Late-Night Headlines
Bloomberg:
The Markit iTraxx Australia index was quoted 5 basis points lower at 230 points as of 9:22 am in Sydney
- Fannie Mae(FNM), Freddie Mac(FRE) and housing industry officials plan a new mortgage modification program designed to cut payments for hundreds of thousands of homeowners facing foreclosure, according to people briefed on the matter. Under the proposal, mortgage servicers will work with borrowers to reduce monthly payments to 38 percent of their income, a level considered a threshold for affordability, using a combination of lower principals, interest-rate reductions and extensions, the people said.
- China may have more work ahead to revive investors' confidence in the world's worst-performing major stock market after unveiling a 4 trillion yuan ($586 billion) stimulus plan. ``You really need the retail investors to be jumping in with both feet in order to get the market hopping,'' Chamie said. ``I just don't see that materializing over the next year or so as we get increasing reports of jobs losses, factories shutting down and slower growth and export activity.''
- Australia's economy, which cruised through the 1997 Asian financial crisis and the dot-com bust, is facing the prospect of its first recession in almost two decades. Waning global demand for commodities threatens to staunch a five-year flood of export earnings that helped boost Australian incomes by the most in more than 30 years.
- Fannie Mae(FNM) may need more than the $100 billion in funding pledged by the U.S. Treasury to stay afloat after reporting a record $29 billion loss and confronting more difficulty in issuing and refinancing debt.
- The International Energy Agency may cut its 2009 oil demand forecast for a third month as the threat of the worst recession since World War II saps fuel consumption, former IEA analysts said. The Paris-based adviser to 28 oil consuming nations will reduce the estimated growth in global demand from 700,000 barrels a day, or 0.8 percent, in its next monthly report on Nov. 13, said four analysts who used to work at the IEA and are now at banks. ``Given the downward revisions to the IMF data, it is highly likely they will revise demand down,'' said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York, who expects demand to shrink 0.4 percent, or 320,000 barrels a day in 2009. ``Anything above zero demand growth now is an optimistic forecast.'' Eagles joined JPMorgan in September after five years at the IEA, where he was editor of the monthly report. ``They have been overly optimistic about demand for the last few years,'' said David Knapp, senior editor of Energy Intelligence Group and a former director of the IEA's Oil Markets Division. Gasoline demand from U.S. motorists declined for 28 consecutive weeks and is 3.9 percent lower than a year ago, according to spending data released by MasterCard Inc. on Nov. 4. Ian Taylor, chief executive officer of closely held commodity trader Vitol Group, said Oct. 28 that crude consumption may decline by 1 million barrels a day next year. U.S. fuel demand in the four weeks ended Oct. 10 sank to 18.6 million barrels a day, the lowest since June 1999, according to the Energy Department. China's gross domestic product may advance 7.5 percent or less next year, the weakest since 1990, according to estimates by Credit Suisse AG, UBS AG and Deutsche Bank AG.
- American Express Co.(AXP) won Federal Reserve approval to convert to a commercial bank, gaining access to funds as credit losses build and sales of asset-backed bonds plummet.
- Las Vegas Sands Corp.(LVS), the casino company controlled by billionaire Sheldon Adelson, is suspending construction in Macau to conserve cash as it works to raise $2.14 billion in capital following a loss in the third quarter.
- Sparx Group Co., Asia's biggest hedge-fund manager with $8.5 billion in assets, posted a first- half loss as slumping stock markets and investor redemptions shrank assets under management by more than a third from a year earlier.
Wall Street Journal: In an aggressive move targeting the root cause of the global financial crisis, Citigroup Inc. plans to announce Tuesday that it is offering to modify the terms of as much as $20 billion in mortgages for borrowers who are current on their loan payments but at risk of falling behind.
- President-elect Barack Obama risks a political backlash and legal battles if he tries to reverse moves by President George W. Bush to expand natural-gas drilling in Utah. Mr. Obama must walk a tightrope as he tries to balance the expectations of his environmentalist supporters against broader public concerns over energy prices and his campaign promises to promote energy independence, said Denise Bode, chief executive of the American Clean Skies Foundation, a nonprofit advocacy group backed by the natural-gas industry. Ms. Bode noted that Mr. Obama has talked about the need to develop the nation's natural-gas resources.
CNBC.com: Layoffs have dominated the news this past few months, but there are some companies and sectors that are still hiring during this down turn said Monster Worldwide (MWW)CEO Salvatore Iannuzzi.
USA Today.com:
- Gasoline prices fell another 17.6 cents the past week, with average prices in three states dipping below $2 a gallon.
Reuters:
- Some $2.1 trillion of European company and bank debt matures in the next three years, raising "substantial refinancing risk", Standard & Poor's said on Tuesday. With new bond issues at a virtual standstill after the bankruptcy of Lehman Brothers, fears have intensified that companies will be unable to raise fresh debt to pay off maturing bonds, potentially pushing them into default. "Funding pressures in Europe have escalated sharply since September as stress in the global financial system accelerated," S&P analysts said in a note.
- U.S. banking regulators plan to release an interagency statement in the next few days encouraging well-capitalized banks to keep lending to credit-worthy borrowers, the director of the Office of Thrift Supervision said. "There is a concern that healthy institutions are sitting idle and not responding to the needs of credit-worthy borrowers," OTS Director John Reich told Reuters in an interview on Monday.
Financial Times: Mexico is taking steps to protect itself from the oil price remaining below $70 a barrel in the clearest sign yet of the concerns of producer countries at the impact of the global economic slowdown on their revenues. The world's sixth biggest oil producer hedged almost all of next years oil exports at prices ranging from $70 to $100 at a cost of about $1.5bn through derivatives contracts, according to bankers familiar with the deal. The cover is far higher than the country - which relies on oil for up to 40 per cent of government revenue - usually seeks. Last year, Mexico hedged 20-30 per cent of its exports.
- China needs a true change of course. The country’s problem is more than a mere global downturn. Its development model is no longer sustainable. China's growth to date has been phenomenal, but it was based on exports and investment, at the expense of consumption. The time for change is now.
Taiwan ’s United Daily:
- Chinese commercial airfares have dropped by as much as 80% on some domestic routes because of a slump in travel demand.
Investor Daily Indonesia
- Indonesia
Late Buy/Sell Recommendations
Citigroup:
- Rated (NPSP) Buy, target $11.
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BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and automaker stocks in the region. I expect US
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