Today's Headlines

Bloomberg:

• Shiller’s Bubble Warning Dismissed in Loan Surge: Brazil Credit. Brazil’s President Dilma Rousseff is disregarding warnings about a housing bubble and is stoking demand instead by helping people buy more homes as prices surge. The government increased the price limit of houses people can buy using the unemployment insurance fund on Sept. 30 after public lending for homes increased more than four times as much as private banks in the two years through June, to 202 billion reais ($90 billion), according to central bank data. Rousseff’s homebuilding program has propelled demand as she seeks to stimulate the economy before next year’s presidential election. Robert Shiller, six weeks before winning the Nobel Prize for economics, cautioned that such demand may be fueling a bubble as home prices grow twice as fast as rent. Mortgage debt as a percentage of disposable household income has climbed to a record 15 percent, almost double the level at the start of Rousseff’s term.

• Former Chinese Commander Warns of War If Japan Shoots Down Drone. A retired Chinese military commander warned Japan that attacking China’s drones would represent the “first shot” of a war, adding to tensions over islands claimed by both sides in the East China Sea. China should attack Japanese planes over the islands as a “minimum response,” Wang Hongguang, former deputy commander of the Nanjing military region, wrote in the Global Times today. Japan Prime Minister Shinzo Abe should be “mentally prepared,” Wang wrote. “China has many kinds of countermeasures from low intensity to high intensity.” The Global Times said in July that Wang had retired recently.

• Rabobank Outlook Changed to Negative by S&P After Libor Fine. Rabobank Nederland had its outlook lowered by Standard & Poor’s after the biggest Dutch mortgage lender was fined 774 million euros ($1 billion) for its involvement in rigging benchmark interest rates.

• Swiss Banks May Shrink on Higher Leverage, JPMorgan Says. UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s biggest banks, may have to shrink their fixed-income, currencies and commodities activities if the nation’s regulator imposes higher leverage ratios than currently planned, according to JPMorgan Chase & Co. (JPM) analysts.

• European Stocks Climb to Five-Year High as HSBC Rallies. European stocks rose to a five-year high as HSBC Holdings Plc reported increased profit and investors awaited this week’s interest-rate decision from the European Central Bank. HSBC climbed the most in two months as Europe’s biggest bank said pretax profit gained 30 percent. PostNL NV rallied 7.8 percent after the Dutch postal operator raised its income guidance. Ryanair Holdings Plc (RYA) tumbled the most in five years after cutting its earnings forecast amid higher competition and a weaker economy. UBS AG and Credit Suisse Group AG fell. The Stoxx Europe 600 Index gained 0.3 percent to 322.5 at the close of trading, the highest since May 2008.

• Commodity Index Drops as Dollar Slips, Treasuries Advance. Industrial metals led a gauge of commodities to a four-month low, while the dollar fell and Treasuries rose, as investors assessed economic data for clues to the next policy moves from central banks. U.S. shares fluctuated while European stocks closed at a five-year high. The S&P GSCI Index of 24 commodities lost 0.2 percent to 611.07 at 12:57 p.m. in New York as copper slid 1.3 percent and natural gas sank 2.3 percent. The Bloomberg U.S. Dollar Index, a gauge of the currency against 10 major peers, fell 0.2 percent after climbing for six straight days in its longest rally since May. Ten-year Treasury yields decreased three basis points to 2.60 percent.

• Seattle May Be First Big City Where Burger Flippers Get $31,200. In Seattle, supporting a $15-an-hour minimum wage could be suicide for politicians. It’s too low. Ed Murray, who’s running for mayor, vows to phase in that minimum for many jobs if he’s elected tomorrow. Incumbent Mike McGinn has declared he may not necessarily stop at $15. Much of the U.S. would scoff at mandating a full-time pay equivalent of $31,200 a year, but in the biggest metropolitan area in the Pacific Northwest it’s an idea taken very seriously.

• NYSE Experiences Data Malfunction Days Before Twitter IPO. NYSE Euronext experienced two technical malfunctions during the first 40 minutes of trading, three days before it handles Twitter Inc.’s initial public offering.

• SAC Agrees to Plead Guilty to End Insider-Trading Case. Billionaire Steven A. Cohen's SAC Capital Advisors LP, the hedge fund accused of fostering a culture of rampant insider trading, has agreed to plead guilty to securities fraud and wire fraud, pay a record $1.8 billion and shutter its investment advisory business.

