Experts: Chinese Yuan Could Replace the Dollar as the World’s Fiat currency

“The Chinese yuan is on track to become a global currency and could even displace the U.S. dollar as the world’s reserve currency, experts say.

China is opening its financial markets to foreign investors and encouraging its currency to be used more in international trade, CNBC reports. Countries that have substantial trade with China, such as Australia, are among the first to base their trade settlements on the yuan, also called the renminbi, since it lowers their transaction costs.

International payments in the yuan jumped 24 percent in November from October, reaching a record 0.56 percent of the global total, CNBC reports, citing data from SWIFT, a transactions services organization….”

Full article

a 1% drop…

“Regulators and banks should develop a system whereby lenders go bust without damaging the world economy to help restore public trust in the industry, JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said.

“We’ve got to get rid of too big to fail,” Dimon, 56, told investors during a panel discussion in the German town of Koenigstein, near Frankfurt, Monday.

“We have to ensure big banks can be taken down without harming the public and at no cost to them.”

Governments and central banks propped up banks with trillions of dollars to prevent further shocks to the financial system and ensure the flow of credit to the economy following the collapse of Lehman Brothers Holdings Inc. in 2008.

Regulators are pushing banks to strengthen capital reserves and liquidity to help them weather financial shocks and avoid taxpayer-funded rescues.

“There’s still the presumption that we can’t let some global banks go to the wall,” Deutsche Bank co-CEO Anshu Jain said at the same panel. Some countries such as Spain don’t feel confident enough to allow smaller lenders to fail, he said….”

Full article

“After dropping for the past two years, global unemployment is on the rise again according to the International Labor Organization, a UN jobs watchdog. 2013 is expected to top 200 million unemployed for the first time with the epicenter in the advanced economies as 28 million jobs have been lost since the onset of the crisis. Critically, for the globalists, they unsurprisingly note that macro imbalances have been passed on to the labor market to a significant degree.

Weakened by faltering aggregate demand, the labor market has been further hit by fiscal austerity programs in a number of countries, which often involved direct cutbacks in employment and wages, directly impacting labor markets. Far from the anti-cyclical response to the initial crisis in 2009 and 2010, the policy reaction has been pro-cyclical in many cases in 2011 and 2012….”

Full article and bar graph 

“Shares of insurance company Travelers Cos were signaling a positive start Tuesday, climbing in pre-market trading. The gain came after the company managed to post a fourth-quarter profit despite the impact of Superstorm Sandy.

Travelers reported operating income of $278 million, or 72 cents per share, down 54.4% from $609 million a  year earlier but still ahead of analyst expectations.

Sandy was the culprit behind the drop, producing the bulk of a sizable increase in catastrophe losses over the prior year. Losses from Sandy accounted for $669 million of the $689 million in after-tax catastrophe losses at Travelers (and more than $1 billion pre-tax). In the similar quarter a year ago after-tax catastrophe losses were just $68 million.

Despite the hit from Sandy, Travelers full-year operating income was up 71.4% to $2.4 billion. “We are pleased with our fourth quarter results, as well as our full year results, particularly in light of Storm Sandy,” said Chairman and CEO Jay Fishman, touting the encouraging pricing trends and renewal rates across the company’s business lines….”

Full report

“(Reuters) – Germany, France and nine other euro zone countries got a go-ahead on Tuesday to implement a tax on trading, despite the reservations of financial centers such as London and Luxembourg that are worried it could drive business out of Europe.

EU finance ministers gave their approval at a meeting in Brussels, allowing 11 states to pursue a financial transactions tax. The 11 are: Germany,France, Italy, Spain, Austria, Portugal, Belgium, Estonia, Greece, Slovakia and Slovenia.

The levy, based on an idea proposed by U.S. economist James Tobin more than 40 years ago but little considered since, is symbolically important in showing that politicians, who have fumbled their way through five years of financial crisis, are getting to grips with the banks blamed for causing it.

“This is a major milestone in tax history,” Algirdas Semeta, the European commissioner in charge of tax policy, told reporters after ministers backed the scheme.

Under EU rules, a minimum of nine countries can cooperate on legislation using a process called enhanced cooperation as long as a majority of the EU’s 27 countries give their permission.

Britain, which has its own duty on the trading of shares, abstained in the vote, along with Luxembourg, the Czech Republic and Malta, said an EU official attending the meeting….”

Full article

Full article

“One report from the Federal Reserve Bank of Chicago is the National Activity Index for the month of December, which was released this morning. It is somewhat misleading by the name because it is a regional Federal Reserve branch issuing the report but it is a national report.

