Frontrunning: October 15

Tyler Durden's picture
  • Spot the pattern: Senate Leaders Nearing a Deal (Politico), Senators say debt, shutdown deal is near (USA Today), Senate Leaders in Striking Distance of a Deal (WSJ), U.S. senators hint at possible fiscal deal on Tuesday (Reuters), Senate Debt-Limit Deal Emerging (BBG)
  • U.S. debt ceiling crisis would start quiet, go downhill fast (Reuters)
  • Uneasy Investors Sell Billions in Treasurys (WSJ)
  • BOE’s Cunliffe Says U.K. Is Not in Grip of Housing-Market Bubble (BBG)
  • Letta Mixes Tax Cut With Rigor in Post-Berlusconi Italian Budget (BBG)
  • Japan Seeks to Export More High-End Food  (WSJ)
  • Burberry names Bailey CEO as Ahrendts quits for Apple (Reuters)
  • China’s Biggest Reserves Jump Since 2011 Shows Inflow (BBG)
  • RBA Says Rate-Cut Impact Evident, Retains Option for Loosening (BBG)
  • London's Wealthy Seek Slice of Downton as Prices Rise (BBG)
  • Iran says world powers' reaction to its nuclear proposal 'good (Reuters)
  • UK opens doors to Chinese banks with special terms for lenders (FT)
  • India Preparing for Global Easy-Money Reversal, Finance Minister Says (WSJ)


Overnight Media Digest


* Top Senate leaders said they were within striking distance of an agreement Monday to reopen the federal government and defuse a looming debt crisis just days before the U.S. could run out of money to pay its bills.

* A UK investigation into potential manipulation of currency markets is looking at a former Royal Bank of Scotland trader, Richard Usher, who participated in electronic chat sessions with traders at other banks, according to people familiar with the investigation.

* Brazilian tycoon Eike Batista has signed a definitive agreement to sell a majority stake in another of his key assets as he advances a plan to shore up his heavily indebted companies. Mining company MMX Mineracao e Metalicos, which is controlled by Batista, said that Abu Dhabi's Mubadala Development Co and Dutch investment fund Trafigura Group have agreed to pay $400 million to buy a majority stake in a port in Itaguai, in the south of Rio de Janeiro state.

* Many U.S. banks are starting to see new growth from the old business of commercial real-estate loans. Recovering property values and improvements in borrowers' credit quality are driving the revival, after years of retrenchment.

* The prospects for a streamlined bankruptcy at Energy Future Holdings, one of the nation's largest utilities, were thrown into doubt on Monday, after creditors failed to agree on how to rework the company's finances.

* Sony Pictures Television will become the first big Hollywood studio to produce a new TV show for Netflix, underscoring how the TV industry's elite are starting to view the streaming video service as a launch pad for original series.

* Capitol Bancorp Ltd Monday agreed to sell its four remaining consolidated banks to Talmer Bancorp Inc, a Michigan bank holding company backed by billionaire financier Wilbur Ross.

* The court-appointed administrator in charge of winding down MF Global Holdings Ltd is concerned about the "exorbitant" defense fees being rung up by lawyers defending Jon Corzine and other former executives and managers in a securities fraud lawsuit.

* is setting up shop inside the warehouses of P&G and some other suppliers in its effort to sell everyday products like toilet paper, diapers and shampoo.



British Finance Minister George Osborne will on Tuesday offer special terms to Chinese state-owned banks in an attempt to make London more attractive to Chinese banks.

U.S. President Barack Obama will meet congressional leaders on Monday afternoon even as signs emerge that the Democrats in the Senate are closer to a deal with their Republican colleagues.

Top Tesco shareholders are doubting the top management in Britain's biggest retailer after it shocked investors after central European profits collapsed.

Twitter plans on mining User data to help target mobile adverts.

Struggling Canadian Smartphone maker BlackBerry, is reassuring its customers about its financial health by publishing an open letter in newspapers in nine countries.

Baby-food brand, Dumex owned by France's Danone, will appoint new management at its Chinese unit following allegations that it bribed doctors and nurses at Chinese hospitals to push parents of newborn babies to buy its infant-milk formula.

Italy was warned by the European Commission on Monday to get approval before going ahead with a proposed 300 million Euro capital increase for Alitalia.



* While Senate leaders praised the progress that was made on a deal to reopen the government and raise the debt limit, it was clear that the most conservative members of the House were not going to go along quietly.

* In a sign of on-demand TV's popularity, some cable companies, including Comcast Corp, Charter Communications Inc and Cox Communications Inc , are talking with Netflix about making subscription services available through the set-top boxes that most Americans have in their living rooms.

