DATA POINTS

US – Oct: ADP private sector adds jobs, 110k / WSJ / R / FT

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US – Oct: Challenger planned layoffs tumbled, 43K from 116k / R

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US – Week: MBA mortgage applications barely up, +0.2% / R

Brazil – Sep: Industry Slows Sharply, -2% / WSJ

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EZ – Oct: Manufacturing Contracts, 47.1 from 48.5 / WSJ / B

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Germany – Oct: Manufacturing PMI shrinks, 49.1 / R

Germany – Oct: Unemployment rises, 7.0% from 6.9% / dpa / AP / FT / B

Russia – Oct: Inflation Up, 5.1% / ITAR-TASS

Japan -3Q: GDP estimated to have grown, +6.2% / K

MARKETS

Greece – Leaving Euro for Drachma Gains

Such a move is still officially anathema in Athens. But a growing body of economists argues that it would be the best course, whatever the near-term financial and economic implications. And now, with a referendum on the European-led bailout facing Greek voters, a vocal minority that has long called for a return to the drachma might find itself with a growing group of listeners…. According to a recent poll in the Greek newspaper Kathimerini, 66 percent of Greeks believe that returning to the drachma would be bad. NYT / WSJ / FT

Some of Papandreou’s party called for him to quit, accusing him of endangering Greek euro membership with his shock decision to call a popular vote, a move that pummeled the euro and global stocks. But the cabinet support at least gives him a stay of execution before a confidence vote in parliament on Friday. R

Papandreou flies to France today to face European leaders surprised by his decision to put the bailout plan to a national vote and call a confidence vote in parliament. His grip on power weakened after a lawmaker from his socialist Pasok party defected, leaving him with 152 deputies in the 300-seat chamber, while another, Vasso Papandreou, called for the formation of a national unity government. Another four lawmakers have criticized the plans for the referendum, stopping short of defection, and six members of the party called on the premier to resign in a joint letter, Athens News Agency said yesterday. Opposition parties have ramped up calls for elections. B / AP / WSJ

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Italy – Borrowing costs stoke crisis fears

Italian bond yields …. have actually risen and remain above 6 per cent for 10-year debt, close to levels of 6.5 per cent that the market thinks are unsustainable… Italian 10-year government bond yields jumped on Monday to 6.10 per cent, approaching euro-era highs of 6.40 per cent, and 30 basis points higher since last Thursday’s EU summit announcement. FT

Yields on Italian 10-year government bonds rose Tuesday to 6.31%, up a third of a percentage point in a single day. Similar German bund yields fell to 1.80%, leaving the gap at 4.5 percentage points, the highest since the euro was launched. WSJ

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ECONOMICS

Thailand – Slips Against Peers

Has by many measures lagged behind much of the rest of Asia over the past decade, posting solid but relatively unspectacular growth while several other emerging Asian economies such as China, Singapore, Vietnam and, more recently, Indonesia have zoomed ahead. …

Economists attribute Thailand’s underperformance in part to a series of natural disasters and political convulsions that have rocked the country in recent years, including a giant tsunami in 2004, a military coup in 2005, rolling protests that shut down the country’s main airport in 2008, and antigovernment demonstrations in 2010 that ended with more than 90 people dead after a bloody crackdown. The events, capped by Thailand’s current flood crisis, have at times rattled foreign investors and distracted policy makers from projects needed to improve the country’s strained infrastructure to further attract foreign capital. WSJ

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Asia – Some Economies Reflect Strains / WSJ

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China – Many Rich Look for an Exit

More than half of China’s millionaires are either considering emigrating or have already taken steps to do so, according to a survey that builds on similar findings earlier this year… The U.S. is the most popular emigration destination, according to the survey of 980 Chinese people with assets of more than 10 million yuan ($1.6 million) published on Saturday by Bank of China and wealth researcher Hurun Report…. Rupert Hoogewerf, the founder and publisher of Hurun Report, said the most common reason cited by respondents who were emigrating was their children’s education, followed by a desire for better medical treatment, and the fear of pollution in China. WSJ

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Brazil – Industry Slows Sharply

Brazil’s industrial sector now has contracted for two consecutive quarters…. Industrial production fell a seasonally adjusted 2% in September compared to August, dragged down by a 9% decline in automobile manufacturing, consumer electronics and other durable goods, and a 5.5% fall in factory machines and other capital goods, … Brazil’s fast-rising currency, the real, explains much of the trend. The currency is one of the world’s biggest gainers against the U.S. dollar since early 2009. That has made local factories vulnerable to foreign imports—even factoring in Brazil’s high import tariffs. WSJ

