Bloomberg:
- Manufacturing in the Philadelphia region expanded in November at the fastest pace in more than two years, reflecting gains in orders and sales. The Federal Reserve Bank of Philadelphia’s general economic index rose to 16.7, higher than forecast, from 11.5 in October, figures from the bank showed today. Readings greater than zero signal growth. Rising foreign demand and record declines in inventories are giving factories incentive to rev up assembly lines. A rebound in manufacturing has helped the economy emerge from the worst recession since the 1930s and may further support growth in coming months. “Manufacturing conditions are improving as we get into the recovery,” said Yasmine Kamaruddin, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “Companies are still drawing down inventories, filling orders with what they have on stock.” The Philadelphia Fed’s index of new orders climbed to 14.8 from 6.2 the prior month, while the shipments index increased to 15.7 from 3.3. The measure of inventories improved to minus 17.3 from minus 31.8. A negative number means stockpiles are shrinking. The report showed the employment index climbed to minus 0.5 from minus 6.8 compared. As demand improves, companies may need to hire more workers, Fed Chairman Ben S. Bernanke said Nov. 16. The Philadelphia Fed’s gauge of prices paid dropped to 14.9 after 21.3 the prior month, and an index of prices received improved to minus 1.5 from minus 4.3.
- The Organization for Economic Cooperation and Development doubled its growth forecast for the leading developed economies next year and predicted a further acceleration in 2011 as China powers a global recovery. The economy of the group’s 30 member countries will expand 1.9 percent next year and 2.5 percent in 2011, the Paris-based organization said in a report today. Output will contract 3.5 percent this year. The OECD, which advises members on economic policy, forecast 2010 growth of 0.7 percent in June.
- Rates for 30-year fixed U.S. home loans fell for the third straight week, offering a boost to potential buyers who may use a government tax credit to purchase homes. The 15-year rate declined to a record low. The 30-year rate dropped to 4.83 percent from 4.91 percent, the lowest since May, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The average 15-year rate fell to 4.32 percent, the lowest since records began in 1991.
- Republican lawmakers demanded a Congressional hearing to review whether the Federal Reserve Bank of New York was unprepared to deal with the bailout of American International Group Inc. last year. The rescue, which funneled billions of dollars to banks that traded with AIG, amounted to a “backdoor bailout” of the firms, Representatives Roy Blunt of Missouri and Spencer Bachus of Alabama wrote in a letter to Barney Frank, the Massachusetts Democrat who heads the House financial services committee. The New York Fed, led at the time by Timothy Geithner, gave up efforts to save taxpayer money on AIG’s rescue after the insurer’s trading partners refused to make concessions, the special inspector for the Troubled Asset Relief Program said in a report this week. Geithner, now the Treasury Department secretary, needs to tell Congress whether regulators got the best deal possible in the bailout, which swelled to $182.3 billion, the lawmakers said. The inspector general’s report “paints a devastating picture of government regulators ill-prepared to deal with the failure of complex financial institutions like AIG, and who failed to fight for what was in the best interest of the taxpayers,” Blunt and Bachus said in the letter today. The Fed gave up efforts after two days last year to negotiate discounts from banks that purchased credit-default swaps from AIG backing securities, and opted to pay them in full, according to the report from Special Inspector Neil Barofsky. Before the Fed stepped in late last year, AIG tried to persuade banks to accept so-called haircuts of as much as 40 cents on the dollar, according to people familiar with the matter. The Fed’s decision to pay the banks in full may have cost taxpayers $13 billion, or 40 percent of the $32.5 billion AIG paid to retire the swaps, the people said.
- The U.S. economic recovery will extend into next year as manufacturing expands and the pace of firings abates, reports today indicated. The Conference Board’s index of leading indicators, a gauge of the outlook for the next three to six months, rose 0.3 percent in October, preserving a string of gains that began in April. “It’s very clear that the economy is now expanding, but I don’t see it being a vigorous expansion,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York, who correctly forecast the leading index. “We are seeing a gradual improvement, but the key word is ‘gradual.’”
