Private Equity

• Yellen to defend Fed's ultra-easy monetary policy (Reuters)
• Japan growth slows on global weakness (WSJ)
• Eurozone third-quarter growth falters (FT)
• Fed Debates Its Low-Rate Peg (Hilsenrath)
• Yellen: Economy Still Needs Fed Aid (WSJ)
• ‘Obamacare’ launch fiasco rouses sceptics (FT)
• DoubleLine's Gundlach says U.S. equities 'only game in town' (Reuters)
• Indian Inflation Exceeding Estimates Adds Rate-Rise Pressure (BBG)
• HUD Said to Fail in Bid to Sell $450 Million of Mortgages (BBG)
• Boeing machinists reject labor deal on 777X by 67 percent (Reuters)

• Philippines Left Reeling in Wake of Storm (WSJ)
• Khamenei controls massive financial empire built on property seizures (RTRS)
• Race to Bottom Resumes as Central Bankers Ease Anew (BBG)
• U.S. Postal Service to deliver Amazon packages on Sundays  (LA Times)
• Obama Stocks Among Best After Re-Election as Rally Tested (BBG)
• Health-Law Rollout Weighs on Obama's Ratings, Agenda (WSJ)
• Twitter in Celebrity Spat With Facebook as Rivalry Builds (BBG)
• Iran deputy industry minister shot dead (AFP)
• Financier of Taliban-linked group shot dead in Pakistan (RTRS)
• Obama: The Lonely Guy (Vanity Fair)

• Twitter's IPO to Make Market Debut (WSJ); Twitter Raises $1.82 Billion, Pricier Value Than Facebook (BBG)
• Worried Senators Press Obama on Health Law (WSJ)
• Greenspan Says Yellen Was His Guide to Economics Research at Fed (BBG)
• European Central Bank seen holding rates despite inflation tumble (Reuters)
• Wall St. Bonuses Over All Are Predicted to Rise 5 to 10% (NYT)
• Cautious consumers seen curbing U.S. economic growth (Reuters)
• China Grants U.S. Investors Indirect Access to Its Stock Markets (WSJ)
• Higher Tax Rates Give Top U.S. Earners Year-End Headaches (BBG)
• Iran Loses Nuclear Leverage as World Ignores Export Drop (BBG)
• NYPD Commissioner Ray Kelly in the running for JPMorgan job (Post)

• Christie Sets Himself Up for Run in 2016 (WSJ)
• De Blasio Elected Next New York City Mayor in Landslide (WSJ)
• Hilsenrath: Fed Study: Rate Peg Off Mark (WSJ)
• MF Global Customers Will Recover All They Lost (NYT) - amazing what happens when you look under the rug
• Virginia, Alabama Voter Choices Show Tea Party Declining (BBG)
• Explosions kill 1, injure 8 in north China city (Reuters)
• Toyota boosts full-year guidance as weak yen drives revenues (FT)
• Starbucks wants to recruit 10,000 vets, spouses to its ranks (Reuters)
• U.S. Economy Slack Justifies Stimulus, Top Fed Staff Papers Show (BBG)
• Israel set to become major gas exporter (FT)

This is one of the few times where the benefactors or professionals who benefit from the bubbles, fully and openly acknowledge that stock prices and certain other asset classes are completely divorced from fundamental valuations.

• Investors are stampeding into initial public offerings at the fastest clip since the financial crisis (WSJ)
• Kerry hails disgruntled Saudi Arabia as important U.S. ally (Reuters)
• SAC Capital prepares for a second life (FT)
• BlackBerry's Fate Goes Down to the Wire (WSJ)
• Dutch Gamble on U.S. Housing Debt After Patience Wins (BBG)
• U.S. Wants Broad Divestitures From AMR, US Airways (WSJ)
• Tensions with allies rise, but U.S. sees improved China ties (Reuters)
• China berates foreign media for Tiananmen attack doubts (Reuters)
• China manufacturers squeezed as costs rise (FT)
• European Borders Tested as Money Is Moved to Shield Wealth (NYT)
• Zurich Probe Finds No ‘Undue Pressure’ Put on Late CFO (BBG)

First it was China hinting that where Silk Road failed in monetizing, pardon the pun, BitCoin, the world's most populous nation could soon take the lead. Then, none other than private equity titan Fortress said it had great expectations for the digital currency. Now, it is eBay's turn to announce that it is preparing to expand the range of digital currencies it accepts, adding that "its payment unit PayPal may one day incorporate BitCoin." But not just yet. FT reports that according to eBay CEO John Donahoe, "digital currency is going to be a very powerful thing."