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Argentina – Fights private economists over inflation rate

For the first time since 2007 — when statisticians and field workers at the National Institute of Statistics and Censuses were replaced with political appointees and the official inflation rate started to fall — the once-hot-button issue of inflation in Argentina is fading from the front pages, said Victor Beker, director of the Center for Research on the New Economy at the University of Belgrano. “What the government set out to do was to suppress alternative statistics,” Beker said. “The objective is to ensure that the consultancies stop publishing and that the official numbers become the only statistics.”…. public outrage over inflation numbers has given way to giddy optimism as Argentina’s red-hot economy continues to grow. WaPo

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World – Corporate wealth is becoming more evenly spread

At the very top, the largest 1% of listed companies in America and Western Europe accounted for 53% and 48% of market value in 2000. In 2010, those proportions had declined to 40% and 28% respectively. e

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POLITICS

China – ‘Flare from Party’s Red Star Signals a Brewing Storm’

Last week, while China watched European financial markets get pummeled, Chongqing Party Secretary Bo Xilai, did some punching of his own at home. Bo–who has been seen as ripe for promotion to a higher post in Beijing but who had been below the waterline in recent months—launched a full-on attempt to answer critics who have been arguing that his tenure in Chongqing has focused on ideology at the expense of economics…. Bo Xilai’s defense of his tenure is another attack on the political status quo in Beijing. By talking about “common prosperity,” Bo was taking on the Party line of “building a moderately prosperous society.” …

Though Bo has captured a lavish amount of foreign media attention and enjoyed a good deal of adulation in the Chinese blogosphere, he has yet to receive universal approval from Beijing for his brand of reform. .. Whatever the motivation, Bo’s pushback does not come at a good time for the Chinese leadership…. Bo’s outburst reminds us that the political winds in China have a way of switching suddenly. wsj

FISCAL POLICY

US – Fears ease over deficit deadlock

Negotiations to strike a deal that could revive confidence in America’s ability to control its public finances are reaching a critical juncture, with a 12-member panel of Congress – equally split between Republicans and Democrats – weighing competing proposals to break the impasse. But so far there is scant evidence that a large-scale fiscal compromise is in the works, with big divisions persisting, particularly over taxes. The so-called “supercommittee” is due to report on November 23…

There has been concern that credit rating agencies would move to punish America’s credit rating in the event of failure, but those worries eased slightly on Tuesday after Moody’s said an adverse outcome might not spur decisive action. FT / B / WSJ

MONETARY POLICY

PBOC – May Loosen Credit as Inflation Cools

China’s inflation is showing signs of easing further, giving Premier Wen Jiabao more room to loosen fiscal and monetary policies as the economy cools and Europe’s sovereign-debt crisis threatens exports. An index of manufacturers’ input costs fell the most in 17 months in October, China’s logistics federation and the statistics bureau said yesterday. … Inflation may moderate to below 5 percent in November and December, compared with a three-year high of 6.5 percent in July, said Zhu Jianfang, the most accurate forecaster of the number in Bloomberg News surveys over the past two years. B

CBI – Iceland Raises Rates to Shield Krona, 4.75% from 4.50%

The central bank is emerging from crisis-management mode as Iceland’s economy recovers from its financial meltdown. At the same time, policy makers are trying to ease capital controls, in place since the end of 2008, without triggering a krona slump that risks fueling inflation. Iceland’s currency has slipped 3 percent against the euro this year, while inflation has hovered at about 5 percent since July. The bank targets price growth of 2.5 percent. B

FINANCE

US – BofA Calls Off Debit-Fee Plan

Bank of America Corp. has dropped its plan to charge customers $5 a month for making purchases with their debit cards, responding to a customer backlash after the fee was announced in September. The move is the highest-profile retreat on the issue WSJ

Four other big lenders, led by J.P. Morgan Chase & Co., dropped their own debit-card fee plans over the past week. Together with Bank of America, the banks hold more than $3.1 trillion of deposits, representing almost a third of those handled by U.S. banks. WSJ

With banks ending the fee, there could be less consumer interest in the Bank Transfer Day campaign, which encourages people to close their accounts at big banks and move their money to credit unions this Saturday. R / NYT

REAL ESTATE

US – Construction Spending increased slightly in September R / cr

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US – Construction Starts Are Slowing Down

