WSJ: EZ spreads now even spread-ier

Lol, read here:

Along with the traditional showering and shaving, MarketBeat has added to its list of morning rituals the daily checking of the euro-zone bond spreads.

This morning finds spreads wider across the board, particularly in Spain, which just elected a new government. So much for votes of confidence.

Spanish 10-year debt yields 6.53% this morning, or about 4.63 percentage points above German bunds, yielding 1.90%. That spread against bunds is about 26 basis points wider today.

Italian debt, meanwhile, yields 6.65%, 11 basis points wider against bunds.

French debt yields 3.45%, 5 basis points wider against bunds.

Austrian debt yields 3.37%, 7 basis points wider against bunds.

Belgian debt yields 4.78%, 9 basis points wider against bunds.

This all means an unpleasant morning is in store for risky assets generally.

The euro is down to $1.3465. Dow futures are down 143 points, S&P futures are down 16 points and Nasdaq futures are down 20 points.

Shocking, breaking story here. The Times still craves a pro-Democratic Party movement so they’re beating this dying horse to…um…well, death.

Read the whole strained piece here (complete with unwarranted hope and disappointment):

In the wake of this week’s eviction of protesters from Zuccotti Park in New York and other urban campgrounds around the country, it’s tempting to dismiss the Occupy Wall Street movement as little more than a short-lived media phenomenon. The issues that spawned the movement — income inequality, money in politics and Wall Street’s influence — were being drowned out by debates over personal hygiene, noise and crime.

By Wednesday morning, when I dropped by the park, about 20 people, including some who looked disheveled and homeless, shared food and barely listened to a speaker with a graying ponytail who denounced New York as an “illegitimate police state.” Thursday’s “Day of Action” led to some more arrests, but it didn’t spawn the mass demonstrations some local politicians had predicted, let alone attract the throngs that the Tea Party mustered for a march on Washington in 2009.

But critics and supporters alike suggest that the influence of the movement could last decades, and that it might even evolve into a more potent force. “A lot of people brush off Occupy Wall Street as incoherent and inconsequential,” Michael Prell told me. “I disagree.”

Mr. Prell is a strategist for the Tea Party Patriots, a grass-roots organization that advocates Tea Party goals of fiscal responsibility, free markets and constitutionally limited government. He’s the author of “Underdogma,” a critique of left-wing anti-Americanism, which includes a chapter on the Berkeley Free Speech movement of the 1960s, which may be the closest historical parallel to the Occupy movement.

“They claim to stand up on behalf of the ‘little guy’ (the 99 percent), while raising a fist of protest against the big, rich, greedy and powerful 1 percent,” he said of the Occupy movement. “The parallels between Occupy Wall Street and the Berkeley Free Speech Movement are too clear to ignore — right down to the babbling incoherence of the participants. The lesson from Berkeley in the 1960s and the protest movement they spawned is: it doesn’t matter that they don’t make sense. What matters is they are tapping into a gut-level instinct that is alive, or lying dormant, in almost every human being. And, when they unleash the power of standing up for the powerless against the powerful — David vs. Goliath — the repercussions can ripple throughout our society for decades.”

MADRID (AP) — Carlos Slim, one of the world’s richest men, has bought 3.23 percent of Spanish-language media giant Grupo Prisa.

Spanish financial officials said Friday the Mexican businessman bought at least 14.7 million shares of the company this month for about euro11 billion ($14.8 billion).

Slim has also purchased 7.2 percent of the publisher of The New York Times in recent years.

Grupo Prisa operates newspapers, broadcasters and publishers in 22 countries.

Last year it received a cash injection from U.S.-based Liberty Acquisitions Holdings Corp. to refinance its $6.4 billion debt.

..

NOVI, Mich. (AP) — A program to make loan money more available to Michigan-based businesses is getting a boost from Fifth Third Bank, Gov. Rick Snyder announced Friday.

