another site
We can only imagine the overwhelmingly positive perspective that Boehner and the GOP leadership will have as they discuss Obamacare’s early days… What’s worse than a “train wreck?” …grab your popcorn…
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ExCBcM8A54A/story01.htm Tyler Durden
Submitted by F.F. Wiley via Cyniconomics blog,
We followed the latest Paul Krugman feud – this one with Niall Ferguson – until Krugman’s tag team partner and CYNICONOMICS reader Brad DeLong entered the fray.
After about a half dozen posts on Krugman and DeLong this year, we had some topic fatigue.
Yesterday, we learned that we dropped out too soon. It turns out that Ferguson followed his DeLong post with possibly the definitive piece on Krugman – a three-part series published in the Huffington Post earlier this month (h/t Tim Iacono and Ralph Benko).
On one level, Ferguson’s series reinforces what we already know. Those familiar with Krugman’s positions are well aware that his regular boasts about being “right about everything” are blatantly false. We know, for example, that he recommended creating a housing bubble in 2002, which didn’t work out so well in hindsight. We also know that he says completely different things about government debt depending on which political party is driving the deficit higher. When the GOP is responsible, he complains about “fiscal train wrecks” and the “threat to the federal government’s solvency.” When advising the Democrats to add even more debt, he claims that “we’re not facing any type of fiscal crisis.”
But Ferguson raises the scrutiny on Krugman’s work in his “HuffPo” series. He draws on meticulous documentation of Krugman’s public positions on the global financial crisis and Euro crisis. He also calls out the posse of liberal bloggers who follow Krugman’s lead by insulting and name-calling anyone who doesn’t think as they do. (See here for one of our related posts.)
Benko published a nice summary of Ferguson’s articles in Forbes.
I’ll combine the links with a handful of other Krugman-related posts we saved this year, starting with the HuffPo series:
“I like to think,” Krugman wrote on August 14, “that if I had been proved … utterly wrong … I’d have had the strength of character to admit it and question my premises. But I don’t know for sure, and with some luck I’ll never find out.” Now that I have shown Krugtron the Invincible to have been utterly and repeatedly wrong about the euro, I look forward to reading his admission of error.
To be precise, I would like to see him admit that he got the biggest call of the last several years dead wrong, again and again and again…
One might have expected a little more humility from an economist who so clearly failed to understand the nature of the biggest financial crisis of his lifetime until after it had happened. Or at least a little less egomania: “Yes,” he wrote in January, “I’ve heard about the notion that I should be Treasury Secretary. I’m flattered, but it really is a bad idea.”
In my previous two articles, I have shown that Paul Krugman – revered by his acolytes as the Invincible Krugtron – failed to anticipate the financial crisis and wrongly predicted that the single European currency would fall victim to it. I have exploded his claim to intellectual invincibility. Very clearly, he has made at least twice as many major mistakes in his career as the mere two he has previously admitted to.
You may ask: Why have I taken the trouble to do this? I have three motives. The first is to illuminate the way the world really works, as opposed to the way Krugman and his beloved New Keynesian macroeconomic models say it works. The second is to assert the importance of humility and civility in public as well as academic discourse. And the third, frankly, is to teach him the meaning of the old Scottish regimental motto: nemo me impune lacessit (“No one attacks me with impunity”).
Like a Fourth of July fireworks show, Ferguson’s series feels like a grand finale to a succession of Krugman feuds and clashes this year. Here are just a few of the skirmishes from the past six months:
False accusations, unsuccessful forecasts and other errors
Egotism and pomposity
Just to be clear, I’m not criticizing Krugman for the number of battles he gets himself into. If he argued his case truthfully and respectfully, there would be little reason for this post. But Krugman accumulates enemies by inventing his own facts, denying obvious mistakes, displaying über-arrogance and insulting those with opposing views. Fortunately, folks such as Ferguson occasionally bring these points to light.
(For more on Krugman’s public positions, see our critiques of his book, End This Depression Now. In “It’s Time to Change Focus From Reinhart-Rogoff Witch Hunts to Krugman’s Contradictions,” we flagged the circular logic in one of Krugman’s favorite excuses for fiscal profligacy. In “Testing Krugman’s Debt Reduction Strategy and Finding It Fails,” we exposed the flaws in his claim that $5 trillion in additional government debt isn’t such a “big deal.”)
