Author: admin

With growth rates for steel products at or near record lows and prices for end-product having plunged to record lows, it is little surprise that the Steel industry would provide the largest Chinese bankruptcy yet in this cycle. As Bloomberg reports, unlisted Haixin Iron & Steel – which halted production and defaulted on CNY3 bn in March – has started bankruptcy proceedings. Having spent 8 months hoping for the government bailout that every Western onlooker believes is every firm’s god-given right, a reorganization application for the Wenxi, Shanxi province-based company (with $1.7 billion of total debt) was accepted by the Yuncheng City Intermediate People’s Court. This is just the start as “Haixin Group’s bankruptcy will be followed by others,” according to researcher Mysteel.com’s Chief Analyst Xu Xiangchun.

 

Output growth (or degrowth) of Steel product is near record lows and still prices are crashing…

As Bloomberg reports,

Haixin Iron & Steel Group, an unlisted Chinese steelmaker that halted production in March because of a capital shortage, started bankruptcy proceedings, making it the largest mill in the nation to enter the procedure.

 

A reorganization application for the Wenxi, Shanxi province-based company was accepted by the Yuncheng City Intermediate People’s Court, according to a statement posted on chinacourt.org, a government site that lists legal proceedings. Creditors are required to claim their rights by Feb. 22, the statement said.

 

China’s slowing economy and the country’s measures to tackle pollution are taking a toll on its steelmakers already plagued by industry overcapacity. Haixin Group’s bankruptcy will be followed by others, according to researcher Mysteel.com Chief Analyst Xu Xiangchun.

 

“Instead of reorganization efforts conducted by local governments, this is an inevitable trend that China will take more ailing steel mills to the courts to protect creditors,” Xu said by phone from Beijing.

 

…

 

Haixin Group has 10.5 billion yuan of debt, compared with 10.1 billion of assets, the official Xinhua News Agency reported yesterday, citing “public data.”

*  *  *
But apart from the entire Steel industry being on the verge of bankruptcy… China is doing great!

“There has to be a restructuring of the Chinese steel industry,” Eder said.

 

“The iron-ore producers are getting more and more aware that their growth expectations have to be redefined. There are enormous over-capacities and more is coming on stream. This will increase the pressure.”

*  *  *

Think it’s irrelevant – of course you do – except the yield on 3.50% govt bond due October 2015 up 5 bps to 3.660%; headed for biggest daily increase in 1-year sovereign yield since July 21, according to data compiled by Bloomberg.

*  *  *

But what should be really worrisome is the potential for global contagion (as Bloomberg adds),

It’s a big change. Every year for the past decade, China has added new mills with the capacity to exceed the annual production of Germany, the largest steelmaker in Europe. The surge in new blast furnaces created a consumption vortex, swallowing half the world’s iron ore and creating unprecedented wealth from Australia’s Pilbara region to Brazil’s Amazon basin. That gravy train, generating annual iron-ore sales of about $160 billion last year, is slowing.

 

The major flaw of producers of iron ore, the most traded commodity after oil, is they tend to be “over-bullish,” said Kirill Chuyko, head of equity research at BCS Financial Group in Moscow.

 

“Humans make mistakes,” said Chuyko, who thinks peak steel has been reached. “Chinese demand is going south.”

Surprise!! Artificially low rates and money-printing has led to massive mal-investment and the blowback is beginning…

Mining giants have wagered $120 billion on belief that steel production in China won’t peak until as late as 2030. As the price of the key steelmaking raw material continued its descent to a five-year low today, it increasingly looks like they got that wrong. It’s a miscalculation that could have huge consequences for companies led by BHP Billiton Ltd. (BHP) and Rio Tinto Group.

 

“I’ve always taken the view that the miners had the best intelligence on this as large investment decisions are based on it,” Richard Knights, a mining analyst at Liberum Capital Ltd. said by phone. “But if they get it wrong by a just a small margin, that has major implications for profitability and the share price for years to come.”

*  *  *

via Zero Hedge http://ift.tt/1t4zaml Tyler Durden

As previously reported, the anticipated Polar Vortex 2.0 has struck, pushing temperatures in all 50 states to below freezing, while heavy snow prompted a state of emergency in western New York and contributed to the deaths of four people. According to Reuters, it was the coldest November morning across the country since 1976, according to Weather Bell Analytics, a meteorologist consulting firm. It remains to be seen how many GDP percentage points were wiped out as a result, unless of course, this time it will be different from last winter. Typically, such cold is not seen until late December through February.

But it was the situation in upstate New York, especially around Buffalo and parts of Erie County, where things got most dire and where 60 inches (1.5 m) of snow accumulated, with more falling, said Steven Welch of the National Weather Service near Buffalo. Snow fell at a rate of up to five inches (13 cm) an hour and some areas approached the U.S. record for 24-hour snowfall totals of 76 inches, or over 6 feet, the NWS said.

The record cumulative snowfall through Wednesday is shown in the image below:

New York Governor Andrew Cuomo declared a state of emergency for 10 counties. National Guard troops were deployed to help residents cope with the storm.

The good news, according to CBS, is that the Tuesday storm is fading away: deputy Erie County Executive Rich Tobe told reporters Wednesday morning that the storm had begun to move toward Buffalo’s northern suburbs, and was expected to leave 2-5 more inches of snow in its wake. But he said the break would be short-lived for the hard-hit southern Buffalo suburbs, where forecasters were calling for more snow on Thursday, as much as three feet more, for a total of up to 100 inches over four days – a year’s worth for the region. Still, there should be an 18 hour window to clear roads, he said.

And then it is all set to flip again, with the current freezing period expected to be followed by a “dramatic warming trend this weekend,” raising the possibility of flooding from melting snow.

