Today's Headlines

Bloomberg:

• EU's Irish Rescue Fails to Stem Contagion; Spain Bonds Drop. European governments’ 85 billion- euro ($113 billion) bailout package for Ireland failed to quell the market turmoil menacing the euro as stocks, bonds and the currency declined. Irish 10-year bonds slid after an early advance, Spanish bonds slid by the most since the euro’s launch and European shares sank 1.4 percent. The euro slid against 15 of its 16 major counterparts and the cost of insuring the debt of Spain and Portugal against default soared to records. “The notion that a rescue package for Ireland would create a firewall and stop the fear of contagion is clearly discredited,” said Preston Keat, director of research at Eurasia Group, a political consultancy, in London. “Portugal and Spain are already facing pressures in the markets.” Six months after the Greek rescue exposed flaws in the euro’s makeup and fueled doubts whether 16 countries belong in the same currency union, policy makers again found themselves meeting on Sunday in Brussels racing to calm markets.
• Portugal, Spain Debt Risk Soars to Records on Bailout Concern. The cost of insuring against default on Portuguese and Spanish government debt soared to record-high levels as an aid package for Ireland failed to reassure investors the region’s debt crisis will be contained. Credit-default swaps on Portugal jumped 37 basis points to 539, and contracts on Spain climbed 28.75 to 351.5, according to CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments increased 9 basis points to 197, a record based on closing prices. “The market seems to think it’s inevitable Portugal requests assistance next -- perhaps in January? -- and then after that Spain will be scrutinized with a fine tooth comb over the coming months,” said Jim Reid, head of fundamental strategy at Deutsche Bank AG in London. Swaps on Italy rose 28 basis points to 244, the highest level in almost six months, as the nation’s borrowing costs increased at a sale of 6.8 billion euros of bonds. The cost of insuring the subordinated bonds of European banks also rose as investors bet Ireland’s precedent for making junior bondholders share the cost of a rescue will be followed. Finance Minister Brian Lenihan told state broadcaster RTE the government needs to impose “big haircuts” on junior bondholders after the bailout. The Markit iTraxx Financial Index of swaps on the junior debt of 25 European banks and insurers soared 16.5 basis points to 294.5, after earlier rising to the highest level since April 2009, according to JPMorgan Chase & Co. The senior index was up 1 at 165, after earlier falling as much as 9 basis points. Swaps on Ireland increased 5.5 basis points to 604 and Greece, which was bailed out earlier this year, dropped 10 basis points to 962, CMA prices show.
• Euro Falls to Two-Month Low Versus Dollar, Yen on Concern Crisis to Spread. The euro fell to the lowest levels in more than two months against the dollar and yen as an 85 billion-euro ($112 billion) aid package for Ireland failed to stem concern that Europe’s sovereign-debt crisis will broaden. “The euro is unable to sustain even modest upticks, and its weakness is dragging down other major currencies,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. “The European debt situation is getting more serious. It’s not just about Ireland and Portugal anymore; Spain and Italy are being hit even harder.”
• Hungary Stocks Enter Bear Market, Bonds Sink on Concern Crisis Will Expand. Hungary’s benchmark equity index dropped more than 20 percent from its 2010 peak and government bonds sank as a surprise interest-rate increase compounded concern that Europe’s debt crisis is spreading east. The BUX Index fell 2.6 percent to 20,221.37 at the close in Budapest, the world’s second-biggest drop today after Turkey’s ISE National 100 Index.
• Baltic Index Drops a Third Session as Fleet Growth Lowers Rates. The Baltic Dry Index, a measure of commodity-shipping costs, fell for a third consecutive session as fleet expansion pulled down rates to hire bigger iron-ore carriers, even as steel prices rise. The gauge declined 25 points, or 1.2 percent, to 2,145 points, according to the London-based Baltic Exchange. That was the lowest level since Aug. 9. Rents to hire iron ore-hauling capesize ships retreated 4.6 percent to $29,333 a day, for a 16 percent slide in the vessels’ four-day run of losses. “Despite an improved steel-price backdrop, the dry-bulk market has been unable to participate on the back of increased vessel deliveries,” Omar M. Nokta, head of research at Dahlman Rose & Co. in New York, wrote in a note e-mailed today.
• Supertanker Demand is 'Soft' in Middle East Gulf, Fearnleys Says.
• EU Says Euro-Area Growth to Weaken in 2011 as Crisis Still 'Casts Shadow'. Europe’s economy may weaken next year as budget cuts to stem a mounting debt crisis hurt consumer demand and faltering global expansion curbs exports, the European Commission said. Gross-domestic-product growth in the 16-nation euro region may weaken to 1.5 percent in 2011 from 1.7 percent this year, the Brussels-based commission said in a report published today. While Germany may expand 3.7 percent this year, the economies of Ireland, Greece and Spain will continue to shrink.

