iftttwall

Ever since the April 2010 disaster on the BP-operated Macondo well in the Gulf of Mexico, there was one big outstanding question: where did the bulk of the oil gol? Now, thanks to a research team led by David Valentine, a microbial geochemist at the University of California, Santa Barbara, sampled more than 534 locations near the spill site, gathering more than 3,000 individual samples, we know the answer: the oil spill – some 10 million gallons of coagulated oil – left an oily "bathub ring" on the sea floor of the Gulf of Mexico, about 25 miles from the well, that's about the size of Rhode Island.

The researchers found an area of 1,250 square miles (3,237 square km), mostly southwest of the Macondo well, where a thin sheen of oil rests in patches on the top half-inch of the seafloor, according to the NSF.

The reason why the massive spill was never visible on the ocean surface? "Based on the evidence, our findings suggest that these deposits are from Macondo oil that was first suspended in the deep ocean, then settled to the seafloor without ever reaching the ocean surface," Valentine said in the statement.

"This analysis provides us with, for the first time, some closure on the question, 'Where did the oil go, and how did it get there?'" Don Rice, the program director of the National Science Foundation's Division of Ocean Sciences, told Live Science in a statement.

More from Live Science:

The droplets of oil started out 3,500 feet (1,067 meters) below the ocean surface and were caught by deep-ocean currents before raining down another 1,000 feet (305 m) to the seafloor, Valentine said. This hydrocarbon rain explains the damage suffered by coral around the site, he said.

 

"The pattern of contamination we observe is fully consistent with the Deepwater Horizon event but not with natural seeps," Valentine said.

Unfortunately, there is more: a major portion of the spill has still not be accounted for and much of the deep ocean oil is still missing. The portion Valentine and his colleagues traced represents only 4 to 31 percent of the oil thought to be trapped in the depths of the ocean (up to 16 percent of the total oil spilled).

AP adds that according to Valentine the spill from the Macondo well left other splotches containing even more oil. He said it is obvious where the oil is from, even though there were no chemical signature tests because over time the oil has degraded.

"There's this sort of ring where you see around the Macondo well where the concentrations are elevated," Valentine said. The study, published in Monday's Proceedings of the National Academy of Sciences, calls it a "bathtub ring."

 

Oil levels inside the ring were as much as 10,000 times higher than outside the 1,200-square-mile ring, Valentine said. A chemical component of the oil was found on the sea floor, anywhere from two-thirds of a mile to a mile below the surface.

 

The rig blew on April 20, 2010, and spewed 172 million gallons of oil into the Gulf through the summer. Scientists are still trying to figure where all the oil went and what effects it had.

Needless to say, BP is not enthused and hardly wants this walk down memory lane recreated which is why the oil giant questioned the conclusions of the study. In an email, spokesman Jason Ryan said, "the authors failed to identify the source of the oil, leading them to grossly overstate the amount of residual Macondo oil on the sea floor and the geographic area in which it is found."

It's impossible at this point to do such chemical analysis, said Valentine and study co-author Christopher Reddy, a marine chemist at Woods Hole Oceanographic Institute, but all other evidence, including the depth of the oil, the way it laid out, the distance from the well, directly point to the BP rig.

And, of course, there is the logical question: who else had a massive oil spill in the GOM in recent years?

And while some of the oil has been found, the question where the rest is remains, as does the far more important question: what was the spill's impact on sealife and sea-currents in the Gulf? One may need to wait many years until that particular answer is revealed.

Source: Fallout plume of submerged oil from Deepwater Horizon

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/1UVG9Hy50aE/story01.htm Tyler Durden

In what appeared to be a sign of discord, Bloomberg reported in September that Ferrari Chairman Luca Cordero di Montezemolo was poised to leave the super-car maker because of a clash over strategy with the brand’s parent Fiat, proclaiming “Ferrari is now American,” which represents “the end of an era.” It now seems Marchionne’s Fiat strategy to compete with Volkswagen’s Lambo division is no set to fail as Bloomberg reports: FIAT CHRYSLER PLANS TO SPIN OFF FERRARI. Expected to list in US and European markets, the IPO of 10% of Ferrari is expected to be completed in 2015… another sign of the top?

As Bloomberg reported in September, there have been hints of discord…

Ferrari Chairman Luca Cordero di Montezemolo is poised to leave the super-car maker because of a clash over strategy with the brand’s parent Fiat SpA (F), people familiar with the matter said.

 

Montezemolo, who has led Ferrari for more than 20 years, may step down later this year, said three people, who asked not to be identified because the discussions are private. The executive has yet to agree on a severance package, and there’s no firm timing for him to leave, they said.

 

…

 

Montezemolo, who took charge of Ferrari in 1991, wants to maintain Ferrari’s autonomous status and limit sales to about 7,000 cars a year to preserve the brand’s exclusive allure. That clashes with Marchionne’s goal of having Ferrari bolster a shift by the group into upscale cars as part of Fiat’s merger with U.S. unit Chrysler Group LLC.

 

…

 

“Ferrari is now American,” which represents “the end of an era,” Montezemolo told close associates

 

Ferrari, which sold about 7,000 cars last year, accounted for about 12 percent of Fiat’s 2013 operating profit. The group sold about 4.4 million cars last year.

And now we find out that:

• *FIAT CHRYSLER PLANS TO SPIN OFF FERRARI
• *FIAT CHRYSLER TO MAKE PUBLIC OFFER FOR 10% OF FERRARI
• *FIAT CHRYSLER TO DISTRIBUTE REST OF FERRARI STAKE TO SHRHOLDERS
• *FIAT CHRYSLER PLANS TO LIST FERRARI IN U.S., EUROPE MKTS
• *FIAT CHRYSLER PLANS TO COMPLETE FERRARI SPIN OFF IN 2015

As DPA reports,

Italo-American car group Fiat-Chrysler Automobiles (FCA) said Wednesday it was going to spin off its racing car subsidiary Ferrari as part of plans to raise fresh capital for the business.

