Dec 24, 2012
MarketWatch | Wall Street at Close report (December 24, 2012).: U.S. stocks slide with no budget pact in sight
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) — U.S. stocks fell on Monday, extending losses into a second session, on worries that President Barack Obama and congressional leaders will not be able to reach agreement to avert steep spending cuts and tax hikes set to start next month.
“There are very few days left in this calendar year, and the rhetoric out of Washington is they are hopeful, yet there is no progress towards getting a deal done,” said Robert Pavlik, chief market strategist at Banyan Partners.
“A lot of folks are fed up with these politicians not being able to work for the benefit of their constituents. We’re telling Europe one thing and we can’t get our own house in order,” he added.
The non-partisan Congressional Budget Office forecasts the economy would go into a recession in the first half of 2013 if lawmakers are unable to strike a budget deal.
The Dow Jones Industrial Average DJIA -0.39% shed 51.76 points, or 0.4%, to 13,139.08.
The S&P 500 index SPX -0.24% retreated 3.49 points, or 0.2%, to 1,426.66, with energy the hardest hit of its 10 major industry groups.
The Nasdaq Composite COMP -0.28% fell 8.41 points, or 0.3%, to 3,012.60.
For every two stocks gaining three fell on the New York Stock Exchange, where 286 million shares traded. Composite volume surpassed 1.2 billion.
The trading session ended at 1 p.m. Eastern, ahead of Tuesday’s Christmas Day holiday, when the stock market will be closed.
Kate Gibson is a reporter for MarketWatch, based in New York. Follow her on Twitter @MWKateGibson.
In gold's own country -- Kerala, India
The New York Times
Monday, December 24, 2012
KERALA, India -- Lord Padmanabha, the presiding deity of Thiruvananthapuram, also known as Trivandrum, the capital of Kerala, who is depicted as reclining on a gigantic snake, Anantha, suddenly went up in the estimation of his devotees recently, when it was discovered that he has an inestimable treasure of gold in his custody.
Kerala values nothing more than gold, and it is comforting for the people of the state to know that their erstwhile rulers too had a fascination for the yellow metal, which they stored in the temple as an offering and as an insurance against famine. The innumerable jewelry shops around the temple and elsewhere in Kerala may be handling as much gold as the temple has accumulated. "God's Own Country" is fast becoming "Gold's Own Country."
With only 3 percent of Indias population, Kerala gobbles up 20 percent of the country's gold every year, and the World Gold Council estimates that India, the largest consumer of gold in the world, consumes 30 percent of the global supply. Two hundred thousand people are employed in the gold industry in this tiny state. Such is the love of gold in Kerala that there may be no household without some gold, tucked away as savings, either to be given away as wedding gifts for daughters or to raise cash by way of gold loans or outright sale.
Buying ornaments and investing in gold is an old tradition, but the proliferation of jewelry stores doing brisk business in gold, diamonds and platinum is a recent phenomenon in Kerala, coinciding with the rise in remittances from the Gulf. While Indian migrants to the west keep their money in the Swiss banks and other destinations, the Indians in the Gulf send their money back home either to purchase land in their villages or to buy gold for their women or simply as investment.
When the gold prices were favorable in the Gulf, they brought gold there, and many Kerala-based shops sprang up in the Gulf. Now that the international prices are the same, gold shops have come up in every city in Kerala. In small towns in Kerala, the most dazzling buildings are either jewelry stores or silk houses or combined "wedding palaces." Fashionable eating places or supermarkets are extremely rare even in prosperous towns.
Most film stars of repute are either partners or "goodwill ambassadors" of these enterprises and appear on billboards or television commercials. One of them, Mohanlal, who has interests in different aspects of the gold business, advocates buying gold in various TV commercials throughout the day. He enticingly asks what his fans are doing in the evening and asserts that he cannot celebrate anything without them. He makes it appear as though gold makes the world go round.
If you want to see gold at its most ostentatious, go to a wedding. At these events, when it comes to the precious metal, the rule is the more, the merrier. Many brides are covered in gold ornaments from the neck to the knee, not to speak of the weight placed on their heads. They resemble temple elephants, which are decked from top to bottom with golden decorations during festivals.
Since gold ornaments are highly desirable and they only increase in value, all available money is spent on them with no concern. Beg or borrow, the brides must be decked in gold. They are literally worth their weight in gold. The poorer the people, the greater is the desire to show off their wealth in gold.
As the lust for gold skyrockets, the demand for imitation gold jewelry has also grown by leaps and bounds. Outside Lord Padmanabha's temple gates, as tall as the Joyalukkas jewelry retailer's building, is Kollam Supreme, a jeweler that freely displays intricate gold ornaments, with no care for security. The secret is that these are just gold-plated ornaments that look like the real thing, with just a gram of real gold used in each of them.
