Weekend Headlines
Bloomberg:
- Treasury Secretary Timothy Geithner disputed claims by Goldman Sachs Group Inc(GS) executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year. Goldman Sachs, Morgan Stanley and JPMorgan Chase & Co.’s investment bank are set to pay record combined bonuses this year, according to analysts’ estimates. Goldman set a Wall Street pay record in 2007 when its compensation totaled $20.2 billion, including $68.5 million for chairman and chief executive officer Lloyd Blankfein. New York-based Goldman Sachs, the fifth-largest U.S. bank by assets, accepted $10 billion from the Treasury and other forms of government support last year. “The basic problem we face across the system is that executives were paid for taking imprudent risks,” Geithner said.
- Treasury Secretary Timothy Geithner, throwing cold water on a plan by congressional Democrats to tax financial transactions, said banks and other market participants would find ways to circumvent the expense. “I have not seen the version of that that I think works,” Geithner said in an interview on Bloomberg Television. Geithner said he expects the Troubled Asset Relief Program to get as much as $175 billion in repayments from banks by the end of next year. The prospect of a so-called Tobin tax, floated last month by U.K. Prime Minister Gordon Brown, is already provoking nervous U.S. financial companies to lobby for its defeat. Democrats, including Oregon Representative Pete DeFazio and Iowa Senator Tom Harkin, this week proposed taxing large transactions in stocks and derivatives. House Speaker Nancy Pelosi said the idea has a “great deal of merit.” In yesterday’s interview, Geithner, echoing some of the banking industry’s reasons for opposing a Tobin tax, said he was concerned it wouldn’t be able to be adopted globally, making it harder to impose. He also noted that the tax may hit less sophisticated investors, instead of the big firms. “There’s a real risk that retail investors, who’ve got fewer choices, they end up bearing the cost of the tax,” he said. Geithner also said he was confident that loopholes concerning derivatives, inserted into legislation Congress is crafting to overhaul financial regulation, would be tightened before a law is passed. Airlines, energy companies and other firms that rely on derivatives to protect their businesses against swings in oil and commodities prices would be exempt from most new requirements in House of Representatives bills designed to rein in more speculative trading.
- Crude oil prices are in “the right range” and there is no need to reduce inventories, Saudi Arabian Oil Minister Ali al-Naimi said ahead of an OPEC meeting scheduled for later this month. “The market is stable right now, volatility is at minimum, everybody is happy with the price, it is in the right range,” al-Naimi said. “There is nothing to worry about.” The 11 countries with OPEC production quotas pumped 26.5 million barrels of crude a day in November, 1.655 million above their collective target, a Bloomberg News survey showed Dec. 1. Output from all 12 members, including Iraq, rose to the highest level in 11 months.
- Some of the economists who anticipated the U.S. job market would see marked improvement in November now project job gains are around the corner, and possibly in the rearview mirror. The drawdown in inventories and rising corporate profits are the most compelling reasons for payrolls to begin showing sustainable increases as soon as this month, these economists said. What’s more, the recent trend of upward revisions will probably continue, signaling the worst employment slump in the postwar era may have already ended. “We could see a positive number for November next month,” said Stefane Marion, chief economist at National Bank Financial Inc. in Montreal, whose forecast of a 30,000 payroll drop was the closest. “Firms now are beginning to redeploy some of their cash flows” by hiring new workers, he said. Corporate profits climbed 21 percent from January through September, the biggest three-quarter gain in five years, while inventories plunged at a record pace, according figures from the Commerce Department. Leaner stockpiles set the stage for recovery in production. “If you run down your inventories hard, you also cut your labor force,” said Peter Possing Andersen, an economist at Danske Bank A/S in Denmark who projected a decline of 50,000 jobs for November. He said the ramp up in production means the manufacturing industry, which has cut workers for the past two years, may stabilize and begin hiring in “a couple of months.”
- Countries with a large government role in the economy don’t do significantly better in avoiding deep recessions than those with smaller public sectors, the Bank for International Settlements said. While data from the latest recession suggest government spending helps stabilize economies, the effect seems to have weakened since the mid-1980s, according to the study published in the Basel, Switzerland-based BIS’s quarterly report. Openness to trade and monetary policy may be gaining in importance, the study said. “Government size does not appear to reduce the depth of recessions,” authors Madhusudan Mohanty and Fabrizio Zampolli wrote.
