Quick Overview

• Angela Merkel's approach -- to decelerate rather than succumb to panic -- is starting to pay off. Euro-zone agreed to reduce Greece's debt burden by half. In addition, the euro backstop fund will be boosted to over a trillion Euros.
• Soros thinks the EZ rescue deal is going to last between 1 day and 3 months
  
  
  
  

• US economic growth accelerated to 2.5% in Q3
• U.S. pending home sales fell 4.6% to 84.5 in September
• U.S. Census chiefs warn bureau cuts will leave nation flying blind in bad economy.

• (FT) FTSE 100 directors saw their total earnings rise by 49 per cent in the past financial year, taking the average to just under £2.7m, according to research by Incomes Data Services, the pay monitoring group.

• World power swings back to America – Pritchard/Telegraph http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

• IBM adds 7 billion to its stock repurchase program bringing the total to $12.2 billion, as IBM had $5.2 billion remaining of its previous repurchase authorization

• U.S. consumer-confidence fell to 39.8 in October from a September level of 46.4

• The U.S. House voted Monday to exclude U.S. airlines from an emissions cap-and-trade program that the European Union plans to impose on all airlines flying to and from the continent beginning next year.

• (Reuters) - A U.S. federal appeals court has revived a lawsuit accusing Rio Tinto Plc of human rights violations related to Papua New Guinea.

• (MW) The S&P/Case-Shiller 20-city composite index rose 0.2% in August, as 10 of 20 cities saw gains. That's the fifth straight month of gains, S&P said Tuesday. On a year-on-year basis, prices are down 3.8%. The 20-city composite is down 30.8% from its peak.

• Vietnam has lost its fight to save its rare Javan rhinoceros population after poachers apparently killed the country's last animal for its horn.

• Rick Perry suggested in a recent interview that Trump still harbored doubts about Obama's birth...

• As the U.S. economy suffers, cattle thefts rise to new highs. An estimated 4,500 cattle have been reported missing or stolen this year in Texas and Oklahoma alone.

• Ford's ranking fell 10 spots in Consumer Reports' annual auto reliability survey -- it now ranks 20th out of 28 major brands.

• CME Floor traders said the proposed tax break makes them nervous, because trading is already migrating away from open outcry and to the computer screen. If electronic trades get a tax break, they said, exchanges will have even less of a reason to promote face-to-face trading.

• (FT) Banks sign up to 'ethical' code: The UK's five biggest lenders have agreed to improve the way they do business..

• (FT) Chinese steel mills have started to cut their production as tighter credit conditions and a cooling real estate market bite in the world’s biggest steel market, pushing the cost of iron ore to a 15-month low.

• The wealthiest 1% of Americans saw their net (AFTER TAX) incomes skyrocket by 275% in the three decades to 2007, substantially more than all other segments of the population, the Congressional Budget Office said.

• The Zetas—a Mexican drug cartel believed to be responsible for numerous beheadings, murders, and acts of mayhem—got on the wrong side of the hacker collective Anonymous after allegedly kidnapping one of their members in Veracruz. Now Anonymous has issued an ultimatum: Release our man by November 5, or we'll expose your identities, addresses, and allies.

Next Update Sunday

Quick Overview

• IT's view of Dow Theory is back to bullish
  http://is.gd/U7MWjQ
• Big banks found themselves under pressure in Europe's debt crisis Saturday, with finance chiefs pushing them to raise billions of Euros in capital and accept huge losses on Greek bonds they hold.

• For the global sugar marketing year that began this month output will exceed demand by 6 million tons so UBS estimates. Macquarie anticipates a 5.32 million-ton glut, and Kingsman a surplus of 8.4 million tons. Barclays Capital estimated 4.5 million tons surplus, and the London-based International Sugar Organization anticipates a surplus of 4.2 million tons.

• U.S. unemployment rates dropped in 25 states, rose in 14 and stayed the same in 11. That is an improvement from August, when unemployment rose in 26 states. Nevada (13.4 %) reported the highest unemployment rate for the 16th straight month. California, with unemployment rate falling from 12.1% to 11.9 %, ranked number two. Michigan had the third-highest rate, at 11.1%.

• Eurozone government deficit rose to 572.5 billion Euros in 2010 from 571.5 billion in 2009, but the deficit-to-GDP ratio dropped to 6.2% from 6.4%.

• More than 170 countries have agreed to speed up adoption of a global ban on the export of hazardous waste.

• IBM ranks first in U.S. and second in world as World's Greenest Company. We've focused on green for 20+ years.

