Today's Headlines

Bloomberg:

• Out of Lehman's Ashes Wall Street Gets Most of What it Wants. Wall Street’s biggest banks, whose missteps caused a global financial crisis and economic slowdown two years ago, were more agile when it came to countering the political and regulatory response. The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives. Higher capital and liquidity requirements agreed to by regulators worldwide have been delayed for years to aid economic recovery. “We continue to listen to the same people whose errors in judgment were central to the problem,” said John Reed, 71, a former co-chief executive officer of Citigroup Inc., who estimated only 25 percent of needed changes have been enacted. “I’m astounded because we basically dropped the world’s biggest economy because of an error in bank management.” The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc. and Morgan Stanley, according to data compiled by Bloomberg. Goldman Sachs CEO Lloyd Blankfein, 56, and his top deputies are in line to collect more than $100 million in delayed 2007 bonuses -- six months after paying $550 million to settle a fraud lawsuit related to the firm’s behavior that year. Citigroup, the bank that needed more taxpayer support than any other, has a balance sheet 14 percent bigger than it was four years ago.
  
• U.S. Retailers' Holiday Sales Increase 5.5%, Most Since 2005. U.S. retailers’ 2010 holiday sales jumped 5.5 percent for the best performance in five years as shoppers snapped up clothing and jewelry at Macy’s Inc., Tiffany & Co. and other stores. Retail sales, excluding autos, rose to $584 billion from Nov. 5 through Dec. 24, said MasterCard Advisors’ SpendingPulse, which measures retail sales by all payment forms. That compared with a 4.1 percent gain a year earlier. The numbers include sales made over the Web.
• China Cuts First-Round Rare Earth Export Quotas by 11%. China cut its export quotas for rare earths by 11 percent in the first round of permits for 2011, threatening to extend a global shortage of the minerals needed for smartphones, hybrid cars and guided missiles.
• Sugar Extends Rally to 30-Year High as Worldwide Demand Outpaces Supplies. Sugar futures extended a rally to a 30-year high on mounting concern that dry weather in Brazil, the world’s biggest producer, and record rainfall in Australia will slash worldwide supplies.
• Muslim Group Claims Attacks on Two Nigerian Cities That Killed 86 People. A Muslim group in Nigeria identifying itself as Jama’atu Ahlus-Sunnah Lidda’Awati Wal Jihad said it carried out Christmas Eve attacks on the cities of Jos and Maiduguri that killed at least 86 people. The group is “avenging the atrocities committed against Muslims in those areas, and the country in general,” according to a statement on its website. “Therefore we will continue with our attacks on disbelievers and their allies and all those who help them.” Multiple bomb blasts in Jos, capital of the central state of Plateau, targeted public places, including a Catholic church, killing at least 80 people, according to Nigeria’s National Emergency Management Agency. Two churches were also attacked by gunmen on the same day in Maiduguri, capital of Borno state in northeast Nigeria, killing six people, said Mohammed Abubakar, the commissioner of police.
• Home Prices in U.S. Decrease More Than Forecast. Home prices dropped more than forecast in October, a sign housing will remain a weak link as the U.S. recovery accelerates into the new year. The S&P/Case-Shiller index of property values fell 0.8 percent from October 2009, the biggest year-over-year decline since December 2009, the group said today in New York. The decrease exceeded the 0.2 percent drop projected by the median forecast of economists surveyed by Bloomberg News.
• Petrobras(PBR) Jumps to Six-Week High on Record Brazil Production, Rising Oil. Petroleo Brasileiro SA, Brazil’s state-controlled oil company, advanced to a six-week high after the country’s oil output climbed to a record in November and crude traded near a two-year high. Brazil’s production of oil rose to a record 2.089 million barrels a day last month, the agency known as ANP said on its website yesterday. Petrobras’ total November oil and gas production was 2.6 million barrels a day, of which 2.03 million barrels was in Brazil, according to an e-mailed statement.
• Wagers Against S&P 500 Drop to Lowest Level in 12 Months as Optimism Gains. Wagers against the Standard & Poor’s 500 Index fell to a one-year low as short sellers slashed bets that phone and consumer discretionary stocks, including Qwest Communications Inc. and Abercrombie & Fitch Co., will retreat. Short interest on the S&P 500 dropped to 7.29 billion shares, or 4.15 percent of shares available for trading, as of Dec. 15, down 2.9 percent from two weeks earlier, according to data compiled by U.S. exchanges and Bloomberg. For phone companies, it slid 12 percent to 440.9 million, and fell 8.7 percent to 1.2 billion shares for consumer discretionary stocks.
• Allstate(ALL) Sues Countrywide Over $700 Million Investment. Allstate Corp. sued Bank of America Corp. and its Countrywide mortgage unit over $700 million in residential mortgage-backed securities the insurer purchased, claiming Countrywide misrepresented the investments. “Countrywide was singularly focused on increasing its market share, offloading the risk onto Allstate and other institutional investors that purchased securities backed by pools of Countrywide’s mortgages,” Allstate said in a complaint filed in federal court in Manhattan yesterday.
• Gramley Says Plosser, Fisher May Dissent From Fed Ease Plan. Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher may dissent from Fed Chairman Ben S. Bernanke’s plan to purchase $600 billion in Treasuries, former Fed governor Lyle Gramley said. “I think Charles Plosser of Philadelphia and Richard Fisher of Dallas probably will dissent from time to time,” Gramley said today in an interview on Bloomberg Television’s “Fast Forward” with Peter Cook. “It probably isn’t going to affect the outcome of monetary policy decisions. Ben Bernanke still has control of the committee.”

