iftttwall

Retail Sales headlines, sliced and diced whichever you like, modestly beat expectations. Ex Autos & Gas, retail sales rose 0.6% against an expectation of a 0.4% rise as falling gas prices provided some support for sales. However, more troubling for the US economy is the 1.6% tumble in ‘electronics and appliances stores’ sales. The big question is “are iPhones part of the ‘electronics and appliances stores’ category?”

 

 

But Electronics tumbled…

 

 

Charts: Bloomberg

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

As reported earlier, Germany’s economy (accounting for about 30% of the Eurozone) avoided a recession by the narrowest of seasonally-adjusted margins when somehow, the Eurostat econometricians managed to calculate with laserlike precision that its economy grew by 0.1% in Q3, reversing the contraction from the previous quarter on hopes the Ukraine situation has now stabilized.

So far so good, but an even more amusing observation arises when looking at which was the fastest growing country in the Euro Area in the third quarter. The answer, courtesy of Eurostat, is that the nation whose GDP rose the most in Q3, surpassing Germany, Finland, the Netherlands, Austria and well, everyone else, was, drumroll…

Greece.

 

Yes, the same Greece whose latest unemployment reading was 25.9%, or more than where it was during the US great depression.

Ah Europe, never change.

via Zero Hedge http://ift.tt/115wXzr Tyler Durden

• “The hate us for our…” Americans’ Cellphones Targeted in Secret U.S. Spy Program (WSJ)
• Ukraine and Russia take center stage as leaders gather for G20 (Reuters)
• Moscow and Kiev trade accusations; U.S. warns Russia against escalation (Reuters)
• Heartland Central Banker Calls Asset Bubbles Top Concern (BBG)
• U.S. Said to Give Banks December Deadline in FX Probe (BBG)
• Series of Failures Enabled White House Breach, Report Finds (WSJ)
• Yen plumbs seven-year trough on likely Japan sales tax delay (Reuters)
• JPMorgan Chase Bankers Said to Lead Moscow Departure (BBG)
• How Health Law’s Medicaid Enrollees Strain the System (WSJ)
• John Major calls UKIP the ‘anti-everything’ party (Reuters)
• Swiss Demand for Currency Automation Seen Reshaping Trading (BBG)
• Islamic State leader urges attacks in Saudi Arabia: speech (Reuters)
• ECB’s Noyer – ‘no problem’ buying government bonds if needed (Reuters)
• Greece Exits Recession After Crisis That Put Euro at Risk (BBG)

 

 

Overnight Media Digest

WSJ

* The Justice Department is scooping up data from thousands of mobile phones through fake communications towers deployed on airplanes, a high-tech hunt for criminal suspects that is snagging a large number of innocent Americans. (http://on.wsj.com/1tNYyf7)

* President Obama could announce executive actions overhauling the immigration system as early as next week, though officials keep debating the best timing for a move that the GOP protests. (http://on.wsj.com/11mWbu5)

* A New Mexico county shows how Medicaid’s growth under the Affordable Care Act has created a paradox: Many low-income Americans have gained coverage, but their numbers are straining some healthcare systems. (http://on.wsj.com/114MMXi)

* China’s CGN Power Co Ltd plans to launch a US$3 billion initial public offering next week in Hong Kong, where it would be among the first companies to gauge investor appetite after the start of a stock-trading link between Shanghai and Hong Kong. (http://on.wsj.com/1ECclvM)

* Halliburton Co is in talks to buy Baker Hughes Inc , a deal that would help the big oil-field services companies contend with falling oil prices. (http://on.wsj.com/1zRO9HD)

* FCC Chairman Tom Wheeler is getting boxed in as the debate continues over net neutrality – the idea that all Internet traffic should be treated the same. (http://on.wsj.com/1v7HCHP)

* Lockheed Martin Corp, the world’s largest defense company with some $45.4 billion in revenue, is pursuing new markets as far-flung as aquaculture equipment and compact fusion reactors amid declining spending on defense equipment. (http://on.wsj.com/14krxTb)

* An intruder was able to get over the White House fence and into the mansion in September because of a series of failures, including unclear radio transmissions and bushes that did not provide the barrier the Secret Service thought they would, a report has found. (http://on.wsj.com/1uiuKN6)

* Warren Buffett’s Berkshire Hathaway Inc agreed to buy Duracell, taking advantage of its long-standing ties with the battery maker’s owner in a deal that reduces taxes for both sides. (http://on.wsj.com/1yCESPQ)

* Moody’s Corp and Kroll are sparring over an unsolicited credit rating Moody’s issued on the debt of National Penn Bancshares. Kroll, which was hired by the bank to rate the debt, contends Moody’s lowballed its rating to scare other banks into hiring it. (http://on.wsj.com/1xD8iil)

* Activist investors are increasingly seeking to advance their agendas at companies by pushing for a role in selecting new management. (http://on.wsj.com/1u858AZ)

* State securities regulators are drawing up plans to allow information on problem stockbroker firms to be shared more effectively among them. (http://on.wsj.com/1wZpYow)

* Amazon.com Inc reached a new multi-year publishing contract with Hachette Book Group Inc covering print and digital books, bringing to an end a bitter dispute that showed how the online retailer’s growing clout is roiling the book industry. (http://on.wsj.com/1vaCSRg)

* Ocwen Financial Corp will not buy the rights to service $39 billion in mortgages for Wells Fargo & Co, the companies said, officially terminating a deal that New York’s financial regulator had put on hold. (http://on.wsj.com/1pXxgbH)

