Bloomberg:
- China’s Runaway Train Is Running Out of Track. A financial drama is unfolding in China as the new year begins. Last week, for the second time in six months, interest rates in the critical interbank lending market spiked above 10 percent, prompting fears of a liquidity crisis that would trigger mass defaults and cripple the world’s second-largest economy. Western investors largely ignored the cash crunch and failed to grasp its potential significance. Although the situation has largely eased after the People’s Bank of China hastily injected at least $55 billion into the market, that isn’t the end of the story. These repeated crises are a sign that the foundations of China’s investment-driven growth model are crumbling -- with unsettling implications for the rest of the global economy.
- Japan Isn’t a Good Buy in 2014. History shows Japanese leaders with sub-50 percent support rates often get little done and tend not to last very long. And Abe’s numbers could be even worse now. The Mainichi newspaper poll closed two days before he angered the world with a provocative visit to Yasukuni Shrine, an action most Japanese didn’t support.
- Pimco Sees Dim Sum Refinancing Boom on Cash Crunch: China Credit. Pacific Investment Management Co. sees a 2014 boom in issuance outside the mainland by Chinese companies, driven by a record amount of Dim Sum bonds set to expire and a cash crunch in domestic markets. Offshore yuan notes maturing this year, excluding certificates of deposits, will more than double to 91.1 billion yuan ($15.1 billion), according to data compiled by Bloomberg. The 3.95 percent average yield on Dim Sum bonds compares to a record 6.29 percent onshore and the 4.76 percent for dollar securities in Asia, according to Bank of America Merrill Lynch indexes that track yuan data since 2004.
- India’s Rates Seen Elevated as Price Surge Risks Growth: Economy. Indian interest rates will remain elevated as long as surging inflation imperils economic growth, a deputy governor of the country’s central bank said. “If you are having continuously high inflation, it will kill your growth,” the Reserve Bank of India’s K.C. Chakrabarty told Bloomberg TV India yesterday. “If interest rates are high, that’s because inflation is high, and unless inflation is brought down, interest rates will not come down.”
- Chinese Shares in Hong Kong Fall to 7-Week Low; ICBC Declines. Mainalnd Chinese shares trading in Hong Kong sank, heading for a seven-week low, as a drop in a gauge of China’s services industries fueled concern growth is slowing in the world’s second-largest economy. Industrial & Commercial Bank of China Ltd., the nation’s bigggest lender, decreased 2.1 percent to head for the lowest close since August. Tencent Holdings Ltd., Asia’s largest internet company, slipped 0.6 percent, retreating from an all-time high. China Shenhua Energy Co. declined 4.2 percent, leading energy shares lower. Zhaojin Mining Industry Co., China’s No. 2 gold producer, gained 2.2 percent as the bullion’s price rose to a two-week high. The Hang Seng China Enterprises Index (HSCEI) of mainland shares traded in Hong Kong, also known as the H-share index, slumped 2.5 percent to 10,447.37 as of 11:01 a.m. in Hong Kong. A close at that level would be the lowest since Nov. 14. The Hang Seng Index (HSI) lost 1.8 percent to 22,923.13. All of the gauge’s 50 members declined.
- Asian Stocks Fall While Credit Risk Climbs With Gold, Yen. Asian stocks dropped, with a regional index headed for its biggest loss in six weeks, and credit risk increased after a gauge of China’s service industries fell. The yen climbed with gold while emerging-market currencies weakened. The MSCI Asia Pacific Excluding Japan Index lost 1.2 percent at 11:41 a.m. in Hong Kong, while the Hang Seng China Enterprises Index tumbled 2.4 percent.
- Euro Set for Weekly Drop; Yen Climbs on Repatriation Speculation. The euro was set for a weekly drop after an advance in 2013, amid bets policy makers in the region will add to measures supporting growth. The yen rose amid speculation the nation’s investors will repatriate earnings. The extra yield 10-year U.S. Treasuries offered over similar government debt for Germany, the 18-nation region’s biggest economy, was near a seven-year high before Federal Reserve Chairman Ben S. Bernanke speaks today and European Central Bank officials meet next week. The Australian dollar weakened briefly after data showed a gauge of Chinese service industries declined.