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/UaXxDDGYuXM/story01.htm Tyler Durden
While the world awaits with bated breath until the moment that Greece can no longer afford to pretend it is solvent and has to apply for its third bailout from Europe, or else threaten to take down Deutsche Bank and its tens of trillions in gross derivatives, the world has to listen to the constant jawboning from the Troika which for the past nearly 4 years continues to express its displeasure with Greece, and yet still provides every Euro of funding the imploding country requests. In the latest iteration of this charade, the Troika has apparently flexed its muscles and made it clear that if Greece wants to receive the next round of cash, it will have to shutter the state-owned Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO). In short: shut down the domestic defense and auto industries, and we’ll talk. Oh, and if as a result you have to import your guns and cars from Germany (whose generous funding has kept you afloat so far), and have to take out Deutsche Bank loans to pay for them, so be it.
From Kathimerini:
The heads of the troika mission in Greece are due to return to Athens at the beginning of November, it was revealed on Tuesday as sources in Brussels insisted that the country’s lenders would not back down over their demands for further fiscal measures and the closure of Hellenic Defense Systems (EAS) and the Hellenic Vehicle Industry (ELVO).
The Greek government has balked at suggestions it may have to find as much as 2 billion euros more than it has planned in savings next year. However, EU sources told Kathimerini that the troika does not consider the draft 2014 budget reliable. Greece’s creditors believe the plan overestimates tax revenues and underestimates social spending.
As a result, the troika wants to thrash out more measures with the Greek government, ensuring that the deficit target for 2014 will be met. The European Commission, European Central Bank and International Monetary Fund agree with Athens’s positions that any extra savings should not come from “horizontal” cuts to wages and pensions.
The precise amount needed to cover Greece’s fiscal gap next year will not be assessed fully until the current troika review is completed. This requires Greece to meet the milestones agreed with its lenders, such as rounding off the first phase of a public sector mobility scheme. EU sources noted that Greece could survive without receiving its next loan tranche until spring, thereby underlining that the troika is not in a rush to complete the review.
With regard to EAS and ELVO, Greece’s lenders do not believe it is possible to save the two state firms as they are a drain on public finances, in contrast to other European countries, where companies in the defense industry are profitable.
Athens has been in contact with the European Commission over the past few days to respond to queries about its plans to keep the firms afloat. The government believes that it could turn EAS into a profitable company with two years. EU sources said Brussels had heard similar pledges from Greek governments over the past 20 years.
The last snarky sentence was from Kathimerini, not us.
And of course, all of the above would be dramatic if it wasn’t quite clear apriori that this is merely the latest iteration of the kick-the-can closed loop, best summarized by the schematic below.
h/t @GreekFire23
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/6-o8jCMJZ-0/story01.htm Tyler Durden
The FHFA reported home prices gained at the lowest pace in 11 months (0.3% MoM vs 0.8% expected) missing expectations by the 2nd largest amont on 13 months. It seems, just as we pointed out that with fast money leaving the room and slow money crushed by higher mortgage rates at the margin that indeed something had to give… Prices in the South Atlantic and East Central actually fell MoM.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TW4tP1pMYCw/story01.htm Tyler Durden
Only 38% of S&P 500 companies that have reported have beaten revenue expectations – compared to a historical average of around 46%. As Bloomberg notes, Q3 2013 will be the first time for 3 consecutive quarters of sub-50% meeting expectations since their records began. Earnings are not much better having seen a slide in performance relative to expectations for 4 quarters now. It seems the hockey-stick of H2 2013 earnings hope that we so vociferously pointed out as ridiculous early in the year is indeed far too high and combined with valuations (as we noted here) that are stretched (Price-to-Sales at 1.6x is around twice the norma since the 1990s) it suggests that any hint of a taper will remove the only leg left for stocks – that of hope-based multiple expansion.
Source: Bloomberg
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Se6-S7kz6Ps/story01.htm Tyler Durden
With the government reopened, and the debt-ceiling non-negotiation off the table, if only for another 3 months, Wall Street’s experts have fallen back to what they do worst: attemping to predict when the Fed will Taper. And just as virtually all economists were convinced the September tapering is a done deal, so nobody sees a Taper in the next three months, and certainly not before March, or, in the case of Larry Fink, June 2014. One thing, however, that nobody in polite, statist company has brought up yet is not only the possibility, but the probability there may not be a taper. At all. Well, Deutsche Bank – the first of any major Wall Street institution – just floated “that” particular bubble. To wit: since “the Fed possibly only has a narrow window to taper before it’s faced with economic headwinds again and if this is the case then why bother taper at all?”
