Tag: finance

 

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… visually:

And compare the “New Normal” to the “Old Normal”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/bm9Qpopipvs/story01.htm Tyler Durden

If anyone needed confirmation that yesterday’s soaring Chicago PMI data (to the highest since March 2011) was a typical “Made In Chicago” fabrication, then look no further than today’s final MarkIt US Manufacturing PMI, which instead of soaring as its Chicago counterpart, tumbled from 52.8 to 51.8, the lowest print since October of 2011 as the report indicated “only modest improvement in business conditions”, “output growth weakest for over four years”, and “new orders increasing at the slowest pace since April.” Then again, in the New Normal world in which data reports separated by 24 hours are expected to indicate diametrically opposite things, this is quite normal, and if nothing else, absolutely bullish. Why? Who knows, but cratering Manufacturing Output is surely beneficial to the stock market, if not the actual economy.

Broken down by Components:

From the report:

Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said: “While better than the earlier flash reading, the final PMI data indicate that the U.S. manufacturing sector ground to a near standstill in October. “Encouragingly, it looks like companies are expecting the slowdown to be temporary, most likely linked to the government shutdown, as indicated by an upturn in the rate of job creation.

 

“However, even the faster growth of employment remains only modest, consistent with barely any increase in official data on manufacturing payrolls. In addition, companies allowed their input inventories to fall at the fastest rate since 2009, highlighting widespread uncertainty towards the near-term outlook.

 

“The mixed signals from the survey therefore add to the likelihood that policymakers will need to wait for some time, perhaps a few months, until the picture clears  as to the true underlying health of the U.S. economy and its ability to create jobs.”

We get it: Chicago is good cop, MarkIt is bad cop whose purpose is to justify the taper delay.

Finally, spot the absolute contradiction between the MarkIt data, and the Chicago PMI euphoria:

Manufacturers linked the slight increase in output primarily to a weaker rise in new orders. Total incoming new work rose modestly and at the slowest pace in six months in October. Panellists commented on greater client demand in both the domestic and international markets. Nevertheless, a marginal increase in new export orders merely reversed a decline in September. Reflective of the weak trend for new orders, the quantity of inputs bought by manufacturing companies fell for the first time in almost three years in October. This was accompanied by the sharpest depletion of stocks of purchases since September 2009. Concurrently, suppliers’ delivery times continued to lengthen, with the latest increase in lead times the greatest for a year-and-a-half.

That’s ok: lies, like everything else, are bullish. Which is why we can only hope that today’s Manufacturing ISM due out shortly, prints in the triple digits. A lie of that magnitude will surely send stocks to turbo all time highs.

Source: Markit

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/oNoCWk0K3s8/story01.htm Tyler Durden

If anyone needed confirmation that yesterday’s soaring Chicago PMI data (to the highest since March 2011) was a typical “Made In Chicago” fabrication, then look no further than today’s final MarkIt US Manufacturing PMI, which instead of soaring as its Chicago counterpart, tumbled from 52.8 to 51.8, the lowest print since October of 2011 as the report indicated “only modest improvement in business conditions”, “output growth weakest for over four years”, and “new orders increasing at the slowest pace since April.” Then again, in the New Normal world in which data reports separated by 24 hours are expected to indicate diametrically opposite things, this is quite normal, and if nothing else, absolutely bullish. Why? Who knows, but cratering Manufacturing Output is surely beneficial to the stock market, if not the actual economy.

Broken down by Components:

From the report:

Commenting on the final PMI data, Chris Williamson, Chief Economist at Markit said: “While better than the earlier flash reading, the final PMI data indicate that the U.S. manufacturing sector ground to a near standstill in October. “Encouragingly, it looks like companies are expecting the slowdown to be temporary, most likely linked to the government shutdown, as indicated by an upturn in the rate of job creation.

 

“However, even the faster growth of employment remains only modest, consistent with barely any increase in official data on manufacturing payrolls. In addition, companies allowed their input inventories to fall at the fastest rate since 2009, highlighting widespread uncertainty towards the near-term outlook.

 

“The mixed signals from the survey therefore add to the likelihood that policymakers will need to wait for some time, perhaps a few months, until the picture clears  as to the true underlying health of the U.S. economy and its ability to create jobs.”

We get it: Chicago is good cop, MarkIt is bad cop whose purpose is to justify the taper delay.

Finally, spot the absolute contradiction between the MarkIt data, and the Chicago PMI euphoria:

Manufacturers linked the slight increase in output primarily to a weaker rise in new orders. Total incoming new work rose modestly and at the slowest pace in six months in October. Panellists commented on greater client demand in both the domestic and international markets. Nevertheless, a marginal increase in new export orders merely reversed a decline in September. Reflective of the weak trend for new orders, the quantity of inputs bought by manufacturing companies fell for the first time in almost three years in October. This was accompanied by the sharpest depletion of stocks of purchases since September 2009. Concurrently, suppliers’ delivery times continued to lengthen, with the latest increase in lead times the greatest for a year-and-a-half.

That’s ok: lies, like everything else, are bullish. Which is why we can only hope that today’s Manufacturing ISM due out shortly, prints in the triple digits. A lie of that magnitude will surely send stocks to turbo all time highs.