Wall Street Journal:

• Google’s(GOOG) Schmidt on NSA, China, North Korea. Google Inc. Executive Chairman Eric Schmidt bristled at reports that the U.S. government allegedly spied on the company’s data centers, saying such an act is “outrageous” and could be a breach of the law if proven true. “It’s really outrageous that the national security agency was looking between the Google data centers if that’s true. The steps that the organization was willing to do without good judgment to pursue its mission and potentially violate people’s privacy, it’s not okay,” Mr. Schmidt told The Wall Street Journal in an interview in Hong Kong. “The Snowden’s revelations have assisted us in understanding that it’s perfectly possible that there are more revelations to come.”

Fox News:

• BlackBerry's(BBRY) $4.7B Sale Implodes, Shares Dive. 

• Top hospitals opt out of ObamaCare. The Obama administration has been claiming that insurance companies will be competing for your dollars under the Affordable Care Act, but apparently they haven’t surveyed the nation’s top hospitals.

CNBC:

• ‘Definitely a bubble brewing’ in stocks: Pro. (video)

• Why this sector could be a big risk to the rally. (video)

Zero Hedge: 

• Holiday Spending "Hopes" Crumble As Income Gains Stagnate. (video)

• Fed's Bullard: Bubbles Are "Blindingly Obvious".

• Factory Orders Ex-Transports Decline For Second Month, Core CapEx Orders Drop 7.2% Annualized In Q3. (graph)

• JPM(JPM) Warns The Biggest Risk To The "Bull Market" Is... Growth?

Business Insider: 

• CHART OF THE DAY: Here's A Sign That Stock Market Investors Are Totally Nuts.

Washington Post:

• For consumers whose health premiums will go up under new law, sticker shock leads to anger. Americans who face higher ­insurance costs under President Obama’s health-care law are angrily complaining about “sticker shock,” threatening to become a new political force opposing the law even as the White House struggles to convince other consumers that they will benefit from it. The growing backlash involves people whose plans are being discontinued because the policies don’t meet the law’s more-stringent standards. They’re finding that many alternative policies come with higher premiums and deductibles.

USA Today:

• Obamacare Is a Centrally Planned Disaster.

Reuters:

• Twitter(TWTR) to close IPO books early on strong demand -sources. Twitter Inc is set to close the books on its $1.75 billion initial public offering a day earlier than scheduled, on Tuesday at 12:00 p.m. EST (1700 GMT) amid strong investor demand for shares, according to two sources with knowledge of the process. 

• Italy eyes 'Google(GOOG) Tax' to help fix public finances. Italy's largest ruling party has proposed legislation to raise government revenues by making it more expensive for multinational online companies like Google, Amazon and Yahoo to do business there. A bill tabled by the center-left Democratic Party (PD) aims to raise at least 1 billion euros through a law, dubbed the "Google Tax", obliging companies that advertise and sell online in Italy to do so only through agencies with a tax presence in the country.  

• METALS-Copper falls on uncertain demand outlook for China. Copper fell for a third consecutive session on Monday due to a drop in the euro, but remained firmly within a range that has persisted for months on uncertainty about the outlook for demand from top consumer China. Benchmark copper on the London Metal Exchange closed at $7,149 a tonne, down from a last bid of $7,240 on Friday.

• Saudi minister demands Iran leave Syria. Saudi Foreign Minister Prince Saud al-Faisal on Monday demanded that Iran leave Syria, saying Tehran was helping President Bashar al-Assad strike his own people.

Financial Times:

• Strong euro poses risk to recovery, Fabrizio Saccomanni warns. Italy’s finance minister has warned of the risks of a strengthening euro to Europe’s fragile recovery, urging the European Central Bank to ease monetary policy to help the continent’s small and medium enterprises. The comments by Fabrizio Saccomanni come less than two weeks after the euro hit a two-year high against the dollar. The single currency has pared back some of its gains, but remains more than 2 per cent higher than at the beginning of the year.

Telegraph:

• Italy's Mr Euro urges Latin Front, warns Germany won't sell another Mercedes in Europe.

ARD:

• ECB's Asmussen Says Interest Rates are Too Low in Germany. Germany is being "seen as a safe haven, capital is flowing into Germany," European Central Bank Executive Board member Joerg Asmussen says in an interview.

Xinhua:

• Party Urges China to Curb Extravagant Official Spending. Chinese Communist Party recently issued a notic on curbing problems related with "formalism, bureaucracy, laxity and extravagance." The notice bans using public funds to hold extravagant banquets. The notice calls for curbs on excessive construction of government buildings. the notice calls for strict controls on spending on government cars.