One of the main culprits for the heavy snow accumulation was the so called “lake-effect” which created a stark divide: In downtown Buffalo and north of the city, there was a mere dusting of precipitation, while in parts south, snow was everywhere. The snow band that brought the snow was very much evident throughout the day as gray clouds persistently hovered over the southern part of the city. The band was so apparent that the wall of snow could be seen from a mile away.

A dramatic time-lapse of the snow-wall can be seen in the video below:

 

But nothing compares to the photos on the ground as shocked residents woke up to find themselves literally burried under 6 or more feet  of snow. Here is a sample of what they saw on Tuesday morning courtesy of Albany Meteorologist Greg Pollak:

OOOOF! MT @EdRussoWSBT: This is what snowed in really means. Pic:Jessica Marie in West Senaca NY via @GregPollak: http://ift.tt/1vnBzhX

— Jim Cantore (@JimCantore) November 19, 2014

Imagine opening the door to this… This is a shot from Buffalo, NY Tuesday…#lakeeffect http://ift.tt/1uaGKep

— Greg Pollak (@GregPollak) November 19, 2014

INCREDIBLE! RT @TrainerAmyIndy: @NWSIndianapolis
Friend in Buffalo opened her garage door and it looked like this: http://ift.tt/1p1oHM6”

— Greg Pollak (@GregPollak) November 19, 2014

Neighbors helping fix the door that was smashed in by the lake effect snow in Cheektowaga… http://ift.tt/1uaGMTL

— Greg Pollak (@GregPollak) November 19, 2014

50 inches of snow in 24 hours? Useful. #BuffaloSnow http://ift.tt/1p1oKaP

— Bipartisan Report (@Bipartisanism) November 19, 2014

Brilliant!
“@g_meslin: Resilient Buffalonians, making the best of a difficult situation.
#snowvember #BuffaloSnow http://ift.tt/1uaGNa6”

— Mike Redding (@ReddingWriting) November 19, 2014

#BuffaloSnow #buffaloblizzard2014 Buffalo braves the storm; Visiting my sister, I was in the ’77 storm; this worse http://ift.tt/1uaGNac

— Pamela Falk (@PamelaFalk) November 19, 2014

If today has got you down just remember one thing; at least you’re not in Buffalo! 70 INCHES! #BuffaloSnow http://ift.tt/1p1oKr7

— Chris (@COverholster) November 19, 2014

NY State Thruway in Buffalo this morning! #BuffaloSnow http://ift.tt/1uaGKv9

— FOX & Friends (@foxandfriends) November 19, 2014

Buffalo, NY was hit by snow so intense it looked like a wall, leaving up to 60 inches (1.5 meters). #BuffaloSnow http://ift.tt/1uaGNqy

— JRehling (@JRehling) November 19, 2014

via Zero Hedge http://ift.tt/1uaGL1X Tyler Durden

• Yellen Inherits Greenspan’s Conundrum as Long Rates Sink (BBG)
• West African Mining Projects Take Hit From Ebola Crisis (WSJ)
• Saudi oil policy uncertainty unleashes the conspiracy theorists (Reuters)
• Senate Rejection of Keystone XL Measure Sets Up 2015 Showdown (BBG)
• Ferguson, Missouri, remains on edge ahead of grand jury report (Reuters)
• Putin Said to Stun Advisers by Backing Corruption Crackdown (BBG)
• Italian ‘Invasion’ Has Swiss Fuming as Immigration Vote Looms (BBG)
• Apple and Others Encrypt Phones, Fueling Government Standoff (WSJ)
• Ukraine rules out direct talks with separatists (Reuters)
• Nielsen to Measure Netflix Viewing (WSJ)
• French-government owned Areva Drops Most Since 1999 After Financial Targets Scrapped (BBG)
• U.S. auto regulator seeks nationwide recall of Takata air bags (Reuters)
• American Roads Can’t Match French Highways Paved by Tolls (BBG)
• Dollar General may have to shut more than 4,000 stores (Reuters)
• Why Japan’s 8% Tax Mauled Economy as Europe Tolerates 20% (BBG)
• Great White Shark Pulled From Nets at Bondi Beach in Australia (BBG)

 

Overnight Media Digest

WSJ

* The Senate narrowly defeated legislation that would have approved the Keystone XL pipeline, delivering a political setback to Senator Mary Landrieu, who had pushed for the vote as a way to show political clout in her Senate runoff race against Republican challenger Representative Bill Cassidy. (http://on.wsj.com/1yQQX3U)

* U.S. auto-safety regulator National Highway Traffic Safety Administration demanded auto makers issue a nationwide recall of air bags made by Takata Corp after receiving a report of an air bag injury in North Carolina. (http://on.wsj.com/1t3cz9P)

* Two Palestinians attacked a synagogue in Jerusalem, killing three American-Israeli rabbis, a British-Israeli rabbi and a policeman and shifting the focus of violence to deep within the heart of the Jewish half of the city. (http://on.wsj.com/1AfI4oL)

* Next month Nielsen will begin measuring viewership of TV shows on subscription online video services, such as Netflix Inc and Amazon.Com Inc’s Prime Instant Video.(http://on.wsj.com/1vnBudS)

* Ohio Precious Metals LLC in remote Jackson, Ohio, has become an outpost in the multibillion-dollar global gold trade, melting scrap gold and shipping it world-wide. (http://on.wsj.com/11AOb8Y)

* The Justice Department complains that new encryption technology by Apple Inc, Google Inc and others makes it harder for police to gather evidence. (http://on.wsj.com/1vo07rG)

