Bloomberg:
- Obama Catastrophe With Congress Looms as Investors Show No Alarm. Fresh from a budget fight so raw that the Republican speaker of the U.S. House cursed the Democratic leader of the Senate outside the Oval Office, President Barack Obama and Congress are heading for an even bigger confrontation over raising the nation’s debt limit.
- Gold Set for Worst Run Since ’04 as Fed Signals End of Purchases. Gold tumbled, poised for the longest run of weekly losses since 2004, as Federal Reserve policy makers said that they’ll probably end asset purchases this year and investors cut holdings by the most since May. Silver slumped to the lowest since August while palladium and platinum dropped. Spot gold fell as much as 1.1 percent to $1,646.15 an ounce, the lowest since Dec. 21, and was at $1,646.75 at 9:35 a.m. in Singapore. Bullion is 0.5 percent lower this week, set for a sixth weekly drop.
- Hong Kong Puts Hit Five-Year Low Amid Economic Recovery: Options. The cost of bearish bets on Hong Kong stocks has fallen to a five-year low as data show China's economy is gaining momentum and the Hang Seng Index climbs to the highest level since June 2011. Puts with an exercise price 10% below the Heng Seng Index cost 3.57 points more than calls betting on a 10% rally. The price relationship known as skew dropped to 2.06 on Dec. 27, its lowest level since February 2008.
- Moody’s, S&P, Fitch Must Face Fraud Claims in SIV Suit. Moody’s Corp. (MCO), Standard & Poor’s and Fitch Inc. must face fraud claims in an investor lawsuit over their ratings of a structured investment vehicle called Rhinebridge that collapsed in 2007, a judge ruled. Morgan Stanley(MS), which helped set up the investment, also lost a bid to dismiss claims of aiding and abetting fraud in a ruling today by U.S. District Judge Shira Scheindlin in Manhattan. Scheindlin narrowed the suit, dismissing other claims.
- The 100 Top-Performing Large Hedge Funds. The February 2012 issue of Bloomberg Markets magazine contains our annual rankings of the world's richest hedge funds. The following 100 comprise our list of best-performing hedge funds managing $1 billion or more.
- The Great Citigroup(C) Hedge Fund Giveaway. Among Vikram Pandit’s last jobs as Citigroup’s (C) chief executive officer was deciding the fate of its hedge fund unit, which employs some colleagues from his days at Morgan Stanley (MS) and Old Lane Partners. Citi needs to get out of the business to comply with the Volcker rule’s restrictions on banks’ hedge fund investments and proprietary trading.
- Coinstar(CSTR) Names CFO Scott Di Valerio CEO as Davis Steps Down.
- Al Gore Getting $70 Million From Qatar-Funded Al Jazeera. Al Gore, who shared the 2007 Nobel Peace Prize for his fight against global warming, may gross about $70 million from the sale of his Current TV network to Al Jazeera, the cable channel funded in part by oil-rich Qatar. Al Jazeera will pay about $500 million for Current TV, including the stake held by Gore, 64, according to two people with knowledge of the deal. The network is one of dozens of investments made by the former vice president since he lost the 2000 presidential race by a slim margin. “It’s reeking with irony,” said Jeff Sonnenfeld, senior associate dean at the Yale School of Management, who studies corporate governance. “It seems to be at least a paradox in terms of his positions on sustainability and geopolitics.”
- Record India Deficit May Limit Rate Cuts as Rupee Drops: Economy. India’s record current-account deficit threatens to weigh on the rupee and curb the magnitude of interest-rate cuts forecast to begin this month in support of government policies seeking faster growth.
- New Congress Faces Same Partisan Divisions. Battles Over Government's Cost and Size Are Likely to Dominate Coming Months.
- Rivals Object to Wal-Mart(WMT) Ads. An aggressive Wal-Mart Stores Inc. advertising campaign that claims better prices than specific, named competitors has rankled rivals, which have complained to attorneys general in more than half a dozen states. The targeted retailers, including Toys "R" Us Inc., Best Buy Co. and several regional supermarket chains, claim Wal-Mart cites inaccurate prices and compares differing products, such as laptop computers with separate specifications.
- Health-Care Unions Will Join Forces. The nation's largest nurses union said Thursday it would team up with a union representing other health-care workers, seeking to make the combined entity the dominant labor group in the fast-growing health-care sector. The groups' decision to join forces intensifies their rivalry with the powerful Service Employees International Union. The California Nurses Association and the National Union of Healthcare Workers said the affiliation was aimed at preventing hospital chains from scaling back benefits for employees and fighting for workplace standards needed to improve patient care.
