Options Traders get Set for Fiscal Cliff, Close Vote

(Reuters) – Options traders in the U.S. stock market are getting their bets in place in case the U.S. economy tumbles down the “fiscal cliff,” or worse, if the U.S. presidential election is so close that the result is disputed.

The stock market has been relatively calm in recent weeks in the face of uncertainty over the November 6 election and concerns that the economy could be pitched into a new recession because of substantial tax rises and government spending cuts – the so-called fiscal cliff – due to hit early next year unless Congress agrees to cancel or delay them.

Some option traders already are starting to build up protective positions on these big risks. In an environment of subdued volatility, the cost of doing so is relatively low, making it advantageous to take out insurance in case Washington remains gridlocked for an extended period after the election and the markets are roiled.

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AFP – A flood of top-end properties are hitting the market as businessmen seek to leave France before stiff tax hikes hit, real estate agents and financial advisors say.

“It’s nearly a general panic. Some 400 to 500 residences worth more than one million euros ($1.3 million) have come onto the Paris market,” said managers at Daniel Feau, a real-estate broker that specialises in high-end property.

While it is not yet on the scale of the Exodus of rich French after the election of Socialist president Francois Mitterrand in 1981, real estate agents said, the tax plans of France’s new Socialist President Francois Hollande are having a noticeable effect.

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Scary.

Via Instapundit, this is the chart to keep in mind when it comes to deficits and campaign promises.  It’s pretty self-explanatory, but pay close attention to the huge jump in deficit spending between FY2008 and FY2009 — and the very large gap between White House and even CBO estimates and reality (in gray) in FY2010-12:

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Cheers on your weekend!

[youtube:http://www.youtube.com/watch?v=K-sPUawl6yg 450 300]

Check out your proximity to s power plant…. 

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Gapping up

RIO +2.3%, MT +0.9% , WETF +2.5%, OI +2.3,  INFA+0.8%, CCL +2.4%, RCL +1.3%,

ATK +2.3%, SYMC +1.3%, ENB +0.5%, ACI +2.4%, ANR +1.5%,  STZ +3.7%,  ETP +1.5,

RF +2%, BCS +1.7%, SAN +1.3% DB +0.6%, HBC +0.6%, BAC +0.6%, ING +0.5%,

RIO +2.3%, GOLD +1.2%, BHP +1.1%, BBL +1.1%

Gapping down 

ZNGA -18.1%, DTLK -14.3%, CTIC -11.8%, VSCP -11.8%, MRCY -11.8%, ABR -5%,

GRPN -4.2%, FB -2.5%,  LLTC -2.2%,  FFIV -1.7%, BIIB -0.6%, ALV -0.6%

 

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AMAT, MT, AVY, BIIB, BRCD, COG, DG, DLTR, FDO, HIG, HPQ, HD, ILMN, LXU, RCI, SUP, WETF, ZNGA,

Full report

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In Play ,

On the Wires 

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“Both President Barack Obama and his GOP challenger Mitt Romney are clueless and dangerous, as both candidates will adhere to the same policies of sidestepping paying down debts and letting the economy correct, heal and get going again, said prominent investors Marc Faber and Jim Rogers.

Under President Obama’s first term, the government has rolled out fiscal stimulus measures and overhauled healthcare and financial oversight regulations.

The Federal Reserve over the last few years has flooded the U.S. economy with liquidity by buying bonds held by banks, a monetary policy tool known as quantitative easing that aims to push interest low and send stocks higher.

Romney has said he disagrees with Fed policies, but according to Faber and Rogers, neither candidate has the stomach to streamline the economy and let it rejuvenate on its own.

“It doesn’t matter if it’s Romney or Obama, they are both the same — they don’t have a clue what’s going on. They caused the problems. These are the guys who got us into this situation, and you think they are going to get us out?” Rogers told CNBC’s “Futures Now” online news venue.

“And [Fed Chairman Ben] Bernanke is certainly not going to get us out, for God’s sakes. But he is going to print money, he is printing money and the risks is if they print a lot of money, why can’t the Dow go to 20,000 or 30,000?”

Gold tends to perform well as an inflationary hedge when the Fed moves to jolt the economy with monetary stimulus, as do stocks as the dollar weakens and interest rates fall.

Soaring stock indices, some say, don’t reflect mounting inflationary pressures and aren’t supported by corporate fundamentals but rather cheap money looking for yield.

“If they continue to print that money and the Dow does go to 30,000, I assure you gold and a lot of other things are going to skyrocket as well.”

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“Apple has posted a video on its homepage today, with footage of Steve Jobs over the years speaking at keynotes and Apple events, showing images of him and the products he created that changed the way we think about and use computers and mobile devices. The video begins with the famous Wayne Gretzky quote that pretty much defines Jobs’ career: “I skate to where the puck is going to be, not where it has been.”

Full article 

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“Energy companies are racing to export natural gas from the U.S. as they search for more-profitable markets amid a continent-wide gas glut that has depressed prices to the lowest levels in a decade.

A consortium including Exxon Mobil Corp.,XOM +0.56% ConocoPhillips Co.COP +1.10% and BP BP.LN +0.27% PLC said late Wednesday it is moving forward with plans to export natural gas from Alaska’s North Slope in a project that could cost as much as $65 billion. The long-awaited effort is expected to have a significant impact not just on Alaska and its economy, but also on U.S. construction and manufacturing companies that would supply steel and other materials for an 800-mile pipeline and the plant that would convert the gas into liquid for export on tankers.”

