Europe Banks Fail to Cut as Draghi Loans Defer Deleverage (Bloomberg)
European banks pledged last year to cut more than $1.2 trillion of assets to help them weather the sovereign-debt crisis. Since then they’ve grown only fatter. Lenders in the euro area increased assets by 7 percent to 34.4 trillion euros ($45 trillion) in the year ended July 31, according to data compiled by the European Central Bank. ... “Thanks to Draghi, the massive shrinkage that was looming six months ago across Europe isn’t happening -- at least not yet,” said Nikolaos Panigirtzoglou, an analyst at JPMorgan Chase & Co. in London. “That’s what the economy needed on the short term.”
Crude Oil's Quick Fall Leaves Trail of Queries (WSJ)
Oil prices dropped more than $3 in less than a minute late in the trading day on Monday, just as trading volume spiked. The move also dragged down prices of gold, copper and even the euro. ... The move sparked talk of an erroneous trade—called a "fat-finger" error in industry parlance—or a computer algorithm gone awry.
Morgan Stanley infrastructure fund hit by Volcker rule (Reuters)
A U.S. regulation that limits how much of its own capital a bank can put at risk is causing headaches for Morgan Stanley as it prepares to raise a new multi-billion-dollar global infrastructure fund, people familiar with the situation said. The regulation, called the Volcker rule, puts a cap on the amount of capital that Morgan Stanley can pledge to the new fund. That means senior executives at Morgan Stanley Infrastructure Partners will have to make do with a smaller share of the fund's profits, the sources said. While the majority of the executives have so far accepted the new reality and Morgan Stanley is in talks to increase the fund managers' share of profits, a few have left the bank.
A Mighty Wind: Sizing Up Fund Manager's Sway (WSJ)
The Wall Street Journal reviewed the performance of 22 stocks after they were mentioned by [David] Einhorn in television interviews, investor conferences, other public events and letters to Greenlight investors. The nine companies where analysts and investors saw his comments as negative fell by a median of 4.9% on the same day, the analysis shows. Thirty days later, the median decline was 13%. ... "It's a pathetic indication of how shallow the stock market is right now, how uninvested people are," says Tim Ramey, an analyst at D.A. Davidson & Co.
Romney Tells Millionaire Donors What He REALLY Thinks of Obama Voters (MoJo)
During a private fundraiser earlier this year, Republican presidential candidate Mitt Romney told a small group of wealthy contributors what he truly thinks of all the voters who support President Barack Obama. He dismissed these Americans as freeloaders who pay no taxes, who don't assume responsibility for their lives, and who think government should take care of them. Romney went on: "[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives."
Bigamist busted: first wife discovers second wife when Facebook suggests her as possible friend (NYDN)
A Washington man pleaded guilty to bigamy after his wife learned he was married to a second woman by looking at Facebook's "people you may know" notification. The second woman's profile picture showed her with the first bride’s husband standing near a wedding cake.
Spain Sells Debt Amid Questions Over Bailout (NYT)
The Spanish Treasury sold 4.6 billion euros, or $6 billion, of short-term debt, and while borrowing costs were slightly lower than in the previous sale, they remained at a high level. Average yields fell to 2.835 percent on the 12-month bill from 3.070 percent in August, with 3.6 billion euros of the paper sold, Reuters reported. Borrowing costs on 18-month debt were also slightly lower.
ECB’s Coene Says Widening Spreads May Force Spain to Ask for Aid (Bloomberg)
European Central Bank Governing Council member Luc Coene said rising bond yields may force Spain into asking for aid and submitting to the ECB’s conditions for granting it. If “markets see that Spain will not” ask for assistance, “then it will not last long before spreads will rise again, and then Spain will be somewhat forced to come back on its decision and submit to the conditionality program,” Coene said at a panel discussion in London yesterday.
Pimco’s Gross: Central Banks ‘Where Bad Bonds Go to Die’ (CNBC)
Bill Gross, the co-Chief Investment Officer of Pimco, and manager of the world’s largest bond funds, has weighed in on recent central bank action with a scathing tweet. He said via Pimco’s Twitter account Monday night: “Central banks are where bad bonds go to die. Sell bad bonds, buy good ones. Investing sometimes can be very simple.”
US inflation fears rise after QE3 (FT)
Market expectations for US inflation over the next 10 years rose as high as 2.73 per cent on Monday, based on the difference or the so-called “break-even rate” between nominal and inflation-protected Treasury debt. That represents the highest intraday break-even rate since May 2006 and near the all-time closing peak of 2.78 per cent from March 2005.
Defense Merger Faces Political Hurdles (WSJ)
Even before executives negotiating the megamerger of Airbus parent European Aeronautic Defence & Space Co. and Britain's BAE Systems PLC try to win over wary investors, they face the delicate challenge of pleasing five governments in four languages with dozens of conflicting interests. ... In a sign of the deal's political sensitivity, German Chancellor Angela Merkel and French Finance Minister Pierre Moscovici said in separate news conferences on Monday that their governments are examining the proposal closely but declined to offer opinions of it.
French court to magazine: Hand over Kate topless photos, stop publishing (CBS)
The publisher of the gossip magazine that published topless photos of Catherine, the Duchess of Cambridge, has been ordered by a French court to give up all digital copies of the photos and stop further publication of the images. ... Closer, the French celebrity and gossip glossy and Chi, its Italian counterpart - also owned by former Italian Prime Minister Silvio Berlesconi - have tried to justify the decision to publish the pictures on the grounds that they're harmless, that they were taken from a public road, even if the couple were on private property, and - the greatest justification of all - that the public wants to see them.