* Hurricane Sandy devastated Mantoloking, a barrier island community of multimillion-dollar homes in New Jersey, Verizon Communications did not rebuild the landlines destroyed in the storm, and traditional telephone service here has now gone the way of the telegraph. The move may presage the end of the lines across the United States. The traditional landline is not expected to last the decade in a country where nearly 40 percent of households use only wireless phones.

* Medicare beneficiaries can sign up for private health plans starting Tuesday, but federal officials fear that many of them, out of confusion, might go to the new federal insurance exchange. In fact, people with Medicare generally cannot buy insurance through the exchange. Policies sold there duplicate many benefits provided by Medicare, and it is illegal for insurance companies, agents and brokers to sell such polices to people known to have Medicare, federal officials said Monday.

* Nearly 2,000 private equity firms are making pitches to state retirement systems, corporate pension funds and wealthy investors in the hope of raising nearly three-quarters of a trillion dollars for their next, new funds, but the recession's effects have lingered for poor performers.

* Regulators and investors seem to disagree with recent calls for the JP Morgan Chase & Co head's ouster over the bank' expensive legal troubles. There is an almost bizarre disconnect between the headlines and what the people who matter - investors, analysts, board members and, yes, even regulators - are seeking. None of them want Jamie Dimon to be fired.

* Cold-weather apparel maker, Moncler, said it had applied to go public on the Milan Stock Exchange, becoming the latest fashion company to pursue a stock listing. A gaggle of fashion labels have gone public in recent years, driven by investors' desire to tap into luxury retail, a sector that has quickly rebounded since the global financial crisis.




* The Harper Conservatives will hit the gas pedal this week in the race toward the next election in 2015. But the opposition parties are vowing to push down hard on the brakes in reminding Canadians about what they call the government's lapse in ethics in the Senate. In a Throne Speech Wednesday, the Tories will be driving ahead with their jobs and tough-on-crime agendas while steering slightly to the left to pick up passengers on the social and consumer issues track.

Reports in the business section:

* BlackBerry Ltd is reaching out to its dwindling customer base with a global communications campaign that seeks to assure them that the Waterloo, Ontario firm is far from dead, despite a calamitous slide in sales, heavy financial losses and a conditional agreement to sell itself at a fraction of its former value.

* Contract talks between Canadian National Railway Co and the Teamsters have hit a rut, and the union is blaming an impasse over rail safety, the industry's hot-button issue after a series of high-profile rail disasters this year. The Teamsters Canada Rail Conference said on Monday that CN's decision last week not to extend a conciliation process could lead to a strike or a lockout on Oct. 28.


* The Fraser Institute added its voice on Monday to what has become a popular call for Ottawa to lift all restrictions on foreign ownership in the telecommunications sector. A report from the right-leaning think tank said eliminating all limits on foreign investment in telecom could be one part of a plan to foster "workable competition". But it could also create a situation where some, but not all, of Canada's large carriers could realistically be sold.


* Rogers Communications Inc is launching a retail venture to market its own wireless plans and brands as well as those of Telus Corp, Fido and Chatr, according to industry sources. Sources say the venture aims to roll out 100 kiosks in enclosed shopping malls across Canada during the next 12 to 18 months, to take advantage of heavy consumer foot traffic and bolster the companies' distribution networks.




- The direct investment and brokerage industries can expect further deregulation, according to the meeting notes of the China Securities Industry Association. The association held that existing rules need to be brought in line with the country's policies to support SMEs.

- Chongqing ChangAn Automobile Co Ltd expects third-quarter profit to increase by between 386 percent and 440 percent, it said on Monday. Profits in this period are expected to hit up to 1 billion yuan ($164 million).


- Ping An Insurance Group Co of China Ltd plans to invest 17 billion yuan in a retirement community, marking its first foray into the elderly care industry.


- Corruption in the field of research and development (R&D) will not only cause economic waste, but also erode the spirit of science and hinder technological innovation, said an editorial in the paper that acts as the government's mouthpiece.


