo Letta, dunque? Sì, anche se Berlusconi garantisce che: « il decreto Iva sarà approvato. Abbiamo le coperture per 10 miliardi: no all'aumento di benzina e simili. È una follia l'aumento dell'Iva». E comunque «la linea politica economica di Letta minimalista e rinunciataria». Il Cavaliere dice «no a governicchi con maggioranze raffazzonate, transfughi e con gente scappata di casa». E chiede pure le dimissioni dei sottosegretari. Insomma, approvati i provvedimenti, «bisognerà tornare a votare»
Berlusconi torna sui motivi della scelta: «Ho deciso nella notte. Perché gli italiani non capivano come facevamo a stare al governo con la sinistra se i nostri deputati si erano dimessi». E continua: «Dobbiamo spiegare ai nostri cittadini le nostre ragioni Forza Italia non è una forza estremista e nessuno mi ha costretto a far dimettere i ministri». E, riguardo al clima agitato all'interno del partito, commenta: « Dobbiamo restare uniti, non dobbiamo dare all'esterno l'impressione che sta dando il Pd, i panni sporchi si lavano in casa. Quello che hanno fatto i ministri lo hanno fatto in buona fede ma abbiamo chiarito tutto.»
 E, a fine riunione, mentre la quasi totalità dei parlamentari del Pdl annuncia che voterà no alla mozione di fiducia del Premier l'unica voce contro sembra quella di Cicchitto: «O congeliamo le dimissioni dei ministri e, così facendo, vengono meno le ragioni per un voto di fiducia oppure il Pdl deve votare la fiducia». Così Fabrizio Cicchitto al termine della riunione del Pdl, sottolineando che questo è l'unico modo per fare ciò che Berlusconi ha detto e cioè votare delle misure in pochi giorni. E poi ha aggiunto: «Mi sarei augurato che all'intervento di Berlusconi fosse seguito un dibattito, anche convocando un'altra riunione domani. Ma mi è stato detto di no».

Corriere della Sera

Senate Democrats say they will defeat Obamacare delay

Democrats who control the Senate were confident that they would defeat Republicans' efforts to delay "Obamacare" health reforms on Monday and send a "clean" bill to keep the federal government operating back to the House of Representatives.

As a midnight shutdown deadline loomed, senior Democratic aides said the Senate would take a simple majority vote shortly after 2 p.m. (1800 GMT) to strip two Republican amendments from the funding measure - one that would delay the healthcare reforms and another that would repeal a tax on medical devices that helps fund health insurance subsidies.

Democrats control the 100-seat Senate with 54 votes, including two independent senators.

Source: REUTERS

FMI: Emerging Markets Best Response to International Capital Inflows

Capital flows to emerging market economies are a source of particular and enduring concern to many policymakers. As seen in the 1997-98 Asian crisis, surging inflows can fuel excessive credit growth, expanded current account deficits, appreciated exchange rates and a loss of competitiveness—followed by painful adjustment when the inflows reverse. Countries often fight these buffeting winds with tight controls on exchange rates, capital flow management and aggressive interest rate movements.
 Instead of trying to resist foreign inflows, countries can bend. We find that the countries that proved to be more resilient to the turbulent gusts of international capital flows were not necessarily those that controlled the inflows, but those where foreign inflows were balanced by offsetting resident outflows.

What distinguishes countries where volatile capital inflows are balanced by offsetting resident outflows from those where they fuel destabilizing current account booms and busts?

We find that these countries typically have:

• strong institutions, such as independent inflation targeting central banks as well as fiscal policy rules that result in lower inflation and more countercyclical fiscal policy outcomes
• stronger financial supervision and regulation
• more flexible exchange rate regimes and limited restrictions on capital flows

 Many of these economies were once just as vulnerable to international capital flows as some of today’s economies. But, through a series of policy choices, they have been able to encourage much greater resilience in their economies.

Each of the countries we study improved their prudential regulation to limit excessive risk taking by domestic financial institutions. The countries also took steps to encourage the development of their domestic financial systems. For example, in Chile, allowing pension funds to invest more of their assets overseas provided the catalyst for the development of foreign exchange derivatives markets that allowed both the pension funds and domestic firms to better manage their exposure to exchange rate fluctuations. While in Malaysia there was a very deliberate and staged process whereby domestic financial strength was built before gradual re-opening of the financial account.

Importantly, floating exchange rate regimes appear to be a key element in encouraging domestic residents to buffer foreign capital inflows. In countries with managed exchange rates, domestic residents commonly react in similar ways to foreign investors – moving capital overseas when foreigners are withdrawing and keeping capital at home when foreigners are piling in. Conversely, in countries with more flexible exchange rate regimes, exchange rate fluctuations seem to serve to encourage domestic residents to repatriate funds when foreign residents are leaving.