- Central banks should allow financial stability to play a role in monetary policy as low interest rates spur banks to take on too much risk, according to a study by the Bank for International Settlements. The risk of banks defaulting jumped by more in economies where interest rates remained low for an extended period before the recent financial crisis, the report by the Basel, Switzerland-based organization said. “The main implication of these findings is that monetary policy is not fully neutral from a financial stability perspective,” wrote economist Leonardo Gambacorta. “It is important that monetary authorities learn how to factor in the effect of their policies on risk taking.”
- Congress Is The Drunk at the Fed's Punch Bowl.
Wall Street Journal:
- The U.S. Environmental Protection Agency will early next week, possibly as soon as Monday, officially declare carbon dioxide a public danger, a trigger that could mean regulation for emitters across the economy, according to several people close to the matter. Such an "endangerment" decision is necessary for the EPA to move ahead early next year with new emission standards for cars. EPA Administrator Lisa Jackson has said it could also mean large emitters such as power stations, cement kilns, crude-oil refineries and chemical plants would have to curb their greenhouse gas output. The announcement would also give President Barack Obama and his climate envoy negotiating leverage at a global climate summit starting next week in Copenhagen, Denmark and increase pressure on Congress to pass a climate bill that would modify the price of polluting. While environmentalists celebrate EPA's authority to regulate greenhouse gases, it has caused many large emitters to cringe at the potential costs of compliance. According to a preliminary endangerment finding published in April, EPA scientists fear that man-made carbon dioxide and other greenhouse gases are contributing to a warming of the global climate. Senior EPA officials said in November the agency would likely make a final decision in December around the time of the summit. Joe Mendelson, Global Warming Policy Director for National Wildlife Federation, said the endangerment decision, would happen at "absolutely the right time." "With House legislation passed, a bipartisan Senate bill in the works, and strong EPA action a virtual certainty, the president goes to Copenhagen with a very strong hand to play," Mr. Mendelson said. The EPA declaration would also ratchet up the pressure on U.S. lawmakers to pass legislation that analysts say would cut emissions in a more economically efficient way. Although the House has passed a climate bill, movement of similar legislation in the Senate has faced much more resistance and passage becomes more difficult in an election year. The EPA's Ms. Jackson and President Obama's energy and climate czar Carol Browner have said they would prefer Congress to take action but are prepared to move ahead in the absence of lawmakers crafting their own law. Industry experts say the Clean Air Act--under which the EPA is making its endangerment finding--was designed to regulate more regional and localized air pollution, and would be a much more blunt tool than Congress could craft. Critics, such as the U.S. Chamber of Commerce, say the endangerment declaration could spark a cascade of litigation and regulation that could harm the economy.
- House lawmakers are gearing up for a vote as soon as next week on a bill aimed at forcing a national college-football playoff. Approval of the legislation by an Energy and Commerce subcommittee would represent the most significant action yet by Congress in its oversight of college football. The plans for a markup next week – still tentative as of late Friday – appeared to signal growing congressional support for the idea, which President Barack Obama also backed during the 2008 campaign.
- During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history. It devoured much of Mr. Watanabe's personal fortune, he says, which he built up over more than two decades running his family's party-favor import business in Omaha, Neb. It also benefitted the two casinos' parent company, Harrah's Entertainment Inc., which derived about 5.6% of its Las Vegas gambling revenue from Mr. Watanabe that year.
- Lewis Hay III, the chairman and chief executive of FPL Group Inc. (FPL), plans to steer the electricity giant toward a $2 billion investment in wind energy in 2010, despite uncertainty surrounding a pending rate case involving the big power company. It's easier and cheaper right now to build up the nation's infrastructure to tap into America's vast wind resources, largely because of the regulatory environment, Hay said.
- Five high-ranking executives at American International Group Inc.(AIG) said last week they were prepared to quit if their compensation is cut significantly by the insurer's government overseers, according to people familiar with the matter. The threat is the latest in the running fracas between AIG and the government's compensation czar, Kenneth Feinberg, who is charged with setting pay limits for top executives at companies receiving the most federal bailout money. The AIG executives who notified the company they were prepared to resign include its general counsel, Anastasia Kelly, and the heads of some of its largest insurance businesses.
- Antiabortion lawmakers in the Senate plan to introduce an amendment as soon as Monday to restrict insurance coverage of abortion in the health bill, setting up a showdown that has no clear path to resolution. Both sides agree the amendment likely doesn't have enough votes to pass, but antiabortion groups and Sen. Ben Nelson (D., Neb.) say they will continue insisting on tough language as a condition for supporting the overall bill. The lack of a clear meeting point makes abortion somewhat different from the other top obstacle to the bill's passage, the publicly run insurance plan that some Democrats oppose. There, both sides are weighing a handful of compromises. On abortion, said Sen. Nelson, "it's certainly not a lock that there's language in the middle." As it stands now, the Senate health bill would include abortion coverage in the new public plan and would allow women who receive government tax credits for insurance to enroll in a plan that covers the procedure.
