Today's Headlines

Bloomberg:

• U.S. Economy Grew 2% as Consumer Spending Rises. The U.S. economy expanded at a 2 percent annual rate in the third quarter and inflation cooled, underscoring the views of Federal Reserve policy makers who say more stimulus will be needed to spur growth. The increase in gross domestic product matched the median forecast of economists surveyed by Bloomberg News and followed a 1.7 percent second-quarter gain, Commerce Department figures showed today in Washington. Other reports showed business activity increased this month and consumer confidence weakened.
• Ireland, Greece Debt Woes Reverse Sovereign Default Swaps Rally. A bondholder showdown in Ireland, slumping Greek tax revenue and political gridlock in Portugal reversed Europe’s biggest sovereign debt rally in three months. The average price of credit-default swaps on Portugal, Italy, Ireland, Greece and Spain rose to 406.5 basis points from 363.5 last week, according to CMA. That’s the biggest weekly increase since Aug. 13. Governments of Europe’s so-called peripheral nations are struggling to lower their budget deficits even as they impose public spending cuts and increase taxes.
• Stocks May Jump 10% After Fed Quantitative Easing Announcement, Biggs Says. U.S. stocks may rise 10 percent should the Federal Reserve announce a program of asset purchases known as quantitative easing, and emerging-market shares will keep rising, according to hedge-fund manager Barton Biggs. “The conventional wisdom is the markets are going to probably sell off,” Biggs, managing partner of New York-based Traxis Partners LLC, said in an interview today with Betty Liu on Bloomberg Television’s “In the Loop.” “Investors may in fact get a “surprise” with “another 10 percent rally.” Biggs said the “most attractive plays” for investors are technology stocks and pharmaceuticals. He said oil-services companies have fallen too much.
• Whitman-Brown Governor's Race in California is Now a 'Toss-Up,' Poll Shows. The race for governor of California between Democrat Jerry Brown and Republican Meg Whitman is now rated a “toss-up” instead of “leans Democrat,” according to Rasmussen Reports.
• Brazil Says Offshore Oil Field May be Americas' Biggest Find in 34 Years. Brazil said the government’s Libra field may hold “gigantic” reserves of as much as 15 billion barrels, almost twice initial estimates, which would make it the biggest discovery in the Americas in more than three decades. Oil was found below a layer of salt at the first exploration well at the government’s field, according to an e-mail sent today by the national petroleum regulator, known as ANP. Brazil drilled to a depth of 5,410 meters (17,750 feet) at the well and may reach 6,500 meters by December, the ANP said. A deposit of 15 billion barrels would be almost twice the size of state-controlled Petroleo Brasileiro SA’s nearby Tupi field, would eclipse Brazil’s total current reserve base and also be the biggest find in the Americas since Mexico discovered Cantarell in 1976.

Wall Street Journal:

• Sinopec in Talks With BP(BP) to Develop Shale Gas in China. China Petroleum & Chemical Corp. (SNP), or Sinopec, said Friday the company is in talks with BP PLC (BP.LN) to explore and develop shale gas resource in China, adding that it plans to bid for six more shale gas blocks to step up its investment in cleaner-burning fuels in the country.
• Recovery in Building is Forecast for 2011. The nation's construction industry, virtually on life support during the economic downturn, will begin a slow recovery next year, according to a forecast set to be released Friday. Next year, the value of new projects that start construction is expected to climb to $445.5 billion, an 8% rise from this year when that figure hit a post-recession low, according to the closely watched McGraw-Hill Construction forecast.
• India's Major Crisis in Microlending. The microlending movement that was supposed to help lift millions of people in India out of poverty has in recent weeks fallen into chaos. Urged on by local government officials and politicians, thousands of borrowers have simply stopped paying lenders, even though they have the money. The government has begun ratcheting up restrictions, fearing that borrowers are being buried by usurious interest rates. In some cases, officials have even arrested lending agents for allegedly harassing borrowers.

Business Insider:

• Interview With Rep. Randy Neugebauer: The Fed Is In The Price-Control Business. Congressman Randy Neugebauer (Republican, Texas) has questioned the Fed's decision to target higher inflation and says there's no way we know it will work. "We've tried to spend and borrow our way into prosperity...now we're being told to print," he said. Neugebauer doesn't think Fed Chairman Ben Bernanke and the FOMC should be targeting higher prices for assets. "The Fed is almost in the price control business," he said, noting that's what he thought markets were supposed to do. The concern for Neugebauer is that inflation might hit commodity prices, and not wages, raising the cost things like food for consumers. He's also worried continued low interest rates are hitting seniors and pensioners who rely on the interest growth from their savings for spending. And all of this action from the Fed might have no positive impact at all, according to Neugebauer. He fears that businesses and individuals are too concerned about paying down debt and cutting costs to take on new loans and spend, no matter how cheap they are.

Zero Hedge:

• How GE(GE) Paid a total of $5 Billion in Domestic Taxes Between 2002 and 2009 on $639 Billion in Domestic Revenues.

MarketWatch.com:

• The 2010 Election: Ugly Economy, Angry Voters.

New York Post:

• Google(GOOG) Yearns to Make YouTube a TV Network. Google is pitching YouTube not only as a popular Web destination, but as a content channel to have a place in the living room alongside TV networks like ABC, CBS and NBC. As Google targets the TV set, it is also making a play for TV-sized ad buys rather than smaller online budgets.
  