- Crude oil fell for the first time in four days as equities dropped, signaling that the U.S. economy and fuel demand will rebound at a slower pace. Imports dropped as Hurricane Ida led to the shuttering of terminals along the Gulf Coast. The Louisiana Offshore Oil Port, used by tankers too large for U.S. harbors, was closed for more than three days.
“All I heard about yesterday was the unexpected draw in inventories,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “There was little mention of Ida, which was a one-off, and the drop will be corrected in the next two reports.” Total U.S. daily fuel demand averaged 18.6 million barrels in the past four weeks, down 4.1 percent from a year earlier, yesterday’s report showed. “Demand is weak when you consider that the refinery rates are the lowest in more than a decade” and supplies are above the five-year average, said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Refineries operated at 79.4 percent of capacity, the lowest level since September 2008 when hurricanes Gustav and Ike stuck the Gulf. The average rate during the second week of November over the previous five years was 87.9 percent of capacity. “The fundamentals are still terrible, no matter how you slice it,” said Chip Hodge, who oversees a $9 billion natural- resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “The demand numbers stink. I don’t see us going much above $80 for a while.”
- Gold demand climbed 10 percent in the third quarter from the previous three months after investors bought the metal as a currency hedge and jewelry purchases picked up, the World Gold Council said. Global consumption increased to 800.3 metric tons as Chinese demand surged to 120.2 tons, the London-based industry group said in a report today. Total demand was 34 percent lower compared with a year earlier.
- Rigs exploring for or producing oil climbed to an 11-year high last week as a percentage of natural gas rigs. Oil’s price-linked resurgence comes after almost a decade in which gas was king, quadrupling its rig count between 1999 and 2008, based on data from Baker Hughes. Oil drilling has more than doubled since June, spurred by prices near $80 a barrel. US crude-oil output climbed to a four-year high in October as new fields in the Gulf of Mexico started production, according to the API. Output last month average 5.36 million barrels a day, up 15% from a year earlier.
- The price of Facebook Inc. stock on exchanges for private companies has jumped as much as 42 percent in the past four months as membership of the site topped 300 million users and the company turned cash flow positive. Facebook shares are currently selling for about $21 each at SecondMarket, said Adam Oliveri, managing director at the New York-based company. That’s up from $14.77 in July.
- Prime Minister Gordon Brown’s government proposed new powers to suspend “abusive” short selling deemed to be endangering the financial system. The Financial Services Bill, laid before Parliament today and which applies to all financial firms, proposes giving the Financial Services Authority formal jurisdiction to impose “emergency restrictions” on short selling. The FSA would also have powers to force all institutions to permanently disclose short positions in markets.
- Elizabeth Warren, a chief watchdog of the government’s rescue of Wall Street, said the $700 billion bailout hasn’t stopped the “culture of excessive risk-taking” that led to the financial crisis. The Troubled Asset Relief Program also has “injected an unprecedented level of pricing distortions and moral hazard into the marketplace,” Warren said at a hearing today of the Congressional Oversight Panel on TARP, which she leads.
- Terrorists Inside US Increase Attacks, Panel Hears. Terrorist incidents over the past 12 months show that Islamic extremists within the U.S. increasingly are launching attacks against targets such as military bases, anti-terrorist experts said today. “The threat is now increasingly from within, from homegrown terrorists who are inspired by violent Islamist ideology to plan and execute attacks where they live,” Mitchell Silber, director of intelligence analysis for the New York City Police Department, said. Silber was among witnesses testifying to the Senate Homeland Security and Governmental Affairs Committee, which has started an investigation into events leading up to the Nov. 5 shooting rampage at Fort Hood, in which 13 people were killed and 43 were injured.