- Iraqi lawmakers approved plans Sunday to hold parliament elections early next year that are seen as an important step toward political reconciliation and easing the withdrawal of U.S. troops. The vote -- during an emergency session convened just before a midnight deadline -- followed marathon talks by political leaders to break an impasse over balloting provisions that would satisfy the nation's rival groups. "I would like to congratulate the Iraqi people for this historical victory," said Vice President Tariq al-Hashemi, who had held up the elections for weeks with a veto. He also hailed political leaders for compromises that "got Iraq out from the bottleneck and out of a problem."
Barron’s:
- Gold Diggers of '09, Beware. Almost everyone is buying it -- or wants to. But it's hard for many investors and traders to wrap their heads around the idea of paying top dollar for a commodity that looks to be trading higher largely on unbridled investor demand -- and perceptions of the yellow metal as a store of value in times of economic stress.
- It's Still Too Early to Worry Too Much.
CNBC.com:
- Predictions '10. A CNBC Special Report.
Forbes:
- I am a primary care internist. All the health care reforms before Congress are counting on me and other doctors to be ready and willing to accept the millions of new patients with shiny new insurance cards. But this concept is a dream, or worse, a nightmare. In reality, my species of doctor will soon be extinct, replaced by nurse practitioners. The growing doctor shortage in the U.S. is in the way of any real health care reform.
NY Times:
- Dozing in a big lift chair, propped up by pillows in the living room of her modest home here, Bertha G. Milliard greeted the nurse who had come to check her condition and review the medications she takes for chronic pain, heart failure, stroke and dementia. Ms. Milliard, 94, said those visits had been highly effective in keeping her out of the hospital. But the home care she receives could be altered under legislation passed by the House and pending on the Senate floor as Congress returned to work this week.As they are across the nation, Medicare patients and nurses in this town in northern Maine are anxiously following the Congressional debate because its outcome could affect Medicare’s popular home health benefit in a big way. The legislation would reduce Medicare spending on home health services, a lifeline for homebound Medicare beneficiaries, which keeps them out of hospitals and nursing homes. Under the bills, more than 30 million Americans would gain health coverage. The cost would be offset by new taxes and fees and by cutbacks in Medicare payments to health care providers. The impact of the legislation on Medicare beneficiaries has been a pervasive theme in the first week of Senate debate, which is scheduled to continue through the weekend. Home care shows, in microcosm, a conundrum at the heart of the health care debate. Lawmakers have decided that most of the money to cover the uninsured should come from the health care system itself. This raises the question: Can health care providers reduce costs without slashing services? Under the legislation, home care would absorb a disproportionate share of the cuts.
- After intense opposition from building owners, Mayor Michael R. Bloomberg has dropped the most far-reaching initiative of his plan for reducing greenhouse gas emissions. The plan, which the owners said was too costly, called for all buildings of 50,000 square feet or more to undergo audits to determine which renovations would make them more energy efficient, and for owners to then pay for many of those changes. The mayor wants to go forward with the proposal to require energy audits, but now is leaving it up to the building owners whether to undertake the changes called for by those audits.
- Apple's(AAPL) App Store Transforming Mobile Computing.
- There has been no shortage of books about Wall Street leaders who made billions of dollars disappear in the financial crisis. But as the Wall Street Journal reporter Gregory Zuckerman writes in “The Greatest Trade Ever,” (Broadway Books, 295 pages) the financial crisis was a goldmine for a small group of investors. One of them, John Paulson, founder of Paulson & Company, a New York hedge fund, made $15 billion in 2007 by shorting the housing bubble.
NY Post:
- The guy lucky enough to have gotten in on Facebook revolution at the beginning is poised to get another dose of misfortune when it comes to his hedge fund. Peter Thiel, the PayPal co-founder who struck gold when he invested $500,000 in Facebook five years ago, is facing a second consecutive year of losses at his hedge fund Clarium. The onetime Silicon Valley star's hedge fund is down 16.4 percent through November, according to performance data reviewed by The Post. That leaves the former PayPal CEO just four weeks to turn around Clarium's fortunes -- an unlikely feat. Clarium's assets also remain down, though so far they are holding steady at $1.6 billion as of Nov. 30. Last summer, Clarium boasted assets of $7.3 billion before things turned sour. The disappointing performance figures have become a stain on the Silicon Valley venture capitalist's otherwise stellar career, and come at a time when most funds are up, with some even erasing the losses they sustained in 2008. There are questions about Clarium's long-term viability should this year's performance fail to bring in fees.
