Category: zerohedge

If last year it was the East Coast’s turn to suffer a freak super storm, this year it is the already battered Philippines, which suffered a 7.2 magnitude earthquake last month, turn as Super Typhoon Haiyan, the equivalent of a Category 5 hurricane, slammed into the Philippines today after forcing thousands of people to evacuate. With sustained winds of 315 kph (195 mph) and gusts as strong as 380 kph (235 mph), Haiyan was probably the strongest tropical cyclone to hit land anywhere in the world in recorded history. “If it maintains its strength, there has never been a storm this strong making landfall anywhere in the world,” said Jeff Masters, founder of Weather Underground in Ann Arbor, Michigan. “This is off the charts.” Not taking chances, the local government has ordered over 125,000 people from 22 provinces to evacuate.

But while luckily human lives will be saved, little else may be. As Bloomberg reports, “Haiyan may inundate rivers, create mudflows and cause storm surges as high as 6 meters (20 feet), Aquino said. Three air force cargo planes, 2 navy ships, helicopters and relief boats are on standby, the president said. About 78,000 families were evacuated in Albay province, Governor Joey Salceda said on his Facebook account. Masters said Tacloban, the capital of the Philippine province of Leyte, would take a direct hit and winds of at least 130 mph may sweep as far as 100 miles inland. “There isn’t much built on the Philippines that can withstand winds like that,” Masters said.

Moments ago Bloomberg just blasted that up to half of the island chain’s sugar cane may be destroyed as a result of the Typhoon, which will wreak havoc on logistic and supply chains globally across numerous commodities. However, it is the human damange that is the biggest threat.

Heavy rains from storms usually cause the highest death tolls on the Philippines, Masters said. Flooding may not be the worst threat this time because Haiyan is moving fairly fast. The high winds and storm surge have the potential to cause catastrophic damage, he said.

 

“We’re swamped with calls for help,” Southern Leyte Governor Roger Mercado said in an interview over DZMM radio. Strong wings uprooted trees in the province, he said.

 

About 2,000 passengers, 50 vessels and 557 rolling cargoes are now stranded in various seaports, the disaster agency said today. Cebu Air Inc. (CEB), the nation’s largest budget carrier, canceled 122 domestic flights and 4 international flights from today to Nov. 9, it said yesterday. Philippine Airlines Inc., in its Facebook account, said 26 local flights and three international flights have been canceled today.

Putting the size of the storm in perspective: “Haiyan was so large in diameter that at one point, its clouds were affecting two-thirds of the country, which stretches more than 1,850 kilometers (1,150 miles). Tropical-storm-force winds extended 240 kilometers from the typhoon’s center.

The wide angle shot below by EUMETSAT shows just how massive the typhoon truly is:

In short a record superstorm:

The true power of Haiyan isn’t known because reconnaissance planes haven’t flown into it, Masters said. The strongest tropical cyclone on record was Super Typhoon Nancy in 1961 with top winds of 215 mph. He said many believe the estimated wind speeds of storms between the 1940s to 1960s was too high.

 

Since 1969, only three storms have been as powerful as Haiyan, Masters wrote on his blog. They were Super Typhoon Tip in 1979 in the Pacific and Atlantic hurricanes Camille in 1969 and Allen in 1980.

 

The strongest storm to hit land was Camille, which went ashore in Mississippi with winds near 195 mph, Master said. While there are some estimates that Camille’s winds were closer to 200 mph, the exact speed is unknown because the instruments were destroyed, according to the U.S. National Hurricane Center.

This is just the beginning. After it is done with the Philippines, Haiyan is expected to strike Vietnam in several days, according to the Japanese Meteorological Agency.  “It is going to be a huge problem for Vietnam and Laos,” Masters said. As much as a foot of rain may fall there, he said.

If there is a silver lining to all the imminent destruction and tragedy, it is that Q4 GDP in the region will be off the charts. Just as Krugman.

Below is CNN with a video summary on the ground.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/O79YH5779t4/story01.htm Tyler Durden

If last year it was the East Coast’s turn to suffer a freak super storm, this year it is the already battered Philippines, which suffered a 7.2 magnitude earthquake last month, turn as Super Typhoon Haiyan, the equivalent of a Category 5 hurricane, slammed into the Philippines today after forcing thousands of people to evacuate. With sustained winds of 315 kph (195 mph) and gusts as strong as 380 kph (235 mph), Haiyan was probably the strongest tropical cyclone to hit land anywhere in the world in recorded history. “If it maintains its strength, there has never been a storm this strong making landfall anywhere in the world,” said Jeff Masters, founder of Weather Underground in Ann Arbor, Michigan. “This is off the charts.” Not taking chances, the local government has ordered over 125,000 people from 22 provinces to evacuate.

But while luckily human lives will be saved, little else may be. As Bloomberg reports, “Haiyan may inundate rivers, create mudflows and cause storm surges as high as 6 meters (20 feet), Aquino said. Three air force cargo planes, 2 navy ships, helicopters and relief boats are on standby, the president said. About 78,000 families were evacuated in Albay province, Governor Joey Salceda said on his Facebook account. Masters said Tacloban, the capital of the Philippine province of Leyte, would take a direct hit and winds of at least 130 mph may sweep as far as 100 miles inland. “There isn’t much built on the Philippines that can withstand winds like that,” Masters said.

Moments ago Bloomberg just blasted that up to half of the island chain’s sugar cane may be destroyed as a result of the Typhoon, which will wreak havoc on logistic and supply chains globally across numerous commodities. However, it is the human damange that is the biggest threat.

Heavy rains from storms usually cause the highest death tolls on the Philippines, Masters said. Flooding may not be the worst threat this time because Haiyan is moving fairly fast. The high winds and storm surge have the potential to cause catastrophic damage, he said.

 

“We’re swamped with calls for help,” Southern Leyte Governor Roger Mercado said in an interview over DZMM radio. Strong wings uprooted trees in the province, he said.

 

About 2,000 passengers, 50 vessels and 557 rolling cargoes are now stranded in various seaports, the disaster agency said today. Cebu Air Inc. (CEB), the nation’s largest budget carrier, canceled 122 domestic flights and 4 international flights from today to Nov. 9, it said yesterday. Philippine Airlines Inc., in its Facebook account, said 26 local flights and three international flights have been canceled today.

Putting the size of the storm in perspective: “Haiyan was so large in diameter that at one point, its clouds were affecting two-thirds of the country, which stretches more than 1,850 kilometers (1,150 miles). Tropical-storm-force winds extended 240 kilometers from the typhoon’s center.

The wide angle shot below by EUMETSAT shows just how massive the typhoon truly is:

In short a record superstorm:

The true power of Haiyan isn’t known because reconnaissance planes haven’t flown into it, Masters said. The strongest tropical cyclone on record was Super Typhoon Nancy in 1961 with top winds of 215 mph. He said many believe the estimated wind speeds of storms between the 1940s to 1960s was too high.

 

Since 1969, only three storms have been as powerful as Haiyan, Masters wrote on his blog. They were Super Typhoon Tip in 1979 in the Pacific and Atlantic hurricanes Camille in 1969 and Allen in 1980.

 

The strongest storm to hit land was Camille, which went ashore in Mississippi with winds near 195 mph, Master said. While there are some estimates that Camille’s winds were closer to 200 mph, the exact speed is unknown because the instruments were destroyed, according to the U.S. National Hurricane Center.

This is just the beginning. After it is done with the Philippines, Haiyan is expected to strike Vietnam in several days, according to the Japanese Meteorological Agency.  “It is going to be a huge problem for Vietnam and Laos,” Masters said. As much as a foot of rain may fall there, he said.

If there is a silver lining to all the imminent destruction and tragedy, it is that Q4 GDP in the region will be off the charts. Just as Krugman.

