Bloomberg:
- Xi Borrows From Mao Playbook in Power Play Ahead of Plenum. The mission for the near-dozen Communists sitting round a table at a Beijing ministry was explicit: criticize their boss, who was present. Party cadres carefully recorded their comments as they spoke, in an echo of sessions held decades ago under Chairman Mao Zedong’s direction.
- Park Calls for Ending ’Vicious Cycle’ of Appeasing North Korea. South Korean President Park Geun Hye called for ending the “vicious cycle” of rewarding North Korean provocations, saying it complicates negotiations and emboldens the Kim Jong Un regime to advance its nuclear program. “We cannot repeat the vicious cycle of the past where North Korea’s nuke threats and provocations were met with rewards and coddling,” she told BBC World News in an interview that aired today. “Otherwise, North Korea will continue to further advance its nuclear capability.”
- Asian Stocks Fall After Fisher Speech on Fed Policy. Asian stocks fell after Federal Reserve Bank of Dallas President Richard Fisher said the U.S. central bank should end its record stimulus as soon as possible. South Korean financial companies including Woori Finance Holdings Co., Shinhan Financial Group Co., Mirae Asset Securities Co. and Hana Financial Group Inc. dropped more than 1.6 percent. Coca-Cola Amatil Ltd. (CCL), Australia’s largest listed drinks company, slumped 4.9 percent after forecasting 2013 earnings will decline. China Resources Enterprise Ltd., a brewer and retailer with businesses in Hong Kong and mainland China, gained 1.5 percent. The MSCI Asia Pacific excluding Japan Index fell 0.2 percent to 478.49 as of 11:47 a.m. in Hong Kong, after rising as much as 0.2 percent.
- Euro at Six-Week Low on ECB; Aussie Climbs as Spending Surges. The euro fell to its lowest level in more than six weeks before European Central Bank Executive Board member Joerg Asmussen speaks in the run-up to a policy meeting amid signs further stimulus may be needed in the region. The euro fell 0.1 percent to $1.3480 as of 12:43 p.m. in Singapore, and last week dropped 2.3 percent, the largest decrease since the five days ended July 6, 2012. It fell as low as $1.3442 today, the least since Sept. 18.
- Rebar Fluctuates as Investors Await China Party Plenum Meeting. Steel reinforcement-bar futures swung between gains and losses before a meeting of China’s top Communist Party officials in Beijing which will map out a blueprint for economic reform. Rebar for May delivery, the most-active contract by volume on the Shanghai Futures Exchange, rose as much as 0.4 percent to 3,685 yuan ($603) a ton and fell as low as 3,666 yuan before trading at 3,670 yuan by 10:41 a.m. local time. The contract lost 1.5 percent last month.
- Junk Loans Approach $1 Trillion as Standards Dip: Credit Markets. Loans to junk related companies in the U.S. are on pace to exceed $1 trillion this year, a level not seen before the financial crisis, as concern rises that lenders are lowering their standards. The almost $873 billion of leveraged loans made in 2013 to borrowers ranging from hotel chain Hilton Worldwide Holdings Inc. to coal producer Peabody Energy Corp. is more than the $642.3 billion obtained in all of last year and up from the post-crisis low of $161.5 billion in 2009, according to Bloomberg. At the current rate, the record of $899.1 billion in 2007 may be eclipsed as soon as this week.
- Fed Gives Banks New Dire Scenarios for 2014 Stress Tests. Lenders including JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) will have to show they can survive the demise of a trading partner or a plunge in value of high-risk business loans in the 2014 version of U.S. stress tests. The scenarios for the annual tests, outlined by the Federal Reserve in a statement yesterday, reflect some of the most pressing threats seen by regulators as they gauge the ability of the U.S. financial system to withstand economic shocks. Bankers will have to show what would happen to the value of leveraged loans they hold, the impact of another housing bust and how they’d fare if a firm that owes them substantial sums collapses.
