- Spain Sets Discount for Bad Bank Assets, Seeks Investors. Spain’s bad bank will buy foreclosed assets at an average discount of 63 percent as the state seeks investors to become shareholders in the 60 billion-euro ($77 billion) facility, the nation’s bank-rescue fund said. The bad bank, known as SAREB, will apply an average discount of 46 percent to gross book value on loans to developers, the FROB rescue fund said in a presentation yesterday in Madrid. Nationalized lenders will transfer 45 billion euros of assets to the bad bank, while other lenders with capital shortfalls may transfer about 15 billion euros, FROB Chairman Fernando Restoy said, adding that the transfer values shouldn’t be a “reference” for the property held on the books of the rest of the banking industry. “The market will always try to make the read across and will conclude that the banks should be holding these assets at the higher discount,” Antonio Ramirez, an analyst at Keefe, Bruyette & Woods Ltd. in London, said in a phone interview. “It doesn’t look like the regulator will force the banks to take additional haircuts.”
- Juncker Calls Extra Finance Chief Talks as Greece Showdown Looms. Euro-area finance chiefs are scheduled to talk three times in the next two weeks as the 17- nation bloc grapples over ways to fill Greece’s financing gap and ease concerns that it might have to exit from the euro. Ministers will probably hold a “physical meeting” on Nov. 8, Luxembourg’s Jean-Claude Juncker, who leads of group of euro- region finance ministers, said in an interview in Luxembourg yesterday. The gathering will take place between a Greece- related conference call set for tomorrow and a regularly scheduled Nov. 12 meeting in Brussels. The negotiations reflect policy makers’ struggle to find a solution for Greece, which remains the epicenter of Europe’s sovereign debt crisis more than three years after it owned up to an inflated budget deficit. International Monetary Fund chief Christine Lagarde is due in Berlin today for talks with German Chancellor Angela Merkel after meeting with French President Francois Hollande in Paris yesterday. “There is no consensus right now,” said Carsten Brzeski, a senior economist at ING Group in Brussels. “I still think that some kind of debt forgiveness will happen in the future but I don’t see it happening right now.”
- Japan’s Industrial Production Falls as BOJ Mulls Easing. Japan’s industrial production fell the most since last year’s earthquake and tsunami, bolstering the case for the Bank of Japan (8301) to add to monetary easing today to support an economy at risk of contraction. Output declined 4.1 percent in September from the previous month, when it dropped 1.6 percent, the Trade Ministry said in Tokyo today. The median of 29 estimates in a Bloomberg News survey of analysts was for a 3.1 percent slide. None forecast such a large decline. A separate report showed unemployment unchanged. Weakness in global demand and the expiration of car- purchase subsidies hit output, which is on a “downward trend,” the ministry said today.
- Asia Leveraged Loans Set to Stall as Global Gloom Spurs Caution. Leveraged loan volumes in Asia may decline in 2013 as Europe’s debt crisis and China’s slowdown limits mergers and acquisitions while private equity firms shy away from selling businesses at discounted prices, lenders say. Companies are disagreeing on the value of assets amid increased global economic uncertainty, making them cautious about large transactions, according to HSBC Holdings Plc, Credit Agricole SA and Mizuho Corporate Bank Ltd. Public-to-private M&A deals in the Asia-Pacific region are down 30 percent this half to date versus the first six months of the year while private- to-public deals slumped 34 percent, according to data compiled by Bloomberg. “M&A volumes this year have been lamentable but it’s not because of any lack of buyside equity and debt capital to get deals done,” said Lyndon Hsu, the head of leveraged and acquisition finance, Asia-Pacific, at HSBC in Hong Kong. “Banks in the region have plenty of money to deploy and there’s a lot of equity capital floating around, but as Europe chokes on its own economic and financial problems and growth in China slows, transaction flows are drying up.”
- U.S. Labor Dept. Says It Is Aiming for Nov. 2 Jobs Data Release.
- Ohio Steel Towns Feeling Recession Fallout Waver on Obama. Kathryn Adams, a Democrat all her 56 years, chokes for a moment as she speaks. “Life is so much harder now for so many people than it was four years ago,” says Adams, a Methodist campus minister at Youngstown State University in Ohio, describing the struggling families she has served in soup kitchens and the declining collections at the local churches that support her work. “Too many people are hurting, and it’s time for a change,” she said, in explaining why she plans to vote against Barack Obama, the man she backed for president in 2008.
- Australia New-Home Sales Dropped 3.7% in September, HIA Says.
- RBI Signals Inflation Needs to Ease to Boost Rate-Cut Scope. Indian monetary policy may have space in future to support growth if price pressures ease and fiscal and trade deficits narrow, even as caution is needed for now to focus on inflation, the nation’s central bank said. “Monetary policy needs to be cautious in the interim, focusing on inflation while using the available space to support growth to the degree it can,” the Reserve Bank of India said in a report yesterday ahead of its interest-rate decision in Mumbai today. If threats from inflation and the deficits recede further, that “could yield space down the line for monetary policy to respond to growth concerns,” it said.
