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A stronger Chinese yuan is part of the reforms that Beijing needs to implement to increase domestic consumption and help ease global imbalances, the head of the International Monetary Fund said on Monday.

IMF managing director Dominique Strauss-Kahn said that the global economy appeared to have turned a corner toward recovery but that the biggest risk to the global outlook was a premature removal of stimulus measures.

In prepared remarks to a financial conference in Beijing, he added that, despite strains on the current global monetary system, he still expected the dollar to remain the principle reserve currency “for some time.”

(Reporting by Jason Subler; Editing by Ken Wills)

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Liberty Global, the international cable operator controlled by John Malone, has agreed to buy Unitymedia from a private equity group for $3 billion in its first German acquisition.

The sale of Germany’s second-biggest cable network by a shareholder group led by BC Partners and Apollo is worth $5.2 billion including assumed debt and marks the largest private equity exit in Europe this year.

The private equity group bought Unitymedia for 1.5 billion euros ($2.2 billion) in 2003.

Unitymedia, second behind Kabel Deutschland, has 4.5 million subscribers in a region covering 10 of the country’s 20 biggest cities, including Cologne, Duesseldorf and Frankfurt.

Liberty Global was created from the combination of cable pioneer Malone’s Liberty Media International and UnitedGlobalCom in 2005.

It operates in Austria, the Netherlands, Eastern Europe, Asia and Latin America and had until now avoided Germany because of regulatory complications. Unitymedia has taken some measures to simplify operations.

BC Partners and Apollo had been running a dual-track process in which they also considered an initial public offering. Liberty Global now plans to increase Unitymedia’s debt to $3.7 billion and use part of the proceeds to fund the equity buy.

The remainder would be funded by a combination of existing liquidity, proceeds from the sale of $750 million in convertible notes and the sale of 6 million Series A and C shares to SPO Partners & Co for about $128 million, Liberty said no credit check payday loan.

GOOD TIME FOR A COMEBACK

Malone, known for creating Byzantine holding structures, has tried to make inroads into Germany before.

In 2001, Liberty Media launched a multi-billion euro bid to become Germany’s largest cable operator by buying assets from Deutsche Telekom and Deutsche Bank. That was eventually blocked by German regulators.

Guy Bisson, a senior analyst at research firm Screendigest, said Liberty tends to pursue market leaders and Kabel Deutschland would have been the natural choice.

“But as a strategic player Unitymedia is the stronger one,” Bisson said because Unitymedia had a higher uptake of digital TV and higher revenue-generated units (RGU) per household.

Asked about regulatory obstacles that thwarted Malone before, Bisson said: “In the late 1990’s everyone thought the German market would turn the corner and become more commercial but that never happened…It’s starting to happen now, so it’s a good time to get back in the market.”

Arndt Rautenberg of OC&C Consultants said he was curious to see how Liberty would increase Unitymedia’s core profit. 

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The bleeding in the housing market seems to be stanched, at least temporarily, according to home price data released on Tuesday.

Most U.S. cities saw gains in the median price of single-family homes sold during the three months ended Sept. 30, according to the National Association of Realtors’ quarterly report on home prices. This is the second consecutive quarter of gains.

The national median home price was $177,900 in the third quarter, up $7,000 from the previous quarter. And while that down more than 11% from the third quarter of 2008, the pace of decline is slowing. In the second quarter of 2009, home prices fell 15.4% from the same period last year.

"The decline in the national median price has moderated recently," Lawrence Yun, NAR chief economist, said in a statement.

Yun said a shrinking supply of unsold homes suggests the housing market is getting closer to price stabilization. But he cautioned that a steady stream of financially qualified buyers is necessary to keep the fledgling housing recovery going.

NAR attributed much of the recent increase in home prices to the government’s first-time homebuyer tax credit, which has helped revive home sales from a deep slump.

"We can’t underestimate just how powerful a catalyst the first-time homebuyer tax credit has been for the housing sector," Yun said.

While a glut of foreclosed properties will continue to weigh on prices in the months ahead, "rising sales from the expanded tax credit should stabilize home prices by next spring," Yun said payday cash advances.

Despite the positive report, many clouds dot the housing market horizon. The darkest of those is the current employment picture. The latest release from the Bureau of Labor Statistics reported a national unemployment rate of 10.2%.

"An unemployment rate of 10.2% is a strong psychological impediment for anyone thinking of buying a house," said Ingo Winzer, president of real estate research firm Local Market Monitor Inc.

"Housing markets respond as much to psychological factors as to economic ones," he said. "So we won’t see much of a pickup in home buying until the unemployment rate has turned downward."

Cheapest and priciest areas

The Cape Coral metro area in Florida recorded the largest decline: 40% to $98,000. the Cumblerland area Maryland and West Virginia had the biggest gain: 19.2% to $122,100.