- Suntech Power Holdings Co.(STP) and Trina Solar Ltd.(TSL) plan to increase production of solar power modules next year after third-quarter sales and profits beat analyst estimates. The companies rose in U.S. trading. Suntech Chief Executive Officer Zhengrong Shi intends to boost capacity 40 percent to 1,400 megawatts by mid-2010. Trina aims to increase cell and module production to 600 megawatts by the end of this year and to as much as 950 megawatts next year. “The market is gaining momentum faster than anyone expected,” Suntech’s Shi said today in a phone interview from China. “We have to expand really fast. In the third quarter, we couldn’t keep up with demand.”
- San Francisco Bay Area home prices rose for the first time since November 2007 as fewer foreclosures were sold, MDA DataQuick said. The median price for houses and condominiums increased 4 percent in October from a year earlier to $390,000, the San Diego-based research company said today in a statement. The number of homes sold rose 4.2 percent to 7,933 for the nine- county region. Prices gained 6.8 percent from September. Sales of homes priced over $500,000 made up 36 percent of transactions, up from a low this year of 23 percent in January. Foreclosure sales were 32 percent of the total, the lowest since June 2008, according to MDA DataQuick.
Wall Street Journal:
- Conditions in Cuba haven't improved under Raúl Castro and in some ways are worse than they had been when his brother Fidel was president, according to Human Rights Watch. In a report released Wednesday, the group accuses Raúl Castro's government of systematic repression and creating "a pervasive climate of fear among dissidents and, when it comes to expression of political views, in Cuban society as a whole."
- Birds Eye Foods, the largest frozen-vegetable company in the U.S., will be acquired for $1.3 billion by Pinnacle Brands Corp. Owned by private-equity giant Blackstone Group, Pinnacle is one of the country's largest packaged-food companies with well-known consumer brands such as Duncan Hines baking mixes and Swanson frozen dinners.
- Many employers are planning to reinstate merit increases in 2010, but some compensation experts say base salaries are unlikely to return to pre-recession levels anytime soon, if ever. Of 555 large U.S. employers polled in October, 83% said they will give out raises next year, while only about half did so in 2009, reports Lincolnshire, Ill.-based Hewitt Associates Inc. None anticipate pay reductions next year, after 10% cut salaries in 2009, according to data Hewitt collected. Companies will raise salaries in 2010 by an average of 2.5%, the second-lowest level on record since this year, when salaries dipped to 1.8%, the survey shows. In 2002, companies raised salaries an average 3.6%, then the lowest level on record, which was down from 4.3% in 2001, Hewitt reports. "We're going to be living in the upper 2% and lower 3% neighborhood for a very long time," says Ken Abosch, North American compensation practice leader for Hewitt. "Companies have fought very hard to bring their cost structure under control and they're not going to easily allow costs to creep back."
- News Corp. (NWS) is working on how to charge for its online news at a fair price, James Murdoch, the media group's chairman and chief executive for Europe and Asia, said Thursday, a day after The Times newspaper provided more detail on its plans and a spring 2010 deadline to implement them. News Corp. wants to charge users either reading its stories online or for companies distributing its content on their Web sites.
- A U.S. Senate panel on Thursday battled over whether the country could expand oil and gas drilling in coastal waters without damaging the environment, spotlighting one of the big fights over climate legislation. The debate in the U.S. Senate Environment and Public Works Committee comes as Senate lawmakers are negotiating over legislation to cut greenhouse-gas emissions by more than 80% by 2050. A vote in the panel earlier this year suggested any deal must include expanded oil and gas drilling--even though the environmental wing of the Obama administration's base and some Democratic Senators are opposed. "There's a need for balance," said Sen. Lisa Murkowski (R-Alaska), the top Republican on the panel. She said last month in an interview on C-Span that she would be "open-minded" about supporting climate legislation as long as it was tied to more oil and gas development and more support for nuclear energy. She questioned whether the Obama administration's approach on coastal drilling--it has delayed acting on five-year drilling plan--reflected her concerns. "The oil and gas industry can develop offshore resources with a footprint smaller than ever before," Marvin Odum, the president of Royal Dutch Shell's (RDSA) U.S. operations, said in prepared testimony. He cited a deepwater project in the Gulf of Mexico called Peridido that is to begin producing in the next few months, which Shell touts as the world's deepest drilling and production facility. Among the drilling techniques to be used is a type that allows more wells to be accessed from a smaller surface area on the sea floor.