Below is CNN with a video summary on the ground.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/O79YH5779t4/story01.htm Tyler Durden

• Fed Anxiety Rises as QE Raises Risk of Loss With Political Cost (BBG)
• Iran Nuclear Deal Expected as Early as Friday (WSJ)
• Israel rejects mooted interim Iran nuclear deal, Kerry heads to talks (Reuters)
• JPMorgan Banker Backed $200 Million Madoff Loan in 2008 (BBG)
• Unleashing the food nazis – FDA Says Trans Fats Aren’t Safe in Food (WSJ)
• Draghi Aggression Shows Pledges Backed by Rate Surprise (BBG)
• S&P Cuts France’s Credit Rating by One Notch to Double-A (WSJ)
• S&P criticises France’s high tax rates for stifling growth (FT)
• Payroll Gains in U.S. Probably Cooled Amid Government Shutdown (BBG)
• What to Watch for in October’s Jobs Report (WSJ)
• US spent $2bn on furloughed workers (FT)
• Snowden persuaded other NSA workers to give up passwords – sources (Reuters)
• Reno Better Than Manhattan for Buyers Demanding Yield (BBG)
• Super Typhoon Haiyan Slams Philippines With Category-5 Power (BBG)

 

Overnight Media Digest

WSJ

* Iran and world powers expect to announce an initial deal as early as Friday to curb Tehran’s nuclear program in exchange for an easing of sanctions, a step that would mark the first breakthrough in a decade.

* The FDA ruled for the first time that trans fats aren’t generally considered safe in food, a sharp policy shift that could lead to banning them in baked goods and other foods.

* Thousands of middle-class Syrians are trying to get to Europe’s northern countries to seek asylum, but many refugees are stuck in the continent’s south.

* Twitter shares launched without incident Thursday, skirting the troubles that plagued rival Facebook in its debut last year and delivering the kind of hefty “pop” that investors in initial public offerings covet.

* Exports rebounded sharply in October from a September slump, in a potentially positive sign for the global economic outlook.

* Senators will press Janet Yellen on a number of issues during a confirmation hearing on her nomination to lead the Fed, but one likely topic is a matter over which she has no control: a key vacancy on the Fed board.

* The European Central Bank’s action reflects heightened worries in Europe that dangerously low inflation threatens the region’s tepid economic recovery.

* Gross domestic product grew at an annual rate of 2.8 percent in the third quarter, which was higher than economists expected, but consumer caution and political friction could be a drag in the coming months.

* Goldman Sachs Group Inc is known as Wall Street’s smartest trading firm, but a dismal third quarter has raised questions on whether the firm needs to take bold steps to right the ship.

* Fairfax Financial said its partners in a $1 billion investment in smartphone maker BlackBerry include a Qatar-based sovereign wealth fund and several Canadian investment funds.

 

FT

NEW BATTLE FOLLOWS HARD ON OBAMA WIN

Barack Obama returned to Washington on Wednesday after his electoral victory over Mitt Romney, braced for emergency negotiations with Congress over the budgetary impasse that threatens to send the U.S. economy back into recession.

CULT OF EQUITY KILLED OFF BY PENSION FUNDS

UK pension funds are holding more bonds than equities for the first time since the so-called cult of equity in the 1950s, say leading City fund managers.

MISSED DEBT TARGET TOPS BRITAIN’S AGENDA

Leading members of the coalition are in urgent talks about how to handle a failure to meet the government’s public debt target as ministers move into the final month before the December 5 autumn statement.

EU HITS BACK AT IMF OVER AUSTERITY

Brussels’ defence is part of an economic forecast that shows several eurozone countries – including France, Belgium and Spain – are on track to miss their EU-mandated deficit targets, meaning they may be forced to impose yet more austerity to get budgets back in line.

EUROPE FEARS U.S. ENERGY GAP

Europe’s ability to compete against the US as a manufacturing centre is being damaged by rising energy costs as North America benefits from cheap natural shale gas, Germany’s biggest companies have warned.

CANTAB HITS CAPACITY AS IT BUCKS TREND

Cantab Capital Partners, the Cambridge-based hedge fund set up by an astrophysicist and former Goldman Sachs partner, is to stop accepting new money after its assets under management doubled this year to $4.5 billion.

EADS OFFICES RAIDED IN BRIBERY PROBE

Several EADS offices in Germany were raided by German state prosecutors and police on Tuesday as part of an investigation into alleged bribes paid to smooth the sale of Eurofighter Typhoon fighter jets to Austria five years ago.

PEARSON IN CONFLICT OF INTERESTS PROBE

Pearson is being investigated in the UK over possible conflicts of interest within its role as both a publisher of textbooks and an issuer of academic qualifications, as regulators seek to ensure that schools buying its teaching resources do not get any unfair advantages.

NORDIC GROUPS TO SLASH HEADCOUNT

Three of the biggest companies in the Nordic region on Wednesday announced plans to slash thousands of jobs in a further sign that Europe’s economic problems are catching up with businesses in what was perceived as a haven.

 

NYT

* The Royal Bank of Scotland agreed on Thursday to pay the U.S. Securities and Exchange Commission $153.7 million to settle charges that it misled investors into buying a risky mortgage-backed security offering, the latest move in a crackdown on mortgage practices that fueled the financial crisis.

* Twitter reached a valuation of $31.7 billion as it began trading on the New York Stock Exchange on Thursday, a figure the company will have to justify by showing a profit sooner rather than later.

* Federal safety investigators said they would review an accident in Tennessee in which a Tesla Model S caught fire, the third such fire in recent weeks.

* Dylan Davies, a security officer hired to help protect the United States Special Mission in Benghazi, Libya, gave the FBI an account of the night that terrorists attacked the mission on Sept. 11,
2012 that contradicts a version of events he provided in a recently published book and in an interview with the CBS News program “60 Minutes.”

* The White House has thrown its weight behind a proposal to raise the federal minimum wage to at least $10 an hour.

* Walt Disney ended its fiscal year in blockbuster style on Thursday, reporting solid growth in fourth-quarter profit, unveiling a substantial Netflix deal and savoring a stock price that has climbed 35 percent over the last 12 months.

* Federal safety officials missed or ignored warning signs before four deadly crashes involving heavy trucks or intercity buses in the last year, the National Transportation Safety Board said on Thursday.

* The White House on Thursday nominated Stefan Selig, a top executive at Bank of America, to a senior Commerce Department post, a rare appointment of a Wall Street banker by the Obama administration.

* A combination of Canadian, American and Qatari investors are helping to finance Fairfax Financial Holding’s planned $1 billion investment in struggling smartphone maker BlackBerry , a filing shows.

* Salix Pharmaceuticals said Thursday that it would acquire Santarus, a maker of gastrointestinal medications like Zegerid and other specialty drugs, for $2.6 billion in cash, or $32 a share.

 

Canada

THE GLOBE AND MAIL

* Canadian investors are lining up to provide 80 percent of the $1 billion in new financing for BlackBerry Ltd with Brookfield Asset Management Inc and a unit of Power Financial Corp headlining the list of institutions joining Fairfax Financial Holdings Ltd in its bet that the smartphone maker will succeed.

* Federal New Democrats provoked a debate about Keystone XL pipeline on Thursday in the Commons with a motion that opposes the controversial project on the grounds that it will send oil-industry processing jobs to the United States and therefore “is not in Canada’s best interests.”

Reports in the business section:

* The introduction of new two-year cellphone contracts slowed subscriber growth for some of Canada’s biggest carriers during the back-to-school season, a sign that consumers are spurning those higher-priced plans even before they become the industry standard in December.

* Both of Canada’s most widely traded insurers, Manulife Financial Corp and Sun Life Financial Inc, as well as Industrial Alliance Insurance beat analysts’ expectations for the quarter as they reported in the last two days, while Great-West Lifeco Inc met consensus.

NATIONAL POST

* Veterans injured in the line of duty could soon find themselves at the front of the line when it comes to federal job openings thanks to a proposal unveiled by the Conservative government on Thursday.

* U.S. investors are readying legal action against the Canadian government over Quebec’s resistance to Strateco Resources Inc’s Matoush uranium mining project, the company’s chief executive says.

FINANCIAL POST

* The new interim chief executive is worth a lot to struggling BlackBerry Ltd – enough to warrant up to $3 million in yearly salary, and 13 million restricted shares.

* France’s Total SA is upsizing its flagship Joslyn oil sands mine in northern Alberta by at least 50 percent in a bid to spread costs thin over larger volumes, the chief executive of its Canadian arm says.

 

China

CHINA SECURITIES JOURNAL

– The simulation of CSI 300 stock index options contracts trading started on Friday. The move indicates the introduction of stock index options is not far off, said unnamed sources.

– China Merchants Property Development Co Ltd approved a 6.5 billion yuan ($1.07 billion) A-share financing program on Thursday. The transaction is still subject to regulatory approval.

SHANGHAI SECURITIES NEWS

– The reforms in China’s Shanghai free trade zone could be extended nationwide after three years, said Ai Baojun, Shanghai’s deputy major, on Thursday at a round table forum.

