Today's Headlines

Bloomberg: 

• China Growth Seen Slowing as Momentum Weakens. China’s factory output and investment growth probably weakened in December, adding to signs the world’s second-largest economy is losing momentum as analysts forecast 2014 expansion at the lowest in 24 years. Industrial-production gains slowed to a five-month low of 9.8 percent and gross domestic product grew 7.6 percent from a year earlier in the October-December period, based on the median estimates of analysts before data due Jan. 20. Expansion will moderate to 7.4 percent this year as investment slows and overcapacity is squeezed, according to a survey last month. 

• China’s IPO Freeze Ends as Neway to Debut Amid Pricing Crackdown. Neway Valve (Suzhou) Co. (603699), a maker of industrial valves, will become the first company to start trading in China today after a freeze on initial public offerings that lasted more than 15 months. The company and existing owners raised 1.5 billion yuan ($241 million) after selling 82.5 million shares at 17.66 yuan each, according to a statement on the Shanghai stock exchange. The deal values Neway Valve at 46.5 times its 2012 earnings, compared with 33.9 times for its listed industry peers, the company said Jan. 8.

• Severe Smog in North China Prompts Warnings to Stay Inside. China warned people in its northern regions to stay indoors today as air pollution in Beijing averaged 18 times World Health Organization-recommended levels. The concentration of PM2.5, fine particulates that pose the greatest risk to human health, was 447 micrograms per cubic meter at 10 p.m. near Tiananmen Square in Beijing, compared with an average of 456 over the past 24 hours, the Beijing Municipal Environmental Monitoring Center said on its website. The WHO recommends exposure to no higher than 25 micrograms per cubic meter over a day.

• HSBC May Overstate Assets by $92.3 Billion: Forensic Asia. HSBC Holdings Plc (HSBA), Europe’s largest bank, may be overstating its assets by as much as $92.3 billion and need to raise capital, according to analysts at Forensic Asia led by Thomas Monaco.

• Brazil Swap Rates Surge After Central Bank Signal; Real Drops. Brazil’s swap rates rose the most in three months as the central bank signaled it will extend the world’s biggest increases in borrowing costs after a surprise quickening of inflation last year. Swap rates on contracts maturing in January 2015 climbed 19 basis points, or 0.19 percentage point, to 10.93 percent at 1:23 p.m. in Sao Paulo. The real depreciated 0.2 percent to 2.3634 per U.S. dollar. The central bank lifted the target lending rate, known as the Selic, by a half-percentage point for a sixth straight meeting yesterday, raising it to 10.50 percent. The decision came after the government reported last week that consumer prices rose 5.91 percent in 2013 even as central bank President Alexandre Tombini said in October that inflation would be less than the prior year’s 5.84 percent. 

• Rowdy Teen Swarms Throw a Scare Into Brazil’s Shopping Centers. Mass visits to malls sustained beyond the holiday season would appear to be a retailer’s dream. In Brazil, they’re cause for concern. A gathering on Jan. 11 at the Shopping Metro Itaquera in Sao Paulo drew about 3,000 young people who began to jump, sing, shout and scare shoppers, leading the mall to shut down briefly and ask them to vacate the premises, according to the mall. Outside, police launched tear gas canisters and, once the mall reopened, young people unaccompanied by parents weren’t allowed entry. 

• European Rally Belies Slog Ahead With Debt at Record. The rally in European bond and stocks markets masks the slog that looms as the euro area confronts record unemployment and debt. Spain, whose banks were bailed out in 2012, sold 2.66 billions euros ($3.62 billion) of three-year debt at the lowest yield on record today. The Euro Stoxx 50 Index has gained 19 percent in the past six months to its highest since the collapse of Lehman Brothers Holdings Inc. in September 2008. “Markets are breaking record after record but the recovery remains feeble,” Isabelle Job-Bazille, chief economist at Credit Agricole in Paris, said today in an interview. “A lag between financial markets and the real economy may be normal, but markets are being very optimistic. Structural brakes on the recovery are still there, notably the debt burden.”  