 

“The separation will be effected through a public offering of FCA’s interest in Ferrari equal to 10 per cent of Ferrari’s outstanding shares and a distribution of FCA’s remaining Ferrari shares to FCA shareholders,” a company statement said.

 

Ferrari shares were going to be listed in the United States and, “possibly,” on a European stock market, FCA said.

 

FCA needs money to put into practice a five-year development strategy centred on the relaunch of Alfa Romeo, a venerable Italian car brand suffering from an outdated product range and shrinking sales.

 

“As we move forward to secure the 2014-2018 business plan and work toward maximizing the value of our businesses to our shareholders, it is proper that we pursue separate paths for FCA and Ferrari,” Fiat-Chrysler boss Sergio Marchionne said.

*  *  *

Top?

via Zero Hedge http://ift.tt/1wCOLNM Tyler Durden

Submitted by Sal Arnuk & Joe Saluzzi, via Themis Trading,

The SEC reportedly does not like trading on information that is not yet public. Just ask SAC Capital, or if you prefer, watch the plethora of insider trading SEC news conferences in general.

Why, even this morning there is a WSJ story about the SEC’s investigation into the early leak and release of Medicare cancer related funding data , which is an investigation into a different government agency!

And remember last year, when the SEC began investigating Thompson Reuter’s early release of ISM data to certain high speed subscribers. While the SEC brought no charges against Thompson Reuters, the data firm did subsequently suspend its “tiered release” practice:

On Monday, Thomson Reuters announced that it was suspending a so-called “tiered release” of market moving data to elite clients. The data and news service had been selling the University of Michigan’s consumer sentiment numbers to paying clients at 9:54:58 on release days—two seconds before the information went to a broader set of clients at 9:55 am. That created an opportunity for high speed trading firms to rake in profits before the rest of the market knew which direction the impending news would propel trading.

(As an aside, AG Schneiderman brought public attention to that story, before the SEC began “looking into” Thompson Reuters’s practices, just as his office brought attention to the dark pool practices before the SEC began investigating those.)

Let’s fast forward, shall we?

*  *  *

Yesterday evening Scott Patterson, author of Dark Pools, published a Wall Street Journal story titled Fast Traders Are Getting Data From SEC Seconds Early. Apparently, two separate academic studies (University of Colorado / University of Chicago, and Columbia University) have found a lag between when paying subscribers received SEC Edgar filings, and when the public did on the SEC’s own website.

 

What Does This Mean? Does This Affect Anyone?

Any time a company files a report with the SEC, noting insider buying or selling by its officers for example, that document becomes public and viewable on the SEC’s website, EDGAR (Electronic Data Gathering Analysis and Retrieval). From the WSJ article:

When a company submits a document, the contractor forwards it to the Edgar subscribers and to the SEC website “at the same time,” according to the SEC. But the studies suggest that the SEC website can take anywhere from 10 seconds to more than a minute to post the documents, giving an advantage to the Edgar subscribers or their customers, who are often professional investors.

The SEC contracts an outside firm to run this database. This outside firm is currently Attain LLC, but it used to be NTT Data at the time the academic studies were conducted. These firms have about 40 subscribers who pay $1500 /month or $720,000 per year in revenue, in addition to the revenue these data firms receive from the SEC (US taxpayers). One of their subscribers is a firm called The Washington Service, and they even advertise the “speed and availability benefits of a value-added EDGAR or real-time insider data feed” on their website. Subscribing firms like the Washington Service in turn sell the fast access to other firms, like high speed trading firms, for undisclosed amounts.

Anyone trading in the market place during any of the thousands of company releases on EDGAR is of course affected. Prices move quickly and volumes surge as the early recipients get the information and trade ahead of the public.

What does the SEC say about this?

“We have reviewed the working paper and are taking the issues raised by it seriously. We are conducting a thorough assessment of the dissemination process, including timing increments, and will make any systems modifications that may be necessary to optimize the dissemination of information to investors and the markets.”

Some Questions.

1)      How could the SEC investigate early release of University of Michigan data last year while this practice is going on with their own data?

 

2)      How can the SEC investigate a competing government agency about the early release of Medicare payment policies, while they are a stakeholder themselves in the “selling data early” game?

 

3)      Does the fact that the agency is a stakeholder in the high speed trading / market structure debate color their objectivity and role as top cop?

 

4)      Could we have imagined anything more far-fetched and unlikely as this practice by the SEC itself?

We’ll answer the last question. No

*  *  *

And here is Nanex' Eric Hunsader asking the SEC a simple question:

 

Insane: Dear Congress, cc: NY AG The SEC is giving some traders faster access to regulatory filings! http://ift.tt/1thPDpH

— Eric Scott Hunsader (@nanexllc) October 29, 2014

via Zero Hedge http://ift.tt/1DvAtj6 Tyler Durden

With QE3 about to wind down, some are declaring that the age of Quantitative Easing is finally over. These probably forgot they said the same thing when QE1, QE2 and Operation Twist ended. Clueless “expertise” aside, who can really blame them: by now it has become all too clear that the Fed itself has absolutely no idea what it is doing and has bet (all in) not only the (taxpayer) farm but all of (crony) capitalism, that it can solve every problem just by printing free wealth for 1% of the population while at the same time impoverishing the rest, leading to precisely the record inequality… that the Fed itself rails against.

A script worthy of a soap opera, one that Kim Jong Un would shoot you just for watching it.