The value of new projects that start construction in 2012 is expected to hit $411 billion… McGraw-Hill had previously forecast starts of $445.5 billion for this year, an 8% jump over 2010. but revised it downward. WSJ

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US – ‘Zombie’ Properties Come Back to Life

Three years after the economy’s turn sent commercial property prices tumbling, opportunities for investors are on the rise as lenders and servicers are disposing of a growing volume of distressed loans and foreclosed properties. The increased flow brings in new owners to “zombie” buildings …

Special servicers, the troubled loan specialists that oversee hundreds of billions in commercial mortgages on behalf of bond investors, have sold $11.6 billion in distressed loans and foreclosed property in the past 12 months, according to analysts at Deutsche Bank AG. That’s up from $7 billion over the prior 12-month period and from $1.2 billion in the 12 months prior to that, WSJ

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Housing – Miami Condos on Upswing

The sale of a huge block of vacant apartments in a foreclosed Miami development has marked an important milestone in the city’s housing recovery: The condo glut is coming to an end. Ever since the recession hit, Miami has been awash in thousands of distressed condos left over from the boom years. Slowly, the glut has been absorbed as investors purchased blocks of these units at huge discounts and then rented them out or resold them one by one. WSJ

SERVICES

Retail – Chain store sales seen up again in October

A tally issued by Thomson Reuters on Monday found that Wall Street analysts expect the 23 retailers in its index — including Costco Wholesale Corp and Macy’s Inc — to report a 4.7 percent increase in October sales at stores open at least a year, or same-store sales, well above the 1.6 percent increase in October 2010. R

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Vets – The Dog Maxed Out My Credit Card

The average household in the U.S. spent $655 on routine doctor and surgical visits for dogs last year, up 47% from a decade ago, according to the American Pet Products Association. Expenditures for cats soared 73% over the same time frame—on pace with human health-care cost increases. Expenditures for people in the U.S. were up 76.7% between 1999 and 2009, according to the U. S. Centers for Medicare and Medicaid Services. More advanced-care options in areas such as ophthalmology as well as treatment of conditions such as cancer are driving up costs for owners, as well as higher standards for routine care. WSJ

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MANUFACTURING

Autos – Sales Defy Economic Woes

Automakers said Tuesday that the annual selling rate for the month was slightly above 13.2 million vehicles, the best performance by the industry since February. A big contributing factor was a surge in sales of pickup trucks at General Motors, Ford and Chrysler. The auto companies also reported strong sales of traditional S.U.V.’s and crossover models. Over all, the industry sold about one million vehicles in the month, a 7.5 percent increase from October 2010. NYT

Both General Motors and Toyota fell short of expectations, with GM edging up by 1.9 per cent from a year earlier, and Toyota posting a 7.8 per cent decline. FT / R / WSJ

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TECH

Servers – HP launches plan to build low-power units

Hewlett Packard Co unveiled plans to develop extremely low-energy servers, partnering with companies such as chip designers ARM Holdings Plc and Advanced Micro Devices Inc in a move that could threaten the dominance of Intel Corp. Explosive growth in data centers that drive the Internet is taking up increasing amounts of electricity and tech companies are looking for ways to make servers more efficient and trim their energy bills. HP, at an event at its research center in Palo Alto, said the effort, dubbed “Project Moonshot,” aimed to find an alternative to the massive computing infrastructure needed to support the Web and billions of mobile devices. R

TRADE & TRANSPORTATION

TPP – Noda Pursues Trade Pact Despite Opposition

Japanese Prime Minister Yoshihiko Noda is throwing his political weight behind an Asia-Pacific free trade pact that would require Japan to slash almost all import tariffs, despite mounting opposition from farm groups and many lawmakers. Mr. Noda is widely expected to announce soon that he will push for Japan to begin negotiations on joining the Trans-Pacific Partnership. He said recently that he wants to make a decision “as early as possible” and is expected to discuss the issue with U.S. President Barack Obama at the Asia-Pacific Economic Cooperation summit in Honolulu Nov. 12-13. WSJ / Y

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Rail – Riding the Dakota Oil Boom

Rail terminals can be developed quickly, giving them an advantage for now over pipelines. The North Dakota Pipeline Authority estimates a doubling in rail-terminal capacity next year alone to more than 700,000 barrels a day. Most of the oil gets to the train depots by truck, picked up from thousands of wells scattered off dirt roads. …

