Today's Headlines

Bloomberg:

• Portuguese, Irish Debt Lead Peripheral Drop on Budget Concern. Irish government bonds tumbled for a 13th day on mounting concern that the nation will be forced to restructure its finances. Spanish bonds also headed for a 13th day of declines as data showed the nation’s economic growth stalled. French Finance Minister Christine Lagarde said yesterday that investors must share in the cost of safeguarding sovereign debt. "Lagarde’s comments mentioned restructuring, and that’s another nail in the coffin” for so-called peripheral nations’ debt, said Steven Major, global head of fixed-income research at HSBC Holdings Plc in London. “There’s still a big constituency of investors and traders who have not recognized until now that restructuring could happen.” The yield on the Irish 10-year bond added 31 basis points to 9.07 percent at 4:18 p.m. in London. The Irish spread over bunds reached an all- time high of 652 basis points, or 6.52 percentage points, Bloomberg generic data shows. The cost to insure Irish government debt against default rose 20 basis points to a record 617, according to data provider CMA, using credit-default swap prices. CDS’s on Portugal added 17 basis points to 494 and Spain’s rose 12 to 289.
  
• Commercial-Mortgage Debt Prices to Rise in 2011 as Low Rates Spur Buying. Prices of commercial-mortgage backed securities will keep rising as buyers seek higher-paying investments with benchmark interest rates near zero, according to Lisa Pendergast, a strategist at Jefferies & Co. “Something is going to have to break to prevent investors from pouring money into CMBS,” Pendergast said during a panel discussion yesterday at Bloomberg headquarters in New York. “We are already starting to see mini-bubbles form.”
• Fed Easing Seen Ineffective by 75% in Global Poll Favoring ECB. Global investors doubt the Federal Reserve’s plan to buy more Treasury securities will boost the U.S. economy or bring down unemployment and say they believe the government is pursuing a weak-dollar policy, a poll shows. Three-quarters of those surveyed say the central bank’s securities purchases -- or quantitative easing -- will have little or no effect on joblessness, according to the latest quarterly Bloomberg Global Poll of 1,030 investors, analysts and traders who are Bloomberg subscribers. More than half say the Fed’s action won’t increase U.S. growth over the next year. Global investors do think the Fed will have some success in lifting inflation, another goal. Half expect inflation to rise modestly as a result of the central bank’s actions. One in five say the Fed will get more than it’s hoping for and that inflation will increase to dangerous levels. Seven of 10 respondents say the U.S. is deliberately keeping the dollar low against other currencies, while only one in four think it’s letting the market decide the value of the greenback, according to the survey conducted Nov. 8 by Selzer & Co., a Des Moines, Iowa-based firm. The results of the poll underscore complaints by officials from China, Germany and Brazil, who say the Fed’s Treasury- purchase plan may jar other economies while failing to fuel U.S. growth. German Finance Minister Wolfgang Schaeuble called the move “clueless” and suggested it was aimed at driving down the dollar. Poll respondents are also worried about U.S. fiscal policy. More than three in five say there’s a moderate or big risk that the budget deficit will provoke a crisis of confidence and a dramatic rise in long-term interest rates in the next two years. Bernanke’s standing among investors has fallen. Just over 60 percent view the chairman favorably in the latest poll, compared with 71 percent who felt that way in September. U.S. Treasury Secretary Timothy Geithner is seen favorably by 44 percent of respondents against 47 percent who rate him unfavorably.
• Goldman(GS) Tells Investors to Exit China Stock Bet. Goldman Sachs Group Inc. recommended clients exit a bet that Hong Kong-listed companies in China will gain on concern the central bank will raise borrowing costs to tame inflation. China’s annual inflation rate jumped to a two-year high of 4.4 percent in October. Inflation is above policy makers’ “comfort zone” and more “tightening” will likely occur, the New York-based analysts wrote in the report. “The near-term risk-reward for this position also looks unappealing as we approach the year-end ‘roll-off,’” they said.