Wall Street Journal:

• Kucinich Cancels Fed Hearing. Rep. Dennis Kucinich postponed a hearing to scrutinize the Federal Reserve’s latest round of debt buying — the day after his office announced it. Aides to the Ohio Democrat, who frequently questions the Fed, alerted other committee Democrats last Wednesday that the Oversight and Government Reform subcommittee he chairs will indefinitely delay a hearing, originally scheduled for Tuesday, “in order to work with the Federal Reserve to allow them to testify,” according to an email.
• Japan Rejects China's Proposed Six-Party Talks. Japanese Foreign Minister Seiji Maehara rejected China's new proposal to hold emergency talks between North Korea and related nations, saying Pyongyang must first display sincere effort to ease its confrontational posture.

CNBC:

• Deficits Posing Threat to More Stock Market Gains: Pros. Deficits from governments large and small pose the biggest challenge ahead to a stock market poised to go higher, a panel of experts told CNBC. While the economic climate is favorable and valuations attractive, the market and economy remain susceptible to shocks, said Goldman Sachs analyst Abby Joseph Cohen. "On the intermediate- to long-term side, we must do something to address not only the federal deficit but also the deficit at the state and local level," said Cohen, head of Goldman's Global Markets Institute. "Keep in mind much of this is related to long-term liabilities."
• Dennis Gartman: 'Eventually, the Euro Breaks Apart'. Faced with "almost terminal problems," Dennis Gartman on Monday said the euro could soon unravel. "Eventually, the euro breaks apart into a northern euro and a southern euro," said Gartman, explaining that the Continent's many languages, religions and cultures are too diverse for the singular currency to work.

Business Insider:

• The Real Wikileaks Story On Iran: It's Becoming The Mexico of the Middle East.
• 12 Infuriating Facts About How Much Federal Employees Make.
• The 15 Most Brilliant New Ideas We've Seen This Fall.
• Did You Miss The Blisteringly Good Manufacturing Report From The Dallas Fed
  

Zero Hedge:

• Obama to Freeze Government Salaries at All Time High. Of course, government workers thank him, as this means federal salaries which have exploded in the past 5 years will be stuck at all time highs for at least two years, even as nominal salaries for everyone else (except FIRE workers of course) continue to decline. (graph)
• Goodbye Irish Sovereignty: EU Commissioner Olli Rehn Issues His First Directive As Overlord Of The Emerald Isle.
  

New York Post:

• Tax Battle in DC Promises a 'Lame' Result. The first showdown of the lame duck Congress is expected to take place over extending the Bush tax cuts -- and it will do nothing but highlight the gulf between the Republican and Democratic camps, The Post has learned. Chances of a compromise are growing, though far from certain, as both sides come to grips with the realities of inaction, the source said. "The markets have priced in a two-year extension and I don't think they understand how tenuous that is," the source said, adding that Senate leaders have yet to start working on a compromise plan.
  

