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Mr. Cain Thaler

Stock advice in actual English.

Murdoch barely survives insurrection

LONDON (Reuters) – BSkyB (LSE:BSY.L) independent shareholders dealt James Murdoch a heavy blow on Tuesday with over 40 percent failing to back his re-election as chairman, venting their anger at his handling of a phone hacking scandal.

Several major shareholders told Reuters ahead of the key annual meeting that they would vote against the 38-year-old because they also want a truly independent chairman rather than an executive of Rupert Murdoch’s News Corp (NasdaqGS:NWSA), which owns 39 percent of BSkyB.

While James Murdoch was supported by some shareholders in the room and given strong support by the board, the result marks his second investor drubbing in just over a month after he endured a huge protest vote at News Corp in October.

News Corp had to withdraw its $12 billion offer for BSkyB in July following revelations that people working for a News Corp weekend tabloid, the News of the World, had hacked into the phones of celebrities and murder victims to secure stories.

Results from Tuesday’s vote showed investors representing 75 percent of shares backed James Murdoch but excluding the stake held by his father’s company, support stood at 56 percent with 31 percent opposed to his appointment and 13 percent of votes withheld.

“He has been given a bloody nose by shareholders in this vote and there may well be further developments,” Tom Powdrill, a spokesman for the shareholder advisory group PIRC, said. “He has clearly lost the support of a large number of the company’s owners.”

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Yellen see’s room for further Fed easing

SAN FRANCISCO (Reuters) – Janet Yellen, the Federal Reserve’s influential vice chair, said on Tuesday the U.S. central bank has room to ease monetary policy further to support a tenuous economic recovery.

Yellen said turmoil in financial markets stemming from both Europe’s banking crisis and general uncertainty about the outlook had increased the risks to the global economy, and that the Fed could offer additional support to U.S. growth.

“The scope remains to provide additional accommodation through enhanced guidance on the path of the federal funds rate or through additional purchases of long-term financial assets,” Yellen said in remarks prepared for delivery to a conference sponsored by the San Francisco Federal Reserve Bank.

Yellen also called for policies to spur a faster recovery in the battered U.S. housing market, although she did not provide any specific recommendations.

The Fed in September decided to dip its toes back into the housing market by reinvesting proceeds of maturing mortgage and housing agency debt from its portfolio back into the mortgage-backed securities market.

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Norway Gunman “unfit to stand trial,” psychiatrists strike again

I’d like to make something very much clear; I think psychiatry is a bullshit field with zero findings that constitute a contribution to the “knowledge” of mankind. They run about, pretending they understand people, spouting off undless streams of psycho-babble, and at the end of the day accomplish little. Their books stand on shelves until they get discredited, decirculated, and burned.

The end.

This piece only confirms my theory, as now thanks to some idiot psychiatrists in Norway, the gunman that blew up one of their government buildings, then went to work slaughtering their children, has been found insane and therefore unfit to stand trial.

OSLO – A psychiatric report on Anders Behring Breivik found that the confessed gunman is insane and therefore not fit to stand trial over twin attacks that killed 77 people, Norway’s VG newspaper said Tuesday.

The VG report was published shortly before Norwegian prosecutors’ scheduled news conference to discuss the contents of the psychiatric evaluation.

The 240-page report, compiled by two psychiatrists, was delivered to the prosecutor’s office earlier Tuesday.

“We have no doubt when it comes to our conclusions,” one of the experts, Torgeir Husby, told reporters when the document was delivered.

Understand something; this man was not insane. What he is is extreme; he sought to preserve Norway culture and heritage, to push for a more conservative government, to cripple the labor party of Norway. Some of those causes like the opposition to labor movements I can even support which makes this a weird position to be in, but rather than go about the correct venues to affect that change, this guy grabbed some rifles and started murdering kids. He is very much sane and knew exactly what he was doing.

It was pre-meditated murder, and now it looks like Norway does not even have the ballsack to stand up and call him out on it.

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EIA report lower crude, higher gasoline inventories

Here’s the excerpt from squawkbox on the EIA crude oil inventories report:

Summary is a 6.2 million drawdown in crude oil with a 4.5 million build in gasoline.

welcome back to squawk on the street. numbers are out for inventories and it’s a mixed report. bigger than expected draw down when it came to crude, down 6.2 million barrels but we also saw a bigger than expected build in gasoline similar to the apis last night of nearly 4.5 million barrel build in gasoline. overall, though, the energy markets, commodities overall, under pressure this morning with that disappointing bond auction in germany, disappointing pmi data coming out of china earlier, coming in with a reading of 48 which would say a little contraction in manufacturing there, so that already had this market worried. jpmorgan downgrading commodities but investors seem to be doing that on their own. we’ll get the eai invin tone for nat gas a little later today. thanks. some stories we’re squawk

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October durable goods orders get “the boots”

WASHINGTON (AP) – U.S. business orders for long-lasting manufactured goods fell for a second straight month in October. While much of the weakness came from a big drop in demand for commercial aircraft, a key category that tracks business investment spending fell by the largest amount since January.

