InformedTrades

We have been discussing the indications being sent by the credit markets and the turn in the credit cycle that appeared to be developing. Just to add to the pile of cyclical turn indicators, we note that the number of corporate bonds receiving S&P credit rating downgrades exceeded upgrades this quarter for the first time since Q1 2010. Obviously, this is led by the high-yield names but the withdrawal of liquidity often rapidly pushes crossover names closer to the edge and inevitably leads up the capital structure and quality spectrum.

Group of Seven finance chiefs meeting in southern France are considering issuing a communique after their talks, a G7 source said on Friday. G7 chair France had said there would be no communique from the talks, but the source said the issue was now being debated and there was a 50 percent chance of a statement.

The central bank chief said China saw no "special urgency" in having the yuan included in the basket of currencies that make up the Special Drawing Right, the International Monetary Fund's in-house unit of account. But Zhou said he welcomed discussion of the idea as part of the search for ways to improve the functioning of the global financial system. The SDR comprises the dollar, euro, yen and sterling. Under current IMF guidelines, the yuan is not eligible for inclusion in the basket because it is not convertible.

Here's Bernanke's speech to the Economic Club of Minnesota. There's not much new here. He basically says the growth outlook isn't great, and that the Fed has more tools. But he says nothing explicit. Markets aren't moving much on this.

Chinese officials told European Union business executives that the yuan will achieve "full convertibility" by 2015, EU Chamber of Commerce in China President Davide Cucino said. "We were told by those officials by 2015," Cucino told reporters in Beijing yesterday, declining to identify the government departments involved. People's Bank of China Governor Zhou Xiaochuan said that while there is no timetable for convertibility, the offshore yuan market is "developing faster than what we had imagined."

 The OECD recommends that central banks keep policy rates at present levels, and barring signs of recovery, consider lowering rates when there is scope.  Other monetary policy responses to the crisis could include further central bank interventions in securities markets, strong commitments to keeping interest rates low over an extended period and the withdrawal of monetary tightening in emerging economies.

European Central Bank President Jean-Claude Trichet talks about the decision to leave the central bank's benchmark interest rate at 1.5 percent and the risks to the euro-area economy.

The negative feedback loop between weak growth and soggy asset markets makes a coordinated monetary policy easing move more likely - perhaps as early as the G7 meeting this weekend. The Fed, the ECB, the BoJ and the BoE could all participate in a coordinated move with a mix of rate cuts and quantitative easing.

UN Security Council members on Wednesday denounced Iran's failure to abide by United Nations resolutions demanding an end to the possible weaponization of its nuclear program. The United States, Germany, France and Britain joined forces in exposing Tehran's advanced 20-per-cent uranium enrichment, which is considered military weapons grade. Tehran said its enrichment program was needed for medical and civilian uses.

A meeting of Group of Seven finance chiefs on Friday will discuss the struggling world economy and progress in regulating the financial sector but a coordinated action plan to calm markets is unlikely. Delegates at the one-day gathering in the Mediterranean port city of Marseille will seek to emphasize their commitment to preserving the fragile global recovery while avoiding promoting a one-size-fits-all approach, G7 sources say.

Like many emerging market currencies, the Brazilian real has quickly given up all the gains it made against the US dollar in the first half of 2011 and is now back at levels not seen for a year. While that movement is undoubtedly part of a broader EM trend, Brazil is also a case apart. As Monday's issue of the central bank's weekly survey of market economists suggested, something big has changed in Brazilian monetary policy.

Kovner is now the 7th hedge fund manager to retire within a year. Recent and major departures from the hedge fund kingdom - Stanley Druckenmiller, Paolo Pelligrini, George Soros, Richard Grubman and Lou Simpson - signal a trend of investors retiring at a time when hedge funds show the worst results in recent memory.

Mandarin could become a compulsory part of the school curriculum in the Karachi, Pakistan's commercial capital, and the surrounding province of Sindh, in a move that is further evidence of the warming relations between Islamabad and Beijing. The authorities want Mandarin to be taught by 2013 to all secondary school children in the region, according to a Sindh government statement.  It may be wishful thinking in a province where over 40 per cent of people can't read at all. But as a sign of China's growing influence it's significant.

Argentina's export quotas on corn and other foodstuffs have sparked fresh controversy about government interventionism in the agriculture sector, especially in light of rising global food demand. In conjunction with export taxes, these limits effectively lower domestic food prices and hence, farmer revenues. Farmers argue that these export quotas, ostensibly established to combat food price inflation and to guarantee food security, not only are preventing them from enjoying the fruits of high global demand but are keeping domestic prices artificially low.

Identities of people involved in the alleged JP Morgan conspiracy to manipulate the price of silver have been exposed, along with the mechanisms of the manipulation of silver.  I was contacted two days ago by key people familiar with this situation.  This was described by an individual out of London who is very familiar with the lawsuit as, "The biggest news in a long time because these are actual people who are coming out and naming names of individuals who were involved in this alleged conspiracy with JP Morgan to actively manipulate the price of silver.  People may go to jail over this.  JP Morgan has all barrels pointing at them as traders are named in this suit, including senior traders at JP Morgan."

A Chinese company few Americans have heard of is gearing up for what could be the largest Internet IPO in U.S. history. The company, Beijing Jingdong Century Trading Co., runs 360buy.com, a fast-growing online-shopping site that sells a broad range of goods, mostly direct to consumers, much like Amazon.com Inc. This business-to-consumer part of China's online shopping market is expected to expand more than fivefold to 650 billion yuan ($100 billion) over the next three years, according to Beijing-based research firm Analysys International.

The debt markets have been warned. A key rate setter-for China's central bank let slip - or was it a slip? - that Beijing aims to run down its portfolio of US debt as soon as safely possible. "The incremental parts of our of our foreign reserve holdings should be invested in physical assets," said Li Daokui at the World Economic Forum in the very rainy city of Dalian - former Port Arthur from Russian colonial days.

UBS shares are diving after the bank unexpectedly has announced that a rogue trader has cost it $2 billion. The stock has fallen at one point by nearly 10%.

The future of mobile payments has the potential to invade your senses. MasterCard is showing off what could be the next wave of innovation in payments this afternoon at an event in New York City. Imagine being able to wave at your TV and order a order a pizza. Or get a coupon because your smartphone was listening to a commercial. These possibilities are not as far-fetched as you might think. MasterCard Labs is working on proof-of-concept for these payment solutions and more. Not all of these futuristic designs will make it to market, but enough of them will that user behavior will be fundamentally changed within the next decade.

The U.S. Geological Survey has revised downward the magnitude of Thursday morning's earthquake off Cuba to magnitude 5.1 from magnitude 6.0. [Updated at 5:20 a.m. ET] A magnitude 6.0 earthquake hit off the southeastern coast of Cuba early Thursday, the U.S. Geological Survey reported.