Bloomberg:
Hedge funds run by Jeffrey Gendell and John Burbank III posted their worst monthly losses in October. Peter Thiel gave back gains made earlier in the year. Nobel-prize winner Myron Scholes froze his biggest fund.
- The cost of protecting corporate bonds from default fell to the lowest in three weeks after China pledged an economic stimulus package to counter the credit crunch that's dragging down growth from New York to Tokyo. Credit-default swaps on the Markit iTraxx Europe index of 125 companies with investment-grade ratings dropped 6.5 basis points to 128.5, the lowest since Oct. 17, according to JPMorgan Chase & Co. prices at 10 a.m. in London. In Tokyo, Japan's benchmark index declined 20 to 220, Morgan Stanley prices show. The Markit iTraxx Crossover index of credit-default swaps on 50 companies with mostly junk ratings dropped 21 basis points to 743, according to JPMorgan.
- The cost of protecting against a default by American International Group Inc.(AIG) dropped after the government expanded the insurer's rescue package. Credit-default swaps linked to AIG bonds fell to an upfront price of 20.5 percentage points from 45 percentage points, according to CMA Datavision in London.
- Fannie Mae(FNM) posted a record quarterly loss as new Chief Executive Officer Herbert Allison slashed the value of the mortgage-finance provider's assets by at least $21.4 billion and said it may need to tap federal funds next year. In its first report since being seized by the U.S. government in September, Washington-based Fannie said its third- quarter net loss widened to $29 billion, or $13 a share, the largest for any U.S. company this year.
- Circuit City Stores Inc.(CC), the 59-year- old seller of televisions and computers, filed for bankruptcy protection, becoming the biggest retail casualty of the slowing U.S. economy and frozen credit markets.
- Goldman Sachs Group Inc.(GS), the Wall Street bank that cut 3,200 jobs last week, identified six equity analysts fired by the firm, including William Tanona, who covered companies such as JPMorgan Chase & Co., and Deane Dray, who followed General Electric Co. Charles Chon, Ajay Kejriwal, Lawrence Keusch and Peter Wahlstrom also left, according to a note the New York-based firm sent to clients.
- The cost of borrowing dollars for three months in London fell after China announced a $586 billion stimulus package and the Group of 20 nations urged central banks to counter the global credit freeze by cutting interest rates. The London interbank offered rate, or Libor, that banks say they charge each other for such loans declined 5 basis points to 2.24 percent today, the lowest level since November 2004, the British Bankers' Association said.
Wall Street Journal:
- President-elect Barack Obama will likely use his executive powers after taking office to block new oil drilling leases on environmentally sensitive land in Utah and to allow federal funding of stem-cell research, putting a quick mark on policy making. Mr. Podesta said Mr. Obama is "a transformational figure" and that the support he received among voters in some Republican states and conservative counties gives him a mandate to pursue his agenda aggressively. Ms. Jarrett, appearing on NBC's "Meet the Press," dismissed criticism from some Republicans that the appointment of Mr. Emanuel, a brash, Democratic street fighter who had served for years in the U.S. House, marked a break from Mr. Obama's pledge to move beyond partisan battles in Washington.
- Less than a month after walking away from Wachovia Corp., Citigroup Inc. is in discussions to acquire another U.S. bank, according to people familiar with the situation.
- Intel Corp.(INTC) is taking its next step in building a business in health care, introducing technology to help homebound patients with chronic medical problems. The Silicon Valley company, at a medical conference in New Orleans, announced a series of trials with health-care organizations of specialized hardware and software developed by the chip maker. The tests are designed to show whether the new tools bring improved results in treating conditions such as diabetes, hypertension and heart disease.
Washington Post:
Howard Dean To Step Down as DNC Chair
Wealth Bulletin:
- The decline in the hedge fund industry will wipe out tens of billions of dollars in fees they pay to investment banks next year, forcing banks to make further staff cuts and shift their focus to less lucrative customers. The closure of hedge funds, withdrawals by investors and deleveraging in the hedge fund industry, which has gathered pace over the past six weeks, has started to have an impact on sales and trading and prime brokerage revenues, the two major areas where hedge funds pay fees and commissions to banks.
Reuters:
China's industrial production growth slowed to about 8 percent in the year to October, the first time it has been in single digits since the end of 2001, according to an official who is familiar with the data. In a sign of the anxiety behind China's spending push, attending officials were told to make "urgently implementing the central government's investment increase and other tasks to expand domestic demand the most important task in economic work," the report said.
- CVS Caremark Corp(CVS) said on Monday it is offering discounts of about 30 percent on fertility treatments to couples struggling with infertility and high medication costs.
Financial Times:
For a man who used “Joe the hedge fund manager” as a spur against his opponent, Barack Obama’s first major political appointment is certainly perplexing. Emmanuel was popular among alternative investment firm employees: According to the Center for Responsive Politics, Emmanuel was the largest recipient of donations from workers at hedge fund and private equity firms this election cycle. While he backed the effort to close the deferred compensation loophole, Emmanuel was not as gung-ho as some of his colleagues when it came to raising taxes on the alternatives industry. He opposed closing the so-called ‘carried interest’ loophole, even writing a memo offering several options to keep it. And Emanuel worked at Wasserstein Perella (now part of Dresdner), earning some $16.2m in his three years as managing director. He also, err, served as a director of Freddie Mac - the troubled US mortgager and recipient of about $100bn in government-sponsored bailout largesse. Guess those hedge fund donations are paying off - no matter what the campaign slogans were.
Globe and Mail:
As the controversy continues to simmer over the role of short selling in the stock market swoon, Canada's single biggest pension fund has quietly stopped providing short sellers with critical ammunition. The Canadian Pension Plan Investment Board said it stopped its securities-lending program for short-sellers in September because of increasing risk in the credit markets. Lending programs are profitable sidelines for many large pension plans and help short-sellers obtain stock.
Leader-Post:
- The wealth in Canada's oilsands, even taking into account the recent plunge in world oil prices, is nearly $1.5 trillion, more than four times the $342 billion officially estimated by Statistics Canada, argues a Canadian think-tank in a report released today. "The coming-of-age of the oilsands has transformed the Canadian economic landscape," it said. "With Canada now claiming the second largest oil reserves in the world, the importance of the oilsands to the rest of the world and its potential impact on the lives of Canadians cannot be underestimated."
Interfax:
- Russia should develop mechanisms to influence the price of oil, Prime Minister Vladimir Putin said today in Moscow Russia
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