Bloomberg:
- Sales of existing U.S. homes increased more than forecast in October to the highest level since February 2007, spurred in part by a tax credit that lured first-time buyers. Purchases rose 10.1 percent to a 6.1 million annual rate from a 5.54 million pace in September, the National Association of Realtors said today in Washington. The median sales price decreased 7.1 percent from October 2008, the smallest decline in more than a year. “It’s an impressive increase and shows a lot of pent-up demand for housing,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. “Buyers have enough confidence to take the plunge. The housing market recovery will be a durable one.” Purchases of existing homes rose 23.5 percent in October compared with a year earlier. The number of previously-owned unsold homes on the market fell 3.7 percent to 3.57 million. At the current sales pace, it would take 7 months to sell those houses compared with 8 months at the end of the prior month. The months’ supply is the lowest since February 2007. The report showed sales of existing single-family homes rose 9.7 percent, the biggest gain since 1983, to an annual rate of 5.33 million. Sales of condos and co-ops increased 13.2 percent to a 770,000 rate. Purchases rose 11.6 percent in the Northeast, 14.4 percent in the Midwest, 12.7 percent in the South and 1.6 percent in the West.
- Worldwide personal-computer shipments will increase more than expected this year on accelerating demand for laptops, research firm Gartner Inc. said today. Shipments will rise 2.8 percent to 298.9 million units in 2009, Gartner said today in a statement. In September, the company projected a 2 percent decline for the year. Personal- computer makers will ship 336.6 million units in 2010, an increase of 13 percent, Gartner said. The company predicts “a modest bump” in consumer demand this quarter as vendors promote Microsoft Corp.’s Windows 7 operating system. Laptop PC shipments got a “significant boost from mini-notebooks,” the company said. The third quarter was “much stronger than we expected, and that alone virtually guaranteed we would see positive growth this year,” Gartner said.
- The U.S. military’s review of the Fort Hood shootings must include an assessment of the accused shooter’s career path and whether he should have been promoted, according to Defense Secretary Robert Gates. Gates said the military also should investigate whether Army policies and procedures would inhibit the discharge of a soldier who was found “not to be fully qualified or unsuitable for continued” service and how these findings might apply to Major Nidal Malik Hasan.
- The U.S. Securities and Exchange Commission will focus on financial instruments such as derivatives as it broadens a crackdown on insider trading by hedge funds, enforcement director Robert Khuzami said. “The days of insider-trading scrutiny being focused almost solely on the equity markets are now gone,” Khuzami said today at a New York legal conference on hedge-fund regulation. After bringing its first insider trading case tied to credit default swaps in May, the SEC will “roll back the curtain on those markets and look at patterns across all markets,” he said.
- Sulfur emissions from imported Chinese drywall is linked to corroding metal and wires in U.S. homes, and may be causing eye irritation and other health complaints by homeowners, federal investigators said.
- King Pharmaceuticals Inc.(KG), LifePoint Hospitals Inc.(LPNT) and Endo Pharmaceuticals Holdings Inc.(ENDP) may be buyout targets as private-equity firms seek companies battered by the economy and poised to gain from the U.S. health overhaul. The three companies, with market caps of about $1 billion to $3 billion each, are steady cash producers with little debt and low share prices compared with their earnings potential, a profile sought by acquirers, according to Pali Capital Inc. in New York and Zurich-based Credit Suisse Group AG.
Wall Street Journal:
- Venture-capital funds are cutting fees as they scrounge for cash amid a bruising fund-raising environment. Battery Ventures, Draper Fisher Jurvetson and Opus Capital are among venture-capital firms that have dangled lower costs in front of investors in the past few months. Some are cutting fees outright, while others are building performance-based hurdles into fee structures. The moves mark the first retreat by the venture-capital industry since the dot-com bust, which forced many firms to cut fees in hopes of luring back investors.
- Games are serious business in China. The country’s online game market will reach 41 billion yuan by 2010 ($6 billion), accounting for half the global market, according to newly released data from Cnzz.com Inc., a Beijing-based third-party data analysis firm (related report in Chinese here). The Cnzz.com report states that almost two-thirds of China’s 338 million Web users are now online game players. The online game industry, which currently accounts for more than half of the total Internet economy, will see strong annual growth at a rate of 20% future years, the report says.
NY Times:
- Top parliamentarian Jean-Paul Gauzes has written to members of an influential European Union committee recommending strict rules for hedge funds that clamp down on pay and borrowing, according to Reuters, which cited his report. The E.U. is scrutinizing a raft of regulations for the funds and other niche financial groups that includes imposing tough borrowing limits on the secretive industry, which has provoked increasing suspicion among politicians.