Oil traders estimate that transporting crude by rail can cost on average $5 to $10 a barrel more than by pipeline… The light, sweet crude flowing from the Bakken, which refiners like for its quality, is inexpensive enough to eliminate those concerns, thanks in part to a boom in inland crude production that drove the U.S. benchmark oil price to nearly $30 a barrel below that of the European benchmark price, known as Brent crude. The differential creates a huge incentive for refiners to buy low-priced Bakken crude and move it by rail to their facilities in the Midwest and Southeast and on the East and West coasts WSJ

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Rail – Why it is moving more crude these days

Pipelines have long been favoured by energy companies because they are generally cheaper and safer. The argument for trains comes down to simple math. Moving a barrel by rail can cost $15, compared with $3 to $6 by pipe, depending on destination. But that price difference pales next to a $20 to $30 premium for reaching the right destinations. That creates an advantage for rail carriers, which can adapt to changing markets in days, compared with the years – if not decades – it takes to build new pipe.

The growth in rail service comes amid a broader industry embrace of a pipeline alternative that has, in many cases, been forced upon it. In the United States, for example, oil production in the Montana and South Dakota Bakken play has increased so quickly that pipelines simply can’t be built fast enough to keep up. The result: Of 425,000 barrels of daily Bakken production, roughly a quarter is now moving on tracks, according to BNSF Railway Co., which moves most of it. G&M

COMMODITIES

Commods – Producers brace for La Niña

For the second time in a year the extreme weather event … is expected to affect commodity producers worldwide, from coffee growers in South America to coal mine managers in Australia…. In the mining industry, many of the coking and thermal coal producers in Queensland, Australia, who have just recovered from the effects of the flooding wreaked by the cyclones and heavy rains from November through to January, are now braced for another season of heavy rains…. Food commodities traders are already watching nervously for dry conditions in key areas of Latin America and a drought in Texas and other southern US states. FT

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ENERGY

Nuclear – India plans ‘safer’ plant powered by thorium

Officials are currently selecting a site for the reactor, which would be the first of its kind, using thorium for the bulk of its fuel instead of uranium – the fuel for conventional reactors. They plan to have the plant up and running by the end of the decade. The development of workable and large-scale thorium reactors has for decades been a dream for nuclear engineers…

Using thorium – a naturally occurring moderately radioactive element named after the Norse god of thunder – as a source of atomic power is not new technology. Promising early research was carried out in the US in the 1950s and 60s and then abandoned in favour of using uranium…. The pro-thorium lobby maintains this was at least partly because national nuclear power programmes in the US and elsewhere were developed with a military purpose in mind: namely access to a source of plutonium for nuclear weapons. G

ENVIRONMENT

Wetlands – Banking on Shale Gas

Federal environmental regulations require companies that destroy wetlands to create similarly sized wetland in the same watershed. While some choose to do the work themselves, many turn to a so-called mitigation bank …. After these companies knock down levees, fill ditches and canals, replace invasive plants with native species, and prove that the changes can be sustained over time, they receive “credits” that each represent roughly an acre of wetland.

These banks, often backed by private equity, pension funds, and university endowments, profit by reselling the credits to companies that destroy wetlands. Mitigation Solutions, which has 15 banks in three states, charges about $30,000 per credit at Patroon Bayou, near rigs drilling the Haynesville/Bossier Shale. Companies operating in sensitive areas close to cities have paid as much as $650,000 per credit, according to Forest Trends Assn., a nonprofit that promotes the preservation of natural habitats. BW

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LABOR & EDUCATION

Germany – ‘Academic Bulimia’

According to the Federal Statistical Office, there were a record 2,217,604 students registered at German universities in the 2010/2011 winter semester. A new record is also expected this year. S

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HEALTH

Vaccinations – A Shocking Chart Atlantic / r

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Pharma – Forget Generics, Pfizer Has Plenty of ‘Lipitor for You’

Pfizer Inc. isn’t rolling over and conceding the market for its cholesterol-lowering drug Lipitor after the blockbuster brand loses its U.S. monopoly at the end of the month. Pfizer said Tuesday it is striking deals with drug-benefit plans and providing discounts to patients to encourage continued use of branded Lipitor, and to preserve a big chunk of its nearly $11 billion in annual sales, in the months after it loses U.S. market exclusivity Nov. 30 and faces competing generic copies…. Lipitor sales are expected to still decline, but Pfizer’s plans suggest it could mitigate the impact more than has happened with other big brand-name drugs that lost exclusivity, at least during the first six months, when only two generic products are expected on the market. WSJ

ENDNOTES

How to pour a Guinness ilc

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