- Investors Sour on Pro Stock Pickers. Investors are jumping out of mutual funds managed by professional stock pickers and shifting massive amounts of money into lower-cost funds that echo the broader market. Through November, investors pulled $119.3 billion from so-called actively managed U.S. stock funds in 2012, the biggest yearly outflow since 2008, according to the latest data from research firm Morningstar Inc.
- Noonan: There's No 'I' in 'Kumbaya'. Obama doesn't seem to have it in him to make a deal.
- Strassel: The Debt-Ceiling Fight Will Be Dirty. The GOP thinks it will win, but the party's strategy is far from clear.
- Exclusive: Radical American Cleric may have booked pre-9/11 flights for hijackers, FBI documents show. The FBI suspected within days of the Sept. 11, 2001, terrorist attacks that the American Muslim cleric Anwar al-Awlaki may have purchased tickets for some of the hijackers for air travel in advance of the attacks, according to newly released documents reviewed exclusively by Fox News. The purpose of these flights remains unclear, but the 9/11 Commission report later noted that the hijackers had used flights in the lead-up to the attacks to test security and surveillance.
- "The country is going to hell": Ex-Wells Fargo CEO. (video) Richard Kovacevich, former chairman & CEO of Wells Fargo, sizes up the "fiscal cliff" agreement and what we have to look forward in the debt ceiling debate. "I'm stunned and shocked that basically, nothing has been done," he says.
- Bye-Bye, Big Bonuses: Hello Claw-backs and Caps.
- No - Americans, Paradoxically, Do Trust The Big Banks.
- America's Bubble Dependent Economy.
- Spain Plunders 90% Of Social Security Fund To Buy Its Own Debt.
- Busy January For Europe - Complete Monthly Event Calendar.
- Retail Sales Confirm "You Can't Spend What You Don't Have".
- This Map Shows Where Everyone Is Moving To And From In America. Washington DC led the country in net inward migration for the 7th-consecutive year, according to Atlas Vans' annual U.S. and Canada moving trends map.
- John Boehner May Have Been Re-Elected Speaker, But He's Still More Vulnerable Than Ever.
- Volatile Venezuela Braces Itself For A Dead President.
- FINANCIAL ADVISOR INSIGHTS: Rosenberg Believes We're Witnessing A Massive Short-Covering Rally.
- Here Are The Latest Facebook(FB) Insiders To Sell Stock.
IBD:
Washington Post:
Washington Post:
- White House seems poised to retool deportation laws. The Obama administration’s decision this week to ease visa requirements for hundreds of thousands of illegal immigrants represents its latest move to reshape immigration through executive action, even as the White House gears up for an uncertain political fight over a far-more-sweeping legislative package in the months ahead.
NY Times:
Breitbart.com: - Gore Went to Bat for Al Jazeera, and Himself. Al Gore’s Current TV was never popular with viewers, but it was a hit where it counted: with cable and satellite providers. When he co-founded the channel in 2005, Mr. Gore managed to get the channel piped into tens of millions of households — a huge number for an untested network — through a combination of personal lobbying and arm-twisting of industry giants. He called on those skills again after deciding in December to sell Current TV to Al Jazeera for $500 million. To preserve the deal — and the estimated $100 million he would personally receive — he went to some of those same distributors, who were looking for an excuse to drop the low-rated channel, and reminded them that their contracts with Current TV called it a news channel. Were the distributors going to say that an American version of Al Jazeera didn’t qualify, possibly invoking ugly stereotypes of the Middle Eastern news giant?
- US Faces Credit Rating Downgrade by Three Top Firms This Year. In the fiscal cliff negotiations, Obama held the line against entitlement reform, but the resulting deal could lead to downgrades by all three top debt ratings agencies later this year.
Reuters:
- SEC drops case against ex-Berkshire exec Sokol - lawyer. The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway Inc, Sokol's lawyer told Reuters.
- Automakers in China brace for year of tepid growth as Japanese struggle. Automakers in China are bracing for another year of tepid single-digit growth in 2013, weighed down by sluggish demand for Japanese cars amid a diplomatic row between the two regional neighbours and government measures intended to restrict traffic in bigger cities.
- Investors swarmed US stock ETFs as fiscal deal reached -Lipper.
- Fracking can be done safely in New York state - dept report.
- Detroit's fiscal 2012 deficit grows to $326.6 mln-audit. Detroit's cumulative budget deficit increased to $326.6 million in fiscal 2012 from $196.6 million in fiscal 2011, according to a city audit released on Thursday. The comprehensive annual financial report painted a bleak picture of Detroit's finances that included a drop in revenue, a bigger debt load and falling credit ratings.
- Europe's dream of toppling dollar fades as Asian Tigers dump euro. The share of euros in the world’s rising powers’ reserve holdings has fallen to its lowest level since 2002, dashing hopes that the single currency will soon challenge the US dollar for global primacy.