Fly On The Wall 7:00 AM Market Snapshot



CSR (CSRE) upgraded to Neutral from Sell at UBS
Cogent (CCOI) upgraded to Buy from Neutral at Citigroup
ITT Educational (ESI) upgraded to Outperform from Market Perform at Wells Fargo
Microsoft (MSFT) upgraded to Buy from Hold at Jefferies
Texas Instruments (TXN) upgraded to Neutral from Negative at Susquehanna


Atlas Pipeline Partners (APL) downgraded to Neutral from Outperform at RW Baird
Nationstar (NSM) downgraded to Market Perform from Outperform at Wells Fargo
PennyMac (PFSI) downgraded to Market Perform from Outperform at Wells Fargo
TMS International (TMS) downgraded to Market Perform from Strong Buy at Raymond James
Teradata (TDC) downgraded to Equal Weight from Overweight at Morgan Stanley
Teradata (TDC) downgraded to Neutral from Buy at Goldman
Teradata (TDC) downgraded to Neutral from Buy at Sterne Agee
Teradata (TDC) downgraded to Neutral from Outperform at Credit Suisse
Veeco (VECO) downgraded to Perform from Outperform at Oppenheimer


Advance Auto Parts (AAP) initiated with an Underperform at Wedbush
AutoZone (AZO) initiated with a Neutral at Wedbush
BIND Therapeutics (BIND) initiated with a Buy at Stifel
BIND Therapeutics (BIND) initiated with an Outperform at Credit Suisse
BreitBurn Energy (BBEP) initiated with a Buy at UBS
Cameron (CAM) initiated with an Outperform at RW Baird
ClubCorp (MYCC) initiated with a Buy at Citigroup
ClubCorp (MYCC) initiated with a Buy at Deutsche Bank
ClubCorp (MYCC) initiated with a Buy at Goldman
ClubCorp (MYCC) initiated with a Buy at Jefferies
Coty (COTY) initiated with an Equal Weight at Barclays
DexCom (DXCM) initiated with a Buy at Benchmark Co.
FireEye (FEYE) initiated with a Neutral at Goldman
FireEye (FEYE) initiated with a Neutral at UBS
FireEye (FEYE) initiated with an Overweight at JPMorgan
Forum Energy (FET) initiated with an Outperform at RW Baird
Genuine Parts (GPC) initiated with a Neutral at Wedbush
Higher One (ONE) initiated with a Strong Buy at Capital One
Insulet (PODD) initiated with a Buy at Benchmark Co.
LINN Energy (LINE) initiated with a Buy at UBS
LRR Energy (LRE) initiated with a Buy at UBS
LinnCo (LNCO) initiated with a Neutral at UBS
Mid-Con Energy (MCEP) initiated with a Buy at UBS
O'Reilly Automotive (ORLY) initiated with an Outperform at Wedbush
QR Energy (QRE) initiated with a Buy at UBS
Qualcomm (QCOM) initiated with a Buy at Stifel
Redwood Trust (RWT) initiated with a Buy at UBS
Rocket Fuel (FUEL) initiated with a Buy at Citigroup
Rocket Fuel (FUEL) initiated with a Neutral at Credit Suisse
Rocket Fuel (FUEL) initiated with an Overweight at Piper Jaffray


Apple (AAPL) hired Burberry (BURBY) CEO Angela Ahrendts as SVP of retail, online stores
Burberry named Christopher Bailey CEO after Ahrendts leaves
Verizon (VZ) expands, enhances next-generation ID platform in Europe
Macy's (M) to open most stores nationwide on Thanksgiving at 8 p.m.
Coldwater Creek (CWTR) to explore strategic alternatives, cut Q3 outlook
InvenSense (INVN) to acquire microphone business from Analog Devices (ADI)
Stanley Furniture (STLY) CEO said business remains “difficult”


Companies that beat consensus earnings expectations last night and today include:
Mercantile Bank (MBWM), Packaging Corp. (PKG), Wintrust Financial (WTFC)

Companies that missed consensus earnings expectations include:
Stanley Furniture (STLY), Brown & Brown (BRO)


  • Private companies are deploying new technology to overhaul a half-century-old approach to tracking changes in the global economy, promising constantly- updated gauges to guide major corporations, hedge funds and governments, the Wall Street Journal reports
  • Once seen as warring factions within the $66B videogame industry, advocates of the traditional console and free-to-play games are striking an alliance to reach out to new players in each other's camps. Both sides see opportunities with a new generation of videogame machines from Sony (SNE) and Microsoft (MSFT) launching next month, the Wall Street Journal reports.
  • The United Auto Workers-affiliated healthcare trust valued its ownership stake in Chrysler Group LLC at $3.6B by the end of 2012, up from $2.7B the previous year, according to a recent filing with the Labor Department. The healthcare trust, a voluntary employees beneficiary association, owns 41.5%of Chrysler, and Fiat (FIATY) owns 58.5%, Reuters reports
  • Emulex Corp. (ELX) held talks with a few private equity firms, including Francisco Partners LP, Thoma Bravo LLC and Thomas H. Lee Partners LP about selling itself, but a deal remains uncertain for the struggling chip maker, sources say, Reuters reports
  • Disruptions in the debt markets from a U.S. government default would be minimized as long as lawmakers gave enough advance notice of which securities would be affected, Bloomberg reports
  • Richard Usher, JPMorgan Chase’s (JPM) chief dealer in London, wrote instant messages while he was at Royal Bank of Scotland (RBS) that U.K. regulators are scrutinizing as part of their investigation of alleged currency manipulation, sources say, Bloomberg reports