• Grantham Says Fed Asset Purchases May Make Stocks 'Dangerously Overpriced'. Jeremy Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co., said the Federal Reserve’s attempt to boost the economy could push U.S. stocks to a level where they will be “dangerously overpriced.” The Fed’s decision to purchase Treasuries and flood markets with cheap money will drive investors out of cash and encourage them to speculate in stocks, which are already overvalued, Grantham said in an interview with the CNBC cable television network. “The S&P is already overpriced and if you push it up another 20 percent it becomes dangerously overpriced,” Grantham said in the interview, which was posted today on the network’s website. “In the not-too-distant future stocks will crack again.” The Fed’s policies also drive up commodity prices, create fears of inflation and heighten tensions with countries concerned that the decline in the value of the dollar will hurt their exports, said Grantham, whose Boston-based firm manages more than $94 billion. "We are in a currency war in a way,” Grantham said. “I hope it stays mild.”
• Large Hedge Funds Are Riskier Than Perceived, Spring Mountain Capital Says. Investors who believe larger hedge funds offer more safety and better returns than their smaller rivals may be misguided, according to Spring Mountain Capital LP. Funds with more than $1.5 billion in assets generate an average of 0.2 percent a month less in alpha, or returns above market indexes, than smaller managers, the New York-based investment management firm said today in a report.
• Cuts by Merkel, Cameron Win Investor Plaudits in Bloomberg Poll. Measures by German Chancellor Angela Merkel and British Prime Minister David Cameron to cut government spending and slash debt are making them standouts in the eyes of global investors. Merkel, 56, is viewed favorably by 68 percent of respondents in the latest Bloomberg Global Poll, top among a dozen world political and economic leaders cited in the survey. Cameron, 44, is second with a 65 percent worldwide favorability rating in the quarterly poll of 1,030 investors and analysts who are Bloomberg subscribers. The leader of Britain’s Conservative Party scored even better in Europe, where more than three-fourths of those questioned view him favorably. Lagging behind, U.S. President Barack Obama’s policies were viewed with optimism by 35 percent of the investors, followed by French President Nicolas Sarkozy with 30 percent and Japanese Prime Minister Naoto Kan with 16 percent.
• Mortgage Rate for 30-Year U.S. Loans Falls to Record. U.S. mortgage rates dropped to a record low, the first decline in a month, as the Federal Reserve began a program to buy Treasury bonds to support the economy. The rate for a 30-year fixed loan fell to 4.17 percent in the week ended today from 4.24 percent, Freddie Mac said in a statement. That was the lowest level in the McLean, Virginia- based mortgage-finance company’s records dating to 1971. The average 15-year rate declined to 3.57 percent from 3.63 percent.
• Activision(ATVI) Says 'Call of Duty: Black Ops' Sets Record Sales on First Day. Activision Blizzard Inc. said “Call of Duty: Black Ops,” the latest version of the best-selling video games, posted $360 million in sales in North America and the U.K. in 24 hours, a record for any entertainment property. Demand for “Black Ops” surpassed the previous record of $310 million in first-day sales set by last year’s “Call of Duty: Modern Warfare 2,” Santa Monica, California-based Activision said today in a statement.
• GM Recalls 13,780 Buicks, Cadiallacs After Fire Reports. General Motors Co. is recalling 13,780 Buick Lucerne and Cadillac DTS cars in the U.S. because of a flaw that can cause power-steering fluid to leak and ignite a fire in the engine.
• Human Genome(HGSI) May Be Takeover Target If U.S. Approves Lupus Drug Benlysta. Human Genome Sciences Inc. may become a takeover target if a lupus treatment it’s developing becomes the first such drug to win U.S. approval next month in more than a half century, analysts said. The safety and effectiveness of Benlysta, which the Rockville, Maryland-based biotech company is developing with GlaxoSmithKline Plc, will be the subject of a U.S. Food and Drug Administration staff report due tomorrow and an advisory panel meeting on Nov. 16. They expect a decision on approval by Dec. 9, and if the drug is cleared, sales may surpass $2.3 billion by 2014, according to the average estimate of four analysts surveyed by Bloomberg.
• MetLife(MET) Halts Sale of New Long-Term Care Insurance.
  

Wall Street Journal:

• Daimler CEO: Electric Cars Are Overhyped. Daimler AG Chief Executive Dieter Zetsche said Thursday that expectations for the development of electric cars are over-optimistic and predicted returns for companies will be small. "In 10 years' time, the overall market share of electric cars is likely to be still in the single-digit percentage range," Mr. Zetsche said during a Daimler event in Stuttgart, according to a prepared statement.

CNBC:

• Big Wave of Mortgage Resets May Not Be As Bad As Feared. The much-anticipated wave of adjustable-rate-mortgage resets—which are beginning to hit many homeowners now—may not be as devastating to the housing market as experts had feared.