Source: Markit

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/oNoCWk0K3s8/story01.htm Tyler Durden

Three weeks ago, during the US government shutdown fiasco, and when there was legitimate concern if the US would begin prioritizing debt payments upon running out of cash, China’s official and most widely read press agency, Xinhua, slammed the US in “U.S. fiscal failure warrants a de-Americanized world” in which it called for a new world order, and an end to the reserve currency. Now, it is time for the follow up, with China kicking “America the eavesdropper” precisely when it is down.

From Xinhua:

The trust fiasco of America the Eavesdropper

The latest outburst of outcries and outrage across the world has laid bare that almighty America has at least one other anomalous addiction besides borrowing —  bugging.

The U.S. debt drama features a polarized and paralyzed Washington at the helm of the world’s largest economy. As nerve-racking as it is, such irresponsible behavior is a recurrent headache economic policymakers worldwide can bear with.

Yet the sole superpower’s spying saga is spicy on a heart-attack scale. It is particularly hurtful to those supposed to trust America the most — its allies.

The recent cascade of eye-popping disclosures depicts a hyperactive Uncle Sam prying into others’ secrets and even eavesdropping on dozens of heads of state.

It has been revealed that the U.S. National Security Agency (NSA) monitored the phone conservations of at least 35 world leaders in 2006. And that is just a tip of the iceberg of the spook organization’s sprawling spying scheme.

Leaked documents show that the NSA has not only gained front-door access to countless Google and Yahoo user accounts through a court-approved process, but secretly broken into the main communications links connecting the two Internet giants’ respective data centers around the world to siphon information at will.

What is counterintuitive in the NSA forage is its nonsensical approach: relentless and indiscriminate like a vacuum cleaner. It just bugs everybody, even its closest allies in Europe.

In the most shocking revelation so far, Uncle Sam turned Madame Europa, German Chancellor Angela Merkel, into, as Deutsche Presse-Agentur puts it, “a dupe whose mobile phone conversations were for more than a decade a source of information for U.S. authorities.”

Merkel and her peers in the U.S. alliance have every reason to feel insulted and betrayed. At the very least, they deserve the kind of respect and trust that underpins the practice that air travelers do not have to fly naked.

The motivation behind America’s extensive eavesdropping is unclear. The explanations the White House has been forced to offer are far from explanatory, and the diorthosis President Barack Obama has promised seems all but skin-deep.

The half-heartedness stands in stark contrast with the pushfulness with which America accuses China of cyber-espionage, and the evasiveness marks a stunning retreat from the straightforwardness with which Washington reproves Beijing for alleged monetary manipulation.

The apparent application of a double standard only reinforces the image of a Janus-faced America. In the sunlight, it preaches; in the dark, it pries. On the offensive, it orates; on the defensive, it equivocates.

The wayward practice has now backfired, and the damage is increasing. Just as the borrowing addiction is shedding America’s economic credibility, the bugging obsession is draining its political and security trustworthiness — only with potentially more destructive consequences.

Trust is the first and foremost casualty. Common sense dictates that trust is a two-way street: One has to trust in order to be trusted. It is particularly true in friendships and alliances. America obviously failed to follow the simple rule.

If Washington did not knit the worldwide wiretapping web just because it could, then its pillage for information unveils an Uncle Sam too deeply entrenched in suspicion and isolation to treat anyone as a real friend.

Ironically enough, the bugging undermines the very thing it is supposed to protect — national security. As America pins its security on alliances, the tapping tale would sour its relationship with allies — and thus erode its security bedrock — more than any terrorist would be capable of.

The harm could go far beyond. For example, mutual trust is vital to China and America’s endeavor to build a new type of major-country relations. Washington’s lack of trust and hemorrhage of trustworthiness would only make the effort more difficult.

Needless to say, trust entails trade-offs, and the quid pro quos are not riskless. But the United States should be wise enough to know that to trust nobody is no less dangerous than to trust anybody.

As indicated in the still simmering spying scandal, the potential cost of excessive bugging could be way higher. Uncle Sam needs to remember what happened to the tailor in the Lady Godiva story — Peeping Tom was struck blind.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0-RaP5yWdRc/story01.htm Tyler Durden

Three weeks ago, during the US government shutdown fiasco, and when there was legitimate concern if the US would begin prioritizing debt payments upon running out of cash, China’s official and most widely read press agency, Xinhua, slammed the US in “U.S. fiscal failure warrants a de-Americanized world” in which it called for a new world order, and an end to the reserve currency. Now, it is time for the follow up, with China kicking “America the eavesdropper” precisely when it is down.

From Xinhua:

The trust fiasco of America the Eavesdropper

The latest outburst of outcries and outrage across the world has laid bare that almighty America has at least one other anomalous addiction besides borrowing —  bugging.

The U.S. debt drama features a polarized and paralyzed Washington at the helm of the world’s largest economy. As nerve-racking as it is, such irresponsible behavior is a recurrent headache economic policymakers worldwide can bear with.

Yet the sole superpower’s spying saga is spicy on a heart-attack scale. It is particularly hurtful to those supposed to trust America the most — its allies.

