Frontrunning: November 9

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  • Greek Aid Payment Call Won’t Be Made Next Week, EU Official (Bloomberg)
  • Central Bank Says Athens Aid Up to Euro Zone (WSJ)
  • Eurozone faces brinkmanship on Greece (FT)
  • Pressure Rises on Fiscal Crisis (WSJ)
  • The JC Penney massacre continues (BBG) - In other news, any minute now Bill Ackman will get that 15x return...
  • SEC left computers vulnerable to cyber attacks (Reuters) cue "back door Trojan" jokes
  • Former Goldman trader accused of fraud (FT)
  • Elizabeth Warren's Inadvertent Best Friends: Wall Street and Republicans (BusinessWeek)
  • Zurbruegg Says Managing SNB Currency Reserves Is Major Challenge (BBG)
  • Obama ally leads push on fiscal cliff (FT)
  • Britain threatens to block banking union (FT)
  • PBOC’s Zhou Says China’s Economy Improving as Data Due (Bloomberg)
  • China slaps duties on steel tube imports (FT)
  • Obama to Make Statement on Economic Growth, Cutting Deficit (Bloomberg)

 

Overnight Media Digest

WSJ

* The White House and Republican lawmakers faced pressure to reach a solution to the looming budget crisis after a nonpartisan agency detailed Thursday how inaction would push the U.S. economy back into recession next year, and skittish investors continued to drive stocks lower.

* China is reining in the yuan after weeks of steady appreciation, a move that could help its big exporters but undercut its long-standing pledge to give the market greater sway in the currency's fate.

* Online luxury retailer Gilt Groupe Inc quietly launched a search for a new chief executive to replace co-founder Kevin Ryan as its strives to shore up its financial performance to support a possible initial public offering.

* McDonald's Corp on Thursday reported the first drop in its monthly same-store sales in nine years.

* Bank of New York Mellon Corp has reached an agreement with the state of Virginia to resolve accusations the bank charged hidden markups on currency transactions to Virginia's employee pension fund, in a deal that will also involve a $1.1 million payment to a whistleblower group, according to a person familiar with the negotiations.

 

FT

NEXT ARCHBISHOP TO KEEP BANK PANEL ROLE

The next archbishop of Canterbury, a former oil executive, is a trenchant critic of the excesses of capitalism who will keep his place on the parliamentary inquiry into banking ethics, the FT has learnt.

INSURERS PAY PRICE FOR SANDY'S DOWNGRADE

Insurers have complained that they face billions of dollars of extra losses after U.S. authorities declared Superstorm Sandy a post-tropical cyclone rather than a hurricane.

BOE BOND DECISION SPARKS QE QUESTIONS

The Bank of England suspended its emergency bond-purchasing programme on Thursday, raising doubts about whether quantitative easing has lost its power to boost the economy.

BRITAIN'S PRISON OUTSOURCING IN TURMOIL

Britain's prison privatisation programme was left in tatters on Thursday after the government decided to keep four out of nine prisons due to be outsourced in state hands and put the rest of the rollout on hold.

OBAMA ALLY LEADS PUSH ON FISCAL CLIFF

Efforts to avert the fiscal cliff gathered momentum as a senior ally of U.S. President Barack Obama called on business leaders to urge Republicans to make concessions to stave off the looming budget crisis threatening the global economy.

BRITAIN THREATENS TO BLOCK BANKING UNION

Britain is warning other EU countries that it will block a single eurozone banking supervisor unless those outside the system win more safeguards, as London expresses growing frustration that its demands are being left to last.

DEXIA IN FRESH 5.5 BILLION-EURO BAILOUT

France and Belgium are to bail out Dexia, once the world's largest municipal lender, for the third time in four years, after agreeing to inject an extra 5.5 billion euros ($7 billion) into the bank.

QUALCOMM VIES WITH INTEL AS CHIP CHAMPION

Chipmaker Intel was on Thursday overtaken briefly in market value by rival Qualcomm in a sign of the rapidly changing fortunes of the smartphone and personal computer industries.

SIEMENS REVEALS 6 BLN-EURO COST-CUTTING PLAN

Siemens plans to save 6 billion euros by 2014 in response to decline in both profitability and orders that has left the German engineering conglomerate trailing rivals such as General Electric.