New York Times:

• For PayPal, the Future is Mobile. By adding legions of new users and online retailers, PayPal is threatening to overtake eBay’s(EBAY) struggling marketplace as the biggest breadwinner within a few years.
• After Del Monte(DLM), Who's Next on the Shopping List. The buyout of Del Monte Foods is the latest in a series of multibillion-dollar deals in the food industry this year, including the $19.5 billion takeover of Cadbury by Kraft Foods, and Coca-Cola’s $13.6 billion purchase of Coca-Cola Enterprises’ North American operations.

cnet:

• Report: 3D TV Sales to More Than Double in 2011. The adoption of 3DTVs is expected to spike next year. Futuresource Consulting predicts that 4 million 3DTVs to be sold worldwide by the end of this year. The figure could at least double next year to 5 million 3DTVs in the U.S. and 3 million in Western Europe, the market researcher said today. Futuresource added that so far, "year-one adoption of 3DTV is running at a far quicker rate in most territories than it did for high-definition."
• Congressman Wants WikiLeaks Listed as Terrorist Group. The incoming chairman of the House Homeland Security Committee says WikiLeaks should be officially designated as a terrorist organization. Rep. Peter King (R-N.Y.), the panel's presumptive next head, asked the Obama administration today to "determine whether WikiLeaks could be designated a foreign terrorist organization."

Politico:

• WikiLeaks Target: American Power. The first victims of the leaked cables released Sunday are anyone who shared secrets with American diplomats, especially Arab leaders who saw their private security deals — and their insistence that those deals be kept from their people — published online with undiplomatic bluntness. But the main effect of the many details of American diplomacy revealed in the thousands of documents obtained and released by WikiLeaks was to deepen the damage to their intended targets: U.S. foreign policy, prestige and power.

Reuters:

• Fed's Bullard - Funding of Consumer Bureau a Worry. St. Louis Federal Reserve President James Bullard said on Monday funding for a consumer protection office established under regulatory reform laws is not based on a clear sense of how much the bureau needs and is a source of concern. "The amount of money allocated in the law is not based on a careful assessment of what the needs of the bureau will be as it attempts to fulfill the mandate of the Congress," he said in remarks prepared for delivery to a conference at the St. Louis Fed.
• Gartner Cuts PC Shipment Forecasts. Research firm Gartner cut its forecasts for global personal computer sales in 2010 and 2011, citing weaker demand in the face of an uncertain economy and as some customers choose tablet computers over PCs.
• US Commercial Real Estate Vacancies Peaking - Realtors. U.S. commercial real estate vacancy rates have already peaked or will soon top out, though rents are likely to continue to fall, a realtors group said on Monday.

Financial Times Deutschland:

• German CDU Wants Curbs on Solar Capacity Growth. Members of Chancellor Angela Merkel's Christian Democratic Union want to limit the growth in solar-panel installations in Germany because the rising costs to consumers may undermine the acceptance of alternative energy. CDU lawmaker and energy-policy expert Thomas Bareiss said in a letter to Environment Minister Norbert Roettgen that the government should cut the guaranteed gratuity per kilowatt hour for newly installed solar panels by an extra amount on Jan. 1, the newspaper said. Depending on installed solar-panel growth in the first months of 2011, additional special gratuity cuts for new installations should be introduced in the middle of the year, the newspaper cited Bareiss as saying. The annual amount to be paid by consumers to subsidize environmentally friendly energy production will increase to 13 billion euros ($17.3 billion) on Jan. 1 from 8 billion euros, the newspaper said.

IrishTimes.com:

• Opposition Condemns Use of Pension Fund in 85 Billion Euro Bailout. THE €85 billion EU-IMF bailout package for Ireland announced last night was roundly condemned by the Opposition parties who are now all likely to vote against the Budget on December 7th. Fine Gael, Labour and Sinn Féin attacked the intention to use the National Pension Reserve Fund to help provide a further €10 billion in further capital for the banks. In total, the banks could end up getting another €35 billion if their losses are bigger than expected. The remaining €50 billion is to cover the State’s borrowing needs for the next three years. Opposition parties were highly critical of the 5.8 per cent average interest rate that will be charged by the EU and the International Monetary Fund.

DigiTimes:

• Late November DRAM Contract Prices Down 12-13%. DRAM contract prices are dropping amid global oversupply caused by increased supply from Samsung Electronics, Inotera Memories and Nanya Technology, the sources said. As spot market prices for 2GB DDR3 modules have slipped to below US$20, contract prices may also drop to below US$20 by the end of 2010, the sources indicated.