New York Times:

• U.S. Solar-Power Projects Forecast to Taper Off. The boom in construction of solar-power plants in California and Arizona is unlikely to last because it depends on temporary U.S. government incentives, according to David Crane, NRG Energy's(NRG) CEO.
  

LA Times:

• Redbox Planning to Expand Onto the Web Next Year. As more consumers leave DVDs behind for digital downloads, the company that brought movie vending machines to grocery stores nationwide is following the audience. Redbox unveiled Thursday a new digital strategy that by next year will expand the number of movies offered to consumers directly in their homes -- a move the Illinois-based company hopes will set the stage for longer-term growth and soothe investors anxious about its prospects.

New York Daily News:

• Suspicious UPS Packages Across East Coast, Including One in Brooklyn, Under Investigation. Authorities are investigating a series of suspicious UPS packages across the East Coast - including a possible explosive inside a delivery truck in Brooklyn, law enforcement sources said. The discovery of an improvised device in a package in the United Kingdom triggered the massive response in the United States. Cargo planes were grounded at airports in Newark and Philadelphia and the NYPD bomb squad surrounded a UPS truck at MetroTech in downtown Brooklyn, officials said. "We're investigating what we believe is a possible explosive device on board that truck," said top NYPD spokesman Paul Browne. The Manhattan Bridge was closed and two buildings in the office complex were evacuated Friday morning.

ABC News:

• Democratic Closing Argument: Personal Attacks. Democrats Attack Over Personal Issues, Republicans Over Policy. It's not just the Aqua Buddha and David Vitter's prostitute, Democratic candidates across the country are closing out the campaign with personal attacks on Republican candidates, sometimes digging up decades-old legal problems.

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Friday shows that 26% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-five percent (45%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -19 (see trends).

Reuters:

• Persistent Low Rates Not Helping Economy - Blackstone(BX) COO Says. A near-zero interest rate policy is not aiding a U.S. economic recovery, as it reduces income to retirees and offers little help to companies sitting on vast amounts of cash, the COO of private equity giant Blackstone Group said on Thursday. "I think that traditional economic theory which says that the lower the interest rate the more stimulation you get in the economy ... misses the point," said Tony James, chief operating officer of Blackstone, which has assets under management of over $100 billion. "When interest rates get too low for too long, you get a structural shift in the economy and lower rates can actually be counterproductive." James said low rates do not help U.S. companies sitting on record amounts of cash and that have no need to borrow money. Leveraged companies which have locked in rates are also not aided. "And I believe that American industry in general has plenty of capacity," he said. "So I don't see that lower rates are going to particularly encourage American industry to borrow and build." It also doesn't help people who depend on money market accounts and savings accounts to live on, he said, as it gives them less income to spend. "So it actually net-net doesn't have any stimulative effect, it has a counter-stimulative effect by reducing income," he said. James' views are shared in part by two top asset managers, Bill Gross, co-founder of Pacific Investment Management Co, and Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co, who lambasted the Fed's loose monetary policy this week. The U.S. central bank's bond asset purchasing program "is in fact inflationary, and, if truth be told, somewhat of a Ponzi scheme," Gross wrote in his monthly investment outlook posted on Pimco's Website. Gross said the United States is in "'a liquidity trap,' where interest rates or trillions in asset purchases may not stimulate borrowing or lending because consumer demand is just not there." Grantham, who helps oversee over $100 billion at Grantham Mayo Van Otterloo & Co, said Fed policy has resulted in "extraordinary destructiveness" and "ruinous cost."
• US Senators Raise Concerns on Oil Sands Pipeline. Nearly a dozen U.S. Senators on Friday raised questions about the need for a proposed $7 billion pipeline that they said will bring "dirty oil" from Canadian oil sands to U.S. refineries and significantly increase the country's reliance on fossil fuels. The lawmakers, 10 Democrats and one independent, said the State Department needs to answer several key questions before deciding whether to approve TransCanada's application to build the 2,000-mile Keystone XL pipeline. Led by Democrats Patrick Leahy, of Vermont, and Jeff Merkley, of Oregon, the letter said the department should examine whether greater use of fuel-efficient technologies and advanced biofuels could offset the need for the pipeline. The department should also consider whether expanded use of oil sands crude will harm U.S. attempts to reduce oil consumption, the lawmakers said. This is the latest in a series of critiques that various lawmakers have lobbed at State as the department considers whether to greenlight the Keystone project, which is expected transport 510,000 barrels per day of crude from Alberta to the U.S. Gulf coast. Clinton angered some lawmakers and environmental groups this month when she said her department was "inclined" to approve the pipeline because of energy security issues. Supporters say the project will ensure a stable source of oil and lessen dependence on oil from the Middle East and Venezuela.
• U.S. Economic Growth Gauge Rises to 3-Week High: ECRI. A measure of future U.S. economic growth rose to a 3-week high in the latest week, while the index's annualized growth rate rose to a 19-week high, a research group said on Friday.

The Globe and Mail:

• Have Talked With 15 Bidders: Potash(POT). says it has been in discussions with 15 potential bidders for the company as it works to trump Potash Corp. of Saskatchewan Inc.BHP Billiton Ltd.’s $38.6-billion (U.S.) hostile bid, but needs more time for a possible counteroffer to come forward given the size, complexity and funding required to do the transaction, new regulatory documents filed Friday show. The “highly charged political environment” around approving such a bid is also a factor weighing on timing of talks, Potash Corp. says.