Politico:
- A series of embarrassing e-mails stolen from a British climate research center last month has wreaked havoc in the obscure academic circles of climate science. Global warming skeptics believe that the correspondence, which shows scientists debating whether to manipulate scientific data to strengthen the case for man-made global warming, is a smoking gun that will change the dynamics of the climate debate. Activists also hope the purloined e-mails will derail Democratic climate negotiations on Capitol Hill and the upcoming international talks in Copenhagen. “The elephant in the room is the questions raised by the e-mails which have been made public,” said Rep. John Shadegg (R-Ariz.) on Wednesday. “Anyone who thinks that the e-mails are insignificant, that they don’t damage the credibility of the entire movement, is naive.” The controversy has rallied and outraged conservative activists who believe the exchanges stolen from the University of East Anglia’s Climate Research Unit prove that climate scientists colluded to suppress data on how humans have affected climate change. They’re pointing to comments that show scientists using a science journal “trick” to manipulate data, vowing to keep challenging studies out of journals even if “we have to redefine what the peer-review literature is” and deriding questions from climate skeptics as “crap criticisms from the idiots.” “This is a sea change in our culture,” said Marc Morano, a former Republican staffer turned prominent climate change skeptic. “Wait until January or February; you’re going to see numbers [on belief in global warming] that have dropped through the floor.”
Rasmussen Reports:
MercuryNews.com:
- They were Raj Rajaratnam's friends, college classmates, business associates and former employees, but federal prosecutors say they doubled as the hedge fund billionaire's secret network of Silicon Valley insiders. The spotlight in the Galleon insider trading scandal has focused on Rajaratnam, a larger-than-life operator of the $7 billion Galleon hedge fund in New York, but the case also has upended the lives of his contacts in the valley. Many are successful valley executives who now are caught in the glare of a national scandal. A few have pleaded guilty and turned against Rajaratnam. Others are fighting criminal charges in the case. Still others who haven't been charged have been put on leave by their employers or have resigned prestigious directorships in public companies. If the government charges are true, the unanswered question is why these friends and associates risked reputation and career to exchange confidential information about valley companies with a hedge fund operator.
Reuters:
- Demonstrators angered by the Obama administration's move to prosecute the self-professed mastermind of the September 11 attacks in civilian court on U.S. soil called on Saturday for the trial to be moved to a military tribunal. More than 1,000 people braved cold and rain to rally outside the Manhattan federal courthouse where Khalid Sheikh Mohammed and four others will be tried. Speakers blasted U.S. Attorney General Eric Holder for his decision to hold the trials in a court just blocks from the World Trade Center site, where thousands of people were killed in the 2001 attacks with hijacked planes. Demonstrators -- among them family members of victims and rescuers-- held U.S. flags and signs reading "no constitutional rights for enemy combatants," and booed and jeered as speakers invoked Holder's name and that of President Barack Obama. "They were murdered ... by the terrorist Khalid Sheikh Mohammed," Edie Lutnick, executive director of The Cantor Fitzgerald Relief Fund, said of the victims. Lutnick's brother Howard Lutnick is chief executive of the Cantor Fitzgerald brokerage firm that lost two-thirds of its staff -- more than 600 people. A brother of theirs died in the attack. "We will be victims no more," Lutnick said drawing cheers from the rally organized by the 9/11 Never Forget Coalition. She called on the U.S. Congress to block the trial. Other speakers, including people who were badly injured on September 11, blasted the trial as "a multimillion-dollar charade" and an "exercise in global Jihadist recruitment" which would only give terrorists a platform. Sixteen years ago "they attacked and we indicted," said former assistant U.S. attorney Andy McCarthy, who prosecuted the 1993 World Trade Center bombing case, tried at the same federal courthouse in lower Manhattan. "We know it's a war ... You don't bring your enemies to a courthouse," said McCarthy, a contributor to the conservative periodical National Review who criticized Obama during the 2008 election campaign for his "collaboration with radical, America-hating leftists."
