Bloomberg:
- Spain Banks Face More Losses as Worst-Case Scenario Turns Real. Spain’s banks face more loan losses as the pace of an economic slump risks turning a worst-case scenario dismissed in stress tests into reality. Bad loans as a proportion of total loans reached a record 9.86 percent, or 169.3 billion euros ($222.1 billion), in July, and may rise further when the Bank of Spain publishes data for August at about 10 a.m. in Madrid. The ratio, which has risen for 16 straight months, climbed from 0.72 percent in December 2006 before Spain’s property boom turned to bust. Spanish bank stress tests by management consultants Oliver Wyman have factored in an economic contraction totaling 6.5 percent between 2012 and 2014 in an adverse scenario that the government and Bank of Spain said has a probability of about 1 percent. Analysts at Nomura and Citigroup disagree, saying spending cuts and economic conditions mean the worst-case outcome already looks feasible. “You can’t attach a 1 percent probability to a scenario that already looks realistic,” Silvio Peruzzo, a European area economist at Nomura in London, said in a telephone interview yesterday. Spain’s gross domestic product will shrink by 6.2 percent between 2012 and 2014, he estimated. Spain’s request for 100 billion euros of European Union financial aid to shore up its banks is increasing concern about the nation’s growing liabilities.
- U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says. The sovereign credit rating of the U.S. will be cut as “fiscal theater” plays out in the world’s biggest economy, according to Pacific Investment Management Co., which runs the world’s largest bond fund. “The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.”
- Lenovo Sees Global PC Slowdown as Reason to Go Into Smartphones. Lenovo Group Ltd. (992) said slowing demand in the personal-computer market, where it overtook Hewlett-Packard Co. (HPQ) as the global leader last quarter, is good reason for the company to expand into smartphones. The PC maker is already the second-largest smartphone maker in its home market of China and plans to capture the top spot, surpassing Samsung Electronics Co., Milko Van Duijl, Lenovo’s president for the Asia-Pacific and Latin America regions, said in an interview with Bloomberg Television today.
- Chinese Company May Still Pursue A123(AONE) After Bankruptcy. The Chinese auto-parts maker that previously bailed out A123 Systems Inc., the U.S. electric-car battery maker that filed for bankruptcy protection this week, said it’s still interested in taking over the company. The bankruptcy filing may turn A123 into a more attractive investment because the court proceedings would clear out legal risks, Ni Pin, president of Wanxiang Group Corp.’s U.S. operations, said in a phone interview yesterday. The automotive business assets that A123 announced this week it would sell to Johnson Controls Inc. are separate from what Wanxiang had targeted, Ni said.
- EBay(EBAY) Forecast Misses Some Estimates Ahead of Holidays. EBay Inc. (EBAY), the world’s largest online marketplace, forecast fourth-quarter revenue that may miss some analysts’ estimates as sales growth slows heading into the holiday season. “There are uncertainties still at this point regarding consumer spending over the holidays,” said Colin Sebastian, an analyst at Robert W. Baird & Co., who has an outperform rating on EBay. “There are event-driven uncertainties, such as elections, the fiscal cliff, debt issues in Europe.”
- Moore Capital’s Coffey Bows Out as Markets Stymie Funds. Moore Capital Management LLC’s Greg Coffey is calling it quits amid markets that have proved difficult for even the most nimble hedge-fund investors. The 41-year-old told investors yesterday in a letter that he’s leaving the hedge-fund industry after a trading career spanning almost two decades. He plans to spend more time with his family and in his home country Australia.
- Obama Pursuing Leakers Sends Warning to Whistle-Blowers. Eric Holder, attorney general under President Barack Obama, has prosecuted more government officials for alleged leaks under the World War I-era Espionage Act than all his predecessors combined, including law-and-order Republicans John Mitchell, Edwin Meese and John Ashcroft. The indictments of six individuals under that spy law have drawn criticism from those who say the president’s crackdown chills dissent, curtails a free press and betrays Obama’s initial promise to “usher in a new era of open government.” “There’s a problem with prosecutions that don’t distinguish between bad people -- people who spy for other governments, people who sell secrets for money -- and people who are accused of having conversations and discussions,” said Abbe Lowell, attorney for Stephen J. Kim, an intelligence analyst charged under the Act.
