Tuesday, December 18, 2012

Today's Headlines

Posted by Gary .....at 3:13 PM
Bloomberg: 
  • French Health Care for Everyone Means Unwanted Generic Medicine. Anita Manfredi got 18 mud baths, nine massages and 12 spray showers at a spring water spa last month. The French state footed two-thirds of the $1,022 bill. Manfredi isn’t the only lucky recipient. Homeopathic remedies, support tights, taxi rides to the hospital for country dwellers and vaginal-muscle retraining for new moms are among benefits reimbursed by the health-care branch of France’s social security, known as assurance maladie.
  • Investors Are Most Bullish Ever on China Economic Growth. More investors than ever say they are bullish about China’s economic outlook, and more favor European rather than U.S. stocks for the first time in two years, a Bank of America Corp. monthly survey showed. A net 67 percent of money managers, who together oversee $503 billion, predicted that China’s economy will grow at a faster rate next year, the highest reading since the survey data started in 2003. Some 7 percent hold more European stocks than appear in benchmarks, the poll showed.
  • Middle East Oil-Tanker Glut Seen Unchanged in Shipbroker Survey. A surplus of the largest crude oil- tankers available for loading in the Middle East will stay unchanged over the next two weeks, according to a Bloomberg News survey of shipbrokers. There are 20 percent more very large crude carriers for hire over the next 30 days than there are cargoes, according to the median estimate of seven shipbrokers and owners in a Bloomberg News survey today. That’s the same as last week, the data showed. The average surplus of the tankers this year is on course for the lowest since at least 2009, survey data showed. VLCCs are earning $16,860 on the benchmark Middle East-to- Asia voyage, according to the London-based Baltic Exchange. That’s a 2 percent decline since the start of the month and down 40 percent from the November high.
  • Highest-Paid California Trooper Is Chief Banking $484,000. California Highway Patrol division chief Jeff Talbott retired last year as the best-paid officer in the 12 most-populous U.S. states, collecting $483,581 in salary, pension and other compensation. Talbott, 53, received $280,259 for accrued leave and vacation time and took a new job running the public-safety department at a private university in Southern California. He also began collecting an annual pension of $174,888 from the state.
  • Gee Takes Jets as $1.9 Million Payday Roils Ohio Students. The Ohio State University President E. Gordon Gee lives in a 9,630-square-foot Tudor Revival mansion that was renovated for him, featuring a great hall, pool, elevator and tennis court. Gee made $1.9 million last year as the highest-paid public university president in the U.S. He also logged $1.7 million in expenses in fiscal 2011, including airfare for trips in private jets, country club dues and fundraising parties at his residence. “He’s overpaid,” said CJ Jones, 19, a junior public affairs major at Ohio State, whose tuition has risen 9.7 percent during her 2 1/2 years at the university, based in Columbus, the state capital. “You should want that job for a sense of Buckeye pride. Why do you have to suck so many resources from our budget? I know kids graduating from OSU with $90,000 in debt, and it’s a public university.”
  • Wells Fargo(WFC) Buys 35% Stake in Hedge-Fund Firm Rock Creek Group. Wells Fargo & Co. (WFC), the biggest U.S. bank by market value, bought a stake in Rock Creek Group LP to provide more hedge-fund offerings to clients amid a push to double the asset-management unit within seven years.
Wall Street Journal:
CNBC:
  • No 'Cliff' Deal by Week's End: GOP Sen. Corker. (video) Senator Bob Corker told CNBC on Tuesday that he does not think a deal to avoid the "fiscal cliff" will be reached by the end of this week. The Tennessee Republican said in an interview on CNBC's "Squawk Box" that he's really surprised by the media's optimism over President Barack Obama's new offer to House Speaker John Boehner, which features concessions on revenue. "We are not close to a deal," Corker said. "I've been trying for three weeks — standing on my head, doing cartwheels — to try to pivot to entitlement reform. This is not a deal here." (Read More: Boehner Proposing a "Plan B" Option)
  • US Policy Gridlock Holding Back Economy? Maybe Not. Washington thinks a resolution of the tense debate over the national debt will unlock a burst of economic growth by lifting uncertainty that has stymied investment. It is a widely held view on Wall Street as well, derived from the glaring signs of weak business confidence over the last year as America struggles to get its fiscal house in order. However, evidence for this belief is far from clear and is an issue of considerable debate, and even some businesses wonder how big a factor uncertainty is.
  • Lindsey: Obama Moves Goal Posts ‘Out of the Ballpark’. President Barack Obama's latest "fiscal cliff" offer does not move the goal posts closer in negotiations with House Speaker John Boehner, it moves them "out of the ballpark," said former Bush administration economic adviser Lawrence Lindsey. "The president campaigned on tax increases for [households] over $250,000 for a total of $970 billion [in new revenue]," Lindsey told CNBC's "Squawk Box" on Tuesday. "So now we're at $1.2 trillion … From what he campaigned on, he's is still moving the goal posts away from a compromise."
