Bloomberg:
- European Court to Rule Over ECB’s Secret File. A court will decide tomorrow whether the European Central Bank should release files on how Greece used derivatives to hide its debt in the first legal challenge to the authority’s bid to shield its workings from scrutiny. Bloomberg News sued the ECB in December 2010 to obtain the documents under European Union freedom-of-information rules. The papers may illuminate the role the central bank played as Greece covered up its deficit for almost a decade before seeking a 240 billion-euro ($311 billion) bailout and the biggest debt restructuring in history.
- U.S. Said to Weigh Tightening Rules for Foreign Lenders. U.S. units of foreign lenders including Deutsche Bank AG (DBK) may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said. The Federal Reserve, drafting standards for the nation’s largest banks, may force non-U.S. firms to house all of their businesses within a U.S. holding company, said the people, who requested anonymity because the rules haven’t been completed. That means local units would have to meet minimum capital standards regardless of their parents’ resources.
- European Crisis Spurs Drugmakers to Pullback Treatments. The European financial crisis is creating a tug-of-war between the pharmaceutical industry and governments as austerity measures from the U.K. to Germany clamp down on reimbursements, especially for new drugs.
- Hollande Presents Mittal Nationalization Among Options for Site. President Francois Hollande presented options to ArcelorMittal Chief Executive Officer Lakshmi Mittal to save jobs at a French plant of the world’s largest steelmaker, not taking its nationalization off the table. Hollande, who met with Mittal for an hour at the Elysee presidential palace in Paris yesterday, said in an e-mailed statement that he asked Mittal to pursue discussions with the government until the Dec. 1 deadline given to the company to find a buyer for the site at Florange in north-eastern France.
- Credit Rating Firms in EU to Face Sovereign-Debt Limits. Credit rating companies face curbs on when they can assess government debt and restrictions on their ownership under draft plans agreed on by European Union officials and legislators. Lawmakers from the European Parliament and Cyprus, which holds the rotating presidency of the EU, also agreed yesterday to let investors sue ratings companies if they lose money because of malpractice or gross negligence.
- Argentina Rating Downgraded by Fitch on ‘Probable’ Default. Argentina’s credit rating was cut by Fitch Ratings, which said a default is probable after a U.S. judge ruled the country can’t make payments on its restructured bonds unless it pays holders of defaulted debt by Dec. 15. The rating on Argentina’s international law bonds was lowered to CC, eight levels below investment grade, from B, Fitch said today in an e-mailed statement. It cut the rating on bonds sold under Argentine law to B- from B.
- China’s Stocks Decline to 2009 Low as Trading Activity Decreases. China’s stocks fell, dragging the benchmark index to its lowest level since 2009, as trading activity slumped. Materials and industrial companies led losses. Haitong Securities Co. dropped among brokerages as regulatory data showed the number of yuan-denominated A-share trading accounts that made transactions last week fell to 5.6 million, the least for a five-day week since at least January 2008. Zhongjin Gold Co. lost 3.3 percent as the metal’s price retreated. CSR Corp. slid 2.4 percent as rail companies dropped. The Shanghai Composite Index (SHCOMP) slid 0.7 percent to 1,977.26 at 10:01 a.m. local time, heading for its lowest close since Jan. 16, 2009.
- China Isn’t Currency Manipulator by U.S. Law, Treasury Says. China isn’t a currency manipulator under U.S. law, though the yuan “remains significantly undervalued” and needs to rise further, the Treasury Department said. China “has substantially reduced the level of official intervention in exchange markets since the third quarter of 2011,” the Treasury said in a statement accompanying its semi- annual currency report to Congress yesterday. The yuan has gained 9.3 percent in nominal terms and 12.6 percent in real terms against the dollar since June 2010, the Treasury said.
- China’s U.S. Debt Purchases Seen Limited, Former Adviser Says. China may limit its purchases of U.S. Treasuries because the central bank has reduced its buying of dollars at home, according to a Chinese academic who has served as a government adviser. The People’s Bank of China has “noticeably” reduced its purchases of dollars from local banks to allow commercial banks to trade among themselves, Ding Zhijie, dean of finance at Beijing’s University of International Business and Economics, said in a Nov. 23 interview. That may cap the nation’s foreign- exchange reserves and consequently its demand for U.S. government debt, he said.
- Green Mountain(GMCR) Profit Gains 22% as K-Cup Sales Rise. Green Mountain Coffee Roasters Inc., the maker of Keurig brewers and single-serve pods, said fiscal fourth-quarter profit rose 22 percent as K-Cup sales gained.
