- NATO Says Russian Forces Are in Ukraine as Putin Goes to G-20. (video) NATO’s chief said Russia is sending troops and heavy weapons into Ukraine as President Vladimir Putin heads to a Group of 20 summit in Australia that’s overshadowed by the crisis. “We have observed in the past days that Russia has again brought arms, equipment, artillery, tanks and rockets over the border into Ukraine,” North Atlantic Treaty Organization Secretary General Jens Stoltenberg said in an interview with Germany’s Bild newspaper. “President Putin has clearly broken the truce agreement and has violated Ukraine’s integrity.” Ukraine is threatened with a return to open warfare, as seen before the Sept. 5 truce that’s being violated on an almost daily basis.
- Ruble Extends Longest Weekly Losing Streak in Nine Years on Oil. The ruble weakened, extending the longest stretch of weekly losses since 2005, as oil trading below $80 a barrel exerts pressure on Russia’s revenue and pushes the economy closer to recession. The currency fell 0.9 percent to 47.2235 per dollar at 7:04 p.m. in Moscow, taking the drop in the past five days to 1.2 percent. Ten-year government bond yields climbed nine basis points to a five-year high of 10.29 percent. The dollar-denominated RTS Index slumped 1.2 percent to the lowest since August 2009.
- Russia Braces for 'Catastrophic' Drop in Oil Prices. President Vladimir Putin said Russia's economy, battered by sanctions and a collapsing currency, faces a potential “catastrophic” slump in oil prices. Such a scenario is “entirely possible, and we admit it,” Putin told the state-run Tass news service before attending this weekend’s Group of 20 summit in Brisbane, Australia, according to a transcript e-mailed by the Kremlin today.
- China Slowdown Deepens as Targeted Stimulus Fails. Aggregate financing in October was 662.7 billion yuan ($108 billion), the People’s Bank of China’s said in Beijing yesterday, down from 1.05 trillion yuan in September and lower than the 887.5 billion yuan median estimate in a Bloomberg survey of analysts. Earlier this week, reports showed deceleration in industrial output and fixed-asset investment. The evidence underscores concern that, outside the U.S., the global economic outlook is deteriorating.
- China Busts Underground Banks With $23 Billion Transactions. Beijing police raided more than 10 underground banks that were together involved in $23 billion of transactions as authorities tighten their controls on the movement of money across China’s borders. Police in the Chinese capital busted the groups on Sept. 18, with 59 people arrested, after they handled almost 140 billion of transactions over the “past few years,” the Beijing Municipal Public Security Bureau said in a statement on its official microblog today. It didn’t give a more detailed time frame for the transfers.
- ECB Can’t Expand Balance Sheet and Revive ABS Market, Pimco Says. The European Central Bank’s plans to expand its balance sheet and revive the region’s moribund asset-backed securities market are unlikely to work, according to Pacific Investment Management Co. The ECB’s decision to buy asset-backed debt risks crowding out existing investors, cutting liquidity in the market and pushing yield premiums to levels where buyers are no longer adequately compensated, Felix Blomenkamp, the head of Pimco’s European ABS team, wrote in a note to investors. Pimco manages $1.87 trillion of assets. “We believe that the ECB will not likely be able to accomplish the two divergent goals of reviving the ABS market and buying ABS in size at the same time,” wrote Blomenkamp, who is based in Munich. “Buying ABS in any meaningful size would debilitate the market, rather than revive it.”
- Italy’s Slump Enters Fourth Year, Complicating Renzi’s Plans. Italy’s economy shrank in the third quarter pushing the nation into a fourth year of a slump that has complicated Prime Minister Matteo Renzi’s efforts to revive growth and keep public finances in check. Gross domestic product fell 0.1 percent from the previous three months, when it declined 0.2 percent, the national statistics institute Istat said in a preliminary report in Rome today. That matched the median forecast in a Bloomberg survey of 22 economists. Output was down by 0.4 percent from a year earlier.
- European Stocks Little Changed as Health-Care Shares Fall. European stocks were little changed, paring a weekly advance, as slides in health-care and commodity-producer shares offset gains in media companies. A gauge of health-care stocks was the biggest drag on the Stoxx Europe 600 Index, as Novartis AG and AstraZeneca Plc retreated. Outokumpu Oyj and Anglo American Plc paced miners lower. Abengoa SA and SBM Offshore NV led oil and energy-related companies down. Schibsted ASA (SCH) pushed a measure of media stocks higher after announcing a deal for joint ventures in online classifieds across four countries. The Stoxx Europe 600 Index slipped 0.1 percent to 335.63 at the close of trading, paring its weekly gain to 0.1 percent.
- Gold Rebounds as Oil Rally Damps Low Inflation Concerns. Gold futures for December delivery rose 1.3 percent to $1,176.10 an ounce at 12 p.m. on the Comex in New York, heading for the biggest gain since Nov. 7. Total volume was an estimated 225,706 contracts.
- Asset Bubbles Are Top Concern for Heartland's Central Banker. As a Federal Reserve bank examiner in the mid-1980s, Esther George delivered bad news to a Nebraska banker: she was downgrading overdue loans, putting his firm’s survival on the line. The owner “broke down and said, ‘This was my life’s work and your decisions are taking my bank away from me,’ ” George, now president of the Federal Reserve Bank of Kansas City, said in an interview. “I was absolutely sympathetic. I knew what it meant for the community.”
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