- Draghi Says No Alternative to Austerity as Economies Shrink. European Central Bank President Mario Draghi said there is no alternative to austerity as Italian and Spanish officials balk at asking for bailouts that may impose more budget cuts. “It’s without doubt that the process of fiscal consolidation has depressed output in parts of the euro area,” Draghi told lawmakers in testimony to the European Parliament in Brussels today. “But what’s the alternative? We need to do that, we need to do that in the best possible way, as effective and as short as possible, complying with basic grounds of social justice.” European officials are pushing debt-strapped nations across southern Europe for more cuts despite the risk that they will worsen recessions gripping the region.
- Merkel Urges Greece to Maintain Austerity to Stay in Euro. German Chancellor Angela Merkel used her first visit to Athens in five years to maintain pressure on Greek Prime Minister Antonis Samaras to meet austerity pledges, proclaiming her desire to keep the country in the euro. The two leaders stood side by side at a press conference as protesters massed outside the Parliament building in a capital on virtual lockdown. Merkel has become the face of austerity in a country suffering a fifth year of recession, which many Greeks blame on German-led conditions attached to emergency loans. “I want Greece to remain in the euro,” Merkel told reporters today halfway through her six-hour visit. “A lot has been done, much remains to be done.”
- U.K. Factory Output Declines More Than Forecast, Exports Plunge. U.K. manufacturing fell more than economists forecast in August and the trade gap widened, indicating the economy may struggle to regain strength. Factory output dropped 1.1 percent from July, when it rose 3.1 percent, the Office for National Statistics said today in London. The median forecast of 25 economists in a Bloomberg News survey was for a decline of 0.7 percent. Overall industrial output fell 0.5 percent, matching economists’ forecasts. The goods-trade deficit widened as exports fell. In a separate report, the goods-trade deficit widened to 9.84 billion pounds ($15.8 billion) in August from 7.34 billion pounds in July. Exports plunged 4 percent and imports rose 4.5 percent.
- Financial Job Losses Surpass 30,000 in Western Europe. Financial job losses in western Europe surpassed 30,000 this year as firms including Royal Bank of Scotland Group Plc and UBS AG cut positions amid the sovereign debt crisis. While the 33,437 reductions are less than half of the 76,654 made in region during the same period a year ago, analysts expect the cuts to increase. Financial firms have announced more than 60,000 cuts globally so far this year, data compiled by Bloomberg Industries show.
- Steel Use in Europe Seen Down 10% as Budget Cuts Curb Building. Europe's apparent steel consumption slid 10% in this year's first seven months as budget cuts curbed construction projects and car sales stalled, the European Steel Association said. Demand for rebar, reinforced steel bars used by builders, slumped 47% in the period from five years earlier, Jeroen Vermeij, director of market analysis and economic studies at the European Steel Association, said today at the 7th EU Iron Ore Conference in Vienna. Any improvement in Europe's steel market will only come in the middle of 2013, Vermeij said. Regional consumption is unlikely to return to 2007 rates and mills have excess production capacity estimated at 60 million metric tons, according to Eurofer, as the association is known. "We will never get back to these levels again," Vermeij said. "This will be the new normal. If your're a rebar producer, your're in for difficult times."
- European Stocks Retreat as EU Finance Ministers Meet. European stocks declined for a second day as the region’s finance ministers gathered in Luxembourg to discuss the sovereign-debt crisis. Bankia SA (BKIA) led the decline, falling to a two-month low. Alcatel-Lucent (ALU) SA dropped to the lowest in at least 23 years as Credit Suisse Group AG said weakness should continue into the third quarter. Vedanta Resources Plc led mining companies higher, limiting losses in Europe.
- Oil Rises as Middle East Tension Counters IMF Growth. Oil advanced for the first time in three days as increasing tension in the Middle East countered concern that a global economic slowdown will curb demand. Crude rose as much as 3.5 percent as Turkey sent more tanks and missile defense systems to the Syrian border yesterday. The International Monetary Fund cut its global growth forecasts today as the euro area’s debt crisis escalates. The spread between West Texas Intermediate oil traded in New York and Brent from the North Sea reached the highest level in almost a year. Crude oil for November delivery increased $2.93, or 3.3 percent, to $92.26 a barrel at 12:14 p.m. on the New York Mercantile Exchange. The contract rose as much as $3.09 to $92.42 today. Brent oil for November settlement gained $2.56, or 2.3 percent, to $114.38 a barrel on the London-based ICE Futures Europe exchange.