- Obama Had Unannounced Fiscal Cliff Talk With Finance CEOs. President Barack Obama’s efforts to engage business leaders in negotiations to avoid the year-end fiscal cliff have included unannounced private talks with top financial executives at the White House.
- Deutsche Bank(DB) Sued Over Home Mortgage-Backed Securities. Deutsche Bank AG (DBK), Germany’s largest lender, was sued by a trustee claiming that some securities sold by a unit of the bank were backed by home-mortgage loans taken out by fraudulent borrowers. DB Structured Products Inc.’s pool of more than 1,500 mortgages included more than 320 that were defective, HSBC Bank USA (HSBA), acting as trustee, said in a lawsuit filed today in federal court in Manhattan.
- Fiscal Cliff: Live Stream.
- Global Steel Industry Faces Capacity Glut. Global steel has a big problem: It's too big and it's getting bigger. This year, steel mills around the world have a production capacity of 1.8 billion tons but will take orders for only 1.5 billion tons. And instead of consolidating and becoming more efficient, the industry is building still more capacity. By 2016, an estimated 100 new mills, with total estimated supply capacity of 350 million tons, are expected to come on stream, according to industry executives and consultants. Companies in Vietnam, Argentina, Ecuador, Peru and Bolivia, all backed in some way by their governments, are building or planning new mills. Officials in these countries say they want to invest in industrial development, supply homegrown steel to their manufacturers and cut imports. But what may appear to be welcome developments for local economies has reverberations through a global industry. "You see people wanting to build new facilities all the time, all over the world," says Dan DiMicco, CEO of Nucor Corp.(NUE), the second-biggest U.S. steelmaker, and a proponent of more consolidation.
- Windows 8 Touchscreen Laptops See Slow Start. One month into the launch of Windows 8, sales are sluggish, say some Asian PC makers – even the ones making the most popular products. “Demand for Windows 8 is not that good right now,” said Asustek Computer Inc. Chief Financial Officer David Chang.
- Morgan Stanley(MS) CEO Asks Employees to Press Congress on Fiscal Cliff. Morgan Stanley Chief Executive James Gorman enlisted his employees to pressure Congress to reach a bipartisan deficit-reduction deal, one of the most high-profile in a series of moves by major corporations seeking to influence the course of negotiations. Mr. Gorman, in an email Tuesday, asked Morgan Stanley ’s more than 16,000 U.S. financial advisers and branch managers to contact their members of Congress and urge them to reach “a bipartisan compromise” to avoid a year-end budget crisis known as the “fiscal cliff.”
- Executives' Good Luck in Trading Own Stock.
- Hope and Exchange. The feds blame the states for refusing to become ObamaCare subsidiaries. ObamaCare is due to land in a mere 10 months—about 300 days—and the Administration is not even close to ready, so naturally the political and media classes are attacking the Governors and state legislators who decline to help out. Mostly Republicans, they’re facing a torrent of abuse in Washington and pressure from health lobbies at home. But the real story is that Democrats are reaping the GOP buy-in they earned. Liberals wanted government to re-engineer the entire health-care system and rammed the Affordable Care Act through on a party-line vote, not stopping to wonder whether it would work. Now that implementation is proving to be harder than advertised, they’re blaming the states for not making their jobs easier.
- Republicans say raising tax rates alone will hardly put dent in budget, deficit. Republican congressional leaders, in their battle to extend the current low tax rates for all Americans, drive home Tuesday their argument that ending those rates for families earning more than $250,000 a year would produce only enough money to run the government for less than nine days. The lawmakers pointed out that President Obama's tax rate plan would generate just $82.3 billion annually, as estimated by the non-partisan Congressional Budget Office.
- Analog Devices'(ADI) profit falls; shares down. Analog Devices Inc.'s fiscal fourth-quarter earnings fell 2.4% as the chip maker continued to be hurt by weak demand, resulting in sales declines at most of its business segments. Shares were down 3.2% at $38.81 in recent after-hours trading as the company projected fiscal first-quarter results below expectations.
- China seen losing ‘world factory’ status within a decade. Early signs that Southeast Asian nations are trumping China as a home to low-cost manufacturing are likely to gather momentum in the next few years, costing the Middle Kingdom its status as the world’s factory within the next five to 10 years, according to Daiwa Capital Markets.
- Asean Chief Warns on South China Sea Disputes. Southeast Asia’s top diplomat has warned that the South China Sea disputes risk becoming “Asia’s Palestine”, deteriorating into a violent conflict that draws sharp dividing lines between nations and destabilises the whole region.
- China's Passport Propaganda Baffles Experts. China’s neighbors are seething with anger over new Beijing-issued passports that they see as the latest, underhand, Chinese jab in an ongoing regional row about maritime territory.
