Today's Headlines

Bloomberg: 

• German Industrial Production Unexpectedly Fell in October. German industrial production unexpectedly dropped for a second month in October, signaling an uneven recovery in Europe’s largest economy. Output (GRIPIMOM), adjusted for seasonal swings, decreased 1.2 percent from September, when it fell a revised 0.7 percent, the Economy Ministry in Berlin said today. Economists predicted a gain of 0.7 percent, according to the median of 38 estimates in a Bloomberg News survey. Production climbed 1 percent from a year earlier when adjusted for working days.

• Merkel Faces Dissent From Party Ranks Over SPD Coalition Accord. German Chancellor Angela Merkel faces internal party resistance to her planned coalition with the Social Democrats as efforts by both sides to form a joint government for her third term enter the final phase. 

• Putin to Shut RIA in Overhaul of Russian State News Coverage. President Vladimir Putin unexpectedly revamped Russian state-controlled print and radio news media, abolishing the RIA Novosti wire service and naming an outspoken television presenter to lead its successor. Dmitry Kiselyov, a deputy director of Russia’s state television and radio holding VGTRK and a host of a weekly news program on the Rossiya 1 television channel, will head the newly formed agency, called Rossiya Segodnya or Russia Today, according to a document signed by Putin and published on the Kremlin’s website today. 

• Ukraine Police Raid Tymoshenko Offices, Destroy Barriers. Ukrainian police stormed the offices of jailed ex-premier Yulia Tymoshenko’s party and tore down barricades erected by protesters urging President Viktor Yanukovych’s ouster as tensions rose on the 19th day of rallies.

• Ukraine Interbank Rates Soar to 20% as Intervention Drains Cash. Ukrainian interbank lending rates soared to a one-year high as policy makers’ bid to prop up the currency depletes cash from the economy and threatens to deepen the country’s third recession since 2008. The KievPrime overnight index, which shows one-day borrowing costs for the country’s lenders, jumped to 20 percent at today’s daily fixing from 12 percent on Dec. 6 and 4.32 percent on Nov. 29. Investors sold Ukraine’s dollar notes, driving yields to record highs, after the country’s foreign reserves dwindled 9 percent last month, according to central bank data published on Dec. 6. 

• European Stocks Rise a Second Day as Chinese Exports Gain. European stocks rose for a second day after a report showed Chinese exports climbed more than expected and a gauge of telecommunications operators gained. Inmarsat Plc rallied 5.8 percent, lifting a gauge of phone companies higher. Banca Monte dei Paschi di Siena SpA advanced 4.9 percent after the lender’s largest investor said it would vote against any share sale taking place before May. The Stoxx Europe 600 Index added 0.2 percent to 317.15 at the close of trading in London after earlier falling as much as 0.2 percent.

• Brent Crude Falls on German Data as WTI Discount Narrows. Brent crude dropped after German industrial output unexpectedly fell, signaling an uneven recovery for Europe’s largest economy. The oil’s premium over West Texas Intermediate shrank for the fourth time in five days. Futures slid as much as 1.7 percent.

• Jumbos Surge 34% With Record ARMs Belying ’08 Anxiety: Mortgages. Jumbo loans, both adjustable and fixed-rate, increased by 34 percent to $216 billion in the first nine months of this year, with ARMs comprising the majority of the gain, said Guy Cecala, publisher of Inside Mortgage Finance, a trade publication in Bethesda, Maryland. A decade ago, jumbo ARMs helped fuel the housing bubble by letting buyers qualify for homes they only could afford at the low rates before they reset. Banks approved mortgages based on the assumption that house prices would keep rising and the loans could be refinanced before higher costs kicked in.

• Glass-Steagall Fans Plan New Assault If Volcker Rule Deemed Weak. Five U.S. agencies will finish the Volcker rule tomorrow after more than three years of Wall Street resistance to its limits on trading and investing. Lawmakers and their allies who want to rein in big banks are ready to pounce if it isn’t strict enough. 

• Sysco(SYY) to Acquire US Foods for $3.5 Billion. Sysco Corp. (SYY) agreed to acquire closely held US Foods for $3.5 billion, adding brands from Cattleman’s meat to Devonshire desserts, in the largest food-distribution deal in eight years in North America. The shares jumped the most since at least 1980.

Wall Street Journal: 

• Americans Continue to Regain Lost Wealth. U.S. Net Worth Rises to $77.3 Trillion; Mortgage Borrowing Rises for First Time in Recovery.