The recent cascade of eye-popping disclosures depicts a hyperactive Uncle Sam prying into others’ secrets and even eavesdropping on dozens of heads of state.

It has been revealed that the U.S. National Security Agency (NSA) monitored the phone conservations of at least 35 world leaders in 2006. And that is just a tip of the iceberg of the spook organization’s sprawling spying scheme.

Leaked documents show that the NSA has not only gained front-door access to countless Google and Yahoo user accounts through a court-approved process, but secretly broken into the main communications links connecting the two Internet giants’ respective data centers around the world to siphon information at will.

What is counterintuitive in the NSA forage is its nonsensical approach: relentless and indiscriminate like a vacuum cleaner. It just bugs everybody, even its closest allies in Europe.

In the most shocking revelation so far, Uncle Sam turned Madame Europa, German Chancellor Angela Merkel, into, as Deutsche Presse-Agentur puts it, “a dupe whose mobile phone conversations were for more than a decade a source of information for U.S. authorities.”

Merkel and her peers in the U.S. alliance have every reason to feel insulted and betrayed. At the very least, they deserve the kind of respect and trust that underpins the practice that air travelers do not have to fly naked.

The motivation behind America’s extensive eavesdropping is unclear. The explanations the White House has been forced to offer are far from explanatory, and the diorthosis President Barack Obama has promised seems all but skin-deep.

The half-heartedness stands in stark contrast with the pushfulness with which America accuses China of cyber-espionage, and the evasiveness marks a stunning retreat from the straightforwardness with which Washington reproves Beijing for alleged monetary manipulation.

The apparent application of a double standard only reinforces the image of a Janus-faced America. In the sunlight, it preaches; in the dark, it pries. On the offensive, it orates; on the defensive, it equivocates.

The wayward practice has now backfired, and the damage is increasing. Just as the borrowing addiction is shedding America’s economic credibility, the bugging obsession is draining its political and security trustworthiness — only with potentially more destructive consequences.

Trust is the first and foremost casualty. Common sense dictates that trust is a two-way street: One has to trust in order to be trusted. It is particularly true in friendships and alliances. America obviously failed to follow the simple rule.

If Washington did not knit the worldwide wiretapping web just because it could, then its pillage for information unveils an Uncle Sam too deeply entrenched in suspicion and isolation to treat anyone as a real friend.

Ironically enough, the bugging undermines the very thing it is supposed to protect — national security. As America pins its security on alliances, the tapping tale would sour its relationship with allies — and thus erode its security bedrock — more than any terrorist would be capable of.

The harm could go far beyond. For example, mutual trust is vital to China and America’s endeavor to build a new type of major-country relations. Washington’s lack of trust and hemorrhage of trustworthiness would only make the effort more difficult.

Needless to say, trust entails trade-offs, and the quid pro quos are not riskless. But the United States should be wise enough to know that to trust nobody is no less dangerous than to trust anybody.

As indicated in the still simmering spying scandal, the potential cost of excessive bugging could be way higher. Uncle Sam needs to remember what happened to the tailor in the Lady Godiva story — Peeping Tom was struck blind.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0-RaP5yWdRc/story01.htm Tyler Durden

Back in January,  we highlighted the main problem plaguing the Greek financial system, and why a bailout (at least third, but likely fourth and fifth, and so on) is inevitable because “the amount of non-performing loans has exploded by a laughable amount, rising some 50% from December 2011, when it was “only” 16% and stood at a gargantuan 24% last month (indicatively, in the US this would mean that some $1.7 trillion in loans was nonperforming). And therein lies the rub, because as Kathimerini prudently notes, the “bad loans come to a considerable 55 billion euros. This means that the sum of NPLs already exceeds the total funds set aside for the recapitalization of the local credit system, which amounts to €50 billion.” Yesterday, Kathimerini provided a much needed update on the amount of NPLs in Greece: according to the latest PwC report, NPLs have risen by another €10 billion in under one year, and now amount to €65 billion, which is now larger than the recapitalization funding and amounts to more than double the €30 billion capital base of local banks!

From Kathimerini:

Nonperforming loans (NPLs) have grown this year to more than twice the size of local banks’ capital, as, according to a report by PricewaterhouseCoopers (PwC), they now amount to 65 billion euros, while the capital base of domestic lenders stands at 30 billion euros.

 

PwC added that the share of bad loans has exceeded 30 percent of all loans issued, up from 25 percent at end-2012 and 18 percent at end-2011.

 

However, Greek banks are very reluctant to sell their bad assets due to the very low prices that investors are offering. Bank officials have told Kathimerini that the offers they have been quoted would make the sale of bad loan portfolios practically pointless.

And since the amount of NPLs is double the equity buffer designed to soak up precisely the kinds of losses that appear once NPLs are priced to reality, it means that nearly 4 years after its first bailout, the Greek banking system is still as broke as ever. In fact, it is now doubly broke and rising at about €15 billion per year.

What this means is simple: just like in Cyprus, the day of inevitable “template” reckoning, in which deposits are “converted” into capital is fast approaching.

