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Bloomberg:
- Samsung Electronics Co., Asia’s biggest maker of chips, flat screens and mobile phones, said profit tripled to a quarterly record as the global economic recovery spurred a rebound in prices. “The company will continue posting solid earnings next year, and the semiconductor business will be the key driver,” said Lee Jin Woo, a fund manager at KTB Asset Management Co. in
- The housing industry contributed to U.S. economic growth for the first time in four years last quarter as federal tax credits sparked demand for homes and energy-efficient renovations. Residential investment accounted for 0.53 percent of growth, a bigger chunk than national defense, at 0.45 percent, and spending on non-durable goods, such as food and clothing, which accounted for 0.31 percent. Samsung forecast a “solid” fourth quarter, echoing comments by No. 1 chipmaker Intel Corp., and said it plans to boost capital spending on semiconductors and displays next year to more than 8.5 trillion won.
- Exxon Mobil Corp.(XOM), PetroChina Co. and Royal Dutch Shell Plc are battling slumping fuel demand as oil majors seek to rebuild profits battered by the global fallout from the worst
- In
- New York has withstood the worst economic crisis in seven decades and remains the leading global financial center, followed by Singapore, which topped London as investors’ preferred place for doing business, according to Bloomberg Global Poll. Twenty-nine percent of respondents in the quarterly poll of investors, traders and analysts who subscribe to the Bloomberg terminal say
Wall Street Journal:
- The idea of talking to the Taliban -- a strategy advocated by Afghan officials -- has become increasingly seductive as the Western death toll in the conflict mounts. Obama administration officials openly ponder an outreach to the leadership of Islamist militants, something that has been long advocated by European allies.
- The Earth Cools, and Fight Over Warming Heats Up. Two years ago, a United Nations scientific panel won the Nobel Peace Prize after concluding that global warming is "unequivocal" and is "very likely" caused by man.Then came a development unforeseen by the U.N.'s Intergovernmental Panel on Climate Change, or IPCC: Data suggested that Earth's temperature was beginning to drop. The renewed discussion of inherent shortcomings in climate models comes on the cusp of potentially big financial commitments. In five weeks, diplomats from around the world will meet in
- And if it doesn't fly, well, is that so bad? Mr. Reid can still say he gave it the varsity try. He'll get it to the floor and let those swing-state Democrats amend the public option away. Not his fault! What he also knows, even if the press doesn't, is that for all the big talk of his liberal members, they are the more likely to give way. Even without a public option, this bill is a big step toward a single-payer system. And it isn't as if any of them risk losing their seats by voting "only" for a $1 trillion health expansion. Better yet, by turning the public option into the big, bad bogeyman, he makes it more likely he'll snag those swing-state votes in the end. Nebraska's Mr. Nelson, Arkansas's Blanche Lincoln, Indiana's Evan Bayh—they can all claim victory for stripping the bill of a national insurance plan, then feel comfortable voting for all the tax hikes and Medicare cuts that remain. Speaking of tax hikes, premium jumps and Medicare cuts, notice how nobody is today talking about them? Mr. Reid surely has. The public option might be controversial in D.C., but the majority leader knows most of the country doesn't understand it, or assumes it doesn't apply to them. Most Americans already have health care that they like, and polls show their real fear is that this experiment will leave them paying more for less. This, not the public option, is ObamaCare's exposed jugular.
CNBC.com:
NY Times:
- Plan to Drill on Colorado Plateau Meets Resistance.
Business Week:
- MBAs Confront a Savage Job Market.
CNNMoney.com:
- Clunkers: Taxpayers paid $24,000 per car. Auto sales analysts at Edmunds.com say the pricey program resulted in relatively few additional car sales. A total of 690,000 new vehicles were sold under the Cash for Clunkers program last summer, but only 125,000 of those were vehicles that would not have been sold anyway, according to an analysis released Wednesday by the automotive Web site Edmunds.com. A total of $3 billion was allotted for those rebates. The average rebate was $4,000. But the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, according to Edmunds.com. That means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.
Business Pundit:
- 10 Fatcats Who Profiteered from the Credit Crunch.
BigGovernment.com:
- One of the last people you’d expect to be a catalyst for the near collapse of history’s most advanced financial system is the secretary of Housing and Urban Development. Though not the masterminds of the nation’s economic woes, Andrew Cuomo and Mel Martinez were willing musclemen for the Congressional and White House driven mandates that housing be made more affordable to all through government subsidy. Those mandates, policy stemming back to the 1960s, were driven by compassion, but have turned out to be the chief cause for the current rampant rates of default, foreclosure, and economic pain striking particularly hard at low-income families. Such is the story Charlie Gasparino tells in his new book, The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System.