The index came to only 0.02 in December. Bloomberg had a consensus reading of 0.28 and a range from economists of 0.10 to 0.50. The reading in November was 0.27. The three-month average increased marginally but remained in negative territory at -0.11.

Of the four components making up the index, two were positive. Employment stood out at 0.09, versus a prior reading of -0.02. The lagging areas were in consumption and housing and in production….”

Read more

“Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) reported fourth quarter and full-year 2012 results before markets opened this morning. The mining company posted diluted quarterly earnings per share (EPS) of $0.78 on revenues of $4.51 billion. In the same period a year ago, Freeport-McMoRan reported EPS of $0.67 on $4.16 billion in revenues. Fourth-quarter results also compare to the consensus estimates for EPS of $0.70 on revenues of $4.47 billion.

For the full year, the company reported adjusted EPS of $3.19 on revenues of $18.01 billion, compared with EPS of $4.78 in 2011 on revenues of $20.88 billion. The consensus estimates called for EPS of $3.15 on revenues of $18.15 billion.

The company’s CEO said…”

Full report

NYSE

NASDAQ

AMEX

AMGN, ARMH, BBVA, CHTR, CMCSA, GLW, DTV, DO, DISH, ET, FE, JCP, LRCX, LIFE, LNKD, PBF, SCHS, SLB, SYMC, TIF, TWC, WCC,

Full report

In Play ,

On the Wires 

“Tired of all this bullishness, and talk about how there’s nothing to worry about anymore?

Don’t worry. That’s why God gave us Nouriel Roubini.

He has a new article at Project Syndicate that could pretty much be titled: Things still suck.

It’s actually titled The Economic Fundamentals of 2013 and, spoiler alert, he says the fundamentals aren’t good.

Roubini identifies four big risks to the global economy.

They are….”

Full article

“Shares of Caterpillar, the world’s largest construction equipment manufacturer, are falling in pre-market trading today after the company announced a big writedown on Friday after the closing bell.

The $580 million charge announced by Caterpillar on Friday afternoon relates to an acquisition the company made in China last year. It paid $800 million for the company, Siwei, but the target company’s management team had apparently been fudging the books for quite some time, leading Caterpillar to wildly overpay for the acquisition.

BofA Merrill Lynch analyst Ross Gjilardi has a good summary of the writedown:

Read more

“DOVER, Del. (AP) — Chemical and bioscience company DuPont Co. says weakness in its performance chemicals and electronics and communications businesses, coupled with costs associated with growth initiatives, led to a sharp drop in fourth-quarter income.

The company on Tuesday reported net income for the quarter ending Dec. 31 of $111 million, or 12 cents per share, excluding significant items, compared to net income of $373 million, or 40 cents per share, for the fourth quarter of 2011.

But the results beat the consensus estimate of Wall Street analysts of 7 cents per share. Its shares rose 91 cents, or 1.9 percent, to $47.90 in premarket trading.

DuPont chairwoman and CEO Ellen Kullman said the company is stronger than it was a year ago, having posted a record year in new product introductions.

“However, weakness in markets served by performance chemicals and electronics and communications provided significant challenges in 2012,” she said. “We’ve adjusted our plans to meet the changing market environment and grow our businesses in a slow-growth world economy.”

Sales for the quarter were flat at $7.3 billion, with currency effects and portfolio changes offsetting a 3 percent increase in global volumes. Sales in Latin America grew 10 percent, with an 8 percent volume gain and a 7 percent increase in local prices. A 6 percent increase in volume in the Asia-Pacific region, was offset by negative currency and pricing effects.

Analysts expected revenue of $7.2 billion.

One-time items affecting fourth-quarter results included $135 million to resolve legal claims stemming from the use of DuPont’s Imprelis weedkiller, bringing the total amount spent on Imprelis claims to $750 million.

DuPont, based in Wilmington, Del., also recorded asset impairment and restructuring charges totaling $99 million, and a pretax gain of $117 million associated with the sale of a business within its agricultural unit….”

Full report

Source 

“NEW YORK (AP) — Verizon Communications’ fourth-quarter loss widened, dragged down by restructuring, pension and Superstorm Sandy costs. The company activated a record number of new devices on its contract-based plans during the period.

The parent of the country’s biggest wireless carrier lost $4.23 billion, or $1.48 per share, for the period ended Dec. 31. That compares with a loss of $2.02 billion or 71 cents per share, a year ago.

Adjusted earnings were 38 cents per share, which includes 7 cents per share for Superstorm Sandy. When stripping out Sandy’s impact, earnings were 45 cents per share.

Operating revenue rose 6 percent to $30.05 billion from $28.44 billion.