The Commerce Department reported Wednesday that orders for durable goods fell 0.7 percent following a September decline of 1.5 percent. Orders for core capital goods, considered a good proxy for business investment spending, dropped 1.8 percent, the biggest decline since a 4.8 percent fall in January.

Manufacturing has been one of the strongest sectors in the economy in this sub-par recovery, but this sector slowed this year as consumer demand faltered and auto factories had trouble getting parts following the March natural disasters in Japan.

The October drop in core capital goods, non-defense products excluding aircraft, was expected to be a temporary setback. This category has been surging this year, spurred by tax breaks that are allowing companies to write-off their investments all in one year as long as the purchases are made before the end of 2011. That has provoked a rush by companies to take advantage of this tax break which Congress passed in an effort to spur the sluggish economy.

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Consumer spending, income edges higher

WASHINGTON (AP) — American consumers barely increased their spending in October but their incomes rose by the most in seven months. The rise in take-home pay could boost spending during the upcoming holiday shopping season.

The Commerce Department said Wednesday that spending increased 0.1 percent last month, the poorest gain in four months. But incomes increased 0.4 percent, the best showing since March.

Private wages and salaries drove the income gain.

The slight October gain in consumer spending represented a big slowdown from a 0.7 percent September increase. Spending on durable goods such as autos showed a solid increase but spending on nondurable goods such as food and clothing fell.

Some economists predicted spending would slow because consumers spent more over the summer while earning less. Consumer spending is important because it makes up 70 percent of economic activity.

After-tax, inflation-adjusted incomes fell at a 2.1 percent rate over the summer, the biggest drop since the third quarter of 2009, just as the recession was ending.

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Germany warns on Greek aid traunche

BERLIN (Reuters) – German Chancellor Angela Merkel rejected on Wednesday criticism of the ECB for not taking bolder steps to stem the euro zone debt crisis and made clear the next tranche of aid for Greece could not be paid out unless big parties in the country committed in writing to back austerity.

“The European currency union is based, and this was a precondition for the creation of the union, on a central bank that has sole responsibility for monetary policy. This is its mandate. It is pursuing this. And we all need to be very careful about criticizing the European Central Bank,” Merkel said in a speech to parliament.

On Greece, she added: “The Greek question hasn’t been cleared up yet, because the conditions are not in place for the payment of the next tranche.

“For that to happen … we need not only the signature of the Greek premier but also those of the parties that have agreed to support the government. Otherwise there can be no payout of the sixth tranche.”

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Maritime stocks tank

Tanking tankers…

NEW YORK (AP) — A dour quarterly report from the ocean shipping company Frontline sent a wave through the entire sector Tuesday and shares in some of the biggest operators tumbled sharply.

There were fears that shipping magnate John Fredriksen may have to step in once again to save Frontline, a company he founded, which said it would need to restructure or run out of money early next year.

The company posted third-quarter losses of $166.2, compared with a net income of $12.2 million during the same period last year.

Rates in the tanker market have been stagnant for years as a global economic funk settles across most developed countries, particularly in the West. Frontline warned that the tanker industry is likely to experience major financial problems if the market remains weak.

There is no quick recovery in sight.

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Will Thanksgiving be unspectacular?

I don’t know how much store can be taken in anecdotal pieces like this (I’ve heard this all before, and sometimes it means nothing as people talk depressed but spend away), but here it is:

Some are holding potluck dinners instead of springing for the entire feast. Others are staying home rather than flying. And a few are skipping the turkey altogether.

On this the fourth Thanksgiving since the economy sank, prices for everything from airline flights to groceries are going up, and some Americans are scaling back. Yet in many households, the occasion is too important to skimp on. Said one mother: “I don’t have much to give, but I’ll be cooking, and the door will be open.”

Thanksgiving airfares are up 20 percent this year, and the average price of a gallon of gas has risen almost 20 percent, according to travel tracker AAA. Still, about 42.5 million people are expected to travel, the highest number since the start of the recession.

