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Bloomberg:
- Yields on bonds backed by hotel, shopping-center and skyscraper loans narrowed relative to benchmarks as U.S. programs help drive demand even as late payments soar on the underlying commercial real estate debt, according to Barclays Capital. The gap, or spread, on top-ranked commercial-mortgage backed securities tightened 0.15 percentage point relative to benchmark swap rates to 6.25 percentage points for the week ended Oct. 15, Barclays data show. That compares with 10.15 percentage points in March, according to Barclays. Demand for the bonds swelled as rising stocks buoyed investor sentiment and government programs helped further prop up prices of the debt.
- The Federal Deposit Insurance Corp. failed to enforce its own guidelines to rein in excessive commercial real estate lending by at least 20 banks that later collapsed, reports by the agency’s watchdog show. The FDIC’s Office of Inspector General analyzed 23 lenders taken over by regulators from August 2008 to March and found that for 20, the agency’s examiners didn’t identify the issue early enough or should have taken stronger supervisory action after recognizing the banks had dangerously high levels of the loans before they failed.
Wall Street Journal:
- Major financial institutions that are too big to fail should be broken up, Greenlight Capital manager David Einhorn said Monday during a conference in New York. The hedge fund manager, who warned about Lehman Brothers Holdings Inc.'s(LEHMQ) frailty before it collapsed, criticized the financial-reform proposals of Treasury Secretary Timothy Geithner. He argued they provide a government back-stop to the largest institutions, entrenching them further. No institution should be too big to fail, Einhorn explained. "The real solution is to break up anything that fails that test," he said. "Lehman shouldn't have existed in any size to threaten the financial system." The same applies to Citigroup Inc. (C), Bear Stearns, American International Group Inc. (AIG) and "dozens" of other firms, Einhorn said. Separately, Einhorn said his hedge-fund firm is betting on the possibility of a major currency collapse and a surge in interest rates, citing ballooning government deficits in some of the world's most developed countries.
- The Iraqi government, backed by the Obama administration, kicks off its biggest post-Saddam investment roadshow Tuesday, to convince American businesses to join the country's reconstruction efforts. The conference has been trumpeted by senior White House officials, including Vice President Joe Biden. Iraq needs Western technology and cash in sectors such as oil, electricity and agriculture.
CNBC:
- Federal Reserve Chairman Ben Bernanke on Monday called for the United States to whittle down its record-high budget deficits and for countries like China to get their consumers to spend more, moves that would help combat skewed global trade and investment flows that contributed to the financial crisis.
Fox News:
Washington Times
- So you thought easy-money mortgages with little or no down payment for people with bad credit was a thing of the past? Think again. You can get just such a loan today - and it's guaranteed by the federal government. Loans insured by the Federal Housing Administration (FHA) have become "the new subprime," and these loans are exposing taxpayers to the same kinds of soaring default rates and losses that brought down Fannie Mae and Freddie Mac as well as destroyed many banks and the private market for mortgage loans.
Washington Post:
- Flow of terrorist recruits increasing. Westerners attending camps in Pakistan and Afghanistan despite successful U.S. strikes. Midway through a propaganda video released last month by a group calling itself the German Taliban, a surprise guest made an appearance: a cleanshaven, muscular gunman sporting the alias Abu Ibrahim the American. The gunman did not speak but wore military fatigues and waved his rifle as subtitles identified him as an American. The video contained a stream of threats against Germany if it did not withdraw its troops from the NATO-led mission in Afghanistan. Although the American's part in the film lasted only a few seconds, it has alarmed German and U.S. intelligence officials, who are still puzzling over his background, his real identity and how he became involved with the terrorist group.
HedgeFundBlogger.com:
- The hedge fund industry is gaining greater pull on capitol hill, an important development as the financial industry is facing more government regulation. Hedge funds have some powerful tools at their disposal: A former congressman willing to lobby on the industry's behalf, the potential return on campaign contributions and a strategy of shaping reform in a way that does not harm hedge funds too severely.
Chicago Tribune:
- As the loss of chiefs, fighters, money and ideological appeal weakens al-Qaida, the network's ability to attack in the West has diminished in recent years, according to Western anti-terrorism officials. The complex debate over U.S. policy in South Asia encompasses differing proposals for tactics, troop levels and strategies for contending with the Taliban. But the Obama administration says it is all driven by a top priority: defeating al-Qaida. That enemy is on the defensive. Al-Qaida has failed to strike the United States during the past eight years. The network last spilled blood in the West in 2005 when the London transit bombings killed 52 people. Global cooperation and aggressive infiltration by Western spy services have thwarted subsequent plots and sharpened a campaign of drone strikes that has killed veteran bosses. "Some pretty experienced individuals have been taken out of the equation," a senior British anti-terrorism official, who requested anonymity because of the sensitive topic, said in a recent interview.