There's a Monetary Firestorm Coming

• U.S. spy chiefs face Congress amid spying rift with Europe (Reuters)
• Deutsche Bank income hit by €1.2bn of legal provisions (FT)
• China's second tapering attempt fails: China central bank seeks to reassure money markets after rate spike (Reuters)
• UBS Takes Action Against Staff in Foreign-Exchange Probe (WSJ)
• Saudi Arabia frees man jailed for Mohammad tweets (Reuters)
• Tax Revolts Hit Hollande as Farmers, Soccer Clubs Protest (BBG)
• German parliament to meet over U.S. spying scandal (Reuters)
• Google Nears Smartwatch Launch (WSJ)
• How to end gridlock in DC? Pork projects (Reuters)
• UBS ordered to increase capital reserves (FT)

"This new incursion by hedge funds and private equity groups into the American single-family home rental market is unprecedented, and is proving disastrous for many of the tens of thousands of families who are moving into these newly converted rental homes... Though it’s not uncommon for tenants to complain about their landlords, many who had rented before described their current experience as the worst they’ve ever had. A former inspector ...said he routinely examined homes just prior to rental that were not habitable. Though it wasn’t his job to answer complaints, he said he fielded “hundreds of calls” from irate tenants."

We knew from the start that this whole 'buy-to-rent' thing would be a disaster. Over the last decade or so, everything that Wall Street touched has turned into a scheme primarily focused on parasitically funneling wealth and resources away from society at large to itself. This is no different. They call it a “new asset class.” We call it Wall Street serfdom.

At first glance, when the CIO of Fortress Investment Group says:

"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."

One might think, the firm that manages $54.6 billion is advocating the end of the USD as we know it... Or is this more muppetry at work?

If there was any doubt that the US housing "recovery" is anything but the latest speculative play by deep-pocketed (namely those who already have access to cheap funding) investors, who are now engaged in rotating cash gains out of capital markets and into real estate, on their way hoping to flip newly-acquired properties to other wealthy investors, then the most recent, September, RealtyTrac report will put that to rest. To wit: Institutional investors (purchasing 10 or more properties in the last 12 months) accounted for 14 percent of all sales in September, up from 9 percent in August and also 9 percent in September 2012. September had the highest percentage of institutional investor purchases of any month since RealtyTrac began tracking in January 2011....All-cash purchases nationwide represented 49 percent of all residential sales in September, up from a revised 40 percent in August and up from 30 percent in September 2012. In other words, institutional purchases are now at all time highs, with all-cash accounting for half of all transactions!

• Despite budget win, Obama has weak hand with Congress (Reuters)
• Carney Brings In McKinsey for Bank of England Strategy Rethink (BBG)
• Bill Gates Buys Stake in Spanish Construction Company FCC (WSJ)
• Jerusalem Mayor Barkat Seeks New Term in Race Arabs Sitting Out (BBG)
• J.P. Morgan Aimed to Limit Damage (WSJ)
• EU Lawmakers Reject Draghi Call for Bank Bondholder Clemency (BBG)
• Wall Street Profits May Halve in Second Half (WSJ)
• Petrobras-led group wins Brazil oil auction with minimum bid (Reuters)
• Apple to Refresh IPads Amid Challenges for Tablet Share (BBG)
• Italy plans to offer guarantees on govt bond derivatives (Reuters)
• Berkshire Beats Apple as Favorite Stock of Tiger 21 Group (BBG)

Earlier this month, we highlighted the fact that the Carlyle Group was the latest in a series of “smart money” private equity firms to decide it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate trade. Well it appears Carlyle has already started to make its move. In case you can’t figure out what appears to be the key logic behind the shift in focus, try this line on for size:

Because the cost of relocating a home is expensive, residents are less likely to move away. “Our customers have no alternative shot at homeownership, nor do they [normally] even have the credit scores and quality to seek anything better,” Mr. Rolfe said. “They never leave the park they are in, and the revenues are unbelievably stable as a result.”

In neo-feudalistic America, always, always go long serfdom.

• Congress Vote Ends Impasse to Be Revisited in January (BBG); Congress Passes Debt, Budget Deal (WSJ)
• House GOP extracts no concessions (Politico)
• Washington becomes the biggest risk to the U.S. economy (Reuters)
• Debt Deal Seen Boosting U.S. Consumers as Holidays Approach (BBG) - only thing missing: disposable income
• Federal Employees Head Back to Work (WSJ)
• Regulator Suggested Shift for Dimon at J.P. Morgan Unit (WSJ)
• Twitter hires Google ad exec ahead of IPO (CNET)
• Teens can now post publicly, but posts are friends-only by default (WaPo)
• Germany Moves to Finalize Coalition Deal (WSJ)
• Draghi Turns Judge on EU Banks as ECB Studies Accounts (BBG)
• UK nuclear deal with China a ‘new dawn’ (FT)