Greek depositors: you have been warned. As for the local stock market, well… New Normal and such.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/4_XgCZIXcy4/story01.htm Tyler Durden

It is now clear why according to the Obama administration there were no glitches plaguing the Healthcare.gov website administering Obamacare: because a whopping six people managed to sign up on the first day it was launched. By the end of the second day: 248 happy participants in a socialized healthcare ponzi scheme. It is also clear why there was nobody happier than the president when the republican party decided to shut down government on the same day as Obamacare was rolled out: because if public attention had focused on the absolute and now confirmed, disaster that the healthcare law’s rollout had been, then everyone, not just the Tea Party, would be demanding a substantial delay in Obamacare.

The enrollment data comes even after the Obama administration has said it cannot provide enrollment figures from HealthCare.gov because it doesn’t have the numbers. “We do not have any reliable data around enrollment, which is why we haven’t given it to date,” Health and Human Services Secretary Kathleen Sebelius told lawmakers on Wednesday. Turns out she did – as Reuters and ABC report, the documents, which are labeled “war room” notes and appear to be summaries of issues with the problematic website beginning on October 2, indicate a mere six enrollments had occurred by that morning – the day after the website was launched and almost immediately crashed.

So how is Obamacare like Facebook, or any other dot com special du jour – only the pageviews matter. Actual user conversions… well, that’s another matter entirely.

To date, Obama administration officials have refused to publicly provide any estimate of successful enrollments, though they have said the site received 4.7 million unique visitors on its first day and has now generated more than 700,000 applications.

 

An internal administration memo obtained by The Associated Press and confirmed by ABC News revealed that the administration projected half a million successful sign-ups by Oct. 31.

Good luck with that. And we mean it: after all like any authentic Ponzi scheme, Obamacare works only if wave after wave of signs up “foot” the costs for everyone who doesn’t. As such, unless massive amounts of people enroll, the program is assued to be a failure. Pardon: even more of a failure than it is now.

Naturally, the government was quick to downplay the figures:

HHS spokeswoman Joanne Peters stressed tonight that the enrollment figures presented in the “war room notes” are unofficial figures. The agency has said it intends to release its first official report on enrollments by mid-November.

 

“We will release enrollment statistics on a monthly basis after coordinating information from different sources such as paper, on-line, and call centers, verifying with insurers, and collecting data from states,” she said.

It gets better. Because after finally admitting there is nobody quite capable of messing something, anything, quite like the government, the administration finally agreed to get private sector help. In this case Oracel and… Google – the same firm that it was revealed earlier this week was furious at the government’s spying agency for illegally tapping its confidential user data streams.

The Obama administration said it has brought in experts from top technology companies including Google Inc and Oracle Corp to fix the HealthCare.gov website, as Republicans press for details about the botched October 1 launch.

 

Health and Human Services said it had added dozens of technology experts and engineers to its round-the-clock effort to fix the technical glitches on the site that is key to the implementation of Obama’s healthcare restructuring law.

 

Giving some of the first details of who might be leading the tech fix, HHS officials identified two experts by name: Michael Dickerson, a website reliability engineer on leave from Google, and Greg Gershman, a Baltimore-based innovation director with the firm Mobomo and who previously worked for the White House and the General Services Administration.

 

“We are doing everything we can to assist those contractors to make HealthCare.gov a highly performant, highly reliable, highly secure system,” Oracle CEO Larry Ellison told shareholders at the company’s annual meeting on Thursday in Redwood City, California. There was no comment from Google.

No need for a comment: the NSA already knew what they would say.

Finally, get your popcron because Darrell Issa is preparing to make a super spectacle out of the Obamacare flub, after yesterday he subpoenaed Sebelius, who previously took full responsibility for the “debacle”, for more information.

Issa said he had subpoenaed Sebelius for more information on the website’s technical problems, including how it was tested, and enrollment data. The subpoena requires the documents to be produced by November 13.

 

“The evidence is mounting that the website did not go through proper testing, including critical security testing, and that the administration ignored repeated warnings from contractors about ongoing problems,” Issa said in a statement.

Needless to say, this is all a short-term distraction: sooner or later the website will be fixed. It is only then that all those people who still have no idea what a complete disaster Obamacare is and will be for the US economy, will finally get the long overdue rude awakening.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/uphsIt2YasM/story01.htm Tyler Durden

It is now clear why according to the Obama administration there were no glitches plaguing the Healthcare.gov website administering Obamacare: because a whopping six people managed to sign up on the first day it was launched. By the end of the second day: 248 happy participants in a socialized healthcare ponzi scheme. It is also clear why there was nobody happier than the president when the republican party decided to shut down government on the same day as Obamacare was rolled out: because if public attention had focused on the absolute and now confirmed, disaster that the healthcare law’s rollout had been, then everyone, not just the Tea Party, would be demanding a substantial delay in Obamacare.

The enrollment data comes even after the Obama administration has said it cannot provide enrollment figures from HealthCare.gov because it doesn’t have the numbers. “We do not have any reliable data around enrollment, which is why we haven’t given it to date,” Health and Human Services Secretary Kathleen Sebelius told lawmakers on Wednesday. Turns out she did – as Reuters and ABC report, the documents, which are labeled “war room” notes and appear to be summaries of issues with the problematic website beginning on October 2, indicate a mere six enrollments had occurred by that morning – the day after the website was launched and almost immediately crashed.