* Honda Motor Co Ltd said it identified the first case outside the United States of a death linked to faulty air bags made by Takata Corp, a development that broadens the scope of a safety alarm that is already roiling North America. (http://on.wsj.com/1Bl0GFk)

* Twitter Inc’s debt was rated as junk by Standard & Poor’s Ratings Services, a sobering grade that comes a day after executives of the social media service tried to reassure skeptics on Wall Street of its long-term growth plan. (http://on.wsj.com/1xmIDMp)

* Since Nov. 4, collectors have flocked to the world’s chief auction houses in New York to buy more than $2 billion of art, a historic high in which 23 works sold for more than $20 million apiece. (http://on.wsj.com/1xmIDMp)

* Google Inc has teamed up with mapping company SkyTruth and marine-advocacy group Oceana to create a new tool aimed at reining in illegal fishing world-wide. (http://on.wsj.com/1zSGxEP)

* BlackBerry Ltd and Samsung Electronics Co Ltd agreed to sell each other’s mobile-security technology, a partnership that could help them win more enterprise customers. (http://on.wsj.com/1znQLKj)

* Oracle Corp and SAP SE have agreed to settle a long-running legal battle over software copyrights, the companies said. SAP will pay Oracle $359 million to settle the case. (http://on.wsj.com/1tOVxeJ)

* The social news site Reddit said that Chief Executive Yishan Wong had abruptly resigned, apparently over a dispute involving office space and the company’s chief operating officer, Ellen Pao, will act as interim CEO. (http://on.wsj.com/1xmKJvA)

 

FT

According to a European Commission investigative report, due to be published on Friday, the Netherlands illegally understated coffee group Starbucks’ taxable income. The U.S.-based company is already in the middle of a controversy over tax deals in Ireland.

In view of falling oil prices, Premier Oil has decided to scale back its plans to explore the disputed waters of the Falkland Islands. The FTSE 250 group said it will reduce its estimated $2 billion capital expenditure requirement as it will develop fewer wells in the northern part of the disputed islands.

Sir Richard Branson sold a 15 percent stake in Virgin Money , a company he owns partly, as he earned at least 70 million pounds (109.84 million US dollar) from the bank’s flotation on the London Stock Market. If the over-allotment option is triggered and new shares are released, Branson as well as Wilbur Ross, a billionaire co-owner of the bank, are poised to reap as much as 85 million pounds.

Paintings by Andy Warhol, Roy Lichtenstein and Ed Ruscha helped Christie’s create a world auction record of $852.9 mln at a contemporary and postwar evening in New York.

 

NYT

* The steepening drop in gasoline prices in recent weeks, spurred by soaring domestic energy production and Saudi discounts for crude oil at a time of faltering global demand is set to provide the United States economy with a multibillion-dollar boost through the holiday season and beyond. (http://nyti.ms/1wt0fk6)

* President Obama will ignore angry protests from Republicans and announce as soon as next week a broad overhaul of the nation’s immigration enforcement system that will protect up to five million unauthorized immigrants from the threat of deportation and provide many of them with work permits, officials said. (http://nyti.ms/114NjZg)

* Daniel Loeb, the activist hedge fund manager, unveiled a new website that takes aim at Dow Chemical Co after months of trying to persuade it to take further steps to increase shareholder value. Loeb’s firm, Third Point, lists on the website several instances of what it called “broken promises” by Dow and its chief executive, Andrew Liveris. (http://nyti.ms/1v8dRqm)

* India and the United States reached an agreement over food stockpiles, removing a major obstacle to a global trade deal that has been stalled for months. The pact, which precedes a meeting this weekend of the Group of 20 major economies, allows India to continue its extensive food subsidy program. (http://nyti.ms/1tOGAtd)

* Hachette won an important victory in its battle with Amazon.Com Inc to set its own prices for e-books, which it sees as critical to its survival. Amazon’s supporters publicly questioned the need for Hachette, the fourth largest publisher, to exist in an era when authors can publish themselves digitally. (http://nyti.ms/1EIr4XQ)

* Berkshire Hathaway Inc, the conglomerate run by Warren Buffett, will acquire Duracell from Procter & Gamble using a transaction aimed at lowering the tax bill. By agreeing to swap his firm’s holdings in Procter & Gamble, worth about $4.7 billion in exchange for Duracell, Buffett will gain one of the best-known battery companies in the world. (http://nyti.ms/1GUSThN)

* A panel of Goldman Sachs Group Inc employees spent a night at the Columbia University faculty club trying to convince a packed room of potential recruits that Wall Street, not Silicon Valley, was the place to be for computer scientists. Their argument to the technologically inclined students was that Wall Street was where they could find far more challenging jobs working on some of the world’s most difficult technical problems. (http://nyti.ms/1qGPitq)

* Virgin America Inc raised about $305.9 million in its initial public offering, at the offering’s price of $23 a share, as the low-cost airline prepares for a new life as a publicly traded company. The stock sale values the airline at about $972.9 million. (http://nyti.ms/1xUdmNA)

* Halliburton Co is in talks to buy Baker Hughes Inc , the deal would unite two of the biggest oil field services providers in what would be one of the largest energy deals in years, Baker Hughes confirmed. (http://nyti.ms/1sLgOpk)

* Comcast Corp’s acquisition of Time Warner Cable Inc has already drawn many heated detractors to urge the Federal Communications Commission to reject the deal. It has been hit yet again by United States President Barack Obama’s endorsement of net neutrality. (http://nyti.ms/1GULCyA)