* Goldman Sachs Group Inc has cemented its position as the top Wall Street bank for mergers and acquisitions in one of the busiest years in the business after planned takeover deals this week by Actavis Plc and Halliburton Co . (http://on.wsj.com/1ylqU54)

* The Ebola epidemic in West Africa has led mining companies in the region to put expansion plans on hold. The Ebola epidemic has scared off ships and planes, prompted expatriates to abandon their posts and delayed the rollout of thousands of jobs meant for residents of the West African countries hardest hit by the virus. (http://on.wsj.com/1xNWVmW)

* French prosecutors have launched a preliminary insider-trading probe targeting several senior managers at BNP Paribas SA, seeking to know how much the managers knew about U.S. litigation risks when selling shares. (http://on.wsj.com/1u8Scr6)

* Canada is debating tighter border security for stock trades. The country’s regulators are probing dealers’ practice of routing stock orders to United States trading venues in exchange for rebates, circumventing domestic markets. (http://on.wsj.com/1usUDIw)

* General Mills Inc agreed to keep the phrase “100 percent Natural” off a brand of granola bars and related products as part of a legal settlement, the food industry’s latest concession in the battle over how to define natural foods. (http://on.wsj.com/1t3vuRP)

* Toyota Motor Corp unveiled a $57,000 fuel-cell car and plans for a United States network of hydrogen refueling stations with a message of exclusivity: Don’t expect to see too many of these vehicles soon. (http://on.wsj.com/1wUxrkR)

* Institutional Shareholder Services is recommending shareholders vote against the pay package for Microsoft Corp’s CEO Satya Nadella in a nonbinding vote at the software company’s annual meeting. (http://on.wsj.com/1u8Y4AD)

* AT&T Inc said federal investigators might need a warrant to gather data about cellphone users’ locations, challenging the more permissive legal framework the government has used for years. (http://on.wsj.com/1uGcL3c)

* The Samsung conglomerate’s shipbuilding and engineering units said Wednesday they have scrapped a plan to merge after facing a hefty bill to buy back shares from shareholders opposed to the deal. Samsung Heavy Industries Co, the world’s second-largest shipbuilder by revenue, said in September it would absorb Samsung Engineering Co. (http://on.wsj.com/1xmEgzv)

* United Parcel Service Inc and FedEx Corp are gearing up for a new test of their ability to handle the surge in holiday e-commerce: The frenzy of online shopping that now comes at the beginning of Thanksgiving weekend, instead of afterward. (http://on.wsj.com/1yRcMAg)

* Irving Azoff is trying to pull his clients’ songs from Google Inc’s YouTube. A lawyer for Azoff’s company, Global Music Rights sent two letters to YouTube demanding the company to immediately stop playing about 20,000 of the group’s songs, saying that the online video service had not sought a license from the organization, Azoff said. (http://on.wsj.com/1EYslZd)

* BHP Billiton Ltd is making a bold bet on China’s rising middle class, starting in sand dunes of southern Australia. Beneath the ground at Olympic Dam lies one of the biggest copper deposits in the world-central to a new investment strategy for the resources company. (http://on.wsj.com/1u90u2e)

* Darden Restaurants Inc said its chief financial officer will retire, and it unveiled a cost-savings plan that includes eliminating a management layer at its Olive Garden and LongHorn Steakhouse chains. The company said the moves are expected to save the company $20 million a year. (http://on.wsj.com/14J12qI)

 

FT

Labour’s Rachel Reeves announced jobless migrants who are from the European Union would have to wait for two years before they could claim out-of-work benefits as part of significant hardening of Labour’s position on immigration.

Britain’s government owns enough land to build as many as 2 million homes that is equal to a decade’s supply, a study by estate agent Savills has found.

Ministers at the Department for Communities and Local Government could be caught unaware by serious financial problems at local councils because of inadequate monitoring, the National Audit Office warned.

Britain’s supermarkets have suffered their first fall in revenues in at least 20 years hurt by lower food prices and a vicious price war that has cut the amount customers spend on groceries, according to a report by market researcher Kantar Worldpanel.

NYT

* In a significant shift, federal safety regulators on Tuesday called on automakers to conduct a nationwide recall of vehicles that contain driver’s-side airbags made by the Japanese supplier Takata Corp. The nationwide move, urged by the National Highway Traffic Safety Administration, would expand a recall that has been mostly limited to two states and two territories associated with high humidity. (http://nyti.ms/1EYwbBy)

* New York State’s chief banking regulator on Tuesday announced a $315 million settlement with the Bank of Tokyo-Mitsubishi UFJ, accusing the bank of “misleading regulators” about its business with Iran and other countries blacklisted by the United States. (http://nyti.ms/1xmMDuW)

* Goldman Sachs Group Inc has dismissed a currency trader because of his ties to an inquiry into potential manipulation of benchmark currency rates, a person briefed on the matter said on Tuesday. (http://nyti.ms/1xU0F7l)

* Three months after formally putting itself up for sale, PetSmart Inc appears to have drawn takeover interest from at least two private equity firms. KKR & Co LP and Clayton, Dubilier & Rice, two prominent private equity shops, are preparing a joint bid for the retailer by early next month, a person briefed on the matter said on Tuesday. (http://nyti.ms/1t3BTwt)

* Phone scams involving reloadable prepaid debit card products like the popular MoneyPak card will be the subject of a Senate committee hearing on Wednesday. Executives from three prepaid card companies are expected to testify before the Senate Special Committee on Aging, along with a representative for a trade association that represents retail chains that sell the cards. (http://nyti.ms/1p0PEQ0)

 

Canada

THE GLOBE AND MAIL

** Prime Minister Stephen Harper’s Conservative Party have retained a pair of seats in by-elections on Monday evening, despite a surge by the Liberal Party in the riding formerly held by Jim Flaherty, Canada’s finance minister. (http://bit.ly/1qjrt08)

