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Bloomberg:
- The Standard & Poor’s 500 Index will probably exceed 1,300 as early as February because the economy continues to rebound from the worst recession since the 1930s, billionaire Kenneth Fisher said. The benchmark index for U.S. stocks has surged 62 percent to 1,093.08 after sinking to a 12-year low in March. It will add up to 25 percent from last week’s close in the next three months, said Fisher, 58, who oversees $35 billion as chairman of Woodside, California-based Fisher Investments Inc. “It’s just a reversal of excessive pessimism,” Fisher, ranked by Forbes magazine as the 289th-richest person in the U.S., said in an interview yesterday. “We still have a lot more bull market to go because we had such a huge bear market.”
- FedEx Corp.(FDX), the second-largest U.S. package-delivery company, projected handling about 8 percent more shipments on its busiest day before the Christmas holiday amid “positive signs” for the economy. More than 13 million shipments will move on Dec. 14, up from 12 million on 2008’s peak on Dec. 15, FedEx said today in an e-mailed statement. That would be a daily record, and the gain would exceed last year’s increase of about 6 percent. The forecast is an “encouraging” holiday-season signal, said Mike Glenn, executive vice president of market development. Laptops, mobile phones and e-mail devices will be popular gifts, as will staples such as clothing, he said, citing conversations with retailers.
- Ezra Levy, a hedge fund trader and chief financial officer of Boston Provident Partners LP, was arrested on federal charges that he stole more than $1.3 million from the Manhattan-based firm. Prosecutors accused Levy in a criminal complaint of two schemes to defraud Boston Provident, run by Orin Kramer, the chairman of the New Jersey State Investment Council. Levy transferred $726,000 from Boston Provident to his bank accounts and had the fund buy shares of Atlas Energy Inc. at inflated prices from an account he controlled, generating a $600,000 profit, according to the complaint.
- Senator Christopher Dodd proposed creating a single U.S. bank regulator and stripping supervision from the Federal Reserve and Federal Deposit Insurance Corp. in legislation aimed a preventing a repeat of the credit crisis. Dodd, chairman of the Senate Banking Committee, would eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision and fold the Treasury Department units into the Financial Institutions Regulatory Administration, according to draft legislation obtained by Bloomberg News. The Connecticut Democrat will release the plan today in Washington.
- Morgan Stanley(MS), Citigroup Inc.(C) and JPMorgan Chase & Co.(JPM) lead the pack of U.S. banks modifying home loans to troubled borrowers under the Obama administration’s main foreclosure prevention plan, the Treasury Department said. Citigroup, the third-largest U.S. bank by assets, began 88,968 trial modifications, or 40 percent of its eligible mortgages, under the Making Home Affordable Program this year, Treasury data through October shows. JPMorgan, the second- largest U.S. bank, has started 133,988 modifications, or 32 percent of eligibility, the Treasury said in a statement today. Morgan Stanley’s Saxon Mortgage Services had begun trials for 44 percent of its 80,477 eligible loans. In all, 20 percent of eligible U.S. homeowners have received trial modifications through the government program, according to the data.
- Oil refiners may face a “day of reckoning” should higher financing costs spur traders to sell cargoes stored at sea back into the market, consultant Petromatrix GmbH said. The combined capacity of tankers being used to store oil products has expanded more than 500% since April. “The day of reckoning may come the day the Fed starts to raise interest rates,” Olivier Jakob, managing director of Petromatrix, said. “You can keep on hiding and hiding and the day it comes out, all hell breaks loose.” The storage trades may also be reversed should freight rates increase or demand for products strengthen, he said.
- Copper stockpiles held in duty-free warehouses in China, the top user, may be re-exported after surging to as much as 350,000 tons from almost none at the start of the year, according to Xi’an Maike Metal International Group. “We can hardly find buyers for refined copper,” said Luo Shengzhang, general manager of the copper department at Xi’an Maike. The company ranks among the country’s three biggest importers, according to the executive. “China’s got to export some copper from now and next year,” Luo said in an interview. Xi’an Maike has had to re-route some bonded copper to London Metal Exchange warehouses in South Korea because the company was unable to find buyers in China, with local supply outpacing demand, said Luo. The effect of the stimulus package was wearing off and local scrap supply was improving, he said. “We do see the trend of more copper being re-routed, though our estimate for bonded copper isn’t as big,” Grace Qu, an analyst at CRU International Ltd., said from Beijing today. A shift of the metal from bonded stockpiles “to LME reported inventory would be bearish for London prices,” she said. In addition to the bonded-zone stockpiles, China may also hold 150,000 tons in the Shanghai area, including in exchange- monitored warehouses; 235,000 tons at the State Reserve Bureau, which maintains government holdings; and 200,000 tons with fabricators and private investors, Luo, 36, said yesterday.
