Bloomberg:
- ECB Withholding Secret Greek Swaps File Keeps Taxpayers in Dark. The European Central Bank’s court victory allowing it to withhold files showing how Greece used derivatives to hide its debt leaves one of the region’s most powerful institutions free from public scrutiny as it assumes even more regulatory power. The European Union’s General Court in Luxembourg ruled yesterday that the central bank was right to keep secret documents that would reveal how much the ECB knew about the true state of Greece’s accounts before the country needed a 240 billion-euro ($311 billion) taxpayer-funded rescue. The case brought by Bloomberg News, the first legal challenge to a refusal by the ECB to make public details of its decision-making process, comes a month before the central bank is due to take responsibility for supervising all of the euro- area’s banks. The central bank already sets narrower limits on its disclosures than its U.S. equivalent, the Federal Reserve. The court’s decision shows the ECB has too broad a discretion to reject requests for disclosure, academics and lawyers said. “It’s a very disturbing ruling,” said Olivier Hoedeman of Corporate Europe Observatory, a Brussels-based research group that challenges lobbying powers in the EU and campaigns for the accountability of EU bodies. “It is such a sweeping, blanket statement that it undermines the right to know.”
- Germany Seen Recession-Bound in Poll Showing Euro Crisis Deepens. Germany, Europe’s largest economy, will be tipped into recession as the sovereign debt crisis roiling its neighbors extends into the new year, according to the latest Bloomberg Global Poll. Even as European leaders laud their latest fix for Greece’s debt woes, 53 percent of 862 investors, analysts and traders who are Bloomberg subscribers said this week they think Germany’s economy will drop into a recession for the first time in more than three years. Sixty-four percent expect Europe’s debt turmoil to deepen again despite recent signs of calming in its financial markets. “Germany is starting to feel some pressure as sentiment in the euro-zone weighs on its economy,” said Chanoine Webb, a poll participant and global investment analyst at Close Brothers Asset Management Ltd. in London. “It won’t be able to decouple for much longer.”
- Aluminum Demand Growth in China Seen Least in More Than 10 Years. Aluminum consumption in China, the biggest user, expanded at the slowest rate in a decade as economic growth decelerated, said an industry official. Demand gained 5.8% in the first nine months to 14.4 million metric tons from a year earlier, said Wen Xianjun, vice chairman of the China Nonferrous Metals Industry Association. The pace is 5 percentage points lower than the same period in 2011 and the least since at least 2000, Wen said in an interview in Chongqing today. "Given the challenges in the global economy and downward pressure in domestic economy, the condition of China's aluminum industry is worsening," Yang Yunbo, director of the association's light metals department, said at a forum in Chongqing today. "Looking forward, we're not optimistic." China is expected to add 1.5 million tons of production capacity this year, according to the group. Output in China Gansu, Ningxia, and Xinjiang regions climbed 55%, 37% and 198% in the first nine months, Wen said. Output rose to a record 1.75 million tons in August and gained 11% from a year ago to 16.5 million tons from January to October, according to the National Bureau of Statistics.
- Cliff-Skeptics in Both Parties Deepen Fiscal Challenges. President Barack Obama says going over the fiscal cliff by missing the deadline for a deficit reduction deal by year’s end would be a “rude shock” for Americans. Republican House Speaker John Boehner says it would be a “fiasco.” Yet a small and potentially influential group of lawmakers in both parties is emerging as fiscal-cliff skeptics, willing -- and some even arguing -- to take the dive. Their attitude may make striking a compromise a messy and drawn-out process. Allowing the more than $600 billion mix of tax increases and automatic spending cuts to begin in January if no deal is reached isn’t their first choice, these lawmakers said, yet it’s a better alternative than a compromise that violates their principles.
- North Korea Seen Preparing Rocket Launch as Soon as Next Week. North Korea has moved two sections of a long-range rocket to a launch site in preparation for a firing that may come as soon as next week, according to a U.S. university monitoring project on the totalitarian state.