Snyder and an official with Cincinnati-based Fifth Third Bank say the bank has the capacity to make new loans totaling $2.5 billion to Michigan businesses in 2012. Word of the additional money was part of an update to the state’s Pure Michigan Business Connect program and brings the multi-year loan program’s capacity from $3 billion to $8 billion.

“It’s about Michigan’s comeback — it’s about job-creation,” Snyder said of the program, which launched about six months ago and involves about 700 state companies and organizations. He said program’s basic premise is “asking Michigan businesses to do business with one another.”

Snyder said the Fifth Third Bank’s 2012 participation is the largest commitment by a financial institution to date. David Girodat, president of Fifth Third Bank Eastern Michigan, said it means an additional $5 billion in access to loans, including another $2.5 billion available for consumers.

The program is a public-private initiative involving the Michigan Economic Development Corp., state agencies and major Michigan companies and organizations. The announcement was made in the Detroit suburb of Novi at the Global Access Exporter Forum.

Really, now the Republicans can’t even pass their own shit? When did they become so incapable?

Weak.

Sauce.

WASHINGTON (AP) — The House has rejected a proposal to amend the Constitution to require a balanced budget, seen by many as the only way to force lawmakers to hold the fiscal line and reverse the flow of federal red ink.

The 261-165 vote was 23 short of the two-thirds majority needed to advance a constitutional amendment. Democrats, swayed by the arguments of their leaders that a balanced budget requirement would force Congress to make devastating cuts to social programs, overwhelmingly voted against it.

Four Republicans joined the Democrats in opposing the measure.

RIO DE JANEIRO (AP) — An oil spill off Brazil’s coast could be “much bigger” than earlier estimated, the Rio de Janeiro state environment minister said Friday, and Federal Police said that oil company Chevron drilled deeper than allowed.

Minister Carlos Minc didn’t say how much oil has leaked from the site of a well owned by Chevron. The leak began Nov. 8 and some Brazilian officials say has not yet been contained.

The exact cause of the leak is not yet known, but a spokesman for Brazil’s Federal Police, which has opened an investigation into the spill, said that Chevron “drilled about 500 meters (1,640 feet) farther than they were licensed to do.”

The official spoke on condition of anonymity as he was not authorized to discuss the matter.

Minc is calling for more transparency on the part of Chevron.

Read here:

Public outrage over this news has spurred some members of Congress to take action. Two bills have been introduced in the Senate to prevent government officials from profiting on nonpublic information gained during the course of doing the peoples’ work.On Thursday, House Financial Services Committee Chairman Spencer Bachus agreed to hold a hearing on a House version of the legislation know as the STOCK Act — short for Stop Trading on Congressional Knowledge Act.

Bachus (R-AL) himself is a target in “Throw Them All Out” for shorting the market after privately meeting with Chairman Ben Bernanke and Treasury Secretary Henry Paulson in the wake of the 2008 financial crisis. Sen. Bachus fired back against Schweizer earlier this week: The book has “several major and serious untruths and outright factual errors about me,” he wrote in a letter to the publisher.

Other notables who have been cited for profiteering include, Rep. Nancy Pelosi (D-CA), Sen. John Kerry (D-MASS) and House Speaker John Boehner (R-OH). (See: OUTRAGE OF THE DAY: Insider Trading In Congress)

Schweizer, who joined The Daily Ticker’s Aaron Task in the accompanying video, does not believe any sort of law banning Congress from trading on inside information will do much good for two reasons: A sense of entitlement on the part of our elected officials and the fact that the SEC does not have the “guts” to enforce such a law.

Read here:

The austerity measures being rolled out in countries across Europe will have a devastating effect on the living standards of its population, an economist told CNBC Friday.

“These reforms are going to be devastatingly impacting on the population in these countries.

We are looking at a decade of lost living standards across most of Europe. The austerity measures are part of the solution but they are also going to deepen the downturn,” James Shugg, senior economist at Westpac, told CNBC.

He added that countries would be facing a prolonged period of hardship because tax revenues would also be hit.

“Europe needs to pull out all the stops and learn from its mistakes to ensure it can come through this with the least possible damage.