The lowest-priced market in the nation is now Saginaw, Mich., where the median home sold for $61,400 during the quarter, a 6.7% drop over last year. The most expensive market was San Jose, Calif., with a median price of $566,000 — although that’s still a 12.9% discount from a year ago.  

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Europe’s biggest bank HSBC Holdings said its underlying third quarter profits were “significantly ahead” of a year ago and said losses on U.S. consumer loans had shown their first fall in three years.

HSBC said loan impairment allowances for its U.S. consumer finance business declined in the third quarter, representing the first quarterly fall since the start of 2006 and their lowest level for over a year.

HSBC said its investment bank arm had maintained its record performance so far this year.

HSBC shares were up 1.8 percent at 704.9 pence at 0830 GMT (3:30 a bad credit payday advance.m. EST).

“I believe the biggest jolt has now passed through the global economy,” said HSBC Chief Executive Michael Geoghegan. “The world will likely see a two-speed recovery,” he said, adding that emerging markets are likely to drive the recovery.

The bank said on a reported basis, including losses on the fair value of its own debt, Q3 profits were lower than a year ago.

(Reporting by Steve Slater and Clara Ferreira-Marques)

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Treasury Secretary Timothy Geithner on Saturday stressed the necessity of keeping global economic stimulus in place until recovery is assured and opposed the utility of a tax on financial transactions as a way to dampen risky bank behavior.

Speaking at the conclusion of a two-day meeting of Group of 20 finance minister and central bankers, Geithner said there was broad agreement that “growth remains the dominant policy imperative across our economies.”

He said high U.S. unemployment, which hit a 26-1/2-year high at 10.2 percent of the civilian workforce in October, highlighted a “very tough economic environment” that will a period of sustained growth to correct.

Earlier, British Prime Minister Gordon Brown had suggested that the G20 should levy on banks — blamed for the excessive risk-taking that led the world into a now-easing financial crisis — and used the proceeds to fund future bailouts.

Geithner played down that idea, noting that the Obama administration was already pushing an overhaul of financial market rules in Congress that would ensure that banks pay the costs of their failures in future from their own pocket.

“A day-by-day financial transaction tax is not something we are prepared to support,” Geithner said in an interview with Sky News. In his concluding press conference, Geithner was asked repeatedly to say why he opposed such a tax on banks and indicated he doubted its effectiveness.

“This idea (of a bank transaction tax) has been around for a long time…I think frankly the experiences are mixed,” he said, expressing an American view that there was no widespread backing for such a tax.

Canadian Finance Minister Jim Flaherty was similarly skeptical.

“It’s one of the ideas that’s on the table, but is not particularly attractive to me as finance minister of Canada. We have been a government that has been reducing taxes,” Flaherty said.

ON DANGEROUS GROUND

Geithner’s key message was that recovery still remains on perilous ground and that it was too soon to discuss the timing for removing the massive fiscal and monetary stimulus that countries around the world have poured into their economies.

“Government policy has to provide a bridge to growth led by the private sector,” he said. “We’re now in the middle span of that bridge.”

That meant policymakers must move cautiously in trying to bring down huge budget deficits without choking off chances for growth led by consumer spending and business investment.

“If we put the brakes on too quickly we will weaken the economy and the financial system, unemployment will rise, more businesses will fail, budget deficits will rise, and the ultimate cost of the crisis will be greater,” Geithner said.

“It’s too early to start to lean against recovery.” 

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U.S. business productivity grew at its fastest clip in six years in the third quarter and new claims for jobless aid fell to a 10-month low last week, suggesting the labor market may be starting to bottom out.

The Labor Department said on Thursday that productivity surged at a 9.5 percent annual rate, the quickest pace since the third quarter of 2003, as companies squeezed more output from a smaller pool of labor to hold the line on costs.

The Labor Department also reported that initial claims for state unemployment benefits dropped to 512,000 in the week ended October 31, the lowest level since early January. Markets had expected a decline to only 523,000, from the 530,000 reported in the prior week.

Some healing of the labor market is crucial to sustaining and strengthening the economy’s recovery after its worst recession in 70 years, with employment key to underpinning consumer spending.

Analysts doubt that the rapid growth rate in productivity, which measures the hourly output per worker, can be sustained, which some analysts say means businesses may soon have to step up hiring to meet the demand for their goods and services.

“We expect the pace of efficiency gains will soon begin to fade,” said Michelle Girard, a senior economist at RBS in Greenwich, Connecticut. “Having cut payrolls so dramatically during the last downturn, we believe that companies will be forced to add workers earlier in this recovery than was the case following the last two recessions.”