- Mubadala Development Co. said a block it’s exploring with partners in Kazakhstan’s Caspian Sea may hold 3 billion barrels of oil and will help the Abu Dhabi- owned investment company meet a goal of raising production. Exploration at the Nursultan Block may take about three years and development may last “several” years beyond that, Maurizio La Noce, head of Mubadala Oil & Gas, said at a conference in Abu Dhabi today. The field may contain 1.5 billion to 3 billion barrels of crude, he said.
- There may be an “acute glut” of natural gas in the next few years because of rising production of so-called unconventional fuel in the U.S. and Canada, according to the International Energy Agency. Global unconventional gas output will rise to 629 billion cubic meters in 2030 from 367 billion cubic meters in 2007, or to 15 percent of worldwide supply from 12 percent, the Paris- based adviser to 28 countries said in its annual World Energy Outlook. Gas supply capacity is set to outpace annual demand growth of 2.5 percent between 2010 and 2015, the IEA said. “There is a silent revolution taking place in the U.S.,” IEA Chief Economist Fatih Birol said today at a press conference in London. Companies such as Chesapeake Energy Corp. and Statoil ASA are investing in unconventional sources for gas including coal seams and shale rock. Shale gas is locked in a type of rock that made the reserves inaccessible until producers developed new drilling techniques in the 1990s. “The looming gas glut could have far-reaching consequences for the structure of gas markets and for the way gas is priced in Europe and Asia-Pacific,” the IEA said in the report.
- The International Energy Agency cut its long-term forecast for global oil demand as the economic crisis saps consumption in developed economies and environmental policies encourage alternative energy use. Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million barrels a day in 2008, the adviser to 28 nations said today in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day. “The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets,” the Paris-based agency said in its executive summary of the report. “World energy demand in aggregate has already plunged with the economic contraction.” The IEA’s forecasts are based on its “reference scenario,” which assumes that governments make no changes to their existing energy policies and measures. The adviser also has a “450 scenario,” whereby world leaders collectively act to reduce the concentration of carbon dioxide and other greenhouse gases in the atmosphere to 450 parts per million. Oil demand would be limited to 89 million barrels a day by 2030 under this scenario, an increase of 0.2 percent a year, as the U.S., Europe and Japan import less fuel and consumption by developed economies slows, the IEA said. That demand is 15 percent lower than the IEA estimates in its reference scenario. The IEA cut its five-year forecasts for global crude consumption in June, citing the economic slowdown. Demand won’t return to levels seen last year, when prices soared to $147.27, until 2012, the agency said at the time.
- Goldman Sachs Group Inc.(GS) Chief Executive Officer Lloyd Blankfein said his bank, the nation’s fifth largest, is easier to manage than its bigger rivals, defending the company against regulators and lawmakers who want to break up the top U.S. lenders. Politicians and regulators are debating whether last year’s credit crisis and government bailouts showed that some finance companies had become so big that their failure would put the entire economy at risk. The Obama administration wants to boost the Federal Reserve’s ability to set stricter capital and liquidity standards to reduce that threat, while lawmakers including Bernie Sanders, a Vermont independent, have proposed limiting the size of banks. Simon Johnson, a professor at the Massachusetts Institute of Technology in Cambridge, said in a Bloomberg radio interview today that Goldman Sachs’s assets nearly quadrupled over the last decade. “What have we gained from a societal perspective from Goldman Sachs becoming four times bigger? Nothing,” said Johnson, a former chief economist for the International Monetary Fund. “Break Goldman Sachs up into four pieces, let them choose how they break up.”
- A U.S. arms-control official said today there is “strong evidence” Iran sought to develop the means to put a nuclear weapon on a missile prior to 2003 and perhaps afterward. Robert Einhorn, the State Department’s special adviser for nonproliferation and arms control, said the United Nations’ International Atomic Energy Agency in Vienna will report on the issue next week. The IAEA will “address Iran’s continuing failure to cooperate with the IAEA’s investigation of the possible military dimensions of its nuclear program, including strong evidence that it has done work on a missile warhead for delivering nuclear weapons,” Einhorn said.
- BlackRock Inc.(BLK) Chief Executive Officer Laurence Fink said his firm was hired to manage assets for Swiss Reinsurance Co. and other institutions as investors are moving “record” amounts of funds out of cash. BlackRock gathered $3 billion from an unnamed institutional investor in Denmark and may get $11 billion from an undisclosed client, Fink said today at an event in New York organized by the Wall Street Journal.