• Metals, Currency Rigging Worse Than Libor, Bafin Chief Says. Germany’s top financial regulator said possible manipulation of currency rates and prices for precious metals is worse than the Libor-rigging scandal, which has already led to fines of about $6 billion. The allegations about the currency and precious metals markets are “particularly serious, because such reference values are based -- unlike Libor and Euribor -- typically on transactions in liquid markets and not on estimates of the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt today.

• Bears in Retreat as Put-Call Ratio Hits Nine-Year Low: Options. By one measure, demand for insurance against equity losses is drying up in the options market. For every 100 bullish contracts that changed hands on the CBOE, 73 bearish ones traded on average in the past 20 days, the lowest ratio since December 2004. "There is very little fear that's been baked into the market," Edward Painvin, CIO of Chase Investment Counsel Corp., said by phone. "There is definitely an element of greed that's involved by the simple fact that people are not willing to pay up for safety." The last time the CBOE put-to-call ratio was this low, in December 2004, the S&P 500 dropped three out of the following four months, with losses reaching as much as 7.2% from March to April.

• Quality of U.S. Emergency Room Care Falls, Physicians Say. With Obamacare bearing down on them, a doctors’ group said emergency rooms are less able to provide quality care, and more resources will be needed to handle an expected surge of patients from the new law. Hospitals have fewer beds available, causing delays in ERs that saw visits climb to 130 million in 2010, according to a report from the Dallas-based American College of Emergency Physicians. Federal funding for disaster preparedness has fallen, so the hospitals are also less prepared to handle a sudden influx of injured patients, the group said. “This report card is sounding an alarm,” Alex Rosenau, the physicians’ group president, said today on a conference call. “The need for emergency care is increasing, the role of emergency care is expanding, and this report card is saying that the policies are failing.”  

• Citigroup(C) Earnings Miss as Bond-Trading Slump Slows Recovery. Citigroup Inc., the third-biggest U.S. bank, reported fourth-quarter profit that missed Wall Street estimates as bond trading slumped. The stock fell more than 3 percent in New York trading.

• U.S. Said to Plan Tighter Limits on Racial Profiling in Probes. The U.S. Justice Department will soon extend its ban on the use of racial profiling during federal investigations, according to a law enforcement official briefed on the matter. The Justice Department under Attorney General Eric Holder has been reviewing the guidelines for federal investigations for several years, according to the official, and is planning to expand the definition to prohibit profiling based on religion, national origin, sexual orientation and gender.

Fox News: 

• World's greatest hacker calls Healthcare.gov security 'shameful'. Security expert -- and once the world's most-wanted cyber criminal -- Kevin Mitnick submitted a scathing criticism to a House panel Thursday of ObamaCare's Healthcare.gov website, calling the protections built into the site "shameful" and "minimal." In a letter submitted as testimony to the House Science, Space and Technology Committee, Mitnick wrote: "It's shameful the team that built the Healthcare.gov site implemented minimal, if any, security best practices to mitigate the significant risk of a system compromise."

• 'Not looking good': Coal workers see future dim amid regulation burden. Far below the Appalachian Mountains, in a space barely big enough to stand up straight, Bobby Combs works a job his father and his grandfather worked. Coal-mining is the highest-paying job available to him in eastern Kentucky. As he skillfully maneuvers a massive machine and rips into a seam of coal, though, Combs wonders if the family tradition ends with him. "It's not looking good," he says, dirt smudging his face.

ZeroHedge: 

• Continuing Claims Surge Most In Over 5 Years To 6-Month Highs. (graph)

• US Treasury's Lew (Ironically) Tells Japan: Stop Manipulating The Yen.

• Hombuilder Sentiment Slips As Buyer Traffic Tumbles. (graph)

• Philly Fed Beats Even As New Order Drop To May 2013 Levels, Inventories Tumble. (graph)

• Chart Of The Day: Goodbye Manufacturing Profits?

