After reported a loss of $15.2bn, US mortgage finance firm Fannie Mae has requested the Treasury for another $10.7bn.

This is the 3^rd time that Fannie Mae has asked Treasury $96bn for aid after had received $15.2bn in March.

The Treasury has made available funds of $200bn each to both Fannie Mae and Freddie Mac. The results were driven by $18.8bn in losses on loans due to the weakening housing market conditions, made worse by rising unemployment.

In 2010, the US government will reveal its plan for both mortgage giant Fannie Mae and Freddie Mac. The government may keep the companies private or merge them into a government agency.

Source: BBC

Banking group HSBC found its pre-tax profits dropped by 51 percent from $10.2 billion compare to the same period; the first six month of 2009.

Group Chairman Stephen Green said “it may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets”.

“Of all the big banks in the US and UK, HSBC is the one that comes closest to being able to claim – without stretching credibility too much – that it’s a proper commercial operation, not too reliant on finance or insurance from taxpayers,” he added.

HSBC is in the process of closing most of its retail lending operations in the US, having taken hefty losses from mortgages which went unpaid.

HSBC has not had to go to governments for extra cash. It decided instead to ask existing shareholders for more money through a rights issue in April, which raised $17.8bn.

Source: BBC, CNN, HSBC

BP’s second quarter profits have more than halves continued to suffer from a weak oil price and falling demand for energy.

BP reported profits of $3.14bn (£1.9bn) for the three months to the end of June, 53% less than for the same period last year.

Tony Hayward, Chief Executive, said BP expected the “recovery to be long and drawn out” after reporting it made $3.14 billion in second quarter, down from $6.74 billion during the same period last year. That means 53 percent decrease.

BP produced  4 percent more oil during the three months to the end of this June than the same period last year, but dramatic fall in price has savage its bottom line.

Last July, oil price had reached the highest price as ever before at $147 a barrel. And now it’s near to reach $70.

“We are in turbulent times, volatile and uncertain. But we continue to steer a steady course through choppy waters,” said Hayward.

However, he said BP was delivering good performance in a tough environment.

“We have already surpassed the target we set ourselves at the beginning of this year for cash costs but we are by no means complacent. We will continue to push efficiencies into the group and make sure every dollar counts,” Hayward said.

It had already reduced cash costs for 2009 by $2 billion and was expecting to save another $1 billion in the second half of the year, Hayward said.

Sources: CNN, BBC News, Guardian

“The relationship between the U.S. and China will shape the 21^st century” said President Barack Obama, as top U.S. and Chinese officials met in Washington for the first meeting of a “Strategic and Economic Dialogue”.

President Obama, Secretary of State Hillary Clinton, Secretary of Treasury Timothy Geithner, Chinese Vice Premier Wang Qishan and Chinese State Councilor Dai Bingguo each addressed the opening session of the two-day meeting.

The U.S.-China Strategic and Economic Dialogue is expected to focus on working towards economic recovery, climate change, security, the spread of nuclear weapons in North Korea and Iran, crating clean and secure energy source, and the economy all areas where common ground existed.

“The current crisis has made it clear that the choices made within our borders reverberate across the global economy – and this is true not just of New York and Seattle, but Shanghai and Shenzhen as well,” said President Obama.

President Obama also emphasized that the U.S. and China must remain committed to strong bilateral and multilateral coordination.

“The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world. That reality must underpin our partnership. That is the responsibility we bear,” President Obama said.

“With the furthering of China’s reform and opening up, China and the United States will have even closer economic cooperation and trade relations and (the) China-US relationship will surely keep moving forward,” he said.

Mr Wang added that the opening up of China’s economy could help the U.S. recovery.

But there are areas of contention. The US is expected to push China to rely less on exports and to focus more on encouraging its domestic market due to the U.S. manufacturers can’t compete fairly with their Chinese competitors, accusing Beijing of deliberately devaluing its currency to make its exports seem cheaper.

Simultaneously China is worried about the value of the U.S. dollar because it holds huge amounts of US debt – more than $800bn of U.S. Treasury securities alone.  China also fears that President Obama’s stimulus spending will stroke inflation in the U.S., and of course, eroding the value of the dollar and making the U.S. debt China holds worth a lot less.

President Obama said that although the US and China would not agree on everything, but he believed the two could make progress on pressing global challenges like trade, emissions and proliferation.

On the economy, Clinton and Geithner praised the U.S. and China for taking bold steps to deal with the global economic crisis and Americans must rebuild their savings, strengthen the U.S. financial system and invest in energy, education and health care.

On security issues, Clinton and Geithner highlighted the “provocative actions of North Korea,” stability in Afghanistan and Pakistan, and economic possibilities in Africa.

Will the new dialogue of the big two countries shape the 21^st century? Will Obama administration be a success of enhancing the world economy? Or will it be a failure?

Sources: BBC News, CNN, CCTV