Old Man Buffet’s $BRK Seeks a $1 Billion Settlement from Insurer Swiss Re

“LONDON (Reuters) – Warren Buffett’s Berkshire Hathaway conglomerate is claiming up to $1 billion from reinsurer Swiss Re in a dispute over a life insurance deal they agreed in 2010.

Berkshire Hathaway is “alleging damages of between $0.5 and $1 billion”, Swiss Re said on page 73 of the third-quarter earnings statement it issued on November 8, adding the claim was without merit.

Swiss Re and Berkshire Hathaway were not available to comment.

Berkshire’s claim against Swiss Re was first reported by the Insurance Insider newspaper on Monday.

Swiss Re shares were up 0.8 percent at 6:25 a.m. EDT on Tuesday, in line with a European insurance sector index <.sxip>.

Analysts at JP Morgan said Swiss Re would be able to meet dividend forecasts even if it had to pay Berkshire Hathaway.”

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“Sharp Corp. (6753), the Japanese TV maker that warned last month about its ability to survive, agreed to sell a stake in itself to Qualcomm Inc. (QCOM) and team up with the U.S. company to make displays, two people familiar with the plan said.

Sharp plans to make an announcement today on the agreement, which includes selling 5 billion yen ($61 million) of new shares to the San Diego-based chipmaker this year, one of the people said, asking not to be named because the plan hasn’t been made public. That would give Qualcomm a 2.6 percent stake in Sharp, based on its 191 billion yen market value yesterday.”

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“Hedge funds invested in Greek debt are poised to be winners after European policy makers flinched and raised the price for how much the recession-stricken country would pay to buy back its bonds.

Hedge funds drove up prices for Greek sovereign debt last week after determining that European finance ministers would back off a pledge to pay no more than about 28 percent of face value to retire the nation’s bonds. Money managers correctly wagered that not enough bondholders would participate at that level to get the deal done. That would put at risk bailout funds that Greece needs to stave off economic collapse.

Transactions involving Greek bonds “increased by the day” after it became clear that the buyback was going to happen, with hedge funds accounting for most of the purchases, said Zoeb Sachee, the London-based head of European government bond trading at Citigroup Inc.

“If all goes according to plan, everybody wins,” Sachee said. “Hedge funds must have bought lower than here. If it isn’t successful, Greece risks default and everybody loses.” ”

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“The euro traded 0.1 percent from a six-week high versus the dollar before European Union finance ministers meet in Brussels today amid optimism the region can find solutions for its debt crisis.

The euro held a three-day gain against the yen after Greece offered to spend as much as 10 billion euros ($13 billion) to buy back government securities and as Spain said it expects funds for bank recapitalization next week. The dollar remained lower as U.S. lawmakers continue negotiations on how to avert the so-called fiscal cliff of spending cuts and tax increases. Demand for Australia’s currency was limited on speculation the central bank will lower interest rates today.”

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South Korea said it agreed with China to allow banks in both countries to borrow funds from an existing swap arrangement to encourage trade settlement in local currencies.

A 64 trillion won ($59 billion) swap line will be made available for loans to allow companies in both countries to settle deals in the won and yuan, according to a statement today from theFinance Ministry and the Bank of Korea. The system is scheduled to start later this month, it said.

The agreement is part of a push among emerging countries to internationalize local currencies after the global financial crisis, according to the South Korea statement. Both China and South Korea acknowledge that the use of the won and yuan is “very low” even as trade between the two countries is increasing, it said.

“We expect several benefits, such as reduced foreign- exchange risk and transaction costs for companies,” according to the statement. Alleviating “external vulnerabilities due to decreased dependence on the major reserve currencies” is also a reason for pursuing the deal, it said.”

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“Woodside Petroleum Ltd. (WPL)’s purchase of a stake in Israel’s largest natural gas deposit takes Asia- Pacific oil and gas acquisitions to a record $99 billion this year, tying the U.S. for the first time.

Australia’s second-largest petroleum producer yesterday said it will pay partners including Noble Energy Inc. (NBL) an initial $696 million and as much as $2.3 billion for part of the Leviathan field. Deals by U.S. energy companies have fallen 35 percent to $98.7 billion in 2012, while Asia-Pacific purchases increased 3.8 percent, according to data compiled by Bloomberg.”

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“The Reserve Bank of Australia cut its benchmark interest rate to the half-century low set during the 2009 global recession as hiring falters and an elevated currency hurts industries such as manufacturing and tourism.

Governor Glenn Stevens and his board reduced the overnight cash-rate target by a quarter percentage point to 3 percent, the central bank said in a statement in Sydney today. The sixth cut in the past 14 months was predicted by 20 of 28 economists surveyed by Bloomberg. The rate matches the level reached from April-October 2009 that was the lowest since 1960.”

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“Gold fell to a four-week low in London, dropping below $1,700 an ounce, as a stalemate in U.S. budget talks weighed on commodities.

Commodities retreated for the first time in four days as talks over the so-called fiscal cliff of spending cuts and tax increases remained deadlocked. European Union finance ministers meet in Brussels today to discuss measures to stem the debt crisis. Bullion pared some losses as the dollar reached a six- week low versus the euro.

“It’s more the risk aversion out of commodities which is probably having an impact on gold,”Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said today by phone. Still, “there are arguments investors should buy gold on worries the U.S. economy could fall over the fiscal cliff,” he said, citing demand for a haven investment.

Gold for immediate delivery dropped 0.6 percent to $1,705.39 an ounce by 11:09 a.m. in London. Prices reached $1,696.78, the lowest since Nov. 6. Gold for February delivery was 0.8 percent lower at $1,706.80 on the Comex in New York.”