** The chair of Canada’s largest school board is calling on Ontario Premier Kathleen Wynne’s government to intervene with the board’s highest ranking staffer, alleging that director of education Donna Quan has blocked trustees from probing controversial payments and partnerships. (http://bit.ly/14DBsDG)

** The Competition Bureau is investigating Loblaw Cos Ltd pricing strategies in a probe that is demanding that some of the chain’s key suppliers hand over secret records about their dealings with the grocery giant. (http://bit.ly/1xiBzz2)

NATIONAL POST

** Calvin Nicol, a 31-year-old piercer and tattoo artist was walking home from work along Rideau Street at about 7 p.m. on Nov. 1 when he was attacked by at least four males who Nicol believes singled him out because of his unique look. (http://bit.ly/1yhDodR)

** After release from a U.S. prison, Canada’s embattled Mafia boss Vito Rizzuto summoned top henchmen to secret meetings in Cuba and the Dominican Republic to plot revenge on rivals, a court in Italy has heard. (http://bit.ly/14DLNPR)

** Activist investor Sandell Asset Management Corp is urging pipeline and power giant TransCanada Corp to make big changes to its corporate structure in order to boost its share price. (http://bit.ly/1xLk8pW)

 

China

CHINA SECURITIES JOURNAL

– China plans to allow insurance funds to invest overseas via the Shanghai-Hong Kong stock connect, reported the paper, citing sources.

– Chinese investors prefer blue chips and focus more on long-term returns when they invest in the Hong Kong market via the Shanghai-Hong Kong equity link, according to a recent survey conducted by the China Securities Regulatory Commission (CSRC).

SHANGHAI SECURITIES NEWS

– An electronic platform for recruiting financial talent was launched on Tuesday as a part of Shanghai’s “financial talents” project to meet the goal of developing the city into a financial center by 2020.

SHANGHAI DAILY

– More than 7,000 10-year US visas were issued by the US Consulate General in Shanghai in the past week after the new extended visa scheme was introduced.

CHINA DAILY

– China is seeing an increasing number of methamphetamine users, said Liu Yuejin, a senior official from the Ministry of Public Security. In the first nine months of this year, police uncovered more than 100 violent crimes caused by meth users.

Read more: http://ift.tt/1tdYZzx…
Follow us: @MailOnline on Twitter | DailyMail on Facebook

 

Britain

Supermarkets still selling chicken contaminated by deadly bug

Supermarkets are selling chicken they know to be contaminated with a bacterium that causes food poisoning and kills more than 100 people a year. (http://thetim.es/1tb7v29)

The Guardian

Christmas computer game releases help inflation edge higher

Inflation edged higher last month, pushed up by more expensive computer game releases in the run-up to Christmas, but overall price pressures remained low. (http://bit.ly/1u7YkQ9)

UK grocery sales in decline for first time in 20 years

UK grocery sales have gone into decline for the first time in at least 20 years as a raging price war and the falling cost of food commodities hit Britain’s supermarkets. (http://bit.ly/1xTQQq9)

The Telegraph

ECB entering ‘very dangerous territory’ warns S&P

The European Central Bank’s plans for 1 trillion euros ($1.25 trillion) of monetary stimulus is fraught with risk and is likely to fail without full-blown bond purchases, Standard & Poor’s has warned. (http://bit.ly/1xBenxe)

London Stock Exchange begins investigation into Quindell’s share price fall The London Stock Exchange is in the early stages of investigating the circumstances surrounding Monday’s 19 pence (0.2966 US dollar) price fall in insurance outsourcer Quindell PLC. (http://bit.ly/1u7oQZZ)

Sky News

United count cost of Champions League absence

Manchester United Plc’s revenue fell by 10 percent in the first quarter of this season, as the club paid the price for its absence from the Champions League. (http://bit.ly/1HhCILy)

Drinks Group Britvic Seeks Board Refreshment

Britvic PLC, the soft drinks manufacturer behind Robinsons and J2O, has begun a search for heavyweight figures to refresh its boardroom nearly a decade after it became a separately listed company. (http://bit.ly/1yPGMg5)

The Independent

Quindell founder Rob Terry apologises after controversial share deal

The founder of troubled outsourcer Quindell has issued an apology for his role in a controversial share deal that resulted in his ousting and left the company’s reputation in tatters. (http://ind.pn/1HhEBYD)

UK inflation rises slightly to 1.3 percent in October

The rate of inflation accelerated slightly to 1.3 percent in October but remains well below the Bank of England’s target of 2 percent for the 11th month in a row. (http://ind.pn/1xlY1r0)

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Housing starts for October at 8:30–consensus up 0.8% to 1.025M rate
Housing permits for October at 8:30–consensus up 0.9% to 1.04M rate

ANALYST RESEARCH

Upgrades

Almost Family (AFAM) upgraded to Neutral from Underperform at RW Baird
CF Industries (CF) upgraded to Outperform from Neutral at Credit Suisse
Columbia Sportswear (COLM) upgraded to Buy from Neutral at Citigroup
DSW (DSW) upgraded to Positive from Neutral at Susquehanna
LHC Group (LHCG) upgraded to Neutral from Underperform at RW Baird
Mosaic (MOS) upgraded to Positive from Neutral at Susquehanna
National Grid (NGG) upgraded to Hold from Sell at Deutsche Bank

