Thursday, November 01, 2012

Today's Headlines

Posted by Gary .....at 3:08 PM
Bloomberg:
  • Greek Stocks Tumble Amid Concerns on Government Stability. Greek stocks dropped for a sixth day, headed for the biggest weekly retreat in four years, amid concern that the country’s coalition government will fail to enforce the austerity program demanded by the European Union. National Bank of Greece SA (ETE), the Mediterranean nation’s largest lender, plummeted 12 percent. Public Power Corp. tumbled 11 percent and Opap SA (OPAP) fell 4.5 percent. The ASE Index (ASE) sank 5 percent to 761.24 at the close of trading in Athens, extending the decline so far this week to 13 percent.
  • Morgan Stanley(MS), AIG(AIG) Face Weeks Without Lower NYC Offices. In any kind of “normal” flood, water would never reach 80 Pine St., a 39-story tower two blocks inland from the lower Manhattan waterfront, landlord William Rudin said.
  • New Jersey Drivers Wait for Fuel as Sandy Curbs Gasoline. New Jersey drivers waited in two- mile-long lines to buy gasoline as Hurricane Sandy’s devastation of the New York metropolitan area flooded fuel terminals, curbed deliveries and left many filling stations in the dark and unable to run their pumps.
  • Sandy Batters New Jersey’s Struggling Housing Market.
  • China Bad Loans to Increase, China Orient Asset Says. Chinese commercial banks may see an increase in non-performing loans from this quarter through the first half of next year, China Orient Asset Management Corp. said, citing a survey conducted. Bad debt may rise as much as 10 percent this year, taking the ratio of non-performing loans to 1 percent to 2 percent of the total by the end of 2012, China Orient said yesterday, citing a survey of commercial banks, asset management firms, investors and intermediaries done in June. The pace at which bad loans increase may accelerate if concerns about a rebound in inflation leads China to tighten monetary policy, said the company, which buys, manages and disposes of bad debt.
  • Ore-Shipping Rates Fall Most in Five Days as Demand Seen Slowing. Returns for Capesize vessels that transport iron ore and coal declined the most in five sessions amid speculation that demand to charter the carriers is slowing. Rates for the ships hauling about 160,000 metric-ton cargoes slid 4.1% to $15,812 today, the lowest since Oct. 22. China, the biggest buyer of iron ore, imported the most cargoes in almost two years in September, according to customs data. There was "close to no activity" yesterday in terms of Capesize vessel charters, RS Platou Markets AS, an Oslo-based investment bank, said in a report today. Iron-Ore stock building had been the biggest cause of rates rising, Platou analysts led by Frode Morkedal said. 
  • Commodities Retreat Most Since May in Dead Month for Investors. Slumping energy and metal prices sent commodities to their biggest monthly loss since May, lagging behind stocks, bonds and the dollar, as the global economy grew at the slowest pace since the 2009 recession. The Standard & Poor’s GSCI Total Return Index of 24 raw materials fell 4.1 percent, erasing gains for the year. The MSCI All-Country World Index of stocks slid 0.6 percent, including dividends, while the U.S. Dollar Index slid 0.02 percent. Bonds of all types gave positive returns, according to Bank of America Merrill Lynch’s Global Broad Market Index. Investor optimism dimmed as the International Monetary Fund cut its global growth forecast and the Federal Reserve said strains on the world economy present “significant downside risks.” China reported the seventh straight quarter of slowing growth, while services and manufacturing in the 17-nation euro area last month contracted more than economists forecast. “Europe is a complete and total disaster and doesn’t appear to be solved,” John Stephenson, who helps manage $2.7 billion at First Asset Investment Management Inc. in Toronto, said in a telephone interview. “China clearly seems to be slowing. You essentially have a situation where investors just have very little optimism.” The S&P GSCI Total Return Index fell for a second month, leaving the gauge down 0.7 percent for 2012. Commodities are headed for a second consecutive annual loss for the first time since 1998.