So how is Obamacare like Facebook, or any other dot com special du jour – only the pageviews matter. Actual user conversions… well, that’s another matter entirely.

To date, Obama administration officials have refused to publicly provide any estimate of successful enrollments, though they have said the site received 4.7 million unique visitors on its first day and has now generated more than 700,000 applications.

 

An internal administration memo obtained by The Associated Press and confirmed by ABC News revealed that the administration projected half a million successful sign-ups by Oct. 31.

Good luck with that. And we mean it: after all like any authentic Ponzi scheme, Obamacare works only if wave after wave of signs up “foot” the costs for everyone who doesn’t. As such, unless massive amounts of people enroll, the program is assued to be a failure. Pardon: even more of a failure than it is now.

Naturally, the government was quick to downplay the figures:

HHS spokeswoman Joanne Peters stressed tonight that the enrollment figures presented in the “war room notes” are unofficial figures. The agency has said it intends to release its first official report on enrollments by mid-November.

 

“We will release enrollment statistics on a monthly basis after coordinating information from different sources such as paper, on-line, and call centers, verifying with insurers, and collecting data from states,” she said.

It gets better. Because after finally admitting there is nobody quite capable of messing something, anything, quite like the government, the administration finally agreed to get private sector help. In this case Oracel and… Google – the same firm that it was revealed earlier this week was furious at the government’s spying agency for illegally tapping its confidential user data streams.

The Obama administration said it has brought in experts from top technology companies including Google Inc and Oracle Corp to fix the HealthCare.gov website, as Republicans press for details about the botched October 1 launch.

 

Health and Human Services said it had added dozens of technology experts and engineers to its round-the-clock effort to fix the technical glitches on the site that is key to the implementation of Obama’s healthcare restructuring law.

 

Giving some of the first details of who might be leading the tech fix, HHS officials identified two experts by name: Michael Dickerson, a website reliability engineer on leave from Google, and Greg Gershman, a Baltimore-based innovation director with the firm Mobomo and who previously worked for the White House and the General Services Administration.

 

“We are doing everything we can to assist those contractors to make HealthCare.gov a highly performant, highly reliable, highly secure system,” Oracle CEO Larry Ellison told shareholders at the company’s annual meeting on Thursday in Redwood City, California. There was no comment from Google.

No need for a comment: the NSA already knew what they would say.

Finally, get your popcron because Darrell Issa is preparing to make a super spectacle out of the Obamacare flub, after yesterday he subpoenaed Sebelius, who previously took full responsibility for the “debacle”, for more information.

Issa said he had subpoenaed Sebelius for more information on the website’s technical problems, including how it was tested, and enrollment data. The subpoena requires the documents to be produced by November 13.

 

“The evidence is mounting that the website did not go through proper testing, including critical security testing, and that the administration ignored repeated warnings from contractors about ongoing problems,” Issa said in a statement.

Needless to say, this is all a short-term distraction: sooner or later the website will be fixed. It is only then that all those people who still have no idea what a complete disaster Obamacare is and will be for the US economy, will finally get the long overdue rude awakening.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/uphsIt2YasM/story01.htm Tyler Durden

• US admits surveillance on foreign governments ‘reached too far’ (FT)
• He must be so proud: Obama halted NSA spying on IMF and World Bank headquarters (RTRS)
• Obamacare website gets new tech experts; oversight pressure grows (Reuters)
• R.B.S. to Split Off $61 Billion in Loans Into Internal ‘Bad Bank’ (NYT)
• Draghi’s Deflation Risk Complicates Recovery (BBG)
• Abenomics: Nissan slashes full-year profit forecast 15% (FT)
• Credit Suisse Dismisses London Trader Over ‘Unusual Trading’ Losses (WSJ)
• RBS avoids break-up with 38 billion pounds ‘internal bad bank’ (Reuters)
• Twitter Said to Attract More Than Enough Interest for IPO (BBG)
• Canceled U.S. health plans are disruptive part of reform -Cigna CEO (Reuters)
• J.P. Morgan, Regulators Wage War of Wording (WSJ)
• Brooks, Coulson Oversaw Hacking in ’Secret’ Relationship (BBG)
• Islamist Rebels Take Fight to Suburbs of Syrian Capital (WSJ)

 

Overnight Media Digest

WSJ

* Before JPMorgan acquired the banking operations of Washington Mutual, the bank’s lawyers tangled with regulators over the wording of the agreement. Five years later, JPMorgan and the Federal Deposit Insurance Corp are still fighting over the meaning of those words. The question of who bears responsibility for Washington Mutual’s legal liabilities is taking on increasing urgency as J.P. Morgan negotiates a pact with the Justice Department that would end probes of soured mortgage bonds issued by J.P. Morgan and Washington Mutual during the housing boom.

* By the year-end, most airline passengers will be able to use their tablets, e-readers and other gadgets during all stages of flight. The Federal Aviation Administration’s decision, its first big shift on electronic devices since it restricted their use in flight in 1966, caps years of debate over whether electronic emissions from devices can interfere with cockpit instrument.