Downgrades

Beacon Roofing (BECN) downgraded to Hold from Buy at KeyBanc
BlackBerry (BBRY) downgraded to Underweight from Equal Weight at Morgan Stanley
Consolidated Edison (ED) downgraded to Sell from Neutral at UBS
Denbury Resources (DNR) downgraded to Hold from Buy at Wunderlich
Pool Corp. (POOL) downgraded to Hold from Buy at KeyBanc
Synchronoss (SNCR) downgraded to Underperform from Neutral at RW Baird
Total System (TSS) downgraded to Sell from Neutral at Goldman

Initiations

American Axle (AXL) initiated with a Market Perform at FBR Capital
Church & Dwight (CHD) initiated with a Buy at BTIG
Cooper Tire (CTB) initiated with an Outperform at FBR Capital
Coty (COTY) initiated with a Buy at BTIG
Dana Holding (DAN) initiated with an Outperform at FBR Capital
Diplomat Pharmacy (DPLO) initiated with an Outperform at Leerink
Diplomat Pharmacy (DPLO) initiated with an Overweight at JPMorgan
Energizer (ENR) initiated with a Neutral at BTIG
Herbalife (HLF) initiated with a Buy at BTIG
Jarden (JAH) initiated with a Buy at BTIG
Liberty Broadband (LBRDA) initiated with a Buy at Evercore ISI
Nu Skin (NUS) initiated with a Neutral at BTIG
Rackspace (RAX) initiated with an Overweight at Barclays
Stoneridge (SRI) initiated with a Market Perform at FBR Capital
Tuesday Morning (TUES) initiated with an Outperform at Wedbush

COMPANY NEWS

Darden (DRI) reported restructuring, CFO retirement, closure of aviation department
Colony Financial (CLNY) to acquire Cobalt Capital Industrial Real Estate for $1.6B
La-Z-Boy (LZB) raised quarterly dividend 33% to 8c per share
Barrick Gold (ABX) appointed Shaun Usmar as CFO Designate
Jack in the Box (JACK) set long-term annual SSS growth target of 2%-3%
PetSmart (PETM) forecast FY15 SSS growth in the low-single digits
Avon Products (AVP) announced actions to reduce costs including headcount reductions

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

Lowe’s (LOW), PetSmart (PETM), Leju (LEJU), Stage Stores (SSI), Staples (SPLS), China Distance Education (DL), Golub Capital (GBDC), La-Z-Boy (LZB), M/A-COM (MTSI), Jack in the Box (JACK), Vipshop (VIPS)

Companies that missed consensus earnings expectations include:

E-House (EJ), Nord Anglia (NORD), SQM (SQM), Xueda Education (XUE)

Companies that matched consensus earnings expectations include:

LightInTheBox (LITB)

Stage Stores (SSI) backs FY14 EPS view of $1.05-$1.15, consensus $1.01
Staples (SPLS) sees Q4 EPS 27c-32c, consensus 31c
Lowe’s (LOW) sees FY14 EPS about $2.68, consensus $2.63
Jack in the Box (JACK) sees FY15 operating EPS $2.73-$2.88, consensus $2.81

NEWSPAPERS/WEBSITES

Sources: KKR (KKR), CD&R team up to take PetSmart (PETM) private, Reuters reports
NHTSA wants ‘millions of vehicles’ recalled due to Takata air bags, CNBC reports (TM, HMC, FIATY, F, GM, NSANY, VLKAY)
Ackman urges significant cost cuts at Zoetis (ZTS), Bloomberg reports
iPhone 7 (AAPL) could include ‘biggest camera jump ever,’ TheTechBlock reports
RadioShack (RSH) loan from Monarch off table, Bloomberg reports
Dollar General (DG) may have to sell over 4K stores for deal approval, NY Post says (FDO)
Wells Fargo (WFC), U.S. not as optimistic on settling mortgage suit, Reuters says
Investors should think about buying Home Depot (HD) dip, Barron’s says

SYNDICATE

Amicus Therapeutics (FOLD) 13.85M share Secondary priced at $6.50
CorEnergy (CORR) 13M share Secondary priced at $6.80
Moelis (MC) 5.5M share Secondary priced at $31.75
Paramount Group (PGRE) 131M share IPO priced at $17.50
Receptos (RCPT) 3.6M share Secondary priced at $100.00

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

Once again all eyes are on the carry-trade driving Yen, whose avalance into oblivion is picking up speed, and where the formerly unimaginable USDJPY level of 120 as presented here in September, is now looking like this week’s business, with the only question how long until Albert Edwards’ next target of 145 is hit leading to nuclear currency warfare between Japan, Korea, China and ultimately, the US and Europe. Unfortunately, for Japan, at this point the terminal currency collapse will do nothing to incrementally boost exports or its economy, and the former Japan finmin was on the tape warning again that the Japanese recession will persist as USDJPY over 115 is now hurting Japan, something which should by now have been clear to most.

Then again with a money-printing Keynesian lunatic in charge, for whom there is now no turning back, Japan really has no options. The good news, at least for the US which is now openly pulling the strings behind Japan’s monetary policy, is that the soaring Yen will continue to drag correlation algos higher, and send the S&P500 to fresh all time highs even as the Japanese economy is devastated.

In other news, the much hyped Stock Connect between China and Hong Kong is a dud with volumes plunging and CLSA calling it a ghost traing. According to Bloomberg, about 2.6 billion yuan, or 20%, of the 13 billion yuan northbound daily quota was taken on day 3 of the link vs 100% and 37% on the 2 opening days. Of the Shanghai connect stocks, 242 were up, and 249 down; of the Hong Kong connect stocks only 81 were up, while 159 down.

