Today's Headlines

Bloomberg:  

• Asia Hedge Fund Started by Ex-Alibaba's Wu Is Bearish on China. F&H Fund Management, the asset manager co-founded by the former chief technology officer of Alibaba Group Holding Ltd., is so bearish on stocks in China that it is opening its hedge fund to outside investors. The FengHe Asia Fund is seeking to more than triple assets to $300 million by the end of next year from $80 million currently, said Matt Hu, a former portfolio manager at China Securities Ltd. who started Singapore-based F&H in 2010 with John Wu, the 19th person hired by Jack Ma’s e-commerce company Alibaba.
• Brazil's Corruption Scandal Isn't Its Biggest Problem. In Brazil, the push to oust President Dilma Rousseff has shifted, as often happens in politics, away from the corruption scandal that first landed her government in trouble. Impeachment calls are now focused on her handling of fiscal accounts, and that is perhaps fitting since few problems in Brazil rank higher than its exploding budget deficit. At 536 billion reais ($141 billion), the gap has swollen to the equivalent of more than 9 percent of gross domestic product. It’s not just that the figure is the biggest in at least two decades; it’s how quickly it has grown as the country sinks into a protracted recession. Eighteen months ago, the deficit was 3 percent of GDP. So while no one is talking about default as a near-term concern -- and bond yields show no such jitters -- many do say that it’s helping fuel an inflation surge and could eventually push the country toward a full-blown debt crisis unless spending is reined in after a decade of largesse.
• Hungary Against Taking Even a ‘Single Syrian’ from Germany. Germany shouldn’t send back refugees to the their first point-of-entry in the European Union based on the bloc’s Dublin accord, Hungarian Foreign Minister Peter Szijjarto said, according to an interview with MTI news service. “The Dublin system is dead since apart from a few exceptions, countries aren’t abiding by its terms,” Szijjarto said on Wednesday, according to MTI. “Not a single Syrian” should be returned from western Europe to Hungary, he said.
• OPEC Challenges Shale Afresh as Iraq Crude Floods U.S. Market. OPEC’s latest challenge to U.S. shale oil producers would be about two miles long, lined end to end, and weigh almost 3 million metric tons. It’s due to reach American ports this month. Iraq, the fastest-growing producer within the 12-nation group, loaded as many as 10 tankers in the past several weeks to deliver crude to U.S. ports in November, ship-tracking and charters compiled by Bloomberg show. Assuming they arrive as scheduled, the 19 million barrels being hauled would mark the biggest monthly influx from Iraq since June 2012, according to Energy Information Administration figures. The cargoes show how competition for sales among members of the Organization of Petroleum Exporting Countries is spilling out into global markets, intensifying competition with U.S. producers whose own output has retreated since summer. For tanker owners, it means rates for their ships are headed for the best quarter in seven years, fueled partly by the surge in one of the industry’s longest trade routes. 
• Energy Default Alarms Get Louder as Pain Seen Lasting Into 2016. Eleven months of depressed oil prices are threatening to topple more companies in the energy industry. Four firms owing a combined $4.8 billion warned this week that they may be at the brink, with Penn Virginia Corp., Paragon Offshore Plc, Magnum Hunter Resources Corp. and Emerald Oil Inc. saying their auditors have expressed doubts that they can continue as going concerns. Falling oil prices are squeezing access to credit, they said. And everyone from Morgan Stanley to Goldman Sachs Group Inc. is predicting that energy prices won’t rebound anytime soon. The industry is bracing for a wave of failures as investors that were stung by bets on an improving market earlier this year try to stay away from the sector. Barclays Plc analysts say that will cause the default rate among speculative-grade companies to double in the next year. Marathon Asset Management is predicting default rates among high-yield energy companies will balloon to as high as 25 percent cumulatively in the next two to three years if oil remains below $60 a barrel.
• Biggest Metals Market Set for First Trade Drop Since Crisis. The biggest market for metals is going into reverse for the first time since the 2008-09 financial crisis as slowing Chinese demand deters investors. The London Metal Exchange is set for weaker volumes this year as hedge funds and banks have scaled back their commodities business, regulators increase scrutiny of the market and the bourse charges higher transaction fees. 
• Steel Output Drops in China as Maike Flags Iron Ore Mismatch. The world’s biggest steelmaker is pouring less metal. Production in China dropped in October from a year earlier as mills battled lower domestic demand, slumping prices and rising industry losses. Crude steel output was 66.12 million metric tons, 3.1 percent lower than the same month last year, according to National Bureau of Statistics data on Wednesday. Supply for the first 10 months was 675.1 million tons, 2.2 percent less than the same period in 2014.
• Bank Hedges Hit Record Low. Investors in U.S. financial stocks are putting their faith in the Fed like never before as confidence grows that the day is drawing nearer when banks will benefit from higher interest rates. Short interest in an exchange-traded fund tracking financial stocks in the Standard & Poor’s 500 Index is the lowest in data going back to 2006, according to data compiled by Bloomberg and Markit Ltd. Traders are protecting less than ever against declines in financial firms as the Federal Reserve is seen as twice as likely to lift interest rates at its December meeting compared with just two months ago.

Fox News:

• ‘The biggest sham’: Sheriffs fume at mass release of 6,000 federal inmates.

CNBC:

• Fed's Williams says 'very strong case' to raise rates next month. San Francisco Federal Reserve President John Williams said Tuesday there's a "very strong case" for the Fed to raise interest rates next month if the economy continues to improve and policymakers are confident that inflation will pick up. "Assuming the data are consistent with those (conditions), I think there's a very strong case for starting the process of raising interest rates" at the Fed's Dec. 15-16 meeting, Williams said in an exclusive interview with USA TODAY. "The next natural step...is to start raising rates and to do that gradually."
• Andreessen sells thousands of Facebook(FB) shares.

Zero Hedge:

• The Legendary U.S. Consumer Is Out Of Cash In These Cities. (graph)
• Macy's(M) Massacre - 3 Years Of Wasted Buybacks Ends Financial Engineering Dreams. (graph)
• Hedge Fund Hotel SunEdison(SUNE) Is Crashing Again - Now Down 86% In Three Months. (graph)
• Confused About What Mario Draghi Will Do Next? Here's The Official Decision Tree From His Former Employer.
• "Irreversibly Broken & Dysfunctional" - There's Something Wrong In The Markets.
• "It's A Bloodbath" - Here Is The Biggest Casualty Of Canada's Recession. (graph)
• The SEC Cracks Down On The Biggest Market Threat: Short Sellers On Twitter.
• BABA Battered As Macro Fears & Counterfeit Concerns Trump Singles-Day Celebrations. (graph)
• "No QE For You!": ECB May Cut "Lifeline" To Portugal After Socialists Overthrow Government.
• Valeant(VRX) Fiasco Hits Biggest Holder: Sequoia Suffers Largest Outflow Of The Year, And Why It Could Get Worse. (graph)
• Macy's(M) Blames "Tepid Spending" On Revenue Miss: Same Store Sales Tumble; Slashes Guidance. (graph)
• Forget Oil, Base Metals Collapse 50% From 2011 Highs. (graph)
• The World's Biggest Bond Bubble Continues To Burst As China Suffers More Defaults. (graph)

Handelsblatt:

• EU's Tusk Says 'Risk of a Brexit Is Real'. EU President Donald Tusk says the risk of the U.K. exiting the European Union is "real,", citing an interview with Tusk. Refugee crisis "adding fuel to the arguments of the euro-skeptics" in U.K., he said.