- LDP Seen Winning Japan Vote That Risks Policy Gridlock. Three years after its half-century rule of Japan ended, the Liberal Democratic Party is poised to regain power. Even so, a splintered political landscape risks the same gridlock that has led to six leaders in as many years. Polls show that while the LDP will get the most seats in the Dec. 16 election in the Diet’s lower house, other parties may limit its victory.
- Obama's Cliff Offer Spurned. GOP Criticizes Proposal for Tax, Spending Increases With Limited Entitlement Cuts. Obama made an opening bid that calls for a $1.6 trillion tax increase, a $50 billion economic-stimulus program and new power to raise the federal debt limit, a broad set of demands Republicans viewed as a step back in talks.
- The Fiscal Cliff: Live Stream.
- Egypt Adds Islamic Influence to Constitution.
- In the End, Greek Crisis Will Hit Taxpayers. Sovereign-debt crises always spark struggles between creditors and debtors over who should suffer losses. Since the Greek crisis exploded nearly three years ago, those fights have played out in euro-zone summits and finance ministers' meetings and have been covered feverishly by the global media. Because of the large number of parties with stakes in the outcome—Greece and 16 other members of the euro zone, the European institutions and the International Monetary Fund—they have been even more complicated than usual. Despite the complications, this week's deal on Greece's debt points to an (almost) iron rule of sovereign-debt crises: Significant losses fall on taxpayers in creditor countries because debt originally extended by private creditors, one way or another, ends up on the balance sheet of the public sector.
- BlackRock(BLK), Rialto Dump Some of Their 'Skin' in CMBS Game.
- Alleged Insider Group Includes TheStreet.com Editor. When Michael Baron's buddies passed on a hot stock tip at a basketball game last year, the senior editor for financial-news website TheStreet.com TST gave it little thought. A year later, the Federal Bureau of Investigation came knocking and told him something he never expected to hear, says a person familiar with his thinking: He had been tied to a sophisticated insider-trading ring.
- Recession Big Factor as Birthrate Falls.
- Obama's Real Fiscal Problem. President Obama is by all accounts more confident than ever since his re-election, telling everyone he sees that he's certain he can pound Republicans enough to get his way on taxes and spending. And if he can't, well, then he can always go over the fiscal cliff and blame Republicans next year for whatever happens to the economy. And maybe he's right. If nothing else, he's been expert at dodging responsibility. The line he's taking so far in budget negotiations could hardly be tougher.
- UN General Assembly votes in favor of Palestinian statehood. The U.N. General Assembly voted Thursday in favor of Palestinian statehood, after the Palestinians asked it to recognize a non-member state of Palestine in the Israeli-occupied West Bank and east Jerusalem, and the Hamas-ruled Gaza Strip. The resolution upgrading the Palestinians' status to a nonmember observer state at the United Nations was approved by a more than two-thirds majority of the 193-member world body -- a vote of 138 to 9, with the U.S. and Israel among those who opposed. There were 41 abstentions.
- Obama wants dividends taxed as income: NYT. According to House Republicans, Treasury Secretary Tim Geithner presented a plan that included taxing dividends as income, The New York Times reported. The New York Times also reported that the White House plan included a 45% estate tax on inheritances over $3.5 million.
- The Millionaire Man Exodus: What Obama Can Learn From The UK's "Tax The Rich" Plan.
- Q3 GDP - The Devil Is In The Details. (graphs)
- IceCap Asset Management: 'Not' Salma Hayek And The Keynesians' 3 Big Mistakes.
