Today's Headlines

Bloomberg:

• ECB Expresses 'Serious Concerns' About Irish Proposals to Stabilize Banks. The European Central Bank said it has “serious concerns” that Ireland’s new banking legislation may threaten the central bank’s independence and its ability to run liquidity operations. “The ECB has serious concerns that the draft law is insufficiently legally certain,” the central bank said in a position paper dated Dec. 17, published on its website. The Irish law should not hurt the ability of euro-region monetary authorities “to enforce their rights including, without limitation, the enforcement of security over any eligible collateral posted by any relevant institution.”
  
• Euro Falls a Second Day on Concern Region's Crisis to Spread; Dollar Gains. The euro weakened on speculation some European nations will struggle to raise funds amid the region’s debt crisis after rating companies downgraded the creditworthiness of Ireland and considered additional cuts. The single currency depreciated versus 15 of 16 major counterparts, falling to two-week lows against the dollar and the yen as Moody’s Investors Service downgraded two Dublin-based lenders to junk status. Costs to insure French government debt rose to a record, indicating the nation may be at risk of losing its top rating.
• Chinese Iron-Ore Imports May Fall in 2011 on Price, Arctic Says. Martin Sommerseth Jaer and Erik Nikolai Stavseth, analysts with Arctic Securities ASA in Oslo, comment on Chinese iron-ore imports in an e-mailed note today. China is the biggest iron-ore consumer and more of the steelmaking material is carried at sea than any other dry-bulk good. “Going into 2011, several Chinese sources are claiming that Chinese iron-ore imports will decline as prices rise too fast. In July 2009, 69 percent of all iron-ore purchases were imports, whereas the percentage had dropped to 40 percent in July 2010 -- due to the rapid escalation in iron-ore prices.”
• The Baltic Dry Index, a measure of commodity-shipping costs, fell to its lowest level in more than four months as ship deliveries and the end of the grain season sent hire-rates lower. The index declined 44 points, or 2.2%, to 1,955 points today. That's the lowest since July 29 and the biggest drop in the current 10-session slide. Rents for panamaxes, the second-biggest vessels tracked by the gauge, led the way with a 4.1% decline to $15,621 a day, the lowest price since May 2009.
• U.S. Commercial Property Rises for Second Consecutive Month, Moody's Says. U.S. commercial property prices rose 1.3 percent in October from the previous month, the second consecutive monthly gain, Moody’s Investors Service said. The Moody’s/REAL Commercial Property Price Index climbed 3.2 percent from a year earlier, Moody’s said in a report today.
• Commodities Rally Falters in Currency Futures as History Shows Dollar Wins. Speculators betting the commodities rally will continue into a third year are being confronted by currency investors wagering the dollar will strengthen in 2011. If history is any guide, the foreign-exchange market will win. Traders have almost tripled their net-long positions in 20 raw-material futures the past five months to the highest level in at least four years, driving a 26 percent gain in the Thomson Reuters/Jefferies CRB Index, government data show. Contracts on the dollar strengthening against the euro have climbed to a three-month high. The U.S. currency moved in the opposite direction of commodity prices 18 of the past 22 quarters, according to data compiled by Bloomberg.
• First-Time Solar Producers May Imperil India's Push for Renewable Energy. India’s first solar auction, planned to boost clean energy in the world’s fourth-biggest polluter, may risk failure after winners were selected without experience or proof that they can keep projects afloat earning low margins. A woolen yarn maker, an animation company and an industrial pipes supplier with no experience building power plants were among 37 winners of the government auction announced Dec. 13. The lowest bidders quoted prices that mean they may struggle to earn an attractive profit, said Bloomberg New Energy Finance analyst Bharat Bhushan.
• Municipal Budget Cuts May Reduce U.S. GDP, Goldman Sachs Says. Lower state and local spending, which accounts for 12 percent of the national economy, may reduce U.S. gross domestic product growth by about half a percentage point next year, Goldman Sachs Group Inc. said. Municipal budgets will likely increase by no more than 1 percent in 2011 after adjusting for inflation as local governments receive less state aid and home-price declines put a drag on property-tax collections, the bank said in a note to clients. That is about 2 percentage points less than average. “State and local governments will continue to face substantial budget pressures for the time being,” wrote Andrew Tilton, a New York-based economist, in the Dec. 17 note.
• AmEx Falls as Credit-Card Fees May Be 'Next Target'. American Express Co. fell the most in the Dow Jones Industrial Average after Stifel Nicolaus & Co. said proposed federal caps on debit-card fees may be followed by similar cuts for credit cards. The shares dropped $1.93, or 4.4 percent, the most in more than two months, to $42.08 at 2:06 p.m. in New York Stock Exchange composite trading.

