Today's Headlines

Bloomberg: 

• Euro Area in Recession for Second Time in Four Years: Economy. The euro-area economy succumbed to a recession for the second time in four years as governments imposed tougher budget cuts and leaders struggled to contain the debt crisis that broke out in October 2009. Gross domestic product in the 17-nation bloc slipped 0.1 percent in the third quarter after a 0.2 percent decline in the previous three months, the European Union’s statistics office in Luxembourg said today. The result matched the median forecast in a Bloomberg News survey of 44 economists, as unexpected strength in Germany and France was outweighed by contractions elsewhere.
  
  Europe’s economic malaise is deepening as governments across the region impose budget cuts to narrow their fiscal deficits. Spain and Cyprus this year joined the list of countries seeking external aid, following Greece, Portugal and Ireland. Unions across the region have held protests against austerity measures.
• French Economy Barely Grows as Hollande Faces Jobless Surge. France’s economy barely expanded in the third quarter, underlining the challenge President Francois Hollande faces in addressing the stagnation that is extending into its second year. Gross domestic product rose 0.2 percent in the quarter from the previous three months when it fell a revised 0.1 percent, national statistics office Insee in Paris said today in an e- mailed statement. Economists had forecast no change, according to the median of 25 estimates in a Bloomberg News survey. GDP rose 0.2 percent from a year earlier. “The third quarter is probably the result of a temporary rebound at the European level,” said Michel Martinez, an economist at Societe Generale in Paris. Business sentiment suggests the French “economy is heading to a moderate recession or at best remaining flat.”
• Schaeuble Sees Decision on Greek Aid as CDU Allies Balk. German Finance Minister Wolfgang Schaeuble said a European decision on how to sustain Greece’s finances is likely next week. Schaeuble said euro-area policy makers are set to agree at a Nov. 20 meeting on the “priority task” of how to close a Greek financing gap that emerged last week. “We’ll resolve that by Tuesday,” Schaeuble said at a conference in Berlin today. Greece needs to finance a two-year extension in debt-reduction targets. Schaeuble’s need for speed contrasts with a demand by senior members of his Christian Democratic Union party to see a full report from Greece’s monitors, known as the troika, before deciding on further payments.
• Israel Warns of Escalation After Tel Aviv Missile Firing. Israeli Defense Minister Ehud Barak signaled that Israel is ready to escalate its military operations against Gaza after at least one long-range missile was fired at Tel Aviv by Palestinian militants. The missile attack “and the volume of fire in general towards Israel is an escalation and there will be a price to pay,” Barak said on Channel 2 television today. Israel Army Spokesman Brigadier General Yoav Mordechai told the same channel that the military was calling up 30,000 reservists hours after Prime Minister Benjamin Netanyahu said the military was ready for a “substantial expansion” to stop rocket attacks.
• Israel Bonds, Stocks Plunge as Ground Operation Considered. Israeli bonds sank the most in almost two months and stocks plunged as the army prepared for a possible ground assault in response to Palestinian rocket fire. The cost of insuring Israel’s debt rose to a 10-week high. The benchmark TA-25 Index fell as much as 1.9 percent, the steepest drop in intraday trading since July 23, and traded 0.9 percent lower as of 11:45 a.m. in Tel Aviv.
• Israel Credit Risk Jumps as Shekel Sinks After Tel Aviv Targeted. The cost of protecting Israeli bonds against default surged to the highest level in two years and the shekel tumbled after police said a rocket from Gaza was fired at the Tel Aviv area. Israel’s five-year credit-default swaps rose 6.8 basis points to 158.5, the highest since Sept. 6, London prices compiled by Bloomberg show.
• Oil Falls as Economic Data Weaken, Stockpiles Advance. Oil fell for a third time in four days as data showed U.S. economic growth weakened and as oil inventories rose to a three-month high. Prices fell as much as 0.7 percent as more Americans than forecast submitted claims for unemployment insurance last week and manufacturing in the New York and Philadelphia regions showed contraction. Oil stockpiles increased to 375.9 million barrels last week. “Prices are reflecting the bad economic news,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The weak economy is the biggest overall factor in the oil market.” Crude oil for December delivery fell 41 cents, or 0.5 percent, to $85.91 a barrel on the New York Mercantile Exchange at 11:22 a.m.
• Jobless Claims in U.S. Jumped Last Week After Sandy. More Americans than forecast submitted claims for unemployment insurance and factory production declined in the northeastern U.S. after superstorm Sandy struck the region. Applications for jobless benefits surged by 78,000 to 439,000 in the week ended Nov. 10, the most since April 2011, the Labor Department said today in Washington. Indexes of manufacturing in the New York and Philadelphia areas showed contractions this month.
• Philadelphia Fed Manufacturing Index Falls to -10.7 From 5.7. The Federal Reserve Bank of Philadelphia’s general economic index decreased to minus 10.7 in November from 5.7 a month earlier. A reading of zero is the dividing line between expansion and contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Economists forecast the gauge would decline to 2, according to the median projection in a Bloomberg survey. Estimates ranged from minus 10 to 8. Another report showed manufacturing in the New York region contracted for a fourth straight month in November as superstorm Sandy knocked out electrical power and limited activity.
• Republican Governors Balk on Health Law After Romney Loss. Republican governors are balking at adopting key provisions of President Barack Obama’s health-care overhaul, a week after Mitt Romney’s defeat dashed their hopes of scuttling the two-year-old law. The state leaders, at a meeting of the Republican Governors Association in Las Vegas, said they’re concerned over costs and regulatory burdens the Patient Protection and Affordable Care Act may impose. Republicans unsuccessfully challenged the law in court and many delayed implementing it, hoping Romney -- who called for the law’s repeal -- would win the Nov. 6 presidential election. “It’s a bad piece of legislation,” Louisiana Governor Bobby Jindal said at a news conference in Las Vegas yesterday. “It’s going to have a lot of unintended consequences.” 
• Wal-Mart(WMT) Forecast Trails Estimates as Sales Gains Slow. Wal-Mart Stores Inc., the world’s largest retailer, forecast fourth-quarter profit that trailed analysts’ estimates in anticipation of a competitive holiday season and after economic conditions slowed U.S. sales gains. The shares fell the most in more than six months. Fourth-quarter profit will be $1.53 to $1.58 a share, the Bentonville, Arkansas-based company said in a statement. The average estimate of analysts surveyed by Bloomberg was $1.59. Chief Executive Officer Mike Duke has been reducing prices to lure U.S. shoppers that are still suffering amid sluggish economic growth and 7.9 percent unemployment.