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
bank guy in Brussels's picture

Political revolution in France underway

The so-called 'extreme' National Front party led by Ms Marine Le Pen, is now the leading French political party in some polls, as Ambrose Evans-Pritchard just covered in an excellent article

Seems French workers, women, youth, the middle class, are figuring out the centre-Left Socialists are not their friends, and the centre-Right party is not on their side either ...

The spirit of Charles de Gaulle is back, as when de Gaulle sent a French battleship to New York to collect and demand the promised payment in gold for dollars, eventually leading to Nixon's closing of the US dollar 'gold window'

The National Front platform:
- Immediately leaving the euro
- Re-negotatiating the EU and then giving French voters the option to leave the EU altogether
- Separating France from NATO and the USA war-mongering machine
- Economic focus on jobs, worker incomes and making it more attractive for business to provide those incomes
- Kicking out illegal immigrants
- Holding a line of classic French society against pressures from Islamic or other elements

The Evans-Pritchard article in the UK Telegraph -

SWRichmond's picture

Excellent...political self-determination, anyone?

involuntarilybirthed's picture

A reasonable social evolution.  As a set amount of free goods and services are spread around to more people less is available for each.  It took true French people a while to realize it.  America will soon go through the same. Budgets will demand it.

AnAnonymous's picture

'Americans' have that power to cherrypick factoids to reinforce themselves in their own fantasy.

It is a drawer within a drawer.

Pritchard cherrypicked factoids to sell his job making mantra: the end of the euro.

And that 'american' poster cherrypicked in the article to send his own fantasy to the moon.

From the article
"It was a bad defeat for the Gaulliste UMP"

and this:
"The spirit of Charles de Gaulle is back"

NoDebt's picture

"Medicare beneficiaries can sign up for private health plans starting Tuesday, but federal officials fear that many of them, out of confusion, might go to the new federal insurance exchange"

How they're going to inflate the numbers of people who have bought a policy through the exchanges.

involuntarilybirthed's picture

The House of Representatives.

Obama wil have to deal with them no matter.  He pushed the negotiations to the Senate but the House is the third leg of the deal.  He will no doubt play the Tea Party as holding America hostage as he and Senate have reached compromise.  It will be interesting yet.

Sudden Debt's picture

It's my birthday today!

And all I want is:

1. Get laid: Check

2. Silver implosion down to 17$!

Australian Economist's picture

Happy Birthday, you've won one free audit from the IRS!

quasimodo's picture

Can't help with #1.

#2, if you close your eyes and click your heels together might just get there. Silver getting pounded atm

Australian Economist's picture

Answer me this.


Say an agreement is reached and the Debt Celing limit is raised, this should be bullish for gold and weak for the dollar due to more free money for the government to waste.


Yet I can't help feeling that gold will just be slammed down even further, why?

quasimodo's picture

Sorry! You lose! AAAHHHHHH(que buzzer)

Agreement being reached, gold will get slammed

Not reached, gold will get slammed. Why you ask? 

Because they can

Australian Economist's picture

That doesn't sound very fair to me. I just want to live in a world where things make sense, where good news is good and bad news is bad.



d edwards's picture

Whenever politicians are making "deals" it usually means the average person is gonna get screwed.

suteibu's picture

Japan produces less than 40% of its own food and yet they feel the need to export even that.   They are dependent on foreigners for food and energy which does not put them in a position of strength. 

"Control oil and you control the nations; control food and you control the people."  - H. Kissinger

And yet Abe struts around like a peacock on the world stage. 


youngman's picture

Instead of these Politicians meeting to see how they can raise the debt ceiling...why don´t they meet to cut expenses so they can live with what they have...that would be real leadership...and my first cut would be those people that stole all that food when they thought they had unlimited food stamps.....what a crock....thieves is all they are....and they are stealing from you and me....and I want justice....they should lose their cards and be banned from welfare for life....

AnAnonymous's picture

•China’s Biggest Reserves Jump Since 2011 Shows Inflow (BBG)

Oh, oh, oh....

You gotta love throwing in data like that.

How comes? The Chinese were sold as trying to exit the USD and they are building up on their reserves?

They cant have enough USD?

Cant wait for the next article on the swaying USD hegemony...