Bloomberg:
- India, the world’s biggest gold consumer, bought 200 metric tons from the International Monetary Fund for $6.7 billion as central banks show increased interest in diversifying their holdings to protect against a slumping dollar. The transaction, equivalent to 8 percent of world annual mine production, was the IMF’s first such sale in nine years and propels India to the ninth-biggest government owner globally, according to figures from London-based research company GFMS Ltd.
- Russian stocks entered a correction, with the benchmark Micex Index slumping more than 10 percent from its high in October, as oil declined and concern deepened the withdrawal of stimulus measures will slow the global economic recovery. OAO Rosneft, Russia’s biggest oil company, lender OAO Sberbank and OAO Novolipetsk Steel lost more than 4 percent. The Micex sank 3.8 percent to 1,218.42, with all 30 stocks declining. The gauge has retreated 11.3 percent from its high on Oct. 21, exceeding the 10 percent threshold that defines a so-called correction.
- David Friehling, the accountant for con artist Bernard Madoff, will plead guilty on Nov. 3 for his role in the largest U.S. Ponzi scheme, prosecutors said.
Wall Street Journal:
- In a very early test of President Barack Obama's political influence, two states are choosing whether to continue Democratic rule while voters elsewhere elect a handful of congressmen and big-city mayors. Elected just a year ago, the president has spent a considerable amount of time and energy trying to ensure that Democrats win governor's races in Virginia and New Jersey and pick up a GOP-held congressional seat in upstate New York. In doing so, Mr. Obama raised the stakes of a low-enthusiasm off-year election season -- and risked political embarrassment if any lost. All three could.
- Some of the biggest companies backing the Blu-ray format for high-definition movies are hedging their bets by introducing players that can also show Internet video, which is making surprising inroads in the home-entertainment market. Electronics retailers and manufacturers including Best Buy Co., Samsung Electronics America Inc. and LG Electronics USA Inc. are selling Blu-ray disc players that tap into movies from online rental companies. The devices provide an alternative to pay-per-view cable services.
CNBC:
- Former Vice President Al Gore thought he had spotted a winner last year when a small California firm sought financing for an energy-saving technology from the venture capital firm where Mr. Gore is a partner. The company, Silver Spring Networks, produces hardware and software to make the electricity grid more efficient. It came to Mr. Gore’s firm, Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top venture capital providers, looking for $75 million to expand its partnerships with utilities seeking to install millions of so-called smart meters in homes and businesses. Mr. Gore and his partners decided to back the company, and in gratitude Silver Spring retained him and John Doerr, another Kleiner Perkins partner, as unpaid corporate advisers. The deal appeared to pay off in a big way last week, when the Energy Department announced $3.4 billion in smart grid grants. Of the total, more than $560 million went to utilities with which Silver Spring has contracts. Kleiner Perkins and its partners, including Mr. Gore, could recoup their investment many times over in coming years. Silver Spring Networks is a foot soldier in the global green energy revolution Mr. Gore hopes to lead. Few people have been as vocal about the urgency of global warming and the need to reinvent the way the world produces and consumes energy. And few have put as much money behind their advocacy as Mr. Gore and are as well positioned to profit from this green transformation, if and when it comes. Critics, mostly on the political right and among global warming skeptics, say Mr. Gore is poised to become the world’s first “carbon billionaire,” profiteering from government policies he supports that would direct billions of dollars to the business ventures he has invested in.
NY Times:
- A government report released Monday concludes that taxpayers will probably never recoup all — or even close to all — of the $67 billion that the Treasury Department lent to General Motors and Chrysler in the last year to prevent their collapse, Nick Bunkley of The New York Times reports from Detroit. The report, by the Government Accountability Office, estimates that G.M. and Chrysler would need to be worth a combined $121.7 billion, or roughly 30 percent more than their values about a decade ago, for the Treasury to break even on its investments. The report said it already was assuming that $6.4 billion of the money lent to the carmakers before their bankruptcies would not be repaid. “Treasury is unlikely to recover the entirety of its investment in Chrysler or G.M., given that the companies’ values would have to grow substantially above what they have been in the past,” the report said. The companies’ current value and recent financial performance are unknown because neither one is publicly traded. The Treasury hopes to have an initial public offering of G.M. shares as soon as 2010, and a sale of its share in Chrysler would occur after that. It owns 60.8 percent of G.M. and 9.85 percent of Chrysler, whose majority owner is the United Automobile Workers union’s retiree health care trust. But the report expressed concern that a plan to wind down the automotive task force created by President Obama to oversee the carmakers’ rescue would leave the government with insufficient expertise to protect its interests in the companies and to determine how and when to divest its stakes.