- The Chicago Board Options Exchange has asked U.S. regulators to continue to allow options traders to use so-called flash orders, despite proposed bans on the practice for both options and cash equities. Bill Brodsky, chairman and CEO of the largest U.S. options exchange, said in a letter to the Securities and Exchange Commission that the practice helps retail investors secure better pricing.
CNBC:
- The Obama administration is promising to change the way it counts the number of jobs saved or created by the economic stimulus program, after the Government Accounting Office revealed measurement flaws in the current system. The GAO report made public today, part of bimonthly tracking of Recovery Act spending, says recent stimulus-related job claims by the administration are inaccurate. The number of jobs created or saved and the accuracy of those figures have been the subject of intense media attention, scrutiny and criticism since the White House touted the Recovery Board’s report that claimed approximately 640,329 jobs had been created or saved through the billions spent on contracts, grants and loans. The GAO says the numbers are incorrect and it provides scenarios where both understating and overstating the figures may have occurred. Here is a sampling of the most glaring flaws noted in the GAO report:
NY Times:
- In nearly a dozen recent terrorism cases in the United States, Britain and Canada, investigators discovered the suspects had something in common: a devotion to the message of Anwar al-Awlaki, an eloquent Muslim cleric who has turned the Web into a tool for extremist indoctrination. Mr. Awlaki, 38, the son of a former agriculture minister and university president in Yemen, has never been accused of planting explosives himself. But experts on terrorism believe his persuasive endorsement of violence as a religious duty, in colloquial, American-accented English, has helped push a series of Western Muslims into terrorism. Maj. Nidal Malik Hasan, the Army psychiatrist charged with killing 13 people at Fort Hood, Tex., on Nov. 5, is only the latest suspect accused of perpetrating or plotting violence to be linked to the cleric.
- Nearly one in 10 homeowners with mortgages were at least one payment behind in the third quarter, the Mortgage Bankers Association said Thursday. That is the highest figure since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008. “Clearly the results are being driven by changes in employment,” Jay Brinkmann, the association’s chief economist, said on a conference call with reporters. Five million more unemployed people over the last year has turned into about two million more overdue loans, he added.
NYPost:
- Microsoft's(MSFT) Xbox Live online service, which is already competing with television networks for viewers, is now making a play for TV advertisers. The software giant wants to court Madison Avenue by measuring its Xbox Live audience in much the same way that Nielsen tracks traditional TV viewers. Microsoft and Nielsen have teamed up for a pilot program that will measure the second season of the Xbox Live game show, "1 vs. 100" using Nielsen's established TV ratings system.
Washington Post:
- Bailout program could be extended. Administration officials are grappling with how best to announce the extension of the Troubled Assets Relief Program(TARP) at a time when the economy is struggling and the unemployment rate is at its highest point in 26 years. No final decision about the fate of the bailout has been made, and officials are keenly aware that their preferred course contains risks. Officials worry that lawmakers, seeking to fund their own projects, may try to tap any large sum of unused money set aside for debt reduction, the sources said, speaking on condition of anonymity because the internal deliberations were private. Congressional Democrats are already eyeing the unexpended bailout cash as a source of funding for new efforts to combat soaring unemployment.
The Business Insider:
- Will the Apple(AAPL) tablet launch in a few months? In a year? Maybe. But as far as Apple's business goes, it doesn't matter. Today, a widely circulated report from Taiwan suggests that Apple's tablet won't launch until late next year. To now, it was believed that the tablet would launch early next year. The report could be hogwash -- the site that reported it, DigiTimes, has a flaky history. But let's assume, for the sake of argument, that it's correct. What does it mean?