But at least one entity has got the Fed all figured out and knows exactly what is going to happen next. The Media.

Actually, scratch that.

Here is Reuters from a few hours ago…

 

And CNBC.

 

But nothing compares to MarketWatch.

via Zero Hedge http://ift.tt/1pXX55z Tyler Durden

From Russell Napier of the Electronic Research Interchange

Great Expectations, Pregnant Pandas and Last Wednesday’s Treasury Market

“I must be taken as I have been made. The success is not mine, the failure is not mine, but the two together make me.”

       – Estella, Great Expectations

What sort of financial world is a world with no volumes, no volatility and steadily rising prices? The only historical example is perhaps the Soviet Union. When the marginal buyer of any product is the state, or its handmaiden the central bank, then simply nothing happens until the state comes out to play.

Across the world the owners of private sector assets sleep under palm trees in Bangkok, relax over mahjong in Beijing, play sudoku in Berlin, read The Sun newspaper in London or take turns to appear on CNBC in New York – all awaiting the arrival of the state. No two private parties will enter a bargain in the absence of the state, for what if the state does not like their price? Then the price will be moved by state fiat and one, or perhaps both, of those parties will look very foolish indeed.

TAKE NOTHING ON ITS LOOKS

As Magwitch, the escaped convict, remarks in Great Expectations, “What larks, Pip!” when a brief flurry of activity stirs the afternoon once the state shows its hand. Then it’s back to talking nostalgically about supply and demand, the way our ancestors spoke affectionately about gas lighting, trams and the taste of saturated fats. Forecasting is difficult, especially about the future, but it is a simple forecast that this state-induced torpor will one day pass. It did just that between 0900 and 0930 EST on Wednesday October 15th.

On the 15th of October 2014, as this analyst celebrated his 50th birthday, volume in the US Treasury market surged, suddenly and without warning, to a record high. Old timers smiled knowingly, as Magwitch did from behind the headstones, and younger members put aside their Angry Birds and wondered what was wrong.

TAKE EVERYTHING ON EVIDENCE

There it was — a real market come and gone in half an hour, like a pregnant panda at Edinburgh zoo. What did it mean and what should you do? You should pay attention to what happens to the direction of prices when volumes surge and markets work. When the veil is lifted, pay attention to what you see beneath. Last Wednesday, in the space of half an hour of active trading, the Treasury market had one of its most rapid rises ever recorded and equities fell sharply.

There is a very simple lesson that when the markets finally break through the manipulation they move to price in deflation and not inflation. This is key because it means financial repression has failed. Such repression requires the artificial depression of interest rates but, crucially, it must be paired with boosting inflation above such rates. On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident.

THERE’S NO BETTER RULE

In North Korea today, Kim Jong Un executed ten Workers’ Party officials for watching South Korean soap operas. Meanwhile in the developed world the excitements of October 15th 2014 have passed and financial fiduciaries continue to get paid to both watch and then appear on daytime television. The time will come when you will have to get back to determining prices.

A price is not a diktat but, like Estella in Great Expectations, the product of both a success and a failure. Last Wednesday, just briefly, diktat disappeared and failure outweighed success in the determination of price. Remember, as Yogi Berra sagely advised, “You can learn a lot just from watching.” Don’t forget what you saw between 0900 and 0930 EST On Wednesday October 15th.

“Take nothing on its looks; take everything on evidence. There’s no better rule.”

      – Mr Jaggers, Great Expectations

via Zero Hedge http://ift.tt/ZZrSZe Tyler Durden

• Fed set to end one crisis chapter even as global risks rise (Reuters)… you mean, for the third time?
• Insider-Trading Probe Focuses on Medicare Agency (WSJ)
• He’s sorry: Rajoy Apologizes as New Wave of Graft Allegations Hits Spain (BBG)
• China could ‘punish’ Hong Kong over protests, says ex-HK central bank chief (Reuters)
• Dubai Insists the Boom is Not a Bubble This Time Around (BBG)
• Bank-Data Sharing Accord Expands Push to Find Tax Cheats (BBG)
• Deutsche Bank Sinks to Third-Quarter Loss on Legal Costs (BBG)
• Kim Jong Un Executes 10 Officials for Watching Soap Operas (BBG)
• French drugmaker Sanofi sacks CEO Viehbacher (Reuters)
• Norway Oil Fund Has Weakest Return Since 2013 on European Losses (BBG)
• The FTC is suing AT&T for throttling its unlimited data customers (WaPo)
• Iraqi peshmerga poised to join battle against Islamic State in Syria (Reuters)
• German Potholes Risk Growth Prospects in Land of Autobahn (BBG)
• Sanctions bind Russia’s energy elite to Putin (Reuters)
• Zambia’s president, ‘King Cobra’ Sata, dies in London (Reuters)

 

Overnight Media Digest

WSJ

* In a significant shift, business groups gave more money in aggregate to Republican candidates than to Democrats in seven of the most competitive Senate races in recent months, in some cases taking the unusual step of betting against sitting senators. (http://on.wsj.com/1zHduVR)

* Federal agencies are probing exploring whether employees of the Centers for Medicare and Medicaid Services, the agency that oversees billions in health spending, have leaked news that ended up in the hands of Wall Street traders, according to people with direct knowledge of the investigations. (http://on.wsj.com/1zH3NXj)

* An unmanned Orbital Sciences Corp’s rocket suffered a catastrophic failure seconds after liftoff Tuesday, dealing a potential setback to NASA’s program to privatize such missions. (http://on.wsj.com/1wbJSMp)

* Hedge funds and other rapid-fire investors can get access to market-moving documents ahead of other users of the Securities and Exchange Commission’s system for distributing company filings, giving them a potential edge on the rest of the market. (http://on.wsj.com/135V9mM)

