Tag: news

Lately Bill Clinton has not been doing the president many favors. First, the “is” definition-challenged former president had some harsh words about Obamacare, and most recently in an overnight question-and-answer session before a standing-room-only crowd in a Beijing hotel ballroom, Clinton who was in Beijing for meetings with China’s President Xi Jinping as well as to promote the work of his New York-based philanthropic organisation, the Clinton Foundation, while withholding comments on Obama – whose approval rating has plunged to an all time low – refused to criticise Edward Snowden. Instead he said he believed it was “perfectly legitimate” for the US government to search “big data pools… to see if there are patterns of communication between certain numbers or sites and others known to be in the possession of terrorist groups”. But he went on, via AFP: “The question is when, if ever, is the government justified in going beyond the patterns to listen to telephone calls, read emails, read text messages, and who’s supposed to decide that? Mr Snowden obviously thought that it was excessive.”

He added:

The fact that Snowden was able to receive a top-secret security clearance despite having only been a contractor for several months “made me think that we are on the verge of having the worst of all worlds: We’ll have no security and no privacy”, Clinton added.

 

“I think the US and China and everybody else, we’re going to have to be more upfront with each other and probably with our own people about what it is we’re looking for and listening to,” he said.

Of course, it is unlikely that anything will change, much to the detriment of US companies with international operations such as Cisco, whose revenues are projected to tumble in big part due to the blowback resulting from the Snowden revelations. Whether this will be a limited, one-time event remains to be seen.

More amusingly, among Clinton’s other comments was his speculation on the gender of the next US president.

Former US president Bill Clinton hopes there will be a woman in the White House in his lifetime and will support his wife Hillary in whatever she decides to do, he told a Chinese audience on Monday.

 

Hillary, who earlier this year stepped down as US secretary of state, has not yet said whether she plans another presidential run after her failed 2008 bid for the Democratic nomination.

 

“I hope we have a woman president in my lifetime, and I think it would be a good thing for the world as well as for America,” Clinton said at a conference organised by the respected Chinese financial magazine Caijing.

 

“But I do not know if she’s going to run, and there is no such thing as a sure thing in politics,” he added.

 

In a question-and-answer session before a standing-room-only crowd in a Beijing hotel ballroom, Clinton, who was president from 1993 to 2001, was asked whether he envisages becoming a “first husband” in the future.

 

“You know, if I knew the answer to that, I couldn’t say,” he responded. “But I can give you an honest answer: I have no idea.”

 

He called his wife “the ablest public servant I have ever worked with” and said that he would support her whatever decision she makes on a White House run.

 

“If that’s what she wants to do, I will support her,” Clinton said. “But if she decides for whatever reason she doesn’t, I will support that.”

 

“It’s very interesting for us; we still feel young and we still feel healthy,” he added, noting that compared with several decades ago, he believes his wife now is “less motivated… by a fear of failure”.

Naturally, it would only be logical that the first female Fed chair be followed by the first female president. One can only hope, however, that in both cases it is not some gender quota driving the choice but the candidate with the best credentials. Then again, considering the current sorry state of the US economy, one wonders what difference does it make just who the next US president will be.

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Amid the Spanish FinMin’s “concerns about the pace of the increase” in government debt, and PM Rajoy’s confidence that the nation would exit the eurozone-fueled banking bailout by January, bad loans in the still disastrously-troubled nations have re-accelerated to an all-time record high of 12.68% of total loans. Mostly linked to the collapsed property sector, bad loans climbed by 6.9 billion euros from the previous month to an unprecedented 187.8 billion euros ($254 billion) in September. Having almost completed the drawdown of its 41 billion bailout – and with the situation fundamentally worse than ever (e.g. record high unemployment), Spanish bond spreads have collapsed to 250bps – their lowest in 29 months.

 

 

Chart: Bloomberg

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The Fed is not taking any chances: on the day in which every index is broadly expected to slip into uncharted, even-number territory, Kevin Henry and the other NY Fed Inkjets are making sure to seal the deal not with one but two POMOs, the first one starting at its usual time of 10:15 am for about $1.5 billion, and the second at 1:15pm for a 2 pm closing amounting to roughly $3.5 billion. Since the total will likely be above the magical $5 billion threshold, the probability of a down day is virtually nil.