SHANGHAI DAILY

– In Shanghai, air pollution on Thursday rose to a PM2.5 density, nearly four times the national limit. It peaked at a hazardous level of about 270 micrograms per cubic meter, four times the national limit of 75.

PEOPLE’S DAILY

– Certain local authorities in China engage in protectionist behaviour, by for example issuing official documents to ‘protect’ local products, said the paper which acts as the mouthpiece of the Chinese government. It is important to reform this attitude in order to better develop the market, it said.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

AkzoNobel (AKZOY) upgraded to Overweight from Neutral at JPMorgan
Alaska Air (ALK) upgraded to Equal Weight from Underweight at Barclays
Amarin (AMRN) upgraded to Buy from Neutral at Citigroup
Aspen Insurance (AHL) upgraded to Buy from Neutral at UBS
BlackRock Kelso (BKCC) upgraded to Market Perform from Underperform at Wells Fargo
Brandywine Realty (BDN) upgraded to Neutral from Underperform at BofA/Merrill
Broadridge (BR) upgraded to Neutral from Underweight at JPMorgan
Concho Resources (CXO) upgraded to Buy from Neutral at SunTrust
Corporate Office Properties (OFC) upgraded to Buy from Neutral at BofA/Merrill
Eastman Chemical (EMN) upgraded to Overweight from Neutral at JPMorgan
Peabody Energy (BTU) upgraded to Buy from Neutral at Goldman
Republic Airways (RJET) upgraded to Overweight from Equal Weight at Evercore
Salix (SLXP) upgraded to Buy from Neutral at Janney Capital
Scotts Miracle-Gro (SMG) upgraded to Market Perform from Underperform at BMO Capital
SolarWinds (SWI) upgraded to Buy from Hold at Needham

Downgrades

AECOM Technology (ACM) downgraded to Neutral from Buy at UBS
AVG Technologies (AVG) downgraded to Neutral from Overweight at JPMorgan
Apollo Global (APO) downgraded to Neutral from Buy at Citigroup
Deere (DE) downgraded to Neutral from Buy at BofA/Merrill
Health Net (HNT) downgraded to Market Perform from Outperform at Wells Fargo
Nationstar (NSM) downgraded to Equal Weight from Overweight at Evercore
Nationstar (NSM) downgraded to Equal Weight from Overweight at Morgan Stanley
Santarus (SNTS) downgraded to Neutral from Overweight at Piper Jaffray
Tremor Video (TRMR) downgraded to Hold from Buy at Canaccord
United Continental (UAL) downgraded to Underweight from Equal Weight at Barclays
Whole Foods (WFM) downgraded to Neutral from Buy at Goldman

Initiations

Antero Resources (AR) initiated with a Buy at Jefferies
Brinker (EAT) initiated with an Outperform at RBC Capital
Burger King (BKW) initiated with a Sector Perform at RBC Capital
C&J Energy (CJES) initiated with a Buy at Guggenheim
CNH Industrial (CNHI) initiated with an Underperform at BofA/Merrill
Chipotle (CMG) initiated with an Outperform at RBC Capital
Community Health (CYH) initiated with an Outperform at FBR Capital
Darden (DRI) initiated with a Sector Perform at RBC Capital
Dunkin’ Brands (DNKN) initiated with an Outperform at RBC Capital
EchoStar (SATS) initiated with an Outperform at Raymond James
HCA Holdings (HCA) initiated with an Outperform at FBR Capital
Health Management (HMA) initiated with a Market Perform at FBR Capital
LabCorp (LH) initiated with a Market Perform at FBR Capital
LifePoint Hospitals (LPNT) initiated with a Market Perform at FBR Capital
McDonald’s (MCD) initiated with a Sector Perform at RBC Capital
Noodles & Company (NDLS) initiated with a Sector Perform at RBC Capital
Peugeot (PEUGY) initiated with a Reduce at Nomura
Quest Diagnostics (DGX) initiated with a Market Perform at FBR Capital
Starbucks (SBUX) initia
ted with an Outperform at RBC Capital
Tenet Healthcare (THC) initiated with a Market Perform at FBR Capital
Texas Roadhouse (TXRH) initiated with an Outperform at RBC Capital
Twitter (TWTR) initiated with a Neutral at Wedbush
Universal Health (UHS) initiated with an Outperform at FBR Capital
Wendy’s (WEN) initiated with a Sector Perform at RBC Capital
Yum! Brands (YUM) initiated with an Outperform at RBC Capital

HOT STOCKS

UBS (UBS) paid $3.76B to buy back StabFund from Swiss National Bank
S&P lowered long-term ratings on France to ‘AA’; outlook stable
Salix Pharmaceuticals (SLXP) to acquire Santarus (SNTS) for $32 per share in cash or $2.6B
Talisman Energy (TLM) announced C$1.5B all cash sale for portion of Montney position
NVIDIA (NVDA) announced additional $1B under stock repurchase plan
Disney (DIS) to release next Star Wars film in December, 2015
Advanced Semiconductor (ASX) to collaborate with Infineon (IFNNY) on auto product assembly
Liberty Property (LRY) to sell 97 properties for $705M
Groupon (GRPN) acquired Korea’s Ticket Monster for $260M
Ensign Group (ENSG) to spin-off real estate assets into REIT

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Covidien (COV), Atwood Oceanics (ATW), Alamo Group (ALG), AVG Technologies (AVG), Molycorp (MCP), Franklin Covey (FC), NVIDIA (NVDA), Disney (DIS), CareFusion (CFN), Stifel Financial (SF), Groupon (GRPN), bebe stores (BEBE), priceline.com (PCLN), Air Lease (AL)

Companies that missed consensus earnings expectations include:
Atlas Resource Partners (ARP), Denison Mines (DNN), Bio-Rad (BIO), PharmAthene (PIP), Darling (DAR), Ensign Group (ENSG), Tallgrass Energy (TEP), Erickson Air-Crane (EAC), Allscripts (MDRX), Monster Beverage (MNST)

Companies that matched consensus earnings expectations include:
Great Plains Energy (GXP), Northern Oil and Gas (NOG), Demand Media (DMD), CTPartners (CTP)

NEWSPAPERS/WEBSITES

• Declining sales of high-end cameras and lenses are raising an alarming question for companies like Canon (CAJ) and Nikon (NNOY): Could the proliferation of camera-enabled, app-heavy smartphones be crushing not only the simple point-and-shoot, but premium models as well? the Wall Street Journal reports
• Boeing (BA) warned that it could look to build its planned 777X jetliner outside Washington state, amid signs of union resistance to a proposed contract designed to keep the production work at the aerospace giant’s traditional manufacturing base, the Wall Street Journal reports
• Coca-Cola (KO) will invest over $4B in China and build new plants between 2015 and 2017, to counter competition which is chipping away at its share of the country’s $69.12B soft drinks market, Reuters reports
• A U.S. judge gave Southwest Airlines (LUV) permission to file a brief asking that US Airways Group (LCC) and American Airlines (AAMRQ) be required to give up take-off and landing slots at key U.S. airports should they merge, Reuters reports
• The longer the Federal Reserve continues its bond-buying stimulus, the higher the odds it will face a year without any money to give the Treasury after taxpayers received a record $88.4B profit in 2012, Bloomberg reports
• Lenovo Group (LNVGY), the largest maker of PCs, will triple the number of markets in which it sells smartphones by focusing on emerging economies where Apple’s (AAPL) iPhone is seen as too costly, Bloomberg reports

SYNDICATE

Addus HomeCare (ADUS) files to sell 4.95M shares of common stock for holders
Boise Cascade (BCC) 7M share Secondary priced at $22.50
CST Brands (CST) 13.1M share Secondary priced at $31.00
Constellium (CSTM) 17.5M share Secondary priced at $17.00
DURECT (DRRX) files to sell common stock
FalconStor (FALC) files to sell 13.17M shares of common stock for holders
Sprouts Farmers Markets (SFM) files to sell 22.5M shares of common stock for holders
Toll Brothers (TOL) 6.25M share Spot Secondary priced at $32.00
U.S. Silica (SLCA) files to sell 10.5M shares of common stock for holders
ZELTIQ Aesthetics (ZLTQ) 4.5M share Secondary priced at $13.00

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/qX6FfeXam6Y/story01.htm Tyler Durden

While today’s big event is the October Non-farm payrolls print, which with consensus having at 120K and unemployment rising from 7.2% to 7.3%, will be more of a drizzle than a typhoon, there was a spate of events overnight worth noting, starting with Chinese exports and imports both rising more than expected (5.6% and 7.6% vs expectations of 1.9% and 7.4% respectively), leading to an October trade surplus of $31.1 billion double the $15.2 billion reported in August. This led to a brief jump in Asian regional market which however was promptly faded. Germany also reported a greater trade surplus than expected at €20.4bn vs €15.4 bn expected, which begs the question just where are all these excess exports going to? Perhaps France, whose trade deficit rose from €5.1 billion to €5.8 billion, more than the €4.8 billion expected. Of note also was the French downgrade from AA+ to AA by S&P, citing weak economic prospects, with fiscal constraints throughout 2014. The agency added that the country has limited room to maneuver and sees an inability to significantly cut government spending. The downgrade, however, was largely a buy the EURUSD dip event as rating agencies’ opinions fade into irrelevance.