Wall Street Journal:
- Thousands of people, many of them soldiers dressed in camouflage, gathered to pay respects and hear the president. On a steamy Texas day, the crowd kept growing until the minutes before the service began. Below the stage was the somber tribute to the fallen — 13 pairs of combat boots, each with an inverted rifle topped with a helmet. A picture of each person rested below the boots. The national anthem played after the Obamas arrived, and the soldiers in the crowd of about 15,000 stood at attention. In an prayer opening the ceremony, each slain victim was named by first name.
- The cost of insuring Japanese government bonds against default has doubled to 75 basis points in the past three months, as markets fret about debt issuance. Credit risk is assuming ever greater stature in government bond markets previously blithely assumed to be risk free. Japan's debt problem is becoming urgent. It is grappling with issues that other governments such as the U.S. and U.K. will face, but is much further down the road already. Its debt-to-gross domestic product ratio is set to rise to a staggering 227% in 2010, the International Monetary Fund forecasts, making it particularly exposed to any rise in market interest rates. Japan's aging population is a crucial concern, driving a shift from saving, much of which went into JGBs, to consuming. An older population also requires higher social security spending -- which all combines to upset the balance that has provided an extremely stable investor base so far for JGBs. Debt affordability is key. Japan has been able to sustain stratospheric debt levels thanks to low yields. Even with the past month's rise of 0.25 percentage point, yields on 10-year JGBs stand at just 1.48%, held down by continued deflation and strong domestic buying.
NY Times:
- When is a good deal too good? That question is being whispered around Wall Street these days, a year after Lehman Brothers went bust in the biggest bankruptcy ever. Sure, the panicked days of last autumn might seem like ancient history. After all, for much of Wall Street, the financial crisis is receding quickly, and many banks are minting money again. And yet all these months later, heads are still being scratched over the way Barclays managed to scoop up the remains of Lehman. Barclays, it turns out, cut itself a remarkably good deal. A recent court filing — this one free of redactions — even accuses Barclays of making off with $5 billion without anyone noticing, an amount that Lehman’s creditors seem to think should be treated as the largest theft in banking history. In simplest terms, the creditors to Lehman’s estate — including large pension funds and hedge funds — claim that Barclays bought the American firm for $5 billion less than it was worth. How could that possibly happen? According to the filing, Barclays received Lehman securities valued at about $50 billion for just $45 billion in cash. The complaint suggests more was going on here than some flubbed back-of-the-envelope math.
- In a nod to its vision of the future, Sony will make its animated hit “Cloudy With a Chance of Meatballs” available to consumers directly through Internet-enabled televisions and Blu-ray players before the movie is released on DVD.
Washington Times
FXStreet.com:
- National chain store sales rose 4.3% in the first week of November versus the previous month, according to Redbook Research's latest indicator of national retail sales released Tuesday. The rise in the index was compared with a targeted 4.8% gain. The Johnson Redbook Index also showed seasonally adjusted sales for the period were up 1.7% from last year and compared with a targeted 2.2% increase. Redbook said, "Merchants saw business improve in seasonal apparel and other weather driven items. Cooler temperatures as well as easy year ago comparisons were said to be factors." It added, "Some stores are already in a rush to cut prices and extend store hours in an effort to create a 'Black Friday' everyday."
Washington Post:
- The Federal Housing Administration, which has played a crucial role supporting American home buyers after the collapse of the mortgage market, has burned through a huge cash reserve in less than a decade and could soon wind up with what amounts to an automatic taxpayer bailout if the agency's fortunes don't improve, according to a review of FHA finances. Senior FHA officials have assured Congress that the agency will not need a bailout, which would be politically sensitive for lawmakers to approve after the government has already spent hundreds of billions of dollars rescuing financial companies. But the agency's complex funding mechanisms -- little understood in Washington, including on Capitol Hill -- do not require the FHA to turn to Congress if the agency cannot cover losses on its outstanding loans. The agency, which collects premiums from borrowers who take out FHA-insured mortgages, has been automatically drawing down on money it deposited with the Treasury Department when the FHA was flush with cash. Those funds have dwindled as the FHA's losses grew. If the losses continue unabated, the FHA would still receive money from Treasury. "It is absolutely a myth that they would have to go to Congress for money," said Marvin Phaup, a former budget analyst at the Congressional Budget Office and now a budget expert at Pew Charitable Trusts. "The FHA has permanent authority to get money from the Treasury because it is backed by the full faith and credit of the federal government."