Crain’s NY Business:
- The New York state pension fund is plowing money back into hedge funds, with plans to invest more than $1 billion by year's end. This after the hedge fund industry experienced its worst year in recent memory, with most funds losing an average of 28% over 2008. The state workers fund just closed a $50 million investment in Stamford, Conn.-based Diamondback Capital, and has several more hedge-fund deals expected to close by 2010, a spokesman for state Comptroller Thomas DiNapoli said Thursday. The New York Common Retirement fund took a beating in 2008, dropping to about $110 billion from more than $150 billion.
Politico:
- It runs more pages than War and Peace, has nearly five times as many words as the Torah, and its tables of contents alone run far longer than this story. The House health care bill unveiled Thursday clocks in at 1,990 pages and about 400,000 words. With an estimated 10-year cost of $894 billion, that comes out to about $2.24 million per word. And for some members, that may not be enough. A “robust” public option can’t be found in the bill. Neither can the word “doctor” – save for a few references to degrees. No “cost curve” is bent. No “blue pill” is dispensed. “Death” and “taxes” are both in there, but “death panel” is not. The text defines dozens of words and phrases, including “family” (“an individual and . . . the individual’s dependents”), “health insurance coverage,” “exchange-eligible individual” and “Indian.” And for those who cry “read the bill,” beware. There are plenty of paragraphs like this one: “(a) Outpatient Hospitals – (1) In General – Section 1833(t)(3)(C)(iv) of the Social Security Act (42 U.S.C. 1395(t)(3)(C)(iv)) is amended – (A) in the first sentence – (i) by inserting “(which is subject to the productivity adjustment described in subclause (II) of such section)” after “1886(b)(3)(B)(iii); and (ii) by inserting “(but not below 0)” after “reduced”; and (B) in the second sentence, by inserting “and which is subject, beginning with 2010 to the productivity adjustment described in section 1886(b)(3)(B)(iii)(II)”. The section deals with “incorporating productivity improvements into market basket updates that do not already incorporate such improvements,” if that helps.
- House ethics investigators have scrutinized the activities of more than 30 lawmakers and several aides in inquiries about issues including defense lobbying and corporate influence peddling, according to a confidential House ethics committee report prepared in July. The report, disclosed on a publicly accessible computer network, was made available to The Washington Post by a source familiar with such networks. The ethics committee is one of the most secretive panels in Congress, and its members and staff members sign oaths not to disclose any activities related to its past or present investigations. Watchdog groups have accused the committee of not actively pursuing inquiries; the newly disclosed document indicates the panel is conducting far more investigations than it had revealed.
- A turnaround in business spending is offering the first hint that the private sector may be prepared to drive economic growth when the government winds down its efforts to spur consumption. After six consecutive quarters in retreat, businesses in the third quarter increased spending on new computers and software at an annual rate of 1.1%. That marked an about-face from the first quarter's annualized 36.4% plunge.
Reuters:
- The global cellphone market is set to grow in the holiday sales-fuelled October-to-December quarter, after four quarters of falls, research firm Strategy Analytics said on Friday. "We forecast handset shipments to grow 3 percent annually in Q4 2009, signaling an end to the recession," analyst Neil Mawston said in a statement.
- Investor appetite for
- Global car sales are expected to grow about 6 percent to 65 million vehicles in 2010 as a financial crisis ends, helping demand revive, Hyundai Motor Group's research body said on Friday.
Financial Times:
- US financial groups with operations in London are increasingly concerned that British regulators’ tough stance on pay could create a two-tier system in which UK bankers’ bonuses are smaller and spread over a longer period than those of American colleagues. Wall Street executives say the line taken by the
- Concerns about the business practices of Galleon hedge fund founder Raj Rajaratnam and his associates were raised inside JPMorgan Chase(JPM) as far back as 2001, according to an internal company document seen by the Financial Times. Mr Rajaratnam and five others – including former employees of Bear Stearns, now part of JPMorgan – were charged this month in an alleged insider trading scheme that US prosecutors called the biggest ever involving hedge funds. The JPMorgan note alleges that the principals of Galleon “liked to operate in the ‘grey areas’” of the markets. “If these allegations are true, there are some serious issues about business conduct,” the memo said.