• Bernanke's Legacy: A Record $1.3 Trillion In Excess Deposits Over Loans At The "Big 4" Banks. (graph)

• GMO Market Commentary: Ignore The "Common Sense".

• NU Skin(NUS) Halted Third Time - Down $45 (39%).

Business Insider:

• MARISSA MAYER'S $109 MILLION MISTAKE.

• 25% Of U.S. Teens Have Abandoned Facebook(FB).

Reuters:

• China's ICBC says won't compensate investors in troubled shadow bank product. Industrial and Commercial Bank of China, the world's largest bank by assets, said on Thursday that it has no plans to use its own money to repay investors in a troubled off-balance-sheet investment product that it helped to market. 

• Best Buy(BBY) shares tumble on weak holiday sales, margin forecast. Best Buy Co (BBY.N) shares tumbled about 30 percent on Thursday after the world's largest consumer electronics chain reported disappointing holiday sales and warned of a bigger-than-expected decline in quarterly operating margins. The company blamed intense discounting by rivals, tight supplies of phones and high-end tablets industrywide, and weak traffic in December. The news, which knocked off almost $4 billion of Best Buy's market value, was the latest evidence that holiday sales at many chains came at the expense of profit. 

• Goldman Sachs(GS) Q4 profit hit by lower bond trading revenue. Goldman Sachs Group Inc reported a 21 percent drop in quarterly profit on Thursday as revenue from fixed-income trading fell in what Chief Executive Lloyd C. Blankfein described as "a somewhat challenging environment." 

• "True" euro zone stress test could show $1 trillion hole in banks - study. An objective stress test of the euro zone's biggest banks could reveal a capital shortfall of more than 770 billion euros ($1 trillion) and trigger further public bailouts, a study by an advisor to the EU's financial risk watchdog and a Berlin academic has found. The study and others published ahead of the EU stress tests, whose results are due in November, are important because they set the expectations against which markets will judge the credibility of the European Central Bank's attempt to prove its banks can withstand another crisis without taxpayer help.

NY Daily News:

• Last week, redOrbit reported that several new cases of human infection with H7N9 had been confirmed since the New Year began. In the past week, the World Health Organization (WHO) has received reports from two Chinese health agencies confirming 13 new cases of H7N9 bird flu.
  Read more at http://www.redorbit.com/news/health/1113045864/h7n9-rise-multiple-new-confirmed-cases-china-011414/#FsoYrYAMzVEcB8l3.99
  How Obamacare will hurt doctors.

Financial Times:

• US banks take on more risk. US banks shrank their holdings of safe securities by more than 3 per cent last year, a development that is likely to further stoke the debate about whether new rules are encouraging them to buy riskier assets.

Telegraph: 

• 'Fatal spiral' of fiscal crises threatens global economy in 2014. Ballooning debt levels in advanced economies pose biggest threat to the global economy, World Economic Forum report warns.

Jakarta Post:

Restructuring: Flowers slams Europe over inaction


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true

• China's bird flu cases continue to rise. The number of human H7N9 bird flu infections continues to rise nationwide with about 20 new cases reported in the first two weeks of 2014. On Wednesday, three new H7N9 cases were reported from Shanghai and Fujian and Zhejiang provinces.

Echoing fears that European policymakers remain in a state of cognitive dissonance – recognizing the need for root-and-branch overhaul of peripheral banks, but backtracking on joint liability plans – Christopher Flowers, the legendary FIG investor who now runs the £2.3 billion ($3.5 billion) private equity group JC Flowers, sounded the alarm over the negative sovereign-bank feedback loop. In a shot across the bows of market bulls, who cite the return of capital flows to weaker eurozone states, Flowers issued a stark warning: "There is a scenario where we have a Lehman-type event: we wake up some Thursday and a big country is in trouble. "And the ECB will have to decide to support banks x, y, z. And then the ECB will, in fact, decide to own bank x, y, z.


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true