From Deutsche’s Jim Reid:
After yesterday’s payroll number the opening paragraph writes itself this morning with the softness clearly further reducing the probability of tapering over the next 3-6 months. I suppose the only concern is that this is becoming consensus and perhaps too obvious. However if the employment data isn’t improving its hard to imagine a Yellen-led Fed risking upsetting the recovery whatever their fears about the risks of ongoing QE. What else is there? Potentially cleansing defaults have been a policy no-no for years now and expansive fiscal policy which might be useful for jobs and growth is not going to happen with politics so divided. So QE remains the highly imperfect main policy tool.
If you’re looking for a less consensus view, I was chatting with DB’s US rate strategist Dominic Konstam yesterday and he is continuing to run with his recent theme that the labour market is exhibiting “late cycle” tendencies which lead him to believe that this cycle only has a 50/50 chance of extending much beyond 2015. Therefore he is considering the prospect that the Fed possibly only has a narrow window to taper before it’s faced with economic headwinds again and if this is the case then why bother taper at all? If employment is indeed late cycle maybe the conditions don’t quite get strong enough in 2014 to persuade the Fed to be too aggressive in pulling back liquidity. He also thinks 2.25% is a good near-term target for 10 year yields and like us feels that risk assets will be supported over the next few months by the Fed’s taper delay but worries whether they can always resist gravity, especially when the cycle turns. An interesting chat and his thoughts are always worth listening to.
Expect many more to join this particular bandwagon, subsequent to which, we also expect that other uber-heretic thought, that instead of tapering, the Fed will instead proceed to monetize even more than $85 billion per month, crumbling collateral environemnt and shadow banking be damned. Heretic, because it will mean that the Fed not only can’t limit its monthly flow, but will have to monetize ever more and more each month, until it ultimately, and logically, runs out of stuff to buy. Which is why, in retrospect, the appointment of Yellen may have been the best thing to happen to the Fed: if nothing else, she will at least bring on the grand reset of a broken monetary and economic system that much faster than someone who may have been at least superficially cautious.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_s6XAbZOFM8/story01.htm Tyler Durden
With the government reopened, and the debt-ceiling non-negotiation off the table, if only for another 3 months, Wall Street’s experts have fallen back to what they do worst: attemping to predict when the Fed will Taper. And just as virtually all economists were convinced the September tapering is a done deal, so nobody sees a Taper in the next three months, and certainly not before March, or, in the case of Larry Fink, June 2014. One thing, however, that nobody in polite, statist company has brought up yet is not only the possibility, but the probability there may not be a taper. At all. Well, Deutsche Bank – the first of any major Wall Street institution – just floated “that” particular bubble. To wit: since “the Fed possibly only has a narrow window to taper before it’s faced with economic headwinds again and if this is the case then why bother taper at all?”
From Deutsche’s Jim Reid:
After yesterday’s payroll number the opening paragraph writes itself this morning with the softness clearly further reducing the probability of tapering over the next 3-6 months. I suppose the only concern is that this is becoming consensus and perhaps too obvious. However if the employment data isn’t improving its hard to imagine a Yellen-led Fed risking upsetting the recovery whatever their fears about the risks of ongoing QE. What else is there? Potentially cleansing defaults have been a policy no-no for years now and expansive fiscal policy which might be useful for jobs and growth is not going to happen with politics so divided. So QE remains the highly imperfect main policy tool.
If you’re looking for a less consensus view, I was chatting with DB’s US rate strategist Dominic Konstam yesterday and he is continuing to run with his recent theme that the labour market is exhibiting “late cycle” tendencies which lead him to believe that this cycle only has a 50/50 chance of extending much beyond 2015. Therefore he is considering the prospect that the Fed possibly only has a narrow window to taper before it’s faced with economic headwinds again and if this is the case then why bother taper at all? If employment is indeed late cycle maybe the conditions don’t quite get strong enough in 2014 to persuade the Fed to be too aggressive in pulling back liquidity. He also thinks 2.25% is a good near-term target for 10 year yields and like us feels that risk assets will be supported over the next few months by the Fed’s taper delay but worries whether they can always resist gravity, especially when the cycle turns. An interesting chat and his thoughts are always worth listening to.