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Shanghai Securities News:
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Late Buy/Sell Recommendations
Citigroup:
- Upgraded (TOL) to Buy, target $23.
- Reiterated Buy on (AGN), raised estimates, boosted target to $66.
- Reiterated Buy on (MXIM), target $25.
Crowell, Weedon:
- Reiterated Buy on (AAPL), raised estimates, boosted target to $240.
Night Trading
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Economic Releases
8:30 am EST
- Personal Income for September is estimated unch. versus a +.2% gain in August.
- Personal Spending for September is estimated to fall -.5% versus a -.5% decline in August.
- The PCE Core for September is estimated to rise +.2% versus a +.1% gain in August.
- The 3Q Employment Cost Index is estimated to rise +.4% versus a +.4% gain in 2Q.
9:45 am EST
- Chicago Purchasing Manager for October is estimated to rise to 49.0 versus a reading of 46.1 in September.
10:00 am EST
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- The NAPM-Milwaukee report, (JCP) analyst meeting and the (CPN) investor update could also impact trading today.
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Bloomberg:
- The U.S. economy returned to growth in the third quarter after a yearlong contraction as government incentives spurred consumers to spend more on homes and cars. The world’s largest economy expanded at a 3.5 percent pace from July through September, figures from the Commerce Department showed today in Washington. Household purchases climbed 3.4 percent, the most in two years. Policy makers will now focus on whether the recovery, supported by government spending and tax credits, can be sustained into 2010 and generate jobs. The record $1.4 trillion budget deficit means President Barack Obama has little room for maneuver as he tries to keep unemployment from rising above 10 percent, while Federal Reserve policy makers wind down emergency programs in a bid to prevent a surge in inflation.
- Why the Goldman Sachs(GS)-AIG Story Won’t Go Away. How did so much taxpayer money end up in the coffers of American International Group Inc.’s too- big-to-fail customers? The more we find out, the more it becomes obvious we still don’t know the half of it. It’s the story that won’t go away: Was last year’s federal rescue of AIG a back-door bailout for the likes of Goldman Sachs Group Inc., Societe Generale SA, Deutsche Bank AG, Merrill Lynch & Co. and other large banks? To believe AIG’s disclosures, you’d have thought its executives decided on their own last year to pay 100 cents on the dollar to the various banks that had bought $62 billion of credit-default swaps from the company. Now, thanks to an Oct. 27 story by Bloomberg News reporters Richard Teitelbaum and Hugh Son, we know otherwise. It turns out the decision to make the banks whole wasn’t AIG’s. It was made by the Federal Reserve Bank of New York, back when its president was the current U.S. Treasury secretary, Timothy Geithner, and its chairman was Goldman Sachs director Stephen Friedman. (Friedman resigned from the New York Fed in May, after the Wall Street Journal reported he had bought more than 50,000 shares of Goldman stock following AIG’s takeover.) Before AIG was seized, its executives had been negotiating for months with the banks, trying to get them to accept discounts of as much as 40 cents on the dollar, Bloomberg reported, citing people familiar with the matter. Then, late in the week of Nov. 3, the New York Fed took over the negotiations with the banks from AIG, together with the Treasury Department (at the time run by former Goldman boss Henry Paulson) and Chairman Ben Bernanke’s Federal Reserve Board. Less than a week later, the New York Fed instructed AIG to pay the counterparties in full, Bloomberg reported. Judging by the result, you might think Geithner’s team was on the banks’ side, rather than AIG’s. But why the rush to pay the banks in full once Geithner’s team took over the talks? The public has never gotten satisfactory answers, notwithstanding that the government’s commitment to AIG now stands at about $182 billion. In a story published yesterday in response to Bloomberg’s scoop, the New York Fed’s general counsel, Thomas Baxter, told the Washington Post that officials were racing to prevent AIG’s collapse and didn’t have time for protracted negotiations with each creditor. That won’t put to rest suspicions that regulators used AIG as a slush fund to shield some of the banks from losses, using taxpayer money. Nor has anyone from AIG or the government explained why there was such a hurry to buy the CDOs. While the banks supposedly received market prices, that deal has since turned sour for taxpayers. The value of the securities, now held by a Fed-run entity called Maiden Lane III, was down by about $7 billion as of June 30, according to the New York Fed. The public might get some answers soon. Next month, the inspector general for the government’s Troubled Asset Relief Program, Neil Barofsky, is scheduled to release a report on whether AIG overpaid the banks, and the extent to which the counterparties’ own financial problems may have been at issue.
