- Europe Starts $648 Billion Aid Fund, Rules Out Immediate Use. European governments set up a full- time 500 billion-euro ($648 billion) fund to aid debt-swamped countries and, not for the first time in the three-year crisis, expressed confidence that the extra financial muscle won’t be needed anytime soon. Finance ministers from the 17 euro countries declared the European Stability Mechanism operational, while saying that Spain, its biggest potential near-term customer, isn’t on the verge of tapping it. Decisions were also put off on Greece’s next aid payment and on an assistance program for Cyprus.
- European Stocks Retreat Most This Month; Cookson Sinks. European stocks dropped the most this month as the World Bank cut its East Asian growth forecast and investors awaited a meeting of euro-area finance ministers for signs on how they will tackle the debt crisis. Cookson Group Plc (CKSN) sank 12 percent as the world’s biggest maker of ceramic linings for metal smelters said annual results will miss its forecasts. KBC Groep NV (KBC) retreated 5.2 percent as the bank’s strategy update disappointed investors. Eurobank Ergasias SA advanced 5.1 percent after a takeover offer from National Bank of Greece SA. (ETE). The Stoxx Europe 600 Index (SXXP) lost 1 percent to 271.43 at the close of trading, the largest decline since Sept. 28.
- Bearish France Bets at 14-Month High to DAX on Budget: Options. Options traders are sending the cost of protecting against a decline in French stocks to the highest level in more than a year relative to German equities after President Francois Hollande's first annual budget raised taxes on big companies and the rich.
- Spending Cuts No Longer Yield Earnings Growth at U.S. Companies. Profit gains earned through job cuts and factory closings in the absence of a global economic recovery are starting to reach their limit. Third-quarter profits and sales for the Standard & Poor’s 500 Index (SPX) probably fell in unison for the first time in three years, according to analysts’ estimates compiled by Bloomberg. Per-share earnings may have dropped 1.7 percent on average after they were little changed in the second quarter. Sales may have slipped 0.6 percent, the data show. While most companies plan to keep a lid on spending, lower expenses aren’t leading to the same kinds of increases they reported earlier this year. Hewlett-Packard Co., the world’s largest personal-computer maker, already forecast full-year profit that trailed analysts’ estimates, FedEx Corp. (FDX) cut its annual earnings forecast and Intel Corp. (INTC) projected lower third- quarter sales, with all three citing softening demand. “A lot of the earnings growth that we’ve seen has been related to cost reductions,” said Peter Jankovskis, co-chief investment officer for Oakbrook Investments in Lisle, Illinois, which manages more than $3 billion. “Now many of those cost reduction efforts have run their course. Without revenue growth, there is no room for profit to expand further.”
- Hedge Funds Cutting Trading Budgets Amid Slump, Survey Finds. Hedge funds are cutting trading costs amid a decline in volumes and muted performance for the $2.1 trillion industry, a survey found. Forty-four percent of hedge funds polled by Greenwich Associates said they will spend less on their trading desks than in 2011, according to a statement released by the Stamford, Connecticut-based company today. About 40 percent of hedge funds said their trading budgets would be unchanged this year, while 17 percent plan an increase, the survey found.
- Traders Eye Grain Prices Rebound as Supply Set to Tighten. Grain prices that tumbled in recent weeks may rebound as demand stays robust while global stockpiles tighten after drought hurt crops from the U.S. to Russia.
- California Facing $5 Gasoline Stirs Brown to Relax Rules. Gasoline closing in on a record $5 a gallon prompted Governor Jerry Brown to direct California regulators to relax smog controls so oil refineries could increase supplies of cheaper fuel. Regular gasoline in California surged to an average $4.668 a gallon, an all-time high and 22 percent more than the U.S. average, according to data today from AAA, the nation’s largest motoring organization. Some stations were charging as much as $5.89 in the Big Sur area, according to GasBuddy.com.
- Romney Tied With Obama in 3-Day Post-Debate Poll. Republican Mitt Romney has pulled even with President Barack Obama since their first presidential debate, overcoming a narrow advantage Obama had held, according to Gallup’s daily tracking survey. In the three days after the Obama-Romney debate on Oct. 3, Gallup found 47 percent of registered voters supporting the president and 47 percent backing his Republican rival. In the three days before the Denver debate, Obama held a 50-45- percentage-point advantage over Romney, the polling found.