Source: FMI

Behind Iran's overtures to Washington lie pent-up pressures for change - from sanctions and internal dissent to regional turmoil

Behind Iran's overtures to Washington lie pent-up pressures for change - from sanctions and internal dissent to regional turmoil - that are shaping a rare chance to end decades of hostility.

For new President Hassan Rouhani, speed is of the essence.

Sanctions are squeezing Iran's oil exports, economic misery is palpable, Arab Spring contagion poses a persistent threat and involvement in Syria's civil war is a drain on hard-pressed resources.

As well as addressing these pressures,Iran may be hoping its softer tone in nuclear talks with the West will bring longer term opportunities, diplomats say.

Ultimately Tehran desires Western recognition of what it sees as its legitimate interests in the wider region - in Syria and Lebanon where Shi'ite Muslim Iran supports the interests of its co-religionists and in its 'backyard' the oil-producing Gulf, where Iran seeks to expand its influence.

For now it is the threats that appear uppermost in the thinking of the Islamic Republic, as it surveys its diminished ecoonomic and regional upheaval.

Iran is adept at surviving economic pressure, but sanctions have bitten deeply. Existing U.S. and EU measures have reduced Iran's oil exports by more than half from pre-sanction levels of about 2.2 million barrels per day (bpd), costing Tehran billions of dollars in lost revenue a month.

The U.S. Congress could soon pass a bill to squeeze Iran's oil exports further. Deeper cuts in oil sales, if accomplished, could worsen the damage Western sanctions have already done to Iran's economy, which suffered a loss of about $26 billion in petroleum revenue in 2012 from a total of $95 billion in 2011; soaring inflation; and a devaluation of its currency, the rial.

In April, the International Monetary Fund forecast gross domestic product would shrink 1.3 percent in 2013 after contracting 1.9 percent last year.

Source: Reuters

U.K. "Help to Buy" Scheme brought forward

Banks accounting for about a third of the mortgage market will start offering taxpayer-subsidised mortgages in just over a week after the Government brought forward the launch date of its controversial Help to Buy scheme by three months. On the eve of the Conservative party conference in Manchester, David Cameron said that the state-backed lenders, Royal Bank of Scotland and Lloyds Banking Group, have signed up to the scheme and the launch date has been brought forward from January. Help-to-Buy will initially be available under the NatWest, RBS and Halifax brands but a Tory spokesman said that other banks are expected to take part over time, The Daily Telegraph report


  Source:  Livecharts

SANTANDER COULD CLOSE IN ON ALTAMIRA REAL ESTATE DEAL

Spanish lender Banco Santander may be close to selling its real-estate company Altamira Real Estate, in what has been labeled the "real-estate deal of the year" by Spanish daily Expansión.

Non-binding offers are expected in the coming days and may include bids from large international funds such as Cerberus, Centerbridge, Apollo and Lone Star.

The Altamira deal is dubbed 'project bison,' after the prehistoric paintings located at the Altamira caves near the northern Spanish city of Santander, from which the group´s Chairman, Emilio Botín, hails.

Up to 10 foreign investors are reported to be interested in the company, including its real-estate management platform, with its approximate 300 employees and an exclusive contract for the sale of apartments for a decade.

Several Spanish banks have been letting go of their property management operations in order to refocus on their core business.

"These types of deals are a very good sign - no one buys a platform to stay in a country for a year," said Fernando Acuna of property management firm Taurus Iberica.

"These will give the funds a deep knowledge of what is going on (...) and allow them to manage other assets which they might buy but which don't belong to the bank."

Shares of Banco Santander were down 1.5% to €5.99 on Monday morning in Madrid.

Source: LiveCharts

EUROZONE INFLATION LEAVES DOOR OPEN TO ECB RATE CUT

Eurozone inflation continued to drop in September and is currently at its lowest reading since early 2010, leaving room for the European Central Bank (ECB) to embark on further quantitative easing. 

Specifically, headline inflation for the region dropped to 1.1% year-on-year during the month, from the prior month´s reading of 1.3%. 

The consensus estimate had been for an advance of 1.2%. 

The ECB's target rate is "below, but close to, 2% inflation". In this context, Capital Economics commented that the data showed that "the ECB has plenty of scope to loosen monetary policy further. At the very least, further action to boost liquidity in the banking sector looks increasingly likely." 

The ECB will take its next monetary policy decision on Wednesday.

Source: LiveCharts