Today's Headlines

Bloomberg:

• Italy Senate Passes Budget Measures. Italy’s Senate approved debt- reduction measures in an attempt to shore up investor confidence and pave the way for a new government that may be led by former European Union Competition Commissioner Mario Monti. The Senate in Rome voted today 156 to 12 to pass the package of measures promised to the European Union in a bid to boost growth and cut Italy’s debt of 1.9 trillion euros ($2.6 trillion), the world’s fourth biggest. Opposition lawmakers did not take part in the vote, allowing the bill to pass. The yield on Italy’s 10-year bond declined for a second day, shedding 43 basis points to 6.45 percent and narrowing the difference with German bunds to 456 basis points.
• Spanish Economy Stalled in Third Quarter as Borrowing Costs Rose to Record. Spain’s economy stalled in the third quarter, undermining the country’s efforts to shield itself from the sovereign debt crisis after Spanish and Italian borrowing costs surged to records. Gross domestic product was unchanged from the previous quarter, when it expanded 0.2 percent, the National Statistics Institute said today in an e-mailed statement in Madrid. The slowdown threatens Spain’s budget-deficit goals, the European Commission said yesterday, meaning the government that emerges from the Nov. 20 general election may have to accelerate spending cuts to prevent the nation becoming the next victim of the debt crisis. The economic figures “add to our view that Spain will struggle and is likely to fall back into recession, if not in the fourth quarter then early next year,” said Ben May, a European economist at Capital Economics in London. “We’ve got unemployment going above 25 percent.” The extra yield on Spanish 10-year bonds compared with German equivalents rose to 408.8 basis points today, from 408.6 yesterday. Spain pays 5.9 percent to borrow for 10 years, the highest since Aug. 5, even as the European Central Bank supports the market with bond purchases. It said the “emergence of a less favorable macroeconomic scenario” means the 2011 deficit will be 6.6 percent of GDP, instead of the 6 percent targeted. A cooling recovery will also postpone the reduction of a 23 percent unemployment rate, the European Union’s highest, and increase the relative weight of the nation’s debt burden, according to the commission.
• Oil Rises, Heading for Longest Run of Weekly Gains Since 2009. Crude for December delivery climbed $1.07, or 1.1 percent, to $98.85 a barrel at 11:15 a.m. on the New York Mercantile Exchange, after increasing to $99.20, the highest intraday level since July 27. Brent oil for December settlement gained 89 cents, or 0.8 percent, to $114.60 a barrel on the London-based ICE Futures Europe exchange.
• MF Global's(MF) 1,066 Brokerage Employees Fired.
• Michigan Sentiment Index Rises. Confidence among U.S. consumers rose more than projected in November, offering additional support to the biggest part of the economy. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 64.2 this month, the highest since June, from 60.9 in October. The median estimate of economists surveyed by Bloomberg News called for a reading of 61.5.
• GM(GM) Volt Fire Prompts U.S. Probe of Lithium Batteries. U.S. auto-safety regulators are scrutinizing the safety of lithium-ion batteries that power all plug-in electric vehicles after a General Motors Co. (GM) Chevrolet Volt caught fire, people familiar with the probe said. The regulators have asked automakers, including GM, Nissan Motor Co. and Ford Motor Co. (F), that sell or have plans to sell vehicles with lithium-ion batteries about the batteries’ fire risk, four people familiar with the inquiry said.

Wall Street Journal:

• Generation Jobless: What Hedge Funds Can Teach College Students.
  
• E*Trade to Launch Roughly 100 Commission-Free ETFs By Year End. E*Trade Financial Corp. (ETFC) plans to launch roughly 100 commission-free exchanged-traded funds by the end of 2011, in a move that matches similar steps taken by competitors the past few years.
• ECRI Weekly Leading Index Still Rising. (graph) The ECRI’s leading index rose to 122.3, its highest level since early September, while its rolling growth rate improved to -8.5% from -9.4% a week ago.
  

CNBC.com:

• UK Trade Body Eyeing Emerging Markets If Euro Zone Splits. A euro zone breakup would be challenging for British exporters but there would be still be export opportunities both in Europe and in emerging markets, the head of Britain's trade and investment promotion agency said on Friday. The British government is making contingency plans for a possible split in the currency bloc, including a study of its impact on private companies, Nick Baird, chief executive of UK Trade & Investment (UKTI), told Reuters in an interview.
• Spit the EU? Europe Debt Crisis Pushes Idea Into the Open.
• US Employer Health Insurance Hits New Low. The percentage of Americans who have health insurance through their employer slipped to a new low of 44.5 percent in the third quarter, a drop of more than 5 percentage points in three years, according to a new poll released Friday.