U.S. stocks rallied on the reports, with the productivity data viewed as good news for company earnings. The blue chip Dow Jones industrial average gained more than 2 percent and closed above the 10,000 threshold for the first time in about two weeks payday loans for bad credit.

Financial markets had expected productivity to rise at a 6.4 percent rate. It grew at a 6.9 percent pace in the April-June period, when the economy was still contracting.

MUTED INFLATION PRESSURES

The U.S. Federal Reserve on Wednesday held overnight interest rates close to zero percent and said it would keep them extraordinarily low as long as excess economic slack and a lack of inflation warning signs prevailed.

The U.S. economy grew in the third quarter for the first time in more than a year, driven largely by government stimulus. The strong productivity report suggested there was little need to worry about inflation at this juncture.

Unit labor costs, a measure of the cost of labor for any given amount of production, fell 5.2 percent last quarter after declining 6.1 percent the previous period. Analysts had forecast a drop of only 4 percent.

“Solid productivity growth provides the basis for a recovery in business earnings and investment in the second half of 2009, and keeps a firm lid on prices and inflation,” said Brian Bethune, chief U.S. financial Economist at IHS Global Insight in Lexington, Massachusetts.

“They provide the Fed more room to keep rates exceptionally low for an extended period in order to coax the economy through the fragile recovery period over the next year and ultimately to an expansion mode.”

Productivity in manufacturing rose at a record 13.6 percent rate in the third quarter, likely driven by automakers ramping up production to rebuild depleted stocks after the popular “cash for clunkers” program boosted sales. 

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U.S. banks are at risk of sizable new loan losses, particularly on commercial property, and some banks may not have sufficient capital to fully cushion against losses, a Federal Reserve official said on Monday.

Some large regional and community banks that have built up unusually high concentrations in commercial real estate loans will be "particularly affected" by conditions in those markets, said Jon Greenlee, associate director of the Fed’s Division of Banking Supervision and Regulation.

In the second quarter, said Greenlee, "Credit losses at banking organizations continued to rise, and banks face risks of sizable additional credit losses given the outlook for production and employment."

Greenlee’s comments were in testimony prepared for delivery to a House of Representatives Oversight and Government Reform subcommittee.

"Poor loan quality, subpar earnings, and uncertainty about future conditions raise questions about capital adequacy for some institutions," he said.

While the stability of the banking system has improved, it is far from robust as banks face pressures from weakness in both residential and commercial property markets, Greenlee said.

Although year-on-year housing price price declines slowed in the second quarter, foreclosures and mortgage loss severities are likely to remain high, he said.

Delinquencies of mortgages backing commercial mortgage-backed securities have increased markedly in recent months and market participants anticipate the delinquency rates will rise by the end of the year, Greenlee said.

Fed examiners are noticing a sharp deterioration in loans in banks’ portfolios and loans in commercial mortgage-backed securities, he said. 

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General Motors expects to announce a market share gain for the third month in a row in October, GM executive director of corporate planning Mike DiGiovanni told reporters on Wednesday.

October will also mark the first year-over-year sales gain GM has managed in 21 months, DiGiovanni said. In September, GM’s sales were down 47% compared to a year earlier.

"When you look at GM’s performance, we’re having a really good October," he said.

The automaker expects its vehicle sales will amount to 20% to 21% of all vehicles sold that month, he said. He expects those numbers to be about 3% higher than Toyota’s and 4% higher than Ford’s, he said.

DiGiovanni credited strong product introductions for the market share rise. Over the past few months, GM has started production on six new or redesigned models: the Chevrolet Camaro performance coupe, Chevrolet Equinox, GMC Terrain and Cadillac SRX small crossover SUVs, Buick LaCrosse luxury sedan and the Cadillac CTS Sportwagon.

Sales of the new 2010 Chevrolet Equinox crossover SUV are strong enough that the automaker is adding a third shift to the Ontario, Canada factory that builds the Equinox and its sister-vehicle the Terrain easy online payday loans.

"We’ve got enough data now that we feel very confident that adding this third shift is the right ting to do, said Susan Docherty, who was recently appointed to head GM’s sales efforts.

An overall improvement in auto sales will also help GM’s bottom line, DiGiovanni predicted.

The market share rise comes despite the fact that GM has shed four of its former eight brands, DiGiovanni said. Only 5% of GM’s October sales came from the four brands that are being shut down, he said, compared to 10% a year ago.

Besides new model introductions, the automaker’s "Truck Month" promotion program has also helped boost sales, Docherty said.

GM still has a much larger percentage of 2009 models on its dealer lots, Docherty said, but part of that is a deliberate strategic decision. The automaker wanted to have more 2009 truck to sell as part of its "Truck Month sales drive. 

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