- Rebar Declines in Shanghai After Biggest Producers Lower Prices. Steel reinforcement-bar futures fell in Shanghai, set for a fourth weekly loss, after the biggest steel producers across China cut prices amid slowing demand. Rebar for May delivery on the Shanghai Futures Exchange dropped as much as 1.2 percent to 3,546 yuan ($586) a metric ton, and was at 3,550 yuan at 10:38 a.m. local time. Futures are down 1.8 percent this week.
- Gold Heads for Best Week Since October on Asian Demand Outlook. Gold headed for the best weekly gain since October on speculation that demand will increase in Asia, the largest consuming region, prompting investors to reverse bearish bets. Platinum rose to the highest price since November. Bullion for immediate delivery climbed as much as 1 percent to $1,237.03 an ounce, the highest level since Dec. 18, and was at $1,229.71 at 9:34 a.m. in Singapore, 1.4 percent higher this week.
- Iraq Violence With al-Qaeda Ties Increases the Pressure on U.S. Militants with ties to al-Qaeda threatened today to take over towns in Iraq’s predominantly Sunni Muslim Anbar province from Shiite Prime Minister Nouri al-Maliki’s government, after 2013 ended with the most civilian deaths and injuries in five years. Civilian deaths in Iraq, including police casualties, totaled 7,818 last year, rivaling the 6,787 in 2008, according to data compiled by the United Nations Assistance Mission for Iraq. An additional 17,981 civilians were injured last year, compared with 20,178 in 2008, the UN found.
- Facebook(FB) Sued Over Alleged Scanning of Private Messages. When users compose messages that include links to a third-party website, Facebook scans the content of the message, follows the link and searches for information to profile the message-sender’s Web activity, violating the Electronic Communications Privacy Act and California privacy and unfair competition laws, according to the suit. The practice compromises privacy and undermines Facebook’s promise of “unprecedented” security options for its messaging function, two Facebook users said in the complaint filed in federal court in San Jose, California.
- Hezbollah Upgrades Missile Threat to Israel. Components Said to Have Already Been Moved to Lebanon from Syria. U.S. officials believe members of Hezbollah, the militant group backed by Iran, are smuggling advanced guided-missile systems into Lebanon from Syria piece by piece to evade a secretive Israeli air campaign designed to stop them. The moves illustrate how both Hezbollah and Israel are using Syria's civil war as cover for what increasingly is seen as a complex and high-stakes race to prepare for another potential conflict—their own—in ways that could alter the region's military balance.
- Snowstorm Rolls Into the Northeast. Frigid Temperatures and Heavy Accumulation Expected to Snarl Northeast. The Northeast braced for a storm that was expected to blanket the region in snow and frigid temperatures Friday, a day after the same system swept through the Midwest, clogging roadways and snarling commutes.
- Beirut Bomb Hits Hezbollah Stronghold. A car bomb ripped through a Hezbollah stronghold in a crowded district of southern Beirut on Thursday, days after a blast in another part of the Lebanese capital killed a politician who opposed the Shiite political and militant group. Thursday's bombing, which killed five people, drew warnings from officials across Lebanon's divided political spectrum that the country was teetering on the edge of sectarian warfare, threatening the kind of tit-for-tat killings that marked the country's 1975-90 civil war.
- New York's Divider in Chief. Bill de Blasio's inaugural address took every opportunity to jab at those who aren't on the margins.
- ObamaCare brings new taxes, fees for 2014. Get ready for the next wave of ObamaCare fees. With the launch of coverage under the health care law on Wednesday, a new set of taxes and fees is kicking in this year -- as part of the hundreds of billions of dollars the government intends to raise over the next decade to help pay for the program.