Quick Overview

• Senate GOP kills Obama plan for  hiring 400,000  teachers and first responders.

• (FT)The European banking crisis is spilling over into commodities trading with French banks, the main financiers of trading houses, reining in their lending.

• Microsoft (MSFT) sales rose 7.3 %. Net income rose 6.1% to 68 cents a share from 62 cents a year earlier.
• Nokia (NOK) +5.55% reported a loss but better-than-expected unit volume.

• The end of the world is nigh. Again! The Oakland-based Family Radio International that stirred a global frenzy when it predicted the rapture would take 200 million Christians to heaven on May 21, now says the cataclysmic event will destroy the globe on Friday.

• Greek politicians have  passed a tough austerity package while the country has been paralyzed by a 48-hour general strike.

• Western Digital Corporation, the world's leading manufacturer of hard disk drives, said global supply may be constrained for several quarters because of flooding in Thailand. Thai floods have affected 14,254 factories and businesses in 20 provinces, according to the Labor Ministry.

• Brazil lowered interest rates by 50 basis points to 11.5 per cent, the second such cut in six weeks.

• 18,000 of U.S. busiest bridges are structurally deficient.

• (FT) Dexia, the stricken Franco-Belgian lender that has been at the centre of recent market turmoil, loaned €1.5bn of fresh capital to its two largest institutional shareholders which then used the cash to buy Dexia shares before 2008, the Financial Times has learnt.

Quick Overview

• U.S. wholesale prices rose 6.9% YoY.

• Human Genome (HGSI) rose on Tuesday following a report in the U.K.'s Daily Mail that GlaxoSmithKline PLC could be preparing a bid of $25 a share.

• The National Association of Home Builders/Wells Fargo housing market index rose by four points to 18, the biggest one-month gain since April 2010

• China's Q3 GDP rose 9.1% against forecast of 9.2%

• Total foreign holdings of U.S. long-term debt in August reached 4.57 trillion U.S. dollars, up from 4.48 trillion in July.

• China's CPI rose 6.1% YoY in September from 6.2% in August and 6.5% in July, which was a 37-month high. Inflation remains above the target of 4% for 2011.

• Chinas business climate index for the real estate sector also fell for the four consecutive month to 100.41 in September.

• Boston, San Francisco Bay Area, Paris, New York, Vienna, Amsterdam, Munich, Lyon, Copenhagen, Toronto are the top 10 innovative cities listed in the annual index for 2011.

• Global deliveries of new containerships have surpassed one million TEU since the beginning of 2011 with 154 vessels delivered and 280,000 TEU more to come by the end of the year, says Alphaliner

• Apple reported a net income of 6.62 billion U.S. dollars or 7.05 dollars per share, compared with 4.31 billion dollars, or 4.64 dollars per share a year ago.

• Coca-Cola said it had sold more drinks in each region around the world in Q3

• The CFTC reestablishes position limits. The rule limits traders to 25% of deliverable supply in the spot month. The spot-month limits apply separately to physically settled and cash-settled contracts. The CFTC will determine deliverable supply in conjunction with the exchanges.

• Intel posts 17% higher profit and issues strong outlook. It also authorized a further $10bn to buy back shares.

• GM sold 2 mln vehicles in China for second straight year

Quick Overview

• OWS Sign: "I'll believe corporations are people when Texas executes one"

• Bloomberg: European leaders have one week to settle differences and flesh out a strategy to terminate their sovereign debt crisis as global finance chiefs warn failure to do so would endanger the world economy.

• The U.S. federal government registered a 1.299 trillion U.S. dollars budget deficit for the 2011 fiscal year ending September.

• The Eurozone trade deficit stood at 3.4 billion Euros (4.7 billion U.S. dollars) in August.
• Annual inflation in the Eurozone stood at 3.0% in September.

Rabbit-Hole Economics
The Great Recession should have been a huge wake-up call. Nothing like this was supposed to be possible in the modern world. Everyone, and I mean everyone, should be engaged in serious soul-searching, asking how much of what he or she thought was true actually isn’t.

Quick Overview

• While some warn of an imminent recession transports seem to point the other way. http://is.gd/5w3qPd         http://is.gd/ikXlcm

• (FT) Chinese copper inventories stood at 1.9m tonnes at the end of 2010, more than the US consumes in a year. The estimate is significantly higher than the 1.0m-1.5m tonnes range foreign executives had assumed and may indicate lower demand than thought.

• Western Europe's cocoa grind rose 14.0% YoY

• The USDA raised its world wheat stock estimated to 202.4m tonnes -- the highest for 10 years.