There is no easy solution to this, it will be hugely painful,” he said.

This affects the refinery space immensely. Game changer, potentially.

Read here:

Jenga! ConocoPhillips just knocked a big hole in the delicate logistical edifice on which the biggest anomaly in the oil world has been balancing.

In oil markets, 2011 has been the year of the great Brent spread. The North Sea crude oil benchmark has been trading at an unusually high premium to U.S. West Texas Intermediate oil for much of the year after many years of rough parity or trading at a slight discount.

On one side, the Libyan conflict pulled up demand for Brent. On the other — as discussed in this “Heard on the Street” column from February — logistical constraints have kept an increasing amount of oil bottled up in the Midwest. As Cushing, OK is where the WTI contract is settled physically, this glut has kept WTI prices depressed, widening the spread. Having started the year trading at a premium of $3.37 a barrel to WTI, Brent’s lead hit a peak of almost $27 on September 6th.

Now one of those bottlenecks on WTI is likely to be eased. Conoco is selling its 50% stake in the Seaway pipeline to Canada’s Enbridge Inc. Conoco kept the pipeline running northwards, i.e. bringing oil from the Gulf coast to Cushing. This kept oil bottled up in the Midwest, meaning Conoco’s refineries there had access to cheaper raw material, allowing them to generate big profits. Now that Conoco is splitting itself, it has no need for Seaway. And Enbridge, as a pipeline operator, has no incentive to keep the pipeline flowing north. By the second quarter of 2012, it expects Seaway to be transporting 150,000 barrels per day from Cushing to the Gulf coast, alleviating the WTI glut.

As of now, Brent’s premium to WTI has collapsed another $2.37 this morning, and is now down under $11 a barrel. As more pipelines get built over the next several years — including, perhaps, a rerouted Keystone XL — the great 2011 spread will be but a fond memory in oil refiners’ minds.

– Liam Denning

I cannot wait for the entire span of city officials to be replaced with an emergency financial manager. Bring on Caesar! Democracy cannot survive when your people are this stupid.

Read here:

A closely guarded report on Detroit’s finances paints an alarming picture of a city that will run out of cash by April unless officials make immediate, painful reductions that will cut deeply in to public services.

The report, obtained by the Free Press, outlines some drastic scenarios that illustrate how steep those cuts must be for the city to stay afloat.

For example, if the city laid off 2,200 employees — a third of its workforce — the city still would run out of cash by July.

No one has said the city is considering that as an option, but it demonstrates the severity of the financial crisis.

Mayor Dave Bing and the City Council have said the solution lies in getting major concessions from reluctant labor unions and reducing the city’s skyrocketing costs for retirees.

Bing is planning a public address Wednesday regarding the financial crisis.

“Mayor Bing inherited a city in fiscal, operational and ethical crisis,” his spokesman Dan Lijana said Monday. “Rather than continuing business as usual and sweeping problems under the rug, Mayor Bing has taken on the tough issues and had an honest dialogue with Detroit about our fiscal challenges.”

The problems are so severe and immediate, restructuring experts said, that the state may have no choice but to appoint an emergency manager with the authority to gut union contracts, sell assets, restructure the government and end nonessential services.

“At the point where Detroit is, they need an emergency manager,” said Pontiac’s emergency manager Louis Schimmel, who also took over the shrinking budgets of Hamtramck and Ecorse years ago. “What are they going to do when they run out of cash?”

ROME — Just in time for Christmas, an album of Neapolitan love songs written by former Italian prime minister Silvio Berlusconi is about to warble its way onto the airwaves, ANSA news agency reported.

The CD entitled “Il Vero Amore” (The True Love), will be released November 22 featuring songs written by Berlusconi, a former cruise-ship singer, and performed by the singer Mariano Apicella.

Berlusconi has not had much to croon about lately, given that he resigned under pressure last Saturday to make way for a new government amid a national debt crisis.

ANSA reported there was speculation the album, originally scheduled for September release, had been deliberately delayed for political reasons.

