S&P Jumps Into Politics Again With EU Outlook Warning (Bloomberg)
The ratings firm put Germany, France and 13 other euro-area nations on review for a downgrade yesterday, saying “continuing disagreements among European policy makers on how to tackle” the region’s debt crisis risk damaging their financial stability. The move came four months after S&P cut the U.S. to AA+, saying “extremely difficult” political discussions over how to reduce America’s more than $1 trillion budget deficit tainted the credit quality of the world’s largest economy. “S&P should back off,” Anthony Valeri, a market strategist with LPL Financial in San Diego, which oversees $330 billion, said in a telephone interview yesterday. “It complicates the job of the EU leaders to resolve the debt problem.”
Angela Merkel Minimizes Possible S&P Downgrade (AP)
"What a rating agency does is the responsibility of the rating agency," Merkel told reporters in Berlin, refusing to elaborate further. She said, however, that she expected a meeting of European leaders later this week in Brussels would help restore markets' confidence. "We will meet on Thursday and Friday as Europeans and take those decisions that we consider to be correct, and through them stabilize the eurozone and also regain confidence," she said.
Geithner To Add US Weight To Euro Zone Talks (Reuters)
U.S. Treasury Secretary Timothy Geithner arrived in Germany on Tuesday for a three-day blitz of euro zone officials to urge them to take decisive action to backstop their currency union and resolve a crushing debt crisis. Geithner will press French President Nicolas Sarkozy, the new leaders of Spain and Italy and Germany's finance minister to agree at a crucial European Union summit on Friday to take steps that will give markets confidence that no euro zone countries will default, and that the region's banks will stay solvent.
Abby Joseph Cohen: First Half Of 2012 Will Be 'Difficult' (CNBC)
The first half of 2012 "will be difficult," both in Europe and in the U.S., Abby Joseph Cohen, Goldman Sachs senior investment strategist, told CNBC Monday. She also expects that U.S. fiscal policy will get tighter. However, "things will start to look better in the second half" of next year, the long-time bull said in her latest forecast. Stocks will stay undervalued until "confidence is rebuilt," Cohen said.
Corzine Rebuffed Warnings (WSJ)
The executive, Michael Roseman, whose title was chief risk officer, also expressed concerns directly to Mr. Corzine in meetings of just the two men and with other people present, people familiar with the situation said. Mr. Roseman contended MF Global didn't have enough spare cash to withstand the risks of its position in bonds of Italy, Spain, Portugal, Ireland and Belgium. He also presented gloomy hypothetical scenarios of what could happen if MF Global's credit rating was downgraded because of the exposure. Mr. Corzine, who started betting on the bonds shortly after arriving as chief executive in March 2010, responded to Mr. Roseman's concerns that some of the scenarios were too extreme and likely impossible, people familiar with the matter said. The former New Jersey governor and Goldman Sachs Group Inc. chairman said MF Global's exposure was limited, adding that the likely profit was worth the risks, these people said. The CEO suggested to board members earlier this year that he might leave the company if they didn't trust his judgment about the bet, according to people familiar with the matter.
Dimon Eyes Clawback (NYP)
Mf Global’s burned commodity customers turned their ire from Jon Corzine to Jamie Dimon yesterday after MF’s creditor committee, led by Dimon’s JPMorgan Chase, objected to a plan to distribute $2.1 billion to customers who have seen their accounts frozen since Halloween. In a Manhattan bankruptcy court filing, the creditors committee, which also includes Bank of America and hedge fund Elliott Management, said they want more assurances that the $2.1 billion is not their money. Among their requests: They want customers to agree in writing that the money they receive could be clawed back.
Financial Crimes Bedevil Prosecutors (WSJ)
A former top U.S. official in charge of investigating the financial crisis said the government has concluded that many inquiries of wrongdoing by financial executives can't succeed as criminal prosecutions. "There's been a realization and a more deliberate targeting by the Department of Justice before we launch criminally on some of these cases'' said David Cardona, who was a deputy assistant director at the Federal Bureau of Investigation until he left last month for a job at the Securities and Exchange Commission. The Justice Department has decided it is "better left to regulators" to take civil-enforcement action on those cases, he said.
In Race For Campaign Funds Among Billionaires, Romney Outpaces Obama (WaPo)
Romney has drawn the most support from billionaires, with at least 42 donating to his campaign. Obama is not far behind, with at least 30 billionaire supporters. Rick Perry and Jon Huntsman Jr. follow with 20 and 12, respectively, according to donor rolls and the current Forbes magazine list of 412 American billionaires. Very wealthy donors are likely to play a greater role in this election cycle in the wake of recent court decisions that have loosened rules for campaign contributions. That will only heighten one of the dominant narratives of the 2012 campaign: the nation’s rising income inequality and the outsize political influence of the super-wealthy...Romney’s richest donor so far is hedge-fund titan John Paulson, who is worth an estimated $16 billion, according to Forbes. Paulson has given $1 million to the Restore Our Future super PAC, which former Romney aides set up to support his candidacy. billionaires supporting the president include longtime Democratic Party backer Peter Lewis, chairman of insurance company Progressive; former Google chief executive Eric Schmidt, who is worth $7 billion; and John Doerr, a venture capitalist worth $2.2 billion who serves on Obama’s jobs council.
Economy Avoiding 'Death Spiral' Increases Bullish Fund Wagers (Bloomberg)
Hedge funds boosted wagers on higher commodity prices for the first time in three weeks as the outlook for the U.S. economy improved. Money managers increased combined bullish positions across 18 U.S. futures and options by 0.7 percent to 566,494 contracts in the week ended Nov. 29, Commodity Futures Trading Commission data show. Investors trimmed their bearish holdings in copper for the first time in four weeks, and pared bets on lower wheat and soybean prices.
Whalen Opening Bank Fund (NYP)
Outspoken financial analyst Christopher Whalen is aiming to put his money where his prodigious mouth is. The co-founder of Institutional Risk Analytics, who has declared the choppy economy a nightmare for investors in bank stocks, has left that firm to kick off an investment fund geared toward gobbling up undervalued bank shares.
The Health Risks Of Being Left-Handed (WSJ)
Left-handedness appears to be associated with a greater risk for a number of psychiatric and developmental disorders. While lefties make up about 10% of the overall population, about 20% of people with schizophrenia are lefties, for example. Links between left-handedness and dyslexia, ADHD and some mood disorders have also been reported in research studies.