• Google's earnings rose 29%.

• Thai authorities are battling to keep the country's worst floods in decades from inundating Bangkok, urging the city's 12 million residents not to panic after a dyke burst in the northern suburb.

• The U.S. Labor Department said that the advance figure for seasonally adjusted initial claims for jobless benefits was 404,000 in the week ending Oct. 8, a decrease of 1,000 from the previous week.

• Australia's unemployment rate fell to 5.2% in September, down from a 10-month high of 5.3% in August

• U.K. unemployment rate in the June-August period stood at a depressing 8.1%, the highest in 15 years.

• MoM the Eurozone industrial production rose by 1.2%, and 5.3% YoY.

• North American railcar owners pulled 11,087 more units out of storage

My Advice to the Occupy Wall Street Protesters
by Matt Taibbi

1. Break up the monopolies. The so-called "Too Big to Fail" financial companies – now sometimes called by the more accurate term "Systemically Dangerous Institutions" – are a direct threat to national security. They are above the law and above market consequence, making them more dangerous and unaccountable than a thousand mafias combined. There are about 20 such firms in America, and they need to be dismantled; a good start would be to repeal the Gramm-Leach-Bliley Act and mandate the separation of insurance companies, investment banks and commercial banks.

2. Pay for your own bailouts. A tax of 0.1 percent on all trades of stocks and bonds and a 0.01 percent tax on all trades of derivatives would generate enough revenue to pay us back for the bailouts, and still have plenty left over to fight the deficits the banks claim to be so worried about. It would also deter the endless chase for instant profits through computerized insider-trading schemes like High Frequency Trading, and force Wall Street to go back to the job it's supposed to be doing, i.e., making sober investments in job-creating businesses and watching them grow.

3. No public money for private lobbying. A company that receives a public bailout should not be allowed to use the taxpayer's own money to lobby against him. You can either suck on the public teat or influence the next presidential race, but you can't do both. Butt out for once and let the people choose the next president and Congress.

4. Tax hedge-fund gamblers. For starters, we need an immediate repeal of the preposterous and indefensible carried-interest tax break, which allows hedge-fund titans like Stevie Cohen and John Paulson to pay taxes of only 15 percent on their billions in gambling income, while ordinary Americans pay twice that for teaching kids and putting out fires. I defy any politician to stand up and defend that loophole during an election year.

5. Change the way bankers get paid. We need new laws preventing Wall Street executives from getting bonuses upfront for deals that might blow up in all of our faces later. It should be: You make a deal today, you get company stock you can redeem two or three years from now. That forces everyone to be invested in his own company's long-term health – no more Joe Cassanos pocketing multimillion-dollar bonuses for destroying the AIGs of the world.

Quick Overview

• PIMCO's Bill Gross: Class warfare by the 99%? Of course, they’re fighting back after 30 years of being shot at.
• Senate Republican/Tea voted unanimously against tax cuts for middle-class families, infrastructure spending, & millions of jobs.

• Slovakia rejected an expansion of the euro zone's bailout fund.

• U.S. stocks off to best October start since 1982

• (WSJ) 9.6%! That’s the decline from 2000 to 2010 in inflation-adjusted median earnings of people 25 to 34 years old with a bachelor’s degree and no graduate degree.

• Corning (GLW) raised the dividend by 50%.

• Japanese consumer confidence rose from 37 in August to 38.6
  
  

Quick Overview

• Dexia, a Belgian-French Bank, was leveraged by more than 100 times. It has assets exceeding Euro 500 billion and equity of just 5 billion  -- and it passed the recent European bank stress test!!
• (FT) Global banking regulators will press ahead with the first worldwide effort to force banks to hold more liquid assets and cut back the industry’s reliance on short-term funding, despite complaints that the rule changes could damage the broader economy, the new chairman of the Basel Committee on Banking Supervision has warned
• A computer virus has hit the US Predator and Reaper drone fleet that Washington deploys to hunt down militants, logging the keystrokes of pilots remotely flying missions, Wired magazine reported.

• Economist: An ill-conceived congressional bill to punish China for manipulation its currency is yet another sign that America has little to be proud of in terms of economic policy... The debt crisis has been running for 18 month now, and the only way that euro-zone leaders have dazzled is through sheer incompetence.

• U.S. nonfarm payroll employment edged up by 103,000 jobs in September, but the unemployment rate remained at 9.1% for the third straight month.

• A big shift of manufacturing from China to the U.S. and other parts of North America will create up to 3 million U.S. jobs in coming years, says a study from Boston Consulting Group.