Business Insider:

• MF Global(MF) Fallout: 'I will never do business in US again'.
• A Worrying Look at GE's(GE) Exposure To Italy.
• Yesterday At Occupy: A Suicide, A Murder And Reports of Tuberculosis.
• China Has Far More Beautiful Bridges Than The Economy Can Support.
• Regulation Fail: MF Global Used The Same Trick To Hide Debt As Lehman Used.
  

Zero Hedge:

• Morgan Stanley(MS) Issues Goldman(GS) Mirror Image Call: Says To Sell EURUSD With 1.30 Target.

CBS News:

• Poll: Cain Tops 3-Way Race With Romney, Gingrich. The field of Republican candidates now has three candidates within striking distance of each other at the top of the list: with 18 percent, Herman Cain is in the top spot, followed by Mitt Romney and Newt Gingrich with 15% each.

Reuters:

• Exclusive - Daimler CEO Casts Doubt On Greek Euro Membership. Automotive giant Daimler, a leading German exporter, is against keeping Greece in the euro zone at all costs and believes Europe's single currency will survive even if Athens is forced to return to the drachma. "It depends on how you define the word, but I wouldn't consider one link splitting off from the rest as a 'break-up' of the euro zone," Chief Executive Dieter Zetsche told Reuters in an interview at the company's headquarters in Stuttgart. "Creating one bailout fund after the other won't help if Greece economically cannot return to the level of the rest of Europe over the next 10 to 20 years."
• Banks to Dump Italian Debt: IFR. European banks are planning to dump more of the 300 billion euros they own in Italian government debt, as they seek to pre-empt a worsening of the region's debt crisis and avoid crippling write downs - a move that could scupper the European Central Bank's efforts to bring down soaring yields. With the ECB providing a bid for Italian bonds that might not otherwise exist, board members at some of Europe's largest bank say now is the time to accelerate disposals. Many are also reversing long-standing policies of buying into new Italian bond issues, denying Rome an important base of support. "Our traditional buying days are no longer," said one board member at a European bank, one of Italy's 10 biggest creditors, who added that the bank has also sold off previous bond purchases. "Unless there is more certainty on Italians changing direction, it will be very tough for them to find buyers." Banks are important creditors to Rome, having bought about 40 percent of the 22 billion euros Italy issued in euro-denominated syndicated bonds since 2009. According to the European Banking Authority, the region's biggest 90 banks held 326 billion euros of Italian debt at the end of last year. "You're better off doing it now rather than waiting," said one investment banker who is currently working on plans for bank clients to further sell down their Italian bond holdings. "It's better to take the losses now when everyone is expecting it rather than wait around for a default." The sheer volume of such sales will make it increasingly difficult for the ECB to keep Italian bond yields down. EBA stress tests showed that in December half of Italy's 10 biggest European bank creditors were foreign: BNP Paribas held 28 billion euros in bonds, Dexia 15.8 billion euros, Commerzbank 11.7 billion euros, Credit Agricole 10.8 billion euros and HSBC 9.9 billion euros. According to people close to some of the bank disposals, the efforts of the European authorities to ensure that a Greek debt restructuring would not trigger CDS payouts has driven much of the bond selling. Unable to confidently hedge their exposures, many are choosing to sell - even at a loss. Italian bonds still have one support bloc. Domestic banks appear to be holding on to their much larger holdings. As of last December, EBA stress tests showed Intesa Sanpaolo held 60 billion euros of Italian debt. UniCredit and Banca Monte dei Paschi di Siena held 49 billion euros and 32 billion euros respectively. Recent results indicate that those holdings have changed little.
• Gold Rises on Italy, Europe Hopes, Tracks S&P. Bullion was on track for its third consecutive weekly gain, its longest winning streak since August, after Italy cleared the way for a full approval of the budget package and the formation of an emergency government to replace that of Prime Minister Silvio Berlusconi. Spot gold rose 1.3 percent to $1,782.40 an ounce by 12:06 p.m. EDT (1706 GMT), on track to snap a three-day losing streak. U.S. December gold futures gained $24.10 to $1,783.70 an ounce. Trading volume was sharply lower than its 30-day norm as U.S. banks, federal government and the bond market are closed for the Veterans Day holiday. Silver rose 1.6 percent to $34.62 an ounce.

Financial Times:

• While the eurozone could survive debt reorganization and exit by small countries such as Greece or Portugal, the same steps by Italy or Spain would effectively break the currency union, and that outcome looks increasingly likely, said Nouriel Roubini, an economist at NYU.

Telegraph:

• Debt Crisis: Live.
• Political Deadlock Derails China's EU Aid Offer. Diplomatic deadlock is curbing China's will to provide cash to help end the eurozone crisis after Europe spurned the simplest of Beijing's three key demands, two independent sources have told Reuters.

ABC:

• European Union officials are studying proposals under which only member countries with healthy economies could sell jointly issued euro bonds.

Xinhua:

• China will face a "severe" external trade situation for a period of time as the global financial crisis continues to deepen, citing Vice Commerce Minister Zhong Shan.