- Head Of The Fed's Trading Desk Speaks On Role Of Fed's "Interactions With Financial Markets".
- The Definition Of Insanity.
- Six Charts To Summarize The NY Fed's Un-Deleveraging Report.
- The Scariest Chart Of The Quarter: Student Debt Bubble Officially Pops As 90+ Day Delinquency Rate Goes Parabolic. (graph)
- China's Obsession With Shale Is Going Into Overdrive.
- This Photo Shows Just How Upset Egypt Is With Its President.
LA Times:
CNN: - Striking union sets picket line at Port of Los Angeles terminal. A strike has been called in a long simmering labor dispute that pits a small union of clerical workers against some of the world's largest ocean shipping lines and cargo terminal operators. About 67 workers from the International Longshore and Warehouse Union Local 63's Office Clerical Unit set up a picket line outside the APM Terminal at the Port of Los Angeles. The terminal and surrounding facility is also known as Pier 400. At 484 acres, it is the biggest and busiest cargo terminal in the Americas for containerized freight.
- Eurozone states face losses on Greek debt. Eurozone governments could be forced to accept losses on their rescue loans to Greece after Monday's late-night deal to overhaul its bailout failed to agree how to reach new debt targets for the struggling country, according to documents seen by the Financial Times. After three gatherings in two weeks, eurozone finance ministers agreed to release a long-delayed €34.4bn aid payment to Athens. But the series of measures agreed, which could relieve Greece of billions of euros in debt by the end of the decade, do not go far enough. The measures to be implemented immediately as part of the deal will only lower Greece's debt levels to 126.6 per cent of economic output by 2020, not the 124 per cent announced by eurozone leaders, according to the documents and senior officials. Instead, eurozone governments postponed further debt relief -- amounting to 2.7 percentage points of gross domestic product -- to a later date, when Greece begins taking in more money than it spends, not counting interest payments.
- Euro moves lower on US fiscal fears, Greece debt doubts. The euro moved away from the previous session's one-month high against the dollar in Asian trading Wednesday as investors' relief about a new debt target for Greece turned to unease over the looming U.S. fiscal crisis.
- Group to sue EPA to force U.S. carbon rules for transport.
- Francois Hollande shows true colours with threat to nationalise ArcelorMittal. Thirty years have passed since French president François Mitterrand launched Europe’s last great wave of nationalisation, seizing the banks, insurance groups, arms makers and steel industry in the culminating debacle of the Collectivist era.
- Bundesbank President Jens Weidmann says new agreement for Greek aid contains no direct transfers from the Bundesbank to the country, citing an interview.
- Chinese stocks' "one-sided" move higher is becoming history as the market matures, according to a front page commentary published on the front page, written by Li Bo, a reporter at the newspaper. Investors should actively adjust to the market, he said. The continued fall of Chinese stocks is due to "tensed" short-term capital, implications from external markets and shares unlocking, citing analysts. The short-term trend of the Shanghai Composite is "not optimistic," citing market analysts.
- China's monetary policy shouldn't be "too loose" and could be tightened if necessary, citing Bank of Communications economist Lian Ping. Monetary policy should limit liquidity, avoid "overly fast" investment growth and avoid high asset prices, citing Lian. Tighter monetary policy will likely cause yuan appreciation pressure, Lian said.
- None of note
- Asian equity indices are -1.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 113.0 -1.75 basis points.
- Asia Pacific Sovereign CDS Index 83.25 -1.5 basis points.
- FTSE-100 futures -.16%.
- S&P 500 futures -.11%.
- NASDAQ 100 futures -.01%.
Earnings of Note
Company/Estimate
- (TFM)/.26
- (ANN)/.74
- (AEO)/.39
- (RUE)/.39
- (PLL)/.66
- (GES)/.44
- (ARO)/.29
- (JOSB)/.55
- (PFCB)/.37
10:00 am EST
- New Home Sales for October are estimated to rise to 390K versus 389K in September.
- Bloomberg consensus estimates call for a weekly crude oil inventory build of +350,000 barrels versus a -1,466,000 barrel decline the prior week. Gasoline inventories are estimated to rise by +900,000 barrels versus a -1,547,000 barrel decline the prior week. Distillate supplies are estimated to rise by 500,000 barrels versus a -2,675,000 barrel decline the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a +1.5% gain the prior week.
- Fed's Beige Book
- None of note
- The Fed's Taruillo speaking, 5Y T-Note auction, weekly MBA mortgage applications report, Jefferies Energy Conference, CSFB Aerospace/Defense Conference and the JPMorgan SMid Cap Conference could also impact trading today.
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