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Oct 2, 2013

NYT | ALERT FGC BOLSA - FGC FINANCIAL MARKETS OCTOBER 2, 2013: How a Debt -Ceiling Crisis Could Become a Financial Crisis / Today in Small Business: Blue Meth Candy.

The New York Times | MY ALERTS


Compiled: October 2, 2013 05:41:31 PM


How a Debt-Ceiling Crisis Could Become a Financial Crisis
A play-by-play by The Financial Times tells how a default by the Treasury could unfold.

You're the Boss

Today in Small Business: Blue Meth Candy
A government shutdown looms. Ten companies say they have achieved return on investment through social media. A look at the small-business health insurance exchange in Washington.

NYT | Global Update October 2, 2013: Berlusconi Backs Down on Threat to Topple Government

The New York Times International Herald Tribune
October 2, 2013
Compiled 20:45 GMT

Global Update


Berlusconi Backs Down on Threat to Topple Government

The backing of Silvio Berlusconi's center-right party allowed Prime Minister Enrico Letta to easily win a confidence vote in the Italian Senate.

Obama Summons Congressional Leaders to White House

On the second day of the government shutdown, President Obama planned to urge passage of a stopgap spending measure and a debt-ceiling increase.

BlackBerry Filing Describes a Global Slide

A delayed regulatory filing said competition was robbing the troubled smartphone maker of customers in its final bright spot, the developing world.

Video: Losing Hope in Fukushima

More than two years after the nuclear meltdown in Fukushima Prefecture, thousands of refugees, desperate to return home, are losing confidence in the Japanese government's cleanup efforts.

Op-Ed Contributors

Deep-Sea Plunder and Ruin

Europe has a chance to put an end to the use of trawls at the bottom of the Northeast Atlantic.

Internal Dissent Imperils Berlusconi's Long Reign Atop His Party

His power within his party has been unquestioned for decades, but in seeking to bring down Italy's coalition government, he may encounter resistance.

Former Japanese Leader Declares Opposition to Nuclear Power

In an abrupt shift, Junichiro Koizumi said that the Fukushima disaster convinced him that Tokyo should switch to renewable energy sources.
Namie Journal

Japan's Nuclear Refugees, Still Stuck in Limbo

Tens of thousands of evacuees from the area around the Fukushima nuclear plant are in emotional and legal limbo as the cleanup limps along.

Problems Persist on Second Day of Insurance Markets

As the traffic levels remained high, many state-run systems seemed to be functioning, but the federal system operating the exchanges for 34 states remained trouble-plagued.

The Landscape of Small-Business Health Insurance

A conversation with Alan Cohen, a founder of Liazon, one of the first companies to establish a private health insurance exchange.

European Central Bank Holds Steady on Rates

The European Central Bank governing council kept its main interest rate at 0.5 percent, where it has been since May.
Bits Blog

Mark Hurd, Oracle's Master Salesman, Wants Your Business

How do you meet with 575 customers in a little over three days? Start with a relentless schedule, add precision timing and throw in lots and lots of coffee.
Bits Blog

Why Big Ag Likes Big Data

Monsanto is paying almost $1 billion for a company that looks at weather and dirt data to predict yields, its latest effort to capitalize on productivity gains from data insights.

N.S.A. Experiment Traced U.S. Cellphone Locations

The National Security Agency tested the collection of location data, but never put the program into play.

In FIFA Politics, Blatter Is the Consummate Player

In nearly four decades with FIFA, Sepp Blatter, the outspoken and commanding figurehead, has never overseen an issue as controversial as whether to shift the Qatar World Cup from summer to winter.

Arsenal's Özil Shows He's Worth Every Penny

Mesut Özil, who has quickly become the focal point of Arsenal's offense, scored one goal and helped set up the other as his club beat Napoli, 2-0, in the Champions League.

A Tough Choice: Play for Brazil or Spain?

Diego da Silva Costa was born in Brazil, but he recently gained Spanish citizenship, and his new country wants him on its national team.

Staunch Group of Republicans Outflanks House Leaders

A powerful group of conservative hard-liners is leading party bosses in the House, and increasingly angering a widening group of fellow Republicans.

Concerns for G.O.P. Candidate Where Pain From Shutdown Is Acute

The first gauge of the shutdown's political fallout might play out in Virginia, where a Republican, Kenneth T. Cuccinelli II, faces Terry McAuliffe for governor.

