Bloomberg:
- Worst Carry Trades Show Central Banks Reaching Stimulus Limits. The $4 trillion-a-day foreign- exchange market is losing confidence in central banks’ abilities to boost a struggling world economy. Rather than sparking bets on growth, the JPMorgan Chase & Co. G7 Volatility Index, which more than doubled in 2007 to 2008 before policy makers employed extraordinary measures to address faltering global expansion, has dropped to a five-year low. While small foreign-exchange swings historically favor the strategy of borrowing in low-yielding currencies to buy those with higher returns, a UBS AG index that tracks profits from the so-called carry trade has fallen to the lowest level since 2011.
- Rajoy Wins Heartland Victory as Spaniards Lift Bailout Obstacle. Prime Minister Mariano Rajoy extended his majority in the stronghold region of Galicia as Spanish voters offered some respite to his 10-month-old government and removed one obstacle to a European bailout.
- Greece Austerity Diet Risks 1930s-Style Depression: Euro Credit. Greece is spiraling into the kind of decline the US and Germany endured during the Great Depression. The economy shrunk 18.4% in the past four years and the IMF forecasts it will contract another 4% in 2013 as Greece struggles to reduce debt in exchange for its $300 billion rescue programs. That's the biggest cumulative loss of output of a developed-country economy in at least three decades, coming within spitting distance of the 27% drop in the U.S. economy between 1929 and 1933.
- Asset-Backed Securities May Face Tougher Oversight in Basel Plan. Banks trading asset-backed securities may face tougher capital requirements and stricter oversight from global supervisors amid concerns that regulation is failing to curb excessive-risk taking. The Basel Committee on Banking Supervision is about to embark on a “fundamental” review of how securitization is regulated, Wayne Byres, the group’s secretary general, said in an interview last week.
- China’s Stocks Drop Most in a Week on Earnings, Property Concern. China’s stocks fell, sending the benchmark index to the biggest loss in a week, on concern corporate earnings are worsening and local governments will take further steps to cool the property market. Inner Mongolia Baotou Steel Rare-Earth Hi-Tech Co. (600111), China’s biggest producer of rare earth, declined the most in a month after third-quarter profit slumped. Shaanxi Construction Machinery Co. plunged 7.4 percent and China Vanke Co. led losses for real-estate developers after the China Securities Journal said northwest Shaanxi province will prevent property companies from reaping profit margins of more than 10 percent. “Third-quarter earnings reports aren’t optimistic and corporate earnings are still finding a bottom,” said Wu Kan, a fund manager at Dazhong Insurance Co. in Shanghai, which oversees $285 million. “Given the current policy outlook, any relaxation on property prices is still far away.” The Shanghai Composite Index (SHCOMP) dropped 0.5 percent to 2,117.66 as of 9:46 a.m. local time, heading for the steepest loss since Oct. 11.
- Rosneft, BP Said to Near $28 Billion Deal for TNK-BP Stake. OAO Rosneft (ROSN) has agreed to the terms of a deal to buy BP Plc (BP/)’s half of its TNK-BP Russian venture, releasing the U.K. company from a fractious nine-year alliance and bringing state-backed Rosneft closer to becoming the world’s biggest publicly traded oil producer, according to people familiar with the talks.
- S. Korea Prepares to Evacuate DMZ Citizens After Threat. South Korea is preparing to evacuate more than 800 residents along the demilitarized zone after North Korea threatened to fire on activists planning to send balloons across the border carrying leaflets critical of its regime. While no orders to leave are currently in place, authorities have been preparing citizens residing within the civilian control line to evacuate if any signs of a possible attack emerge, Park Kwang Hae, an official at Paju City Council, said by telephone today.