Washington Times
- Want to dine with five U.S. senators? Then just drop by Wednesday night and, oh, by the way, bring $30,400. That's what it costs to be a "co-chair" of the Democratic Senatorial Campaign Committee's Women's Senate Network party, thrown by power lobbyist Heather Podesta. "What do you get when you put the minds of key Democratic Women Senators, the brush strokes of Women Artists, the recipes of Women Chefs, and the design of a Woman Architect together in the same house?" Mrs. Podesta said in an e-mail addressed "Dear friends." Who knows? But it will cost you to find out, according to the e-mail, which lays out contributions required for access to the event. "Those people who gave $30,000 have a seat at the table, the dining table with you, and they sit down and they explain to you what they want, what they're concerned about and perhaps even specific legislation they care about," said Craig Holman, a government affairs lobbyist for Public Citizen, a Washington watchdog group.
FINalternatives:
- Having all but liquidated its fund of hedge funds portfolio in the wake of a pay-to-play scandal, New York’s state pension fund plans to pour more than $1 billion into single-manager hedge funds by the end of the year. The $116 billion New York State Common Retirement Fund is in talks with several potential managers, already awarding a $50 million mandate to Stamford, Conn.-based Diamondback Capital, Crain’s New York Business reports.
The Business Insider:
- Beware a surprise economic crash in China. The country is expanding like crazy, and while this may look great in the short term, there are many signs that the country's economic path is unsustainable. The government itself realizes the problem, but must balance the country's bubble concerns with the zealous economic expectations of its population, and most importantly, the massive need for job creation. It's also a huge country and the government has far less control over the economy than it would like to admit.
- Shares of AIG are up almost five percent this morning, even while the broader indexes and many financial stocks are down. So what's going on? There is chatter running between trading desks that the government is preparing to announce a plan to reduce its stake in AIG on very favorable terms.
Detroit News:
- United Auto Workers President Ron Gettelfinger said "fatigue" from givebacks by Ford Motor Co. workers caused them to soundly reject proposed changes to their labor contract. Speaking on Fox Business Network on Tuesday morning, Gettelfinger conceded UAW leaders did a poor job in convincing a majority of the 41,000 Ford workers the latest concessions were a "win-win" for members and the automaker. "We just did not do a good job selling it to our membership," Gettelfinger said. "We underestimated the fatigue, if you will, or the people constantly having to make a decision on a contract," Gettelfinger said. The official results of the vote show 70 percent of production workers and 75 percent of skilled trades workers voted against the proposed changes.
Intrade:
- The odds that Chris Christie wins NJ’s race for governor have risen to 56%.
Rassmussen:
- Voters for the first time are blaming President Obama nearly as much as President Bush for the country’s continuing economic problems. A new Rasmussen Reports national telephone survey finds that 49% still blame the economic situation on the recession that began under Bush. But 45% now say the nation’s economic problems are caused more by Obama’s policies. Just a month ago, 55% pointed the finger at Bush, while only 37% said the policies Obama has put in place since taking office were at fault. These findings had remained largely unchanged since May.
Politico:
- Democrats have blown so many deadlines for getting health reform done this year that insiders are increasingly skeptical they can finish by year’s end — and some even suggest the effort might slip to a new deadline, before the State of the Union address. The discussions are an acknowledgment that with only two months left in the year, Democrats are still a long way from sending a bill to the president’s desk. The House could take up reform on the floor as early as this week, with a good shot at passing something by Veterans Day. But in the Senate, Majority Leader Harry Reid is still wrangling with his moderate members to corral 60 votes just to get the debate started. And on Monday, Reid sent a letter to Republicans acknowledging that he is waiting on the Congressional Budget Office’s cost estimates and analysis to finish drafting a bill. Democrats signaled that those estimates would not be ready this week, casting further doubt on their ability to finish reform this year.
- The tight New Jersey governor’s race, likely the most competitive of the three most closely watched contests in the nation Tuesday, is a rare test of which electoral factor is more decisive — an incumbent’s unpopularity or the structural politics of a state. Gov. Jon Corzine, the Democrat, is seeking a second term with approval ratings in the basement and at a time when the economy is deeply troubled. Yet he’s doing so in a state that has become solidly Democratic and while running against a conservative Republican, Chris Christie, who has his own challenges, not the least of which is an independent candidate whose presence makes it possible for the governor to win without capturing 50 percent of the vote. Here’s POLITICO’s list of five things that will determine if it's disapproval of Corzine or New Jersey’s deep-blue demography that wins the day:
Reuters:
- Liberia may have oil resources of over a billion barrels, with the first well expected to be drilled next year, a senior national oil company official said on Tuesday. Marie Leigh-Parker, NOCAL's senior vice president for administration and finance, said the first well would be drilled by Anadarko Petroleum (APC) next year. "We are hoping to get more than a billion barrels of oil," she told Reuters on the sidelines of an Africa oil conference.