* Facebook Inc chief Mark Zuckerberg vowed to continue spending abundantly on new technologies in the coming years, explaining away a quarterly profit that took a hit from megadeals such as WhatsApp. (http://on.wsj.com/137yxCg)

* The Federal Trade Commission sued AT&T Inc, alleging that the company misled millions of cellphone subscribers by selling them unlimited data plans and then effectively capping those plans. (http://on.wsj.com/ZYsoGP)

* The first rule of IPOs is: You don’t talk about IPOs. It is a lesson highlighted by RBC Capital Market’s decision to relinquish a coveted role underwriting the record-breaking initial public offering of Alibaba Group Holding Ltd last month because of public comments by one of its executives. (http://on.wsj.com/1yHbFnw)

 

FT

Lloyds Banking Group Plc will cut more than 9,000 jobs and shut 200 of its 2,253 branches, it revealed on Tuesday as it seeks to strengthen its future as Britain’s leading retail bank with a major digital transformation focussing on slashing costs and closing branches.

Britain’s skills and equalities minister Nick Boles has become the first conservative minister to suggest the government’s immigration approach is damaging Britain’s global competitiveness.

Another member of the Bank of England’s monetary policy committee, Jon Cunliffe argued on Tuesday for rates to remain at their record low indicating lower possibility of the UK interest rate to rise in the near future.

The number of British children who live in poverty has shot up to more than one in four since the start of the recession, following government austerity measures and benefit cuts, an UNICEF report said.

 

NYT

* General Motors Co hopes to invigorate sales of its slow-selling Chevrolet Volt by introducing a new version of the plug-in hybrid sedan next year, with more of its parts production taking place in Michigan. (http://nyti.ms/1nOIyxo)

* Arthur Levitt Jr., the longest-serving chairman of the Securities and Exchange Commission, will serve as an adviser to BitPay, the Bitcoin payment processor, and Vaurum, an exchange for institutional investors. The moves were announced on Tuesday (http://nyti.ms/ZYoCx0)

* The possibility that JPMorgan Chase & Co would build a two-towered, $6.5 billion headquarters on the Far West Side of Manhattan streaked across the skyline in recent weeks, only to die quietly on Tuesday. Jamie Dimon, chairman of Chase, called Mayor Bill de Blasio and Governor Andrew Cuomo on Tuesday to say that the country’s largest bank had decided to stay put on the East Side. (http://nyti.ms/1FU29Cj)

* Three years ago, AT&T Inc warned smartphone customers with “unlimited” data plans that their connections might be slowed if they used a lot of data. On Tuesday, the Federal Trade Commission said AT&T’s disclosure was deceptive because it was not specific enough. (http://nyti.ms/1sAZl2E)

* The German lender Deutsche Bank announced a management shakeup Tuesday that will move the chief financial officer, Stefan Krause, to a newly created post and give his duties to a Goldman Sachs Group partner, Marcus Schenck. Deutsche Bank also named Christian Sewing to the management board with responsibility for legal affairs. In addition, Henry Ritchotte, Deutsche Bank’s chief operating officer, will retain that title while overseeing an effort to improve the bank’s information technology, including internet and mobile banking services. (http://nyti.ms/1wEd1Qm)

 

Canada

THE GLOBE AND MAIL

** Police in Canada will soon have new tools to track terror suspects through online records, bank accounts and other means – powers the Royal Canadian Mounted Police commissioner called for this week, but which are already moving through Parliament. (http://bit.ly/1sDhEEc)

** As North American and global crude oil prices hit the skids, falling this week to four-year lows, producers in northern Alberta are benefiting from strengthening prices for Western Canada Select heavy oil and a weaker Canadian dollar. (http://bit.ly/1wFh1QL)

** Doug Ford, who said good riddance to political life just a few months ago before he stepped into the mayor’s race for his brother, has his sights set on a new target – leader of Ontario’s Progressive Conservative Party.(http://bit.ly/1E0jB6h)

NATIONAL POST

** The new chief executive of Cliffs Natural Resources Inc doubts that Ontario’s “Ring of Fire” will be developed for decades to come, or that anyone will buy his company’s rich chromite assets in the region in the near future. (http://bit.ly/1wFhyCe)

** Canada’s threat assessment agency warned last year of the potential for a terrorist attack in Ottawa, calling the capital region “a rich environment” and noting that “active shooter” terror attacks had taken place in the United States and Europe. (http://bit.ly/1tgG7EQ)

** The soldier commanding Canadian CF-18 fighter jets and other aircraft deployed to the Middle East says these forces are “on target” to launch operations against Islamic State of Iraq & Al-Sham jihadists by Saturday. (http://bit.ly/139l90u)

 

China

CHINA SECURITIES JOURNAL

– Ni Hong, spokesperson from the Ministry of Housing and Urban-Rural Development of China said at a press conference on Tuesday that property market problems should be solved by market-based instruments.

– Li Daokui, a professor at Tsinghua University, said at an industry meeting that the third-quarter GDP was dragged down 0.3 percent by the property sector, according to the newspaper.

SECURITIES TIMES

– The State Council, China’s cabinet, said it would increase the scale of its science service sector to 8 trillion yuan ($1.31 trillion) by 2020, according to a guideline released on Tuesday.

CHINA DAILY

– A new regulation taking effect on Saturday that makes private clubs in public venues, like parks and historical buildings, forbidden zones to officials shows that the Communist Party leadership seems determined not to give in to corrupt and self-gratifying officials.

PEOPLE’S DAILY

– The vitality and authority of the law is in its implementation, an editorial said. Leading officials at all levels must not talk their way around the law nor use their power to suppress the law or exhibit favouritism, but instead they should lead the way in compliance with, and respect for, the law.