On Day 1, Parks Close, Workers Stay Home and 'Panda Cam' Goes Dark

Barricades and padlocks closed access to federal facilities across the country Tuesday as the vast machinery of the federal government began shutting down for the first time in nearly two decades.

Netanyahu Pushes Back on Iran

The Israeli leader has reason to be skeptical, but Iran deserves a chance to prove itself.
Op-Ed Columnist

Our Democracy Is at Stake

The future of how we govern ourselves is on the line, and majority rule is still majority rule.

DealBook P.M. Edition October 2, 2013: Loeb Raises Stake in Sotheby's and Seeks Board Seat

Wednesday, October 2, 2013
Loeb Raises Stake in Sotheby's and Seeks Board Seat
Loeb Raises Stake in Sotheby's and Seeks Board Seat The activist investor Daniel S. Loeb wants to join the board of Sotheby's and has called for the chief executive to step down. Mr. Loeb also disclosed that he is now the company's biggest shareholder with a 9.3 percent stake in the company.
    Apax Wins and Loses in Rue21 Conundrum of Its Own Design
    Deal Professor: Apax Wins and Loses in Rue21 Conundrum of Its Own Design The buyout of the fashion retailer rue21 pits old investors in Apax Partners against new ones, with the firm forced to choose the best path through the conflicts of interest, says Steven M. Davidoff, the Deal Professor.
    Re/Max Rises in Debut, While Empire State Trust Is Subdued Outside the real estate sector, investors also lined up on Wednesday for shares of Burlington Stores, which operates the Burlington Coat Factory retail chain.
    3 London Portfolio Managers Leave SAC Capital Three portfolio managers with a SAC Capital Advisors unit in London have left the firm, according to documents filed with a British agency that tracks corporate registrations.
    Portugal Telecom and Oi of Brazil Agree to Merge
    Portugal Telecom and Oi of Brazil Agree to Merge The companies said they would have 100 million telecommunications subscribers combined.
    Greenhill Expands Into Brazil Despite Nation's Woes The boutique investment bank Greenhill & Company has opened an office in Brazil and hired the former Goldman Sachs executive Daniel Wainstein to run it.
    Buzz Tracker
    Marc Jacobs Leaving Louis Vuitton Marc Jacobs is leaving Louis Vuitton after 16 years to focus on his own fashion line, which reportedly will move toward an initial public offering.
    Weekly jobless claims will still be released, despite the shutdown of the federal government. Clorox holds a meeting with analysts.

Wall Street at Close report by MarketWatch October 2, 2013: Stocks finish lower on 2nd day of shutdown

By Wallace Witkowski and Victor Reklaitis, MarketWatch 

SAN FRANCISCO (MarketWatch)U.S. stocks closed lower Wednesday, paring losses during the trading session as investors looked for a possible thaw in negotiations over the government shutdown after a private-sector jobs report came out weaker than expected. 

The S&P 500 index SPX -0.07% declined 1.13 points, or 0.1%, to finish at 1,693.87, with telecom, health care, and industrials as the worst performing sectors. The index had been down nearly 15 points earlier in the session. 

Government shutdown may not end soon
Senate Republican leaders and Democratic aides sent the message Tuesday to not expect the government shutdown to end soon, why Wall Street seems to be cautiously shaking off the government shutdown, and a look at today's market action. Photo: Getty. 

The Dow Jones Industrial Average DJIA -0.39% , which at one point was off by 147 points intraday, closed down 58.56 points, or 0.4%, at 15,133.14, with shares of United Technologies Corp. UTX -0.31% , Coca-Cola Co. KO -0.13% and American Express Co. AXP -0.11%  weighing on the index.
The Nasdaq Composite COMP -0.08% , which at one point had ventured briefly into positive territory, finished the day down 2.96 points, or l0.1%, at 3,815.02. Earlier in the session, the Nasdaq had been down nearly 30 points. 

As the government shutdown dragged into its second day, stocks started to bounce off their intraday lows as President Barack Obama invited congressional leaders to the White House for a 5:30 p.m. Eastern meeting to discuss the situation and the looming debt-ceiling crisis. Soon after the invitation, a letter from Senate Majority Leader Harry Reid to House Speaker John Boehner went public, proposing that the House reopen the government and discuss differences at a House-Senate conference. Boehner reportedly rejected the proposal. 