SeekingAlpha:
- Goldman Sachs(GS): ‘A Hybrid Hedge Fund and Bookie’ Many of us didn’t like it — we thought banks like Goldman should have been recapitalized the right way, by wiping out shareholders and forcing subordinated creditors to eat their share of losses. But that ship has sailed. We socialized the risk while privatizing the profit because we were told we had no other choice: The government had to guarantee the biggest banks’ liabilities because they were too unstable to survive bankruptcy or FDIC receivership. If that’s true, why haven’t we seen any substantial reforms to reduce systemic risk? Congress is kicking around new resolution authority to help resolve failed systemically-important banks. But the goal should be reducing systemic risk to begin with. Yet serious reform of the derivatives market — something that would reduce its size significantly — is nowhere on the radar.
DetroitFreePress:
- Even with a tentative agreement that is filled with product and job promises -- including a $1,000 per-worker bonus -- a deal reached between Ford Motor Co.(F) and the UAW faces widespread opposition, according to union workers and leaders. The agreement was recommended for approval by the UAW's top leadership last week, but must be ratified by union members to become official. Ford, in an effort to obtain the contract changes, has promised the UAW that it will continue to create more than 2,000 jobs across Ford's U.S. plants, add a new product to the lineups at several metro Detroit plants and provide the $1,000 onetime bonus.
SunSentinel.com:
- Florida health officials are drawing up guidelines that recommend barring patients with incurable cancer, end-stage multiple sclerosis and other conditions from being admitted to hospitals if the state is overwhelmed by flu cases. The plan, which would guide Florida hospitals on how to ration scarce medical care during a severe flu outbreak, also calls for doctors to remove patients with poor prognoses from ventilators to treat those who have better chances of surviving. That decision would be made by the hospital.
The Atlantic:
Politico:
- The White House and congressional Democrats are working to marginalize the Chamber of Commerce — the powerful business lobby opposed to many of President Barack Obama’s first-year priorities — by going around the group and dealing directly with the CEOs of major U.S. corporations. Since June, senior White House officials have met directly with executives from more than 55 companies, including Chamber members Pfizer, Eastman Kodak and IBM.
USAToday:
- Reported vehicle theft has fallen to a 20-year low even as the number of vehicles on the road has doubled, as manufacturers install sophisticated anti-theft technology in cars and police target organized car-theft rings. The FBI estimates 956,846 motor vehicles were stolen in 2008 — 315 cars for every 100,000 people. That's less than half the rate in 1991, when a high of 1.66 million vehicles were stolen — 659 for every 100,000 people. Data for 2009 are not yet available.
Financial Times:
- Middle East families and sovereign wealth funds are slashing their investments and demanding more favorable terms from private equity funds following the financial crisis. The region has been a significant source of capital for the private equity industry in recent years but many investors are still suffering from the collapse in liquidity that followed the collapse of Lehman Brothers. One private equity executive who recently finished raising a buy-out fund said: "The one area where we have not raised any money is the Middle East. The region shut down 12 months ago." Private bankers, who are important middlemen for wealthy private investors, said many of their regional clients were loath to make fresh commitments.
Novaya Gazeta:
- Former Soviet President Mikhail Gorbachev said the decision of three political parties to walk out of Russia’s parliament last week to protest alleged vote-rigging in Oct. 11 regional votes showed that elections had become a “mockery of the people.” “If such disciplined, cautious peoples so close to regime resorted to this sort of maneuver, it means that trust in this political institution, elections, has been completely lost,” Gorbachev said.
Khaleej Tiomes Online:
- DUBAI - Iran is holding out for big discounts on its purchases of gasoline for November, offering 25-30 percent less than market prices even though the risk of U.S. sanctions means sellers expect a premium, traders said. Industry sources said on Monday it was unrealistic for Tehran to seek the kind of low prices that might be negotiated by a favored buyer like Saudi Arabia. Tehran, which cut its October gasoline purchases by about 20 percent, compared with the previous month, to 102,120 barrels per day (bpd) or about 12 cargoes of gasoline, does not appear to have done any deals yet for next month, traders said. “It’s ridiculous what they are asking for, it’s almost as if they are not interested in buying...but I get the sense they are struggling with the premiums attached to cargoes sold into Iran,” said a Middle East based trader.
Style Underperformer:
Large-Cap Growth (+.78%)
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Homebuilders (-.40%), Banks (-.11%) and Oil Tankers (-.02%)
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