- Lebanon Clashes Erupt in ‘Day of Rage’ to Protest Bombing. Supporters of Lebanon’s opposition March 14 coalition clashed with police following the funeral of an assassinated security official as they held a “Day of Rage” protest against Syrian President Bashar al-Assad. Hundreds headed toward the Grand Serail, headquarters of Prime Minister Najib Mikati, whom the group has blamed for the Oct. 19 bombing that killed Brigadier General Wissam al-Hassan. They pelted police with stones, spurring security forces to fire into the air to disperse the crowd. Protesters turned violent after a top March 14 politician, former Prime Minister Fouad Siniora, demanded that Mikati step down. Mikati’s Cabinet is backed by the Shiite Muslim militant Hezbollah group, an Assad ally and the main bloc in the pro- Syria March 8 coalition. “Leave, Mr. Prime Minister, otherwise you’ll be accused of covering up for the criminals,” Siniora told the cheering crowds. “The Lebanese will no longer accept the continuation of the Cabinet of assassination."
- Australia to Announce Cuts at Budget Review Tomorrow, Swan Says. The Australian government will announce “significant” cuts at a budget update tomorrow as it remains committed to restoring a surplus, according to Treasurer Wayne Swan. “The toughest conditions in the global economy in generations have cut a swathe through traditional sources of revenues,” Swan said today in his weekly economic note. “This will require more savings to be found. The savings will be significant.”
- Poor in India Starve as Politicians Steal $14.5 Billion of Food. Ram Kishen, 52, half-blind and half- starved, holds in his gnarled hands the reason for his hunger: a tattered card entitling him to subsidized rations that now serves as a symbol of India’s biggest food heist.
- Hedge Funds Cut Bets to 12-Week Low as Prices Drop: Commodities. Hedge funds cut bullish commodity bets to the lowest since July as speculation that governments in China and Europe aren’t doing enough to boost growth drove prices to the biggest loss in five weeks. Speculators reduced net-long positions across 18 U.S. futures and options by 4.4 percent to 1.18 million contracts in the week ended Oct. 16, the lowest since July 24, U.S. Commodity Futures Trading Commission data show. Gold bets slid 7 percent, the first decline since Aug. 14, and those in silver fell 5.8 percent, the first drop in 12 weeks.
- Crash Puts New Focus on China Leaders. As a Chinese court prepares to expose the alleged crimes of former Communist Party highflier Bo Xilai, censors and security officials have been trying to bury a separate scandal that has emboldened critics of President Hu Jintao and could complicate efforts to restore the party's tarnished image. Just three days after Mr. Bo was fired as party chief of Chongqing in March, the 23-year-old son of President Hu's closest confidant crashed a black Ferrari at 4 a.m. on a snow-slickened Beijing ring road. Ling Gu died on the spot, according to party insiders, Chinese reporters and others whose accounts offer new insights into the hushed-up incident. Two ethnic Tibetan women squeezed into the vehicle were badly hurt, and one later died. All details of the crash, including the name of the driver, were quickly suppressed.
- Chinese Investors Fear Chill in Canada.
- Law Firms Face Fresh Backlash Over Fees.
- Pennsylvania: Last-Minute Game-Changer? The State Hasn't Backed a GOP Presidential Candidate Since '88, but as Obama's Lead Narrows, Romney's Camp Eyes It.
- Spanish Vote Delivers Mixed Verdict. Premier's Party Controls Home Region, Trails Basque Nationalists, in Test of Rajoy's Crisis Management.
- Dorothy Rabinowitz: The Unreality of the Past Four Years. The Benghazi fiasco is a brutally illuminating portrait of the Obama White House in crisis mode.
- If These 5 People Who Tried Windows 8 Are Normal, Microsoft(MSFT) Has A Big Problem On Its Hands.
- Caterpillar(CAT) Announces Earnings On Monday — Here Are The 4 Questions We Want Answered.
- The REAL Eurozone Crisis Is About Much More Than Debt.
- GALLUP: Mitt Romney Expands His Lead To An Enormous 7 Points.
- Every Investor And CEO Needs To See This Chart Before The Fiscal Cliff Is Hit. (graph)
- Iran And The White House Issue Opposing Statements About Post-Election "One-on-One" Talks.