Britain

The Times

AGGRIEVED CUSTOMERS TURN UP THE HEAT ON RBS

Lawyers acting for businesses affected by Royal Bank of Scotland Group Plc’s turnaround division have demanded that the bank preserve “critical evidence” before a planned group legal action. Quinn Emanuel, an American law firm, has written to RBS highlighting concerns that a decision to close the global restructuring group could lead to key evidence being lost. (http://thetim.es/1wE9ik4)

TORY DONOR MICHAEL FARMER’S FUND IN COPPER ‘SQUEEZE’

A hedge fund run by a prominent Conservative donor is believed to control more than 80 percent of the copper in London Metal Exchange warehouses. Information at the LME, the world’s largest exchange for metals and whose prices are used as benchmarks in contracts around the world, showed that on Tuesday and Wednesday last week a single owner held between 80 and 90 percent of the copper in stock in its system. Red Kite Group, a hedge fund led by Michael Farmer, has been identified by brokers and traders as the dominant holder of copper. (http://thetim.es/1wEDVHL)

The Guardian

INTEREST RATES CAN STAY LOW FOR LONGER, SAYS BANK OF ENGLAND DEPUTY CHIEF The Bank of England can afford to keep interest rates low for longer than previously thought, Deputy Governor Jon Cunliffe has said, in comments that will reinforce the market view that rates will remain at 0.5 percent until at least the middle of next year. (http://bit.ly/1tfkBhY)

The Telegraph

VODAFONE ACCUSED OF ILLEGALLY WITHOLDING REPORT ON 6 BLN STG GERMAN TAKEOVER

Vodafone has been accused of illegally withholding a report on its 6 billion pounds ($9.68 billion) takeover of Kabel Deutschland as part of a “pattern of obstructing” efforts by shareholders to uncover the details of the deal. (http://bit.ly/1wEaBzj)

RETAILERS WANT CHANCELLOR TO EXTEND BUSINESS RATES DISCOUNTS

The retail industry is pressing the Chancellor to extend the 1.1 billion pound discount on business rates he announced in last year’s Autumn Statement. Business rates are due to rise by another 2.3 percent next April, an increase set by the rate of RPI inflation in September, but the British Retail Consortium want George Osborne to cap this increase at 2 percent. (http://bit.ly/1sBGNPH)

LACK OF WIND OR NUCLEAR PROBLEMS ‘COULD WIPE OUT BRITAIN’S SPARE POWER CAPACITY’

A cold and windless day could result in households’ lights being dimmed this winter, despite new emergency measures to prevent blackouts, experts have warned. Britain’s spare capacity, the safety buffer between electricity supplies and peak demand,has fallen to just 4 percent, the lowest level in seven years, following a series of power plant fires and closures, analysis from National Grid revealed. (http://bit.ly/1wADJbN)

LABOUR STEPS UP RAIL RE-NATIONALISATION CAMPAIGN

Labour will on Wednesday call for a change to the law that could lead to the re-nationalisation of Britain’s railways. Andy Sawford, member of parliament for Corby and East Northamptonshire, will propose a bill that would allow a train operator owned by the British taxpayer to compete against private companies for lucrative contracts to run rail lines. (http://bit.ly/1wEHayX)

Sky News

RYANAIR FACES 6.5 MLN STG FRENCH LABOUR LAW PENALTY

Ryanair Holdings Plc is facing a 6.5 million pound penalty after losing an appeal against a decision that it broke French labour laws. The no-frills carrier was found guilty of paying workers under Irish contracts to save money on payroll and other taxes. (http://bit.ly/1tCfsC1)

The Independent

LIFE AFTER LIBOR: BANKERS TO FACE PERSONAL FINES FOR RIGGING PRICES

Banks could face a significant new regulatory crackdown on their wholesale market activities as the financial authorities seek to prevent a repeat of the scandals that have destroyed the reputation of the sector in recent years. The Bank of England, in conjunction with the Financial Conduct Authority and the Treasury, yesterday published a wide-ranging consultation document which holds out the possibility of a radical tightening of the supervisory regime for financial institutions that trade in the foreign exchange, interest rate derivatives, commodities and also bond and equity markets. (http://ind.pn/1wEbec6)

MPS DEMAND SCRUTINY OF MINING FIRMS’ ETHICS

The Government must take action to prevent British mining companies avoiding tax in some of the poorest parts of the world where they operate, MPs demanded on Tuesday. Miners have been repeatedly accused of using sophisticated networks of anonymous shell companies and bribery of local officials to avoid paying their fair share of local taxes in return for the minerals and oil they remove from the land. (http://ind.pn/ZX9S1b)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
FOMC meeting announcement and funds rate at 14:00

ANALYST RESEARCH

Upgrades

Abbott (ABT) upgraded to Buy from Hold at Deutsche Bank
Ambev (ABEV) upgraded to Buy from Neutral at Goldman
Amgen (AMGN) upgraded to Buy from Neutral at Nomura
C.H. Robinson (CHRW) upgraded to Buy from Neutral at BofA/Merrill
Hannon Armstrong (HASI) upgraded to Buy from Neutral at BofA/Merrill
Midway Gold (MDW) upgraded to Speculative Buy from Hold at Canaccord
PG&E (PCG) upgraded to Buy from Hold at Deutsche Bank
PG&E (PCG) upgraded to Outperform from Market Perform at Wells Fargo

