Volcker Rule Proposal

Daily Market Commentary for October 11, 2011

The Federal Reserve approved the controversial Volcker Rule proposal, a measure that could force big banks to cling onto a wide variety of trades for at least two months. (read more at Millennium-Traders.Com)
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According to Moody's Analytics, the U.S. economy remains vulnerable to a new downturn, though the probability of a recession in the next six months to a year is unchanged at 40%. The economy remains under pressure from Europe's debt crisis, Washington's budget debate and high foreclosure rates.

New York City State Comptroller Thomas DiNapoli reported the securities industry is facing the likelihood of 10,000 more job cuts through 2012. "Since April 2011, the securities industry in New York City has lost 4,100 jobs. The Office of the State Comptroller forecasts that the City could lose nearly 10,000 additional jobs by the end of 2012, which would bring total job losses in the securities industry to 32,000 since January 2008. Additional job losses are expected in banking and in other parts of the financial services sector," the report said.

International lenders reported Greece is likely to receive an 8 billion euro ($10.9 billion) tranche of aid in early November. The European Union, International Monetary Fund and the European Central Bank, known as the troika, said the fiscal 2011 deficit target is no longer within reach due partly to a further decline in gross domestic product and also due to slippages in the government’s implementation of austerity measures. Earlier this month, Athens announced that its 2011 deficit was likely to be nearly 8.5% of GDP, down from 10.5% in 2010 but well short of the 7.6% target that accompanied the €110 billion EU-IMF bailout approved last year. European Central Bank President Jean-Claude Trichet on Tuesday, speaking in his capacity as head of the European Systemic Risk Board, told the European Parliament that the euro-zone crisis “has reached a systemic dimension.”

BlackBerry service of Research In Motion Limited (NasdaqGS: RIMM) experienced problems in the U.K. for a second consecutive day, the U.K.'s biggest mobile operator by revenue. "We are aware of the ongoing service interruption to Blackberry users. The issue is being investigated by RIM, and they are working to resolve the problem as soon as possible," an Everything Everywhere spokesperson said in an email.


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