Expect many more to join this particular bandwagon, subsequent to which, we also expect that other uber-heretic thought, that instead of tapering, the Fed will instead proceed to monetize even more than $85 billion per month, crumbling collateral environemnt and shadow banking be damned. Heretic, because it will mean that the Fed not only can’t limit its monthly flow, but will have to monetize ever more and more each month, until it ultimately, and logically, runs out of stuff to buy. Which is why, in retrospect, the appointment of Yellen may have been the best thing to happen to the Fed: if nothing else, she will at least bring on the grand reset of a broken monetary and economic system that much faster than someone who may have been at least superficially cautious.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/_s6XAbZOFM8/story01.htm Tyler Durden
With every passing quarter, Caterpillar, perhaps the last truly industrial company in the epically misnamed Dow Jones (non)-Industrial Average, provides an ever clearer answer to the question we posed this past July, namely “Is CAT Nothing But The Dow’s Most Overpriced Dog?” The most recent confirmation that CAT is indeed a massive dog, came moments ago when the company announced Q3 earnings which were for lack of a better word, disastrous: EPS came at $1.45 on expectations of $1.67, revenues missed by a whopping $1 billion, when the sales print $13.4 billion missed expectations of $14.47 billion – perhaps the biggest top-line miss in the company’s history since the Lehman bankruptcy. But it was the guidance that is slaying the stock right now: “The company has revised its 2013 outlook and now expects sales and revenues to be about $55 billion, with profit per share of about $5.50. The previous outlook for 2013 sales and revenues was a range of $56 to $58 billion with profit per share of about $6.50 at the middle of that range.” But don’t worry: despite our continuous warnings about the sad state of this company the trend, it is only “transitory”, and any minute now thing may get better. Unless they don’t.
“This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year. That is a 17 percent decline from 2012, with about 75 percent of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40 percent for the full year and Power Systems’ and Construction Industries’ sales to each be down about 5 percent,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
Not only is mining down from 2012, the demand for equipment has been difficult to forecast. Orders for new mining equipment began to drop significantly in mid-2012 and have continued at very low levels. As a result of weak orders and feedback from end users, the sales and revenues outlook provided in January of 2013 included a decline in mining sales. At that time, based on strong mine production for many commodities, the company’s outlook expected that order rates would improve later in 2013.
“Unfortunately, order rates have not picked up much despite continuing strong commodity production. That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013,” Oberhelman said.
And the outlook:
From an economic standpoint, the company expects better world growth in 2014. However, significant risks and uncertainties remain that could temper global economic growth. The direction of U.S. fiscal and monetary policy remains uncertain; Eurozone economies are far from healthy and China continues to transition to a more consumer-demand led economy. In addition, despite higher mine production around the world, new orders for mining equipment remain very low. As a result, the company is holding its outlook for 2014 sales and revenues flat with 2013 in a plus or minus 5 percent range. The company expects sales growth in Construction Industries, relatively flat sales in Power Systems and a decline in Resource Industries’ sales.
“There are encouraging signs, but there is also a good deal of uncertainty worldwide as we look ahead to 2014, and our preliminary outlook reflects that uncertainty. Despite prospects for improved economic growth and continued strong mine production around the world, we won’t be increasing our expectations for Resource Industries until mining orders improve. We can’t change the economy or industry demand, but we’ve taken many actions to align our costs with the environment we’re in currently. While we’ve done much already, we’re not finished and expect to take deeper actions to improve our cost structure and balance sheet. We’re not seeing bright spots in mining yet, but the turnaround will happen at some point, and when it does, we’ll be ready to respond,” Oberhelman added.
Sure. “At some point” it will happen. Just not now and not for the foreseeable future. In fact, as long as the Fed is monetizing, kiss any recovery goodbye.
But that’s ok: who needs revenues, and certainly earnings, when all Bernanke needs to do is crank up the P/E multiple expansion by one more notch. And all shall be well until next quarter.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/yVZQexj3GF8/story01.htm Tyler Durden
With every passing quarter, Caterpillar, perhaps the last truly industrial company in the epically misnamed Dow Jones (non)-Industrial Average, provides an ever clearer answer to the question we posed this past July, namely “Is CAT Nothing But The Dow’s Most Overpriced Dog?” The most recent confirmation that CAT is indeed a massive dog, came moments ago when the company announced Q3 earnings which were for lack of a better word, disastrous: EPS came at $1.45 on expectations of $1.67, revenues missed by a whopping $1 billion, when the sales print $13.4 billion missed expectations of $14.47 billion – perhaps the biggest top-line miss in the company’s history since the Lehman bankruptcy. But it was the guidance that is slaying the stock right now: “The company has revised its 2013 outlook and now expects sales and revenues to be about $55 billion, with profit per share of about $5.50. The previous outlook for 2013 sales and revenues was a range of $56 to $58 billion with profit per share of about $6.50 at the middle of that range.” But don’t worry: despite our continuous warnings about the sad state of this company the trend, it is only “transitory”, and any minute now thing may get better. Unless they don’t.