But even those who choose to stay home and cook for themselves will probably spend more. A 16-pound turkey and all the trimmings will cost an average of $49.20, a 13 percent jump from last year, or about $5.73 more, according to the American Farm Bureau Federation, which says grocers have raised prices to keep pace with higher-priced commodities.

In Pawtucket, R.I., Jackie Galinis was among those looking for help to put a proper meal on the table. She stopped at a community center this week seeking a donated food basket. But by the time she arrived, all 300 turkeys had been claimed.

So Galinis, an unemployed retail worker, will make do with what’s in her apartment. “We’ll have to eat whatever I’ve got, so I’m thinking chicken,” she said.

Then her eyes lit up. “Actually, I think I’ve got red meat in the freezer, some corned beef. We could do a boiled dinner.”

Galinis has another reason to clear out her apartment’s freezer: Her landlord is in the process of evicting her and her 3-year-old son. The unemployment rate in Pawtucket, a city struggling with the loss of manufacturing jobs, is 12.1 percent, well above the national average.

Carole Goldsmith of Fresno, Calif., decided she didn’t need to have a feast, even if she could still afford it.

Goldsmith, an administrator at a community college in Coalinga, Calif., said she typically hosts an “over-the-top meal” for friends and family. This year, she canceled the meal and donated a dozen turkeys to two homeless shelters. She plans to spend Thursday volunteering before holding a small celebration Friday with soup, bread “and lots of gratitude.”

“I think everybody is OK with it,” she said. “They understand. Everybody is in a different place than they were a year ago.”

In suburban Chicago, the Oak Park River Forest Food Pantry got rid of turkey altogether. Last year, the pantry had a lottery in October to distribute 600 turkeys between almost 1,500 families.

The pantry’s management has decided to give all of its families a choice between other kinds of meat — ground turkey, sliced chicken, fish sticks and hamburger patties — along with the other trappings of a Thanksgiving feast. The decision will save $16,000, money that can go to feeding the hungry for the rest of the year.

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Merck to pay up $950 million to settle Vioxx dispute

Seriously either our drug industry is blatantly corrupt or the FDA demands more “protection” money than a prohibition mob boss.

Maybe both, actually?

NEW YORK (AP) — The U.S. Department of Justice says Merck will pay $950 million to resolve investigations into its marketing of the painkiller Vioxx.

The agency says Merck will pay $321.6 million in criminal fines and $628.4 million as a civil settlement agreement. It will also plead guilty to a misdemeanor charge that it marketed Vioxx as a treatment for rheumatoid arthritis before getting Food and Drug Administration approval.

Merck stopped selling Vioxx in 2004 after evidence showed the drug doubled the risk of heart attack and stroke. In 2007 the company paid $4.85 billion to settle around 50,000 Vioxx-related lawsuits.

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Debtor’s prison back in vogue?

Read here:

As if life wasn’t already tense enough for Americans who can’t pay their debts, collection agencies are now taking advantage of archaic state laws to have some debtors arrested and sent to jail.

More than one-third of US states allow debtors to be arrested and jailed, says Jessica Silver-Greenberg in the Wall Street Journal.

Judges typically grant arrest warrants when the debtors have failed to show up for court dates or failed to make court-ordered payments.

Of course, the reason debtors have failed to make court-ordered payments is often the same reason they didn’t pay their debts in the first place: They don’t have any money.

In September, a 53 year-old woman named Vivian Joy was stopped for a broken tail-light in Champaign, Illinois. And then, because the cops discovered that she still hadn’t paid $2,200 to a collection agency, she was cuffed and carted off to jail.

Joy’s excuse?

She doesn’t have any money.

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Emerging markets stocks at 35% discount

I’d be the first one to tell you to ignore the advice of this piece.

Read here:

Emerging-market stocks are trading at levels 35 percent cheaper than their 15-year average as rising profits and falling interest rates from Brazil to Indonesia buoy investor confidence.

While the MSCI Emerging Markets Index’s 9.7 percent gain from this year’s low on Oct. 4 lifted its price-earnings ratio to 10.3 from 9.7, the gauge is still trading below its mean since 1996, according to data compiled by Bloomberg. The measure jumped an average 35 percent after developing-nation policy makers began cutting interest rates in 2003, 2005 and 2008.

Investors pulled $26 billion from emerging-market mutual funds in the first nine months and the stock indexes sank about twice as much as advanced nations after Indonesia, Poland and Brazil raised interest rates. Now borrowing costs are coming down as policy makers seek to spur expansions at a time when export growth and inflation are slowing. The MSCI index may rise 30 percent in a year as record earnings outweigh Europe’s debt crisis, more than 17,000 forecasts compiled by Bloomberg show.