Newsweek:
NJ.com:
- Bullets pierced his thigh, his midsection and both arms. A dozen staples hold together the wound in his side. Fragments of metal remain in his body. Bridgewater native Alan Carroll, one of 29 people wounded in Thursday’s mass shooting at Fort Hood in Texas, knows he has some healing to do, but he’s hoping to do it fast. Early next year, his Army unit departs for Afghanistan, and Carroll, a private second class, said he’s determined to go along. "I’m doing everything I can to deploy in January," Carroll, 20, said by telephone from Fort Hood, where he’s recuperating from his injuries. Shot four times, Carroll was released from the hospital Saturday. He uses crutches to get around for the time being. His mother, Teresa Scholte, has been at his side since late last week. She’s more measured about her son’s intentions to deploy despite his injuries, but Scholte says she’s learned not to second-guess him.
Rassmussen:
Politico:
- Senate Majority Leader Harry Reid found his health reform efforts seriously complicated Monday by the explosive issue of abortion, as key centrist senators said they wanted to see airtight language in the bill blocking federal funding for the procedure. Abortion threatened to derail a House health reform bill Saturday, and now it’s standing in the way of Reid’s attempts to get 60 votes as well, with Sen. Ben Nelson (D-Neb.) saying he wants to see language as restrictive as the House’s in the Senate bill. If the language isn’t clear in prohibiting federal funds for abortion, “you could be sure I would vote against it,” said Nelson, who met with Reid on Monday.
zerohedge:
- Even though our good Samaritan friends at One New York Plaza may take offense to this designation, the trading desk that controls the formerly free world is not located anywhere on the premises of Goldman Sachs, but is instead situated on the 9th floor of 33 Liberty Street, also known as the home New York Fed. From a trading desk cluster at this location, 39 year old Brian Sack controls the uber-secretive money flows that determine the daily fate of credit, equity and virtually all other markets, that have now been subsumed by the government's central planning ambitions and aspirations to determine each and every uptick in the increasingly more irrelevant S&P 500.
San Francisco Chronicle:
- SmartMeters, which Pacific Gas and Electric Co. have been installing throughout its territory, are the subject of a lawsuit by a Bakersfield man who blames them for his soaring electric bills. Pete Flores has sued PG&E over the meters, claiming they caused his monthly bill to jump from less than $200 to more than $500. The class-action suit, filed on Oct. 16 in Kern County Superior Court, alleges that the meters aren't accurate and lead to overcharges that PG&E should be forced to refund. "Whatever the problem is needs to be sorted out and fixed now," said attorney Michael Louis Kelly, representing Flores. Residents of Bakersfield, Fresno and the surrounding area have been complaining for months about the SmartMeters. The devices are designed to track electricity and gas usage with precision and transmit their data to the utility via wireless. But residents started to question the meters' accuracy after their monthly electric bills jumped this summer. PG&E, based in San Francisco, blames the higher bills on a combination of hot weather and recent increases in electricity rates.
Reuters:
- Britain's top two banks, HSBC and Barclays, signaled bad debts may be past their peak, with HSBC declaring on Tuesday the first improvement for three years in losses on U.S. consumer credit.
- Watchmaker Fossil Inc (FOSL) posted a quarterly profit that outpaced market estimates and its own forecast, buoyed by stronger sales at company-owned stores, and said its international accessories business would continue to gain momentum. The Richardson, Texas-based company was one of the top percentage gainers on Nasdaq on Tuesday -- its shares rising as much as 11 percent to touch their year high at $32.07.
Financial Times:
CBC News:
- More than 100 surgeries have been cancelled at the Ottawa Hospital as swine flu patients flood emergency rooms and fill hospital beds. "We are postponing people who really need to be done, and that's not something we take lightly, and it is not something we want to do," said Dr. Jack Kitts, CEO of the Ottawa Hospital. The hospital has been forced to cancel 112 surgeries originally scheduled for between Oct. 28 and Nov. 6. They include operations that are considered less time-sensitive, such as shoulder repairs, knee and hip replacements and hernia operations. In many cases, patients have to make costly arrangements to come in for surgery or have arranged for relatives to help them, Mamazza said. "So, it puts quite a burden on the family itself," he said. And many patients have already waited a very long time for their surgeries, Kitts said. "By the time these patients have waited several months to get here, they're often in a lot of pain and have developed other illnesses," he said. The hospital is trying to give patients another operation date within a few weeks, and Kitts said staff are determined not to cancel a patient's surgery more than once.
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