“This year has proven to be difficult, with expected sales and revenues nearly $11 billion lower than last year. That is a 17 percent decline from 2012, with about 75 percent of the drop from Resource Industries, which is principally mining. We expect Resource Industries to be down close to 40 percent for the full year and Power Systems’ and Construction Industries’ sales to each be down about 5 percent,” said Caterpillar Chairman and Chief Executive Officer Doug Oberhelman.
Not only is mining down from 2012, the demand for equipment has been difficult to forecast. Orders for new mining equipment began to drop significantly in mid-2012 and have continued at very low levels. As a result of weak orders and feedback from end users, the sales and revenues outlook provided in January of 2013 included a decline in mining sales. At that time, based on strong mine production for many commodities, the company’s outlook expected that order rates would improve later in 2013.
“Unfortunately, order rates have not picked up much despite continuing strong commodity production. That has caused us to ratchet down our sales and revenues outlook as we have moved through 2013,” Oberhelman said.
And the outlook:
From an economic standpoint, the company expects better world growth in 2014. However, significant risks and uncertainties remain that could temper global economic growth. The direction of U.S. fiscal and monetary policy remains uncertain; Eurozone economies are far from healthy and China continues to transition to a more consumer-demand led economy. In addition, despite higher mine production around the world, new orders for mining equipment remain very low. As a result, the company is holding its outlook for 2014 sales and revenues flat with 2013 in a plus or minus 5 percent range. The company expects sales growth in Construction Industries, relatively flat sales in Power Systems and a decline in Resource Industries’ sales.
“There are encouraging signs, but there is also a good deal of uncertainty worldwide as we look ahead to 2014, and our preliminary outlook reflects that uncertainty. Despite prospects for improved economic growth and continued strong mine production around the world, we won’t be increasing our expectations for Resource Industries until mining orders improve. We can’t change the economy or industry demand, but we’ve taken many actions to align our costs with the environment we’re in currently. While we’ve done much already, we’re not finished and expect to take deeper actions to improve our cost structure and balance sheet. We’re not seeing bright spots in mining yet, but the turnaround will happen at some point, and when it does, we’ll be ready to respond,” Oberhelman added.
Sure. “At some point” it will happen. Just not now and not for the foreseeable future. In fact, as long as the Fed is monetizing, kiss any recovery goodbye.
But that’s ok: who needs revenues, and certainly earnings, when all Bernanke needs to do is crank up the P/E multiple expansion by one more notch. And all shall be well until next quarter.
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/yVZQexj3GF8/story01.htm Tyler Durden
Overnight Media Digest
WSJ
* The delayed September jobs report clouded the outlook for the U.S. economy, creating a new obstacle for the Federal Reserve to wind down its controversial bond-buying program.
* Republican critics say Senator Mike Lee helped chart a doomed course that weakened the party’s standing and hurt the Utah’s economy.
* Investors are seeking at least $5.75 billion from JPMorgan in a bid to recover losses from mortgage-backed securities sold to them before the financial crisis, said people familiar with the talks.
* In 87 deals since 2006, Puerto Rico and its public agencies sold $61 billion of bonds, giving the tiny island more municipal debt per capita than any U.S. state. In the process, the territory paid Wall Street securities firms, lawyers and others about $1.4 billion.
* Online brokerage firm Charles Schwab Corp showed customers on its trading platform incorrect prices on certain fixed-income securities for about a week, the latest financial firm to suffer from technology glitches.
* The Securities and Exchange Commission is set to propose rules allowing entrepreneurs to tap large numbers of ordinary investors for small amounts of capital, advancing long-delayed “crowdfunding” provisions from last year’s Jumpstart Our Business Startups Act.
* Billionaire investor Carl Icahn sold more than half his stake in Netflix Inc for nearly $1 billion in recent days, he disclosed on Tuesday, saying it was “time to take some chips off the table.”
* Dutch lender Rabobank Groep NV is poised to pay close to $1 billion to settle allegations that it participated in a wide-ranging scheme to manipulate benchmark interest rates, according to people familiar with the matter.