“You still have great relative growth advantages for a lot of the underlying economies and very cheap stocks,” David Donabedian, who oversees about $17 billion as chief investment officer at Atlantic Trust, said in a Bloomberg Television interview. “We’ll begin to see better performance out of the emerging markets over the next three or four months and the reason is we’re going to see some positive policy changes.”

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Groupon shares plummet 10%

(Reuters) – Groupon Inc stock slumped as much as 14 percent on Tuesday on concern about increased competition, leaving shares of the largest daily deal company close to their $20 initial public offering price.

Groupon shares fell to as low as $20.03 in late morning action before recovering slightly. The company was the third-largest decliner on the Nasdaq.

Groupon raised more than $700 million in an IPO in early November.

LivingSocial, Groupon’s closest rival, announced plans on Monday to offer more than 20 deals with national merchants over the crucial Black Friday shopping period.

Daily deal companies often subsidize national deals, making them less profitable than offers run with local merchants. The national deals usually bring in lots of new customers, but pressure profit margins.

“In the last few days we’ve been hearing about LivingSocial stepping up promotions,” said Edward Woo, an analyst at Wedbush Securities. “The concern is that there will be much more competition for Groupon going forward.”

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Crisis in Europe key to U.S. economy

Read here:

Third quarter gross domestic product was revised down Tuesday from 2.5% to 2.0%. That’s a sizable adjustment, but when you consider GDP growth from the previous quarters this year, a .5% revision downward is hardly that bad. (See: As Gloom Rises, U.S. Economic Data Flow Strengthens)

In Q1, the U.S. economy grew a minuscule .4%. In Q2, that number rose to 1.3%. So 2.0% growth in the third quarter at a time when there were “terrible headwinds” such as the debt ceiling debate and a market drop of 8%-9% is not horrible and actually shows some resilience in the consumer, which makes up 70% of the GDP figures, says Yahoo! Breakout’s Jeff Macke.

“Consumer spending was revised slightly down to a 2.3% growth pace from 2.4% because of adjustments to motor vehicle fuels and lubricants,” reports Reuters. “It was still the quickest pace since the fourth quarter of 2010.” This is right in line with previous reports of retail sales and earnings on The Daily Ticker.

What does this all mean for next year as we head into 2012? In a word, Macke says, the outlook is “grim.”

But he acknowledges the fact that no one has a clue what next year will bring. There are just too many unknown variables plaguing the global economy, the biggest of which Macke says is the European debt crisis.

In a sea of uncertainty, one thing is clear, says Macke: The future of the U.S. economy rests upon what happens in Europe. If Europe “seizes economically,” it is going to have a huge impact on the U.S. in terms of both jobs and the ability of U.S. companies to do business there.

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Egypt breaks down, goes full ‘tard

CAIRO – Egypt’s ruling military moved up the date for transferring power to a civilian government to July next year and consulted Tuesday with political parties on forming a new Cabinet. But the major concessions were immediately rejected by tens of thousands of protesters in Cairo’s iconic Tahrir Square threatening a “second revolution.”

“We are not leaving, he leaves,” chanted the protesters, demanding that military ruler Field Marshal Hussein Tantawi and his council of generals immediately give up power to a civilian transitional authority. “The people want to bring down the field marshal,” they shouted in scenes starkly reminiscent of the uprising that ousted Hosni Mubarak nine months ago.

Aboul-Ela Madi and Mohammed Selim el-Awa, two politicians who attended a five-hour crisis meeting with the military rulers, said the generals accepted the resignation of Prime Minister Essam Sharaf’s government and will form a “national salvation” Cabinet to replace it.

Previously, the military rulers had floated late next year or early 2013 as the timetable for transferring power.

The military’s concession came less than a week before the first parliamentary election since the ouster nine months ago of longtime authoritarian ruler Mubarak. The elections are staggered over three months.

“Our demands are clear. We want the military council to step down and hand over authority to a national salvation government with full authority,” said Khaled El-Sayed, a member of the Youth Revolution Coalition and a candidate in the upcoming parliamentary election. The commander of the Military Police and the Interior Minister, who is in charge of the police, must be tried for the “horrific crimes” of the past few days, he added.

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China to push huge, trillion dollar stimulus

Read here:

China announced Monday is it set to invest in a $1.7 trillion stimulus program over the next five years to ensure economic growth amid fears of slowing growth at home and abroad.

“Global economic conditions remain grim, and ensuring economic recovery is the overriding priority,” said Chinese Vice-Premier Wang Qishan, Reuters reports. “[And] an unbalanced recovery would be better than a balanced recession.”