* The Dubai port operator DP World agreed to acquire Economic Zones World, a developer and operator of industrial parks, giving it access to the Jebel Ali Free Zone for $2.6 billion in cash, including debt. (http://nyti.ms/1sLqX5j)

* Dutch financial services company ING Groep NV said that it planned to further reduce its stake in Voya Financial, its former United States business, through a sale of shares to the public. ING said that it planned to sell about 34.5 million shares, reducing its stake in Voya to about 19 percent from the current 32.5 percent. (http://nyti.ms/1ww4F9T)

 

Canada

THE GLOBE AND MAIL

** Senior Canadian government officials say Canada will under no circumstances be purchasing F-35s on an expedited basis and that no decision has been made on which new warplane to buy. In the face of a U.S. military report that Ottawa has made a secret decision to buy U.S. F-35 stealth fighters, officials say the lack of firm details on cost and capabilities has not instilled confidence. (http://bit.ly/11nennk)

** Prime Minister Stephen Harper welcomed a deal between China and the United States to cut greenhouse gas emissions but gave no indication he would commit to bigger reductions on behalf of Canada. (http://bit.ly/1xnoyph)

** The federal government plans to punish mining and energy companies that run afoul of its new corporate social responsibility policy by withdrawing support they receive from agencies such as Export Development Canada and embassies abroad. (http://bit.ly/1zTutU3)

NATIONAL POST

** The Bank of Canada is raising the alarm over the risks of electronic money, which is growing in popularity but not yet highly regulated and provides “no user protection.” (http://bit.ly/1wZuX8t)

** Toronto-Dominion Bank will be compensating thousands of clients to the tune of more than C$13.5 million ($11.9 million) for a series of instances in which they were charged excess fees on investments. On Thursday, TD settled the matter that affected at least 10,000 accounts of clients and former clients through a rare “no contest” settlement with regulators. (http://bit.ly/1GVtSDh)

** Gunman Michael Zehaf-Bibeau, who was shot dead on Parliament Hill Oct. 22 after killing a soldier, had toured the Centre Block as an ordinary member of the public in the days before his destructive rampage, the Ottawa Citizen has learned. The Royal Canadian Mounted Police’s working theory of his actions is that Zehaf-Bibeau planned to behead a Canadian politician once he made it onto the Hill after killing Corporal Nathan Cirillo at the National War Memorial. (http://bit.ly/1vbCaTN)

 

China

CHINA SECURITIES JOURNAL

– Chinese brokerages need to submit to the regulator by year-end their plans to replenish capital over the next three-years, as part of the regulator’s broader efforts to improve the fund management mechanism and widen capital sources.

SHANGHAI DAILY

– Shanghai’s housing authority unveiled on Thursday a revised criteria for “normal” homes, to help buyers qualify for preferental policies and boost sales of residential property. The city government will raise the price threshold to allow more homebuyers, particularly end-users, to be eligible for preferential tax policies.

CHINA DAILY

– China will soon put its first domestically developed electric-powered aircraft into mass production, and designers expect a huge market at home and abroad. The paper said the two-seater, light-duty plane will run on electric motors, with electricity coming from fuel cells, solar cells, ultracapacitors, power beaming or batteries.

SECURITIES TIMES

– Shanghai Metersbonwe Fashion & Accessories has announced that it will invest 52.5 million yuan ($8.57 million) for a 15 percent stake in a private bank that will be jointly set up with other investors. It did not give details on the bank or who the other investors are.

PEOPLE’S DAILY

– China’s economy is undergoing structural adjustment and the recent slowdown in its growth momentum is pragmatic and necessary to ensure efficiency.

 

Britain

The Times

* British American Tobacco fined for oversupplying cigarettes to Belgium

British American Tobacco Plc has been fined by HM Revenue & Customs for oversupplying cigarettes into Belgium which can be smuggled back into the UK. The fine from the taxman follows pressure from politicians who have complained HMRC has been too soft on tobacco companies. (http://thetim.es/1wYGIMx)

* Eurostar upgrade on fast track to reach Amsterdam and Germany

Eurostar has unveiled its biggest upgrade in 20 years of running high-speed trains under the Channel between London and Paris with the presentation at St Pancras International of its e320 German-built trains. (http://thetim.es/1znp30o)

The Guardian

* Lloyds to cut 1,250 jobs in insurance

Lloyds Banking Group is shedding 1,250 jobs as it cuts costs and changes the way it sells insurance products in its branches. The cutbacks – described as devastating news by union officials – are the latest to take place at the 24 percent taxpayer-owned bank. (http://bit.ly/1qFkVUi)

* Standard Chartered boss hails ‘constructive’ investor talks

The boss of Standard Chartered Plc ended three days of crucial talks with investors on Thursday, insisting the discussions had been “constructive” as he battles to keep his job at the emerging markets bank. (http://bit.ly/1xxlHri)

The Telegraph

* BT plans to scrap 2.4 bln pounds Wholesale division

BT is planning to scrap its Wholesale unit and fold the multi-billion-pound business into Openreach, the monopoly division that controls Britain’s national telecoms infrastructure, in a move that will concern rivals who already fear its power. (http://bit.ly/1xm5o38)

* Asda hits out at price gimmicks by ‘desperate’ rivals

Asda, the British arm of U.S. supermarket group Wal-Mart Stores Inc has launched a ferocious attack on its supermarket rivals, accusing them of being “desperate” and misleading customers with price gimmicks. (http://bit.ly/1EAUZzi)