  • Ships at 8-Year Low Seen Falling in Hyundai Price War: Freight. Prices for new ships have fallen to an eight-year low as shipyards sacrifice margins to win orders. Hyundai Heavy Industries Co., the world's largest shipbuilder, may be about to make the price war worse. The company could push prices down as much as 15% industrywide as it tries to replenish an order backlog that is near a five-year-low, according to E*Trade Securities Co. analyst Park Moo Hyun. The Ulsan, South Korea-based shipbuilder, which as as much capacity as the next two biggest years combined, has so far largely resisted price cuts even as global orders drop to the slowest since 1999. "Hyundai Heavy will have to aggressively go out there and win orders to fill up its docks,k" said Park. "That means it has to cut prices." The company only has about 18 months of work in hand for its shipyards because of the order slowdown and Chinese competition, and it has started its first early-retirement program. 
  • Panasonic May Cut More Jobs as $9.6 Billion Loss Forecast. Panasonic Corp. (6752), Japan’s third- biggest employer, eliminated almost 39,000 jobs in the past year, and its chief financial officer said the TV maker doesn’t plan another round of cuts. Investors say it has to. Even after reducing its workforce by about 11 percent -- almost double the reductions at Sony Corp. (6758) and Sharp (6753) Corp. combined -- Panasonic will post a 765 billion-yen ($9.6 billion) loss in the year ending March 31, the company said yesterday. Panasonic plunged the most in at least 38 years in Tokyo trading today, making it the biggest percentage loser in the MSCI Asia- Pacific Index (MXAP), and Moody’s Investors Service said it will review the company’s debt for a potential downgrade. “They have to cut, cut, cut,” said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, which manages about $300 million in assets. “They’re not doing it fast enough. You have to be lean and mean.”
  • Sharp Says It Faces 'Material Doubt' on Survival. Sharp Corp. (6753), the world’s worst- performing major stock, said there was “material doubt” about its ability to survive after forecasting a record $5.6 billion full-year loss on falling demand for its display panels. The net loss will probably be 450 billion yen in the year ending March 31, the Osaka-based TV maker said in a statement yesterday, scrapping its earlier projection for a 250 billion- yen loss. The new forecast compares with the 296 billion-yen loss average of 17 analyst estimates compiled by Bloomberg. Sharp has failed to win a planned 67 billion-yen investment from Taiwan’s Foxconn Technology Group and has had difficulty selling commercial paper as it burns through cash. The company said its loss for the six months ended Sept. 30 was “huge,” stemming from falling prices for liquid-crystal-display panels, delays at an LCD factory and declining sales in Japan and China. The company’s warning echoes that made by chipmaker Elpida Memory Inc. before it filed for bankruptcy in February.
  • Bill Gross Says Quantitative Easing Not Spurring Investments. Bill Gross, who runs the world’s biggest mutual fund at Pacific Investment Management Co., said there is no evidence that investment is being spurred by the Federal Reserve’s quantitative easing program. “All of the money being created and freed up is elevating asset prices, but those prices are not causing corporations to invest in future production,” Gross wrote in a monthly investment outlook posted on the Newport Beach, California-based company’s website today. Lower interest rates are being used “to consume as opposed to invest,” he said. Investors should recognize that asset and currency prices ultimately rest on the ability of the economy to grow, Gross wrote. If real growth is stunted in the U.S. and globally, then investors should also acknowledge “bite-sized” future returns and the growing risks of “misguided” monetary and fiscal policy that may disrupt financial markets at some point. The so- called fiscal cliff may be the first of a series of disruptions, though Gross expects some type of compromise on the possible tax increases and budget cuts. 
  • GM Joins Chrysler Missing Sales Estimates. GM, the largest U.S. automaker, predicted a 14.4 million industry light-vehicle sales pace, which is adjusted for seasonal trends. Chrysler, which issued a similar outlook for the month, also joined GM, Toyota Motor Corp. (7203) and Ford Motor Co. (F) in reporting deliveries that trailed estimates for their respective results.
Wall Street Journal: 
  • Live Updates: Hurricane Sandy. 