- Presenting All The US Debt That's Fit To Monetize. (graph)
- Spanish Regional Bailout Fund Runs Out Of Money Just As Regional Elections Begin.
- Q3 Earnings Season To Date Summary: Ugly... And Getting Worse.
- China, China, Everywhere; But Not A Drop Of QE To Drink.
- In Historic First China Begins Oil Extraction In Afghanistan.
- Psst: This Tax About to Go Up for 163 Million People. President Barack Obama isn't talking about it and neither is Mitt Romney. But come January, 163 million workers can expect to feel the pinch of a big tax increase regardless of who wins the election.
- Kudlow: White House Benghazi Blunder Grows Even Worse. With each passing day it seems the White House response to the Libya attacks grows all the more baffling. Larry Kudlow smells a rat.
- Jordan foils al Qaeda plot, arrests 11 militants: state TV. Jordan has foiled a plot by an al Qaeda-linked cell to bomb its shopping centres and assassinate Western diplomats, state television said on Sunday, thwarting an attempt to destabilize the key U.S. ally. Security forces had detained 11 suspects, all Jordanians, in connection with the plot, which envisaged carrying out attacks in the capital Amman using smuggled weapons and explosives from Syria, according to security officials cited by television. The plot had been active since June. Minister of Information Samih al Maaytah said the arrests underscored the serious threat posed by radical "terror groups" seeking to undermine the kingdom's long tradition of stability. A key U.S. ally in the Middle East and Israel's peace partner, Jordan enjoys close ties with Western intelligence agencies and has often been targeted by al-Qaeda and other Islamist militants. The cell had targeted two major shopping malls in the capital and was planning a bombing campaign in the capital's affluent Abdoun neighborhood, where many foreign embassies are located. A security source said the suspects had manufactured explosives "aimed at inflicting the heaviest losses possible".
- Japan exports tumble -10.3%, China row hits manufacturing mood. Japan's exports tumbled at their sharpest pace since the aftermath of last year's earthquake in the year to September, while manufacturers' mood hit its lowest since early 2010, data published on Monday showed, a sign the diplomatic row with China is further hurting the export-reliant economy. The latest data reinforce concerns that Japan, the world's third largest economy, may slide back into recession as sales to China and Europe sag amid the global slowdown and demand at home led by rebuilding from last year's earthquake and tsunami disaster loses momentum. They weak figures pile pressure on the Bank of Japan to stimulate the economy, and it will likely cut its economic forecasts and ponder further easing monetary policy at its Oct. 30 meeting, according to sources familiar with its thinking. Exports fell 10.3 percent in the year to September, against a 9.6 percent drop expected by economists, down for four months in a row, as shipments of cars, ships and electronics slumped, Ministry of Finance data showed on Monday.
- Fears rise of mortgage ‘ticking time bomb'. Claims management companies that feed off compensation payments made by banks are shifting their attention to interest-only mortgages as fears grow that tougher regulation could open the doors to a future mis-selling scandal. Lenders are increasingly concerned that a looming clampdown on these mortgages, which do not require borrowers to pay off the capital each month, will put the onus on them to ensure customers can afford to repay the loans at the end of the term.
- Merkel to warn UK on Europe budget veto. Germany is planning to warn Britain that it will seek to cancel next month’s European budget summit if David Cameron, the prime minister, insists that he will veto any deal other than a total freeze on spending. Angela Merkel, Germany’s chancellor, does not believe there is any point in holding the budget summit to agree on a seven-year framework for EU spending if Britain intends to veto any deal, say people close to the negotiations.
- Democrats Threaten Payroll Tax Cut Consensus. Some Democrats in Congress are seeking to include an extension of the $120bn payroll tax cut in negotiations over the looming “fiscal cliff”, shaking what had appeared to be a bipartisan consensus to allow the measure to expire as planned at the end of the year. The move could complicate the budget talks due to begin after the November presidential election and alarm rating agencies – since the sunset of the payroll tax measure is the only big provision that both parties seem comfortable directing towards deficit reduction.