* The CFTC is so cash starved that it is being forced to delay cases, shelve certain probes and decided not to file charges against two men in the “London whale” trading mess, a top official said.

* Euro-zone inflation fell to its lowest in almost four years, raising pressure on the ECB to ease money supply and support the recovery.

* Germany described as “incomprehensible” U.S. criticism of its export-led economic policies, saying the country’s domestic economy is the main pillar of its growth.

* Goldman Sachs Group Inc scored some points with regulators with a loan to a New York City bicycle-sharing program named after rival Citigroup Inc. The $41 million loan to the Citigroup bike program was part of $2 billion in loans and investments made by the Wall Street bank from October 2010 until December 2012 to comply with U.S. rules designed to ensure financial services reach low- and middle-income neighborhoods, according to a recent regulatory review of the bank’s adherence to the Community Reinvestment Act.

* The way things are going, the term “cable TV” may have to be replaced by “phone TV.” Nearly a decade after Verizon Communications Inc and AT&T Inc began building pipelines to carry TV service to U.S. homes, they are nearing the market share of cable operators in areas where they operate, according to third-quarter results released by cable and phone companies in recent days.

* In the wake of a major immigration-law violation case involving Indian outsourcing giant Infosys Ltd, federal agents are investigating other companies for possible similar alleged misdeeds, according to an official with the Department of Homeland Security.

* Fannie Mae sued nine of the world’s largest banks over alleged manipulation of interest rates, joining the legal battles in the rate-rigging scandal. The lawsuit, filed Thursday in U.S. District Court in Manhattan, said that the mortgage-finance giant sustained an estimated $800 million in damages from banks that allegedly manipulated the London interbank offered rate and other financial benchmarks. Fannie also sued the British Bankers’ Association, a private association of large British banks.

 

FT

The Royal Bank of Scotland has suspended two traders in its foreign exchange division amid global investigations into the possible manipulation of the $5.3 trillion-a-day forex market, sources said.

Wells Fargo, the fourth-largest U.S. bank, has settled claims with the U.S. Federal Housing Finance Agency over bad mortgages the bank sold ahead of the financial crisis, according to sources.

Insurer American International Group said it had completed its first share buyback since its $182 billion government bailout during the financial crisis.

Japanese consumer electronics company Sony on Friday morning slashed its full-year profit forecast by 26 percent, hit by weakness in its struggling TV operation.

 

NYT

* Google has spent months and millions of dollars encrypting email, search queries and other information flowing among its data centers worldwide. Facebook’s chief executive said at a conference this fall that the government “blew it.” And though it has not been announced publicly, Twitter plans to set up new types of encryption to protect messages from snoops.

* In an announcement at the company’s office on Thursday, Google showed off an updated version of its Android mobile operating system, called “KitKat 4.4,” that can search for information both on the web and some smartphone apps.

* Now that new insurance marketplaces are opening under the Affordable Care Act, insurance companies are canceling millions of individual plans that fail to meet minimum standards.

* Time Warner Cable lost 306,000 television subscribers in the third quarter, hurt by a contract dispute that resulted in a blackout of CBS programming.

* Rebuffing a strategy of diversification, the venture capital firm XPV Capital believes it can find success by developing expertise in one area.

* Riding a surge in demand for new fuel-efficient planes, Boeing said on Thursday that it would increase production of its top-selling 737 jets to 47 a month by 2017, from 38 now.

* The Container Store has raised $225 million in its initial public offering, after demand from potential shareholders prompted the company to seek even more in its ma
rket debut.

* A majority of Oracle shareholders demonstrated their opposition to the compensation of chief executive Lawrence Ellison on Thursday, voting against a non-binding resolution on the company’s pay practices.

* Citigroup’s financial strategy and solutions group takes stock of the growing wave of shareholder activism, and concludes that what was once primarily an American phenomenon is spreading abroad.

* Fannie Mae sued nine of the world’s largest banks on Thursday, accusing them of colluding to manipulate interest rates and seeking more than $800 million of damages. In a complaint filed in Federal District Court in Manhattan, Fannie Mae, the government-controlled mortgage company, accused the banks of conspiring for many years to suppress the Libor, including during the 2008 financial crisis.

 

Canada

THE GLOBE AND MAIL

* A new environmental study into Taseko Mines Ltd’s billion-dollar New Prosperity mine proposal in British Columbia says it would pose “several significant adverse environmental effects.”

* Singing superstar Shania Twain and the late Saskatchewan curler Sandra Schmirler are among the notable Canadians who will be celebrated with postage stamps in 2014.

Reports in the business section:

* Barrick Gold Corp is moving aggressively to slash costs and deal with a debt hangover, halting construction at its expensive Pascua Lama mine and raising billions in one of Canada’s biggest stock sales.

* Some of the world’s largest energy companies have unleashed a torrent of oil sands spending, despite industry concerns about access to export markets, soaring costs and volatile Canadian heavy crude prices.

NATIONAL POST

* Toronto Police Chief Bill Blair announced on Thursday that investigators have found a video of Toronto Mayor Rob Ford that allegedly depicts him smoking a crack pipe and charged his friend with extortion, leading a defiant mayor to insist he has “no reason to resign.”