- Health Site Flaws Test Democrats’ Unity as Attacks Rise. Democratic Senator Joe Manchin of West Virginia announced he is drafting legislation with Republican Senator Johnny Isakson of Georgia to postpone the law’s penalty for failing to obtain health insurance, a core provision that the White House has insisted on maintaining without delay. Senator Mary Landrieu of Louisiana, a Democrat facing re-election in a state that backed Obama’s Republican opponents in 2008 and 2012, said in an interview this week that Obama should fire some staff members to hold them accountable for the website’s problems. She stopped short of joining demands from Republicans for Sebelius’s resignation. Health and Human Services officials who testified this week before House committees will appear next week in front of two Senate panels whose Republican members have been outspoken in criticizing them.
- Obama’s ‘Dishonesty’ Could Slow Second Term. President Barack Obama continued to take political heat for the troubled debut of his signature health plan while his advisers downplayed the significance of the program’s low enrollment rate. Mitt Romney, the Republican candidate who lost the 2012 presidential race to Democrat Obama, accused the president of lying. “He wasn’t telling the truth,” Romney said today on NBC’s “Meet the Press.” “That fundamental dishonesty has really -- has really put in peril the whole foundation of his second term,” Romney said. “I think it is rotting it away.” During the presidential campaign and later, as Congress debated the Affordable Health Care Act, Obama repeatedly said that no one would be forced to give up their existing health coverage under the law. The statement “undermined the president’s credibility,” Romney said.
- Obamacare Birth Control Rule Assailed by Court as Split Widens. A requirement of President Barack Obama’s health-care law that group insurance plans cover contraceptives may violate religious freedom, a U.S. appeals court said, widening a split among the circuits and making it more probable the U.S. Supreme Court will take up the issue. A three-judge panel in Washington said a lower court was wrong to deny an injunction sought in a lawsuit by two brothers who are Catholic. The men sued on religious grounds, seeking to exclude contraceptive coverage from health plans provided by their produce-distribution companies. While the panel didn’t rule on the actual challenge, they disagreed with the trial judge’s determination that the suit was unlikely to succeed.
- Investors Return to IPOs in Force. Investors are stampeding into initial public offerings at the fastest clip since the financial crisis, fueling a frenzy in the shares of newly listed companies that echoes the technology-stock craze of the late 1990s.
- You Also Can't Keep Your Doctor. I had great cancer doctors and health insurance. My plan was cancelled. Now I worry how long I'll live. Everyone now is clamoring about Affordable Care Act winners and losers. I am one of the losers. My grievance is not political; all my energies are directed to enjoying life and staying alive, and I have no time for politics. For almost seven years I have fought and survived stage-4 gallbladder cancer, with a five-year survival rate of less than 2% after diagnosis. I am a determined fighter and extremely lucky. But this luck may have just run out: My affordable, lifesaving medical insurance policy has been canceled effective Dec. 31.
Fox News:
- Graham says he'll continue to block Obama nominees unless he gets Benghazi info. South Carolina Sen. Lindsey Graham reiterated his pledge to block all of Obama’s nominees for executive branch positions until Congress is allowed to hear testimony from those on the ground during the Benghazi terrorist attacks in 2012.
- For signs of bubble, look no further than LBOs. Market watchers who have been out hunting for bubbles may want to look at debt rather than equity. A number of measures that focus on leverage, particularly in the area of corporate takeovers, show that kind of risk-taking back at levels just before the financial system imploded and sent the economy into its worst slump since the Great Depression. Leveraged buyouts—LBOs—for both big and midsize companies are approaching debt levels last experienced in 2007, according to the latest figures from Thomson Reuters.
Zero Hedge:
Business Insider:- Obama's Approval Rating Down To 40%. (graph)
New York Times:
- After Delay, Lenders Set To Visit Greece for Audit. Inspectors from Greece’s international lenders have put a postponed visit to the country back on the agenda and will return early this week after Athens made a new proposal on filling a gap of 2 billion euros in the 2014 budget, the European Commission has said.