Fox News:

• ObamaCare exchanges limit access to top hospitals, medical centers. If you like your hospital, you might not be able to keep it. In the latest surprise to emerge during the implementation of the Affordable Care Act, people seeking insurance on the ObamaCare exchanges are finding the plans limit access to some of the best-ranked hospitals and cancer centers in the country. The access problem is a byproduct of the effort to drive down costs of subsidized coverage, prompting insurance companies to shy away from more expensive facilities.

MarketWatch:

• This bubble blowing bull market won’t end well.

• Fed's Lacker: Taper on the table in December.

• Emerging budget deal won’t trim U.S. debt.

CNBC:

• Investors have been fleeing the municipal bond market. The U.S. municipal bond market shrank to $3.686 trillion in the third quarter of the year, the smallest since the end of 2009, from $3.721 trillion in the second quarter of the year, according to Federal Reserve data released on Monday. Households held $1.64 trillion in bonds in the quarter, the lowest since the final quarter of 2006 and less than the $1.67 trillion they held in the second quarter, according to the report on the country's financial accounts.

• Fed could do 'small' QE taper in nod to job gains: Bullard.

• Retail and big-money crowd heading in opposite directions. Mom-and-pop retail investors are zigging and big-money institutions are zagging as the market tries to figure out which way things are going after a record-busting year on Wall Street. While the overall market mood is solidly bullish, recent fund flows show almost diametrically opposed views as to where money will be best treated.

Zero Hedge: 

• Why We're Stuck with a Bubble Economy. (graph)

• Greece Tumbles Into The Deflationary Abyss, While Its Primary Surplus Sounds The "Grexit" Alarm. (graph)

• Quote Of The Day: UK Housing Market "Warp Speed" Edition.

• US Gets Involved In Another Foreign Conflict, Will Support French Troops In Central African Republic.

• Chart Of The Day: Jobs, Jobs, Jobs.

Business Insider: 

• Things Are Getting Ugly In San Francisco: Protestors Stopped A Google(GOOG) Bus From Moving.

• There's A Brewing Democratic Civil War, And Elizabeth Warren Is Leading The Charge. 

• Competing Global Derivatives Rules Could Lead To 'Chaos'.

New York Times:

• South Korea Announces Expansion of Its Air Defense Zone. Defying both China and Japan, South Korea announced on Sunday that it was expanding its air patrol zone for the first time in 62 years to include airspace over the East China Sea that is also claimed by Beijing and Tokyo.

Credit Bubble Stocks:

• Hussman's Ratio of Margin Debt to Commercial and Industrial Loans. (graph)

Real Clear Politics:

• The Clash of Generations.

Reuters:

• China to aid ailing shipbuilders with more subsidies. China is handing out new subsidies for buying ships to help its beleaguered shipbuilders, confounding a government pledge to reduce support for sectors with over-capacity in order to reform the economy.

• McDonald's(MCD) November sales miss as U.S. weakness persists. The fast-food chain, the world's largest by revenue, has struggled for more than a year to significantly increase those monthly sales, hindered by slack demand and intense competition for the business of budget-conscious diners. November's biggest disappointment came from the United States, where monthly sales at restaurants open at least 13 months fell 0.8 percent, versus the 0.3 percent gain expected, on average, by 14 analysts polled by Consensus Metrix.

Telegraph:

• Money printing, search for yield and the mirage of financial stability. Unfortunately, the near free money environment has gone on for much longer than anyone anticipated, and we seem incapable of easing ourselves off the life support.

London South East:

• Putin Taps Hardline TV Anchor To Head New News Agency. President Vladimir Putin on Monday disbanded Russia's biggest news agency and appointed a hardline state television anchor to head a new media outlet, measures seen as a crackdown on media freedom. Dmitry Kiselyov will head Rossia Segodnya, a new news agency that will replace RIA Novosti, according to an order published on the Kremlin's website. A deputy director of Russia's state TV holding VGTRK, Kiselyov rose to prominence as host of the Sunday weekly news programme on the Rossia 1 channel, where he fiercely criticises the West.

Xinhua:

• China Won't Rely on GDP to Assess Local Officials. China won't use GDP as the only major indicator to assess local government and officials' performance, citing a statement from the Organization Department of the Communist Party of China Central Committee. China will strengthen inspection of local govt debt and use it as an "important indicator" for local officials' performance reviews.China will change government official assessment from purely comparing economic growth to development sustainability. Greater emphasis of local official evaluation will be placed on environmental protection, product safety and elimination of excess capacity. Economic growth shouldn't be achieved by excess investment and high pollution, it said.