* If there were any doubts about the oil sands industry’s resolve to expand amid growing protests, escalating costs and volatile oil prices, they were put to rest Thursday by mega announcements by Canadian and global oil companies that they are pushing forward with a new generation of projects.

FINANCIAL POST

* Two years after losing out on a bid to buy rival Prime Restaurants, Cara Operations has reached a deal with Fairfax Financial Holdings Ltd to merge the two food service giants.

* The Toronto stock market ended October trading sharply lower Thursday, amid major announcements from the oilpatch, earnings disappointments and uncertainty about the Federal Reserve’s next move.

 

China

SHANGHAI SECURITIES NEWS

– The management committee of the pilot Free Trade Zone in Shanghai plans to implement 19 of the 23 measures designed to expand the service industry by the end of this year.

CHINA DAILY

– The Ministry of Public Security released a circular on Thursday directing police departments across the country to crack down on crimes targeting medical workers, following a spate of incidences leading to the death or injury of hospital staff.

– A policeman was detained for allegedly shooting and killing a pregnant woman in Guangxi Zhuang in the south of China, according to authorities. The case is the fourth incident in two years of a police officer killing innocents with an issued firearm.

PEOPLE’S DAILY

– Leading government officials in China need to put themselves in the position of the masses to understand what people want, where there is public distress and hardship, said a commentary in the paper that acts as the government’s mouthpiece.

SHANGHAI DAILY

– China will extend its European polysilicon anti-dumping investigation by half a year, delaying the imposition of tariffs on imports, the Ministry of Commerce said on Thursday, without elaborating on the reasons for the extension.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Alpha Natural (ANR) upgraded to Market Perform from Underperform at Raymond James
General Growth (GGP) upgraded to Buy from Neutral at BofA/Merrill
Green Dot (GDOT) upgraded to Overweight from Neutral at JPMorgan
Greenbrier (GBX) upgraded to Buy from Underperform at BofA/Merrill
ITT Corp. (ITT) upgraded to Outperform from Neutral at RW Baird
Netflix (NFLX) upgraded to Outperform from Neutral at RW Baird
PACCAR (PCAR) upgraded to Hold from Sell at McAdams Wright
Penn Virginia (PVA) upgraded to Outperform from Neutral at Credit Suisse
Quintiles (Q) upgraded to Outperform from Neutral at RW Baird
Siliconware Precision (SPIL) upgraded to Buy from Sell at UBS
Valero Energy (VLO) upgraded to Outperform from Market Perform at Cowen

Downgrades

ARIAD (ARIA) downgraded to Hold from Buy at Jefferies
ARIAD (ARIA) downgraded to Market Perform from Outperform at Leerink
Advance Auto Parts (AAP) downgraded to Hold from Buy at Deutsche Bank
Alamos Gold (AGI) downgraded to Market Perform from Outperform at Raymond James
Alamos Gold (AGI) downgraded to Sector Perform from Outperform at RBC Capital
Avon Products (AVP) downgraded to Market Perform from Outperform at BMO Capital
bebe stores (BEBE) downgraded to Neutral from Buy at Janney Capital
Chart Industries (GTLS) downgraded to Neutral from Overweight at Piper Jaffray
Craft Brew (BREW) downgraded to Neutral from Buy at Citigroup
Education Management (EDMC) downgraded to Underperform at BMO Capital
Hornbeck Offshore (HOS) downgraded to Hold from Buy at Wunderlich
Monotype Imaging (TYPE) downgraded to Neutral from Overweight at JPMorgan
PetSmart (PETM) downgraded to Neutral from Buy at BofA/Merrill
Provident Financial (PROV) downgraded to Market Perform at Raymond James
Royal Dutch Shell (RDS.A) downgraded to Hold from Buy at Societe Generale
Royal Dutch Shell (RDS.A) downgraded to Neutral from Outperform at Macquarie
Santander Mexico (BSMX) downgraded to Hold from Buy at Deutsche Bank
Solar Capital (SLRC) downgraded to Market Perform from Outperform at Wells Fargo
Sony (SNE) downgraded to Hold from Buy at Jefferies
Strayer Education (STRA) downgraded to Underweight from Equal Weight at Morgan Stanley
Taubman Centers (TCO) downgraded to Neutral from Buy at BofA/Merrill
TeleTech (TTEC) downgraded to Equal Weight from Overweight at First Analysis
Vertex (VRTX) downgraded to Market Perform from Outperform at Bernstein
Volcano (VOLC) downgraded to Market Perform from Outperform at BMO Capital
Weight Watchers (WTW) downgraded to Equal Weight from Overweight at Barclays

HOT STOCKS

Wal-Mart (WMT), Green Dot (GDOT) expanded debit card pact
Republic Services (RSG) authorized additional $650M for stock repurchases
Fluor (FLR) sees FY14 revenues ‘flattish’ at consolidated level with improving margins
Starwood Property (STWD) to spin-off single-family residential business