Charlotteobserver.com:
- While many of his peers are hunkering down in the financial crisis, U.S. Bancorp(USB) chief executive Richard Davis is on the offensive. This spring, for instance, the Minneapolis-based bank announced plans to open a new capital markets and corporate banking office in Charlotte. On Monday, Davis, 51, was in town to meet employees, visit with clients and check out a trading floor set to open Monday in the bank's Hearst Tower offices. The bank has nearly 150 employees here in corporate banking, capital markets and a corporate trust business purchased from Wachovia Corp. in 2005. It has said it's adding a total of about 70 employees here by the end of next year, although Davis said the number could be higher.
Morningstar:
- Republican lawmakers Wednesday sought to preserve the current Treasury backstop of the private student-loan marketplace, rather than pursue more ambitious plans favored by congressional Democrats and the Obama administration. The House passed a bill in September that would effectively remove all private-market involvement in providing student loans. That vote was almost entirely along partisan lines. The legislation has become bogged down in the Senate, partially due to the continuing haggling in that chamber over health care, but also because of concerns by a growing number of moderate Democratic lawmakers over what has been proposed. According to lobbyists advocating both in favor and against the changes, the number of Democratic senators who have expressed concerns about the proposed student-loan-market overhaul either in public or private ranges from 12 to 20.
The Pragmatic Capitalist:
- What Are The Best Hedge Funds Buying?
Zerohedge:
- 13th Straight Week of Domestic Equity Fund Outflows As Market Rips 11% Over Same Period.
Cnet news:
- In a troubled economy, companies and consumers are looking for any advantage they can get. So it is that Best Buy(BBY) is jumping the gun by as much as nine days on Black Friday, announcing that, starting immediately, shoppers can get Black Friday bargain pricing on select products. The electronics retailer says that the come-hither pricing will be offered on "certain models of flat panel televisions." It will also feature reduced pricing on some home-theater products. The deals are available in-store and online.
- Windows 7 isn't just getting good reviews, it's also selling well, CEO Steve Ballmer told shareholders Thursday. Delivering opening remarks at Microsoft's shareholder meeting, Ballmer said that Windows 7 was off to a "fantastic start." "We've already sold twice as many units as any OS in a comparable time frame," Ballmer said. "Windows 7 is simply the best PC operating system that we or anyone else has ever built." By last week, Windows 7 accounted for 4 percent of Web-accessing devices, according to Net Applications; it took Vista more than seven months to reach that level. Addressing the overall economy, Ballmer reiterated that things seem to have stabilized.
Rassmussen:
Politico:
- Treasury Secretary Timothy Geithner is taking fire from both sides of the aisle, as liberals and conservatives are now pushing for him to resign. In a tense exchange before the Joint Economic Committee this morning, Rep. Kevin Brady (R-Texas) asked Geithner to resign over his handling of the economy, AIG bonuses and stimulus spending. “Conservatives agree that as point person you’ve failed," Brady said. "Liberals are growing in that consensus as well … will you step down from your post?” One of the "liberals" Brady was referring to is Rep. Peter DeFazio (D-Ore.), who said on MSNBC Wednesday there is "a growing consensus" that Geithner needs to be replaced.
- Sen. Joe Lieberman’s threat to filibuster any health care bill with a public option could kill health reform this year — and embolden Democratic challengers who’d like to send him packing in 2012. But Lieberman doesn’t seem worried. “I don’t think about that stuff,” Lieberman told POLITICO this week. “I’m just — I’m being a legislator. After what I went through in 2006, there’s nothing much more that anybody [who] disagrees with me can try to do.”
TheStreet.com:
- It isn't Google's (GOOG) Android mobile phone success, nor the upcoming Chrome computer operating system. UBS put a $700 price target on the stock Thursday due to a rebound in good, old Internet ad pricing.