- Burgeoning financial products inflate China's shadow banking system. The size of the shadow banking system in China is said to be larger than the estimates of international financial institutions and surged rapidly last year to 15 to 17 trillion yuan (US$2.4-$2.7 trillion) as the country introduced many financial and trusts products, significantly increasing credit risks.
- China Audit Ignores Billions of Yuan of Local Government Projects. A central government audit of local government debt doesn't include hundreds of billions yuan worth of construction projects and may become a prominent risk, citing a National Development and Reform Commission researcher.
Morgan Stanley:
- Upgraded (PKI) to Overweight, target $38.
- Downgraded (BXS) to Underperform, target $12.
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 101.5 +1.0 basis point.
- Asia Pacific Sovereign CDS Index 78.75 -1.75 basis points.
- FTSE-100 futures -.12%.
- S&P 500 futures -.09%.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
- (MOS)/.88
- (FINL)/.10
8:30 am EST
- The Change in Non-farm Payrolls for December is estimated at 153K versus 146K in November.
- The Unemployment Rate for December is estimated at 7.7% versus 7.75 in November.
- Average Hourly Earnings for December are estimated to rise +.2% versus a +.2% gain in November.
- Factory Orders for November are estimated to rise +.4% versus a +.8% gain in October.
- ISM Non-Manufacturing for December is estimated to fall to 54.0 versus 54.7 in November.
- Bloomberg consensus estimates call for a weekly crude oil inventory decline of -1,000,000 barrels versus a -586,000 barrel decline the prior week. Gasoline supplies are expected to rise by +2,200,000 barrels versus a +3,782,000 barrel gain the prior week. Distillate supplies are estimated to rise by +1,250,000 barrels versus a +2,423,000 barrel gain the prior week. Finally, Refinery Utilization is estimated to rise by +.5% versus a -1.2% decline the prior week.
- None of note
- The Fed's Bullard speaking, Fed's Plosser speaking, Fed's Yellen speaking and the Eurozone Services PMI report could also impact trading today.
1 comment:
The Marc Jones Reuters report Global shares, oil slip on Fed stimulus nerves. And the Pedro Nicolaci da Costa Reuters report Fed becoming worried about stimulus side effects are most insightful.
The US Dollar, $USD, rose to 80.35 on December 3, 2012, and is strikingly seen in the chart of its 200% ETF, UUP, and places an end to its ongoing decline, that has occurred since 1971, under the Milton Friedman Free To Choose Floating Currency Regime, which has supported Inflationism under Liberalism, whereby stocks, VT, leverage up over credit, AGG, in bouts of risk on momentum rallies, as is seen in the Risk On ETN, ONN, jumping higher.
The seven month long global debt based, currency carry trade rally, that began in June 2012, has ended. First with Commodities, DBC, trading lower September 14, 2012 and now once again trading lower on December 3, 2013. Confirmation of the end of Liberalism’s final carry trade rally comes from the currency demand curve, the ratio of Small Cap Pure Value Shares to Small Cap Pure Growth Shares, RZV:RZG, turning lower, from its December 20, 2012 high.
US Federal Reserve and ECB, unlimited quantitative easing, opened ended policies, have finally turned “money good” US Ten Year Notes, TLT, and German Bunds lower. The Fiscal Cliff Rally, enabled bond vigilantes to call the Benchmark US Ten Year Note Interest Rate, $TNX, higher, from 1.70% to 1.90%, as well as to call a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the chart of the steepner ETF, STPP, steepening and breaking out higher.
The combination of the trade lower in the EUR/USD, the fall lower in Commodities, DBC, from strong resistance, the steepening of the 10 30 US Soveign Debt Yield Curve, $TNS:$TYX, and the strong fall lower in World Treasury Bonds, BWX, as well as International Corporate Bonds, PICB, means an end to Liberalism as an economic paradigm.
The Elizabeth Zimmermann and Dietmar Henning WSWS report Massive cuts at German steelmaker ThyssenKrupp, documents the end of corporate profitability and global trade. And the Ulrich Rippert WSWS report The German chancellor’s Christmas message, relates that the European welfare state cannot be sustained.
We are witnessing the rise of Authoritarianism, as an economic paradigm, which is commencing out of the Greek and European Sovereign and Banking Debt Crisis, where the dynamos of regional security, stability, and sustainability are powering up Regionalism and Totalitarian Collectivism; as the dynamos of corporate profitability and global trade are powering down Crony Capitalism and European Socialism. The Road To Serfdom has been fully paved and finished with the global debt bubble, AGG, finally bursting on December 6, 2012.
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