Gross domestic product averaged 9.7% in China from 2008 to 2010, but growth has been slowing since the beginning of this year. The country’s GDP slowed to 9.1% in the third quarter, from 9.5% in the second and 9.7% from the first.

There’s been much discussion by economists — even here on The Daily Ticker — over whether China can maintain those near double-digit growth patterns. Evan Smith, co-manager of the Global Resources Fund at U.S. Global Investors, worries about a so-called “hard-landing” in China.

But should GDP in China slow further, the demand from the country’s billion-plus population is not going anywhere. In the accompanying video, Smith and The Daily Ticker’s Aaron Task and Daniel Gross discuss China’s impact on global resources.

From coal to corn to iron ore, China is “impacting the price of almost all commodities,” he says. And in terms of oil, the implications are rather concerning. “There is not enough oil on the planet if they continue grow like they have been growing.”

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Italy’s new PM insists he can fix country

BRUSSELS (Reuters) – Italy’s new prime minister Mario Monti said on Tuesday he is committed to turning around the country, but he offered no new details on how he will deliver broad reforms to invigorate the euro zone’s third-largest economy.

Speaking following his first meetings in Brussels since taking office, Monti said he was determined to win back investor confidence, after Italy’s short-term borrowing costs have surged to levels seen as unsustainable, striking the 17-nation euro zone at its core.

“We can get to the bottom… to the heart of structural reforms in Italy,” Monti said, flanked by European Commission President Jose Manuel Barroso.

“As far as the issue of public finances goes, I’ve already said a couple of minutes ago that, in general terms, we’ll respect the commitments undertaken by my government,” Monti told a news conference.

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ECB funding demands surge

FRANKFURT/LONDON (Reuters) – Euro zone banks’ demand for central funding surged to a two-year high on Tuesday, and U.S. funds cut their lending to the bloc’s banks, tightening a squeeze that looks unlikely to ease this year.

Fast-spreading sovereign debt worries have left lending markets virtually frozen and the European Central Bank as the only available funding option for many banks.

The ECB’s weekly, limit-free handout of funding underscored the widespread problems, with 178 banks requesting 247 billion euros, the highest amount since mid-2009.

Just as fears about the financial health of Italy and Spain have stopped banks lending to some their peers, U.S. funds have also continued to retreat from the region, and Italian and Spanish banks have seen corporate deposits flow out to safer havens.

U.S. money market funds, which are key providers of liquidity to banks and have been pulling back from the euro zone since May, cut their exposure to European banks by a further 9 percent in October, according to ratings agency Fitch.

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Leftist governments forced out in Europe

MADRID (AP) — Throw a dart at a map of Europe now and it takes expert aim to hit a country run by a left-of-center government, especially after Spain’s Socialists were emphatically drubbed out of power over the weekend.

Although the shift to the right began years ago in such heavyweights as France and Germany, it is now all but complete three years into the continent’s grinding debt and economic crisis. Why? When times get tough — when “the cows get thin” as the Spanish say — political experts say edgy voters seek comfort with conservatives.

“The center-right is the natural preference in times of crisis,” said Piotr Kaczynski of the Centre for European Policy Studies in Brussels. “If you look at societies and how they make their preferences, they all tend to vote more conservative in times of crisis and more center-left in times of economic progress.”

Granted, on the European Union map there are scattered spots of leftist liberalism. A new Social Democratic government runs Denmark, there is a center left government in Norway and there is a broad Social Democratic-led coalition in Austria. And the Socialists might beat conservative President Nicolas Sarkozy in France’s presidential election next year.

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Jefferies fights “lies”

BOSTON (AP) — Investment bank Jefferies Group Inc. on Monday tried to calm recent market worries about its financial exposure to Europe’s debt crisis with a letter stating that it has been the target of an orchestrated campaign of “malicious lies and false rumors” in the wake of the MF Global Holdings collapse.

The company said it has recently cut its exposure to debt-burdened European countries, and that it expects to post record operating results for its fiscal fourth quarter.

The letter follows a sell-off of Jefferies shares that has reduced their value by about one-third since Oct. 27.

A six-page letter addressed to “clients, shareholders, bondholders, employees and friends” from Chairman and CEO Rich Handler and Executive Committee Chair Brian Friedman said: “Throughout the month of November, Jefferies has been barraged by a group of people maliciously spreading rumors, half-truths and outright lies through every means possible, including calling analysts and security holders, as well as using the mass media in an effort to amplify and legitimize their efforts.”

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