NYDailyNews:
AP:
- Companies fraudulently collected at least $100 million in federal contracts from a $4 billion government program designated for disabled military veterans who run small businesses, congressional investigators charge. The Small Business Administration failed to check if companies were eligible for the no-bid contracts for veterans with service-related injuries, allowing, for example, a contracting employee at a military base in Tampa, Fla., to improperly funnel a $900,000 Air Force contract to his wife's firm. Moreover, because there are few penalties for companies found ineligible, many were still being handed tens of millions of dollars in government work even after they were found to be flouting the rules, according to the report released Thursday by the Government Accountability Office. In many cases, small business owners falsely claimed they had a service-related injury to get the federal work — such as a $7.5 million FEMA contract for Hurricane Katrina work — and were only caught when competitors protested. In other situations, the small veteran-owned businesses were legitimate but then improperly passed the work to large or foreign-based corporations.
Reuters:
- Williams-Sonoma Inc (WSM) posted a higher-than-expected quarterly profit and raised its full-year forecast on Thursday, helped by cost cuts and a move to offer lower-priced home goods. The operator of the Williams-Sonoma cookware and Pottery Barn furnishings chains has updated its styles and slashed prices on some items to woo shoppers in the economic downturn. Throughout the quarter, response to the company's merchandise and marketing efforts was "progressively stronger-than-anticipated," resulting in improved selling margins, Williams-Sonoma Chief Executive Officer Howard Lester said in a statement. "The results are an indication that upper-income consumers are spending a bit more, which is not surprising given the rally in the stock market and the stabilization in the housing market," Barclays analyst Michael Lasser said.
- American Superconductor Corp(AMSC) said it expects fiscal 2010 adjusted earnings per share to grow more than 80 percent, helped by a strong backlog and lower costs, and reaffirmed its outlook for the current financial year. The company, which makes electrical systems for wind farms and turbines, expects adjusted earnings per share to be more than $1.15 for 2010. With more than $300 million of fiscal 2010 backlog in hand, the company has a strong platform to grow total revenue to more than $400 million in the year, Chief Executive Greg Yurek said.
- GameStop Corp's (GME) quarterly profit beat expectations helped by price cuts that stoked video game console demand and as used-game sales boosted margins -- signs a months-long period of gloom may be easing. The optimism is in contrast to months of dour industry sales reports as the sluggish economy discourages consumers from buying $60 games and consoles costing $200 or more. Consumers are returning to the stores for titles like new versions of Microsoft's "Halo" and Electronic Arts' (ERTS) "Madden NFL," as well as Square Enix's "Batman: Arkham Asylum" and Take-Two Interactive's (TTWO) "NBA 2K10." "In this category, it's less about the economy and more about the title catalog, and that started to happen for us in this quarter," Raines said in an interview. "We saw gamers coming back to us."
- U.S. Federal Reserve officials on Thursday said inflation is not an imminent threat and downplayed the consequences of the falling U.S. dollar. Philadelphia Federal Reserve Bank President Charles Plosser and Dallas Federal Reserve Bank President Richard Fisher both said the U.S. recovery was underway but noted risks to growth remain.
- Google Inc (GOOG) is opening its much-anticipated Chrome software to external developers, as the search giant prepares to expand its reach into operating systems. The company hosted a media event on Thursday to show off the free cloud-based software, which it hopes to have on the market in netbooks ahead of the 2010 holiday season. Google executives said they designed Chrome with an emphasis on speed, security and simplicity. The software currently starts up on a PC in seven seconds, and Google said it is hoping to cut the boot time further.
Financial Times:
- A string of countries have edged towards imposing capital controls to stop short-term speculative inflows driving their currencies higher amid concerns about the growth of an emerging market asset bubble. On Thursday Brazil, which surprised the markets a month ago by imposing a 2 per cent tax on the inflow of money destined for financial assets, said it would further tighten those restrictions. The finance ministry imposed a new 1.5 per cent tax on the issuance of depository receipts, assets that allow Brazilian companies to offer shares on foreign exchanges.
Telegraph:
Leipziger Volkszeitung:
- Chancellor Angela Merkel’s government is prepared to send more troops to Afghanistan and deliver arms to the Afghan army, she said.
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