Looking at today’s payrolls data, the expectation is for a rather modest headline gain of 120k in today’s report and for the unemployment rate to tick up 0.1ppt to 7.3%. As DB observes, the most recent estimates from economic forecasters have virtually all come below the 130k level with a number of estimates under 100k – so it’s fair to say that expectations for the shutdown-affected month of October are biased to the low end. With that in mind, it will be interesting to see how markets react to today’s report, and whether any weakness in October will be interpreted as being transitory. For the record DB is expecting a +130k headline print today, +130k for private payrolls and an unemployment rate of 7.3%. As such, risk for risk is to the downside, as even a modestly stronger than expected number will result in bringing tapering expectations closer if only for the day.

As usual, any hints and rumors of what the Fed may or may not do, especially in the aftermath of the ECB’s surprising rate cut, will be driving force for any market moves.

Finally, southeast Asia is literally being rocked right now by Super Typhoon Haiyan, one of the strongest storms ever. The Keynesian inside all of us will immediately proclaim: bullish for GDP.

In addition to payrolls, we also get the monthly personal income and spending reports as well as the UofMichigan confidence survey which is expected to show that sentiment has picked up in November after reaching a year-to-date low in October. Bernanke will be making some remarks at the IMF Annual Research Conference late in the US trading session.

US Data Docket

• US: Change in nonfarm payrolls, cons 120k (14:30), Unemployment rate, cons, 7.3% (14:30)
• Univ. Of Michigan confidence, cons 74.5 (15:55)
• US: Fed speakers – Lockhart (18:00) Bernanke, Fischer and Summers (21:30), Williams (22:00)

Market Re-Cap from RanSquawk

Stocks traded lower in Europe, with the French CAC index under performing its peers after S&P cut French sovereign debt rating. The cautious sentiment supported the more defensive equity sectors, with health care among the best performing for much of the session this morning. Utilities also benefited from an encouraging earnings report by ENEL, with shares advancing around 2%. Despite the risk averse sentiment, combination of profit taking related flows following yesterday’s surge post ECB rate decision, together with the fact that the latest sovereign downgrade adds more pressure on Germany meant that Bunds also traded lower, albeit marginally. Going forward, apart from awaiting the release of the latest jobs report by the BLS, attention will also be on the jobs report from Canada, as well as Prelim. U. Michigan report.

Overnight Bulleting from Bloomberg and RanSquawk

• France cut to AA from AA+ at Standard & Poor’s; Outlook revised to stable from negative.
• According to ECB sources, ECB’s Draghi is said to have pushed for ECB rate cut at decision yesterday.
• Treasuries steady before report forecast to show U.S. economy added 120k jobs in October with the unemployment rate rising to 7.3% from 7.2%.
• Draghi pushed for yesterday’s rate cut over opposition from Bundesbank President Jens Weidmann and at least two other Governing Council members, according to four euro-area central bank officials
• Pimco is wagering at least $10b in the credit-default swaps market that U.S. corporate bonds will gain as the Fed extends stimulus into 2014, according to traders and investors
• U.K. house prices rose to a record last month as easing credit availability drove buyers back to the market in all regions of England and Wales for the first time in almost three years, Acadametrics said
• Germany’s trade surplus widened to EU20.4b in September, more than forecast; exports gained 1.7%, also more than estimated, while imports fell 1.9%
• The Reserve Bank of Australia forecast below-trend growth and rising unemployment in 2014 as resource investment drops and renewed currency strength drags on the economy, leaving open the chance of lower interest rates
• China’s exports rose 5.6% in October, more than 1.7% median forecast; trade surplus widened to $31.1b, most this year; Communist Party plenum starts tomorrow
• Obama said he’s sorry that thousands of Americans are losing their medical insurance as a result of his health-care law, as his administration works to contain the political damage from the troubled rollout of his signature domestic achievement
• Sovereign yields mostly higher, EU peripheral spreads widen. Nikkei -1.0%, leading Asian stocks lower; Shanghai falls 1.1%. European stocks decline, U.S. equity-index futures gain. WTI crude lower; copper and gold little changed

Asian Headlines

Chinese Trade Balance (USD) (Oct) M/M 31.10bln vs. Exp. 24.80bln (Prev. 15.21bln) – 10-month high.
– Exports (Oct) Y/Y 5.6% vs. Exp. 1.7% (Prev. -0.3%)
– Imports (Oct) Y/Y 7.6% vs. Exp. 7.4% (Prev. 7.4%)
Chinese Premier Li Keqiang said China’s economy has to expand 7.2% per year in order to create 10mln jobs annually.

EU & UK Headlines

France cut to AA from AA+ at Standard & Poor’s; Outlook revised to stable from negative.
The ratings agency cited weak economic prospects, with fiscal constraints throughout 2014. The agency added that the country has limited room to maneuver and sees an inability to significantly cut government spending.

According to ECB sources, ECB’s Draghi is said to have pushed for ECB rate cut at decision yesterday. Sources said ECB’s Weidmann and at least two  others said to want to wait for new data adding that Draghi said should not expect too much from monetary policy.

German Trade Balance (Sep) M/M 20.4bln vs. Exp. 15.4bln (Prev. 13.1bln, Rev. 13.3bln)

German Current Account Balance (Sep) M/M 19.7bln vs Exp. 15.0bln (Prev. 9.4bln, Rev. 10.1bln)

French Budget Balance (Sep) YTD -80.8bln vs. Prev. -93.6bln

French Manufacturing Production (Sep) M/M -0.7% vs. Exp. 0.4% (Prev. 0.3%, Rev. 0.9%)

French Industrial Production (Sep) M/M -0.5% vs. Exp. 0.1% (Prev. 0.2%, Rev. 0.7%)

UK Visible Trade Balance GBP/Mln (Sep) M/M -9816 vs. Exp. -9200 (Prev. -9625, Rev. -9957) – Widest since October 2012

US Headlines

The Hill writes that October’s jobs report could be dismal, with the effects of the 16-day government shutdown clearly weighing on the figures. Last month’s numbers, delayed a week by the fiscal impasse, could run about 110,000, which would be the weakest since July.

Stocks traded lower in
Europe this morning as market participants not only reacted to the downgrade of French sovereign debt rating by S&P but also positioned for the upcoming release of the jobs report by the BLS. The cautious sentiment supported the more defensive equity sectors, with health care among the best performing for much of the session this morning.

S&P says no change on systemically important French banks. Of note, S&P cut France to AA from AA+, outlook revised to stable from negative. Separately, S&P’s Director Gill says Euro-bank capital shortfall at over 1%.

FX

After a knee jerk move lower by EUR/USD following the downgrade, EUR/USD gradually recovered and edged into positive territory, largely driven by EUR/JPY related flows which staged a decent bounce following yesterday’s heavy selling. As a result, EUR/GBP traded higher, even though shorter-dated implied vols traded flat. Looking elsewhere, RBA cut its 2014 GDP forecast 2%-3% and also cut 2015 GDP forecast to 2.25%-3.25% citing lower mining investment, fiscal restraint and high AUD.

SNB President Jordan said that interest rates will remain low in Switzerland and that there is need to wait to assess impact of ECB rate cut, also noting that low rates may lead to Swiss property bubble risk.

Commodities

Saudi Arabia cuts oil production in October to 9.75mbpd vs. 10.1mbpd in September.