Sky News

* Discounter B&M in talks over Homebase stores

The fast-growing discount chain B&M is in talks over a multimillion pound bid to take on dozens of Homebase DIY stores in a move that would underline the changing landscape of UK retailing. (http://bit.ly/1sIJr7z)

* Buffett spends $3 bln on Duracell purchase

Berkshire Hathaway Inc investment vehicle is to pay $3 billion to Procter & Gamble Co for Duracell battery business. The consumer goods firm, which took control of Duracell when it bought Gillette in 2005, had previously announced its intention to slim down. (http://bit.ly/1yCZA24)

The Independent

* Hasbro ‘in talks’ to buy Hollywood studio DreamWorks Animation

Toymaker Hasbro Inc is in talks to buy Hollywood studio DreamWorks Animation as chief executive Brian Goldner moves to build up an entertainment arm. (http://ind.pn/1xTxzTT).

* ‘Shell was told to replace pipeline six years before Nigeria oil spills’

Royal Dutch Shell Plc failed to act on its own internal advice to replace a 30-year-old pipeline years before it wreaked havoc on the Niger Delta by rupturing and spilling thousands of barrels of oil into the area, according to court documents. (http://ind.pn/1oSZ5km)

 

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Retail sales for October at 8:30–consensus up 0.2%
Consumer sentiment index for November at 9:55–consensus 87.5
Business inventories for September at 10:00–consensus up 0.3%

ANALYST RESEARCH

Upgrades

CEVA (CEVA) upgraded to Outperform from Perform at Oppenheimer
Empire State Realty (ESRT) upgraded to Buy from Hold at Stifel
Fly Leasing (FLY) upgraded to Buy from Neutral at BofA/Merrill
Global Partners (GLP) upgraded to Outperform from Sector Perform at RBC Capital
Harley-Davidson (HOG) upgraded to Buy from Neutral at Goldman
IAMGOLD (IAG) upgraded to Overweight from Neutral at HSBC
NetEase.com (NTES) upgraded to Buy from Neutral at UBS
NetEase.com (NTES) upgraded to Overweight from Underweight at HSBC
Raytheon (RTN) upgraded to Outperform from Market Perform at Cowen
Rofin-Sinar (RSTI) upgraded to Buy from Neutral at Longbow
Salix (SLXP) upgraded to Buy from Neutral at UBS
Teekay Tankers (TNK) upgraded to Neutral from Underweight at JPMorgan

Downgrades

Abercrombie & Fitch (ANF) downgraded to Neutral from Outperform at Credit Suisse
AmeriGas (APU) downgraded to Underperform from Neutral at Credit Suisse
Hersha Hospitality (HT) downgraded to Hold from Buy at MLV & Co.
Immune Design (IMDZ) downgraded to Hold from Buy at Jefferies
Meritor (MTOR) downgraded to Neutral from Buy at Goldman
Nike (NKE) downgraded to Neutral from Buy at Sterne Agee
Ross Stores (ROST) downgraded to Sell from Hold at Canaccord
Suburban Propane (SPH) downgraded to Underperform from Neutral at Credit Suisse
TJX (TJX) downgraded to Sell from Hold at Canaccord
Total System (TSS) downgraded to Market Perform from Outperform at JMP Securities
Universal Display (OLED) downgraded to Perform from Outperform at Oppenheimer
Urban Outfitters (URBN) downgraded to Neutral from Buy at Mizuho
Wal-Mart (WMT) downgraded to Underperform from Market Perform at BMO Capital
lululemon (LULU) downgraded to Underperform from Neutral at Sterne Agee

Initiations

AbbVie (ABBV) initiated with a Buy at Deutsche Bank
Advance Auto Parts (AAP) initiated with a Buy at Sterne Agee
AutoZone (AZO) initiated with an Underperform at Sterne Agee
Carter’s (CRI) initiated with a Buy at Sterne Agee
Children’s Place (PLCE) initiated with a Neutral at Sterne Agee
Container Store (TCS) initiated with a Fair Value at CRT Capital
DHT Holdings (DHT) initiated with a Buy at UBS
Diana Shipping (DSX) initiated with a Neutral at UBS
Genuine Parts (GPC) initiated with a Neutral at Sterne Agee
National Oilwell (NOV) initiated with a Neutral at UBS
Navios Acquisition (NNA) initiated with a Buy at UBS
O’Reilly Automotive (ORLY) initiated with a Neutral at Sterne Agee
Scorpio Bulkers (SALT) initiated with a Neutral at UBS
Scorpio Tankers (STNG) initiated with a Buy at UBS
Star Bulk Carriers (SBLK) initiated with a Neutral at UBS
Teekay Tankers (TNK) initiated with a Buy at UBS
TriplePoint Venture (TPVG) initiated with a Buy at UBS
Tsakos Energy (TNP) initiated with a Buy at UBS
USD Partners (USDP) initiated with an Outperform at Credit Suisse

COMPANY NEWS

Baker Hughes (BHI) confirmed preliminary discussions with Halliburton (HAL)
Nestle (NSRGY) to explore strategic options for development of Davigel
Google (GOOG) to retire Google Wallet for digital goods API on March 2, 2015
Geron (GERN) announced a global strategic collaboration with Janssen Biotech (JNJ)
AmerisourceBergen (ABC) was awarded an estimated $4.06B firm-fixed-price contract for prime vendor pharmaceutical and pharmaceutical-related products and support for worldwide distribution
Puma Biotechnology (PBYI) announced positive top line results from PB272 Phase II Trial

