U.S. Initial Jobless Claims Rose Last Week (Bloomberg)
Applications for jobless insurance increased 2,000 in the week ended Nov. 19 to 393,000, Labor Department figures showed today in Washington. Economists forecast 390,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment insurance rolls rose and those receiving emergency benefits declined.
Fed Seeks To Boost Banks With Stress Tests (Bloomberg)
The Fed yesterday told the 31 largest U.S. banks to test their loan portfolios against a deep recession to ensure they have enough capital to withstand losses. Banks with large trading operations will also test against a European market shock. The most severe scenarios outlined by the Fed include an unemployment rate of as much as 13 percent, an 8 percent drop in gross domestic product and a 52 percent plunge in stocks from the third quarter of 2011 to the fourth quarter of 2012. “This is a daunting test,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a Washington regulatory research firm whose clients include the largest banks. “The Fed’s credibility as a tough guy can’t be challenged based on this.”
German Bond Auction Flops (WSJ)
A German Finance Agency spokesman said the auction reflected a nervous market but the "result doesn't mean any refinancing bottleneck for the budget." The German government was able to sell only €3.644 billion ($4.92 billion) of the €6 billion in 10-year bunds on auction for an average yield of 1.98%. Observers said the result was the worst in recent memory for a German government-bond sale.
Turkey Farmers Lose Out On Thanksgiving Rally (Bloomberg)
“Any time corn prices jump, our costs go up a lot,” said John Burkel, a fourth-generation turkey farmer in Badger, Minnesota, who raises about 2 million birds he sells to grocers including SuperValu Inc. (SVU) and Safeway Inc. “We’ll see the best revenue numbers ever, but costs are so high that we’re just running more dollars through our fingers.” Burkel estimates he will spend $1.688 million this year to generate $1.755 million in revenue, a 3.8 percent profit margin that’s down from 4.7 percent last year and below his annual goal of 8 percent to 10 percent. Burkel said he has cut his flock by about 500,000, or 20 percent, to save on feed costs that jumped about $250,000 from 2010.
Investors Bullish On Fed Tips (WSJ)
Hours after an Aug. 15 meeting with Federal Reserve Chairman Ben Bernanke in his office, Nancy Lazar made a hasty call to investor clients: The Fed was dusting off an obscure 1960s-era strategy known as Operation Twist. The news pointed to a boom in long-term bonds. It was a good call. Over the next five weeks, prices on 10-year Treasury bonds soared, offering double-digit returns in an otherwise dismal year. By the time the Fed announced its $400 billion Operation Twist on Sept. 21, the window for quick profits had all but slammed shut. Ms. Lazar is among a group of well-connected investors and analysts with access to top Federal Reserve officials who give them a chance at early clues to the central bank's next policy moves, according to interviews and hundreds of pages of documents obtained by The Wall Street Journal through open records searches. The access is part of a push by hedge funds and other traders to get more information about the inner workings of government. Developments in Washington have become more important after the financial crisis in 2008 spawned new regulations and a stronger hand by lawmakers in businesses.
CME Pledges More Funds To Free MF Global Customer Cash (WSJ)
CME said it will grant MF Global's bankruptcy trustee latitude to "make larger interim distributions of cash to customers now, given the monumental task he faces to sort through the considerable data and claims in order to complete the MF Global liquidation."
Billboard Called Anti-Semitic Is Quickly Pulled (NYT)
A billboard promoting a budget brand of vodka was taken down Tuesday amid a firestorm of criticism that its advertising slogan was anti-Semitic. “Christmas quality,” the billboard read, “Hanukkah pricing.” The advertisement, which was posted on a two-sided billboard overlooking the West Side Highway near 130th Street late Monday to promote Wodka vodka, also featured a long-haired dog wearing a yarmulke and a smaller dog wearing a Santa hat. Wodka is known for advertising that is intended to draw attention by generating controversy. A previous ad carried the text “Hamptons quality. Newark pricing.” Brian Gordon, who runs MMG, the company that designed the campaign, denied that it was intended to be shock advertising. “We thought people would perceive it as ‘ha ha quirky,’ ” said Mr. Gordon, who was quick to point out that he is Jewish. “But people perceived it as offensive, and because of that, we pulled it.”
Record sales expected on Black Friday, but . . . (NYP)
Dangling deep discounts on everything from Barbie dolls to Gap jeans and big-screen TVs, retailers will ring up a slew of one-day sales records on the day after Thanksgiving, according to the America’s Research Group consultancy. But the surge — which many industry watchers predict will top last year’s Black Friday sales record of $10.69 billion, as recorded by ShopperTrak — will be fueled by rock-bottom prices that sap retailers’ profit margins, according to Britt Beemer, president of the Charleston, S.C.-based consulting firm. “Black Friday is looking good this year mainly because the prices on big-ticket electronics have gotten so cheap that anybody can afford them,” according to Beemer, who predicts a smaller-than-average sales increase for the holiday season overall.
Banks Accused Of 'Dishonesty' On Reform (FT)
Bankers’ efforts to water down tougher new regulations by claiming they will harm economic growth are “intellectually dishonest and potentially damaging” and could inspire an even more robust crackdown, a leading UK regulator has warned. “A profession which should stand for integrity and prudence now supports a lobbying strategy that exploits misunderstanding and fear,” said Robert Jenkins, who was named in July to the 11-member Financial Policy Committee, a new body charged with protecting financial stability. Responding to bank executives’ warnings that the Basel III capital and liquidity standards could force them to cut lending and raise rates, Mr. Jenkins said the lobbying was “dishonest because it is untrue“.
Groupon Back To IPO Level (NYP)
Shares in the world’s No. 1 daily deal company, famous for its half-off offers on everything from spa outings to fencing classes, fell to their initial public offering price of $20 a share yesterday on fears that margins will get squeezed by runaway expenses. Groupon, which created demand for its stock by selling only 5 percent of its shares, saw a more than 30 percent pop during its debut. Yesterday those gains evaporated, with shares falling almost 15 percent to close at $20.07 — before nosing down to $20 in after-hours trading.
Neighbors of New IHOP Say ‘No Relief’ from Smell of Bacon (NYT)
Mary Beth Powers often awakes to the overwhelming odor of bacon wafting from the IHOP 11 stories beneath her apartment. “There can be times at three or four in the morning when you feel like you’re in the kitchen with them,” said Ms. Powers, who lives on 15th Street. “There is no relief.” The smell is at times so pungent, she said, that it clouds her thinking. “It smells like rancid bacon. I just imagine it: a film of crap on my furniture, on my rugs, on my walls. I actually wonder, is this being soaked up in my apartment?” said an exasperated Ms. Powers. “Is it in my hair? Do I smell like IHOP now?”