- Deflation remains a threat to the euro-area economy and a greater risk in some countries, presenting a “headache” for the European Central Bank over when to tighten policy, according to Capital Economics Ltd. While ECB President Jean-Claude Trichet said Oct. 1 that there has been “no materialization of deflationary risks” in the 16-nation economy, Capital’s European economist Ben May said in a report late yesterday that spare capacity leaves the region in jeopardy of a “prolonged and damaging period of falling prices.”
- The number of Americans collecting unemployment insurance fell more than forecast to the lowest level in seven months, a government report showed. The number of people receiving jobless benefits declined by 148,000 to 5.8 million in the week ended Oct. 17, the lowest since March 21 and biggest weekly drop since July, Labor Department figures showed today in Washington. Initial jobless claims fell by 1,000 to 530,000 in the week ended Oct. 24, from 531,000 the prior week. The four-week moving average of initial claims, a less volatile measure, declined to 526,250 last week, the lowest level since January, from 532,250. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 4.4 percent in the week ended Oct. 17, from 4.5 percent the prior week.
- Crude oil rose the most in a month after the U.S. economy grew in the third quarter for the first time in more than a year, spurring optimism that fuel demand will increase. U.S. fuel consumption dropped 0.8 percent to an average of 18.5 million barrels a day last week, yesterday’s report showed. Gasoline demand fell 1 percent to 8.86 million barrels a day.
- Cooper Tire & Rubber Co. is paying tariffs on imported tires. Free-trade agreements sought by Caterpillar Inc. and Wal-Mart Stores Inc. are on hold. Delta Air Lines flight attendants may join a union. There’s a common thread running through these developments. Organized labor is gaining momentum under the Democratic administration of President Barack Obama. Though reaching their most-publicized goals -- legislation making it easier to organize and a government-run health insurance program -- remains in doubt, unions are making other gains through executive orders, rule changes and appointments. More advances may be ahead as regulatory nominees are confirmed. “You absolutely know something is going to happen to you, you just don’t know when,” said Michael Lotito, a San Francisco attorney at Jackson Lewis LLP who handles labor issues for companies. “There is going to be a flurry of labor action down the pike.”
- Federal Deposit Insurance Corp. Chairman Sheila Bair, breaking with the Obama administration, said U.S. financial companies should prepay into a fund the government would use to unwind large failed firms. Congress should set up a Financial Company Resolution Fund and force institutions with more than $10 billion of assets to pay before a firm collapses, Bair said in testimony prepared for a House Financial Services Committee hearing today. Investors in failed companies also should take losses, she said.
Wall Street Journal:
- U.S. lawmakers and the regulators who will oversee the nation's financial-services industry split Thursday on key portions of the Obama administration's proposal to monitor and avert financial crises, highlighting the thorny issues that could slow progress on regulatory overhaul efforts. A draft proposal to deal with "too big to fail" firms unveiled by the Treasury Department and Rep. Barney Frank (D., Mass.) earlier this week received a sharp response at a key hearing on Capitol Hill. The Federal Reserve gave the measure a vote of confidence, but the Federal Deposit Insurance Corp. and lawmakers on both sides of the aisle on the House Financial Services Committee expressed unease or outright opposition about the broad new authorities envisioned to oversee financial markets.
Forbes:
- For more than six months, HTC enjoyed the privilege of being the only cellphone maker to have a handset running on Google's mobile platform, Android. Several manufacturers, including Samsung, Motorola (MOT) and LG have since crowded in. Motorola, which announced a new Android phone with Verizon( VZ) Wireless on Oct. 28, is forging particularly close ties with Google( GOOG).
CNNMoney:
Rassmussen:
- Most voters think the news media has too much power over their elected representatives in Washington and the decisions they make. It’s yet another finding that highlights the distance voters see between themselves and their government. A new Rasmussen Reports national telephone survey finds that 62% believe that what the media thinks is more important to the average member of Congress than what voters think. Just 27% say what voters think is more important to the average congressman.
Politico:
- House Speaker Nancy Pelosi unveiled a $894 billion health care bill Thursday that would extend coverage to 36 million Americans through a mix of subsidies, tax incentives and penalties on individuals and small businesses, but the final package falls short of the more liberal vision of a public health insurance option. Party leaders would like to start debate on the bill next week and hope to have a final vote before Veteran's Day on Nov. 11. The long-awaited introduction of a combined House health care bill that totals 1,990 pages produced few major surprises. After weeks of public hand-wringing, leaders – and party liberals – bowed to political reality by allowing doctors and hospitals to negotiate their rates with the government under the public plans.