- Exchange at Debate Escalates Libya Feud. Mitt Romney's extended argument with President Barack Obama over Libya Tuesday night sets up a potentially dramatic moment next Monday, when the two men meet again to discuss American foreign policy in the final presidential debate. Mr. Romney questioned in Tuesday's event in Hempstead, N.Y., the administration's shifting and inconsistent accounts of the Sept. 11 attack on the U.S. consulate in Benghazi, Libya, which claimed the lives of U.S. Ambassador Christopher Stevens and three other Americans.
- Iran Renews Cyberattacks on U.S. Banks. Iranian hackers renewed a campaign of cyberattacks against U.S. banks this week, targeting Capital One Financial Corp. and BB&T Corp. and openly defying U.S. warnings to halt, U.S. officials and others involved in the investigation into the attacks said. The attacks, which disrupted the banks' websites, showed the ability of the Iranian group to sustain its cyberassault on the nation's largest banks for a fifth week, even as it announced its plans to attack in advance.
- FBI Foils New York Fed Bomb Plot. A Bangladeshi man was arrested Wednesday and charged with trying to detonate a 1,000-pound car bomb outside the Federal Reserve Bank of New York, a target he chose in a bid to disrupt the U.S. economy, authorities said. Quazi Mohammad Rezwanul Ahsan Nafis was taken into custody in a lower Manhattan hotel room after repeatedly using a cellphone to try to detonate material that he believed was a bomb in a van parked outside the New York Fed, officials said.
- Gramm and Solon: Can Government Benefits Turn an Election? This election will test the relative power of private-sector aspirations versus public-sector dependence.
- Henninger: The Un-President. Barack Obama shows an unerring instinct for policy deniability.
- Global Economy: When China Sneezes. To this day, Chinese people of a certain age can recite a slogan from Mao Zedong’s Great Leap Forward campaign that exhorted the masses to “overtake Britain and match America” in steel production. That disastrous attempt to industrialize in the late 1950s led to the worst man-made famine in history – one that few outside the country knew about because China was so isolated from the rest of the world. More than 50 years later, China is so integrated into the global economy that even relatively minor shifts in its domestic production or spending can have a big impact on the other side of the world. “China can transmit real shocks widely,” the International Monetary Fund said in a recent report, “whether these originate domestically or elsewhere.”
- Cyprus Expects Swift Bailout as S&P Cuts Deeper to Junk. Cyprus said on Wednesday it expected talks to start with lenders on badly needed aid next week, as ratings agency Standard & Poor's pushed it deeper into junk territory, implying domestic political expediency lay behind a delay in clinching a deal.
- Full FBI Statement On Arrest Of Fed-a-Bomber Suspect Quazi Nafis, Who Worked "On Behalf Of al Qaeda".
- Chinese Goldilocks GDP: Q3 Economy Goalseeked Just As Expected At 7.4%.
- 'Shadow Banking' In China.
- Housing Starts And Permits: Euphoria May Be Premature.
- Och-Ziff Calls Top Of "REO-To-Rental", And Distressed Housing Demand, With Exit Of Landlord Business.
- Alleged 9/11 Mastermind Blasted 'War On Terror' Policies In Court While Wearing A Camo Vest.
- New Investment Vehicle Lets Investors Bet On Mortgages With Insane 16x Leverage.
- Corporate cutbacks hold back Amex(AXP) profit. American Express Co's third-quarter profit rose only marginally and spending growth remained muted for the second quarter in a row as corporate executives cut spending on travel and entertainment. Expense accounts have come under greater scrutiny as companies look to cut costs to protect profit margins, hurting the credit card lender, which gets more than a quarter of its U.S. billed business from corporate customers. Amex shares dipped 1 percent in after-hours trading after it reported a modest 1 percent rise in quarterly profit. Travel and entertainment volumes grew 4 percent, the slowest rise this year and far below the 12 percent growth seen a year earlier.
- Japan ministers visit shrine for war dead. Japan's land minister and postal minister visited a controversial shrine for war dead on Thursday in a move which could further strain relations between neighboring China and Korea, already tense over territorial disputes. The two ministers' pilgrimage to the Yasukuni Shrine, seen by many in the region as a symbol of Japan's war-time militarism, came a day after Japan's main opposition party leader and possible next prime minister, Shinzo Abe, visited there.
- Solyndra presses for bankruptcy plan OK over US objection. Failed solar panel maker Solyndra pressed a federal judge on Wednesday to approve its plan to end its politically charged bankruptcy over objections by the U.S. government, which argued the plan was being used by investors to dodge taxes. Critics say government involvement in the company has cost taxpayers twice: for a $528 million government loan, and for tax breaks potentially worth $340 million that will go to venture capitalists.