- Baidu(BIDU) Leads ADR Drop as IMF Cuts Global Outlook: China Overnight. Chinese stocks in New York slid to a two-week low as the International Monetary Fund reducing its global growth estimates clouded the outlook for the world’s largest exporter. Baidu Inc. (BIDU), owner of China’s most-popular search engine, sank to a three-month low after Credit Suisse Group AG became the third bank to cut its rating this month. China Eastern Airlines Corp. (CEA) fell for the first time in six days to trade at the biggest discount to its Hong Kong stock in two weeks.
- Iron Ore Seen Dropping Back to $100 on Worldwide Slowdown. Iron ore may fall back to $100 a dry metric ton or lower next year as the global economic slowdown hurts demand while output increases, according to the China Metallurgical Industry Planning & Research Institute. "The economic situation in the world and China isn't good enough to support a sustained price rebound," said Li Xinchuang, president of the Beijing-based company, which advises the Chinese government and steel mills. The target from Li, who's also executive vice secretary-general of China Iron & Steel Association, is 9.4% below yesterday's price. "New production capacity is coming out a lot" as current iron ore prices remain above the output costs at so-called major mining companies, Li said today. Production costs at the top five mining companies are about $40 a dry ton, implying prices could go lower as demand weakens, said Li. Stockpiles at major Chinese ports including Tianjin and Qingdao have risen to about 100 million tons from about 94 million tons at the end of June, Li said.
- Toyota-Led Slump May Drag China Car Sales Growth to 8-Month Low. Chinese passenger-vehicle sales probably rose at their slowest pace in eight months as a territorial dispute with Japan turned consumers away from buying cars made by Toyota Motor Corp. (7203) to Nissan Motor Co. (7201) The state-backed auto association will probably say deliveries increased 2 percent to 1.35 million units last month, based on the average estimate of nine analysts surveyed by Bloomberg. Toyota and Nissan yesterday reported their biggest drops in China sales since at least 2008, while Honda Motor Co. (7267)’s sales were the lowest since May 2011, according to monthly data compiled by Bloomberg.
- Wheat Climbs as U.S. May Cut Supply Estimates; Soy, Corn Gain. Wheat futures rose for the second straight day on speculation that the U.S. may lower its forecasts for global supplies as dry weather damages crops from Russia to Australia. Soybeans and corn also gained.
- Confidence Among Small U.S. Businesses Cooled in September. Confidence among U.S. small businesses cooled in September as fewer companies said they planned to hire or invest in new equipment, a survey found. The National Federation of Independent Business’s optimism index fell to 92.8 from an August reading of 92.9. Four of the 10 components that make up the gauge decreased, the Washington- based group said. The fourth decline in the past five months for the measure showed business leaders may be putting off some of their hiring and investment decisions because of a lack of clarity on tax and regulatory policy.
- Treasuries Gain by Most in Three Weeks After IMF Cuts Forecasts. Treasury 10-year notes rose the most in three weeks after the International Monetary Fund cut its economic forecasts and said there is an “alarmingly high” risk of a steeper slowdown. The gains pushed 30-year bond yields down from almost the highest level in more than two weeks as investors sought the securities as a haven. U.S. debt was also buoyed as European Union ministers prepared to meet in Luxembourg amid a lack of clarity about whether Spain will ask for external financial aid. The U.S. plans to sell three-year notes today, the first of three auctions of coupon-bearing Treasuries this week totaling $66 billion.
- U.S. Charges 530 in Mortgage Probe With $1 Billion in Losses. The U.S. charged 530 people with targeting homeowners in mortgage schemes that cost the victims more than $1 billion, Attorney General Eric Holder said today. More than 73,000 homeowners around the country were affected, the Justice Department said in a statement. The cases, brought over the past year, included “foreclosure rescue schemes” that take advantage of those who have fallen behind on payments, according to the statement.
- Owens Corning(OC) cuts full-year earnings forecast. Owens Corning trimmed its earnings forecast for the year due to weakness in its roofing and composites businesses. Shares of the construction and industrial-materials company dropped more than 7 percent in premarket trading Tuesday. Owens Corning now anticipates adjusted earnings before interest and taxes between $280 million and $310 million. It previously predicted $360 million to $420 million. The Toledo, Ohio, company previously announced that there was weakness in the U.S. roofing shingle market late in the second quarter. That trend continued into the third quarter. The company says shipments fell after a price hike in the middle of September and are not expected to get better for the rest of the year. The company says composites demand in the second half of 2012 will be hurt by softness in the U.S. roofing market and lower industrial production, particularly in Europe. Owens Corning cut its 2012 global glass fiber market demand growth estimate to about 3 percent. The long-term average growth rate historically is 5 percent.