* Daniel Loeb often makes headlines for publicly pitching his investment ideas. His new brainstorm: Get smaller. Loeb’s Third Point LLC will return 10 percent of its $14 billion in assets to investors, according to a letter received by investors Tuesday and reviewed by The Wall Street Journal.
* New York Times Co’s sale of the Boston Globe and Worcester Telegram & Gazette to Boston Red Sox owner John Henry has been stalled by an unsettled class-action lawsuit related to the Telegram & Gazette, Times Co said Tuesday.
FT
Alibaba, China’s No. 1 e-commerce firm, is considering listing on the London Stock Exchange after failing to convince Hong Kong regulators of the merits of its corporate governance concerns.
JPMorgan Chase could face a $6 billion fine from institutional investors to settle claims that it mis-sold mortgage-backed securities, according to people familiar with the matter.
Rabobank could face a near $1 billion fine from British and U.S. regulators looking to settle allegations that the Dutch lender helped manipulate benchmark interbank lending rates, three people familiar with the matter said.
A hedge fund with a reputation for aggressive campaigning to boost company performance has bought a 5 percent stake in the recently listed Royal Mail.
E-commerce company eBay said it would buy Shutl, a London-based same-day courier service, in order to take more control of product deliveries
NYT
* Figures for unemployment and job creation in October and November will be skewed by the temporary disappearance of hundreds of thousands of government workers and contractors, economists say.
* A Labor Department report showing lackluster hiring in September – 148,000 jobs – is expected to further put off the Federal Reserve’s decision to reduce its stimulus efforts.
* Apple applications, which essentially duplicate Microsoft Office and used to cost $10 each, will now be free to anyone who buys a new Apple device.
* A federal judge has ruled that Goldman Sachs must pay the legal fees of a former computer programmer, Sergey Aleynikov, accused of stealing code from the bank.
* SAC Capital Advisors will close its London office and cut six portfolio management teams in the United States, the hedge fund’s management revealed.
* Amazon.com Inc is expected to generate $75 billion in revenue this year by putting its customers first. Tuesday, in a very rare move, it put its bottom line first by tightening the requirements for one of its most popular shipping methods, Super Saver Shipping, which for over a decade mailed items free as long as the order met a $25 threshold. The new threshold is $35.
* Federal gridlock over the debt ceiling could adversely affect the bottom lines of big Wall Street banks and firms, a report by Thomas DiNapoli, the New York State comptroller, asserts.
* The Internal Revenue Service plans to delay the start of tax-filing season by a week or two because of the government shutdown, the agency said on Tuesday. But taxpayers will still have to turn in their 2013 returns by April 15 as usual.
* A class-action suit by delivery workers at The Worcester Telegram & Gazette prompted a judge to issue a temporary injunction preventing the sale of The Boston Globe.
* A recent court case has given the federal government a chance to sidestep Congress and eliminate private equity’s billion-dollar tax break. The question is whether the Obama administration takes up the fight.
Canada
THE GLOBE AND MAIL
* The Prime Minister’s Office intervened directly in the Senate
expense affair, pressing Prince Edward Island Senator Mike Duffy into a plan to repay past expense claims and instructing him on what he should say to the media, Duffy’s lawyer says.
* A split has emerged in Prime Minister Stephen Harper’s government over a fundamental principle: the rules governing the potential breakup of Canada. The Conservatives’ senior Quebec minister has declared in two media interviews that a 50-percent-plus-one vote for separation is enough for a province to secede.
Reports in the business section:
* A U.S. unit of Montreal-based CGI Group Inc, a global technology services giant with annual revenue of $10 billion, is the main contractor behind the problem-plagued, Web-based insurance exchange that plays a key role in the Affordable Care Act, commonly known as Obamacare.
* Canadian food giant Maple Leaf Foods Inc is facing a potential breakup as it puts its $1.6-billion bakery unit up for sale, at the same time as potential suitors target its meat division.
NATIONAL POST
* Hospitals and clinics should resist patient requests to be treated by doctors of a particular race, religion or sex, a top medical group is telling its members, highlighting a touchy yet reportedly common healthcare phenomenon.
* The West Coast General Hospital in Port Alberni, British Columbia, recently posted signs on its doors telling visitors to stop bringing flowers for friends and family.
FINANCIAL POST
* Canada will relax rules on foreign investment for the United States, Mexico and 12 other countries as a result of its free trade pact with the European Union.