The Blaze:
Reuters:
- Yum(YUM) says key 4th-qtr sales in China to fall. Yum Brands Inc said on Thursday that it expects a decline in fourth-quarter sales at established restaurants in China, where a cooling economy is making it difficult to exceed the 21 percent gain it had there a year earlier. Yum, which saw more than half its total revenue and operating profit for the third quarter of 2012 come from China, said fourth-quarter same-restaurant sales there are expected to be down 4 percent. Yum shares fell 7 percent to $69.25 in extended trading. Stock in Yum is widely viewed as a way for U.S. investors to bet on what is still the world's fastest-growing major economy. The last time Yum reported a decline in same-restaurant sales for China appears to have been in the fourth quarter of 2009, when those sales fell 3 percent in mainland China, according to Yum's financial reports.
- Israel’s Iron Dome Did ‘Remarkably Well,’ Panetta Says. Defense Secretary Leon Panetta said Iron Dome, the U.S.-funded Israeli missile defense system, performed “remarkably well” in defending Israel against Hamas rockets. Panetta said yesterday the system intercepted about 400 rockets fired at Israel, or about 85 percent of those targeted by its radar and battle-management system as heading toward populated areas.
- Investors swarm into stock ETFs amid "fiscal cliff" hopes-Lipper.
- Japan Nov manufacturing PMI edges down to 46.5. Japanese manufacturing activity contracted in November at the fastest pace in 19 months, a survey showed on Friday, as falling exports, weak domestic demand and declining capital expenditure push the world's third-largest economy towards recession. The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 46.5 in November from 46.9 in October. It remained below the 50 threshold that separates contraction from expansion for a sixth straight month.
- US oil imports in Sept down from year ago-EIA.
- Citigroup(C) sentences Europe to faster economic death. Citigroup's end of year forecast – Prospects for Economies and Financial Markets in 2013 and Beyond – is in essence a celebration of American revival and ascendancy. It sentences Europe to slow economic death.
- Bundestag lawyers doubt legality of ECB interest waiver, citing a report by Bundestag legal advisers and Bernd Riexinger, head of Germany's Left Party. The ECB will present a plan to waive interest on government bonds it holds. The loss to German taxpayers would amount to EU2.5B. Riexinger told the newspaper "cancelling interest means cancelling debt" and says he doubts the proposal will withstand judicial review.
- Hong Kong Housing Official Says Home Prices May Fall 20%. Prices of apartments in the city will drop on the latest govt measures, which will curb investment demand, citing Stanley Wong, chairman of the Housing Authority's subsidized housing committee. Wong didn't provide a timetable for the decline in prices.
- China's development faces more risks from increasing "unstable and uncertain factors" to world economic growth, Zhong Sheng said in a commentary.
- China's financial innovation may cause more "bubbles" and "excess speculation" in the financial market, and bring more risks, Financial News said in a front-page commentary.
- Yichang Three Gorges Quantong Coated and Galvanized Plate Co., the second largest private company in China's central province of Hubei, may default on about 7b yuan of debt from more than 10 banks including China Construction Bank, Hankou Bank, Citic Bank, Citic Trust, Guangxi Beibu Gulf Bank and China Minsheng Bank, citing an official from the company.
- None of note
- Asian equity indices are unch. to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 111.0 -1.0 basis point.
- Asia Pacific Sovereign CDS Index 82.75 -1.0 basis point.
- FTSE-100 futures -.17%.
- S&P 500 futures -.18%.
- NASDAQ 100 futures -.07%.
Earnings of Note
Company/Estimate
- (GCO)/1.33
- (UNFI)/.46
8:30 am EST
- Personal Income for October is estimated to rise +.2% versus a +.4% gain in September.
- Personal Spending for October is estimated unch. versus a +.8% gain in September.
- PCE Core for October is estimated to rise +.2% versus a +.1% gain in September.
- NAPM-Milwaukee for November is estimated to rise to 47.0 versus 43.3 in October.
- Chicago Purchasing Manager for November is estimated to rise to 50.5 versus 49.9 in October.
- None of note
- The Fed's Stein speaking, Fed's Kocherlakota speaking, China Manufacturing PMI and the Canadian gdp report could also impact trading today.
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