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“European stocks climbed for a second day, erasing an earlier drop, as American lawmakers continued to debate plans to address the so-called fiscal cliff. U.S. index futures and Asian shares were little changed.

OC Oerlikon (OERL) Corp. rallied 4.5 percent as the world’s largest maker of textile machinery raised its earnings forecast and sold units. TUI Travel Plc gained 2.7 percent after Europe’s largest tour operator reported earnings that topped analyst estimates. United Internet AG (UTDI)tumbled 7.5 as Warburg Pincus LLC offered its 5.5 percent stake for sale.”

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“The yen strengthened for a second day and metals fell after U.S. manufacturing shrank and the budget standoff intensified. Japanese carmakers advanced after data showed American car sales rose to the highest level since 2008.

The yen advanced against all its major peers, adding 0.2 percent to 82.10 per dollar as of 11:28 a.m. in Tokyo. The euro traded near a six-week high against the greenback. Aluminum, copper and zinc declined at least 0.4 percent. Futures on the Standard & Poor’s 500 Index lost 0.3 percent, while the MSCI Asia Pacific Index (MXAP) fell 0.3 percent after yesterday closing at the highest level in seven months.”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

See how your taxes will be effected if we go over the cliff…

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“Seeking to jump-start stalled talks on avoiding the “fiscal cliff,” House Republicans on Monday proposed a new 10-year, $2.2 trillion blueprint to President Barack Obama that calls for increasing the eligibility age for Medicare and lowering cost-of-living hikes for Social Security benefits.

The proposal from House Speaker John Boehner and fellow Republicans comes in response to Obama’s offer last week to raise taxes by $1.6 trillion over the coming decade but largely exempt Medicare and Social Security from budget cuts.

It was presented shortly after Obama took to the Twittersphere to lobby for his proposal, which drew scorn from Republican leaders last week.

The GOP plan proposes to raise $800 billion in higher tax revenue over the decade but it would keep the Bush-era tax cuts — including those for wealthier earners targeted by Obama — in place for now.”

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“NEW YORK (Reuters) – Many executives say they’re anxious about the U.S. fiscal cliff negotiations, but Dow Chemical Co’s chief executive says he’s more bothered by the messy Chinese leadership transition, which he believes is wreaking greater harm on global markets.

“Markets have, in a holistic sense, really been suffering more from China’s slowdown than any slowdown here in the United States,” Andrew Liveris said during the company’s investor day in New York on Monday.

China, Dow Chemical’s second-largest market by sales, unveiled its new leaders in November after months of speculation about who would assume top roles, as well as controversy about widespread corruption among government officials and the cooling growth of the country’s economy.

The leadership transition has been “very uncomfortable” for the Chinese and has “created a disruption to their supply chains and created a pause” in economic growth rates, Liveris said.

“We’d been used to double-digit growth rates in plastics now in China now for the better part of a decade, and now that’s slowed to stopped in this last six months.” “

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“WASHINGTON/NEW YORK (Reuters) – Regulators on Monday charged the Chinese arms of five top accounting firms with securities violations over their refusal to produce certain audit papers, raising questions about whether talks between the United States and China to resolve the issue have stalled.

The Securities and Exchange Commission began proceedings against the Chinese affiliates ofDeloitte, KPMG, PricewaterhouseCoopers, BDO and Ernst & Young.

It was the SEC’s widest enforcement effort yet to procure documents in connection with probes of possible accounting fraud of U.S.-listed Chinese companies.

The SEC has been seeking documents related to investigations of possible wrongdoing at nine China-based companies, the agency said. Chinese secrecy laws have stymied efforts to obtain audit documents that investigators need to determine whether there were accounting irregularities.

An administrative law judge will schedule a hearing to determine potential sanctions against the Chinese arms of the accounting firms, the SEC said….”

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$ORCL is paying next year’s dividend this month…

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U.S. equities fell back on weak data points.

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” At month end we like to look at the monthly chart to refresh our long-term view of the market.

The outstanding feature on the chart is the trading range between about 750 and 1550. Two bull markets have ended their run at the top of the range, and the current bull is only about 150 points below that long-term resistance.”

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“This Great Graphic was on Barry Ritholtz’s Big Picture blog. It originally was from Morgan Stanley’s Adam Parker. It notes that nearly 90% of this year’s earnings growth of the S&P 500 companies can be traced to 2% or 10 companies.

There seems to be two industries represented and Big Oil is not one of them. It is finance with 6 of the top 10, but if you allow the inclusion of GE (due to GE Finance), finance accounts for 70%. Technology is the other industry, led by Apple, IBM and Western Digital….”

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“Euro-zone equities will outperform U.S. stocks in 2013. That is one of J.P. Morgan Cazenove’s predictions for 2013, appearing in a note to investors released Monday. The argument holds that the fiscal drag could be bigger for the U.S. in 2013 than Europe, where much of the worst is already built in.

Here are the nine market themes identified by J.P. Morgan Cazenove strategists for 2013:

1. Improved risk-reward in European periphery.  Look for these stocks to perform in peripheral spread tightening: Enel  IT:ENEL +0.76%, Fiat IT:F -0.79%, Telefonica  TEF +0.15% ES:TEF -0.40% and others.

2. Improving risk-reward for financials: BNP Paribas FR:BNP -0.87%, Banco SantanderES:SAN -0.27%  SAN +0.39%and Commerzbank DE:CBK -0.87% are among those that are most sensitive to bank credit spreads and still trade below book value.

3. Caution on cyclical U.S. top-line plays. The analysts expect a slowdown in U.S. activity in the first half of 2013 and advise a rotation to euro-zone exposure. That’s away from stocks like ARM Holdings  UK:ARM -0.45% ARMH -0.46%….”

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