* Sales of new homes in the Toronto housing market appear to be rebounding but activity in the country’s largest market has a long way to go to match 2012 levels.
China
CHINA SECURITIES JOURNAL
– Beijing is expected to roll out new policies to curb the rapid rise in home prices in the fourth quarter after China’s house prices rose 9.1 percent in September from a year earlier, the sharpest rise since January 2011, the newspaper reported without citing sources.
SHANGHAI SECURITIES JOURNAL
– Ninety-two companies have listed on the “E-board” in Shanghai, an electronic over-the-counter exchange for trading of non-listed companies. IPOs in China remain frozen.
– China will launch its new egg futures contract on Nov. 11 on the Dalian Commodities Exchange, sources said.
21ST CENTURY BUSINESS HERALD
– The province of Sichuan has unleashed a stimulus spending package of 4.26 trillion yuan ($699.11 billion) for infrastructure, environmental protection and other investment projects over 2013-2014.
CHINA DAILY
– A joint operation by U.S. and Chinese police has resulted in the closure of four child pornography sites in China and the arrest of 180 suspects in 30 provinces, with an additional 19 detained in Hong Kong.
– A top pension official voiced support for raising the retirement age to deal with strain placed on pension funds by an aging population.
SHANGHAI DAILY
– The city of Harbin is shut for a second day due to heavy pollution, with one station still showing a PM2.5 reading of 367, down from Monday’s reading of 1,000 but still as much as 15 times the levels deemed safe by the World Health Organisation.
PEOPLE’S DAILY
– A total of 151,350 graft cases and 32 ministry-level officials were investigated for corruption from January 2008 to August 2013, according to a report from the Supreme People’s Procuratorate released on Tuesday.
Fly On The Wall 7:00 AM Market Snapshot
ANALYST RESEARCH
Upgrades
BBCN Bank (BBCN) upgraded to Outperform from Market Perform at BMO Capital
BBCN Bank (BBCN) upgraded to Outperform from Market Perform at Raymond James
C.R. Bard (BCR) upgraded to Neutral from Sell at Goldman
C.R. Bard (BCR) upgraded to Overweight from Neutral at Piper Jaffray
Commercial Vehicle Group (CVGI) upgraded to Overweight from Neutral at JPMorgan
Consolidated Edison (ED) upgraded to Neutral from Sell at UBS
DuPont (DD) upgraded to Overweight from Neutral at JPMorgan
Eaton Vance (EV) upgraded to Outperform from Underperform at Credit Suisse
Fossil (FOSL) upgraded to Overweight from Neutral at Piper Jaffray
Gentex (GNTX) upgraded to Outperform from Neutral at RW Baird
Medtronic (MDT) upgraded to Buy from Hold at Deutsche Bank
Morgans Hotel (MHGC) upgraded to Buy from Neutral at MKM Partners
NuStar Energy (NS) upgraded to Equal Weight from Underweight at Morgan Stanley
NuStar GP Holdings (NSH) upgraded to Equal Weight from Underweight at Morgan Stanley
Papa John’s (PZZA) upgraded to Buy from Neutral at Janney Capital
Peoples Bancorp (PEBO) upgraded to Outperform from Market Perform at Raymond James
Syngenta (SYT) upgraded to Overweight from Neutral at HSBC
Downgrades
ARM Holdings (ARMH) downgraded to Neutral from Buy at UBS
American Campus (ACC) downgraded to Neutral from Buy at UBS
American Equity (AEL) downgraded to Market Perform from Strong Buy at Raymond James
Centene (CNC) downgraded to Sell from Neutral at Citigroup
Cimarex Energy (XEC) downgraded to Market Perform from Outperform at FBR Capital
Coach (COH) downgraded to Neutral from Buy at BofA/Merrill
Cree (CREE) downgraded to Hold from Buy at Needham
EOG Resources (EOG) downgraded to Market Perform from Outperform at FBR Capital
Eagle Bancorp (EGBN) downgraded to Market Perform from Outperform at Keefe Bruyette
Exelon (EXC) downgraded to Underperform from Hold at Jefferies
Federated Investors (FII) downgraded to Neutral from Buy at Citigroup