Kollam Supreme is such a well-known brand that it is hardly necessary to say anywhere that these are gold plated. The Kollam brides look as impressive as their richer counterparts at a fraction of the cost. This new brand of ornaments satisfies the intense desire of ordinary people look as affluent as their rich neighbors.
Kerala is littered with small financial institutions that lend money instantly against gold deposits. Muthoot, one of the largest of these lenders, prides itself in completing a transaction within three minutes, and its branches can be seen on every corner in Kerala.
The same family has competing businesses, with each brother advertising in a different color, red being the most prominent of them. The owner of the red Muthoot was featured on the cover of Forbes magazine for running a big business empire in India based on gold loans. Hundreds of his branches are small establishments, with a simple, but elegant, counter in front and a big, fortified room behind.
Those who have feared a crash in gold prices have been proved wrong, as prices are escalating every day, even more than fuel prices. Those who have stocks of gold are overjoyed, and people buy up even at phenomenal prices in the expectation of even higher returns. Soaring prices of any commodity should normally cause concern and raise a hue and cry. But Keralites continue to buy gold in the full confidence that gold prices will never fall.
It's not as if Keralites dont have other avenues for investment. Land is another hot commodity that brings in steady profits. But land transactions are fairly transparent, land registration is cumbersome and expensive, and land holdings are hard to hide. Land transactions also require sound judgment as there is an element of speculation in them. For these reasons, when it comes to their money, Keralites are putting their faith in gold.
Mr. Sreenivasan, a former Indian diplomat, is the executive vice chairman of the Kerala State Higher Education Council. His views are personal and do not reflect the policy of his state.
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Insight: Security fears dogged Canada debate on China energy bid OTTAWA (Reuters) - In September, two months after China's state-owned CNOOC Ltd made an unexpected $15.1 billion bid for Canadian energy company Nexen Inc, Canada's spy agency told ministers that takeovers by Chinese companies may threaten national security
ITV to buy majority stake in Gurney Productions of U.S. (Reuters) - Britain's ITV Plc said it will buy a 61.5 percent stake in U.S.-based Gurney Productions, which makes reality programs, for $40 million to boost its production business in the United States.
India and Russia seal new defense deals, trumpet partnership NEW DELHI (Reuters) - India agreed to buy dozens of Russian military helicopters and kits for the assembly of Sukhoi jets at a summit in New Delhi on Monday, where the leaders of both countries reaffirmed their commitment to a strategic partnership.
LSE cuts LCH.Clearnet offer by a quarter LONDON (Reuters) - The London Stock Exchange cut its offer for a majority stake in transatlantic clearing house LCH.Clearnet by a quarter to 366 million euros ($482 million) to reflect new capital requirements.
KBC to sell Russian bank subsidiary for 300 million euros BRUSSELS (Reuters) - Belgian banking and insurance group KBC has struck a deal to sell its Russian banking unit Absolut Bank, one of the final businesses it is divesting to meet conditions agreed with European regulators after it received state aid.
Vimpelcom to net $1.4 billion as Altimo ups economic stake MOSCOW (Reuters) - Emerging markets telecoms operator Vimpelcom said it would receive around $1.4 billion for the conversion of its preferred shares by shareholder Altimo into ordinary shares in a move that will boost the Russian investor's economic interest.
T-Mobile appeal could derail Austria telecom merger: source VIENNA (Reuters) - T-Mobile Austria plans to appeal against the allocation of radio frequencies that will result from Hutchison Whampoa's takeover of Orange Austria, in a move that could derail the deal.
Xstrata lifts cost estimate for Frieda River copper mine by $300 million MELBOURNE (Reuters) - Global miner Xstrata Plc has lifted its initial capital spending estimate for the undeveloped Frieda River copper mine in Papua New Guinea by $300 million to $5.6 billion, a minority partner in the project said on Monday
Dealtalk: "Kamikaze" trades take shine off record Asia equity block deals HONG KONG (Reuters) - Minutes after the market close on a Tuesday in September, a number of bankers in Asia received a phone call from Temasek Holdings looking to unload a big chunk of shares in Singapore Telecommunications Ltd .
ICE's NYSE swoop creates derivatives giant LONDON/NEW YORK (Reuters) - IntercontinentalExchange Inc agreed as part of its $8.2 billion takeover of NYSE Euronext to pay the New York Stock Exchange operator a termination fee of $750 million if it fails to gain antitrust clearances, suggesting a high level of confidence the deal will go through.