Financial Times:
- Bloomberg is planning a further year of aggressive investment and may make more acquisitions as the financial data group seeks to broaden its reach to become the world’s “most influential source of news”. “The game is ours to lose,” Peter Grauer, its chairman, told the Financial Times days after completing the purchase of Business Week, one of the first deals in the 28-year-old company’s history. The privately held company, which subsidizes its global news operation with the profits from subscriptions to its $1,500-a-month financial data terminals, was studying whether to start charging for its content on Bloomberg.com and Businessweek.com, he said. “I think maybe we’re hitting the bottom” of the news industry slump, Mr Grauer said.
- Alistair Darling, chancellor, is preparing a crackdown on “extraordinarily high” bankers’ bonuses when he makes his pre-Budget report on Wednesday, but is expected to reject a windfall tax on bank profits. Mr Darling’s officials are in a race against time to draw up some form of supertax to curb what the chancellor fears will be a lavish bonus season, only months before a general election.
- In October, newspapers around the world carried photographs of Raj Rajaratnam, founder of Galleon Group, the hedge fund manager, in handcuffs. His arrest was in connection with the US authorities’ most ambitious insider trading case ever, one that has ensnared some 20 individuals for allegedly clearing some $53m (£32m, €35m) of illegal trades since 2006. The case set alarm bells ringing across hedge funds. “I can’t remember wiretaps ever being used over extended periods of time for an insider trading case,” says Donald Chase, a partner at Morrison Cohen, a law firm. “You only heard of such tactics in relation to criminal gangs and drug busts.” All of this has raised fears in the industry about who might be next, says Marcelo Cruz, a risk specialist and adjunct professor at New York University. At the heart of the matter is pursuit of information, the holy grail for fund managers of all stripes. Due to the competitive nature of the industry, analysts and traders always seek information their competitors lack through channels that at times may be suspect. This proverbial “edge” can be the key ingredient of performance and hefty payouts for managers. It is no secret that some traders and analysts spend a lot of time exchanging information with colleagues and reaching out to insiders of industries in the hope of gaining the edge, says Mr Cruz. “Rumours, gossip and loose talk are their bread and butter. Most of what’s discussed in these conversations is fair game, but traders must know when not to cross the line.” “There is no bigger game-changer for a hedge fund than fraud. Firms that took years to build, have been wiped out in days,” says Ellen Schubert, chief adviser to Deloitte’s asset management services group.
- Citigroup(C) is racing against the clock to convince US authorities that it be allowed to repay $20bn of bail-out funds, with insiders and regulators arguing that unless the bank acts in the next 10 days it will have to wait for more than a month. The short window for a decision on the repayment of funds from the troubled asset relief program raises the stakes for Citi in its quest to free itself from the shackles of the government, which also owns a 34 per cent stake in the lender. Separately, the Kuwait Investment Authority, the Gulf state’s sovereign wealth fund, has made a $1.1bn profit after selling its entire 5 per cent stake in Citi for $4.1bn – less than two years after acquiring preferred shares in the ailing bank during the financial crisis. Citi’s executives have been lobbying Washington to be allowed to repay Tarp, arguing that the bank has cash reserves of more than $240bn and its financial performance is improving. However, Citi’s situation is further complicated by the US government stake. People close to the situation said the government was willing to co-ordinate a sale of at least part of its stake with Citi’s own capital-raising but the tight timing – and the authorities’ lingering concerns over the bank’s health – might delay that. Citi declined to comment but insiders acknowledged that unless it could launch a share offering by December 14 or 15, it would probably have to wait until at least late January.
TimesOnline:
- Tensions between Britain and America over the war in Afghanistan erupted into the open yesterday as the Defense Secretary questioned President Obama’s decision to put a date on the start of US troop withdrawals. In an interview with The Times, Bob Ainsworth said that the Government would not follow Washington’s promise to start pulling out in 2011. “You can’t put a time on it. You’ve got to look at conditions,” he said. He accepted that the public would not tolerate the war “going on forever”, but insisted there was no deadline for withdrawal. “Nobody is talking about a drawdown, we are talking about bringing more in there . . . but we are talking about transition.” He said that it would be wrong to set a date for the start of troop reductions. His comments reflect dismay at the highest level in the British Armed Forces about Mr Obama’s suggestion this week that US troop withdrawals would start by mid-2011. Britain expects to have substantial forces on the ground in Afghanistan for at least five or six more years. David Cameron, the Conservative leader, also voiced disquiet over “artificial timetables”. Speaking on a visit to Afghanistan, he said: “We all want to make progress and bring British troops home as soon as we can but any timetable has got to be based on success and results and we must not give people false hope. “I think it is very important not to send mixed messages. Instead, let’s say we’re here to train up the Afghan National Army and police and as soon as the job is done we can bring our troops home. But don’t let’s set artificial timetables.”