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Bitauto (BITA), Hollysys Automation (HOLI), Bona Film (BONA), Agile Therapeutics (AGRX), StarTek (SRT), SINA (SINA), Penford (PENX), Matthews (MATW), Ocera Therapeutics (OCRX), TubeMogul (tube), Cerulean (CERU), Flexion (FLXN), SMART Technologies (SMT), Kingstone Companies (KINS), Pfenex (PFNX), Vital Therapies (VTL), Evoke Pharma (EVOK), Cinedigm (CIDM), ZBB Energy (ZBB), Papa Murphy’s (FRSH), Onconova (ONTX), Nordstrom (JWN), Reed’s (REED), RE/MAX Holdings (RMAX)

Companies that missed consensus earnings expectations include:
B2Gold (BTG), Pan American Silver (PAAS), Intrexon (XON), Catalyst Pharmaceutical (CPRX), Trinseo S.A. (TSE), StoneCastle (BANX), Argos Therapeutics (ARGS), CafePress (PRSS), Catalent (CTLT), Montage Technology (MONT), Veracyte (VCYT), ESCO Technologies (ESE), Mandalay Digital (MNDL), WidePoint (WYY), Century Communities (CCS), Charles & Colvard (CTHR), Cesca Therapeutics (KOOL)

Companies that matched consensus earnings expectations include:
Medley Management (MDLY), U.S. Geothermal (htm), Weibo (WB), Celator Pharmaceuticals (CPXX), Applied Materials (AMAT)

NEWSPAPERS/WEBSITES

EU says Starbucks (SBUX) tax deal in Netherlands may be illegal state aid, WSJ reports
FTC asking Apple (AAPL) about health data protection, Reuters reports
Royal Bank of Scotland (RBS) to exit U.S. mortgage business, Reuters reports
SAP (SAP) to pay Oracle (ORCL) $359M to settle legal battle, WSJ reports
Alibaba (BABA) plans to raise up to $8B in bond offering, Bloomberg reports
BP (BP) loses bid for new trial regarding negligence in oil spill, Bloomberg says

SYNDICATE

Cheniere Energy Partners (CQH) files to sell 10.1M common shares
Covenant Transportation (CVTI) files to sell 2.2M shares of Class A common stock
EnLink Midstream (ENLK) files to sell 10.5M units representing limited partners
FibroGen (FGEN) 8.1M share IPO priced at $18.00
Landmarket Infrastructure (LMRK) 2.65M share IPO priced at $19.00
NeuroDerm (NDRM) 4.5M share IPO priced at $10.00
Premier (PINC) 3.7M share Secondary priced at $32.35
TRI Pointe Homes (TPH) files automatic common stock shelf for holders
Tiptree Financial (TIPT) files to sell 21.2M shares for holders
Virgin America (VA) 13.337M share IPO priced at $23.00
Zoe’s Kitchen (ZOES) 3.8M share Secondary priced at $32.00

via Zero Hedge http://ift.tt/115tsJc Tyler Durden

And a stunner just out of of Bloomberg:

• PIMCO PAID GROSS $290 MILLION BONUS FOR 2013, DOCUMENT SHOWS
• PIMCO PAID FORMER CEO EL-ERIAN ABOUT $230 MLN BONUS IN 2013

More from the source:

Pacific Investment Management Co. paid its former Chief Investment Officer Bill Gross a bonus of about $290 million in 2013, a year in which his Total Return Fund trailed a majority of peers, according to documents provided to Bloomberg View by someone with knowledge of Pimco’s bonus policies.

 

Mohamed El-Erian, 56, the former chief executive officer who previously shared the title of CIO with Gross, received a 2013 bonus of about $230 million, according to figures first reported today by Bloomberg View columnist Barry Ritholtz.

 

By comparison, Laurence D. Fink, CEO of BlackRock Inc., the world’s biggest money manager, received $22.9 million in 2013 compensation, and Michael Diekmann, CEO of Pimco’s parent Allianz SE, was paid 7.2 million euros ($8.99 million), regulatory filings show.

 

“While Pimco does not comment on compensation, the figures provided to Bloomberg are not correct,” said Dan Tarman, a spokesman for Newport Beach, California-based Pimco, declining to specify the firm’s objections. “For more than three decades, Pimco’s managing directors have maintained a substantial interest in the firm, currently 30 percent of profits, and this provides an important means to attract and retain the best investment talent to serve our clients.”

Which begs the question: is one valued more on managing the world’s largest bond fund (excluding the riskless Federal Reserve LLC hedge fund of course) and by its performance, or lack thereof, or on being the “straight to CNBC/BBG” pundit-slash-diva-slash-columnist-slash-blogger, i.e., marketer. Or an even bigger question: for that money can’t one come up with more credible “departure” reasons. Recall:

A globally-respected financier has revealed that he quit his job running a $2 trillion investment fund after his young daughter wrote him a note pointing out that he had missed 22 landmark events in her life.

 

Mohamed El-Erian’s ten-year-old told her dad that he had skipped her first day of school, Halloween parade, her first soccer game of the year and many recitals because he was too busy at work.

 

The California-based investment guru’s resignation in May 2013 shocked the financial world. However in a recent interview, Mr El-Erian, who made $100 million in 2011 alone, explained that his young daughter and wife Jamie were at the heart of his decision.

…

In an essay for Worth in June, El-Erian, 56, explained his decision. He said: ‘About a year ago, I asked my daughter several times to do something – brush her teeth, I think it was – with no success.  ‘I reminded her that it was not so long ago that she would have immediately responded, and I wouldn’t have had to ask her multiple times; she would have known from my tone of voice that I was serious.