- It may soon be time to go for the gold. Something tells me we might be experiencing the give-up phase for gold. By that I mean a point in the gold price cycle when just about everyone gives up on the possibility that gold prices will ever rise again. Which could mean the time to buy is here.
Zero Hedge:
Business Insider:
- America's Most Popular Lightbulbs Are Going Off The Market. Soon you won't have much of a choice than to buy energy-efficient lightbulbs — the government ban on the production of 40- and 60-watt incandescent bulbs has gone into effect for the new year. These lightbulbs account for more than half of the lightbulbs purchased in the U.S., according to Sustainable Business.
- Retired state workers sue over Illinois pension changes. A group representing retired state workers on Thursday filed the second lawsuit challenging sweeping changes to the state’s public employee pension system, arguing the measure violates a clause in the Illinois Constitution intended to protect retirement benefits by “gutting” annual cost-of-living increases.
Reuters:
- FireEye buys cyber forensics firm Mandiant for about $1 billion. Cybersecurity company FireEye Inc has acquired Mandiant Corp, the computer forensics specialist best known for unveiling a secretive Chinese military unit believed to be behind a series of hacking attacks on U.S. companies. FirEye shares jumped more than 20 percent after Thursday's announcement of the $1.05 billion cash-and-stock deal, which FireEye said closed on Monday. It unites two companies with relatively new technologies for thwarting cyber attacks, and brings together two of the most-respected executives in the security industry: FireEye CEO Dave DeWalt and Mandiant founder Kevin Mandia.
- U.S. permanently relaxes rules aimed at healthier school meals. U.S. regulators said on Thursday they were permanently relaxing school meal rules that were designed to combat childhood obesity by reining in calories and portion sizes but aroused complaints the policies caused students to go hungry.
- EMERGING MARKETS-Latam stocks fall, China data weighs on Brazil. Stocks in Mexico fell by the most since early November while Brazilian equities saw their biggest one-day drop in a month. Brazil's benchmark Bovespa stock index fell 2.26 percent to 50,341.25, falling sharply back from a key resistance level around 51,600.
Obama takes on coal with first-ever carbon limits
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Read more at http://www.philly.com/philly/news/politics/20130919_ap_0f857b20e0c144a5a1e1b9dddc9f9d72.html#YRThyDOhArykUeYy.99
Financial Times:
Telegraph:- ‘Frontier’ fund sales to retail investors face crackdown. The Financial Industry Regulatory Authority is to crack down on brokers pushing emerging market “frontier” funds and other higher-risk products on unsophisticated retail investors, according to the regulator’s annual preview of its priorities. Announcing its agenda for 2014, Finra said US investors were not being given proper information about the risk of emerging market funds, exchange traded funds and transfers from their 401k retirement plans.
- IMF paper warns of 'savings tax' and mass write-offs as West's debt hits 200-year high. Debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, warns IMF paper. Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund. The IMF working paper said debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its “toolkit” for emerging market blow-ups. “The size of the problem suggests that restructurings will be needed, for example, in the periphery of Europe, far beyond anything discussed in public to this point,” said the paper, by Harvard professors Carmen.
- French car market in 2013 'should be forgotten'. Car makers sold just 1.79m vehicles in France last year, the worst performance in 15 years.
- None of note
- Asian equity indices are -1.5% to -.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 130.50 +1.5 basis points.
- Asia Pacific Sovereign CDS Index 106.0 +.75 basis point.
- FTSE-100 futures -.01%.
- S&P 500 futures -.09%.
- NASDAQ 100 futures -.08%.
Earnings of Note
Company/Estimate
- (LNN)/.91
Afternoon:
- Total Vehicle Sales for December are estimated to fall to 16.0M versus 16.31M.
- None of note
- The Fed's Bernanke speaking, Fed's Stein speaking, Fed's Plosser speaking, Fed's Lacker speaking, UK Construction PMI and the ISM New York for December could also impact trading today.
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