But Apicella said that was “nonsense” and the delay was “purely for technical reasons.”

The new CD represents the fourth collaboration between Berlusconi and Apicella.

If those pesky ratings weren’t there, then of course everything would be better.

EU leaders are desperately grasping at straws now. If this is what they’re spending their time on, things could get very ugly.

Read here:

The European Union set out proposals for strict new regulations on credit-rating firms today in a move, it said, was aimed in part at diversifying the industry.

As expected, the proposals included a number of measures the largest rating firms–Moody’s Investors Service Inc., Standard & Poor’s Corp. and Fitch Ratings–have staunchly opposed. The launch of the proposals was delayed Tuesday afternoon because of last-minute wrangling over key details, a person familiar with the discussions said.

One of the issues still being debated was a proposal to give the European regulatory agency power to temporarily ban ratings of sovereign debt in exceptional circumstances. The Commission said again Tuesday there will be some kind of ban in the final text but details are still pending.

The rental boom continues, quietly off everybody’s radar…

BIRMINGHAM, Ala.–(BUSINESS WIRE)– Colonial Properties Trust (NYSE: CLP – News), continued its multifamily focused growth strategy with the acquisition of Colonial Grand at Hebron (formerly Waterford Place), a 312-unit Class A apartment community in Dallas, Texas, for $34.1 million. The company funded the purchase with $23.9 million in proceeds from the sale of Colonial Center Town Park 400, an office asset located in Orlando, Florida, and borrowings on the company’s unsecured credit facility.

Colonial Grand at Hebron is a new multifamily development that was completed earlier this year, and is in lease up with 66% of the units leased upon acquisition. Colonial Center Town Park 400, a 176,000-square-foot Class A office building completed in 2008, was 24% occupied upon disposition.

“The continued execution of our multifamily focused growth strategy has helped us unlock the capital from an underperforming office asset in exchange for a new multifamily asset at an attractive value,” noted Thomas H. Lowder, Chairman and Chief Executive Officer.

Oh goody, this is of course super bullish for oil prices, as now the EU has room to recover. I am sure bullshit production coming out of Costa Rica or someplace will more than suffice to keep demand static in the meantime…

Read here:

I haven’t spoken about the multifamily space in a little while, but it is still booming.

Read here:

Construction cranes are coming back on the scene after a stay in storage.

But their handlers are choosy, returning them for now to the lone sector of the commercial real estate market that is fertile ground: rental apartments.

Amid an arid new-development landscape in commercial real estate, the apartment market is blooming. Vacancy rates are falling, demand is surging and new supply is scant, letting landlords raise rents for seven straight quarters, says Ryan Severino, senior economist with Reis, a commercial real estate research firm.

“More people in the (rental apartment) industry are getting excited about new projects,” he said.

Besides tight supply, new construction is being driven by falling homeownership rates and growing numbers of people in their 20s and early 30s who are finally landing jobs and moving to their own place.

Rental apartment operator AvalonBay Communities (NYSE:AVB – News) has $1 billion in development projects under way, and notes that rental household formation has grown by over 1 million units the past 12 months.

AvalonBay broke ground in the third quarter on four projects on both coasts, at a cost near $210 million. Plus, $600 million in projects is starting this quarter, including in Manhattan where rental vacancy has dropped to the low single digit percentages, pushing rents up.

An additional $3 billion in the development pipeline should keep AvalonBay busy the next two or three years, President Timothy Naughton told analysts recently.

UDR (NYSE:UDR – News), another big apartment operator, has more than 2,500 units in development for an estimated $751 million. Management says it’s looking for more sites to buy.

Construction of rental housing is even starting in hard-hit Florida housing markets. Colonial Properties (NYSE:CLP – News), which focuses on multifamily apartments in the Sun Belt, began construction recently on a 232-unit apartment community in Orlando — Colonial Grand at Lake Mary — with completion set for late 2012.

About time someone got common sense and struck this down.

WASHINGTON (AP) — A judge on Monday blocked a federal requirement that would have begun forcing tobacco companies next year to put graphic images including dead and diseased smokers on their cigarette packages.

U.S. District Judge Richard Leon ruled that it’s likely the cigarette makers will succeed in a lawsuit to block the requirement. He stopped the requirement until the lawsuit is resolved, which could take years.

Leon found the nine graphic images approved by the Food and Drug Administration in June go beyond conveying the facts about the health risks of smoking or go beyond that into advocacy — a critical distinction in a case over free speech.

The packaging would have included color images of a man exhaling cigarette smoke through a tracheotomy hole in his throat; a plume of cigarette smoke enveloping an infant receiving a mother’s kiss; a pair of diseased lungs next to a pair of healthy lungs; a diseased mouth afflicted with what appears to be cancerous lesions; a man breathing into an oxygen mask; a cadaver on a table with post-autopsy chest staples; a woman weeping; a premature baby in an incubator; and a man wearing a T-shirt that features a “No Smoking” symbol and the words “I Quit”

Now closing in on 6.66%. Superstitious, no?

Apparently, the bond market is spooked.

I need to read all the fine print, but frankly this is getting stupid. Unless they’re hiding fraud in their numbers, this company will crush all those who doubt her.

Cameco (TSX: CCO.TO – News) (NYSE: CCJ – News) today reported its consolidated financial and operating results for the third quarter ended September 30, 2011 in accordance with International Financial Reporting Standards (IFRS).

“Cameco performed well during the quarter despite the prevailing economic uncertainty. We realized higher prices on our uranium sales and achieved higher sales volumes resulting in higher adjusted earnings,” said president and CEO Tim Gitzel. “With sales commitments of over 300 million pounds, we are positioned to continue delivering solid financial performance while preparing our assets for the growth we expect in the nuclear industry.

“During the quarter, we undertook several initiatives to advance our strategy to double annual uranium production by 2018 and add value for our shareholders. We signed a memorandum of agreement (MOA) with our Inkai partner to increase total production to 5.2 million pounds annually. We also signed a non-binding memorandum of understanding (MOU) to process all Cigar Lake ore at McClean Lake mill, which we expect will result in a significant reduction in the operating cost.

“We believe in the long-term fundamentals of the nuclear industry and will continue to pursue our strategy in a disciplined manner to ensure we can respond appropriately to evolving market conditions.”

By Daniel Gross

Teng, who didn’t complete primary school, earns 70 renminbi (about $12 per day) working at a brick factory in Luan, a nearby city. His marriage prospects are poor, because he doesn’t earn much money. And he can’t leave for a higher-paying job on the coast because he must take care of his parents.

To reach this village in the Qinling Mountains, you drive 90 minutes outside bustling Xi’an on a deserted toll road. In China, the infrastructure frequently precedes the traffic. Turning off the highway, you climb into the mountains on a well-paved road that climbs around gorges, past a shallow, rushing river where water spills rapidly over large boulders, past a temple complex nestled in a small valley. The small bus beeped loudly every time it rounded a switchback. After 45 minutes, we pulled off the main road into the village — about 40 yards of paved road flanked by a couple dozen buildings with terra cotta roof tiles, and braids of drying corn nailed to the wall.

Here, 28 families scratch out a meager existence. The children have left for schools in larger towns, and the able-bodied who can seek work in the cities. The rest go into the mountains to gather herbs, grow some soybeans and corn, or subsist on extremely meager pensions of about80 renminbi ($15) per month.

Here’s some breaking news for the China bulls: Despite the gleaming towers of Shanghai, the monumental glass-and-steel sprawl of Beijing, the massive airports and high-speed rail networks, this is a very poor country. The urban China of bourgeois living, brand names and chic restaurants is real and growing. But the denizens of modern China are only 20 years removed from the poverty of Ta Ping. And a huge chunk of the country remains trapped in it.

“China is in the process of developing from a poor country to a rich country,” says Wen Hai, a senior professor of economics at Beijing University. “On the one hand you have the people on the coasts, and then you see the backwater.”