Iran deputy foreign minister Araqchi said it is too soon to say if on verge of P5+1 nuclear deal, but added he is a bit optimistic. In related news, US Secretary of State Kerry is said to be ready to go to Geneva on Friday if an Iranian nuclear deal reached. Also, Russia said that there are positive changes in the positions of world powers and Iran at Geneva talks, hopes for ‘concrete result’ China’s net crude imports slide to 14-month low on fuel margins, falling 21% against the September high to 20.3mmt, roughly 4.8mln bpd – the slowest rate since August 2012.

China’s copper arrivals fell 11.2% in October, coming off an 18-month high in the previous month due to poor price differentials between domestic and international copper markets and as a week-long holiday cut shipments. China October iron ore imports at 67.83mln tons, which is a 9.1% decline from September but up 20.2% on year, according to customs.

The complete overnight recap from Jim Reid of DB

Fascinating day in markets yesterday as 1999 met June 2013 after what was a surprise aperitif from the ECB. The IPO market had the feel of 1999 while the June 2013 reference points to the fact that stronger US data had US equities (S&P 500 -1.3%) facing their worst day since August 27th on renewed fears that tapering may be back on the agenda before March. Though US Q3 GDP brought back tapering fears to equities, treasury markets actually had their firmest day in 3 weeks (10yr yield -4bp) perhaps helped by the surprise move from Draghi. The price action across LATAM reflected that of the DM world as EM equities had another weak day while EM fixed income managed to outperform. Indeed, the MSCI EM equity index recorded its sixth straight loss yesterday in its longest losing streak since August, while a number of sovereign and CDS markets managed to close tighter on the day (though tracking the wides at the close) helped by the firmness in the UST markets. The Brazilian real (-0.7%) and IBOVESPA (-1.2%) were among the underperformers in EM yesterday.

Q3 US real GDP was 2.8% against 2% expectations and with the price index at 1.9% (1.4% consensus), nominal GDP grew at a surprising annualised 4.8% in the quarter. There was mixed views on the real GDP beat though. Many suggested the large inventory accumulation (worth around 0.8%) could mean payback this quarter while on the other side DB’s Joe LaVorgna thinks that it’s an appropriate increase given his expectation of an increase in demand. Whatever your thoughts on this, it does complicate matters for the Fed and markets before year-end. Our base case remains slow global nominal growth and a very, very slow taper but perhaps you need sell-offs to cement why it’s going to be tough to taper aggressively. Markets are still very dependent on liquidity in our opinion and days like yesterday perhaps support this. Today’s payrolls (more later) is the next big event that could re-shape or add to this crucial debate.

Back to the US GDP report, the contradiction was the 0.5% increase over expectations in the price index which goes against what we’ve seen elsewhere in the world of late. Indeed the ECB cut yesterday due to the lower inflation risks. Draghi was careful to say he saw no deflation risks but then again he couldn’t really say anything else in his position. Given that very few saw inflation going this low in Europe in 2013 it’s impossible to rule out further flirtation with deflation in 2014. A 25bp rate cut is unlikely to make too much difference unless the currency continues to fall aggressively so Draghi  must be hoping global activity pulls European inflation up in 2014 or he’ll have some very awkward unconventional policy discussions coming up. He wasn’t that convincing yesterday when asked about what policies he had left if indeed they did need to act further.

The tone in Asia this morning is also weaker as markets digest a poor day for stocks yesterday. China’s trade data for October has provided regional markets with a brief excuse to rally overnight but the initial excitement has been faded. China’s October trade surplus reached $31bn (vs $15bn previous month) thanks largely due to a consensus beating export number (5.6% YoY vs 1.7% expected). Exports also managed to bounce back from last month’s -0.3% print. October imports also beat consensus, coming at 7.6% against median estimates of 7.4%. Losses in equities are being led by the Shanghai Composite (-0.6%) and Nikkei (-0.9%). There has also been some focus on the effects of a Category 5 hurricane which made landfall in the Philippines earlier today. Elsewhere as we go to print, S&P 500 futures are up 0.16% and UST yields are unchanged at 2.60%. France was downgraded to AA from AA+ by S&P overnight as we type.

Onto today’s payrolls, the expectation is for a rather modest headline gain of 120k in today’s report and for the unemployment rate to tick up 0.1ppt to 7.3%. Interestingly the most recent estimates from economic forecasters have virtually all come below the 130k level with a number of estimates under 100k – so it’s fair to say that expectations for the shutdown-affected month of October are biased to the low end. With that in mind, it will be interesting to see how markets react to today’s report, and whether any weakness in October will be interpreted as being transitory. For the record DB is expecting a +130k headline print today, +130k for private payrolls and an unemployment rate of 7.3%.

Turning to the day ahead, French and German September trade numbers are scheduled early this morning as well as French industrial production. US payrolls will be setting the tone for the latter half of the day, which will be released at the same time as personal income/spending numbers for September. The UofMichigan confidence survey is expected to show that sentiment has picked up in November after reaching a year-to-date low in October. Bernanke will be making some remarks at the IMF Annual Research Conference late in the US trading session. Over the weekend, China’s inflation, industrial production and retail sales numbers for the month of October will be released. China’s much awaited Third Plenum meeting gets underway tomorrow where DB’s Jun Ma expects a wide ranging package of reforms will follow, in terms of industry deregulation, financial liberalisation, reforms to land titles, state-owned enterprises and social security.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/MbJgHwNQn9M/story01.htm Tyler Durden

While today’s big event is the October Non-farm payrolls print, which with consensus having at 120K and unemployment rising from 7.2% to 7.3%, will be more of a drizzle than a typhoon, there was a spate of events overnight worth noting, starting with Chinese exports and imports both rising more than expected (5.6% and 7.6% vs expectations of 1.9% and 7.4% respectively), leading to an October trade surplus of $31.1 billion double the $15.2 billion reported in August. This led to a brief jump in Asian regional market which however was promptly faded. Germany also reported a greater trade surplus than expected at €20.4bn vs €15.4 bn expected, which begs the question just where are all these excess exports going to? Perhaps France, whose trade deficit rose from €5.1 billion to €5.8 billion, more than the €4.8 billion expected. Of note also was the French downgrade from AA+ to AA by S&P, citing weak economic prospects, with fiscal constraints throughout 2014. The agency added that the country has limited room to maneuver and sees an inability to significantly cut government spending. The downgrade, however, was largely a buy the EURUSD dip event as rating agencies’ opinions fade into irrelevance.

Looking at today’s payrolls data, the expectation is for a rather modest headline gain of 120k in today’s report and for the unemployment rate to tick up 0.1ppt to 7.3%. As DB observes, the most recent estimates from economic forecasters have virtually all come below the 130k level with a number of estimates under 100k – so it’s fair to say that expectations for the shutdown-affected month of October are biased to the low end. With that in mind, it will be interesting to see how markets react to today’s report, and whether any weakness in October will be interpreted as being transitory. For the record DB is expecting a +130k headline print today, +130k for private payrolls and an unemployment rate of 7.3%. As such, risk for risk is to the downside, as even a modestly stronger than expected number will result in bringing tapering expectations closer if only for the day.

As usual, any hints and rumors of what the Fed may or may not do, especially in the aftermath of the ECB’s surprising rate cut, will be driving force for any market moves.

Finally, southeast Asia is literally being rocked right now by Super Typhoon Haiyan, one of the strongest storms ever. The Keynesian inside all of us will immediately proclaim: bullish for GDP.

In addition to payrolls, we also get the monthly personal income and spending reports as well as the UofMichigan confidence survey which is expected to show that sentiment has picked up in November after reaching a year-to-date low in October. Bernanke will be making some remarks at the IMF Annual Research Conference late in the US trading session.

US Data Docket

• US: Change in nonfarm payrolls, cons 120k (14:30), Unemployment rate, cons, 7.3% (14:30)
• Univ. Of Michigan confidence, cons 74.5 (15:55)
• US: Fed speakers – Lockhart (18:00) Bernanke, Fischer and Summers (21:30), Williams (22:00)

Market Re-Cap from RanSquawk

Stocks traded lower in Europe, with the French CAC index under performing its peers after S&P cut French sovereign debt rating. The cautious sentiment supported the more defensive equity sectors, with health care among the best performing for much of the session this morning. Utilities also benefited from an encouraging earnings report by ENEL, with shares advancing around 2%. Despite the risk averse sentiment, combination of profit taking related flows following yesterday’s surge post ECB rate decision, together with the fact that the latest sovereign downgrade adds more pressure on Germany meant that Bunds also traded lower, albeit marginally. Going forward, apart from awaiting the release of the latest jobs report by the BLS, attention will also be on the jobs report from Canada, as well as Prelim. U. Michigan report.