- Steel Dynamics'(STLD) profit plunges. Steel producer and metals recycler Steel Dynamics Inc's third-quarter profit plunged 77 percent as global economic uncertainty cut into steel shipments. Profit fell more than 50 percent for the third straight quarter. Steel prices have been depressed in recent months due to the lack of a strong recovery in steel demand in China -- the world's largest producer and consumer of steel -- along with a persistently oversupplied market. The benchmark 62-percent grade iron ore index fell 22 percent in the June to September period. Although prices have recovered from a three-year low of below $87 last month, they are still 25 percent below this year's high of $149.40. "We believe volumes could continue to be challenged in the fourth quarter, as fluctuations in immediate customer needs and hesitancy for customers to carry inventory persists," Chief Executive Mark Millett said in statement. Global demand for steel will slow next year because of weaker consumption growth in China and uncertainties from the European debt crisis, according to the World Steel Association.
- Greece faces anti-austerity shutdown as EU meets. Greek workers will walk off the job for the second time in three weeks on Thursday, hoping to show EU leaders meeting in Brussels that a new wave of wage and pension cuts will only worsen the plight of a people worn down by five years of recession. Mired in its worst downturn since World War Two, Greece is preparing 11.5 billion euros of cuts to satisfy the "troika" of the European Commission, European Central Bank and IMF, and secure the next instalment of its 130-billion-euro bailout. "Just once, the government ought to reject the troika's absurd demands," said Yannis Panagopoulos, head of the GSEE private sector union, one of two major unions that represent about 2 million people, or half of Greece's workforce. "Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite," he said.
- Toyota to Maintain Lower Production in China. The company will maintain lower production in China for the rest of this year due to deterioration in Japan-China relations, citing plans presented to business partners, including parts makers. The company likely to have lowered produciton by 60% at its Guangzhou plant in China in Oct.
- Japanese TV Sales in China Fall During Holiday. Sales at eight makers fell combined 40% from year-earlier during China's National Day holiday, citing All View Consulting. Sharp TV sales fell 50%, Sony 40%, citing All View.Market share fell to 18% vs. year-earlier 30%. Chinese maker share rose to 67% from 59%.
- Shanghai to Expand Checks on Home Purchase Limit. Shanghai will continue to increase checks on the implementation of home purchase limits, citing Liu Haisheng, director of the city's housing support and building administration bureau. Shanghai will curb speculative housing demand, the report cites Liu as saying.
- China's power consumption slows further. China's power consumption growth slowed further in September as factory activity and industrial output showed weaker increases amid the economic downturn. The National Energy Administration (NEA) said Wednesday that the China's total electricity consumption grew only 2.9% from a year earlier to 405.1 billion kilowatt hours. The growth was 0.7 of a percentage point lower than August and 9.3% lower than the September 2011 figure, according to NEA data.
- None of note
- Asian equity indices are -.25% to +1.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.0 -8.5 basis points.
- Asia Pacific Sovereign CDS Index 95.5 -3.75 basis points.
- FTSE-100 futures +.14%.
- S&P 500 futures unch.
- NASDAQ 100 futures +.05%.
Earnings of Note
Company/Estimate
- (PPG)/2.20
- (BSX)/.11
- (CY)/.19
- (LH)/1.74
- (LUV)/.12
- (BBT)/.72
- (DO)/1.02
- (FITB)/.39
- (KEY)/.21
- (PM)/1.39
- (TRV)/1.60
- (BAX)/1.14
- (MS)/.25
- (VZ)/.64
- (ADS)/2.23
- (UNP)/2.18
- (RHI)/.38
- (CMG)/2.29
- (COF)/1.68
- (SNDK)/.34
- (MSFT)/.56
- (GOOG)/10.65
- (RVBD)/.25
- (GPC)/1.12
- (NUE)/.43
8:30 am EST
- Initial Jobless Claims are estimated to rise to 365K versus 339K the prior week.
- Continuing Claims are estimated to rise to 3275K versus 3273K prior.
- Philly Fed for October is estimated to rise to 1.0 versus -1.9 in September.
- Leading Indicators for September is estimated to rise +.2% versus a -.1% decline in August.
- None of note
- The EU Leaders Summit, Greek Parliament vote on austerity measures, Greek union strike, Bloomberg Economic Expectations Index for October, weekly Bloomberg Consumer Comfort Index and the weekly EIA natural gas inventory report could also impact trading today.
No comments:
Post a Comment