- UnitedHealth(UNH) to Buy Brazil Insurer Amil for $4.9 Billion. UnitedHealth Group Inc., the biggest U.S. health insurance company, agreed to pay about $4.9 billion to buy 90 percent of Amil Participacoes SA (AMIL3), a Brazil-based insurer and hospital chain that gives the American company a stake in the world’s second-biggest emerging economy.
- Lilly(LLY) Alzheimer’s Drug Slows Mental Decline, Study Finds. Eli Lilly & Co. (LLY)’s experimental Alzheimer’s treatment slowed memory loss and cognitive decline in early-stage patients by about 30 percent, offering the first evidence that a medication may hamper the course of the ailment, researchers said.
- Report Threatens Huawei's Growth Plans. China Tech Giants Pose 'Security Risk,' U.S. House Panel Says.
- Eurozone's Bazooka Has Surprisingly Few Bullets.
- Billions in Aid to Italy Stolen by Mafia.
- Merkel Should Bury Euro During Greece Visit: Economist.
- Decline, Decay, Denial, Delusion, And Despair. (graphs)
- Chart Of The Day: The "New Normal" Trade Off - Debt vs Jobs.
- California Wakes Up To Another Record High Gas Price.
- From The SEC To Goldman Sachs(GS) In One Easy Step: The Revolving Door Farce Full Frontal.
- From Zero Interest Rate To Zero Retirement: How The Fed Doomed Elderly Americans To Endless Work.
- LIVE: Mitt Romney Is Hammering Obama On Libya In A Big Foreign Policy Speech.
- WHOOPS: Mario Draghi And ECB VP Caught On Microphone Joking About Whether Their Words Will Move Markets.
- Last Time The Economy Added 873,000 Jobs It Was Growing At A White-Hot 9.3%. Right now, in the third quarter of 2012, economists think the economy is growing at an an anemic 1.5% or so. So the economy was growing six times as fast in 1983 when it was adding that many jobs. Hmmmm ….
- Analyst Slashes Facebook To SELL, Says Spammy Mobile Ads Are Tricking Users And Ruining The Service.
- More Cracks In The German Economy. Germany's August manufacturing orders fell 1.3 percent in August, which was worse than the 0.5 percent decline expected by economists. Weakness came from within. Domestic orders plunged 3.0 percent.
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Reuters:
- Iran would need 2-4 months to amass bomb material - think tank. Iran would currently need at least two to four months to produce enough weapons-grade uranium for one nuclear bomb, and additional time to make the device itself, a U.S. security institute said on Monday. Estimates of how quickly Iran could enrich its uranium to the fissile level required for bombs are closely watched as they may give an indication of how much time its foes believe they have to prevent it obtaining nuclear weapons, if and when it decided to do so.
- Turkish president says "worst case" unfolding in Syria. Turkish President Abdullah Gul said on Monday the "worst-case scenarios" were now playing out in Syria and Turkey would do everything necessary to protect itself, as its army fired back for a sixth day after a shell from Syria flew over the border. Gul said the violence in Turkey's southern neighbour, where a revolt against President Bashar al-Assad has evolved into a civil war that threatens to draw in regional powers, could not go on indefinitely and Assad's fall was inevitable. "The worst-case scenarios are taking place right now in Syria ... Our government is in constant consultation with the Turkish military. Whatever is needed is being done immediately as you see, and it will continue to be done," Gul said.
- Copper falls to week-low on strong dollar, demand uncertainty.
- 7,000 police to protect Angela Merkel during Athens visit. Greek police are preparing a huge security operation involving 7,000 officers, water cannon and a helicopter to protect German chancellor Angela Merkel during her visit to Athens tomorrow.
- German Chancellor Angela Merkel won't make any promises about supporting additional financial aid for Greece when visiting the country tomorrow, citing officials.
- Suzuki Sept. China Sales Plunge -44.5%. The decline accelerated in mid-Sept. as anti-Japan protests grew, citing the co. The company still expects -20.0% y/y declines in coming months.
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