- Governments are unlikely to agree on all the details of a new global climate change deal when they meet in Copenhagen next month, U.N. Secretary-General Ban Ki-moon said on Tuesday. While optimistic that the 192 countries will be able to reach some sort of political agreement, Ban warned it would not be the last word on a successor to the United Nations' carbon-cutting Kyoto Protocol. "We need the political will because if there is the political will I am sure that there is a political way that we can conclude a binding agreement in Copenhagen," he said after talks with British Prime Minister Gordon Brown in London. Rich and poor nations are divided over how to share cuts in greenhouse gas emissions and over the amount of money developing countries need to adapt to global warming and how to raise it. Speaking later at a conference on religion and the environment near London, Ban urged rich states to take the initiative. "First and foremost, the developed countries should lead this campaign, considering all these historic responsibilities and also considering that they are the countries that have most of the capacities -- financial and technological," he said. In a sign of the divisions to be overcome, African nations boycotted U.N. climate talks in Barcelona on Tuesday in a protest to urge rich countries to set deeper 2020 cuts in greenhouse gas emissions.
- Ford Motor Co(F) said on Tuesday its U.S. sales in October rose 3 percent and it gained market share due to strong demand for cars and crossover vehicles. "Consumer demand for our new ... products is driving Ford's market share gains," Ken Czubay, Ford's U.S. sales chief, said in a statement. At the end of October, Ford officials were unsure whether October sales would finish up or down, but several analysts had forecast a decline.
- New orders received by U.S. factories rose a stronger-than-expected 0.9 percent in September, while inventories continued to shrink, the Commerce Department said on Tuesday in a report suggesting manufacturing activity is feeding the economic recovery. It was the fifth month out of six that orders rose, the department said. Inventories have now fallen for 13 months in a row, with factories paring their stocks by 1 percent in September. This is the longest streak of shrinking inventories since they fell 15 months in a row beginning in February 2001. While factories cut inventories more sharply in September than in August or July, the Commerce Department said last week inventory liquidation by all businesses slowed in the July through September period, adding nearly a percentage point to the increase in third-quarter Gross Domestic Product. In September, machinery, which makes up roughly 7 percent of factory orders, had the largest surge of 7.9 percent in its biggest increase since March 2008.
- Polo Ralph Lauren Corp (RL) posted a quarterly profit far above Wall Street estimates and strengthened its full-year revenue outlook, as demand for its fashions picked up as the quarter progressed. The maker of clothing brands such as Ralph Lauren, Chaps and Club Monaco saw its shares rise 2.6 percent as investors hoped results indicated more sustainable demand. "I am of the opinion the customer has begun to move back into a more balanced point of view," Chief Operating Officer Roger Farah said on a conference call. "Those that have money are beginning to spend it again."
- Small businesses would be granted a permanent reprieve from complying with part of the Sarbanes-Oxley corporate reform laws, under a draft U.S. House of Representatives bill discussed on Tuesday. Small companies have not had to comply fully with the rules since the Sarbanes-Oxley law was approved in 2002 in response to the Enron and WorldCom corporate scandals. Companies with a market capitalization below $75 million have argued that they faced disproportionately higher costs compared with larger companies and have convinced regulators to delay compliance at least five times. The Securities and Exchange Commission is now requiring small companies to report on the effectiveness of their internal controls as of June 15, 2010. But Republicans, hoping to thwart this SEC requirement, introduced an amendment on Tuesday to a House Financial Services Committee draft bill to do just that.
- Institutional investors are going to gang up on "arrogant" hedge funds, a pension fund chairman warned, as investors increasingly press for changes that would link lucrative fees more closely to genuine outperformance. A key complaint of investors has been that while many of them lost money during the financial crisis, hedge fund managers were still able to rake in millions of dollars in fees. Last year, average hedge fund returns were a minus 19 percent. "If they want money from us they will have to offer ... alignment of interests. If hedge funds remain arrogant and not humble, I think money will go elsewhere," Philip Read, chairman of the British Coal Staff Superannuation Scheme, said on Tuesday. "We're increasingly going to gang up against you... Institutional investors are totally disillusioned with funds not delivering what was on the tin," he told the Hedge 2009 conference in London.
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