  • Trading 'Kill Switch' Coming Soon: NYSE Exec. U.S. regulators and exchanges are getting closer to a framework for a "kill switch" that could be used to shut down trading before software glitches get out of control and wreak havoc on markets, a top exchange official said Tuesday.
  • Why China May Be Facing US-Style Credit Crunch. China, already struggling with a slowing economy, may now be facing the type of credit crunch that helped derail the U.S. economy four years ago. Among the all-too-familiar ingredients: supposedly risk-free—yet high-yield—investments, off-balance-sheet transactions, little if any disclosure and investors who don't ask a lot of questions. All this has one Wall Street analyst warning that China is "a step closer to a potential credit event in the shadow banking sector."
SeekingAlpha:
Reuters: 
  • Fed's Fisher says quantitative easing not very effective. Dallas Federal Reserve President Richard Fisher said Tuesday he had opposed the Fed's recent bond-buying programs because he did not think they are very effective in bringing down the high jobless rate, a top Fed official said on Tuesday. "I don't think it's as effective...as my colleagues do," he told the Gainesville Area Chamber of Commerce.
  • ECB'S Praet says France must cut spending, start reforms. France must cut spending in order to meet its budget deficit target and undertake structural reforms to boost competitiveness, European Central Bank Executive Board Member Peter Praet said on Tuesday. "France has too often resisted change," Praet said in an interview with French daily Le Figaro. "There is a consensus now in France on the need to improve public finances and competitiveness. To do that, structural reform is needed." He also said euro zone countries should not back away from meeting a 3 percent deficit target despite an economic downturn in the bloc.
  • World 2013 growth seen slow, political risks remain-bank group. Political risks ranging from turmoil in Italy to potential impediments to euro area reform could hamper the world economy next year, a global banking group warned on Tuesday as it projected another year of sluggish growth. In a somewhat gloomy forecast for 2013, the Institute of International Finance said fiscal policy in the United States and tensions between Japan and China could also weigh, although emerging economies should continue to improve. The bank lobby group said it expected the global economy to grow just 2.7 percent next year, s carcely a pick-up from the modest 2.5 percent it sees for 2012. A year ago, it had predicted world growth of 3.7 percent for 2013.
  • Medicaid, other costs threaten NY state and local budgets-report. Costs for Medicaid, education and employee retirement benefits are threatening to overwhelm state and local government budgets in New York, a report by a national task force issued on Tuesday found. 
  • French banks will know new liquidity ratios in Jan -Noyer. Bank of France Governor Christian Noyer said on Tuesday that French banks will find out in January how liquidity requirements will change under the new banking rules set out in Basel III. "The liquidity ratios were set a bit quickly, they hadn't been calibrated very well and we're finalising the reforms to the ratios," Noyer told BFM radio.  
  • US, Europe may take five years to recover from jobs crisis, UN says. Global economic growth is expected to remain sluggish in the coming year and will be insufficient to pull countries out the unemployment crisis many are facing, the United Nations said in a report on Tuesday. It said under policies now in place it may take at least five years to recover from the job losses in Europe and the United States in the 2008-2009 recession. "A worsening of the euro area crisis, the 'fiscal cliff' in the United States and a hard landing in China could cause a new global recession," said Rob Vos, head of the U.N. Development Policy and Analysis Division. "Each of these risks could cause global output losses of between 1 and 3 percent."
Financial Times:
  • Corporate credit and the lessons of CPDOs. With such substantial leverage, investors should question the sustainability of existing risk spreads if monetary policy fails to sustain current economic growth rates. Commentators, including this one, have previously noted the possible negative consequences of quantitative easing policies and zero bound interest rates.
AFR: 
  • China puts foot down over Huawei. The Chinese government has warned Australia risks jeopardising its role in China’s economic transformation unless it stops discriminating against Chinese companies, including telecommunications equipment manufacturer Huawei. China’s ambassador to Australia, Chen Yuming, said Chinese investment would continue to focus on Australia’s substantial mineral resources. But as the Chinese economy became less reliant on producing exports, there would be a greater emphasis on investments in agriculture and consumer goods. Mr Chen said China did not want to see a repeat of what he said was the “discriminatory’’ decision to ban Huawei from building part of the national broad­band network on security grounds.

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