Infinity Pharmaceuticals (INFI) downgraded to Neutral from Buy at UBS
Integra LifeSciences (IART) downgraded to Underweight at Morgan Stanley
Lannett (LCI) downgraded to Perform from Outperform at Oppenheimer
Matador (MTDR) downgraded to Hold from Buy at Canaccord
Modine Manufacturing (MOD) downgraded to Underweight from Neutral at JPMorgan
Monarch Casino (MCRI) downgraded Hold at Brean Capital
National CineMedia (NCMI) downgraded to Neutral from Overweight at JPMorgan
Panera Bread (PNRA) downgraded to Hold from Buy at KeyBanc
Regency Energy Partners (RGP) downgraded to Underweight at Morgan Stanley
Regions Financial (RF) downgraded to Neutral from Buy at SunTrust
Resolute Energy (REN) downgraded to Market Perform from Outperform at FBR Capital
Spectra Energy Partners (SEP) downgraded to Underweight at Morgan Stanley
Symmetricom (SYMM) downgraded to Neutral from Buy at B. Riley
Twin Disc (TWIN) downgraded to Neutral from Outperform at RW Baird
Ultra Petroleum (UPL) downgraded to Neutral from Buy at ISI Group
Waters (WAT) downgraded to Neutral from Buy at BofA/Merrill
Weight Watchers (WTW) downgraded to Neutral from Outperform at Credit Suisse
Initiations
AOL (AOL) initiated with a Buy at BofA/Merrill
Expedia (EXPE) initiated with an Outperform at FBR Capital
HomeAway (AWAY) initiated with a Market Perform at FBR Capital
Liberty Media (LMCA) initiated with an Outperform at FBR Capital
Lifeway Foods (LWAY) initiated with an In-Line at Imperial Capital
MakeMyTrip (MMYT) initiated with a Market Perform at FBR Capital
NGL Energy Partners (NGL) initiated with a Neutral at Goldman
Orbitz (OWW) initiated with a Market Perform at FBR Capital
Pandora (P) initiated with a Market Perform at FBR Capital
PetSmart (PETM) initiated with a Neutral at ISI Group
priceline.com (PCLN) initiated with an Outperform at FBR Capital
Sirius XM (SIRI) initiated with an Outperform at FBR Capital
TripAdvisor (TRIP) initiated with a Market Perform at FBR Capital
Walker & Dunlop (WD) initiated with a Market Perform at Wells Fargo
HOT STOCKS
American Realty (ARCP) acquired Cole Real Estate (COLE) for $11.2B or $14.59 per share
Twitter (TWTR) secured $1B credit line
Corning (GLW) announced strategic, financial agreements with Samsung (SSNLF)
Corning (GLW) announced additional $2B of share repurchases
Canadian National (CNI) announced two-for-one stock split, announced 15M share repurchase plan
Bill Barrett (BBG) announced $371M sale of West Tavaputs natural gas property
Broadcom (BRCM) sees cutting up to 1,150 employees in restructuring
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
W.R. Grace (GRA), Encana (ECA), JAKKS Pacific (JAKK), Wellpoint (WLP), Thermo Fisher (TMO), BE Aerospace (BEAV), Nabors Industries (NBR), TSYS (TSS), ACE Ltd. (ACE), Altera (ALTR), C.R. Bard (BCR), Corning (GLW), Broadcom (BRCM), Juniper (JNPR), iRobot (IRBT), Pzena Investment (PZN), Celestica (CLS), Amgen (AMGN), Cubist (CBST), RF Micro Devices (RFMD)
Companies that missed consensus earnings expectations include:
Hudson Valley (HVB), Flagstar Bancorp (FBC), Unisys (UIS), WesBanco (WSBC), Pacific Biosciences (PACB), Ziopharm (ZIOP), Abaxis (ABAX), Datalink (DTLK), FMC Technologies (FTI)
Companies that matched consensus earnings expectations include:
AmSurg (AMSG), Horace Mann (HMN), Waste Connections (WCN), Robert Half (RHI), Super Micro Computer (SMCI), Cree (CREE)
NEWSPAPERS/WEBSITES
SYNDICATE
Cancer Genetics (CGIX) 2.86M share Secondary priced at $14.00
Crown Castle (CCI) 36M share Secondary priced at $74.00
Gigamon (GIMO) 5.1M share Secondary priced at $38.50
Guidewire Software (GWRE) 7.76M share Secondary priced at $48.75
OCZ Technology (OCZ) files to sell 13.48M shares of common stock for holders
Venaxis (APPY) files to sell $20M of common stock
Ziopharm (ZIOP) files to sell $50M in common stock
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/r4mhMm4Q06U/story01.htm Tyler Durden