Business Insider:

• Deutsche Bank: There's A Massive Credit Spigot About to Superpower The U.S. Economy. (graphs)

MarketWatch.com:

• FedEx(FDX) SmarPost to Drive Busiest Day in FedEx History. FedEx Corp. expects to see its busiest day in company history when it moves almost 16 million shipments around the world on December 13. This is a more than 11 percent increase from last year's busiest day when the company handled 14.2 million shipments. For the overall holiday season, FedEx is expecting a total volume increase of approximately 11 percent compared to 2009. FedEx forecasts more than 223.3 million shipments will move through its global networks between Thanksgiving and Christmas.
• World PC Chip Sales Rise in 3rd Quarter: IDC. Worldwide personal computer chip shipments and sales revenue rose in the third quarter, but sequential gains were weaker than usual, an industry group said Thursday. Unit PC chip shipments grew 8.6%, while revenues increased 24.1%, according to IDC. Meanwhile, shipments grew 2.1% from the second quarter, while revenue rose 2.5% in the same period.

New York Times:

• U.S. Giving to Colleges Plunges 12%, Worst Since 1930s.
• E.U. Seeks to Reassure Jittery Markets on Ireland. Bond investors, betting that Ireland’s finances will fail, and the European Union, the lender of last resort, are engaging in a risky game of chicken that analysts say is threatening to derail Europe’s fragile recovery. As frantic investors continued to unload Irish bonds Thursday, José Manuel Barroso, the president of the European Union’s executive, said the bloc stood ready, if needed, to offer a financial lifeline to help Ireland survive its worst economic crisis in decades. “We have all the essential instruments in place in the European Union and euro zone to act if necessary,” Mr. Barroso said at the Group of 20 summit meeting in Seoul. “The E.U. is ready to support Ireland.”

LA Times:

• FDIC Prepares to Crack Down on Officials of Failed Banks. Dozens of former officers and directors are advised to work out settlements or face legal action for their alleged misdeeds during the financial crisis.
• Nike's(NKE) Retail Expansion: 15th California Store Open and 250 to 300 New Stores Planned Globally.
  

Politico:

• Obama Ready to Deal on Tax Cuts for the Wealthy. The White House signaled Wednesday that President Barack Obama is ready to cut a deal on the Bush-era tax cuts — accepting a temporary extension of the cuts for the wealthiest Americans to win renewal of tax breaks for middle-class taxpayers.
• Democrat Phil Bredesen Want President Obama 'Mea Culpa'. President Obama should come back to the health care bargaining table with a “mea culpa” if Democrats want to have a meaningful conversation about improving the future of health care, a key Democratic governor tells POLITICO. The partisan way the health care overhaul was passed had “the seeds of its own destruction just built in,” Tennessee Gov. Phil Bredesen said in an interview Wednesday. “In a perfect world, I would love it if a president would say, ‘look I got off on the wrong foot here, we’re doing some things, let’s put something together, we all have the desire to cover more uninsured people and … I’m willing to say mea culpa and maybe we can get all these things right,” he said. “I’m very practical. I have no desire for my party to be a tragic Greek figure. I want us to pass things that have broad enough support and staying power that they really change the way our society works for the better. I think we can get from here to there,” he said. “But it’s not just lining up behind what was passed and opposing all efforts. I think that’s just doomed to fail.”

Rasmussen Reports:

• Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 25% 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 -20 (see trends).

Reuters:

• Q+A - How High Can Copper Go After Record Peak? Copper hit a record high of $8,966 a tonne on Thursday, with sentiment stoked by strong economic data from top consumer China. The metal, used in power and construction, soared 140 percent last year and has gained 20 percent in 2010, due to a combination of fund buying, an improving economic and demand outlook, Chinese growth, supply worries and a weak dollar.
• Amazon(AMZN) Pulls Book on Pedophilia After Complaints. Amazon has pulled an electronic book about pedophilia from its online store after complaints and a boycott threat, according to media reports on Thursday. The book, "The Pedophile's Guide to Love and Pleasure: a Child-lover's Code of Conduct," by Philip R. Greaves II, went on sale on Oct. 28 and cost $4.79 to download, the reports said.
• Moody's to Decide on Ireland Rating in December.
• Kohl's(KSS) Store Openings to Accelerate. Kohl's Corp is planning to open more stores in 2011 than it originally planned, citing more favorable conditions in the commercial real estate market.

DigiTimes:

• Taiwan Makers Expected to Benefit From TriQuint(TQNT) Insufficient GaAs PA Capacity. International GaAs semiconductor supplier TriQuint Semiconductor has received orders for handset power amplifiers (PAs) far in excess of its capacity and therefore some of its clients are likely to shift orders to other makers, with this expected to benefit Taiwan-based OEM makers including Advanced Wireless Semiconductor and WIN Semiconductors, according to industry sources.