Why is $5 billion so critical? The TBAC explained it in August…

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As Bitcoin soars over $600, another alternative to the fiat currency system is being monkey-hammered lower this morning as status quo support does everything it can to rotate stocks above the key levels we discussed earlier… because stocks rising on anything but fundamentals cannot be exposed for the liquidity-fueled excesses a rising precious metals price would unveil.

Gold is still holding above recent lows but Silver has broken to fresh 3-month lows…

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While the relentless multiple expansion (if not so much earnings growth and certainly not revenue contraction) looks set to push all three main stock indices over the key psychological levels of 16000, 1800 and 4000, with the all time bubble high on the Nasdaq increasingly looking like the next big target, the stock market mania has nothing on Bitcoin, which only yesterday crossed $500 for the first time ever, and as of this morning is already 20% higher, having just crossed $600 minutes ago. Which means that anything prices in Bitcoin has entered bear market in just the past day. How high BTC goes, is nobody’s guess (Raoul Pal had a truly stunning price target): once the buying frenzy kicks in, step aside, especially since China is increasingly looking like it may be jumping on board the latest mania.

So is there any catalyst that has driven a more than  100% increase in the USD value of the currency in November alone? As previously noted, one event that may be promoting much broader acceptance in China is that the currency is now accepted for payment for real estate:

Bitcoin acceptance in China has now extended into real estate with a residential developer in Zhangjiang Hi-Tech park in Shanghai finding a new way to promote sales through the acceptance of Bitcoin virtual currency.

 

Shanda Group, one of the large IT giants in China, through its real estate development arm, opened sales of its first real estate investment project on October 25th, 2013. 300 apartments in the soon to be built buildings ranging from 42-81sqm were available for sale and sold out in a few minutes as demand far outstripped supply.

 

As part of the promotion, Shanda accepted Bitcoins for payment. Although the exchange rate was ‘fixed’ at 1,000 Chinese Yuan (CNY) to one Bitcoin and the developer reserved the right to adjust the rate, the deal represents one of the first times that Bitcoin could be used for such a large scale ‘public’ purchase. The exchange rate was about 1,200 CNY : 1 Bitcoin on BTCChina that day, so the developer was obviously trying to hedge a bit in case Bitcoin fell through, but considering the rate is rapidly reaching nearly 2,000 CNY : 1 Bitcoin, it would have been a great deal for the developer – Bitcoin is one of the few investments in China that has been increasing faster than real estate in 2013.

The rate now is much higher. However, as reported over a week ago, that may change depending on what comes out of the Senatorial hearing on Bitcoin sheculed for later today:

The Department of Justice and Securities and Exchange Commission are telling a U.S. Senate committee that Bitcoins are legitimate financial instruments, boosting prospects for wider acceptance of the virtual currency.

 

Representatives from the agencies told the U.S. Senate Committee on Homeland Security and Governmental Affairs ahead of a hearing today that the digital money offers benefits and carries risks, like any other online-payment system, according to letters they released before the meeting.

 

The committee scheduled the hearing “to explore potential promises and risks related to virtual currency for the federal government and society at large” after the Silk Road Hidden Website was shut down in October. The closing of the marketplace, where people could obtain drugs, guns and other illicit goods using Bitcoins, is helping fuel a rally in the virtual currency as speculators bet that the digital money will gain more mainstream acceptance.

 

“The FBI’s approach to virtual currencies is guided by a recognition that online payment systems, both centralized and decentralized, offer legitimate financial services,” Peter Kadzik, principal deputy assistant attorney general, wrote in a letter yesterday. “Like any financial service, virtual currency system of either type can be exploited by malicious actors, but centralized and decentralized online payment systems can vary significantly in the types and degrees of illicit financial risk they pose.”

Tune in at 3pm when we will carry the Bitcoin hearing live.