- One of President Barack Obama’s key political advisers has become the central strategist in New Jersey Gov. Jon Corzine’s bruising campaign for re-election, a race the White House desperately wants to win to avert the consequences for its own agenda of a Republican winning in a traditionally Democratic state. The White House was so concerned about Corzine's chances during the summer that Corzine's aides feared the first-term governor was being pressured to step aside for a stronger candidate. Those fears turned out to be groundless, but were part of the reason Corzine hired Joel Benenson, who has helped impose discipline on a struggling campaign and crystallize Corzine’s aggressive attacks on the character of his Republican opponent, former U.S. Attorney Chris Christie. The race is seen as extremely close, complicated by the presence of a third candidate, Chris Daggett. For the White House, it’s a crucial symbolic prize. With Democrat Creigh Deeds running far behind his Republican rival in Virginia, the New Jersey race – once believed to be hopeless for Corzine – is now seen as the White House’s best bet to make the 2009 election cycle a political wash and to calm the nerves of congressional Democrats approaching the crucial 2010 midterm elections.
USA Today:
- More than 40% of President Obama's top-level fundraisers have secured posts in his administration, from key executive branch jobs to diplomatic postings in countries such as France, Spain and the Bahamas, a USA TODAY analysis finds. Twenty of the 47 fundraisers that Obama's campaign identified as collecting more than $500,000 have been named to government positions, the analysis found. Overall, about 600 individuals and couples raised money from their friends, family members and business associates to help fund Obama's presidential campaign. USA TODAY's analysis found that 54 have been named to government positions, ranging from Cabinet and White House posts to advisory roles, such as serving on the economic recovery board charged with helping guide the country out of recession. Nearly a year after he was elected on a pledge to change business-as-usual in Washington, Obama also has taken a cue from his predecessors and appointed fundraisers to coveted ambassadorships, drawing protests from groups representing career diplomats. A separate analysis by the American Foreign Service Association, the diplomats' union, found that more than half of the ambassadors named by Obama so far are political appointees, said Susan Johnson, president of the association. That's a rate higher than any president in more than four decades, the group's data show. Ambassadors earn $153,200 to $162,900 annually. "It is time to end the spoils system and the de facto sale of ambassadorships," Johnson said. "The United States is best served by having experienced, knowledgeable and trained career officers fill all positions in our diplomatic service."
Reuters:
- Iraq's Oil Ministry said on Thursday that it will sign a final deal on November 3 with BP (BP) and China's CNPC to develop its biggest oilfield, Rumaila, the nation's first major oil pact since the U.S. invasion in 2003. The ministry will also sign an initial deal on November 2 with Italy's Eni Spa over the Zubair oilfield, Oil Ministry spokesman Asim Jihad said. Both deals involve supergiant oilfields and a promise of increased production that could catapult Iraq up to the top ranks of the league of oil producing nations. Iraq's oil infrastructure is dilapidated after years of war, sanctions and underinvestment, and while it has the world's third largest reserves, it is only the 11th largest producer. The country hopes foreign investment will help it move up to third place with oil output of around 7 million barrels per day (bpd) -- triple current production of around 2.5 million bpd -- within six or seven years. Rumaila, with estimated reserves of 17 billion barrels, is the workhorse of Iraq's oil sector, producing almost half of the country's total daily output.
The Australian:
- BHP Billiton chief executive Marius Kloppers sees signs of a ``pullback'' in demand as China finishes rebuilding its inventories of raw materials. ``China has been the major and sometimes only source of demand for commodities in the second half of 2009,'' he said in a speech overnight at the London annual general meeting of the world's largest mining company. ``Restocking in China is now essentially complete and we are seeing signs of a pullback in demand.'' ``We ... believe it won't be until mid-2010 before we see clean underlying demand that is not masked by inventory effects,'' he said.
Digitimes:
- The current shortage in the supply of LED chips is expected to continue in the first quarter of 2010 due to significant demand for LED backlighting from the LCD TV and notebook segments, according to industry players. LED chipmaker Epistar revealed that its order visibility has extended to December, even though demand for LED-backlit LCD TVs is expected to slow down in that month amid off-season effects. In addition, ASP (average selling price) of LED-backlight units for LCD TV and notebook applications will also remain steady in 2010 thanks to strong demand, Epistar said.