One wonders how many Americans dads would miss every event of their child’s upbringing for a tiny fraction of that bonus, and further to that, perhaps that very question is at the core of why there happens to be just a little “resentment” toward the bailed-out US financial class in the past 5 or so years.

via Zero Hedge http://ift.tt/1pYLBo6 Tyler Durden

The key event overnight was the release of European Q3 GDP data, which saw Germany averting a recession by the narrowest of margins when following a -0.2% drop in Q2 economic growth, Germany grew by the smallest amount possible in Q3, or 0.1%, in line with expectations, thus averting two consecutive quarters of decline, the technical definition of a recession.

As Goldman notes, Germany’s statistical office did not release at this point any detailed figures but hinted in its press statement that private consumption was a main contributor to growth as private households increased their spending “strongly”. Net trade was also a positive factor as exports rose stronger than imports. However, machinery investment was down “significantly” and inventories also contributed negatively. Although we don’t have the detailed figures yet, the breakdown of GDP demand components seems to be consistent with a “confidence shock” that hit the German economy during Q2 – reflecting the tensions in the Ukrainian/Russian conflict – and that led to a decline in investment spending (the most volatile and most sensitive part of the economy). But this also suggests that the economy should resume its growth momentum as the negative confidence shock fades out. Of course, if the recent re-flaring of the Ukraine situation persists, look for German Q4 GDP to once again contract, with a handy “scapegoat” once again readily available.

In fact this increasingly appears probable, especially when moments ago this hit:

• GERMANY WEIGHS BACKING FURTHER RUSSIA SANCTIONS: WIRTZ

The French economy likewise posted a modest increase in Q3, although one wonders how aggressively the data had to be fudged for a country whose PMIs all indicate a -1% or greater contraction.

Italy however was less creative with its use of “hookers and blow”, and continued its recession with a 3rd negative print, contracting at -0.1% as expected, while Portugal also missed third quarter growth estimates.

In any event, European markets have played little attention to the slew of Eurozone GDP releases which revealed a beat on expectations for the core (France & German) while showing that weakness still remains in the periphery as Italy slipped back into recession and Portugal fell short of expectations, as equities trade in relatively mixed territory with volumes particularly thin thus far. Furthermore,  On a sector specific basis for equities, energy names continue to underperform as WTI prices head for their longest weekly decline since 1986. Elsewhere, the utilities sector continues to feel the squeeze, with RWE under further selling pressure (-2.8%) with participants speculating over whether the Co. will cut their dividend. Fixed income products reside in positive territory with no fundamental news being attributed to the move, it is also worth noting that volumes in the Bund are particularly thin with just over 100k contracts having gone through at the time of writing.

All eyes continue to be on WTI and Brent, which were trading just above $74 and $78 respectively. Another bout of liquidations may take the West Texas contract to a $60 handle soon enough and with it raise the specter of widespread HY defaults, which would break the relative 6 year calm the space has experienced thanks to ZIRP.

In more relevant for HFT algos overnight developments, price action centred mostly on USD strength which sent USD/JPY to its best levels since 18th Oct’07. The move higher was attributed to Japanese corporate seller positions taken out by Asia-based hedge funds and European names buying to trigger stop-losses above 116.10. However, during the European session USD has traded in a relatively rangebound manner with USD briefly coming off its best levels and thus providing some reprieve for its major counterparts, notably GBP/USD which earlier struck its lowest level since September 2013. Elsewhere, price action for EUR/USD may see some magnetism towards 1.2450 where there is 1.1bln in option expiries due to roll-off at 1500GMT NY cut.

In the energy complex WTI Crude futures have seen a bid in recent trades on bargain hunting following selling seen throughout the week, and after WTI finished lower by USD 3 at the NYMEX pit close yesterday. Do note that yesterday crude futures finished at session lows after a technical break below USD 75.00 in WTI and ahead of the Dec Brent December futures expiry. News that Libya’s Hariga oil port had reopened also weighed on prices, as well as lacklustre Chinese data on Wednesday night which indicated a slowdown in consumption. In terms of energy newsflow the IEA released their monthly report and said pressure on OPEC to reduce production is building but it appears no clear consensus on a supply cut yet. Elsewhere, precious metals markets have traded in a relatively rangebound manner throughout the European session, with participants looking ahead to the US retail sales and Univ. of Michigan confidence releases.

On the US calendar today we have US retail sales, which this time will probably disappoint on a drop in nominal values of car and gas transactions even if the control group is expected to remain steady (although based on disappointing commentary by retail chains in this earnings season, the US consumer is seriously hunkering down ahead of the winter), as well as the Univ. of Michigan confidence and any comments from Fed’s Bullard and Fischer.