Worse, the commodity rout continues, with the slide in iron ore prices has been a particular focus in the commodity complex with Dalian iron futures hitting a second consecutive record low as data in China continues to fail to impress. Nonetheless, precious metal prices have continued to see support with spot gold managing to break out of its tight overnight range to touch the USD 1,200/oz level

European equities enter the North American crossover mostly in the green after picking up off their worst levels which were seen earlier in the session following overnight weakness in Asian equities and pulling back some of yesterday’s gains. In terms of the rebound, nothing fundamental has been attributed the move higher, although it does coincide with the Gilt-led softness seen in fixed income products following the less dovish than expected BoE minutes release, which also saw short-sterling reverse its earlier flattening pattern. Despite the upside for European stocks, the FTSE 100 trades in the red as the continuing decline in iron prices has placed weight on the mining-heavy FTSE index, with names such as Rio Tinto and Antofagasta seeing a bout of underperformance.

Bulletin Headlines Summary

• GBP/USD pulls off session lows following a less dovish than anticipated BoE minutes release, which has also placed pressure on fixed income products.
• European equities trade mostly in the green with no sustained direction, although the FTSE 100 underperforms as Iron ore miners continue to feel the squeeze of the slide in iron ore prices.
• Looking ahead, attention turns towards the release of US housing starts, building permits, DoE crude oil inventories and of course the FOMC minutes release.
• Treasuries decline with core euro zone sovereigns amid heavy corporate issuance calendar and as investors awaits release of minutes from Fed’s October meeting.
• Bank of England policy makers voted 7-2 to keep the key interest rate at a record low this month as some of the majority began to raise concerns about potential inflation pressures
• Obama plans to issue a reprieve for undocumented immigrants whose children were born in the U.S., part of an order that would shield between 4m and 5m from deportation, according to people familiar with the proposal
• Prime Minister Shinzo Abe invoked the American Revolution in calling a snap election and shelving a further increase in a tax that sank Japan into recession
• BOJ’s Kuroda secured a wider majority today and warned inflation could fall below 1% after the world’s third- largest economy slid into recession
• Keystone XL pipeline backers came up one vote short in the Senate and vowed to try again in January, when they expect to have enough support to send a bill to Obama
• Sovereign yields mostly higher. Asian stocks mostly lower. European stocks gain, U.S. equity-index futures lower. Brent crude and gold higher, copper falls

US Event Calendar

• 7:00am: MBA Mortgage Applications, Nov. 14 (prior -0.9%)
• 8:30am: Housing Starts, Oct., est. 1.025m (prior 1.017m)
• Housing Starts m/m, Oct., est. 0.8% (prior 6.3%)
• Building Permits, Oct., est. 1.040m (prior 1.018m, revised 1.031m)
• Building Permits m/m, Oct., est. 0.9% (prior 1.5%, revised 2.8%)
• 2:00pm: Minutes of October 28-29 FOMC meeting released

FX

One of the more notable movers in FX markets has been GBP following the BoE minutes. Despite residing at session lows in anticipation of an overtly dovish release, GBP saw a sharp move higher as the report revealed a 7-2 split and was not as dovish as some had expected. More specifically, particular focus was paid on comments that a tighter labour market is likely to lead to wage growth soon and the fact that the MPC majority said there is a risk of inflation overshooting the 2% target. Furthermore, CAD has continued to weaken with weakness being attributed to the failure of the Keystone pipeline bill to be passed in the Senate which would have seen the construction of an oil pipeline from Canada to US gulf refineries. Additionally, the decline in iron ore prices has filtered through to FX markets, with AUD seen lower throughout overnight and European trade with yesterday’s jaw-boning of the AUD and cross-related selling in AUD/JPY also placing further weight on the Antipodean currency. Elsewhere, overnight, USD/JPY broke back above 117.00 to trade at its highest since

COMMODITIES

The slide in iron ore prices has been a particular focus in the commodity complex with Dalian iron futures hitting a second consecutive record low as data in China continues to fail to impress. Nonetheless, precious metal prices have continued to see support with spot gold managing to break out of its tight overnight range to touch the USD 1,200/oz level. In the energy complex, despite opening lower following last nights API inventories which revealed a build of 3700k vs. Prev. drawdown of 1500k, energy prices have ebbed higher throughout European trade as participants look ahead to today’s DoE inventories with the headline expected to reveal a drawdown of 1500k, a number which is higher than initially forecasted.

 

DB’s Jim Reid Concludes the Overnight Recap

So after much excitement yesterday following Prime Minister Abe’s snap election announcement, sales-tax delay and planned stimulus package all eyes have turned to the BoJ meeting this morning. In terms of the headlines, as expected QE has remained steady at ¥80tn annually with the board having voted 8-1 in favour. After last month’s 5-4 vote it seems consensus has been built around the new measures which will be a relief to policy makers, especially after the measures announced this week. Taking a closer look at the details, the central bank notes that the outlook in Japan’s economy is ‘expected to continue its moderate recovery trend, and the effects including those of the subsequent decline in demand following the front-loaded increase prior to the consumption tax hike are expected to dissipate gradually’. CPI is expected to remain at the current level for the time being whilst there is some mention that QQE is so far exerting its intended effects with the Bank expected to continue with stimulus for as long as necessary to achieve the 2% target. The result is certainly a positive for Kuroda following what was largely a split decision last month on extending QE. The press conference takes place as we go to print so this is worth keeping an eye on for Kuroda’s take on this week’s fiscal events.

In terms of how markets are reacting post BoJ, the Nikkei is currently trading -0.14% having opened around +0.7% stronger and then declining to trade -0.3% lower post the decision. The JPY has weakened a further 0.37% versus the Dollar to now trade at 117.29 and mark a seven year low. Elsewhere bourses are mixed around Asia. The CSI 300, Hang Seng and Kospi are +0.11%, -0.41% and -0.01% respectively.