- Hurricane Sandy: Live Updates.
- Hurricane Sandy: Photos.
- Losses May Exceed Those of 2011 Storm. Airlines, Retailers, Shippers Brace for End-of-Quarter Hit; Insurers Could See Claims Running as High as $10 Billion.
- Election 2012: Streaming Coverage.
- Fiscal Cliff Forces All Sides to Jockey. Lawmakers, CEOs, business groups and charities are scrambling to shape the debate over tax and spending policy after the November elections, staking out negotiating positions for what could be a fast-paced brawl. The jockeying is intensifying as Election Day approaches, despite a halt in talks between party leaders about how to avoid a total of $500 billion in annual tax increases and federal spending cuts set to begin in January, a double-whammy known as the fiscal cliff.
- Google(GOOG) Unveils New Nexus Tablet and Smarphone. (video)
- McGurn: The Fog of Obama's Non-War. Seven weeks after a U.S. ambassador was murdered and there are still no answers.
- Postcards From An Underwater New York.
- Nation's Oldest Nuclear Power Plant, New Jersey's Oyster Creek, Declares Alert Following Water Surge.
- The Incredible Shrinking Half-Life Of Central Bank Action.
- STUNNING IMAGES OF MANHATTAN UNDER WATER.
- MASSIVE SHAKEUP AT APPLE(AAPL)—SCOTT FORSTALL IS OUT.
- Millennials Are Turning Into A Generation Of Fiscal Conservatives.
- There's No Way Obama's Recovery Is Sustainable.
- Scary Video Of Water Rushing Into The Brooklyn-Battery Tunnel.
- Stock Exchanges Testing New Plan To Get The Markets Open Again This Week.
- China's Baidu(BIDU) eyes soft fourth quarter as economy bites. Baidu Inc, China's largest search engine company, posted its slowest quarterly revenue growth in more than two years and forecast softer-then-expected growth this quarter, hurt by weaker sales as China's economic engine sputters. However, the company -- which still grew revenue by 50 percent in the third quarter -- said it added a record number of new advertisers for the quarter and was focusing on boosting revenue from fast-growing mobile search traffic. "Their large customers' spending has not been so robust and has been quite flat, but Baidu has done a decent job of bringing new customers online," said Michael Clendenin, managing director of technology consultancy firm RedTech Advisors.
- US markets shut on Tuesday, focus shifts to Wednesday. Hurricane Sandy will close U.S. stock markets for a second day on Tuesday, as Wall Street turned its attention to whether markets would be able to resume functioning on the month's final trading day on Wednesday. U.S. stock markets closed on Monday due to weather for the first time in 27 years. Bond markets closed early, at noon, as winds and waves from Hurricane Sandy lashed the Eastern seaboard. NYSE Euronext and Nasdaq OMX Group, the largest two U.S. exchange operators, said they intend to reopen Wednesday, conditions permitting. The bond markets will also close on Tuesday, with traders aiming to reopen on Wednesday.
- Sicilian vote, Berlusconi threat add to Italy uncertainty. Former Italian prime minister Silvio Berlusconi's struggling party suffered a heavy defeat on Monday as voters turned against the centre-right in its former stronghold of Sicily, five months before national parliamentary elections. The centre-left candidate Renato Crocetta, an openly gay anti-mafia campaigner, was set to be the next regional governor while there were strong gains for the anti-establishment 5-Star Movement of comic Beppe Grillo. "We've won in Sicily, it's crazy," said Pier Luigi Bersani, head of the Democratic Party (PD), the main party on the centre-left, adding that the result laid the groundwork for real change in the national elections.
- China's financial stability may be affected if it doesn't control large or one-way yuan appreciation resulting from speculative "hot money" or other negatives, according to a front-page commentary by Wang Donglin, a reporter at the newspaper. The current rapid appreciation of the currency isn't sustainable while it poses a hidden threat to the financial system, according to the commentary.
- None of note
- Asian equity indices are -.50% to +.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 125.50 +2.5 basis points.
- Asia Pacific Sovereign CDS Index 97.0 +.25 basis point.
- FTSE-100 futures -.14%.
- S&P 500 futures -.63%.
- NASDAQ 100 futures -.94%.
Earnings of Note
9:00 am EST
- The S&P/CaseShiller Home Price Index for August is estimated to rise +.5% versus a +.44% gain in July.
- None of note
- The effects of Hurricane Sandy, Fed's Dudley speaking, Fed's Kocherlakota speaking, ECB's Draghi speaking, Spain GDP report, German Unemployment report, Italy bond auction, India rate decision, Japan rate decision, Japan Manufacturing PMI, (MAT) analyst meeting and the (UNP) Investor Day could also impact global trading today.