Overnight Bulleting from Bloomberg and RanSquawk

• France cut to AA from AA+ at Standard & Poor’s; Outlook revised to stable from negative.
• According to ECB sources, ECB’s Draghi is said to have pushed for ECB rate cut at decision yesterday.
• Treasuries steady before report forecast to show U.S. economy added 120k jobs in October with the unemployment rate rising to 7.3% from 7.2%.
• Draghi pushed for yesterday’s rate cut over opposition from Bundesbank President Jens Weidmann and at least two other Governing Council members, according to four euro-area central bank officials
• Pimco is wagering at least $10b in the credit-default swaps market that U.S. corporate bonds will gain as the Fed extends stimulus into 2014, according to traders and investors
• U.K. house prices rose to a record last month as easing credit availability drove buyers back to the market in all regions of England and Wales for the first time in almost three years, Acadametrics said
• Germany’s trade surplus widened to EU20.4b in September, more than forecast; exports gained 1.7%, also more than estimated, while imports fell 1.9%
• The Reserve Bank of Australia forecast below-trend growth and rising unemployment in 2014 as resource investment drops and renewed currency strength drags on the economy, leaving open the chance of lower interest rates
• China’s exports rose 5.6% in October, more than 1.7% median forecast; trade surplus widened to $31.1b, most this year; Communist Party plenum starts tomorrow
• Obama said he’s sorry that thousands of Americans are losing their medical insurance as a result of his health-care law, as his administration works to contain the political damage from the troubled rollout of his signature domestic achievement
• Sovereign yields mostly higher, EU peripheral spreads widen. Nikkei -1.0%, leading Asian stocks lower; Shanghai falls 1.1%. European stocks decline, U.S. equity-index futures gain. WTI crude lower; copper and gold little changed

Asian Headlines

Chinese Trade Balance (USD) (Oct) M/M 31.10bln vs. Exp. 24.80bln (Prev. 15.21bln) – 10-month high.
– Exports (Oct) Y/Y 5.6% vs. Exp. 1.7% (Prev. -0.3%)
– Imports (Oct) Y/Y 7.6% vs. Exp. 7.4% (Prev. 7.4%)
Chinese Premier Li Keqiang said China’s economy has to expand 7.2% per year in order to create 10mln jobs annually.

EU & UK Headlines

France cut to AA from AA+ at Standard & Poor’s; Outlook revised to stable from negative.
The ratings agency cited weak economic prospects, with fiscal constraints throughout 2014. The agency added that the country has limited room to maneuver and sees an inability to significantly cut government spending.

According to ECB sources, ECB’s Draghi is said to have pushed for ECB rate cut at decision yesterday. Sources said ECB’s Weidmann and at least two  others said to want to wait for new data adding that Draghi said should not expect too much from monetary policy.

German Trade Balance (Sep) M/M 20.4bln vs. Exp. 15.4bln (Prev. 13.1bln, Rev. 13.3bln)

German Current Account Balance (Sep) M/M 19.7bln vs Exp. 15.0bln (Prev. 9.4bln, Rev. 10.1bln)

French Budget Balance (Sep) YTD -80.8bln vs. Prev. -93.6bln

French Manufacturing Production (Sep) M/M -0.7% vs. Exp. 0.4% (Prev. 0.3%, Rev. 0.9%)

French Industrial Production (Sep) M/M -0.5% vs. Exp. 0.1% (Prev. 0.2%, Rev. 0.7%)

UK Visible Trade Balance GBP/Mln (Sep) M/M -9816 vs. Exp. -9200 (Prev. -9625, Rev. -9957) – Widest since October 2012

US Headlines

The Hill writes that October’s jobs report could be dismal, with the effects of the 16-day government shutdown clearly weighing on the figures. Last month’s numbers, delayed a week by the fiscal impasse, could run about 110,000, which would be the weakest since July.

Stocks traded lower in Europe this morning as market participants not only reacted to the downgrade of French sovereign debt rating by S&P but also positioned for the upcoming release of the jobs report by the BLS. The cautious sentiment supported the more defensive equity sectors, with health care among the best performing for much of the session this morning.

S&P says no change on systemically important French banks. Of note, S&P cut France to AA from AA+, outlook revised to stable from negative. Separately, S&P’s Director Gill says Euro-bank capital shortfall at over 1%.

FX

After a knee jerk move lower by EUR/USD following the downgrade, EUR/USD gradually recovered and edged into positive territory, largely driven by EUR/JPY related flows which staged a decent bounce following yesterday’s heavy selling. As a result, EUR/GBP traded higher, even though shorter-dated implied vols traded flat. Looking elsewhere, RBA cut its 2014 GDP forecast 2%-3% and also cut 2015 GDP forecast to 2.25%-3.25% citing lower mining investment, fiscal restraint and high AUD.

SNB President Jordan said that interest rates will remain low in Switzerland and that there is need to wait to assess impact of ECB rate cut, also noting that low rates may lead to Swiss property bubble risk.

Commodities

Saudi Arabia cuts oil production in October to 9.75mbpd vs. 10.1mbpd in September.

Iran deputy foreign minister Araqchi said it is too soon to say if on verge of P5+1 nuclear deal, but added he is a bit optimistic. In related news, US Secretary of State Kerry is said to be ready to go to Geneva on Friday if an Iranian nuclear deal reached. Also, Russia said that there are positive changes in the positions of world powers and Iran at Geneva talks, hopes for ‘concrete result’ China’s net crude imports slide to 14-month low on fuel margins, falling 21% against the September high to 20.3mmt, roughly 4.8mln bpd – the slowest rate since August 2012.

China’s copper arrivals fell 11.2% in October, coming off an 18-month high in the previous month due to poor price differentials between domestic and international copper markets and as a week-long holiday cut shipments. China October iron ore imports at 67.83mln tons, which is a 9.1% decline from September but up 20.2% on year, according to customs.

The complete overnight recap from Jim Reid of DB

Fascinating day in markets yesterday as 1999 met June 2013 after what was a surprise aperitif from the ECB. The IPO market had the feel of 1999 while the June 2013 reference points to the fact that stronger US data had US equities (S&P 500 -1.3%) facing their worst day since August 27th on renewed fears that tapering may be back on the agenda before March. Though US Q3 GDP brought back tapering fears to equities, treasury markets actually had their firmest day in 3 weeks (10yr yield -4bp) perhaps helped by the surprise move from Draghi. The price action across LATAM reflected that of the DM world as EM equities had another weak day while EM fixed income managed to outperform. Indeed, the MSCI EM equity index recorded its sixth straight loss yesterday in its longest losing streak since August, while a number of sovereign and CDS markets managed to close tighter on the day (though tracking the wides at the close) helped by the firmness in the UST markets. The Brazilian real (-0.7%) and IBOVESPA (-1.2%) were among the underperformers in EM yesterday.

Q3 US real GDP was 2.8% against 2% expectations and with the price index at 1.9% (1.4% consensus), nominal GDP grew at a surprising annualised 4.8% in the quarter. There was mixed views on the real GDP beat though. Many suggested the large inventory accumulation (worth around 0.8%) could mean payback this quarter while on the other side DB’s Joe LaVorgna thinks that it’s an appropriate increase given his expectation of an increase in demand. Whatever your thoughts on this, it does complicate matters for the Fed and markets before year-end. Our base case remains slow global nominal growth and a very, very slow taper but perhaps you need sell-offs to cement why it’s going to be tough to taper aggressively. Markets are still very dependent on liquidity in our opinion and days like yesterday perhaps support this. Today’s payrolls (more later) is the next big event that could re-shape or add to this crucial debate.

Back to the US GDP report, the contradiction was the 0.5% increase over expectations in the price index which goes against what we’ve seen elsewhere in the world of late. Indeed the ECB cut yesterday due to the lower inflation risks. Draghi was careful to say he saw no deflation risks but then again he couldn’t really say anything else in his position. Given that very few saw inflation going this low in Europe in 2013 it’s impossible to rule out further flirtation with deflation in 2014. A 25bp rate cut is unlikely to make too much difference unless the currency continues to fall aggressively so Draghi  must be hoping global activity pulls European inflation up in 2014 or he’ll have some very awkward unconventional policy discussions coming up. He wasn’t that convincing yesterday when asked about what policies he had left if indeed they did need to act further.