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• What can possibly go wrong: Tepco Successfully Removes First Nuclear Fuel Rods at Fukushima (BBG)
• Japan’s Banks Find It Hard to Lend Easy Money (WSJ)
• U.S. Military Eyes Cut to Pay, Benefits (WSJ)
• Airbus to Boeing Cash In on Desert Outpost Made Field of Dreams (BBG); Dubai Air Show: Boeing leads order books race (BBG)
• Sony sells 1 million PlayStation 4 units in first 24 hours (Reuters)
• Russian Tycoon Prokhorov to Buy Kerimov’s Uralkali Stake (WSJ)
• Google Opening Showrooms to Show Off Gadgets for Holidays (BBG)
• Need. Moar. Prop. Trading: Federal Reserve considering a delay to Volcker rule (FT)
• Raghuram Rajan plans ‘dramatic remaking’ of India’s banking system (FT)
• SAC Capital’s Steinberg faces insider trading trial (Reuters)
• Six killed as tornadoes rip through U.S. Midwest (Reuters)
• High-Risk Patients Fuel More Health-Law Worry (WSJ)
• Greece has fired or suspended 116 tax inspectors, deputy minister says (Kathimerini)
• J.P. Morgan Reaches $4.5 Billion Settlement With Investors (WSJ)
• Iceland Tells Hedge Funds Not to Bet on 75% Claims Writedown (BBG)

 

Overnight Media Digest

WSJ

* The U.S. military’s top commanders, amid a shrinking Pentagon budget, have agreed to a plan that would curb the growth of pay and benefits for housing, education and health.

* The Obama administration’s overtures to Iran are straining the U.S. alliance with Israel in ways not seen in decades, compounding concerns about the White House’s ability to manage the Middle East’s proliferating security crises.

* The dearth of borrowers illustrates the reality behind Japan’s economic-policy experiment: It is easier to increase the money supply than to get people to put the cash to work.

* The asset-management industry is pushing back against a powerful, yet little known Treasury Department office that is laying the groundwork for tougher federal regulation of mutual funds and other asset managers.

* Boeing formally launched its 777X jetliner with record orders, as jet-buying commitments at the Dubai Airshow for Boeing and rival Airbus highlighted the growing ambition of Persian Gulf airlines.

* The committees that control consolidated data feeds for Nasdaq OMX Group and NYSE Euronext are nearing agreement on a plan to back up their data streams, according to people familiar with the matter.

* More than 15 percent of the factories in Wal-Mart Stores Inc’s initial round of safety inspections in Bangladesh failed their audits and had to make improvements to keep doing business with the giant retailer.

* Suntech Power Holdings Co, mired in more than $2.3 billion in debt, would pay back about 30 percent of what it owes to Chinese creditors in a deal that would also keep its solar-equipment factories humming under new management.

* Bloomberg LP’s news division will lay off about 50 people or about 2 percent of its newsroom, according to people familiar with the company’s plans, the latest financial news and data provider to make job reductions

 

FT

The chair of the European Banking Authority has warned that Europe’s ability to deal effectively with the next financial crisis risks being undermined, if decision-making is not streamlined and nationalist tendencies contained.

Gulf airlines splashed out over $150 billion on new plane deals on day one of the Dubai Airshow, underlining their status as powerful forces in global aviation.

Less than a week after Barclays slashed 1700 jobs at its UK branches, the bank’s global retail head has warned of further job cuts as the bank tries to trim its cost-heavy high-street business.

Edmond de Rothschild is preparing to launch a London-based merchant banking business this week as the Franco-Swiss private banking group seeks to turn London into its fourth major business centre.

Directors’ pay at the UK’s biggest listed companies has risen 14 percent, as company bosses reap the benefits of a windfall from long-term incentive plans.

Former U.S. Treasury Secretary Timothy Geithner is joining private-equity firm Warburg Pincus as president and managing director.

 

NYT

* The push to reshape financial oversight hinges on negotiations in the coming weeks over the so-called Volcker Rule, a regulation that strikes at the heart of Wall Street risk-taking.

* Mobile games are a major growth opportunity, and analysts say a recent flop underscores the challenges Walt Disney faces in a shifting marketplace.

* As many as 4.8 million people could be affected by expiring jobless benefits through 2014, and there is little sign that Congress will act before it adjourns in two weeks.

* J. Craig Venter, the maverick scientist, is looking for a new world to conquer – Mars. He wants to detect life on Mars and bring it to Earth using a device called a digital biological converter, or biological teleporter.

* The flood of orders at the Dubai Airshow, including the sale of 225 of Boeing’s new 777X jets, highlighted how the big money in aviation is shifting to the Middle East and Asia.

* Timothy Geithner will join the private equity firm Warburg Pincus as president, the firm said on Saturday. It would be his first prominent position since leaving office as Treasury secretary this year.

