Bloomberg:
- EU Stumbles on Greek Debt Reduction After Clash With IMF. European finance ministers failed to agree on a debt-reduction package for Greece after battling with the International Monetary Fund over how to nurse the recession- wracked country back to fiscal health. With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrounge together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014. More than 11 hours of talks broke up early today in Brussels with praise for the Athens government’s economic overhaul and a declaration that an accord on the financing package will wait at least until a hastily arranged meeting of the ministers on Nov. 26.
- Euro Finance Chiefs Seek Near-Term Greek Fix, Fight on Debt Path. European governments are trying to plug an immediate hole in Greece’s finances and prevent new ones from opening in the latest installment of the debt-crisis brinkmanship rattling the euro economy. Finance ministers are battling among themselves and with the International Monetary Fund to find 15 billion euros ($19.2 billion) through 2014 for Greece and seek an elusive formula for putting its debt on a sustainable path. A crisis meeting in Brussels that began at 5 p.m. yesterday is shadowed by concerns that a two-year fix will leave Greece needing more money and possibly more debt relief to emerge from the spiral of deficits and recession. “It’s essential now that we take a decision on a set of credible measures to introduce debt sustainability,” European Economic and Monetary Commissioner Olli Rehn told reporters as he entered the meeting. “At the same time, we have to be ready to take further decisions in the light of future developments and of course conditional and dependent of full implementation of reforms of the program by Greece over the coming years.” Officials said the negotiations won’t make a final decision to release the next 44 billion-euro tranche of aid to Greece, partly because parliaments in Germany, the Netherlands and Finland have yet to weigh in.
- EU Splits Leave Single Insurance Rules Plan on Sidelines. The European Union’s 12-year push to introduce a common set of rules for the region’s insurance industry is close to being sidelined as some of the biggest member states prepare to introduce the regulations piecemeal.
- Euro Weakens, Asian Stocks Erase Gain as Greek Aid Talks Falter. The euro fell and Asian stocks erased gains after European finance ministers failed to agree on a debt-reduction package for Greece. The yen touched a seven- month low as Japan’s exports dropped more than expected. The euro declined 0.5 percent to $1.2748 as of 1:14 p.m. in Tokyo.
- China’s Shanghai Index Falls Below 2,000; Heads for 2009 Low. China’s stocks fell, sending the Shanghai Composite (SHCOMP) Index below 2,000 for a second day this week. The Shanghai Composite dropped 0.5 percent to 1,999.19 as of 11:20 a.m. local time, poised for its lowest close since January 2009. The gauge first broke above 2,000 in July 2000 and almost tripled to 6,092.06 on Oct. 16, 2007, according to data compiled by Bloomberg dating to 1991. “After more than 10 years of development, the 2,000 level is breached and we are back to square one,” Zhang Gang, a strategist at Central China Securities Holdings Co., said by phone from Shanghai on Nov. 20.
- China Stocks’ Triangle Break Signals Losses: Technical Analysis. The Shanghai Composite Index (SHCOMP) will likely fall to 1,700, a 15 percent drop from yesterday’s close, after the benchmark index broke through a triangular consolidation trading pattern, according to Chart Partners. The benchmark index’s slide below “big resistance” at 2,100 and the break of the triangle foreshadow a retreat to 1,700 in the “medium term” and possibly to 1,500, Thomas Schroeder, Bangkok-based managing director at Chart Partners, wrote in an e-mailed response to questions.
- Feldstein Says U.S. Fixing Cliff May Not Avoid Recession. Harvard University economics professor Martin Feldstein said the U.S. economy may fall into a recession next year even if Congress and President Barack Obama avert the full brunt of the so-called fiscal cliff. “You are perilously close to the edge of another recession even if we don’t go over the fiscal cliff,” Feldstein said in a Bloomberg Television interview from New York. The end of payroll tax cuts will reduce gross domestic product by about 1 percentage point in 2013, and other tax increases and spending cuts may bring “over 2 percent of GDP tightening,” he said.
- Al-Qaeda ‘Cancer’ Spreads With U.S. Chasing, Panetta Says. Al-Qaeda and affiliated terrorist groups have spread beyond Afghanistan and Pakistan and must be pursued by other countries with help from U.S. military commandos, Defense Secretary Leon Panetta said today. “We have slowed the primary cancer -- but we know the cancer has also metastasized to other parts of the global body” despite American military gains against al-Qaeda in Pakistan, Afghanistan, Somalia and Yemen in the last decade, Panetta said in a speech today in Washington.
- CFTC Eases Swap Pay-to-Play Rules With Government Pension Plans. Wall Street banks have been freed from Dodd-Frank Act limits on political contributions intended to limit fraud in swaps with government pensions. The CFTC said in a letter today that it would not enforce so-called pay-to-play restrictions on banks selling swaps to the pensions. The restrictions apply to dealers that have made political contributions to municipal officials in the two years before a trade.
- Silver Trade Drops 30% on China Bourse as Industrial Demand Ebbs. Silver trading on the largest spot market in China, the second-largest consumer, tumbled this year as slowing growth cut industrial use, said an industry official. Volume on the Shanghai White Platinum & Silver Exchange dropped about 30 percent from a year earlier to 1,000 metric tons, said Gao Huijie, chief executive officer. Industrial demand represents most transactions on the bourse, where about 20 percent of China’s annual demand is traded, he said.
- Most Households Face 'Fiscal Cliff'. Lower-Income People in Particular Would See Steep Tax Increases if Washington Can't End Budget Dilemma by Year-End.