As well as the BoJ news to digest today, we’ve also got the FOMC minutes to look forward to later. It’s easy to make an argument either way with regards to what we might expect. On the one hand, we could make a case that the details could be something of a non-event with the focus shifting immediately to the December meeting. On the other hand DB’s Joe Lavorgna summed it up well at the start of the week, commenting that the statement from the October 28th- 29th meeting was notably more hawkish than expected, particularly with regards to the economy and upgrading its assessment of the labour market. Joe also mentions the lack of commentary around a stronger dollar or recently tightening financial conditions, so conceivably these could be mentioned. All in all the key will be whether the minutes rubber stamp the edging up in hawkishness or whether it will throw the doves an olive branch.

Whilst on the US, the S&P 500 continues to extend its record closing highs (+0.51%) after trading in a relatively narrow range over the past week. As well as being supported from the positive tone extending from Abe’s announcement, macro data did little to dampen sentiment. The NAHB housing market index surprised to the upside with the 58 print ahead of expectations of a 55 reading. Digging deeper into the details, all three subcomponents of the index – present conditions, expectations and buyers traffic – rose along with gains in all four regions of the country to cause the index to print just short of September’s post recession high (59). Our US colleagues point out that the NAHB series leads housing construction by around six months and so they expect a marked improvement in residential construction over the next couple of quarters, boosting total housing-related spending which they feel is enough to sustain a 3%-plus real GDP growth over next year. – a pretty bold call. Meanwhile the PPI reading for October was relatively strong. The headline (+0.2% mom) reading and ex. food and energy print (+0.4% mom) beat expectations of -0.1% and +0.1% respectively. Away from the macro prints, the Fed’s Kocherlakota was in the press once again, this time commenting that the Fed is risking its credibility by not acting aggressively enough to bring inflation back up to its 2% target. He also reiterated that inflation will not rise back to this target until 2018 with the potential for a turnaround in inflation through 2015 ‘very unlikely’. Treasuries were generally stronger across the board, the 10yr rallying 2bps whilst the DXY closed down 0.33% at the end of play.

Turning our focus to Europe yesterday, the Stoxx 600 closed +0.61% and the Euro rallied +0.67% versus the Dollar following an unexpectedly stronger German ZEW survey print with the 11.5 reading (0.5 expected) marking the first rise in German investor confidence for eleven months. Closer to home, UK CPI data was largely in line. The +1.3% yoy headline figure a touch higher than the +1.2% consensus although the core print came in slightly under expectations at +1.5% yoy (vs. +1.6% yoy expected). DB’s George Buckley noted that despite yesterday’s print showing a slight rise, he is revising his forecasts down to +0.9% by year end, rising to +1.6% in 2015 and then +1.9% in 2016, highlighting in particular that December will be a likely flashpoint for the CPI given the +6.4% rise in household energy bills last year not being repeated and thus taking 0.3% off the headline rate. Interestingly George also points out a move in sterling could take over three years to fully impact CPI inflation, suggesting that the annual rise in Sterling to peak in July this year will likely impact CPI towards the end of 2016. Elsewhere the RPI print came in line at +2.3% yoy whilst PPI input was softer at -8.4% yoy (-8.3% yoy expected). Gilts closed flat and elsewhere 10y Bunds ended 0.5bp firmer. Credit markets generally underperformed, Xover finished 4bps wider over the day although we highlight that this was perhaps due to more technical factors around significant new issuance. New issuance in the US market is also causing some indigestion.

Just wrapping up the market moves yesterday, WTI and Brent extended declines, down 1.68% and 1.21% respectively and have continued to trade weaker overnight. Ahead of the OPEC meeting next week, the FT has reported the apparent lack of consensus between members which is underlying the struggles the group is facing given surging US output. In terms of an outcome for the meeting, a disagreement between members is surely a worst case scenario so it will be interesting to see if we hear any of the major producers align comments in the mean time.

In terms of the highlights today, we kick off in Europe this morning with the September construction output print (market looking for +1.5% mom) along with current account data whilst later in the day we expect to hear from the ECB’s Praet speaking on the ‘long-term financing of the economy’ in Frankfurt. As well as this, we will be keeping an eye on the BoE’s November minutes today. Over in the US and away from the highlighted FOMC minutes we have October building permits and housing starts data (DB expecting 1.1m versus 1.025m consensus) and the MBA’s new mortgage applications. Given the strong NAHB print yesterday it will be interesting to see whether today’s housing data confirms the trend.

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

We’ve known for 5,000 years that mass spying on one’s own people is always aimed at grabbing power and crushing dissent, not protecting us from bad guys.

We’ve known for 4,000 years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 2,500 years that prolonged war bankrupts an economy.

We’ve known for 2,000 years that wars are based on lies.

We’ve known for 1,900 years that runaway inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for millennia that torture is a form of terrorism.

We’ve known for thousands of years that – when criminals are not punished – crime spreads.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies, as it destroys all trust in the financial system.

We’ve known for centuries that monopolies and the political influence which accompanies too much power in too few hands are dangerous for free markets.

We’ve known for hundreds of years that companies will try to pawn their debts off on governments, and that it is a huge mistake for governments to allow corporate debt to be backstopped by government.

We’ve known for centuries that powerful people – unless held to account – will get together and steal from everyone else.

We’ve known for hundreds of years that standing armies and warmongering harm Western civilization.

We’ve known for 200 years that allowing private banks to control credit creation eventually destroys the nation’s prosperity.

We’ve known for two centuries that a fiat money system – where the money supply is not pegged to anything real – is harmful in the long-run.

We’ve known for 200 years that a two-party system quickly becomes corrupted.

We’ve known for over a century that torture produces false and useless information.