Wall Street Journal: 

• Israel, Hamas Broaden Hostilities. Israel hit the Gaza Strip with airstrikes and artillery shells for a second straight day on Thursday and Hamas ramped up rocket fire at Israel, as both sides widened hostilities in the conflict's bloodiest escalation in four years. The attacks followed an Israeli attack on Wednesday that killed Ahmed Jabari, the commander of Hamas's armed wing, the Ezzedine al-Qassam Brigades. The attack on Mr. Jabari, and a barrage on what Israel said were several other Hamas military sites, came after several days of Hamas rocket attacks on Israeli territory.
  

CNBC: 

• Obama's Offer to Resolve 'Cliff' Is ‘Sucker’s Game': Ross. 
• John Metz, Denny's Franchisee And Hurricane Grill & Wings Owner, Imposes Surcharge For Obamacare.

Zero Hedge:

• Prominent Hedge Fund Q3 Buys And Sells. 
• The Empire Manufacturing General Business Conditions expected six months forward dropped to its lowest level since March 2009. (graph)
• The Bernanke-Obama-Keynes Toxic Triangle Dead End. 
• Israel Releases Another Aistrike Video As It Prepares To Send Troops Into Gaza Strip. 
• The FHA Is Blowing Up: Bad News For The Housing Market.

Business Insider:

• President Obama Needs To Take A Class On Negotiating. 
• AP Report: Israeli Troops Amassing And Moving Toward Gaza Border. 
• CHART OF THE DAY: The Timing Of The Market Selloff Is Particularly Cruel For Hedge Funds. The stock market has been clobbered since the election, and the timing couldn't be worse. This week, BofA/ML released the results from their latest hedge fund manager survey and found: Hedge fund net exposure to the equities is 40%, the highest Jun’07! Ominously, our backtesting since Jul’07 shows that whenever hedge fund exposure is >35%, S&P 500 tends to consolidate 4-5% and underperform UST 10yr by 700bps over the subsequent 4 weeks.
• How The Fiscal Cliff Could Slam The Housing Recovery. 
• NIGEL FARAGE: It's Truly Astonishing That We Have Nazism On The Rise In Southern Europe.

Reuters: 

• U.S. Postal Service reports $15.9 billion annual loss. That is more than triple its $5.1 billion loss last year.
• DERIVATIVES: Position limits appeal, new rule on the way. The Commodity Futures Trading Commission is set to file an appeal following a District Court ruling against the agency's attempt to impose position limits on commodity derivative markets, despite earlier speculation that it might not be the best avenue for the agency to pursue. 
• French unions say deal far off in labour reform talk. French unions rejected a proposal for labour reform from employers on Thursday because it failed to improve job security, a sign that a deal seen as crucial to reviving the economy is unlikely by the government's year-end deadline. 
• Top euro policymakers at odds over Greek debt fix.The European Union's top economic official sought to rule out any write-off of Greece's debt to governments on Thursday after a European Central Bank policymaker said for the first time that a "haircut" on part of it was probable.
• Europe shares sag as crisis spreads to Netherlands. The Dutch economy shrank by 1.1 percent, much more sharply than expected. Shares in Franco-Dutch airline Air France-KLM fell 8.5 percent, telecom group KPN lost 5.3 percent and retailer Ahold shed 2.2 percent.

The Economist: 

• The time-bomb at the heart of Europe. Why France could become the biggest danger to Europe’s single currency.

Telegraph: 

• Chinese perma-growth at risk as Leninists tighten Politburo grip. 
• Anti-austerity marches turn violent across southern Europe. Demonstrations turned violent in Spain and Portugal after millions took part in a mostly peaceful general strike on Wednesday in organised labour's biggest Europe-wide challenge to austerity policies since the debt crisis began three years ago.

El Confidencial:

• Spain Mulls IMF Aid Instead of EU Bailout. Spain is mulling requesting a credit line from the IMF alone as an alternative to a European bailout. An IMF credit line is being studied due to German opposition to European bailout for Spain. PM Rajoy has asked government officials to work on an alternative solution to EU bailout for Spain.