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities trade in relatively mixed territory with participants not reading too much into the latest GDP releases.
• Eurozone GDP releases revealed a beat for the core (France & German) while showing that weakness still remains in the periphery as Italy slipped back into recession and Portugal fell short of expectations.
• Looking ahead, attention turns towards the release of US retail sales & Univ. of Michigan confidence and any comments from Fed’s Bullard and Fischer.
• Treasuries head for weekly decline after U.S. sold $66b of 3Y/10Y/30Y debt in quarterly refunding auctions; PPI, CPI reports due next week.
• Euro-area economy grew 0.2% in 3Q vs 0.1% median estimate in Bloomberg survey; Germany +0.1%, in line with forecasts, from revised -0.1% in 2Q;  France +0.3% vs 0.1% est., revised -0.1% in 2Q
• ECB Governing Council member Christian Noyer told French daily Les Echos in an interview that the ECB could buy state or company debt if it decided that its policies weren’t having any effect
• PBOC’s targeted liquidity injections haven’t been enough to spur a pickup in lending as aggregate financing in October was 662.7b yuan ($108 billion), down from 1.05t yuan in September
• U.K. house-price growth accelerated in October as the number of properties changing hands rose to match a seven-year high, according to Acadata and LSL Property Services
• Japan’s Abe moving toward delay of sales tax increase, perhaps for 18 months from original plan of next October, according to Nikkei newspaper
• Japan’s Government Pension Investment Fund posted notice on its website soliciting transition managers for Japanese and foreign stocks as well as foreign bonds
• Russia is preparing for a “catastrophic” slump in oil prices, which it can weather thanks to a cushion of more than $400 billion in reserves, President Vladimir Putin said
• The U,.S. House of Representatives is poised to vote again to allow the Keystone XL pipeline — this time with the promise of a Senate vote next week as Republicans and Democrats seek advantage in a runoff for the last undecided U.S. Senate seat
• Obama’s top military adviser said more U.S. troops may be needed in Iraq for a “long and difficult” fight against Islamic State, as military planners assess the shortcomings of Iraqi forces
• Sovereign yields decline. Nikkei +0.6%, Shanghai -0.3%.  European stocks mixed, U.S. equity-index futures higher. Brent crude +0.7% after falling below $78/bbl yday; gold and copper lower

US Event Calendar

• 8:30am: Retail Sales, Oct., est. 0.2% (prior -0.3%);
  • Retail Sales Ex Auto m/m, Oct., est. 0.2% (prior -0.2%)
  • Retail Sales Ex Auto and Gasoline, Oct., est. 0.4% (prior -0.1%)
  • Retail Sales Control Group, Oct., est. 0.4% (prior -0.2%)
• 8:30am: Import Price Index, Oct., est. -1.5% (prior -0.5%)
  • Import Price Index y/y, Oct., est. -1.6% (prior -0.9%)
• 9:55am: University of Michigan Consumer Sentiment Index, Nov. preliminary, est. 87.5 (prior 86.9)
• 10:00am: Business Inventories, Sept., est. 0.2% (prior 0.2%)
• 10:00am: Mortgage Delinquencies, 3Q (prior 6.04%); MBA Mortgage Foreclosures, 3Q (prior 2.49%)
• 9:10am: Fed’s Bullard speaks in St. Louis
• 4:00pm: Fed’s Fischer, Powell speak in Washington

 

* * *

DB’s Jim Reid completes the overnight recap

A theme that has built up in US markets over the last few sessions has been the battle between supportive macro data and declining energy stocks. This battle for the moment seems to be doing a good job at keeping markets in check. Yesterday the S&P closed +0.05% as the energy sector continued to drag on the rest of the index, declining 1.34%. In terms of data, the JOLTS headline figure of 4.7m job openings in September was slightly softer compared to the August reading (4.8m) however the encouraging signs came from a rise in the ‘hiring rate’ to 3.6% (from 3.4%) as well as a rising ‘quit’ rate to 2.0% from 1.8% which represents the highest level since April 2008. As we mentioned yesterday this data is on the Fed Chair Yellen’s dashboard of economic indicators and the numbers will certainly lend further support to the strengthening labour market thesis.

Offsetting this however was a further fall in the oil price. Brent declined 3.1% to $77.92 in trading last night whilst WTI was 3.9% lower to $74.21, both at the lowest levels since September 2010. The negative sentiment continues to be focused over the global supply glut and worries that OPEC won’t cut production at the meeting on the 27th of this month. Interestingly a report in the FT mentioned that Mexico has spent nearly $800m to insure against a further fall in oil prices next year, with the finance minister mentioning the need to protect public finances given the commodity funds around one-third of federal revenue. Whilst on the subject of oil, we’ve re-attached our link from yesterday to Oleg’s piece on the tipping point of the oil price in relation to the HY market, apologies for those we were unable to access it yesterday.

Whilst we’re on the topic of HY, the latest weekly HY fund flow data shows another week of differing fortunes for US and European funds. US funds saw a 4th consecutive week of inflows ($930mn) which means they have now added just over $8.5bn in this time (3% of NAV). In Europe however we saw another week of moderate outflows ($32mn). We have now seen just 1 week of inflows in the past 7 weeks (since late September). That said we have still seen net inflows YTD of $3.5bn (9.9% of NAV) in Europe. Despite the recent inflows in the US we have still seen net outflows YTD of $6.4bn (2.1% of NAV). In my discussions with numerous HY fund managers in recent weeks, most think HY is now cheap but until there is consistency of inflows there is little incentive or ability to be too aggressive expressing that view.

Just going back to wrap up the US data yesterday, jobless claims rose 12k to 290k which was a touch higher than expectations of 280k. This has pushed the 4 week average up to 285k although we note that this still remains at historically low levels. Treasuries meanwhile were stronger, with the 10yr 4bps tighter over the day whilst credit markets largely reflected equity moves and closed flat.

Closer to home the Stoxx 600 closed +0.2% at the end of play, although traded as high as +0.6% and as low as -0.4% over the session as market sentiment fluctuated over tumbling oil prices and selected solid corporate earnings prints.