We’ve known since the 1930s Great Depression that separating depository banking from speculative investment banking is key to economic stability. See this, this, this and this.

We’ve known for 80 years that inflation is a hidden tax.

We’ve known for 79 years that war is a racket that benefits the elites but harms everyone else.

We’ve known since 1988 that quantitative easing doesn’t work to rescue an ailing economy.

We’ve known since 1993 that derivatives such as credit default swaps – if not reined in – could take down the economy. And see this.

We’ve known since 1998 that crony capitalism destroys even the strongest economies, and that economies that are capitalist in name only need major reforms to create accountability and competitive markets.

We’ve known since 2007 or earlier that lax oversight of hedge funds could blow up the economy.

And we knew before the 2008 financial crash and subsequent bailouts that:

• The easy credit policy of the Fed and other central banks, the failure to regulate the shadow banking system, and “the use of gimmicks and palliatives” by central banks hurt the economy

• Anything other than (1) letting asset prices fall to their true market value, (2) increasing savings rates, and (3) forcing companies to write off bad debts “will only make things worse”

• Bailouts of big banks harm the economy

• The Fed and other central banks were simply transferring risk from private banks to governments, which could lead to a sovereign debt crisis

Postscript:  Those who fail to learn from history are doomed to repeat it … and we’ve known that for a long time.

 

via Zero Hedge http://ift.tt/1uGEqky George Washington

Just a week after Dr. Craig Spencer was declared ‘Ebola-free’, The Daily Mail reports a woman, who had arrived from Guinea 18 days ago (and was on the NYC Ebola monitoring list), dropped dead in a Brooklyn hair salon this afternoon. FDNY sent their Special Operations and Hazmat units but she was declared dead at the scene. Witnesses said she was bleeding from the “face, nose, mouth, everything.”

 

 

 

As The Daily Mail reports,

There are new fears of a possible Ebola outbreak in New York City after a woman dropped dead on Tuesday afternoon.

 

FDNY activated the Special Operations and Hazmat units after the the woman, who had recently traveled from Guinea according to a source on the scene, died at Amy Professional African Hair Braiding in Brooklyn.

 

He then said he ran in there to find a woman laying on the floor.

 

When asked what she was bleeding from, Costa said, ‘face, nose, mouth, everything.’

 

 

Meanwhile, members of FDNY could be seen carefully changing into Hazmat gear outside before heading into the establishment, for what they referred to as a ‘fever travel illness.’

 

At the same time, individuals could be seen walking in and out of Amy Professional African Hair Braidig wearing no protection at all.

 

It had been reported in October that an FDNY memo instructed all personnel to use more vague terms when discussing Ebola, such as ‘fever travel incident.’

According to a source who was on the scene, the incident occurred just after 3:00 in the afternoon, and the woman was pronounced dead on arrival.

 

As ABC reports, the woman was on the NYC monitoring list…

UPDATE: Source: Woman on NYC monitoring list died of “apparent non-Ebola condition;” test to be performed in “abundance of caution” – @ABC

— ABC News Health (@ABCNewsHealth) November 19, 2014

NEW: NYC Health Dept. investigating death of woman on Ebola monitoring list; at last check, woman did not have symptoms – @ABC

— ABC News Health (@ABCNewsHealth) November 19, 2014

*  *  *

ABC7 reports further that,

The remains of a woman who died of an apparent heart attack at a hair salon in Brooklyn will be tested for Ebola.

 

EMS responded to the hair salon on Belmont Avenue in Brownsville around 2:30 p.m. on Tuesday.

 

She was declared dead at the scene.

 

The woman had been on the list of those being monitored for Ebola exposure.

 

She had recently arrived in the city from Guinea and was one of 350 people on the monitor list.

 

The New York City Health Department said at last check the woman did not have symptoms and was being monitored because of her travel history.

 

She had been back in the country for 18 days.

 

Test results are expected back late Tuesday or early Wednesday.

*  *  *

via Zero Hedge http://ift.tt/1u8JdWQ Tyler Durden

From a reader

ZH:

My wife and I own a small business and we had previously (in 2013)  been buying health insurance on our own for ourselves and our two kids.  The cost was about six hundred per month with a $5200 deductible, $6800 total out of pocket exposure for the family of four. 

After spending months trying to register for the ACA in late 2013 and early 2014 my kids got put on our state’s insurance (at “no cost”) and my wife and I bagged an ACA policy at a subsidized cost of $281 per month with a total out of pocket of about $6500 (just for the two of us).

Attached is the ACA notification of next year’s price increase.  As you can see the cost goes from $281 to $555, a monthly increase of $274, a percentage increase of 97%. 

Basically we are now paying the same amount for the two of us that we paid for all four of us one year ago.

How can that increase occur in a “free market” economy?  Did I miss something? Has some input cost leaped exponentially in order to double the price I pay? Or has private industry colluded with government to rig the markets (again) in their favor?

How much longer will the American people allow corporations to rip them off in collusion with the government?  Fuck this bogus economy and government captured by corporations.  Where is the leader who will rise up from the masses and snuff out the corp/govt nexus before it imprisons us all in debt serfdom police state?

Do you think for one minute that freaking Mitch McConnell, Harry Reid, Nancy Pelosi, John Boehner or anyone newly elected or previously elected cares one shit about my wife and kids or what we pay for crappy health care that we cannot afford to access due to high deductibles?  Those fucks cannot see beyond the next donor phone call, and only come clucking out of the hen house in order to give voice to the latest party certified political meme, be it ‘freedom’, ‘liberty’, ‘security” or some other hollowed out focus group tested bullshit sound bite.

via Zero Hedge http://ift.tt/14IszbO Tyler Durden