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“The stock market is reaching toward new highs on the fourth anniversary of the financial crisis, but many people refuse to be lured back.

Even as stock indexes have doubled in value since the market low in March 2009, investors have yanked a net $138 billion from mutual funds and exchange-traded funds that invest in U.S. stocks, according to the Investment Company Institute, a mutual-fund trade group. Investors over the same period put $1 trillion into bond funds, a traditionally lower yielding but safer investment.

It marks the first time since 1981 that investors have pulled money from U.S.-stock funds for more than a year at a time.

Crumbling confidence in stocks reflects a broader loss of trust in the stock market and in the idea that the prudent investor could expect a comfortable retirement and even a measure of wealth.”

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S&P futures

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the unemployment rate is 7.8%…

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“A study by engineers based at the Norwegian University of Science and Technology has questioned some common assumptions about the environmental credentials of electric cars.

Published this week in the Journal of Industrial Ecology, the “comparative environmental life cycle assessment of conventional and electric vehicles” begins by stating that “it is important to address concerns of problem-shifting”. By this, the authors mean that by solving one problem, do electric cars create another? And, if so, does this environmental harm then outweigh any advantages?

The study highlights in particular the “toxicity” of the electric car’s manufacturing process compared to conventional petrol/diesel cars. It concludes that the “global warming potential” of the process used to make electric cars is twice that of conventional cars.”

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” Canada avoided many of the mistakes that the U.S. made in its housing market.

Banking regulations and lending standards have been much tighter, and that has prevented prices from getting completely out of control.

However, top economists including Robert Shiller and David Rosenberg are increasingly sounding alarms that the Canadian housing market is the next bubble and it’s about to burst.”

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Pink slips will not be a cost effective way of trimming down expenses at Motorola says Google Inc. The costs of closing plants will be more than expected.

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“NEW YORK (AP) — Americans may have slowed their spending in September after splurging during the start of the busy back-to-school shopping season in the month before. But most importantly, they were still spending.

September sales rose 3.9 percent — a slowdown from the 6-percent rise in August — as 22 retailers like Macy’s and Costco reported mixed results, according to the International Council of Shopping Centers. Still, given the economic and political uncertainty that weighs on many Americans right now, analysts say the results are an encouraging sign for stores as they head into what’s traditionally the busiest shopping period of the year in November and December.

“This should set up to be a good holiday season,” said Ken Perkins, president of Retail Metrics LLC, a research firm.

Retailers’ monthly sales figures are based on revenue at stores opened at least a year. That measure, which is considered to be an indicator of a retailer’s health because it excludes results from stores recently opened or closed, offers insights into how Americans are spending during the slow economic recovery.

But only a handful of merchants representing about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue. And that list is dwindling: Target Corp. on Thursday said that it will no longer report monthly figures starting next year.”

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“SAN FRANCISCO (AP) — The recent spike in gasoline pricesaround the nation is expected to wane slowly in coming weeks, butCalifornia may not be so lucky due to supply challenges fueled by refinery issues and pipeline outages, analysts said.

Throughout the state, the average price of a gallon of regular gasoline jumped 8 cents Thursday to $4.32 and was up 18 cents during the past week, according to AAA’s Daily Fuel Gauge.

Analysts said the average price of regular gas was poised to quickly soar past $4.37 a gallon — the high so far this year — after refinery outages and pipeline problems left California short on supplies.

The highest average price ever for regular gasoline in the state was $4.61 in 2008.

Among the recent disruptions, an Aug. 6 fire at a Chevron Corp. refinery in Richmond left one of the region’s largest refineries producing at a reduced capacity. A power failure in Southern California has affected an Exxon Mobil Corp. refinery, and a Chevron pipeline that moves crude to Northern California also was shut down.”

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“The jobless rate in the U.S. probably rose in September as employers limited hiring, keeping the labor market’s lack of progress at the center of Federal Reserve deliberations and the presidential election.

Unemployment increased to 8.2 percent last month from 8.1 percent in August, according to themedian projection of 88 economists surveyed by Bloomberg. Payrolls climbed by 115,000 workers, less than the 139,000 average over the first eight months of the year, the report may also show

“We’re running in place,” said Ethan Harris, co-head of global economics research at Bank of America Corp. in New York. “A gain of around 100,000 or so jobs is just enough to absorb the population of new workers.” ”

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“The Federal Reserve signaled it’s moving toward linking its outlook for near-zero interest rates to specific economic conditions such as a decline in the unemployment rate.

The move would represent a shift from the Fed’s policy of tying low rates to the calendar. At its last meeting, the Federal Open Market Committee extended its time horizon at least through the middle of 2015 from late 2014, a decision that some policy makers said could be misinterpreted as a downgrade of their economic outlook, according to minutes of the Sept. 12-13 gathering.

“The benefit of some numerical guidelines or thresholds would be that people would really understand their intention of keeping rates low,” said James Hamilton, a professor of economics at the University of California at San Diego whose research on the effectiveness of alternative policy tools has been cited in Fed Chairman Ben S. Bernanke’s speeches.”

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