The various CPI readings in the region did little to excite the market and continue to paint a subdued inflationary environment. Germany printed in line with expectations (-0.3% mom, +0.8% yoy) along with Spain (+0.5% mom, -0.1% yoy) whilst France was the marginal positive with the country reporting flat mom reading (vs. -0.1% expected) and a better than expected +0.5% yoy (vs. +0.4% expected). More importantly perhaps was the ECB’s Coeure who touched on the topic of inflation and was quoted as saying that ‘what we see is a subdued outlook for inflation and a weakening of the growth momentum and a continuously sluggish momentum in credit dynamics, which all confirm the need for a very accommodative monetary stance for an extended period of time’. If that wasn’t enough Reuters also published a report noting that 61 professional forecasters surveyed by the ECB expect eurozone inflation of 1% next year and 1.4% in 2016 (down from 1.2% and 1.5%). Today we have the second part of the European data double header with the regional Q3 GDP prints including Germany, France and Italy as well as the wider Eurozone estimate.

Just wrapping up the news in and around Europe yesterday, Russia posted a +0.7% yoy GDP figure, above expectations of +0.3% although down on the previous reading (+0.8%). This comes after the Bank of Russia has forecasted growth of +0.3% this year before stagnating in 2015 with concerns over both geo-political tension with Ukraine and lower oil prices. The MICEX closed down 1.42% yesterday whilst the ruble extended declines, losing 2.1% versus the Dollar.

Before we take a look at the rest of the day ahead, late last night we had some headlines out of Asia with the Asian Review reporting that Japan Prime Minister Abe is moving a step closer to postponing the consumption tax. The article quotes a senior government official who was reported as saying that Abe is ‘basically moving toward putting off’ raising the tax from 8% to 10%, with a decision to be made as early as next week. It will certainly be interesting to keep an eye on proceedings next week in Japan, with preliminary Q3 GDP due late on Sunday (London time) as well as Abe hosting further meetings with mayors and business leaders early in the week. With the potential for a decision around dissolving the lower house to be made next week too, it could certainly be an eventful week for the region and one we will be keeping a keen eye on. As we type the Nikkei is -0.2% on the day whilst JPY is 0.2% weaker versus the Dollar to 115.98 on the back of the comments. Elsewhere other Asian markets are generally mixed with bourses in Hong Kong, China and Korea +0.1%, -0.2% and -0.9% respectively.

In terms of the rest of the day ahead and away from the GDP prints in Europe, we’ve also got the HICP print for the region which we don’t expect to be too far away from the market consensus of 0.4% yoy for the headline figure after yesterday’s regional prints. As well as this we’ve got ECB members Lautenschlaeger and Coeure scheduled to speak at stages during the day and closer to home we’re expecting UK construction output. Later in the day and across the pond, we’ve got a relatively packed data docket which kicks off with retail sales. DB’s Joe LaVorgna mentions that the print will be especially important to gauge the current state of consumption in the region. Joe highlights that although retail sales only account for around one-quarter of total consumer spending, the data are highly correlated with overall consumption and in point of fact, the quarterly annualized change in retail control has a nearly 0.80 correlation coefficient to overall inflation-adjusted spending. Our colleagues have a +0.4% forecast for the ex. auto and gas print which is notably firmer than the headline and ex. autos figure which they’re expecting to be flat. Post this reading we will also be awaiting the import price index print followed by Michigan confidence and business inventories shortly after. If that wasn’t enough we will also have the usual Fedspeak with Bullard (speaking on the US economic and monetary policy outlook), Fischer and Powell due today.

via Zero Hedge http://ift.tt/1BnD5Uq Tyler Durden

Indulge me in a bit of a thought experiment.

Let’s say there was a fellow here in Palo Alto named Brad. He told me that he had invented the world’s perfect tiger repellant. He simply sprayed it on, and voila, no tigers would bother him.

This was intriguing to me, because I had, in turn, created a tiger attractant. My claim was that this invisible spray would attract tigers from several miles away.

The trouble was, my spray just didn’t seem to work. Try as I might, no tigers ever appeared. Not even once. Back when I was roaming around Indonesia and Sumatra, tigers would show up all the time. But here in Palo Alto, it just didn’t work anymore.

Brad, on the other hand, roamed the streets of my fair city without any fear of tiger attack. His spray, it seemed, was 100% effective. My spray didn’t work. His did.

But here’s the thing…………..the truth of the matter is, my spray worked perfectly and his was, in fact, just water. Totally inert. The reason his spray seemed so good at repelling tigers is that, between you and me, there aren’t any tigers in Palo Alto. Not even rich ones.

And that’s kind of the situation I find myself in. Because I have some trading friends who, over the past several years, have been doing fantastic with their various indicators and systems. If you look at their trading, they basically are just long all the time, so it’s not shock that they’re making money. And they want me to use these systems too, and it would seem logical to do so, because, well, they’re making money. And the tigers are staying away.

But the simple fact of the matter is that these “systems” are merely lucky beneficiaries of a completely distorted market environment. These systems probably provided, in real life, as much marginal advantage as the aforementioned tiger repellent. That is, as long as there aren’t any tigers, then you can rest assured you won’t be bothered by any big felines.

As for my tiger attractant, no matter how good it is, if the tigers simply aren’t around, they aren’t available to attract………..that is, until an environment more similar to Jakarta returns. What I’m trying to say is that the siren song of the aforementioned systems has no allure for me. They don’t sing to me the way charts do, and frankly, once the tigers show up again, I don’t think they stand a chance.

via Zero Hedge http://ift.tt/1yE4I5Q Tim Knight from Slope of Hope