Draghi turns tables on eurozone leaders (FT)
Mario Draghi has turned the tables on eurozone leaders by demanding they implement urgently measures to combat the escalating debt crisis, and warned of massive economic and social costs if instead the European Central Bank’s credibility was put at stake. In an uncompromising message, the new ECB president said “robust” economic governance of the eurozone was essential for financial stability and criticised the delay in deploying the European Union’s bail-out fund, the European Financial Stability Facility – originally launched 18 months ago.
ECB Backs $27 Billion Weekly Limit on Government Bond Purchases, FAZ Says (Bloomberg)
European Central Bank governing council members have agreed on a 20 billion-euro ($27 billion) weekly upper limit for sovereign debt purchases as resistance among members grows, the German newspaper Frankfurter Allgemeine Zeitung reported. The ECB council meets every other week to decide on an upper limit for bond purchases used to stem rising yields as the European debt crisis widens, the newspaper reported, without saying where it obtained the information. Members met again late yesterday to discuss lowering the level, FAZ said.
European Rift on Bank’s Role in Debt Relief (NYT)
Only the fiercely conservative stewards of the European Central Bank have the firepower to intervene aggressively in the markets with essentially unlimited resources. But the bank itself, and its most important member state, Germany, have steadfastly resisted letting it take up the mantle of lender of last resort. European politicians and analysts say that unbending stance now threatens the survival of the euro and the broader integration of Europe itself.
Fund Transfers Are Focus of MF Global Probe (WSJ)
Regulators have unearthed new details indicating MF Global Holdings Ltd. shifted hundreds of millions of dollars in customer funds to its own brokerage accounts in the days before its bankruptcy filing, according to people familiar with the matter. Such moves could violate regulations stipulating that commodities brokers can't mix customer funds with brokerage funds. Brokerage funds often are used to back proprietary trading positions. According to MF Global's internal records, the transactions were as large as hundreds of millions of dollars at a time, these people said.
Gillian Tett: Greek bond losses put role of CDS in doubt (FT)
These days, it is becoming less clear whether those sovereign CDS contracts really offer effective “insurance” against default. And that in turn raises a more unnerving question: if the exposures of the large European banks were measured in gross, not net, terms, just how much more vulnerable might they be to sovereign shocks? Or, to put it another way, could the problems now hanging over eurozone banks and bond markets be about to get worse, due to the state of the sovereign CDS sector?
Protester Brandon Watts, who was first to pitch a tent at Zuccotti Park, is now the bloody face of 'Day of Action' (NYDN)
Soon after protesters started pitching tents, a gal pal of Watts’ told the New York Times Magazine he lost his virginity at the encampment. “Brandon lost his virginity today — not to me,” Core Jones, 20, told the magazine on Oct. 23. “I don’t know who the girl is. But I want to have a party for him.” On Thursday, Watts stood atop a wall inside Zuccotti Park and tossed objects — including a AAA battery — at cops standing outside the barricade along Liberty St., police said. Suddenly, the 6-foot-1, 160-pound Watts charged the officers and snatched a hat off the head of a deputy inspector, cops said. Cops caught him as he ran back into the park, but he began to fight back, police said. He was wrestled to the ground and busted his head on the concrete, causing a gash to gush blood down his face.
Tax Spat Stymies Debt Panel (WSJ)
Republicans are digging in against any agreement that does not extend current income-tax rates, which are scheduled to expire at the end of 2012. Democrats want them extended only for lower- and middle-income Americans, holding out for higher rates on families with taxable income over $250,000 a year. If any agreement is to be reached on cutting the deficit by next Wednesday's deadline, this impasse must be resolved.
Papademos Wins Cabinet Approval for Greek Budget Calling for 5.4% Deficit (Bloomberg)
The fiscal plan, which will be approved by the Greek Parliament before a meeting of European Union leaders in December, is designed to regain the confidence of creditors and secure resumption of international financing. Prime Minister Lucas Papademos, appointed last week, is racing against a three- month deadline until elections to secure international loans and avert a collapse of the economy.
NYSE and Deutsche Borse Offer Deal Concessions (DealBook)
Deutsche Börse and NYSE Euronext announced plans Friday to divest businesses in Europe and open up other operations to rivals, in an effort to win regulatory approval for their proposed $9 billion merger. NYSE Euronext said it would sell its pan-European single equity derivatives units, except the options businesses in its home markets. Deutsche Börse also said it would divest similar operations. The companies added they would give rivals access to Eurex Clearing, a clearinghouse for derivatives products, to offset regulatory concerns that the pending merger would lead to uncompetitive practices.
BlackRock’s Fink Attacks Societe Generale in Row Over ETF Risks (Bloomberg)
So-called synthetic ETFs, offered by firms including Societe Generale’s Lyxor Asset Management and Deutsche Bank AG, introduce a layer of complexity and counterparty risk that investors may not be aware of, Fink said yesterday. Synthetic funds generate returns through derivatives contracts rather than owning underlying securities as traditional ETFs do. “If you buy a Lyxor product, you’re an unsecured creditor of SocGen,” Fink, who heads the world’s largest asset manager, said at a conference held in New York by Bank of America Corp.’s Merrill Lynch unit. Providers of synthetic ETFs should “tell the investor what they actually are. You’re getting a swap. You’re counterparty to the issuer.”
Occupy London Protestors ‘Repossess’ UBS Building (CNBC)
Occupy London Stock Exchange demonstrators announced on Friday they had “repossessed” a building belonging to Swiss investment bank UBS in Hackney East London. The direct action saw a dozen activists from the Occupy London campaign gain access to the empty building on Thursday evening as part of what they called the global fight for real democracy. The demonstrators said doing so gave them a legal right to the building, which a spokesperson for the bank confirmed to CNCB.com was unoccupied.
Man pleads guilty to penis pump Medicare scam (AP)
An Illinois man pleaded guilty in Rhode Island on Thursday to charges he shipped unwanted penis enlargers to diabetes patients as part of a Medicare fraud scheme that cost $1 million to $2.5 million from 2005 to 2009. ... Diabetes patients were sent the penis enlargers repackaged in clear plastic bags with an information sheet claiming "regular use" increases blood flow in the urinary tract and prostate. Winner then charged Medicare $284 each for a total of $370,305, authorities said.