Wall Street Journal:

• Firms Enlist More Recruiters. As Demand in Hiring Slowly Increases, Companies Fill Headhunter Positions.
• Police Fatalities Are Up 37% in 2010. So-called cluster killings helped make 2010 a particularly deadly year for law enforcement, with deaths in the line of duty jumping 37% to about 160 from 117 the year before, according to numbers as of Tuesday compiled by the National Law Enforcement Officers Memorial Fund.
• Obama's Presidency Joins the Fray. Americans prefer a leader who does not stand aloof from the weight and the lessons of our history.

CNBC:

• Consumer Confidence Shows Surprise Drop in December.
• Treasurys Accelerate Slide After Weak Five-Year Auction.
  

Business Insider:

• In 2010 Fox News Had More Total Viewers Than MSNBC, CNN and HLN COMBINED. That dominance came primarily at the expense of CNN which lost 29% of its total viewership in 2010 and 34% of its prime time viewers. Yes, you read that right.
• A Personal Investigation Into One of China's Ghost Cities.
  

Forbes:

• Research In Motion(RIMM): PlayBook Battery Life Too Short?

24/7 Wall St.:

• Short Sellers Make Big Push into Telecom, Tech.

Adweek:

• Sources: Netflix(NFLX) Thinking World Domination. Online video and DVD distributor Netflix is talking with several advertising and media agencies about potential international assignments, according to sources. Currently, Netflix provides service in the U.S. and Canada. But the company is poised for overseas expansion, according to Netflix CEO Reed Hastings, who recently told The Hollywood Reporter that Europe, Latin America and Asia are markets the company would consider entering as soon as the recently launched Canadian operation gets its bearings.

cnet:

• Rumor: Apple(AAPL) Prepping Three iPad 2 Versions.

Real Clear Politics:

• 'Shall' D.C. Decide for Patients & Doctors? The text of Obamacare is dry and legalistic, except when it summons the majesty of the King James Bible to intone imperiously, "the secretary shall . . ." The secretary in question is the secretary of health and human services, Kathleen Sebelius, who "shall" and "may" do all manner of things to complete the great unfinished canvas that is Obamacare. As George W. Bush might say, Sebelius is "the decider." Because of the discretion she's granted to remake American health care, she rivals Nancy Pelosi, Hillary Clinton, and Oprah Winfrey as the most powerful woman in America.

Reuters:

• Institutional Investor Confidence Rises in December. Confidence among global institutional investors rose in December, as improved sentiment toward the United States outweighed continued concerns about Europe, State Street Corp said on Tuesday.

Financial Times:

• Consumption Growth Could Power US in 2011. The answer to one simple question is enough to give a good idea of what will happen to US growth in 2011: how much of their income will US consumers spend and how much of it will they save? Economists – including some noted pessimists – are starting to believe that they will spend quite a lot. As a result, there is hope that 2011 will be the year when recovery from the Great Recession truly begins with growth as high as 4 per cent.

Der Spiegel:

• Opposition to the Euro Grows in Germany. Surveys show that many Germans are worried about the future of the euro, but the country's political parties are not taking their fears seriously. The number of grassroots initiatives against the common currency is increasing, and political observers say a Tea Party-style anti-euro movement could do well.

Rheinische Post:

• Passengers at German airports should be divided into risk groups for purposes of security checks, the future president of the ADV association of German airports said. So-called profiling, in effect at airports in Israel and announced for the U.K., would allow security services to adapt the intensity of searches to the security risk, Chritoph Blume, president of the ADV from Jan. 1, said.

Imerisia:

• Greek sales in the holiday season decreased 25% on average, with clothing and restaurants the hardest hit, citing the National Federation of Commerce. Sales in overall clothing retail and at restaurants fell by 40%.
  

China National Radio:

• China's Vice Premier Li Keqiang said the country will place more emphasis on inflation controls.

Economic Observer:

• About one third of foreign direct investments in China entered the country's property market this year, citing an official from the Ministry of Commerce.

Financial News:

• China may raise interest rates when inflationary pressure escalates in the first half of 2011, citing Ba Shusong, a researcher at the State Council's Development Research Center.

Caixin:

• China needs to "moderately" raise capital requirements on the nation's biggest banks to counter cyclical risks and take into account big lenders' systemic importance, Liu Mingkang, Chairman of the China Banking Regulatory Commission said in an interview.