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Orient-Express (OEH), Minerals Technologies (MTX), MasTec (MTZ), Amerisafe (AMSF), Southwestern Energy (SWN), Republic Services (RSG), Newmont Mining (NEM), American Vanguard (AVD), Kemper (KMPR), Trimble Navigation (TRMB), Standard Pacific (SPF), AMN Healthcare (AHS),  Fluor (FLR), Callidus Software (CALD), Green Dot (GDOT), AIG (AIG)

Companies that missed consensus earnings expectations include:
Genesee & Wyoming (GWR), Portland General Electric (POR), Hutchinson Technology (HTCH), Tellabs (TLAB), LRR Energy (LRE), Bill Barrett (BBG), Ellie Mae (ELLI), CEC Entertainment (CEC), MRC Global (MRC)

Companies that matched consensus earnings expec
tations include:
Dresser-Rand (DRC), Spansion (CODE), Chef’s Warehouse (CHEF), Clovis (CLVS)

NEWSPAPERS/WEBSITES

• Verizon (VZ) and AT&T (T) are nearing the market share of cable operators in areas where they operate. Both phone companies have shown a greater willingness than their cable rivals, such as Comcast (CMCSA) and Time Warner Cable (TWC), to experiment with delivering movies and TV programming over the Internet outside the traditional pay-TV bundle, the Wall Street Journal reports
• After years of grooming customers to expect a few thousand dollars off sticker prices on even its latest models, GM (GM) said it is changing course and promising to shun lavish discounts when it comes to selling its newest pickup trucks, the Wall Street Journal reports
• As U.S. retailers face the shortest holiday season in years, they’re preparing to assail customers with deals and promotions this week. Wal-Mart Stores (WMT) is kicking off its online deals today, underscoring concerns that intense discounting aimed at luring budget-conscious shoppers could result in the most tepid holiday spending rise in four years, Reuters reports
• Hilton Worldwide, owned by Blackstone Group (BX), is aiming to launch its IPO the week of December 2, sources say, Reuters reports
• Shares of U.S. homebuilding companies (LEN, KBH, DHI) have fallen over 20% since May, even as home-improvement retailers rose to a record high, a sign some investors are too pessimistic that higher mortgage rates could derail new construction, Bloomberg reports
• Tesla Motors (TSLA) suffered its biggest one-month loss of market value in October, a 17% decline, amid concern among some investors that a fivefold stock-price surge outpaced the growth prospects for the electric-car company, Bloomberg reports

SYNDICATE

Artisan Partners (APAM) 4.8M share Secondary priced at $56.00
Barrick Gold (ABX) 163.5M share Spot Secondary priced at $18.35
Container Store (TCS) 12.5M share IPO priced at $18.00
Ikanos Communications (IKAN) files to sell 22.5M shares of common stock
Intermountain Community Bancorp (IMCB) files $377.68M mixed securities shelf
LyondellBasell (LYB) to sell 15M shares for holders
Pebblebrook Hotel (PEB) files to sell 2.2M shares of common stock
Streamline Health Solutions (STRM) files $37.5M mixed securities shelf
Tower International (TOWR) files to sell 2.58M shares of common stock for holders
Western Digital (WDC) 10.87M share Secondary priced at $67.00

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/B7gDt6Z6dRU/story01.htm Tyler Durden

Curious which were the best and worst performing asset classes for the month of October? Deutsche Bank explains.

After September’s no Fed taper fuelled performance, financial markets were supported in October by the near-term satisfactory resolution of the fiscal situation in the US. Asset returns in October broadly reflect what we’ve generally seen so far YTD. Developed world equities have seeing the best of the returns while the performance of commodities has been disappointing. October’s highlights in equities centred on the European periphery where Greek, Italian and Spanish equities returned +17.2%, +11.1% and +8.3% respectively, pushing YTD returns above +20% for Italy and Spain and above +30% for Greece. That said Japanese stocks still lead the way YTD with the Nikkei up just shy of +40% (+39.9%) despite weaker returns in October (-0.9%). EM equities produced another decent month of returns (+4.9%) following the summer’s weakness with the MSCI EM index now back into positive territory YTD, only Chinese stocks (-1.5%) saw negative returns in October amongst the EM countries included in our review.

At the other end of the returns spectrum commodities saw further declines with the CRB index (-2.7%) seeing it’s 6th monthly decline of the year with the YTD performance of -5.8%. Although US WTI crude fell -5.8% in October it is still up (+5.0%) YTD; one of the few commodities to be in positive territory in 2013.

In terms of fixed income returns were positive across the spectrum as key government bond yields saw further declines. 10 year Treasury yields fell around 6bps to 2.55% and traded below 2.5% during October. Government bonds saw more impressive declines in Europe with the 10 year Bund and the 10 Year Gilt both down around 10bps to 1.67% and 2.62% respectively. So government bond total returns were positive with Italian BTPs leading the way (+2.6% in October and +6.2% YTD). EM bonds retraced more of the summer weakness but they remain in negative territory YTD. In credit we saw further outperformance from the higher beta part of the credit spectrum with Fin Sub and HY leading the way. GBP Fin Sub returned an impressive +3.2% in October and is up +8.9% YTD.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0ESsx8Dp_CI/story01.htm Tyler Durden