- IMF's epic plan to conjure away debt and dethrone bankers. So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan. "If you enacted this plan, it would devastate bank profits and cause a massive deflationary disaster. There would have to do `QE squared' to offset it," he said. The result would be a huge shift in bank balance sheets from private lending to government securities. This happened during World War Two, but that was the anomalous cost of defeating Fascism. To do this on a permanent basis in peace-time would be to change in the nature of western capitalism. "People wouldn't be able to get money from banks. There would be huge damage to the efficiency of the economy," he said. Arguably, it would smother freedom and enthrone a Leviathan state. It might be even more irksome in the long run than rule by bankers. Personally, I am a long way from reaching an conclusion in this extraordinary debate. Let it run, and let us all fight until we flush out the arguments. One thing is sure. The City of London will have great trouble earning its keep if any variant of the Chicago Plan ever gains wide support.
- IFO president Hans-Werner Sinn says Germany will end opposition to eurobonds sooner or later. Sinn said "political actionism" won't stop with the ESM as the money won't be enough despite the leveraging.
- The European Central Bank rejects concrete yield targets for Spain, citing central bank officials. Spain would like the ECB to push yields on 10-year bonds below current levels while the ECB sees role in preventing tensions like in July this year when yields rose >7%. Different opinion may be reason for Spain reluctance to apply for the ESM.
- Greece's main opposition Syriza party, which as vowed to cancel the terms of the country's two international bailouts, would come in first if general elections were held now, a poll by Rass shows. Syriza would get 23.8% of the vote. Prime Minister Antonis Samaras's New Democracy party 22.7% and the Nationalist Golden Dawn party third with 9.2%% of the vote. 87.7% say the government should adopt tougher stance in talks with the troika.
Kyodo:
China State Oceanic Administration:- Tokyo's metropolitan police department, Kanagawa prefectural Police and Osaka prefectural police will help monitor the water around Senkaky islands and prevent illegal landing by Chinese activists.
- Chinese marine patrol ships returned to waters near a group of disputed islands after earlier departing to avoid a typhoon. The ships are continuing to carry out patrols in the area.
- Wave of attacks by Boko Haram kills 23 in Nigeria. A wave of attacks by suspected Boko Haram Islamists in northeastern Nigeria has killed at least 23 people and destroyed several buildings, a hospital official and residents said yesterday. A nurse at the Potiskum general hospital spoke of 20 bodies being brought to the morgue, while residents said three bodies were buried by their families following explosions and shootings in the restive city on Thursday. “We now have a total of 20 bodies brought in yesterday from the attacks of the previous night. Initially, 11 bodies were brought and nine more were received later,” a nurse who asked not to be named said. “Most of them have gunshot wounds but some had their throat slit. The bodies included that of a police sergeant and a prison warder,” he said. Residents said the toll could be higher as some relations had taken some bodies from the streets for burial.
Weekend Recommendations
Barron's:- Made positive comments on (AAPL), (GOOG), (TXI), (BBT), (NOV) and (EMC).
- Made negative comments on (BNNY).
- Asian indices are -.50% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 117.0 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 93.75 +1.0 basis point.
- FTSE-100 futures -.31%.
- S&P 500 futures +.25%.
- NASDAQ 100 futures +.42%.
Earnings of Note
Company/Estimate
- (BTU)/.34
- (STI)/2.02
- (HAS)/1.20
- (VFC)/3.49
- (CAT)/2.22
- (FCX)/.73
- (TXN)/.40
- (HMA)/.20
- (YHOO)/.25
- (VECO)/.31
- (WDC)/2.30
- (WYNN)/1.34
- None of note
- None of note
- The Fed's Pianalto speaking and the German Finance Ministry Monthly Report could also impact trading today.
No comments:
Post a Comment