* Were the young founders of Snapchat, a mobile-messaging start-up, delusional for turning down a multibillion-dollar buyout offer? Greedy to think they might get more later? Or courageous to chase their dreams? The decision they faced – to cash out or remain independent – is one that all successful technology entrepreneurs eventually confront.

 

Canada

THE GLOBE AND MAIL

* In a historic showdown, Rob Ford faces formal repudiation from Toronto city council, which will vote on Monday on a motion stripping him of virtually all of his powers as mayor, after three tumultuous weeks of disclosures over his use of crack cocaine and a
lcohol.

* A line of severe storms swept across southern and eastern Ontario Sunday night, bringing heavy rain and winds gusting to 90-kilometres an hour.

Reports in the business section:

* On two week-long trips to Australia in the past month, the CEO and vice-chairman of Saputo Inc has travelled hundreds of kilometres in the state of Victoria to meet with dairy farmers who own shares of Warrnambool Cheese and Butter Factory Co.

* Malaysia’s Petronas is lining up Asian energy players to help build a Canadian liquefied natural gas megaproject, but there is a catch. Before anyone joins the ownership team, the prospective partners must sign long-term contracts to buy LNG.

NATIONAL POST

* Canada’s auditor general has found that the billions of dollars set aside for the federal government’s shipbuilding plan won’t be enough to get the navy the vessels it was promised, or needs.

* A lawyer representing embattled Toronto Mayor Rob Ford said Sunday it was “highly unlikely” he would seek a court-ordered injunction to block Toronto city council from moving forward Monday with a motion to further diminish the mayor’s power.

FINANCIAL POST

* It’s not exactly the 11th province just yet, but Canadian companies have been gobbling up property in the United States like never before.

* The highly anticipated next-generation gaming consoles from Sony Corp and Microsoft Corp are expected to re-energize earnings growth and boost share prices across the industry.

 

China

SHANGHAI SECURITIES NEWS

– Insurance regulators are considering accelerating the establishment of shipping insurance pilot programs in the Shanghai Free Trade zone, and plan to establish an offshore insurance market.

CHINA SECURITIES JOURNAL

– An official with the State-owned Assets Supervision and Administration Commission (SASAC) and enterprise reform gave an interview to the China Securities Journal in which he said reforms would concentrate on institutions managing state-owned enterprises.

– Alibaba’s payment unit has partnered with Intime Retail (Group) Co Ltd to allow customers at Intime’s department stores to shop using their mobile phones, potentially leading to a shake-up of China’s Point of Sales (POS) market.

SECURITIES TIMES

– There will be 570 million people in China who use their mobile phones to access the Internet by the end of this year, according to a forecast by consultancy iMedia Research.

CHINA DAILY

– The end of the controversial “reform through labour” detention system, announced after the third party plenum, is expected to come no earlier than the end of November.

– The Chinese small and medium enterprise (SME) confidence index from Standard Chartered declined to 52.04 in the third quarter, down from the previous quarter, as small businesses remain cautiously optimistic. The article said surveys indicate SMEs are having an easier time getting loans this year.

SHANGHAI DAILY

– China is set to have the largest number of lung cancer patients in the world by 2025, according to experts at a forum in Beijing.

PEOPLE’S DAILY

– In an editorial, People’s Daily called on China to further liberate people’s mind, social productivity and vibrancy.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Baxter (BAX) upgraded to Outperform from Neutral at Credit Suisse
Diebold (DBD) upgraded to Buy from Hold at KeyBanc
Goldcorp (GG) upgraded to Buy from Neutral at Citigroup
Kirkland’s (KIRK) upgraded to Buy from Neutral at SunTrust
Kosmos (KOS) upgraded to Buy from Neutral at Mizuho
Lamar Advertising (LAMR) upgraded to Overweight from Equal Weight at Evercore
MSC Industrial (MSM) upgraded to Buy from Hold at BB&T
PS Business Parks (PSB) upgraded to Outperform from Market Perform at BMO Capital
Penn National (PENN) upgraded to Outperform from Market Perform at Wells Fargo
PennantPark Floating Rate (PFLT) upgraded to Outperform at Keefe Bruyette
Sappi Ltd. (SPP) upgraded to Buy from Sell at UBS
Swift Transportation (SWFT) upgraded to Outperform from Neutral at RW Baird
Vitamin Shoppe (VSI) upgraded to Conviction Buy from Buy at Goldman