Analysts polled by FactSet expected earnings of 50 cents per share on revenue of $29.82 billion.

The company’s stock fell 84 cents, or 2 percent, to $41.70 in premarket trading Tuesday.

Verizon Wireless revenue climbed 9.5 percent to $20 billion. At the wireline division, operating revenue fell 1.5 percent to $10 billion.

Verizon Communications Inc. activated 2.1 million net new devices on contract-based plans, helped by the iPhone 5’s launch and by data plans rolled out over the summer.

There were 144,000 FiOS Internet and 134,000 FiOS Video net additions in the quarter, bringing the company to a total of 5.4 million FiOS Internet and 4.7 million FiOS Video customers.

For the year, Verizon Communications earned $875 million, or 31 cents per share. In the previous year it earned $2.4 billion, or 85 cents per share. Annual operating revenue increased to $115.85 billion from $110.88 billion.

Total debt for 2012 declined to $52 billion from $55.2 billion.

Verizon’s report marks the debut for telecommunications companies this earnings season. Rival AT&T Inc. reports on Thursday.”

Source 

“NEW BRUNSWICK, N.J. (AP) — Higher sales helped Johnson & Johnson post a much bigger fourth-quarter profit than a year ago, when a slew of charges depressed results.

The New Brunswick, N.J., company says net income was $2.57 billion, or 91 cents per share, up from $218 million, or 8 cents per share, in 2011’s fourth quarter.

Excluding about $800 million in one-time acquisition and litigation charges, earnings in the latest quarter would have been $3.38 billion, or $1.19 per share. That beat the expectation of analysts by 2 cents per share.

The maker of prescription drugs, consumer health products and medical devices says revenue totaled $17.56 billion, just shy of analysts’ average estimate of $17.69 billion.

J&J said it expects full-year profit of $5.35 to $5.45 per share. Analysts had expected $5.49.”

Source

“MINNEAPOLIS (AP) — Delta says its fourth-quarter profit was nearly wiped out by Superstorm Sandy and special charges.

Delta recorded a profit of $7 million for the quarter, or a penny per share. During the same period last year it earned $425 million, or 51 cents per share.

Delta says that without special items it would have earned $238 million, or 28 cents per share.

Revenue rose 2 percent to $8.6 billion. Both its adjusted profit and its revenue were slightly better than expected by analysts surveyed by FactSet.

Superstorm Sandy hurt revenue by $75 million. The storm slowed down the re-opening of Delta’s new oil refinery, causing a $63 million loss at the refinery.

Shares of Delta Air Lines Inc., based in Atlanta, are up a penny to $13.62 in premarket trading.”

“(Reuters) – U.S. electricity regulators are expected to impose a $1.5 million fine as early as Tuesday on a Deutsche Bank AG subsidiary over alleged power market manipulation, the Wall Street Journal reported, citing people with knowledge of the matter.

The Federal Energy Regulatory Commission (FERC) earlier proposed that the energy-trading arm of Deutsche pay the fine and disgorgement of $123,198 in alleged ill-gotten profits last year, saying it manipulated California power prices.

Last week, the FERC requested a further extension in the legal deadline until January 22 amid the ongoing talks. (http://link.reuters.com/tej45t)

Deutsche Bank has disputed FERC’s allegation that it manipulated the market by deliberately losing money on physical transactions to profit in derivative markets…”

Full article

“With 72 percent of corporate earnings exceeding analysts’ estimates, it may be difficult for U.S. stocks not to reach a record in 2013.

The Standard & Poor’s 500 Index is 5.1 percent below the all-time high in October 2007. Profits in the benchmark gauge are forecast to exceed $1 trillion this year, or 31 percent more than when the gauge peaked, according to more than 11,000 analyst estimates compiled by Bloomberg. Even if the price- earnings ratio, now 9.8 percent below the six-decade mean, doesn’t expand, the S&P 500 is poised to recover fully from the financial crisis that began almost six years ago.

Last week, the S&P 500 hit a five-year high as 48 of the 67 companies that reported results exceeded analyst estimates in the biggest expansion in profits since the technology bubble of the 1990s. While bears say the rally will stall when forecasts prove too high, bulls say U.S. companies generating more income than ever will push stocks to new records.

“Corporate America has done an incredible job post- recession,” Leo Grohowski, BNY Mellon Wealth Management’s New York-based chief investment officer said in a Jan. 16 phone interview. His firm oversees $179 billion. “It’s not going to be a return to the ’80s and ’90s where we had people retiring from their day jobs to become day traders. I wouldn’t revert to the historic P/E ratio kind of environment. But the good news is I don’t think we need that to reach a record….”

Full article