New York Post:
Real Clear Politics:
Financial Times:Real Clear Politics:
- Obamacare's Widening Disconnect. Our relationship with government is in shambles, our feeling of disconnect with Washington at an historic level. Yet the real problem is not a health-care website that doesn’t work. The real problem is a president and a Washington culture which both believe it is okay to lie to get a bill passed. There is no connection between such behavior and the values of most Americans beyond Washington, for whom getting what you want usually results from hard work, honest bargaining and a little compromise.
- Egypt to look beyond U.S. for arms: foreign minister. Egypt's Foreign Minister Nabil Fahmy said on Saturday that Egypt would look beyond the United States to meet its security needs and warned Washington that it could no longer ignore popular demands in a changed Arab world. Speaking ahead of a visit by U.S. Secretary of State John Kerry, Fahmy said the United States must take a long-term view of its relations with Egypt and understand that in the wake of the Arab Spring, "it would have to deal now with the Arab peoples, not only with Arab governments".
- In political messaging wars, White House deploys a Twitter army. Besieged by unflattering stories about the launch of President Barack Obama's healthcare program, the White House saw a news report that it wanted to swiftly knock down.
- Fed's Fisher concerned credit spreads have narrowed too much. Federal Reserve Bank of Dallas President Richard Fisher on Monday said he was concerned that corporate credit spreads have narrowed too much.
- Italian banks' cut plans too modest despite strike call. With Italy mired in its longest recession since the Second World War, the country's hard-pressed banks are cutting jobs, closing branches and infuriating unions, but the cuts are far too modest to achieve the profitability gains they need.
- Europe's Big Banks Cut Corporate Lending, Boost Sovereign Debt. Region's 16 largest banks lowered risk exposure to corporate credit by 9%, while raising risk exposure to sovereign debt by 26% in 2011, 2012, citing Fitch Ratings. Fitch cites approaching Basel III capital rules as being partly to blame for decline in corporate credit lending.
- Europe is a currency saint but an egregious demand sinner. This year’s burst of euro strength has brought crisis closer and baked a lot of future damage into the 17-nation bloc.
- The Fed is locked in a QE prison of its own making. US policymakers are caught in a trap – a seemingly inescapable dilemma that stems directly from the massive scale of QE.
- Schaeuble Says No ESM Money for Ailing Banks. German Finance Minister Wolfgang Schaeuble says his party agreed with potential coalition partner SPD not to consent to spending tax money to save banks in Europe, particularly not from the ESM.
- China's Property Bubble Is "Danger" to Economy. China's real estate bubble poses "danger" to economy and the government should combine property controls with economic reform of land and tax policies, according to a front-page editorial. It is urgent to reduce bubble caused by speculation and reduce potential financial and economic risks.
Weekend Recommendations
Barron's:- Bullish commentary on (CVA) and (DFS).
- Asian indices are -.50% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 134.0 +4.0 basis points.
- Asia Pacific Sovereign CDS Index 103.50 +4.0 basis points.
- FTSE-100 futures +.49%.
- S&P 500 futures +.23%.
- NASDAQ 100 futures +.25%.
Earnings of Note
Company/Estimate
- (CME)/.73
- (VMC)/.26
- (SYY)/.47
- (K)/.89
- (ODP)/.06
- (VNO)/1.09
- (HTZ)/.71
- (APC)/1.16
- (THC)/.44
- (TDW)/.87
- (CF)/3.92
- (MRO)/.77
- (DNB)/1.87
10:00 am EST
- Factory Orders for September are estimated to rise +1.8%.
- (WWW) 2-for-1
- (DSW) 2-for-1
- The Fed's Powell speaking, Fed's Rosengren speaking, Eurozone PMI, RBA rate decision, ISM New York for October and the Robert W. Baird Industrial Conference could also impact trading today.
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