Hourly Market Report
|Gold||1663.80||1664.80||+ 6.80||+ 0.41 %||1666.80||1655.80|
|Silver||30.20||30.30||+ 0.24||+ 0.80 %||30.46||29.93|
|Platinum||1542.00||1550.00||+ 7.00||+ 0.46 %||1593.00||1535.00|
|Palladium||683.00||689.00||+ 6.00||+ 0.89 %||694.00||679.00|
|Rhodium||1100.00||1200.00||+ 0.00||+ 0.00 %||1125.00||1100.00|
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MarketWatch | U.S. Market Stocks Future IndIndications.: U.S. stock futures sink on fiscal-cliff fears
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — Worries over the fiscal cliff were set to rob Wall Street of Christmas cheer Monday, with stock index futures pointing to a lower start for what will be a shortened preholiday session.
Futures on the Dow Jones Industrial Average DJH3 -0.26% fell 39 points, or 0.3%, to 13,097. S&P 500 futures SPH3 -0.33% dropped 5.6 points, or 0.4%, to 1,420.30, while Nasdaq 100 futures NDH3 -0.43% moved down 11.5 points, or 0.4%, to 2,649.
Hopes that lawmakers and the White House would agree on a plan to avert around $600 billion in spending cuts and tax hikes set to take effect Jan. 1 were dealt a blow late last week after House Speaker John Boehner failed to persuade fellow Republicans to back a package dubbed “Plan B” that would have raised taxes on households earning more than $1 million annually. See: Boehner holds out hope for fiscal cliff deal .
“With no Plan B and the gulf between the parties as wide as ever, there is little to cheer this holiday season. The optimism that had seen the market rally strongly over the last few weeks is diminishing rapidly amid signs that a deal is as far away as ever,” said Rebecca O’Keeffe, head of investment at Interactive Investor in London.
Economists fear that failure to avoid the cliff could knock the U.S. economy into recession, dragging global growth down along with it.
Lawmakers over the weekend said there remains time for a deal but acknowledged time is running short.
Meanwhile, thin, holiday trading conditions could exaggerate market moves on Monday and later in the week. U.S. markets close early Monday at 1 p.m. Eastern for Christmas Eve and resume trading on Wednesday.
European markets were little changed in featureless Christmas Eve activity. See: Europe flat on fiscal-cliff fears in holiday trade .
No significant pieces of economic data are scheduled for release Monday. Returning traders will be greeted by the Case-Shiller home index for October on Wednesday, along with data on weekly jobless claims, consumer confidence and new home sales. See Economic Preview: Fiscal cliff keeps Wall Street, consumers on edge .
On the corporate front, Alexza Pharmaceuticals Inc. ALXA -6.92% on Friday said it won approval from the U.S. Food and Drug Administration for it Adasuve treatment for schizophrenia and bipolar disorder. See: Alexza Pharma: FDA OK'S schizophrenia treatment .
The Wall Street Journal on Sunday reported that Birmingham, Ala.-based banking concern Regions Financial Corp. RF -0.97% is the subject of an inquiry by federal agencies looking into allegations it improperly classified certain loans. Regions, the Securities and Exchange Commission and several federal and state agencies declined to comment to the Journal, the report said. See: Regions Financial eyed by U.S. over loan status: WSJ .
Google Inc. GOOG -0.93% is designing a new device, dubbed X Phone, to take on competitors Apple Inc. AAPL +0.51% and Samsung in the smartphone market, The Wall Street Journal reported Friday, citing unnamed sources. See: Google developing 'X Phone' aimed at Apple: report .
Investors will also be looking for follow through by some of last week’s big movers. See: Stocks to watch Monday: RIM, Nike, Alexza .
Shares of smartphone maker Research In Motion Ltd. RIMM -0.46% dived 23% on Friday after the company offered a vague response to a question on a conference call about how it would handle service fees on its new BlackBerry 10 platform. See: Fuzzy answers on service fees hit RIM .
Reuters Enlarge Image
Herbalife Ltd. HLF -19.08% shares were crushed last week after hedge-fund manager Bill Ackman revealed he had taken a huge short position on the multilevel marketing purveyor of nutritional supplements. Herbalife, which plans a Jan. 7 analyst day, has denied Ackman’s accusation that the firm’s business model amounts to a pyramid scheme.
Investors will watch whether shares of Nike Inc. NKE +6.16% can continue to set the pace after finishing last week toward the front of the pack among advancers in the S&P 500. The athletic-shoe and -apparel maker reported a stronger-than-expected second-quarter profit late Thursday.