MarketWatch.com
- Top hedge fund managers including Paul Tudor Jones and David Einhorn have built big gold positions this year on concern about inflation. But what if the price of the precious metal already reflects this worrying outlook? "I'm not a gold fan," Bill Ackman, head of hedge fund firm Pershing Square Capital Management, said during a speech last month at the Value Investing Congress in New York. The metal is a "greater fool" type investment, he added. "You have to go to a lot of investment conferences like this to persuade other people to buy it," Ackman said. "I'd much rather own something with a stream of money coming in." One hedge fund investor said almost every manager they speak to has invested in gold in some way recently. This is one of two macro-economic trades that are popular in the industry, the other being shorting, or betting against, the U.S. dollar, the investor explained on condition of anonymity. During the first half of 2008, a common hedge fund trade was to short financial stocks and go long commodities-related shares. But the financial crisis and a ban on short-selling financial stocks triggered record redemptions from hedge funds later in the year. Many commodities-related stocks slumped as managers were forced to unwind positions to return cash to investors.
NYPost:
- As support for Treasury Secretary Timothy Geithner wanes on Capitol Hill amid frustration with the Obama administration's handling of the economy, JPMorgan Chase(JPM) CEO Jamie Dimon is emerging as a potential replacement. Sources tell The Post that a number of policy makers have begun mentioning Dimon as a successor to Geithner, whose standing in Washington has suffered because of the country's high unemployment rate, the weakness of the dollar, the slow pace of the recovery and the government's mounting deficit.
Public Capital:
- Goldman Sachs(GS) is in the hot seat at the state’s $22 billion Permanent School Fund. One of the fund’s five hedge fund managers, Goldman Sachs has lost much of its investment team and has been one of the lower performers for the school fund. So last week, the State Board of Education, which oversees the school fund, put Goldman Sachs on a 90-day watch list. It was a due diligence warning that the contract will be ended, said David Bradley, chairman of the Permanent School Fund committee. Goldman Sachs manages $357.7 million of the fund’s $2.2 billion hedge fund allocation. It’s annualized first-year return was 1.1 percent compared to the 3.4 percent composite returns for the all five of the managers. While the weak returns raised a red flag, it was the wholesale turnover of the staffers that created the greatest concern, Bradley said.
24/7 Wall St.:
- The 24/7 Wall St. Real-Time 500 Largest Companies In America.
BigGovernment.com:
paidContent.org:
- Well, it isn’t exactly the acquisition I was hoping for, but close, and probably for the better: BNO News, of the popular @BreakingNews Twitter feed and the BNO iPhone app, is launching its business syndication venture, called BNO News Wire, and MSNBC.com has signed on as the first client. Along with that, MSNBC.com will take over the management of the @BreakingNews Twitter feed starting next month, while BNO and its 20-year old Dutch founder Michael van Poppel will now focus on developing its subscription-based wire service to sell to news companies. BNO’s new wire-service headlines will now be fed into the Twitter feed, along with the usual third-party headlines that it aggregates. The wire service will formally launch in January and will build on some of the original stories that BNO has started doing of late, such as this and this. The BNO premium subscription-based iPhone app is not part of the MSNBC.com deal; some wire-service stories will go on the iPhone app but the ull slate will only be for the paid news media clients.
Rassmussen:
- Just 38% of voters now favor the health care plan proposed by President Obama and congressional Democrats. That’s the lowest level of support measured for the plan in nearly two dozen tracking polls conducted since June. The latest Rasmussen Reports national telephone survey finds that 56% now oppose the plan. Half the survey was conducted before the Senate voted late Saturday to begin debate on its version of the legislation. Support for the plan was slightly lower in the half of the survey conducted after the Senate vote. Prior to this, support for the plan had never fallen below 41%. Last week, support for the plan was at 47%. Two weeks ago, the effort was supported by 45% of voters. Intensity remains stronger among those who oppose the push to change the nation’s health care system: 21% Strongly Favor the plan while 43% are Strongly Opposed.
Politico:
- Republicans aren’t the only ones staring at the unnerving prospect of a 2010 primary season filled with smash-mouth intraparty contests that threaten to distract the party and leave Senate nominees bloodied and cash-depleted. In a handful of next year’s most competitive Senate races — and for a few of the Democratic Party’s most precariously perched incumbents — discordant Democratic primaries are already taking shape, complicating a midterm election landscape in which the party will be playing defense for the first time in four years. In some cases, the Democrat-on-Democrat fights are simply about ambition. In others, ideology is at the heart of the conflict. The common denominator is that the intraparty battles stand to divert critical resources and divide the party at an especially inopportune time.
Daily Finance:
Modern Distribution Management:
- The National Association for Business Economics has released its November 2009 Industry Survey, in which NABE panelists have increased their expectations for growth in 2010. "While the recovery has been jobless so far, that should soon change," said NABE President Lynn Reaser, chief economist at Point Loma Nazarene University. "Within the next few months, companies should be adding instead of cutting jobs."
