Today's Headlines

Bloomberg: 

• Most FOMC Participants Saw QE3 Ending in 2013. Federal Reserve policy makers said they will probably end their $85 billion monthly bond purchases sometime in 2013, with members divided between a mid- or end-of- year finish. “A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013” while a few others specified no time frame, according to the record of the Federal Open Market Committee’s Dec. 11-12 gathering released today in Washington. “Several others thought that it would probably be appropriate to slow or stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet.” The minutes show a divide among FOMC participants on how long the purchases should last. Participants who provided estimates were “approximately evenly divided” between those who said it would be appropriate to end the purchases around mid-2013 and those who said they should continue beyond that date.

• Gross Says Government Financing Schemes Such as QE End Badly. Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said investors should be alert to the longer-term inflationary risks of stimulus programs such as quantitative easing. “Ultimately, government financing schemes such as today’s QE’s or England’s early 1700s South Seas Bubble end badly,” Gross wrote in his monthly investment outlook released today on the Newport Beach, California-based company’s website.

• BP(BP) Spill Defendant Transocean(RIG) to Settle for $1.5 Billion. Transocean Ltd. will settle all federal claims over the Deepwater Horizon explosion and subsequent oil spill for about $1.5 billion, a person familiar with the matter said. The agreement will be announced today, said the person, who declined to be identified because the matter isn’t public.

Wall Street Journal: 

• Auto Makers Post Higher December Sales.

• U.S. Retailers Report Soft December Sales.

MarketWatch.com: 

• Prepare for zero real growth in the U.S. in 2013.

Fox News: 

• Illinois Dems advance ban on most modern firearms. 

• Boehner elected to second term as House speaker.

Zero Hedge:

• ADP Private Payrolls Spike To 215K, Above Expectations On Spike In Construction Jobs - Now With Infographic. 

• Initial Claims Misses By Most Since Sandy, Reverts To 2012 Average. (graph) 

• Why The 2013 'Debt Ceiling' Debacle Will Be Worse Than 2011.

• Geithner Out Before March.

Business Insider:

• Deutsche Bank Warns Of A 'Violent' Turn In The US Dollar In 2013. 

• The 'Economist' Agrees About The Europification Of The United States. 

• Hedge Fund Presents Massive, Bearish Outlook On The State Of US Markets.

The Atlantic:

• What’s Inside America’s Banks? Some four years after the 2008 financial crisis, public trust in banks is as low as ever. Sophisticated investors describe big banks as “black boxes” that may still be concealing enormous risks—the sort that could again take down the economy. A close investigation of a supposedly conservative bank’s financial records uncovers the reason for these fears—and points the way toward urgent reforms.

Institutional Investor's Alpha:

• Beware the Temptation to Follow Hedge Funds' 13F Filings.

The Hill:

• Boehner Tells GOP He's Through Negotiating One-On-One With Obama.  Speaker John Boehner (R-Ohio) is signaling that at least one thing will change about his leadership during the 113th Congress: he’s telling Republicans he is done with private, one-on-one negotiations with President Obama. During both 2011 and 2012, the Speaker spent weeks shuttling between the Capitol and the White House for meetings with the president in hope of striking a grand bargain on the deficit. Those efforts ended in failure, leaving Boehner feeling burned by Obama and, at times, isolated within his conference.

The Blaze: 

• Al Gore’s Current TV Rebuffs Advances by TheBlaze, Agrees to Sell Channel to Al Jazeera. The multimillion dollar deal came after Current rebuffed TheBlaze when it approached the network about buying the channel last year. According to a source close to the negotiations, officials at TheBlaze were told that “the legacy of who the network goes to is important to us and we are sensitive to networks not aligned with our point of view.” As reported by the Wall Street Journal, Hyatt said that the decision to go with the Middle Easter outlet came, in part, because, “al-Jazeera was founded with the same goals we had for Current.” This admission on the part of Current clearly shows that the network aligns itself with al-Jazeera — at least when it comes to goals and aspirations — something critics will likely question. As the AP noted, Dave Marash, a former “Nightline” reporter who worked for the network for a time, left in 2008 after sensing an anti-American bias.

Reuters:

• U.S. mortgage applications fall for 3rd straight week -MBA. Applications for U.S. home mortgages fell last week for the third consecutive week as refinancings fell to the lowest level since last April, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 10.4 percent in the week ended Dec. 28. The MBA's seasonally adjusted index of refinancing applications also fell 10.4 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 10.5 percent. Both indexes dipped for a third straight week.

• INSIGHT-'Cliff' deal's retirement plan revenue boost questioned. One modest way that U.S. lawmakers were able to offset the impact of delaying spending cuts in the deal to avert the "fiscal cliff" was through a retirement plan provision that is supposed to raise $12.2 billion over 10 years. The only problem is that some retirement and fiscal policy experts doubt whether enough people will take advantage of the provision, which allows workers to move their money from one kind of plan to another, for the government to be able to raise that much money.

• Euro falls to near three-week low against dollar.

• Suicide car bomber kills 27 Shi'ite pilgrims in Iraq. A suicide bomber driving a car killed at least 27 Shi'ite Muslims at a bus station in the Iraqi town of Mussayab on Thursday, police and medics said, as they were gathering to return home from a religious rite. The attack, which also wounded at least 60, underlines sectarian tensions that threaten to further destabilise the country a year after U.S. troops left.

• Family Dollar(FDO) everyday item sales hit profit, stock off. Family Dollar Stores Inc posted a lower-than-expected quarterly profit on Thursday, sending its shares tumbling 11.8 percent as its push to sell more everyday items including soft drinks and cigarettes attracted more customers but hurt profitability. The company also lowered its forecast for the year and said December sales, which came in after the quarter ended, were hurt as shoppers limited their discretionary spending.

Financial Times:

• Backlash pushes Republicans to seek cuts. A conservative backlash against Republicans over their deal with Barack Obama to lift taxes has hardened the party leadership’s resolve to demand huge spending cuts as the price for increasing the country’s borrowing limit. Mitch McConnell, the Republican Senate minority leader, rejecting Mr Obama’s statement that he would not negotiate over the issue, said the debt ceiling debate in coming months was the ideal time to force the administration to cut outlays.

Telegraph:

• Construction sector dealt blow as new orders slump to 2009 levels. Britain's construction sector dealt a blow to recovery hopes after new orders and activity in the housing market slumped to levels not seen since the depths of the recession in 2009.

Le Nouvel Observateur:

• French President Francois Hollande's government hasn't taken any "decisive" measures to improve the country's competitiveness and attract foreign capital, Lazard's CEO Kenneth Jacobs said in an interview. Some of Hollande's fiscal measures may "discourage" the French business community and make France less attractive for foreign investors, he said.

Kathimerini:

• Non-performing loans at Greek banks rose 50% in 2012 to EU55b, citing bank officials. NPLs accounted for 23.4% of total loan portfolio at end of Dec. vs. 16% at end of 2011.