Also Monday, the dollar slipped modestly overall, while Nymex crude-oil futures posted a small loss as gold futures edged higher.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
MarketWatch | Asian Markets at Close Report (December 24, 2012).: Asia stocks tiptoe higher in quiet trade
HONG KONG (MarketWatch) — Asia stocks edged higher in thin holiday-week volume Monday, with gold miners and resource sector stocks among the outperformers as most major markets prepared to go on break.
Hong Kong’s Hang Seng Index HK:HSI +0.16% ended 0.2% higher, while Australia’s S&P/ASX 200 AU:XJO +0.25% closed with a 0.3% gain, as both markets traded in a shortened session ahead of a two-day break.
The Shanghai Composite Index CN:000001 +0.27% improved by 0.3%, while South Korea’s Kospi KR:SEU +0.07% edged up 0.1% in choppy trade. Taiwan’s Taiex XX:Y9999 -0.06% bucked the trend, however, to slip 0.1%.
The gains in Asia came despite losses on Friday for U.S. and European bourses, with top Republican fiscal-cliff negotiator House Speaker John Boehner saying he was ready to return to talks with the White House. Read: Boehner holds out hope for fiscal-cliff deal.
“Despite some negative leads, Asian markets have managed to edge higher. ... This is a bit of an improvement on the losses seen in the risk space on Friday, when fiscal cliff negotiations stalled,” said Stan Shamu, a market strategist at IG Markets.
Japanese bourses, closed for the Emperor’s Birthday on Monday, were due to reopen Tuesday, and the Shanghai market will be open for trading for the rest of the week. But most other major markets in Asia were scheduled to close for Christmas.
“Markets are likely to maintain tight ranges ahead of the Christmas break and, of course, until we get further leads on the fiscal cliff negotiations at the end of the week,” Shamu added.
The fiscal-cliff worries late last week had sent New York-traded benchmark gold futures almost 1% higher on Friday, aiding the region’s gold-mining shares.
In Sydney, top gold producer Newcrest Mining Ltd. AU:NCM +1.02% NCMGF +1.90% finished 1% higher and Kingsgate Consolidated Ltd. AU:KCN +1.15% KSKGF -2.11% climbed 1.2%.
Banks aided the rebound for Chinese markets after Friday’s losses amidst heightened worries over the U.S. fisccal cliff.
In Hong Kong, HSBC Holdings PLC HK:5 +0.68% HBC -0.74% UK:HSBA +0.68% rose 0.7%, Agricultural Bank of China Ltd. HK:1288 +0.80% ACGBF +36.49% added 0.8% and China Construction Bank Corp. HK:939 +1.14% CICHF -1.89% climbed 1.1%; in Shanghai, Agricultural Bank CN:601288 +0.74% added 0.7%, CCB CN:601939 +0.23% rose 0.2%, and China Merchants Bank Co. CN:600036 +3.03% jumped 3%.
In Seoul, gains were led by a 2.2% rise in shares of heavyweight Samsung Electronics Co. KR:005930 +2.22% SSNLF 0.00% on a positive outlook for 2013. The advance also followed a Korea Times report that the company aims to sell about 20% more mobile phones in 2013 than it did this year. Read: Samsung aims to sell 510 million handsets in 2013.
Investors appeared to shrug off news Friday that the European Union had filed a complaint against Samsung Electronics over its recent legal actions against Apple Inc. AAPL +0.37% .
In Sydney, shares of Billabong International Ltd. AU:BBG +0.61% BLLAF +2.34% improved 0.6% after swinging in both directions, as the surfwear company opened its books to a consortium of bidders to conduct due diligence. Read: Billabong opens its books to bidding consortium .
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Follow him on Twitter @MktwKumar.
Alert Name: FGC BOLSA- FGC FIN
December 24, 2012 Compiled: 12:26 AM
December 24, 2012 Compiled: 12:26 AM
By NASSIM NICHOLAS TALEB (NYT)
More stabilization won’t save the economy. We need to decentralize decision making and force all players to put skin in the game.
By PAUL KRUGMAN (NYT)
The prophets of doom still won’t stop.
Data on new home sales for November, consumer confidence for December and the Standard & Poor’s/Case-Shiller housing price index will be reported.
By ANNIE LOWREY (NYT)
Maya MacGuineas is the face of the Campaign to Fix the Debt, a nonpartisan phalanx of chief executives, politicians and economic experts lobbying lawmakers to broker a deal.
By WILLIAM YARDLEY (NYT)
Mr. Hirschman, who in his youth helped rescue thousands of artists and intellectuals from Nazi-occupied France, went on to become an influential economist known for his optimism.