- Intel(INTC) falls to 52-week low, leading tech retreat. Intel downgraded on pricing worries; Netflix(NFLX) also downgraded.
- Is Housing Recovering as Much as Everyone Thinks? "While we have seen many dramatic headlines touting the housing recovery over the last 3.5 years, these headlines and the analysts who author them have been over- predicting changes in the housing market (versus what actually occurred)." said Laurie Goodman of Amherst Securities in a new report. "Recoveries, with attendant price increases, were anticipated in the spring and summer of 2009, 2010 and 2011; by the fall and winter the predictions of price changes were amended to reflect further price declines. In actuality, after netting out the seasonal factors, home prices have been little changed in the past few years."
- Prepping for Obamacare, Chain Cuts Workers' Hours. The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.
- Latest Casualty of Mixed Economic Outlook: Business Travel. With more questions than answers about what to expect with the U.S. and European economies for the rest of this year and early next year, companies are pulling back on business travel.
- Langone Takes Welch’s Side: Jobs Numbers ‘Don’t Square’. Government numbers showing the unemployment rate has fallen under 8 percent for the first time in nearly four years don't reflect actual business conditions, venture capitalist Ken Langone said on CNBC.
- Turkey Deploys 25 F-16s To Syria Border.
- Santelli Slams 'Surprise' Unemployment Data In Epic Screamfest.
- What Will Benefit From Global Recession? The US Dollar.
- Obama Is Crumbling In Two Previous 'Safe' States.
- We've Heard From Two Separate People That This Iran Nuclear Story Is Spooking Traders Today.
- These Stunning Charts Show Some Of The Wild Trading Activity That Came From A Dark Pool This Morning.
- Mitt Romney Gives An Inspirational Speech In The Pouring Rain.
- Taliban Shoots Little Girl Who Dared Speak Out Against Them.
- China Announces Plans To Reform Labor Camp System After Another Huge Controversy Spreads Online.
- Japanese Car Sales Plummet in China. Toyota announced on Tuesday that its sales to dealerships in China dropped 49 percent in September from the same month a year ago, while Honda said that its sales had fallen 40 percent and Nissan said that sales were down 35 percent. Mazda said last week that its sales had fallen 35 percent last month.
- US Treasury watchdog probes solar tax grant program. The Treasury Department's inspector general is investigating a popular stimulus program that allowed rooftop solar panel projects to turn tax credits into cash grants.The Treasury's internal watchdog is looking at how the department managed the program and is searching for "possible misrepresentations" about the fair market value of solar systems that received grants, one large installer of solar panels disclosed in a filing with U.S. regulators. The inspector general issued subpoenas to SolarCity Corp and other big players in the market, working with the Justice Department's civil division, San Mateo, California-based SolarCity said in a filing late last week.
- S&P sees lower 2013 growth for US state and local govts. Standard & Poor's Ratings Services said on Tuesday it expected state and local governments in the United States to grow less in 2013 than previously forecast. Cuts in public sector workforces as well as a focus by families on fixing their budgets instead of spending are key factors in the reduced growth expectations, S&P said in a report.
- Spanish yields rise as bailout prospects dim. Spanish bond yields rose on Tuesday when investors trimmed expectations of a swift solution to Madrid's debt problems while the country's politicians resist seeking a bailout.
- Eleven euro states back financial transaction tax. Eleven euro zone countries agreed on Tuesday to press ahead with a disputed tax on financial transactions aimed at making traders share the cost of fixing a crisis that has rocked the single currency area.
- Syrian massacre is veiled in silence. The Syrian forces told Um Mohammed they would be back in an hour with her husband and sons, along with the other men they snatched from the basement shelter in the Damascus suburb of Daraya. Instead, she said, they shot them all.
Les Echos:
- France's wealth tax should include artworks, Christian Eckert, the National Assembly's rapporteur on budget affairs, said in an interview.
- Shanghai's Consumer Confidence Drops. WEAKER internal and external demand as well as less willingness to spend have dented Shanghai's consumer confidence in the third quarter, a survey showed yesterday. The Index of Consumer Sentiment dropped 4.4 points quarterly to 100.6 in the three months ended September 30, the first fall since the second quarter of last year, according to studies conducted by Shanghai University of Finance and Economics. A reading above 100 indicates optimism and the contrary points to a lack of confidence. The Index of Consumer Expectations shed 4.4 percent from the earlier three months to 98.6 points as the dismal global economic outlook has created uncertainties and reduced consumers' hopes about the future. Of the 1,000 consumers surveyed by the university, 72.8 percent considered it a bad time to buy a home in the next six months on wide expectations that home prices may fall.
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