Downgrades

AmTrust Financial (AFSI) downgraded to Neutral from Buy at Compass Point
Artisan Partners (APAM) downgraded to Underperform from Neutral at BofA/Merrill
Aspen Technology (AZPN) downgraded to Hold from Buy at Canaccord
Cliffs Natural (CLF) downgraded to Sell from Hold at Brean Capital
DTE Energy (DTE) downgraded to Hold from Buy at ISI Group
Emerson (EMR) downgraded to Market Perform from Outperform at Wells Fargo
G&K Services (GK) downgraded to Hold from Buy at KeyBanc
InvenSense (INVN) downgraded to Neutral from Overweight at Piper Jaffray
InvenSense (INVN) downgraded to Sector Perform from Outperform at Pacific Crest
MSC Industrial (MSM) downgraded to Equal Weight from Overweight at Stephens
MSC Industrial (MSM) downgraded to Sell from Hold at Deutsche Bank
Michael Kors (KORS) downgraded to Neutral from Buy at Janney Capital
Nippon Telegraph (NTT) downgraded to Neutral from Buy at Goldman
Parker-Hannifin (PH) downgraded to Market Perform from Outperform at BMO Capital
PartnerRe (PRE) downgraded to Neutral from Buy at BofA/Merrill
Saia, Inc. (SAIA) downgraded to Market Perform from Outperform at Cowen
Sanofi (SNY) downgraded to Equal Weight from Overweight at Barclays
Sanofi (SNY) downgraded to Hold from Buy at Deutsche Bank
Sanofi (SNY) downgraded to Hold from Buy at Jefferies
Sanofi (SNY) downgraded to Neutral from Buy at BofA/Merrill
South State (SSB) downgraded to Outperform from Strong Buy at Raymond James
Synchronoss (SNCR) downgraded to Outperform from Strong Buy at Raymond James
Whirlpool (WHR) downgraded to Neutral from Buy at Sterne Agee

Initiations

Alibaba (BABA) initiated with a Buy at Citigroup
Alibaba (BABA) initiated with a Buy at Deutsche Bank
Alibaba (BABA) initiated with a Buy at Evercore
Alibaba (BABA) initiated with a Buy at Nomura
Alibaba (BABA) initiated with a Buy at SunTrust
Alibaba (BABA) initiated with a Buy at Topeka
Alibaba (BABA) initiated with a Neutral at Goldman
Alibaba (BABA) initiated with an Outperform at Pacific Crest
Alibaba (BABA) initiated with an Outperform at RBC Capital
Alibaba (BABA) initiated with an Outperform at Raymond James
Alibaba (BABA) initiated with an Outperform at Wells Fargo
Alibaba (BABA) initiated with an Overweight at JPMorgan
Alibaba (BABA) initiated with an Overweight at Morgan Stanley
Cedar Realty Trust (CDR) initiated with a Buy at MLV & Co.
ClubCorp (MYCC) initiated with a Buy at CRT Capital
Cogent (CCOI) initiated with a Buy at BTIG
Insys Therapeutics (INSY) initiated with an Overweight at Piper Jaffray
Neovasc (NVCN) initiated with an Outperform at JMP Securities
ValueVision (VVTV) initiated with a Buy at Topeka
Yahoo (YHOO) resumed with a Buy, $63 price target at Citigroup
Zayo Group (ZAYO) initiated with a Buy at BTIG

COMPANY NEWS

Facebook (FB) sees Q4 revenue growth 40%-47% YoY
Deutsche Bank (DB) confirms Marcus Schenck as deputy CFO, said in talks with authorities over LIBOR
SPX Corp. (SPW) announced plan for tax-free spin-off of Flow business
Sanofi (SNY) board removed Christopher Viehbacher as CEO
T-Mobile (TMUS) CEO said growth continued in October
Western Gas Partners (WES) to acquire Nuevo Midstream for $1.5B

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Facebook (FB), Wi-LAN (WILN), SP Plus Corp. (SP), Prosperity Bancshares (PB), Provident Financial (PROV), EverBank (EVER), TE Connectivity (TEL), WellPoint (WLP), Nova Measuring (NVMI), STMicroelectronics (STM), TrueCar (TRUE), SolarWinds (SWI), Pulaski Financial (PULB), First NBC Bank (NBCB), UMB Financial (UMBF), Newfield Exploration (NFX), Western Gas Partners (WES), American Financial Group (AFG), U.S. Steel (X), First Community (FCBC), USANA (USNA), Meridian Interstate Bancorp (EBSB), iCAD (ICAD), National Interstate (NATL), Trustmark (TRMK), Watts Water (WTS), HCC Insurance (HCC), Cabot (CBT), Quaker Chemical (KWR), Inphi (IPHI), Panera Bread (PNRA), Green Plains (GPRE), Dun & Bradstreet (DNB), Marriott (MAR), Nanometrics (NANO), McKesson (MCK), CNO Financial (CNO), Trinity Industries (TRN), FARO Technologies (FARO), Cascade Microtech (CSCD), C.H. Robinson (CHRW), Corporate Executive Board (CEB), Western Digital (WDC), Pericom (PSEM), Wynn Resorts (WYNN), Owens-Illinois (OI), Kona Grill (KONA), ZELTIQ (ZLTQ), Edison International (EIX), Vertex (VRTX), Aspen Technology (AZPN), Cray (CRAY), Big 5 Sporting (BGFV), Cincinnati Financial (CINF), Harmonic (HLIT), Xoom (XOOM), Engility Holdings (EGL), Mercury Systems (mrcy), Kforce (KFRC), Aflac (AFL), TriQuint (TQNT), Dyax (DYAX), Fiserv (FISV), Total System (TSS), Rogers Corp (ROG), CAI International (CAP), Plantronics (PLT), Electronic Arts (EA), Ultimate Software (ULTI)

Companies that missed consensus earnings expectations include:

Applied Industrial (AIT), Universal American (UAM), Praxair (PX), ClickSoftware (cksw), Ballard Power (BLDP), SM Energy (SM), Myers Industries (mye), Black Box (BBOX), KEYW (KEYW), Wabash (WNC), Chemtura  (CHMT), Willis Group (WSH), Arthur J. Gallagher (AJG), EXCO Resources (XCO), Internap (INAP), Applied Micro Circuits (AMCC), Dynamic Materials (BOOM), Cascade Bancorp (CACB), Huron (HURN), Anadarko (APC), ARI Network (ARIS), Gilead (GILD), Epiq Systems (EPIQ), PriceSmart (PSMT)

Companies that matched consensus earnings expectations include:

Littelfuse (LFUS), First Bank (FRBA), Timmins Gold (TGD), Republic Airways (RJET), Mueller Water (MWA), Gladstone Investment (GAIN), Eagle Materials (EXP), GFI Group (GFIG), Cleco (CNL), MidSouth Bancorp (MSL), FEI Company (FEIC), Verisk Analytics (VRSK), LeMaitre (LMAT), Blackstone Mortgage (BXMT), Extreme Networks (EXTR), Express Scripts (ESRX), AMC Entertainment (AMC)

NEWSPAPERS/WEBSITES
Groupon’s (GRPN) head of product exits after less than two months, Re/code reports
The retail group behind Walmart (WMT), Best Buy (BBY) and Gap (GPS) threatened its retailers with steep fines if they introduce Apple Pay (AAPL), NY Times reports
Lloyds Banking (LYG) looks to resume dividend payouts in 2015, Daily Mail reports
Trinity Industries (TRIN) ordered to hold mediation talks, NY Times says
BAE (BAESY) says U.S. Air Force stopped South Korea F-16 improvements, Reuters reports

SYNDICATE
AtheroNova (AHRO) 4M share Secondary priced at 75c
eGain (EGAN) files to sell 1.21M shares for holders
Regulus Therapeutics (RGLS) 5.294M share Secondary priced at $17.00
RiceBran (RIBT) files to sell 2.36M shares for holders
Shell Midstream Partners (SHLX) 40M share IPO priced at $23.00
Sientra (SIEN) 5M share IPO priced at $15.00
Sun Bancorp (SNBC) files to sell 1.13M shares for selling stockholders
TrueCar (TRUE) files to sell 1M shares for holders
Urstadt Biddle Properties (UBA) files to sell 2.5M shares of common stock
Vanda (VNDA) files to sell common stock

via Zero Hedge http://ift.tt/1sDVgKY Tyler Durden

Futures are largely unchanged ahead of today’s, if not the year’s, key event: the FOMC meeting in which Janet Yellen will announce the end of QE3, and with that the market will finally realize that the training wheels from the past 6 years are off, if only until the next market tantrum, or European/Chinese gray swan, pushes the Fed right back in.

As Deutsche Bank observes, the Fed has been wanting to hike rates on a rolling 6-12 month horizon from each recent meeting but never imminently which always makes the actual decision subject to events some time ahead. They have seen a shock in the last few weeks and a downgrade to global growth prospects so will for now likely err on the side of being more dovish than in the last couple of meetings. They probably won’t want to notably reverse the recent market repricing of the Fed Funds contract for now even if they disagree with it. However any future improvements in the global picture will likely lead them to step-up the rate rising rhetoric again and for us this will again lead to issues for financial markets addicted to liquidity. And so the loop will go on for some time yet and will likely trap the Fed into being more dovish than they would ideally want to be in 2015.

But for now, expect a creeping hawkishness to finally be realized by a broken market that has levitated on nothing but implicit and explicit Fed support for the past 6 years. In the meantime, for those curious how to trade today’s FOMC, DB’s Alan Ruskin notes that over the last two years the S&P 500 has on average been 0.35% down on the day of the statement when there is no press conference. When there is one the index is up 0.87%, perhaps reflecting the dovish nature of Bernanke and Yellen relative to the committee. There is also more volatility across different asset classes on press conference days. Alan speculates that this is perhaps due to the market’s interpretation of the dots that appear at press conference meetings.

So will yesterday’s epic short squeeze be undone? Tune in in just over 7 hours to find out.

In the meantime, despite yesterday’s amazing Facebook flameout which rivaled the Antares rocket explosion, yet another rollercoaster night of Yen-carry levitation has assured that all initial losses in the Emini are made up futures are flat to start the day.

Turning to Asia markets are generally stronger across the board following the positive lead from the US. Bourses in Japan, Hong Kong, China and Korea +1.6%, 1.4%, +1.2% and +1.7% respectively as we type. Focusing on Japan, the September industrial production print surprised to the upside (2.7% mom v 2.2% exp) but all eyes will be on the conclusion of the Bank of Japan policy meeting on Friday for whether a refresh of policy is attempted or hinted at. Asian credit markets are also on a firmer footing overnight with IG spreads around 1-2bp tighter across benchmark names while new issues are also being well absorbed.

Looking at the rest of the day ahead, we’ve got a fairly quiet calendar in the US with just the mortgage application print to look forward to. in Europe the notable readings include the September retail sales for Spain and consumer confidence in France. All eyes will be on the FOMC statement today though.