Wall Street Journal:

• Hynix Chief Says Chip Price Plunge to Hit Earnings. Hynix Semiconductor Inc.'s chief executive expects computer-memory chip prices to continue to fall early next year and hit the company's fourth-quarter result, as the short-term outlook for the global chip market remains grim. "Chip prices remained strong until the first half of this year, but they dropped sharply, especially during the fourth quarter," Chief Executive O.C. Kwon said in a recent interview.
• Online Ads Pull Ahead of Newspapers. This year, for the first time, advertisers will have spent more on Internet ads than on print newspaper ads, according to new estimates from eMarketer. The digital-marketing research firm says U.S. spending on online ads will hit $25.8 billion, surpassing the $22.8 billion spent on print ads in newspapers.
• S&P Could Revise One-Third of Muni Note Ratings Lower. Standard & Poor's Ratings Services is seeking comment on proposed revisions to rating a form of municipal note that allows state and local borrowers to temporarily raise short-term funds backed by a promise to repay with a future bond issue.
• Chris Dodd's Exit Interview.
  

CNBC:

• Outrageous Predictions: Congress to Block Fed's QE3.

Business Insider:

• Netflix(NFLX) CEO Rebuts Short-Seller Whitney Tilson in Blog Post.
• Meet Todd Newman: The Fed's #1 Target at the Hedge Fund Diamondback.
  

Zero Hedge:

• The Bennie Who Stole Christmas. (graphs) Ben Bernanke is a highly educated PhD from Princeton who has never worked a day in the real world since he graduated from college in 1975. His entire life has been spent in the ivory tower of academia surrounded by models and theories that work perfectly in the comfort of his office. After building his reputation as an “expert” on the Great Depression by studying it and reaching the wrong conclusions, he came down from his ivory tower in 2002 to join an organization that has systematically destroyed the value of the US currency, thereby undermining the well being of the once vibrant middle class.

New York Times:

• One Out of Four U.S. Jobs Added in 2010 Was Temporary.

Washington Examiner:

• California's Economic Suicide Now Includes Cap-and-Trade.

Risk.net:

• Credit Default Risk of Germany Reaches New High. Debt protection costs rise across eurozone peripherals. The cost of insuring against a German government default on its debt has reached a new high for the year, with credit default swaps (CDS) rising from 56 basis points at end of trading on Friday, December 17 to 57bp at 1.00pm London time today. Greece saw its CDSs fall from 989bp to 952bp, but otherwise CDSs on peripheral eurozone debt rose over the weekend. Five-year CDSs on Portugal increased from 469bp on Friday to 479bp today. The cost of insuring against an Irish default rose marginally from 581bp to 583bp over the same period. Meanwhile CDSs on Italian sovereign debt widened from 204bp to 212bp. The cost of default insurance against Spanish debt increased from 333bp on Friday to 345bp today, while CDSs on Hungary crept up from 375bp to 378bp, according to data provider Markit. Today, Moody's announced its decision to downgrade the ratings of several Irish financial institutions, including Allied Irish Bank and Bank of Ireland. This follows its downgrade of Irish government bond ratings from Aa2 to Baa1 on December 17.

Rasmussen Reports:

• For First Time Ever, Most Voters Think Health Care Repeal Likely. A new Rasmussen Reports national telephone survey finds that 52% of Likely U.S. Voters think it is at least somewhat likely that the health care plan will be repealed. Thirty-three percent (33%) view repeal as unlikely. Those figures include 16% who believe repeal is Very Likely and 5% who believe it is Not at All Likely. Fifty-five percent (55%) of voters now favor repeal of the health care law, including 40% who Strongly Favor it. Forty-one percent (41%) are opposed to repeal, with 31% Strongly Opposed. Support for repeal has ranged from 50% to 63% in weekly tracking since the bill became law in late March.

Reuters:

• Hedgebay Debuts Tool to Value Fund "Side Pockets". Hedgebay, a secondary market for hedge fund stakes, has launched a tool to help investors value the billions of dollars worth of illiquid assets still held in opaque "side pocket" portfolios left over from the credit crisis. An estimated 10 percent of funds in the $1.8 trillion hedge fund industry still have so-called side pockets, according to Hedgebay co-founder Elias Tueta, referring to separate portfolios created by hedge funds during the crisis to house hard-to-shift assets.
• ECB Wants Liquidity Included in New Stress Tests. The European Central Bank is backing the European Commission to include a liquidity criterion in the new round of euro zone bank stress tests next year, but they face opposition from Germany, EU sources said. EU leaders agreed on a new round of stress tests last week as part of Europe's efforts to win back confidence of financial markets, but detailed criteria of the tests are to be agreed only in January. The tests themselves are to start in February.
• Heavy Snow, Cold Disrupt Travel Across North Europe.
• Euro Dips Below 200-day Moving Average Vs. Dollar.
• Raytheon(RTN) to Pay $490 Million for Applied Signal(APSG). U.S. defense contractor Raytheon Co (RTN.N) said it would pay $490 million to acquire cybersecurity firm Applied Signal Technology Inc (APSG.O), which makes equipment that militaries and governments use to detect threats.