While real wages dropped 1.4%
Eleven states made Forbes' list of danger spots for investors including California, New York, Illinois, and Ohio. They warned (and with the cliff it is even more critical), if you have muni bonds in these states - clean up your portfolio; if your career takes you there - rent, don't buy! Two factors determine their list of 'fiscal hellholes'. The first is whether there are more takers (someone who draws money from the government) than makers (the gainfully employed). The second is a state credit-worthiness score (via Conning) based on large debts, uncompetitive business climates, weak home prices, and bad trends in employment. Conning rates North Dakota the safest state to lend money to, Connecticut the most hazardous. A state qualifies for the Forbes' death spiral list if its taker/maker ratio exceeds 1.0 and it resides in the bottom half of Conning’s ranking. See below for the 11 states to avoid...no matter what Bob Toll, Larry Yun, Bob Pisani, or Alexandra Lebenthal tells you..
Beggaring thy neighbour has consequences. Neighbours might turn around and bite back. How long until other nations join with Brazil in declaring trade measures against the United States is uncertain, but there may be few other options on the table for creditors wanting to get their pound of flesh, or nations wishing to protect domestic industries. After all, the currency wars won’t just go away; competitive devaluation is like trying to get the last word in an argument. The real question is whether the present argument will lead to a fistfight.
- Two weeks ago here: The Latest Greek "Bailout" In A Nutshell: AAA-Rated Euro Countries To Fund Massive Hedge Fund Profits... and now on Bloomberg: "Hedge Funds Win as Europe Will Pay More for Greek Bonds" (BBG)
- Oracle sends shareholders cash as tax uncertainty looms (Reuters)
- GOP Makes Counteroffer In Cliff Talks (WSJ)
- Iran says captures U.S. drone in its airspace (Reuters)
- IMF drops opposition to capital controls (FT)
- Vogue Editor Wintour Said to Be Possible Appointee as U.K. Envoy (BBG)
- Juncker Stepping Down French Finance Minister to Head Euro Group? (Spiegel)
- Australia cuts rates to three-year low (FT)
- Europe’s banking union ambitions under strain (Reuters)
- EU Nations Eye New ECB Bank Supervisor Amid German Doubts (BBG)
- Frankfurt's Ambitions Get Cut Back (WSJ)
- House Republicans Propose $2.2 Trillion Fiscal-Cliff Plan (BBG)
- Union solidarity rubs up against slow economy in LA port strike (Reuters)
- Geithner predicts Republicans will allow higher tax rates (Reuters). And "no risk" of a US downgrade, "no risk"
- Geithner takes hard line on fiscal cliff (FT)
- Narrowing LDP lead points to Japan post-election confusion (Reuters) - not to mention, USDJPY plunges if LDP loses
- Vietnam Says China Must Avoid Trade Weapon in Maritime Spat (Bloomberg)... and real one, one hopes
- Greece unveils bond buyback plan (FT)
- ECB Can’t Deliver Spain Spread Rajoy Wants, Wellink Says (Bloomberg)
- UK’s euro trade supremacy under attack (FT)
- Merkel Signals Debt Write-Off Possible as Buyback Begins (Bloomberg)
- ECB's Noyer Says Bond-Buying Plan 'Is Bearing Fruit' (WSJ) - as long as just plan, and not execution.
After this year's presidential campaign, private equity and certainly Bain Capital, will likely be the last entity that those pandering to populist agendas will go to advice over the future of the business cycle in broad terms, and the future of US labor, most certainly including outsourcing, in narrow terms. And Goldman - that staunch defender of the superiority of capital over labor - will hardly be confused as ever taking the role of workers in any discussion. Which is why we read the following interview by Goldman's Hugo Scott-Gall with Bain Capital partners Michael Garstka and Alan Bird on such topics as corporate restructurings and the future of outsourcing with great interest, as it is very much unlikely that any of the conventional media sources would carry it. And while one may have ideological biases in whatever direction, the truth as presented previously, is that US private equity is a massive "behind the scenes" juggernaut, whose portfolio holding companies account for a whopping 8% of US GDP, and is directly and indirectly responsible for tens of millions of currently employed US workers! At the end of the day, it may well be that what private equity firms such as Bain think about the future of US labor prospects is the most important thing that matters for the future of the so very critical US unemployment rate. Which is why we present, for your reading pleasure, the somewhat unorthodox interview below...
