Week Oct 5 2012 – Weekly Recap & The Week Ahead
“When you get to the end of your rope, tie a knot and hang on” — Franklin D. Roosevelt
1. Spain ready for a bailout, Germany signals “wait” – according to Reuters, Spain is ready to request a euro zone bailout for its public finances as early as this week but Germany has signaled that it should hold off. Participants said there were tense exchanges at a euro zone ministerial meeting in Cyprus in mid-September when Schaeuble told his peers Berlin could not take another bailout for Spain to parliament so soon after lawmakers approved up to 100 billion euros ($129 billion) to help Spanish banks in July.
2. Postal Service defaults again while Congress campaigns — the Postal Service has defaulted on a $5.6B payment for its retiree funds, which was due at the end of September, adding to a $5.1B payment the USPS missed earlier this year. The agency also expects net operating losses of $15B for FY 2012.
3. Apple suppliers said to be making smaller tablet — WSJ reported that Apple Inc.’s (NASDAQ:AAPL) Asian component suppliers have started mass production of a new tablet computer smaller than the current iPad. The smaller tablet will have a 7.85-inch liquid crystal display with a lower resolution compared with the latest iPad model that came out in March. South Korea’s LG Display Co. and Taiwan’s AU Optronics Corp. last month started mass production of the LCD screens for the new device.
4. Spanish Bond Auction Eases Bailout Pressure — per WSJ, the Spanish Treasury sold two-year and five-year bonds at lower costs than at previous sales as the latest bank stress test and the European Central Bank’s much anticipated bond buying plan provided a benign backdrop to the auction. Yields fell on the five-year bond to 4.77% and 3.28% on the two-year variety.
5. Japan Auto Makers See Plunge in Chinese Sales — the Senkaku-Diaoyu islands dispute between Japan and China hit Japanese car makers hard in September, with Mitsubishi’s Chinese sales plunging 63% on year and those of Mazda (MZDAF.PK) by 35%. Toyota’s (TM) sales skidded 40%, the FT reports, adding that the company will cut production in China by over half and suspend Lexus exports. Non-Japanese car makers have been benefiting from the spat.
6. Greek PM says can’t manage beyond November without next aid tranche — according to Reuters, Greek leader Antonis Samaras told a German paper that his country could not manage beyond November without the next tranche of international aid and suggested the ECB could help by easing the terms of its Greek debt holdings.
The week ahead — Economic data from Econoday.com:
