Style Outperformer:
- Mid-Cap Value (+.03%)
- 1) Coal +1.39% 2) Gold & Silver +.83% 3) Disk Drives +.69%
- SSRI, RIC, BBRG, DMND and CP
- 1) AGO 2) SYMC 3) NFX 4) HCA 5) AMLN
- 1) RTN 2) XLNX 3) GOOG 4) CSCO 5) VTR
Friday, December 30, 2011
Bull Radar
Style Outperformer:
Friday Watch
Evening Headlines
Bloomberg:
- Euro Set for First Back-to-Back Annual Drop Since 2001 on European Crisis. The euro is set for its first back- to-back annual drop versus the dollar since 2001 on concern Europe’s debt crisis will weigh on the region’s economic growth. The 17-nation euro traded 0.3 percent from a decade low against the yen before data next week forecast to confirm European manufacturing contracted for a fifth month.
- Credit Agricole Squeezed With BNP by Slide in French Corporate Bond Sales. Credit Agricole SA (ACA) and BNP Paribas SA, the top arrangers of French corporate debt sales this year, are girding for a slowdown in 2012 after companies raised the least amount in the second half since 2007. Bond sales by French companies have fallen 22 percent since July 1 compared with the year-earlier period to 62.6 billion euros ($81 billion), according to data compiled by Bloomberg. The market may shrink more as Standard & Poor’s considers whether to strip France of its AAA credit rating and Europe’s second-biggest economy enters a recession.
- China's Manufacturing Contracts for Second Month, PMI Shows. China’s manufacturing contracted for a second month in December as global growth faltered and Premier Wen Jiabao prolonged a crackdown on speculation in the housing market. The index was 48.7 in December, HSBC Holdings Plc and Markit Economics said today. That compared with a preliminary result of 49 reported on Dec. 15 and a final reading of 47.7 for November. “Weakening external demand is starting to bite,” said Qu Hongbin, a Hong Kong-based economist for HSBC. Developer China Vanke Co.’s contract sales dropped 36 percent last month from a year earlier, while new home prices in Shanghai, Beijing, Shenzhen and Guangzhou slid from the previous month. In a sign that construction projects are slowing, Hitachi Construction Machinery Co., Japan’s second-largest heavy- equipment maker, said this month that Chinese demand for excavators will decline in the first half of next year.
- Australia Home Prices Drop 3.7%. Home prices in Australia’s eight capital cities slid 3.7 percent in the first 11 months of 2011, extending the biggest drop in at least 12 years on concerns Europe’s debt crisis may damp the nation’s economic growth. Brisbane led the decline, slumping 7 percent in the January-November period, followed by Melbourne, which posted a 5.7 percent retreat, according to figures from RP Data, a real estate researcher. “The downside risk would come from global weakness affecting the Australian economy,” said David Cannington, a Melbourne-based economist at Australia & New Zealand Banking Group Ltd. (ANZ), with A$161 billion ($164 billion) of mortgages as of November. “The housing market will, broadly speaking, reflect the relative strength or weakness of the Australian economy.” Economists at the nation’s four-biggest banks, which hold 87 percent of mortgages, said the central bank’s interest rate cuts won’t be enough to offset concerns about Europe’s crisis or spur a rebound in the housing market. Home loans rose 5.7 percent in the 12 months through November, matching the weakest annual pace since 1977, central bank data showed today.
- Fed Says Dealers Tighten Terms on Hedge-Fund Security Trades. Wall Street dealers made it tougher for hedge funds to finance trading of securities and derivatives in the three months through November, a Federal Reserve survey showed today. Responses “indicated a broad but moderate tightening of credit terms applicable to important classes of counterparties,” especially hedge-fund clients, trading real estate investment trusts and nonfinancial corporations, according to the quarterly survey of senior credit officers at 20 dealers covering the period of September to November.
- North Korea Threatens South, Tells World To Expect No Change From Kim Jong Un. North Korea told “the world’s foolish politicians” to expect no change from the new regime headed by Kim Jong Un and threatened a “sea of fire” for South Korean President Lee Myung Bak’s administration. “The world will witness how millions of North Korean people, who transformed sadness to courage and tears to strength under the pillar of the great leader Kim Jong Un, will achieve final victory,” the commission said in the statement.
- Slowing Chinese Growth Means Ore-Vessel Rates at Lowest in Decade: Freight. The weakest growth in demand in at least a decade for shipments of iron ore, the second-biggest commodity cargo after crude oil, means rates for the largest vessels will plunge to the lowest level since 2002. Capesizes, each hauling about 160,000 metric tons of ore, will earn an average of $15,000 a day next year, about 4 percent less than in 2011, the median estimate in a Bloomberg survey of 10 analysts shows. While that implies losses for ship owners and investors in their companies, speculators can profit because forward freight agreements, handled by brokers and used to bet on transport costs, are anticipating an average of $16,367, according to data from the London-based Baltic Exchange. Owners are contending with the biggest fleet in history as vessels ordered when rates reached $233,988 in 2008 continue to leave ship yards. The glut may widen because trade in iron ore will expand 2.5 percent next year as the number of capesizes rises 9.8 percent, according to Clarkson Plc, the world’s biggest shipbroker. Economic growth in China, whose steel mills consume 65 percent of all seaborne ore, will slow to the weakest since 2001, economist estimates compiled by Bloomberg show. “The question for ship owners now is how are you going to hang on, how long are you going to hang on, and when is the light at the end of the tunnel?” said Andreas Vergottis, the Hong Kong-based research director at Tufton Oceanic Ltd., whose $1.45 billion shipping hedge fund is the world’s largest. “There is definitely no light in the 2012 tunnel.”
- CMBS Holders Allege 'Brazen Scheme' to Steal $60 Million. A group of commercial-mortgage backed securities investors including Angelo Gordon & Co. and Winthrop Realty Trust sued a junior lender and other parties, alleging a “brazen scheme,” to steal more than $60 million from bondholders, according to a New York court filing. The investors, three collateralized debt obligations and TCG Holdings I LLC, hold pieces of a $1.26 billion deal sold by Credit Suisse Group AG in 2007, Royal Bank of Scotland Group Plc analysts led by Richard Hill wrote in a report today. They are seeking to block Galante Holdings Inc. from purchasing a $150 million loan on the J.W. Marriott Summerlin Hotel, Resort, Spa and Casino in Las Vegas for less than $85 million, according to the court filing.
- JPMorgan(JPM), Ally Sued by HSH Nordbank Over Mortgage Securities. JPMorgan Chase & Co., the biggest U.S. bank by assets, and Ally Financial Inc. were among the financial institutions sued by the German lender HSH Nordbank AG over losses on about $293 million in mortgage bonds.
- Commodities Poised for First Annual Decline Since 2008 on Europe. Commodities headed for the first annual drop since 2008, paced by declines in cotton, copper and cocoa, on concern that the European sovereign-debt crisis and a cooling Chinese economy will sap demand for raw materials. Cocoa in New York plunged 31 percent in 2011 on signs of expanding supplies from Ivory Coast, the biggest producer. Cotton is down 37 percent this year amid increasing output and dwindling demand. Copper, often seen as an indicator of economic activity as it is used in construction and automobiles, set for the first losses since 2008. China is the biggest consumer of copper.
- Japan to Double Sales Tax to Reduce Debt. Japan’s ruling party agreed on a plan to double the sales tax by 2015 after weeks of internal debate and a member revolt as Prime Minister Yoshihiko Noda fights to head off another credit-rating downgrade. The proposal decided on late yesterday would raise the sales tax from 5 percent to 8 percent in April 2014 and to 10 percent in October 2015.
- Deepening Crisis Over Euro Pits Leader Against Leader. On a chilly October evening in her austere chancellery, Angela Merkel placed a confidential call to Rome to help save the euro. Two years after the European debt crisis erupted in little Greece, the unthinkable had happened: Investors were fleeing the government debt of Italy—one of the world's biggest economies. If the selloff couldn't be stopped, Italy would go down, taking with it Europe's shared currency. Her phone call that night to the 16th-century Quirinale Palace, once a residence of popes, now home to Italy's octogenarian head of state, President Giorgio Napolitano, trod on delicate ground for a German chancellor.
- Banks Face Off For Facebook IPO. Goldman Sachs, Morgan Stanley Are Considered Front-Runners for Top Job in Handling 2012's Trophy IPO.
- IMF Warned Greece On Debt Levels With Worsening Outlook - Sources. The International Monetary Fund recently told the Greek government that a worsening economic outlook suggests the beleaguered nation may be unable to reduce its debt to sustainable levels even with a planned 50% write down in privately-held Greek government bonds, according to two officials familiar with the conversations.
- Libya's Largest Oil Port On Cusp Of Resuming Exports - NOC Head.
- A Margin for Error in Hedge-Fund Filings. Are some of the smart-money crowd playing investors for suckers? For years, finance experts have put together statistical analyses that suggest something fishy is going on with some of the reported returns in a large universe of hedge funds. New analysis conducted by Gjergji Cici of the College of William and Mary, and Alexander Kempf and Alexander Puetz of the University of Cologne adds to the questions. Their research shows the valuations hedge funds report for their stocks in quarterly filings with the Securities and Exchange Commission are sometimes at odds with actual stock prices.
- Tensions Rising Over Drone Secrecy. Tensions are quietly increasing between the White House and some congressional leaders over access to sensitive information about the government's use of drones in Pakistan and Yemen, officials said. The White House has brushed aside requests for information from lawmakers, who argue that the strikes, carried out secretly by the Central Intelligence Agency and the military's Joint Special Operations Command, have broad implications for U.S. policy but don't receive adequate oversight.
- Verizon(VZ) Outages, New $2 Fee Irk Customers. Verizon Wireless has built its reputation on the quality of its cellular network, touting its reliability over rival AT&T Inc., but a series of outages this month threatens the largest U.S. wireless carrier's image. On Thursday, Verizon Wireless said its engineers had fixed the third outage in December for its new high-speed data network. Some customers had complained they were getting slower connections or no signal at all. Verizon Wireless further frustrated customers Thursday by disclosing it would impose a $2 fee on those paying their bills by phone or on Verizon's website starting Jan. 15. The company said it was necessary to help provide "single-bill payment options."
- Bright Ideas: Innovation in 2011. The Year's Inventions: From IBM's 'Jeopardy'-Playing Watson to a Replacement Heart Valve.
- Egyptian Raids on U.S. Groups Draw Ire. Egyptian security forces seized computers, printers and documents from offices of at least 17 nongovernmental organizations Thursday, including three American groups, further straining the fraying ties between Egypt's interim military leadership and its allies in Washington. The U.S. said it was "deeply concerned" about the raids. It raised the specter of clamping down on funding to Egypt's powerful military, one of Washington's closest military allies in the Middle East.
- Hong Kong Exports in Danger Amid Global Slump. Hong Kong’s export growth decelerated sharply in November, reflecting the impact of cooling economic conditions in Europe and setting the stage for a grim year ahead, according to government data reported Thursday. Exports for the month were up 2% from a year earlier, easing from an 11.5% rate of expansion in October.
Zero Hedge:
CNBC:
- Treasury to Start Charging Banks for Risk Monitoring. The U.S. Treasury Department plans to start charging large banks a fee to cover the costs of the financial risk council it leads and a research office tasked with measuring threats to financial markets. The Financial Stability Oversight Council and the Office of Financial Research were created by the 2010 Dodd-Frank financial oversight law, which instructs the government to bill banks for their operations. On Thursday the Treasury Dept. released a proposed rule that would apply to banks with more than $50 billion in total assets, starting in the middle of next year. The department is proposing charging these banks a flat rate that would be applied to an institution's total consolidated assets, and would be collected twice a year. The department has yet to announce the specific fee banks will be charged because the budget for the council and research office will not be known until President Barack Obama releases his fiscal 2013 budget proposal early next year.
- Farmer Anger Adds to India's Economic Worries. Usually around this time of the year, Jalgaon city in western India is abuzz with trucks ferrying mountains of fluffy white cotton to its markets. But this year, farmers have been blocking roads with burning tyres and refusing to sell their produce in a bid to force the government to prop up crop prices which they say barely cover costs. "Look at input costs. You are raising the price of fertilizers, electricity, seeds and not raising the price of cotton," farmer Yuvraj Vaman Patil, who has been holding on to most of his 1.9 tonne harvest, said at a recent rally. Patil is not alone. In recent weeks, thousands in farm belts from the state of Maharashtra in the west to Andhra Pradesh in the south have been out on the streets, demanding the government hike support prices of farm commodities to match rising costs.
- Movie Ticket Sales Hit 16-Year Low In 2011. The curtain is falling on the worst year for Hollywood in recent memory. The movie industry sold 1.28 billion tickets in North America in 2011, according to Hollywood.com, the lowest since 1995.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 22% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty percent (40%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).
- U.S. Mulls Transfer of Taliban Prisoner in Perilous Peace Bid. The Obama administration is considering transferring to Afghan custody a senior Taliban official suspected of major human rights abuses as part of a long-shot bid to improve the prospects of a peace deal in Afghanistan, Reuters has learned. The potential hand-over of Mohammed Fazl, a 'high-risk detainee' held at the Guantanamo Bay military prison since early 2002, has set off alarms on Capitol Hill and among some U.S. intelligence officials. As a senior commander of the Taliban army, Fazl is alleged to be responsible for the killing of thousands of Afghanistan's minority Shi'ite Muslims between 1998 and 2001.
- Major Dubai Companies 'May Need Bail-Outs'. Some of Dubai’s biggest companies will need state-funded bail-outs in 2012 if large-scale defaults are to be avoided, Standard & Poor’s (S&P) has warned.
- Spain's Economy Worsening, Says Central Bank. The Bank of Spain has warned that the economy has worsened, rattling investor confidence in Europe's fourth biggest economy just as recently installed prime minister Mariano Rajoy prepares to unveil his immediate budget plans.
- Steel demand growth may ease through 2015 and expectations of growth similar to the previous five years are "unrealistic," citing Zhang Changfu, vice chairman and secretary general of the China Iron and Steel Association.
- Shanghai's land sales by value fell for the first time in three years in 2011, citing SouFun Holdings Ltd.
- None of note
- Asian equity indices are -.25% to +.75% on average.
- Asia Ex-Japan Investment Grade CDS Index 204.50 -.5 basis point.
- Asia Pacific Sovereign CDS Index 164.0 +2.0 basis points.
- FTSE-100 futures +44%.
- S&P 500 futures -.22%.
- NASDAQ 100 futures -.09%.
Earnings of Note
Company/Estimate
- None of note
- None of note
Upcoming Splits
- None of note
- The NAPM-Milwaukee for December could also impact trading today.
Thursday, December 29, 2011
Stocks Rising into Final Hour on Euro Bounce, Better US Economic Data, Short-Covering, Window-Dressing
Broad Market Tone:
- Advance/Decline Line: Higher
- Sector Performance: Almost Every Sector Rising
- Volume: Light
- Market Leading Stocks: Underperforming
- VIX 22.90 -2.64%
- ISE Sentiment Index 151.0 +106.85%
- Total Put/Call 1.07 +15.05%
- NYSE Arms .49 -89.59%
- North American Investment Grade CDS Index 121.30 -.21%
- European Financial Sector CDS Index 279.81 +7.05%
- Western Europe Sovereign Debt CDS Index 369.06 +.22%
- Emerging Market CDS Index 307.48 -.53%
- 2-Year Swap Spread 49.0 -2 basis points
- TED Spread 58.0 +1 bp
- 3-Month EUR/USD Cross-Currency Basis Swap -118.50 +7.5 bps
- 3-Month T-Bill Yield .00% unch.
- Yield Curve 163.0 -2 bps
- China Import Iron Ore Spot $138.40/Metric Tonne +1.17%
- Citi US Economic Surprise Index 69.40 -.1 point
- 10-Year TIPS Spread 1.96 -3 bps
- Nikkei Futures: Indicating +47 open in Japan
- DAX Futures: Indicating +13 open in Germany
- Slightly Higher: On gains in my Tech, Medical and Biotech sector longs
- Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges and some of my (EEM) short
- Market Exposure: Moved to 75% Net Long
Today's Headlines
Bloomberg:
- Euro Falls to a 15-Month Low Versus Dollar on ECB Moves, Italy's Auction. The euro fell to a 15-month low against the dollar as Italian bond yields rose after the nation sold less than its maximum target at an auction, highlighting funding difficulties amid the region’s sovereign-debt crisis. The 17-nation currency dropped to a decade low versus the yen as concern increased that the European Central Bank will inject more cash into the financial system to avoid a credit crunch from the region’s debt crisis. The yen and dollar strengthened against most of their major counterparts as demand increased for safer assets. “The Italian debt auction was a little bit underwhelming,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “The fact that the 10-year yield didn’t come down and they sold a bit less than that maximum target amount, that spurred further euro selling.” The euro was little changed at $1.2945 at 1:38 p.m. in New York after falling to $1.2858, the weakest level since Sept. 14, 2010.
- ECB Has More Scope to Cut Rates as Prices Wane. The European Central Bank has more room to cut interest rates to a record low early next year after reports showed the sovereign debt crisis is damping inflation pressures. The rate of growth in M3 money supply, which the ECB uses as a gauge of future inflation, fell to 2 percent in November from 2.6 percent in October, the Frankfurt-based central bank said today. Growth in loans to households and companies across the 17-nation euro area also slowed, while inflation in Germany, the region’s largest economy, decelerated in December. The data reinforce the view “that underlying inflationary pressures are easing and that the ECB has ample scope to cut interest rates again in the early months of 2012,” said Howard Archer, chief European economist at IHS Global Insight in London. “Euro-zone inflation is poised to retreat markedly over the coming months.”
- Libor Gap Hints at Debt Crisis Money-Market Freeze: Euro Credit. The gap between the highest and the lowest rates that banks say they can borrow from each other in dollars is close to a 2 1/2 year high, a sign Europe's failure to end the debt crisis is straining the financial industry. The divergence from reported fixings by the 18 banks contributing to the three-month London interbank offered rate reached 28 basis points yesterday, within two basis points of the widest since May 2009. Libor for three-month loans climbed to .579 percent yesterday, the most since July 2009, even as central banks injected cash into the market.
- Sovereign, Corporate Bond Risk Rises, Credit-Default Swaps Show. The cost of insuring against default on European sovereign and corporate debt rose, according to traders of credit-default swaps. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments climbed three basis points to 355 at 11:30 a.m. in London. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 15 basis points to 770, according to JPMorgan Chase & Co. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 3.5 basis points to 177 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased nine basis points to 283 and the subordinated index was 12 higher at 519.
- Most Germans believe the sovereign-debt crisis in the euro area isn't over, AWD Holding AG said, citing a survey the financial-services broker commissioned from polling company Forsa. Some 90% of Germans expect other euro-area countries will require a bailout in the "near future," according to the survey of 1,000 people for Hanover, Germany-based AWD.
- U.S. Lawmakers Backtrack on Pledges by Expanding Federal role in Mortgages. Washington lawmakers, who began 2011 with sweeping plans to shrink the U.S. government’s role in mortgage finance, are heading into 2012 after enacting policies that expand it. An 11th-hour payroll tax cut extension signed into law last week will for the first time divert funds directly from Fannie Mae (FNMA) and Freddie Mac, the two mortgage-finance companies under U.S. conservatorship, to pay for general government expenses. That move came after two others that also could increase government involvement: Lawmakers allowed a tax break on private mortgage insurance to expire and raised loan limits for mortgages insured by the Federal Housing Administration. Advocates of private mortgage finance say they are concerned that using fees from Fannie Mae and Freddie Mac is setting a precedent that will keep the government in the mortgage business for a decade or more.
- Bond Ratings Show Credit Quality May Have Peaked: Credit Markets. Credit-ratings firms are growing less optimistic about U.S. corporate borrowers, downgrading more companies as they forecast defaults will rise. The ratio of upgrades to downgrades fell to 1.08 this year from 1.4 in 2010, according to data from Moody's Capital Markets Group.
- China Industrial Corn Consumption May Slow. Industrial use of corn in China, the second-biggest consumer, may grow at the slowest pace in at least five years as the economy cools, curbing the need for imports, said state-affiliated researcher Cngrain.com.
- Home Sales in U.S. Beat Forecasts. The number of Americans signing contracts to buy previously owned homes rose more than forecast in November as falling prices and low borrowing costs boosted demand. The index of pending home sales (USPHTMOM) increased 7.3 percent to the highest level since April 2010 after climbing 10.4 percent the prior month, figures from the National Association of Realtors showed today in Washington. Economists forecast a 1.5 percent gain, according to the median estimate in a Bloomberg News survey.
- U.S. Business Activity Grows Faster Than Forecast Despite Europe Slowdown. The Institute for Supply Management-Chicago Inc. said today its business barometer (CHPMINDX) was little changed at 62.5 from a seven- month high of 62.6 in November.
- China Stops Encouraging Foreign Investment in Auto-Industry Manufacturing. China will stop encouraging foreign investment in car manufacturing to allow for “healthy development” of a market that saw sales growth plummet to a tenth of last year’s pace. The change ends seven years of foreign-investor benefits including reduced tariffs on imported plant equipment, said Jenny Gu, a senior market analyst at LMC Automotive in Shanghai. Foreign investment in more fuel-efficient vehicles will still be encouraged, the National Development and Reform Commission and the Ministry of Commerce said in a statement.
- Italian Bond Risk Bubbles Away. While 10-year yields below 7% are more palatable than above, they are still two percentage points above where they started the year. That is despite ECB rate cuts and a plunge in German yields of more than a percentage point. Italy has no choice but to push on with its gargantuan funding program. It can sustain high yields for some time thanks to its long average debt maturity of seven years which means the higher rates take time to feed through. But 2012 still carries a serious risk that investors again feel the heat, and leap for the exit.
- Canadian Household Debt Levels Merit Monitoring: CMHC. Canadians' record level of household debt is a "serious issue" that merits closer monitoring by authorities in the years ahead, Canada Mortgage and Housing Corp. (CMH.YY) said. In a year-end publication released Thursday, CMHC - the government-owned provider of mortgage insurance in Canada - said mortgage debt accounts for 68% of total household debt, by far the largest contributor.
- Egyptian Forces Storm NGOs. Egyptian soldiers and police stormed nongovernmental organization offices throughout the country Thursday, banning employees inside from leaving while they interrogated them and searched through computer files, an activist and security official said. Egyptian state television reported at least 18 offices were targeted in the raid.
- Turkish Air Strike Kills 35 Kurds. Thirty-five people were killed on Turkey's border with northern Iraq late Wednesday, in what Kurdish politicians say was a Turkish air strike against civilian Kurds, mistaken for members of the outlawed Kurdistan Workers Party, or PKK. Deputy Chairman of Turkey's governing Justice and Development Party, or AK Party, Huseyin Celik, confirmed late Thursday that the 35 dead were smugglers, all under 30 years of age, but stopped short of calling them "civilians". If the dead are confirmed to be civilians, Mr. Celik said, the incident was "an operational accident."
- Goldman Sachs(GS) + Warren Buffett = Not Many Jobs.
MarketWatch:
Business Insider:
Wall Street All-Stars:
Rasmussen Reports:
Financial Times:
Business Insider:
- Princeton Students Disrupt A JPMorgan(JPM) Recruiting Session With A Devastating Chant.
- A Rare Look Inside The Fukushima Evacuation Zone. (pics)
- These 10 Dates Are Crucial For The Future Of Europe.
- The White House Just Agreed To Sell Saudi Arabia The Largest US Overseas Arms Package Ever.
- MF Global Client Attorney On Closing His JPMorgan(JPM) Account: 'Don't Worry Jamie, Mine Won't Be The Only One.'
- China Is Steadily Buying Up The US Auto Industry.
- US Gasoline Sales Show No Sign Of Economic Recovery. (graph)
- Will "Tax the Rich" Solve Our Deficit/Spending Crisis? If we look at tax revenues and income in a practical way, we find "tax the rich" will not close the widening $1.5 trillion gap between Federal revenues and spending.
- New Fiscal Compact, Or More Of The Same For Europe?
Wall Street All-Stars:
Rasmussen Reports:
Financial Times:
- Land Prices Surge in US Shale Oilfields. The cost of drilling rights in US shale oilfields surged during 2011 as large US energy groups and state-owned oil companies embarked on a “resource grab”, according to data provided to the Financial Times. Oil extracted in the US by “fracking” – drilling through dense rock, then fracturing it with high-pressure fluids – has grown fivefold since 2006 to 500,000 barrels a day.
Telegraph:
- Eurozone Credit Crunch Fears on M3 Money Contraction. Europe is at mounting risk of a fresh credit crunch after the eurozone money supply contracted for a second month in November and the volume of private loans began to shrink. Data released by the European Central Bank shows that M3 money figures tracked by experts as a leading indicator for the economy have turned negative since August, signalling almost certain recession over coming months for the region as a whole. "The message of these numbers is that the eurozone faces a bleak 2012, with inflation falling rapidly," said Tim Congdon from International Monetary Research. "There is a desperate need to restore growth to the banking system and boost the quantity of money."
- Italian Bond Auction Highlights Eurozone Nation's Woes. Signs that Italy faces a tough start to 2012 were evident on Thursday as the country's final bond sale of the year saw nervous investors demand close to 7pc to hold the ailing nation's 10-year debt.
Bild Zeitung:
- The euro currency area may break up in 2012, as steps taken to preserve it remain inadequate, Beatrice Weder di Mauro, a member of German Chancellor Angela Merkel's council of economic advisers, said in an interview. The German economy may shrink as much as .5% next year if the crisis holds back growth in global trade, Weder di Mauro said.
- Spanish banks are preparing to sell so-called contingent convertible bonds as a means to cover extra provisioning costs from a cleanup of real estate assets planned by the government. The government's latest idea is to apply a new discount of about 20% on real estate assets on their books.
Bear Radar
Style Underperformer:
- Large-Cap Growth (+.69%)
- 1) Coal -.40% 2) Oil Tankers +.09% 3) Retail +28%
- DECK, HMIN, GNI, DNP and NL
- 1) TC 2) BX 3) DECK 4) REE 5) LOW
- 1) UTX 2) BAC 3) BHI 4) JPM 5) HPQ
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