  • Romney Touts Support From CEOs on Jobs Council. Mitt Romney’s White House bid comes down to business experience – i.e. he has it, the president doesn’t. To that end, the Romney campaign trotted out a roster of well-known business leaders Thursday who are backing the Republican presidential nominee. Supporters include Charles Schwab, Cisco Chief Executive John Chambers and Bernie Marcus, the co-founder of Home Depot. The newest name on the list belongs to Intel CEO Paul Otellini, a member of President Barack Obama’s Council on Jobs and Competitiveness.
  • Manufacturing Expands, Construction Spending Rises. The ISM's manufacturing purchasing managers' index was little changed at 51.7 in October from 51.5 in September. A reading above 50 indicates expansion. Economists surveyed by Dow Jones Newswires expected the October PMI to come in at 51.0.
  • Critics Say Ballots Cast By Email Are Vulnerable to Tampering. 
  • Activists: Syrian Rebels Kill 28 Soldiers in North. Syrian rebels killed 28 soldiers in attacks on military checkpoints in northern Idlib province Thursday, just hours after a wave of bombings hit Damascus and its outskirts, activists said.
  • Chinese Internet Firms Agree to Code of Conduct. China's Internet search companies and a government-sponsored trade group agreed to a code of conduct on Thursday to moderate tensions in the increasingly competitive search environment in the fast-growing market. The Internet Society of China said industry giant Baidu Inc., as well as upstart Qihoo 360 Technology Co. and a number of smaller search engines, agreed to "maintain fair competition [and a] fair and orderly market environment."
MarketWatch.com: 
  • How Europe’s short CDS ban could hit the euro. “They may be right. But equally, traders and investors who want to bet against [Economic and Monetary Union] might just transfer their activity to another market that’s not subject to any restrictions—like the euro,” wrote Steve Barrow, currency and fixed-income strategist at Standard Bank in London.
Fox News: 
  • Challenger: U.S.-Based Firms' Planned Job Cuts Jumped 41% in October from Prior Month. Layoffs planned by U.S.-based companies climbed 41% during October from the prior month, which had seen the second-lowest levels in nearly two years, according to data from consulting firm Challenger Gray & Christmas Inc. "The final three months of the year tend to see heavier downsizing activity as companies make year-end adjustments to meet earnings goals and to prepare for the new year," said Challenger Chief Executive John A. Challenger. "Certainly, the deluge of weak third-quarter earnings reports that resulted from declining sales here and abroad does not bode well for workers as 2013 approaches." U.S.-based employers in October said they planned to cut 47,724 jobs, an increase of 12% from a year earlier.
CNBC:
RasmussenReports:
Reuters: 
  • Investors skirt new shorting curbs to bet on EU woes. New rules to stop speculators making Europe's debt crisis worse by betting on government bond defaults are prompting investors to find alternative ways to insure against or profit from bad news in the region. In anticipation of the rules - aimed at increasing transparency and stamping out market manipulation - investors have pulled out of the $100 billion market in droves, with volumes already down about 40 percent from mid-2011 peaks. Instead, they are tentatively switching to buying corporate CDS, selling sovereign bonds or using the options market. "If you've restricted them from using sovereign CDS ... they will clearly look for some alternative that is out there," said Saul Doctor, credit strategist at JPMorgan. "The most obvious alternative is just to go and short the bonds outright or going short through the futures market."
Telegraph: 
  • The euro is heading for a permanent state of depression. If the euro survives in its current form, then Mario Draghi, president of the European Central Bank, will surely have earned his place in the history books as one of the chief architects of its salvation. 
  • Don't cry for me, François. French leader François Hollande is uncomfortably close to a collapse in credibility. His poll rating has sunk to 36pc. The speed of decline has been shocking. The latest broadside comes from ex-German chancellor Gerhard Schröder, supposedly his ally on the Left. "The election promises of the French president are going to shatter on the walls of economic reality," he said in Paris. The backsliding in the retirement age is indefensible and "cannot be financed". Two or three more blunders of this kind and "reality will catch up with out French friends".
RTHK:
  • China's Shenzhen government passed legislation to outlaw additional births outside the mainland beyond the one-child policy. Parents will be fined three times the "social upbringing fee" for each illegal child. The law goes into effect Jan. 1, citing the city's legislature.

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