- Sea Tensions Erupt at Asian Summit.
- Israel, Hamas Press for Advantage. Both Sides Step Up Attacks Amid Talk That Cease-Fire Looms; Some See a Gain in Stature for Gaza Strip's Leaders.
- Is The Largest Weekly Inflow Into Bank Savings Accounts On Record, A Flashing Red Alarm? (graphs)
- Meanwhile, In The Land Of The Setting Sun... And Exports. (graphs)
- Now The Hard Part Begins: The China Challenge.
- Kyle Bass On The End Of The Debt Super-Cycle. (video)
- Tell Me Again... Which Of These Nations Is Communist?
- REPORT: Hedge Fund Billionaire Steve Cohen Is 'Portfolio Manager A' In The Latest Insider Trading Case.
- Top Nomura Economist Is Skeptical Of Fiscal Cliff Progress — And There's Good Reason To Take Him Seriously. At this point it does not appear that the two sides have exchanged specific proposals. Consequently, it is not clear whether these differences can be bridged.
- Homeland Security Wants To Double Its Domestic Drone Fleet.
- Elmo Toymaker Hasbro Responds To Underage Sex Scandal Surrounding The Kids' Character.
- Americans donate just $8 million to cut national debt. $7.7 million is barely a drop in the bucket. That sum represents just 0.000007% of the approximately $1.1 trillion deficit the U.S. ran in the latest fiscal year. The country's total outstanding debt is more than $16 trillion -- perilously close to the $16.394 trillion debt ceiling, and the Treasury Department expects to hit the legal borrowing limit by the end of this year.
- FBI probing allegations around HP(HPQ) and Autonomy: source.
- Euro zone bogged down in myriad of Greek debt options. Greece's debt cannot be cut to 120 percent of GDP by 2020, the level deemed sustainable by the IMF, unless euro zone member states write off a portion of their loans to Greece, a document prepared for euro zone finance ministers shows. The 15-page document, circulated among ministers, the European Central Bank and the IMF for a meeting that began on Tuesday and is still going on 10 hours later, sets out in black-and-white how far off-track Greece is in reducing its debt to the IMF-imposed target, from a level around 170 percent of GDP now.
- Salesforce.com(CRM) results beat Street. Business software provider Salesforce.com Inc beat Wall Street expectations for the third quarter and maintained its earnings outlook for the rest of its fiscal year despite the uncertain economic outlook. The company said it seemed to have weathered the effects of Superstorm Sandy and fears among its clients surrounding the "fiscal cliff" as it projected sales for the current quarter, ending Jan. 31, of between $825 million and $830 million, roughly in line with analysts' average forecast of $829.9 million. The fiscal cliff refers to U.S. government spending cuts and tax rises due to be implemented under existing law in early 2013 that may cut the federal budget deficit but also tip the economy back into recession. Shares rose 1.8 percent to $148.59 in extended trade.
- Facebook(FB) director Andreessen sells $54 mln in shares.
- Scholastic(SCHL) cuts outlook as sales of high-margin products fall. Children's book publisher Scholastic Corp reduced its forecast for the fiscal year ending May 31, 2013 on lower sales in its high-margin educational business.
- Failed talks with union spells end to Twinkie-maker Hostess. Hostess Brands Inc will proceed with a plan to go out of business after the maker of Twinkie snack cakes said last-minute talks with striking workers broke down on Tuesday. Hostess and its striking bakers union were pressed by New York Bankruptcy Judge Robert Drain into mediation to try to end the walkout and save the company and its 18,500 jobs.
- EU leaders warn Greece's aid could be delayed. European leaders warned that the vital tranche of international aid may not be released to Greece until December as in-fighting and indecision dogged another summit in Brussels.
- China Studies Expanding Nationwide Property Tax. China will steadily expand the scope of value-added taxes and reduce business taxes, according to an article written by Minister of Finance Xie Xuren. China will continue to increase tax incomes of local governments, Xie wrote.
- China Shouldn't Loosen Property Control Policies. China should also accelerate the nationwide introduction of property tax trial, citing Wang Juelin, a researcher at the Ministry of Housing and Urban-Rural Development.
- None of note
- Asian equity indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 122.25 +1.25 basis points.
- Asia Pacific Sovereign CDS Index 88.75 -1.75 basis points.
- FTSE-100 futures -.27%.
- S&P 500 futures -.61%.
- NASDAQ 100 futures -.53%.
Earnings of Note
Company/Estimate
- (DCI)/.34
- (DE)/1.88
8:30 am EST
- Initial Jobless Claims are estimated to fall to 410K versus 439K the prior week.
- Continuing Claims are estimated to rise to 3345K versus 3334K prior.
- The Preliminary Markit US PMI for November is estimated to fall to 51.0 versus 51.3 in October.
- Final Univ. of Mich. Consumer Confidence for November is estimated to fall to 84.5 versus a prior estimate of 84.9.
- Leading Indicators for October are estimated to rise +.1% versus a +.6% gain in September.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,000,000 barrels versus a +1,089,000 barrel gain the prior week. Gasoline supplies are estimated to rise by +1,000,000 barrels versus a -440,000 barrel decline the prior week. Distillate supplies are estimated to fall by -1,000,000 barrels versus a -2,539,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +.6% gain the prior week.
- None of note
- The Spanish/German 10Y bond auctions, China HSBC Manufacturing PMI, weekly MBA mortgage applications report, weekly Bloomberg Consumer Comfort Index and the Bloomberg Economic Expectations Index for November could also impact trading today.
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