FOREIGN BANKS FAIL TO GROW IN CHINA

Foreign banks are failing to make headway in China and will not create profitable mainland businesses just through riding the expected growth in the markets, according to a study by consultancy Oliver Wyman.

 

NYT

* Inflation slowed further in China last month, the Chinese government said on Friday morning, leaving further room for the Chinese government to continue heavy lending by the country's state-owned banks to rekindle economic growth without stoking a broad increase in prices.

* The president of the European Central Bank expressed satisfaction Thursday with progress toward resolution of the euro zone crisis, applauding "amazing" efforts by members of the currency union to reduce government spending.

* JPMorgan Chase & Co disclosed on Thursday that it had received the green light from regulators to buy back as much as $3 billion of its stock in the first quarter of next year, another sign that the nation's largest bank is moving beyond a multibillion-dollar trading loss it suffered on a soured derivatives bet.

* Priceline.com Inc said it will buy Kayak Software Corp for $1.8 billion in cash and stock.

* Sanofi said on Thursday that it would effectively cut in half the price of a new cancer drug after a leading cancer center said it would not use the drug because it was too expensive.

 

Canada

THE GLOBE AND MAIL

* The Conservative-dominated Senate is likely to defeat gambling legislation that was supported unanimously by all parties in the House of Commons.

A large number of Conservative and Liberal senators are ready to defeat a private member's bill that would allow Canadians to bet on a single sports event. ()

* Two people were killed as an explosion loud enough to be heard for kilometers ripped through an industrial plant in Quebec on Thursday, triggering a fire that produced a thick, dark cloud of toxic smoke. ()

Reports in the business section:

* The U.S. Television Coalition, a group of five local stations, is asking Canadian cable, satellite and Internet TV providers to pay for the right to distribute their signals to viewers. The signals are currently plucked off the air and redistributed to Canadian viewers without any direct compensation paid to the stations.

The coalition comprises WIVB and WNLO, Buffalo stations that carry the CBS signal; the Minneapolis-based ABC affiliate KSTP; NBC affiliate WDIV in Detroit; and the NBC affiliate in Rochester. ()

* Frank Stronach, the 80-year-old founder of auto parts giant Magna International Inc is stepping down from the board of directors of the company he founded in 1957.

Stronach said he is too busy starting a new political party in Austria and getting his latest venture - a chain of steakhouses serving organic beef - up and running to remain on Magna's board. ()

NATIONAL POST

* Politicians turned down an application to re-zone land near Nestle Canada's factory in Toronto for a residential and commercial development.

Nestle Canada officials spoke out against any residential development on the land, arguing that increased traffic and potential noise concerns from new residents will affect the viability of their 24-hour, 7-day-a-week business. ()

FINANCIAL POST

* Some investors still seem to think governments will rescue failing large banks despite new rules designed to allow troubled institutions to collapse without taxpayer bailouts, the head of the Group of 20s Financial Stability Board said on Thursday.

Mark Carney, who is also governor of the Bank of Canada, said the FSB had made progress in implementing reforms to ensure no bank was considered "too big to fail," but that more work may need to be done. ()

* Close to C$120 million ($120.3 million) in revenues generated by TMX Group Inc could be affected by a data fee review undertaken Thursday by the Canadian Securities Administrators, according to analysts at RBC Capital Markets.

The umbrella group for Canada's securities regulators is looking into possibly regulating the fees equity marketplaces, such as stock exchanges, charge for data.

 

China

CHINA SECURITIES JOURNAL

-- Second-hand residential property prices in Beijing, Shanghai and Guangzhou were rising consecutively in the past seven months, with Shanghai and Guangzhou's price rising over 1 percent.

-- Net profit in 19 listed Chinese securities houses was at 686 million yuan ($109.88 million) in October, down about 40 percent from a month earlier.

SHANGHAI SECURITIES NEWS

-- China's venture capital and private equity sector is seeing a sharp decline this year after expanding rapidly over the past few years. In October only 19 investment deals were done worth $472 million, the lowest level so far this year, according to data from Zero2IPO Research Centre.

PEOPLE'S DAILY

Jia Qinglin, chairman of the national committee of the Chinese People's Political Consultative Conference (CPPCC) said the party must work to engage in deliberative democracy to improve the socialist system and to promote the construction of socialist democratic politics.