Bonds

Americas

Treasuries Rise as Job Losses Signal U.S. Economic Recovery Is Faltering Treasury notes gained, with two-year note yields falling the most since May, after a report yesterday showing larger-than-projected job losses in June added to concern the worst recession in 50 years has further to run.

Treasury's Distressed-Debt Program Said to Begin With $20 Billion of Funds The U.S. Treasury Department may begin its program to spur purchases of mortgage-backed securities from banks with about $20 billion in public and private money, down from as much as $100 billion when it was announced in March, two people familiar with the matter said.

Real Mex Restaurants Pays Highest Yield in Five Months as Junk Sales Rise Real Mex Restaurants Inc., owner of the El Torito and Chevys Fresh Mex chains, paid the highest yield since February on a speculative-grade bond issue as sales from lower-rated companies rose this week.

Seven More U.S. Banks Seized as Regulators Close Most Lenders Since 1992 Six banks in Illinois and one in Texas were seized by regulators as the deepening financial crisis pushed the toll of failed U.S. lenders this year to 52, the most since 1992.

Europe

Private-Equity Firms Say FDIC Rules Will Thwart Takeovers of Failed Banks Private-equity firms said the Federal Deposit Insurance Corp. may be diminishing the appetite for future bank takeovers by demanding buyout groups put more capital at risk.

IMF Softens Criticism of Currency Policies Before Chinese Economic Review The International Monetary Fund is softening the language used to characterize exchange rates ahead of the lender’s first report in three years on China’s economy.

Camulos in Talks to Give Mariner Role in Hedge-Fund Business Operations Camulos Capital LP, a hedge-fund firm founded by former Soros Fund Management LLC trader Richard Brennan, is in talks to have Mariner Investment Group run its business operations.

Trichet Sets Policy `Cruise Control' as ECB Urges Banks to Drive Recovery European Central Bank President Jean- Claude Trichet is urging the region’s banks to play their part in generating an economic recovery.

Asia

Investors Should Bet on Flattening German Bund Yield Curve, Helaba Says Investors should bet that the difference in yield between two- and 10-year German securities will narrow, Helaba Landesbank Hessen-Thueringen said.

Halabi Companies Fail to Fix $1.9 Billion Commercial Mortgage Bond Default Investor Simon Halabi’s real-estate companies failed to remedy a default on 1.15 billion pounds ($1.9 billion) of commercial mortgage bonds at a time when, according to Fitch Ratings, “pretty much” all such European deals would breach loan-to-value conditions if they were tested.

European Government Bonds Post Fourth Weekly Gain as Recovery Sputters European 10-year bonds advanced for a fourth week, the longest winning streak this year, as signs that the economic recovery is faltering stoked demand for the relative safety of fixed income.

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