- The Met Office plans to re-examine 160 years of temperature data after admitting that public confidence in the science on man-made global warming has been shattered by leaked e-mails. The new analysis of the data will take three years, meaning that the Met Office will not be able to state with absolute confidence the extent of the warming trend until the end of 2012. The Met Office database is one of three main sources of temperature data analysis on which the UN’s main climate change science body relies for its assessment that global warming is a serious danger to the world. This assessment is the basis for next week’s climate change talks in Copenhagen aimed at cutting CO2 emissions. The Government is attempting to stop the Met Office from carrying out the re-examination, arguing that it would be seized upon by climate change skeptics. The Met Office works closely with the University of East Anglia’s Climatic Research Unit (CRU), which is being investigated after e-mails written by its director, Phil Jones, appeared to show an attempt to manipulate temperature data and block alternative scientific views. The UN’s Intergovernmental Panel of Climate Change admitted yesterday that it needed to consider the full implications of the e-mails and whether they cast doubt on any of the evidence for man-made global warming.
- Fears are growing among western banks that Dubai Holding, the personal investment vehicle of the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, will be the next state-owned Dubai company to default. The conglomerate went on a debt-fuelled spending spree in the past decade, borrowing $12 billion (£7.3 billion) to fund ambitious projects in Dubai and to create a private equity arm that bought stakes in Tussauds and the budget hotel chain Travelodge. Details of the main lenders to Dubai Holding are not public but bankers in Dubai say the group borrowed from international banks, including Royal Bank of Scotland and HSBC, as well as local lenders. One official close to the company conceded the firm was “a bloody mess” and its boss, Mohammed Gergawi, a close confidant of Maktoum, had been “in denial” about the problems it faced.
Intl. Business Times:
- Financial stocks are still top bets among some of the largest hedge funds, which continued piling into big banks like JPMorgan Chase & Co(JPM) and Citigroup Inc(C) in the third quarter. Overall, hedge funds retained big bets on financial stocks as they made Citigroup the biggest recipient of increases to existing positions. Paulson bought into Citigroup in the third quarter with a hefty 300 million share stake. Other banks among the top 10 increases to existing positions included JPMorgan, Citizens Republic Bancorp Inc (CRBC) and Huntington Bancshares Inc (HBAN). Hedge funds have been exposed to the banking sector because of its potential upside after financials were at the epicenter of the credit crunch and suffered the most during the bear market. "If you want an economically sensitive vehicle, there's none better," said Anton Schutz, president of Mendon Capital Advisors Corp, an adviser to funds with financial assets. "And if you believe that there's a recovery coming ... I think there's a reasonably good reason why people are here," Schutz said.
Berliner Zeitung:
- Germany's VDMA plant and machinery makers' association expects the economy to go through a credit squeeze next year that will increase the number of company insolvencies. Production in the plant and machinery industry will drop 20% this year, VDMA board member Josef Trischel said.
Corriere della Sera:
- The current economic recovery may be stronger than forecast, though the lack of private demand may make growth hard to sustain once the effects of government stimulus wear off, the new chief economist for the OECD said in an interview.
CCTV:
Xinhua:
- China's economy still faces the twin problems of "insufficient" domestic demand and weak external environment next year, citing Yao Jingyuan, the statistics bureau's chief economist.
Weekend Recommendations
Barron's:
- Made positive comments on (DTV), (S), (KMP), (T), (MRK), (F), (AAPL), (AFL), (QCOM), (AMX) and (DOW).
Citigroup:
- Reiterated Buy on (GOOG), target $640.
- Reiterated Buy on (NVDA), target raised to $21.
- Reiterated Buy on (GLW), target $20.50.
- Reiterated Buy on (AMD), target raised to $11.
- Reiterated Buy on (MGA), target $60.
Night Trading
Asian indices are -.50% to +1.25% on avg.
S&P 500 futures -.10%.
NASDAQ 100 futures -.13%.
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Earnings of Note
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- (PBY)/.04
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Economic Releases
3:00 pm EST
- Consumer Credit for October is estimated at -$9.3B versus -$14.8B in September.
Other Potential Market Movers
- The Fed's Bernanke speaking, Fed's Dudley speaking, Copenhagen Climate Conference, UBS Media/Communications Conference, (MET) investor day, (AKAM) analyst day and the (SLG) analyst meeting could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and technology stocks in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 75% net long heading into the week.
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