The tone in Asia this morning is also weaker as markets digest a poor day for stocks yesterday. China’s trade data for October has provided regional markets with a brief excuse to rally overnight but the initial excitement has been faded. China’s October trade surplus reached $31bn (vs $15bn previous month) thanks largely due to a consensus beating export number (5.6% YoY vs 1.7% expected). Exports also managed to bounce back from last month’s -0.3% print. October imports also beat consensus, coming at 7.6% against median estimates of 7.4%. Losses in equities are being led by the Shanghai Composite (-0.6%) and Nikkei (-0.9%). There has also been some focus on the effects of a Category 5 hurricane which made landfall in the Philippines earlier today. Elsewhere as we go to print, S&P 500 futures are up 0.16% and UST yields are unchanged at 2.60%. France was downgraded to AA from AA+ by S&P overnight as we type.

Onto today’s payrolls, the expectation is for a rather modest headline gain of 120k in today’s report and for the unemployment rate to tick up 0.1ppt to 7.3%. Interestingly the most recent estimates from economic forecasters have virtually all come below the 130k level with a number of estimates under 100k – so it’s fair to say that expectations for the shutdown-affected month of October are biased to the low end. With that in mind, it will be interesting to see how markets react to today’s report, and whether any weakness in October will be interpreted as being transitory. For the record DB is expecting a +130k headline print today, +130k for private payrolls and an unemployment rate of 7.3%.

Turning to the day ahead, French and German September trade numbers are scheduled early this morning as well as French industrial production. US payrolls will be setting the tone for the latter half of the day, which will be released at the same time as personal income/spending numbers for September. The UofMichigan confidence survey is expected to show that sentiment has picked up in November after reaching a year-to-date low in October. Bernanke will be making some remarks at the IMF Annual Research Conference late in the US trading session. Over the weekend, China’s inflation, industrial production and retail sales numbers for the month of October will be released. China’s much awaited Third Plenum meeting gets underway tomorrow where DB’s Jun Ma expects a wide ranging package of reforms will follow, in terms of industry deregulation, financial liberalisation, reforms to land titles, state-owned enterprises and social security.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/MbJgHwNQn9M/story01.htm Tyler Durden

In a mirror image of the NSA’s wanton invasion of privacy – whether ‘enabled’ by privacy policy ‘small print’ or not – NYTimes Charlie Savage claims that the CIA pays the US’ 2nd largest telecom company, AT&T, $10 million a year in exchange for voluntarily handing over troves of phone logs. This has been going on since at least 2010 and while the CIA is forbidden from “acquiring information concerning the domestic activities of US persons,” AT&T has indeed been handing over information pertaining to American citizens.

 

Via Russia Today,

Citing federal officials with knowledge of the program, The Times’ Charlie Savage wrote that telecommunication giant AT&T has been routinely collaborating in CIA investigations by surrendering phone records to the agency and even scouring vast archives of dated logs on their behalf since at least 2010, adding yet another scandalous chapter in the sordid story of the telecom’s long-lasting and often elusive relationship with the government.

 

…

 

done through a voluntary contract in which AT&T is awarded millions of dollars annually in exchange for searching its databases for the CIA in instances where the agency provides the phone number of an overseas terrorism suspect whose contacts are then called into question.

 

…

 

Representatives for both the CIA and AT&T declined to confirm the existence of the program to the Times, with the intelligence agency acknowledging that it is forbidden from “acquiring information concerning the domestic activities of US persons.”  According to Savage, however, AT&T has indeed handed over information pertaining to American citizens, the likes of which are supposedly subject to privacy safeguards — that could then be bypassed by other US agencies.

 

“Most of the call logs provided by AT&T involve foreign-to-foreign calls, but when the company produces records of international calls with one end in the United States, it does not disclose the identity of the Americans and ‘masks’ several digits of their phone numbers,” Savage said officials told him.

 

…

 

Speaking on behalf of the CIA, spokesman Dean Boyd told the Times that the agency “protects the nation and upholds privacy rights of Americans by ensuring that its intelligence collection activities are focused on acquiring foreign intelligence and counterintelligence in accordance with US laws.”

 

“We value our customers’ privacy and work hard to protect it by ensuring compliance with the law in all respects. We do not comment on questions concerning national security,” AT&T spokesman Mark Siegel added.

 

…

 

A caveat says that AT&T will indeed share personal information, however, to “Comply with court orders, subpoenas, lawful discovery requests and other legal or regulatory requirements, and to enforce our legal rights or defend against legal claims.” Another says information could be shared with “a responsible governmental entity in emergency or exigent circumstances or in situations involving immediate danger of death or serious physical injury.”

 

According to Savage’s sources, however, no court order is necessary for the sort of specific collaboration cited in the Times, and the exchange of millions of dollars annually suggests that the relationship is one that involves legitimate business transactions — with one party being the intelligence arm of the United States.

 

…

 

Elsewhere in their Privacy Policy, AT&T acknowledges, “We share your Personal Information with companies that perform services for us” and adds “we cannot guarantee that your Personal Information will never be disclosed in a manner inconsistent with this Policy.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OzOElLhL1gA/story01.htm Tyler Durden

In a mirror image of the NSA’s wanton invasion of privacy – whether ‘enabled’ by privacy policy ‘small print’ or not – NYTimes Charlie Savage claims that the CIA pays the US’ 2nd largest telecom company, AT&T, $10 million a year in exchange for voluntarily handing over troves of phone logs. This has been going on since at least 2010 and while the CIA is forbidden from “acquiring information concerning the domestic activities of US persons,” AT&T has indeed been handing over information pertaining to American citizens.

 

Via Russia Today,

Citing federal officials with knowledge of the program, The Times’ Charlie Savage wrote that telecommunication giant AT&T has been routinely collaborating in CIA investigations by surrendering phone records to the agency and even scouring vast archives of dated logs on their behalf since at least 2010, adding yet another scandalous chapter in the sordid story of the telecom’s long-lasting and often elusive relationship with the government.

 

…

 

done through a voluntary contract in which AT&T is awarded millions of dollars annually in exchange for searching its databases for the CIA in instances where the agency provides the phone number of an overseas terrorism suspect whose contacts are then called into question.

 

…

 

Representatives for both the CIA and AT&T declined to confirm the existence of the program to the Times, with the intelligence agency acknowledging that it is forbidden from “acquiring information concerning the domestic activities of US persons.”  According to Savage, however, AT&T has indeed handed over information pertaining to American citizens, the likes of which are supposedly subject to privacy safeguards — that could then be bypassed by other US agencies.

 

“Most of the call logs provided by AT&T involve foreign-to-foreign calls, but when the company produces records of international calls with one end in the United States, it does not disclose the identity of the Americans and ‘masks’ several digits of their phone numbers,” Savage said officials told him.

 

…

 

Speaking on behalf of the CIA, spokesman Dean Boyd told the Times that the agency “protects the nation and upholds privacy rights of Americans by ensuring that its intelligence collection activities are focused on acquiring foreign intelligence and counterintelligence in accordance with US laws.”

 

“We value our customers’ privacy and work hard to protect it by ensuring compliance with the law in all respects. We do not comment on questions concerning national security,” AT&T spokesman Mark Siegel added.

 

…

 

A caveat says that AT&T will indeed share personal information, however, to “Comply with court orders, subpoenas, lawful discovery requests and other legal or regulatory requirements, and to enforce our legal rights or defend against legal claims.” Another says information could be shared with “a responsible governmental entity in emergency or exigent circumstances or in situations involving immediate danger of death or serious physical injury.”

 

According to Savage’s sources, however, no court order is necessary for the sort of specific collaboration cited in the Times, and the exchange of millions of dollars annually suggests that the relationship is one that involves legitimate business transactions — with one party being the intelligence arm of the United States.

 

…

 

Elsewhere in their Privacy Policy, AT&T acknowledges, “We share your Personal Information with companies that perform services for us” and adds “we cannot guarantee that your Personal Information will never be disclosed in a manner inconsistent with this Policy.”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/OzOElLhL1gA/story01.htm Tyler Durden

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

A little over a week ago, the world’s first Bitcoin ATM was launched to much fanfare in a Vancouver coffee shop called Waves Coffee. This particular machine is made by a company called Robocoin and they sell for $20,000 per unit. While I applaud the company for installing the world’s first Bitcoin ATM, I have been quite vocal in my opposition to their requirement that you use biometrics in order to access the machine (a palm scanner). I find this to be an unnecessary feature that will only serve to condition people to use biometrics for financial transactions and I view this as unacceptable.