Bulletin Headline Summary from Bloomberg and RanSquawk

• Treasuries gain as market awaits FOMC policy statement at 2pm in Washington DC; Fed expected to keep “considerable time” language, end QE.
• Fed won’t provide new economic projections, Yellen not scheduled for post-meeting presser; click here for Decision Day Guide
• The end the Fed’s third round of bond purchases is proving to be a non-event for MBS, partly because even though the central bank won’t be adding more of the bonds to its balance sheet, it will still be buying enough to prevent holdings from shrinking
• Bank of England Deputy Governor Jon Cunliffe said slowing inflation and a bleaker outlook for the economy justify keeping emergency stimulus for longer
• EU said no nation has broken budget rules by a big enough margin to warrant immediate action, a move that gives France and Italy more time to win approval for their draft spending plans
• Pimco, seeking to stem redemptions after its co-founder Bill Gross left unexpectedly, was dropped as manager of a $6.16b strategy offered by a unit of Prudential Financial Inc
• Iraqi Kurdish fighters armed with mortars and Katyusha rocket launchers arrived in Turkey today on their way to the Syrian town of Kobani, where they’ll join the fight against Islamic State, according to live footage on NTV television
• The U.S. vowed to continue its commercial space launch program just hours after a rocket carrying supplies to the International Space Station exploded over a Virginia launch pad
• North Korean leader Kim Jong Un is seeking to erase the remaining influence of his dead uncle, executing about 10 senior Workers’ Party officials on charges from graft to watching South Korean soap operas, according to an aide to a South Korean lawmaker
• Sovereign yields mostly lower. Asian and European stocks gain; U.S. equity-index futures mixed. Brent crude and copper gain, gold little changed

US Event Calendar

• 7:00am: MBA Mortgage Applications, Oct. 24 (prior 11.6%) Central Banks
• 2:00pm: Fed seen maintaining overnight bank lending rate of 0%-0.25%
• Fed seen ending QE program
• 11:30am: U.S. to sell $15b 2Y FRN
• 1:00pm: U.S. to sell $35b 5Y notes

DB’s Jim Reid Conludes the Overnight Recap

Two weeks ago today’s FOMC conclusion was looking set to be a pretty exciting event. However the fact that the S&P 500 has rallied 9.03% off the intra-day lows that week to now only be around 1.3% off the all time highs probably means it will be a much more predictable affair. However it’s likely that recent events will have had an impact in our opinion.

Our take is that the Fed has been wanting to hike rates on a rolling 6-12 month horizon from each recent meeting but never imminently which always makes the actual decision subject to events some time ahead. They have seen a shock in the last few weeks and a downgrade to global growth prospects so will for now likely err on the side of being more dovish than in the last couple of meetings. They probably won’t want to notably reverse the recent market repricing of the Fed Funds contract for now even if they disagree with it. However any future improvements in the global picture will likely lead them to step-up the rate rising rhetoric again and for us this will again lead to issues for financial markets addicted to liquidity. And so the loop will go on for some time yet and will likely trap the Fed into being more dovish than they would ideally want to be in 2015.

On the specifics for today, DB’s Peter Hooper expects the Committee to maintain a modestly dovish stance with relatively few changes other than those necessitated by the ending of QE. A big question mark will be as to whether they explicitly mention the recent volatility or tighter financial conditions similar to what they did in September last year. Peter doesn’t think so as back then Treasury yields had climbed over 100bps and the labor market had showed signs of slowing which hasn’t happened this time round. Peter thinks they are concerned about there being an ‘investor put’ if they make too much of the volatility of two weeks ago. For us though its easy for them to act like this now that markets have recovered but it might be a little circular. The rebound started with Bullard’s about turn suggesting that QE might be extended and also as markets started to price out 2015’s interest rate rises. The rally soon got extra legs when speculation arose that the ECB might be considering buying corporate bonds. So if the Fed use this rebound to be too hawkish then it may backfire so we’d expect some compromise probably in the form of keeping considerable time in and emphasising the global risks to growth and inflation.

DB’s Alan Ruskin makes some interesting observations about the FOMC. Firstly he says that over the last two years the S&P 500 has on average been 0.35% down on the day of the statement when there is no press conference. When there is one the index is up 0.87%, perhaps reflecting the dovish nature of Bernanke and Yellen relative to the committee. There is also more volatility across different asset classes on press conference days. Alan speculates that this is perhaps due to the market’s interpretation of the dots that appear at press conference meetings.

Ahead of all this markets shrugged off some mixed data in the US yesterday to rally strongly. The good news came from the Conference Board Consumer Confidence report that topped estimates (94.5 v 87.0) to print at a seven year high. The Richmond Fed manufacturing survey also came in stronger than expected (20 v 11). The bad news though came from September’s durable goods data. The volatile headline series fell unexpectedly (-1.3% mom v +0.5% mom expected) and the core capex reading (ex. aircraft and defense) also weaker. A weak core capex adds downside risk to the Q3 GDP numbers as our US colleagues pointed out earlier this week. The other notable data release in the US yesterday was the S&P/Case Shiller house price index which came in slightly below expectations (+5.57% yoy v +5.70% expected).

With the S&P 500 (+1.19%) and the Russell (+2.86%) rallying, US Treasuries were unsurprisingly weaker. 10yr yields closed +3bp to 2.29%. Commodities were also stronger with WTI, Brent, and Copper up +0.5%, +0.2% and +0.8% on the day.

Turning to Asia markets are generally stronger across the board following the positive lead from the US. Bourses in Japan, Hong Kong, China and Korea +1.6%, 1.4%, +1.2% and +1.7% respectively as we type. Focusing on Japan, the September industrial production print surprised to the upside (2.7% mom v 2.2% exp) but all eyes will be on the conclusion of the Bank of Japan policy meeting on Friday for whether a refresh of policy is attempted or hinted at. Asian credit markets are also on a firmer footing overnight with IG spreads around 1-2bp tighter across benchmark names while new issues are also being well absorbed.

Looking at the rest of the day ahead, we’ve got a fairly quiet calendar in the US with just the mortgage application print to look forward to. Over on this side of the Atlantic, the notable readings include the September retail sales for Spain and consumer confidence in France. All eyes will be on the FOMC statement today though.

via Zero Hedge http://ift.tt/ZZiN2k Tyler Durden