- As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
- Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
- Argentina debt repayment order frozen (FT)
- Obama Is Flexible on Highest Tax Rates (WSJ)... not really
- Geithner deployed for fiscal cliff talks (FT)
- Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
- Euro-Zone Budget Proposal Is Unveiled (WSJ)
- EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
- LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
- SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
- EU to launch free trade negotiations with Japan: EU officials (Reuters)
- Egypt protests continue in crisis over Mursi powers (Reuters)
- Greece hires Deutsche, Morgan Stanley to run Greek voluntary debt buy back, sources say (Kathimerini)
- Executives' Good Luck in Trading Own Stock (WSJ)
- Hollande Presents Mittal Nationalization Among Site Options (Bloomberg)
- Eurozone states face losses on Greek debt (FT)
- Spain's rescued banks to shrink, slash jobs (Reuters)
- EU Approves Spanish Banks' Restructuring Plans (WSJ)
- At SAC, Portfolio Managers Are Treated Like Stocks (BBG)
- China considers easing family planning rules (Reuters)
- European Court to Rule Over ECB’s Secret Greek File (BusinessWeek)
- And another top tick indicator: Asia Funds Buy London Offices in Bet Volatility Is Past (Bloomberg)
- Harvard Doctor Turns Felon After Lure of Insider Trading (BBG)
- Zucker Is Lead Candidate to Head CNN (WSJ) - it's not true until CNN misreports it
- Iran "will press on with enrichment:" nuclear chief (Reuters)
With Thanksgiving this Thursday, trading desks will be empty on Wednesday afternoon and remain so until next Monday. So even though it is a holiday shortened week, here are the main things to expect in the next 5 days: Bank of Japan meeting, the European Council meeting and the Eurogroup meeting. Key data releases include European and Chinese Flash PMIs.
Earlier today, the Financial Stability Board (FSB), one of the few transnational financial "supervisors" which is about as relevant in the grand scheme of things as the BIS, whose Basel III capitalization requirements will never be adopted for the simple reason that banks can not afford, now or ever, to delever and dispose of assets to the degree required for them to regain "stability" (nearly $4 trillion in Europe alone as we explained months ago), issued a report on Shadow Banking. The report is about 3 years late (Zero Hedge has been following this topic since 2010), and is largely meaningless, coming to the same conclusion as all other historical regulatory observations into shadow banking have done in the recent past, namely that it is too big, too unwieldy, and too risky, but that little if anything can be done about it. Specifically, the FSB finds that the size of the US shadow banking system is estimated to amount to $23 trillion (higher than our internal estimate of about $15 trillion due to the inclusion of various equity-linked products such as ETFs, which hardly fit the narrow definition of a "bank" with its three compulsory transformation vectors), is the largest in the world, followed by the Euro area with a $22 trillion shadow bank system (or 111% of total Euro GDP in 2011, down from 128% at its peak in 2007), and the UK in third, with $9 trillion. Combined total shadow banking, not to be confused with derivatives, which at least from a theoretical level can be said to offset each other (good luck with that when there is even one counterparty failure), is now $67 trillion, $6 trillion higher than previously thought, and virtually the same as global GDP of $70 trillion at the end of 2011.
The “shale revolution” has been grabbing a great deal of headlines for some time now. A favourite topic of investors, sector commentators and analysts – many of whom claim we are about to enter a new energy era with cheap and abundant shale gas leading the charge. But on closer examination the incredible claims and figures behind many of the plays just don’t add up. To help us to look past the hype and take a critical look at whether shale really is the golden goose many believe it to be or just another over-hyped bubble that is about to pop, we were fortunate to speak with energy expert Arthur Berman.
Mere hours after BP settles, the US Coast Guard confirms there is an offshore (shallow water) platform burning in the Gulf of Mexico in the area of West Delta Block 32 (near West Cote Blanche Bay). Local TV says that two people are dead and two people are missing after an explosion at the platform. More to come...
UPDATE:Gulf rig fire was result of rig explosion at oil/gas platform "West Delta 32"owned by Black Elk Oil, ac. to Coast Guard
- Israel Mobilizes Troops as Hostilities Escalate (WSJ)
- FHA Sets Stage for Taxpayer Subsidy With 2012 Deficit (Bloomberg)
- On eve of fiscal cliff talks, positions harden (Reuters)
- Japan PM Noda contradicts challenger Abe on BOJ (Reuters)
- Regulators cut JPMorgan's ability to trade power (Reuters)
- EU Should Reach Agreement on Greek Aid Next Week, Grilli Says (BBG)
- Moscovici rejects talk of French crisis (FT)
- Egypt Urges Push for Gaza Peace as Rockets Hit Israel (BBG)
- Leading Japan politicians draw election battle lines (Reuters)
- Fed Push to Tie Zero-Rate to Economic Goals Faces Doubts (BBG)
- China’s commerce minister voted out in rare congress snub (Reuters)
- China’s new leaders could have reform thrust upon them (Reuters)
- Both Sides of Gaza Border Brace for Further Conflict (WSJ)
- Fed Sees Hurdles in Housing Rebound (Hilsenrath)
- The Complete 2012 Business Schools Ranking (Bloomberg)
BP Employees Indicted for Manslaughter and Lying to Federal Investigators in Connection with the Gulf Oil Spill