Another company called Lamassu, Inc. is also building Bitcoin ATMs and their machines do no require biometrics, so I will be watching their rollout closely.

My strongly supportive public position on Bitcoin has been made clear for well over a year now. In fact, my first lengthy article on it was in August 2012, when it was still trading around $10/btc versus $300/btc today. The article was titled: Bitcoin: A Way to Fight Back Against the Financial Terrorists?

The rollout of Bitcoin ATMs is a huge positive for the network going forward. The difficulty of buying bitcoins has been a huge obstacle that has prevented more people from getting involved. These ATMs will change that paradigm entirely for the communities in which they are installed.

More from the Washington Post:

A new Bitcoin ATM in Vancouver is off to a fast start, conducting $100,000 (Canadian) worth of transactions in its first eight days of operation. That’s according to Robocoin, the firm that created the machine and hopes to see the equipment deployed in major cities around the world.

 

“Robocoin has finally made Bitcoin accessible,” says Jordan Kelley, the company’s CEO. Kelley says that so far approximately 80 percent of the machine’s business has been people buying Bitcoins, while the other 20 percent has been people who wanted to sell their Bitcoins for cash. Robocoin says its machine is the first Bitcoin ATM in the world.

Full article here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/gFIdgfG3t8w/story01.htm Tyler Durden

If you’re 24, buried in college loans and looking for a job in a city that’s affordable but not completely depressing, you’re probably wondering where to start (while spoon-feeding yourself ice cream in your high-school bedroom). On the other hand, if you’re in your early 30s and New York or Los Angeles is grinding you down into a quivering husk of financial and emotional instability, it might be time to get out. Either way, with new data showing that 36 percent of adults between the ages of 18 and 31 are currently living at home with mom and dad (the highest number in 40 years, according to Pew Research Center), vocativ thought it was high time to crunch the numbers and figure out where the hell you can actually live these days and still retain some self-respect.

 

Via Vocativ,

The Livability Index: The 35 Best US Cities For People 35 and Under

Our semi-exhaustive, mostly scientific guide to America’s most livable cities

We started with the 50 most populous cities in the country, according to the 2010 census, and pared down results from there using Open Internet sources. Our Livability Index takes into account 20 essential indicators for those between 18 and 35, like average salary, employment rates, and the cost of rent and utilities measured against everyday factors like bike lanes for commuting, low-cost broadband and the availability of good, cheap takeout. We also considered all-important lifestyle metrics like the price of a pint of beer and an ounce of high-quality weed, and the level of access to live music and coffee shops.

 

The following 35 cities represent your best chance of not dying jobless and alone in your parent’s basement. You can slice and dice the data by city or across categories, depending what you care about most. In the end, some bigger cities like Los Angeles and Chicago didn’t make the top 35 (though they may have ranked in individual categories).  

Click map for interactive exhibit:

The Top 35 Cities:

And Some individual breakdowns:

Youngest Population:

Cheapest Beer:

Cheapest Weed:

Highest Average Salary:

Grab your patchouli; it’s time to move to Portland!

 

Source: Vocativ

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Submitted by Michael Snyder of The Economic Collapse blog,

Did you know that 40 percent of all American workers make less than $20,000 a year before taxes?  And 65 percent of all American workers make less than $40,000 a year before taxes.  If you work on Wall Street, or have a cushy job with the federal government, or work for a big tech firm out on the west coast, life is probably pretty good for you right now.  But the truth is that most Americans are not living the high life.  In fact, most Americans are just trying to figure out how to survive from month to month. 

For many Americans, making a choice between buying food for your family and paying the light bill is a common occurrence.  But if you don't live in that America, hearing that people actually live like that may sound very strange to you.  After all, if everyone around you has expensive cars, the latest electronic gadgets and million dollar homes, the notion that America is in the midst of a very serious "economic decline" may seem very bizarre to you.

On Wednesday, the Dow hit a brand new record high, and Wall Street celebrated.  Since the financial crisis of 2008, stocks have been on an unprecedented run.  The top performers in the market have not just made millions of dollars – they have made billions of dollars.  Luxury apartments in Manhattan and beachfront homes in the Hamptons are selling for absolutely astronomical prices, and it seems like life in the good parts of New York City is one gigantic endless party these days.

Meanwhile, life is quite good down in Washington D.C. as well.  The wealth is spread more evenly, but on average the D.C. region actually has the highest standard of living of any major U.S. city.  The reason for this is the obscene growth of the federal government.  Over the past couple of decades, the U.S. government has ballooned in size and so have government salaries.  During one recent year, the average federal employee living in the Washington D.C. area received total compensation worth more than $126,000.

Out in the San Francisco area, Internet money is flowing like wine right now.  As I wrote about yesterday, top employees of companies such as Facebook and Twitter can make millions of dollars a year.  And if you were lucky to get a piece of the ownership of one of those companies at a very early stage, you are essentially set for life.

And with the Twitter IPO coming up, Internet euphoria is once again reaching a fever pitch.  For example, just check out what a 56-year-old administrative assistant said this week about why she is going to buy Twitter stock…

“I’m just buying because everybody’s talking about Twitter,” she said. “I’m just gonna take a chance.”

Is that how we should make our investment decisions from now on?

Just buy a stock because everybody's talking about it?

That is the kind of insanity that is going on in "wealthy America" right now.

Unfortunately, the gap between "wealthy America" and "poor America" is greater than ever before.

If you live in "wealthy America", what you are about to hear next will probably sound very strange.

CNN recently profiled a 44-year-old overnight prison guard named Delores Gilmore.  She works really hard, but a lot of times she simply does not have enough money to pay all of her bills…

"The first of the month, I pay the rent," she said. "The next check, I pay my light bills. Sometimes I won't pay my rent and I pay the light bill from last month — if they cut if it off. Then I pay the rent the end of the month."

Her life consists of going to work, taking care of her children, going to sleep, and then getting back up and repeating that same cycle once again…

"I'm not fooling anybody," she told me. "I don't have any friends. And that's sad. … I go to work, come home, take them where they gotta go, if they gotta go somewhere, come back home, lay down, go to work.

 

"That's what I do. All day, that's what I do."

Sadly, the truth is that tens of millions of Americans can identify with what she is going through on a daily basis.  In millions of families, both the husband and the wife work multiple jobs and it is still not enough.

If we truly did have a free market capitalist system, the entire country would be a land of opportunity and things would be getting better for everybody.  Unfortunately, that is not the case at all.  The following are 21 facts about "wealthy America" and "poor America" that are hard to believe…

#1 The lowest earning 23,303,064 Americans combined make 36 percent less than the highest earning 2,915 Americans do.

#2 40 percent of all American workers (39.6 percent to be precise) make less than $20,000 a year.

#3 According to the Pew Research Center, the top 7 percent of all U.S. households own 63 percent of all the wealth in the country.

#4 On average, households in the top 7 percent have 24 times as much wealth as households in the bottom 93 percent.

#5 According to numbers that were just released this week, 49.7 million Americans are living in poverty.  Tha
t is a brand new all-time record high.

#6 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.

#7 Household incomes have actually been declining for five years in a row and total consumer credit has risen by a whopping 22 percent over the past three years.

#8 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.

#9 The homeownership rate in the United States is at an 18 year low.

#10 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.

#11 18 percent of all food stamp dollars are spent at Wal-Mart.

#12 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.

#13 It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless.  That number has risen by 72 percent since the start of the last recession.

#14 One recent study discovered that nearly half of all public students in the United States come from low income homes.

#15 In 1980, CEOs at S&P 500 companies made 42 times as much as their employees did on average.  Today, CEOs at S&P 500 companies make 354 times as much as their employees do on average.  In fact, there are many CEOs that make more than 1000 times what the average employees in their companies make.

#16 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.

#17 At this point, one out of every four American workers has a job that pays $10 an hour or less.

#18 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

#19 Approximately one out of every five households in the United States is now on food stamps.

#20 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.

#21 At this point, the poorest 50 percent of all Americans collectively own just 2.5 percent of all the wealth in the United States.

So which America do you live in?

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