• The number of foreign trade containers moving through the Port of Tokyo rose 9.7% in the first half of 2011 from the same period last year to 1.98 million TEUs.

• North American railroads again set a new all-time high in intermodal loadings with 313,026 containers and trailers in the week ending Oct. 1.

• (Bloomberg) -- U.S. sugar stockpiles are shrinking to the lowest in 37 years after rain and freezing weather damaged the beet crop, potentially reversing a price slump and forcing the government to ease import limits.

• Fitch cut Italy to "A+" from "AA-," citing high public debts, low growth and politically technical and complex solution necessary to fix the country's financial situation. The agency also downgraded Spain's long-term credit rating to “AA-" from "AA+."

• Moody's downgraded Britain's part-nationalized banks Lloyds and Royal Bank of Scotland on Friday.

• Japan's benchmark coincident composite index gained 0.3 point to 107.4 in August.

• German Chancellor Angela Merkel said Europe's banks should look first to raise money in the private sector before turning to governments to bolster their financial cushions against potential losses from the continent's sovereign debt crisis.

• Bankers, not taxpayers, should have to shoulder the losses in case of massive financial firm failures, a top Federal Reserve official said on Friday as growing discontent with Wall Street drove protests around the country.

• The Dutch government said Friday it would move to classify high-potency marijuana alongside hard drugs such as cocaine and ecstasy, the latest step in the country's ongoing reversal of its famed tolerance policies.

Confronting the Malefactors
There’s something happening here. What it is ain’t exactly clear, but we may, at long last, be seeing the rise of a popular movement that, unlike the Tea Party, is angry at the right people.

Quick Overview

• European Central Bank surprised and kept rates at 1.5%.

• U.S. first time claims for unemployment benefits rose 6,000 to 401,000

• U.S. Homeownership fell 1.1 % to 65.1% between 2000 and 2010.

• Fed Dallas President Richard Fisher said protests against Wall Street and the central bank stem from frustration with unemployment, and he sympathizes with the discontent.

• Bloomberg: SABMiller the world’s second- biggest brewer, advanced the most in almost three years in London trading after Brazilian news website IG reported that the beer maker is in talks to be bought by larger competitor Anheuser-Busch InBev.

Quick Overview

• Financial Times: European Union finance ministers are examining ways of coordinating recapitalizations of financial institutions.

• Dexia is back at bailout trough! Its shares hit an all-time low despite a statement of support from the French and Belgian finance ministers. The question now becomes whether this means taxpayers will be called on to take losses so that bondholders can be spared.

• The Fed is ready to take further steps to help an economy that is "close to faltering," Fed chairman Ben Bernanke said in his bleakest assessment yet of the fragile U.S. recovery.

• Italy's bonds were downgraded by Moody's to A2 from Aa2

• The ISM manufacturing index  rose to 51.6% from a 50.6% reading in August.

• U.S. construction projects rose 1.4% in August

• Bloomberg: Take-home pay, adjusted for prices, fell 0.3 percent in August, the third decrease in five months, and personal income dropped for the first time in two years, the Commerce Department reported last week. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.

• Chrysler reported a 27% jump in September U.S. sales to 127,334 vehicles.
• GM reported a 19.8% jump in September U.S. sales to 207,145 Vehicles.

• YoY Macau gambling revenue rose 39% last month.

• Yum reported its third-quarter profit rose to 80 cents a share from 74 cents.

• Investor reaction to Apple’s latest phone – drop the stock by 3.8%.

Quick Overview

• The Occupy Wall Street / 99% had at least 700 people arrested over the weekend.
• Wall Street bankers are withholding funds from Barack Obama's re-election campaign because they believe they are unloved, Warren Buffett has warned.

• The Greek government ok’s austerity budget with a deficit at 8.5% of 2011 GDP.

• The USDA guesses September 1 corn stocks at 1.128 billion. 166 million above the average pre-report trade estimate.
• The USDA guesses September 1 soybean stocks at 215 million bushels, down 10 million from pre-report trade expectations.
• The USDA guesses the 2011 wheat crop at 2.008 billion bushels, down 38 million from the average pre-report estimate.
• (Reuters) - China, the world's second biggest corn consumer, is likely to more than triple imports to four million tonnes in the crop year starting October as strong livestock feed demand swallows up a bumper harvest.

Protectionism beckons as leaders push world into Depression  "The need to act in the collective interest has yet to be recognised. Unless it is, it will be only a matter of time before one or more countries resort to protectionism. That could, as in the 1930s, lead to a disastrous collapse in activity around the world," he said.