Panelists expect a "sizable housing rebound, low inflation, and further rise in stock prices." Panelists are also "mostly optimistic" that the Federal Reserve's policies will not lead to higher inflation. NABE expects 3% pace of real GDP growth in the fourth quarter 2009, and 3.2% gain over four quarters of 2010. NABE panelists believe the end of net employment losses is near, with modest declines during the fourth quarter followed by a "bottom" in the first quarter of 2010 and gains after that. Most panelists don't expect a complete recovery of previously lost jobs until 2012. Housing recovery will gather momentum. Panel expects housing starts and residential investment to rise sharply in 2010, with housing starts increasing 36% and residential investment up 9%. Low house prices and interest rates will help drive this improvement. Inventory liquidation of 2008-2009 will hit bottom by the end of the year with restocking started again in 2010. Business spending on structures will continue to decline, but at a slower pace than in 2009. The dollar will weaken further in 2010 but will stabilize against the euro. Inflation will remain low, due to "substantial labor market slack and further productivity gains."
AP:
Reuters:
- Chicago Federal Reserve President Charles Evans expects U.S. unemployment to peak at around 10.5 percent next spring and hopefully easing to about 9.5 percent by end-2010, according to comments published on Monday.
- China's banking regulator has urged big state lenders including Bank of China (601988.SS) (3988.HK) to raise capital adequacy ratios to 13 percent next year after rapid loan expansions in 2009, according to a source with direct knowledge of the matter. Bank of China, China Construction Bank (601939.SS) (0939.HK) and Bank of Communications (601328.SS) (3328.HK) have notified the regulator they are working on fund raising proposals to meet the guideline, said the source, who declined to be identified as he was not authorized to speak to the media.
- Peet's Coffee & Tea Inc (PEET) raised its cash-and-stock offer to buy Diedrich Coffee Inc (DDRX), but with its shares trading down, the proposed deal offered little upside to a competing all-cash bid from Green Mountain Coffee Roasters Inc (GMCR). Gourmet coffee chain Peet's revised its offer to $32 a share, or $261 million, based on Friday's closing, after Diedrich informed the company that it considered a $30-per-share Green Mountain bid superior to a previous deal it signed with Peet's.
Financial Times:
- Deteriorating credit conditions in India’s banking system over the coming months have raised concerns about a hefty increase in problem loans and weakening bank profitability, ratings agency Moody’s warned on Monday. In spite of clear signs of recovery, Moody’s has maintained a negative outlook for the Indian banking system. In a report, the ratings agency flagged up worries about deteriorating asset quality and the volume of restructured loans. During the fiscal year ending March 2009, the level of gross non-performing loans for commercial banks rose by 22.5 per cent, almost double the 11.9 per cent of the previous year. “The rapid expansion of retail lending in recent years, combined with the slowdown of the Indian economy, has led to increased delinquency rates, especially for unsecured retail loans,” said Nondas Nicolaides, a Moody’s analyst and author of the report. The agency’s warning comes as expectations rise that the Reserve Bank of India will raise interest rates early next year. At its last policy-setting meeting the bank left rates unchanged but began to tighten up loose monetary policy introduced earlier to defend the economy from the global financial crisis. The RBI’s requirement that banks increase their cover ratio for non-performing loan provision to at least 70 per cent by next September would “severely affect” bank profitability in the short term, Moody’s predicted. The measure threatens to bring to an end a comfortable run in which the profitability of commercial banks, like the State Bank of India and the Bank of Baroda , has benefited from the high lending environment and net interest income rising sharply in 2009.
- When the word came from Brussels on Thursday evening that Herman Van Rompuy, the Belgian prime minister, would be the first president of the European Council, and Lady Ashton, the UK member of the European Commission responsible for trade, would be the EU “high representative”, there was an overwhelming sense of disappointed expectations. Neither has any significant international profile, nor much experience of global negotiations beyond Lady Ashton’s brief year as trade commissioner. “It is rather less than we were hoping for,” said another US administration member, speaking with massive understatement, but diplomatically off the record. “We want to hear a strong voice from Europe.”
- HP sells more to consumers, who are responding to the introduction of Microsoft’s new operating system, Windows 7, and are snapping up cheap netbooks. By comparison, only a fifth of Dell’s sales, and barely any profits, come from individual consumers. Yet prospects for both makers are brightening, with market researcher IDC predicting global growth in PC shipments of 11 per cent annually through to 2013, and 5 per cent in value terms. Companies’ computers are ageing, with around 70 per cent of Dell’s customer base still using Windows XP (a version released back in 2001), according to Deutsche Bank. As they start to spend on upgrades next year, Dell’s shares should stand out from the pack.