Downgrades

Alpha Natural (ANR) downgraded to Sell from Neutral at Citigroup
Bill Barrett (BBG) downgraded to Neutral from Buy at Goldman
Bona Film (BONA) downgraded to Market Perform from Outperform at Cowen
CONSOL Energy (CNX) downgraded to Neutral from Buy at Citigroup
Commercial Metals (CMC) downgraded to Neutral from Buy at Citigroup
Corporate Office (OFC) downgraded to Market Perform from Outperform at BMO Capital
GSE Holding (GSE) downgraded to Market Perform from Outperform at Cowen
Halcon Resources (HK) downgraded to Sell from Neutral at Goldman
Interactive Brokers (IBKR) downgraded to Market Perform at Keefe Bruyette
MercadoLibre (MELI) downgraded to Underweight from Equal Weight at Morgan Stanley
Microsoft (MSFT) downgraded to Underperform from Neutral at BofA/Merrill
NVIDIA (NVDA) downgraded to Underweight from Equal Weight at Morgan Stanley
Nucor (NUE) downgraded to Neutral from Buy at Citigroup
Renewable Energy (REGI) downgraded to Hold from Buy at Canaccord
SuperValu (SVU) downgraded to Sell from Neutral at Goldman
Synchronoss (SNCR) downgraded to Neutral from Outperform at RW Baird
Walter Energy (WLT) downgraded to Neutral from Buy at Citigroup

Initiations

Cyberonics (CYBX) initiated with a Buy at Citigroup
Gaming and Leisure Properties (GLPI) initiated with a Neutral at Credit Suisse
Gastar Exploration (GST) re-initiated with an Outperform at Imperial Capital
Stonegate Mortgage (SGM) initiated with an Outperform at FBR Capital

HOT STOCKS

JPMorgan (JPM) reached $4.5B agreement with 21 institutional investors
Lloyds (LYG) sold asset management business to Scottish Widows Investment Partnership
Boeing (BA) launched 777X program at Dubai Airshow with over $95B in agreements
GE (GE) received $26B in agreements at Dubai Air Show
Royal Bank of Scotland (RBS) said making progress on IP&ED unit sale
FDA classified Medtronic’s (MDT) voluntary field action on guidewires a Class I recall
Media General (MEG), DISH (DISH) reached retransmission consent agreement
Insight (NSIT) announced it will be reseller of Google Chromebooks (GOOG)
Oracle (ORCL) acquired Bitzer Mobile, terms not disclosed

NEWSPAPERS/WEBSITES

• The Dubai Airshow is shaping up to be an order extravaganza for Boeing (BA), but that doesn’t mean rival Airbus (EADSY) has ceded the field, and has reported respectable numbers  as well, the Wall Street Journal reports
• The asset-management industry (BLK) is pushing back against the Financial Stability Oversight Council, a powerful, yet little-known Treasury Department office that is laying the groundwork for tougher federal regulation of mutual funds and other asset managers, the Wall Street Journal reports
• Capital ratios at U.S. banks have strengthened and bank lending is quite strong, Boston Fed President Eric Rosengren said today at a financial regulation conference in the United Arab Emirates, Reuters reports
• Daimler (DDAIF) and its Chinese partner BAIC Motor will sign a new strategic cooperation agreement tomorrow, with Daimler becoming an “important partner” with shareholding rights, Reuters reports
• Google (GOOG) is opening showrooms called Winter Wonderlabs in six U.S. cities, promoting its latest products and stepping up retail efforts against Apple (AAPL) and Microsoft (MSFT) as the year-end holiday shopping season gets under way, Bloomberg reports
• Salesforce.com (CRM )introduced an overhauled version of its mobile software, seeking to en
  sure clients and partners will be able to use more features of the company’s sales, marketing and customer service software, Bloomberg reports

BARRON’S

Kimberly Clark (KMB) shares expensive despite spin-off
Blount (BLT) could offer a dividend buyback
Carlyle Group (CG) could return over 20% next year
Discovery (DISCA) could rise 20%
US Airways (LCC) could reward investors (AAMRQ)

SYNDICATE

Ascent Capital Group (ASCMA) files to sell 253,333 shares for holders
MetLife (MET) files automatic mixed securities shelf
The Bancorp (TBBK) files $100M mixed securities shelf
UPS (UPS) files automatic mixed securities shelf

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