Today's Headlines

Bloomberg: 

• Obama May Levy Carbon Tax to Cut U.S. Deficit, HSBC Says. Barack Obama may consider introducing a tax on carbon emissions to help cut the U.S. budget deficit after winning a second term as president, according to HSBC Holdings Plc. A tax starting at $20 a metric ton of carbon dioxide equivalent and rising at about 6 percent a year could raise $154 billion by 2021, Nick Robins, an analyst at the bank in London, said today in an e-mailed research note, citing Congressional Research Service estimates.
• Smith & Wesson(SWHC), Gunmakers Rally After Obama Re-Elected. Smith & Wesson Holding Corp. (SWHC) climbed the most in two months to lead a rally among firearms manufacturers as traders speculated that President Barack Obama’s re-election will spur gun sales. Smith & Wesson, a maker of pistols and rifles, jumped 7.8 percent to $10.20 at 11:51 a.m. in New York following an 11 percent gain that was the biggest in intraday trading since Sept. 7. Sturm Ruger & Co. (RGR) rose 5.5 percent to $47.10.
• Republicans to Hold Most Governor Offices Since 2000. Republicans won the North Carolina governor’s office from Democrats to take control of 30 U.S. statehouses, the most in more than a decade. The party also held off re-election challenges in Utah and North Dakota, and retained the corner office in Indiana, where Republican Mitch Daniels stepped down because of term limits. Democrats previously controlled the governor’s offices in eight of the 11 states voting for their chief executives yesterday. The Republican victories build on gains made two years ago, when the party’s candidates rode a wave of economic discontent to capture 11 governor’s offices from Democrats and reclaim a majority it lost in 2006. Its winners this year pledged to cut taxes and spur economic growth. There were 29 Republicans in governors’ seats heading into yesterday’s election, compared with 20 held by Democrats and one filled by an independent. 
• EU Cuts 2013 Growth Forecast as Crisis Weighs on Germany. The European Commission said the euro-zone economy will virtually grind to a halt next year as the debt crisis ravages southern Europe and gnaws at the economic performance of export-driven Germany. The 17-nation euro economy will expand 0.1 percent in 2013, down from a May forecast of 1 percent, the commission said today. It cut the forecast for Germany, Europe’s largest economy, to 0.8 percent from 1.7 percent.
• German Economy Will Fail to Pick Up in 2013, Advisers Say. German economic growth will fail to pick up next year as the euro region’s sovereign debt crisis saps demand for German exports, the government’s council of economic advisers said in its annual report. The German economy, Europe’s biggest, will expand 0.8 percent in 2013, the same pace as this year, the five-member council said in the 476-page report, which was published in Berlin today. Foreign trade won’t contribute to growth as imports accelerate faster than exports, it said. “The second half of 2012 is characterized by widespread recessionary trends in the euro zone that impact on the German economy through foreign trade and confidence” and damp the economy’s expansion through declining investment, the report said.
• Samaras Faces Down Parliament Dissenter as Greeks Strike. Greek Prime Minister Antonis Samaras faces a test of his fragile coalition government today as he seeks parliamentary approval of austerity measures to unlock bailout funds amid the third general strike in six weeks. The bill on pension, wage and benefit cuts was brought to the 300-seat Parliament today with a roll-call vote expected to be held late in the evening. Approval of the legislation is the first of the votes required by Nov. 12 to get a 31 billion-euro ($40 billion) aid tranche.
• Merkel Euro Budget Veto Policy Is Wrong, Council of Advisers Say. Efforts by German Chancellor Angela Merkel’s government to expand powers of the European Commission to allow it to veto euro area states’ budgets are misplaced and unrealistic, her panel of economic advisers said. Sovereign rights over budgets must remain under control of national governments while obligations to follow the fiscal arrangements devised to stabilize the euro are tightened, said the group, known as the “Five Wise Men,” in their annual report presented to Merkel in Berlin today. The veto plan, aired last month by German Finance Minister Wolfgang Schaeuble, sparked opposition in France, Italy and Spain.
• Europe Stocks Drop on Economy Concern, U.S. Fiscal Cliff. European stocks fell the most in two weeks as the European Commission cut its growth forecast for the region and concern over an impending fiscal crisis in the U.S. increased after the re-election of President Barack Obama. Randgold Resources Ltd. (RRS) slumped the most in six months after predicting that its annual output will be at the bottom of its target. Holcim Ltd. (HOLN), the world’s largest cement maker, slid 2.4 percent as earnings missed analysts’ estimates. The Stoxx Europe 600 Index (SXXP) declined 1.4 percent to 271.04 at the close of trading, erasing an earlier gain of as much as 0.7 percent.

Wall Street Journal:

• Election 2012.
• Post-Election: Live Blogging the Market Reaction. 
• Financials Sink on Regulatory Worries, 'Cliff'. 
• Hope Over Experience. A divided country gives Obama a second chance. Some of our conservative friends will argue that Mr. Obama's victory thus represents a decline in national virtue and a tipping point in favor of the "takers" over the makers. They will say the middle class chose Mr. Obama's government blandishments over Mr. Romney's opportunity society. We don't think such a narrow victory of an incumbent President who continues to be personally admired justifies such a conclusion. Perhaps this fear will be realized over time, but such a fate continues to be in our hands. There are few permanent victories or defeats in American politics, and Tuesday wasn't one of them. The battle for liberty begins anew this morning.

Barron's:

• Fitch Warns of U.S. Rating Downgrade if Fiscal Cliff Isn’t Averted. The election results are barely 12 hours old but Fitch Ratings has already sent a warning shot across the bow of Obama’s second term as president, saying on Wednesday that the U.S. triple-A credit rating is at risk if Washington can’t avoid the fiscal cliff and reduce the deficit.

MarketWatch.com:

• Gephardt warns of ‘bad days’ for markets. “If it looks like that is happening you could have a couple really bad days on Wall Street,” Dick Gephardt said at an event hosted by National Journal magazine. “You could have the markets drop by 1,000 or 2,000 points.”

CNBC: 

• Copper falls to 2-month low as focus shifts to economy. Copper dropped to a two-month low on Wednesday as investors switched focus from the outcome of the U.S. election to a weak European economy, a Greek austerity vote and the U.S. "fiscal cliff" of tax hikes and spending cuts.
• Why Stocks May Keep Falling: 'The Sugar High Will End'. Investors cast their own vote on the presidential race Wednesday, and the result was a landslide rout that could have lasting repercussions beyond Tuesday's results.
• Fixing 'Fiscal Cliff' Will Mean 'High, Higher' Taxes: Gross. A newly re-elected President Barack Obama will push for higher taxes—including a dividend-tax hike that will cause a substantial drop in stocks, Pimco's Bill Gross told CNBC Wednesday.

Zero Hedge:

• Was That It For This Round Of The "Housing Recovery"?
• Athens Riotcams Are Back - Live Webcasts. 
• And Now Come The Margin Calls: NYSE Margin Debt At 16 Month High. (graph)

Business Insider:

• Nor'easter Could Bury NYC In 6 Inches Of Snow. 
• How Obama Could Turn The Supreme Court Into A Bastion Of Liberalism. 
• Crazy Video Of Greek Protesters Throwing Molotov Cocktails At Riot Police. (video)
• Syrian Rebels Are Now Firing Directly At Assad's Palace. 

HedgeFundBlogger.com:

• Hedge Funds Fell in October as Earnings Disappointed. Hedge funds took it on the chin in October, according to recent data compiled by Bloomberg. Hedge funds reportedly lost 1.9% on average last month as weak earnings reports appeared to betray an even weaker economy.

Bespoke Investment Group:

• Top 5 Worst One Day Reactions to Presidential Elections.

Reuters:

• Exclusive: Boeing(BA) to announce major defense division restructuring. Boeing Co announced a major restructuring of its defense division on Wednesday that will cut 30 percent of management jobs from 2010 levels, close facilities in California and consolidate several business units to cut costs. The company told employees about the changes ahead of the planned announcement set for later Wednesday, a copy of which was reviewed by Reuters. Boeing, the Pentagon's second-largest supplier, said the changes were the latest step in an affordability drive that has already reduced the company's costs by $2.2 billion since 2010, according to the document.
• Colorado, Washington first states to legalize recreational pot. Colorado and Washington became the first U.S. states to legalize the possession and sale of marijuana for recreational use on Tuesday in defiance of federal law, setting the stage for a possible showdown with the Obama administration. Supporters of a Colorado constitutional amendment legalizing marijuana were the first to declare victory, and opponents conceded defeat, after returns showed the measure garnering nearly 53 percent of the vote versus 47 percent against. But another ballot measure to remove criminal penalties for personal possession and cultivation of recreational cannabis was defeated in Oregon, where significantly less money and campaign organization was devoted to the cause. "Colorado will no longer have laws that steer people toward using alcohol, and adults will be free to use marijuana instead if that is what they prefer. And we will be better off as a society because of it," said Mason Tvert, co-director of the Colorado pro-legalization campaign.
• Merkel warns Britain against European Union exit. Germany's Angela Merkel on Wednesday warned Britain not to turn its back on Europe ahead of talks in London with Prime Minister David Cameron aimed at overcoming divisions that threaten to block a European Union budget deal later this month. Cameron has said he is ready to veto the EU's seven-year budget and has attacked its "ludicrous" spending plans, in comments likely to fuel a view among many in Europe that London is drifting away from the 27-nation union.

USA Today:

• Exit Poll Data. Behind  the Results. A breakdown of how various demographics voted and which issues mattered most.

Il Sole 24 Ore:

• The European Commission expects Italian gross domestic product to drop -.5% next year. The Italian govt had said on Sept. 20 that the economy would contract -.2% next year.