Goldman Sachs Chief Executive Lloyd Blankfein on Wednesday urged Congress to raise the debt ceiling to avoid “extremely adverse” consequences. 

Declining stocks outnumbered advancers by 16 to 13 on the New York Stock Exchange and by about 3 to 2 on the Nasdaq. By the close, composite volume topped 3.1 billion shares for NYSE-listed stocks and 1.7 billion shares for Nasdaq-listed stocks.
Investors are “having a little rethink over the implications and longevity of the U.S. government shutdown,” said Andrew Wilkinson, chief economic strategist at Miller Tabak, in emailed comments on Wednesday. 

Some strategists now say there’s a clear chance the shutdown could blend with the debt-limit debate, prolonging the shutdown to mid-October. They’ve also noted a longer shutdown would create more of a drag on the economy and might call into question Washington’s ability to reach a debt-ceiling deal. The debt-ceiling issue is widely seen as more important.

“I think it’s impossible to handicap how long this is going to take,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott, about the shutdown, which he estimates will drag on GDP by 0.1% a week. “In the meantime, the market’s going to be under pressure but we’re not at a violent selloff yet.” 

A huge selloff would be triggered if gridlock in Washington extends past Oct. 17, when the Treasury will have to start “robbing Peter to pay Paul” to meet obligations and some $30 billion in interest payments in November become threatened, Luschini said. 

Investors over the past few years have become somewhat less sensitive to drama in Washington, according to Jim Kee, president and chief economist at South Texas Money Management, which has $1.9 billion in assets under management. But he also said that there will be a stronger market reaction if the current shutdown lasts longer than others, noting the median length for a shutdown is three days. “If we’re still talking about the shutdown in a week or two, that will create a lot of volatility and downward pressure in markets,” Kee said. Earlier in the day, one ex-Treasury official said the downside risks even include the U.S. economy falling back into recession

“The job market appears to have softened in recent months,” said Mark Zandi, chief economist of Moody’s Analytics, which prepares ADP’s report, in a statement. “Fiscal austerity has begun to take a toll on job creation.”
The ADP report is taking on greater significance this week, because the government’s monthly jobs report might not come out if the shutdown continues. 

While Fed chief Ben Bernanke avoided commenting on monetary policy at a conference sponsored by the St. Louis Fed, Boston Fed President Eric Rosengren earlier in the day said that tapering of monthly asset purchases by the central bank could move slowly over the next several years.
In overseas trading, European stocks fell after the European Central Bank left key interest rates unchanged as expected. ECB President Mario Draghi said in a news conference that risks to the growth outlook remain skewed to the downside, adding that the bank is “attentive” to developments in foreign exchange. 

In Italy, Silvio Berlusconi said he would back the government of Prime Minister Enrico Letta in a confidence vote on Wednesday, a surprise move that has allowed the coalition government to avoid a collapse

Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski. Victor Reklaitis is a New York-based markets writer for MarketWatch. Follow him on Twitter @VicRek.

Wall Street at Close Report by CNBC October 2, 2013: Stocks close lower as DC stalemate continues, dragged by industrials

Stocks eased off session lows but still closed in the red Wednesday, amid mounting worries that the ongoing budget battle in Washington could eventually lead to a failure to raise the country's debt ceiling.
(Read more: Get out the rallyhats: Shutdowns are bullish!)
  Name Price   Change %Change
DJIA Dow Jones Industrial Average 15133.14
-58.56 -0.39%
S&P 500 S&P 500 Index 1693.87
-1.13 -0.07%
NASDAQ Nasdaq Composite Index 3815.02
-2.96 -0.08%

The Dow Jones Industrial Average finished in negative territory, dragged by United Tech and American Express. The blue-chip index fell nearly 1 percent at its session low.

The S&P 500 and the Nasdaq also closed lower. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, jumped above 16.

Most key S&P sectors ended in negative territory, led by consumer staples and industrials. 

The partial shutdown of the federal government entered its second day, with an estimated 800,000 federal employees furloughed. Experts say even if the shutdown issue is resolved, investors will have a bigger hurdle to jump when the Treasury Department will exhaust its borrowing limit on Oct. 17.

Unless Congress votes to raise the debt ceiling, the U.S. will default on its debt for the first time ever.

(Read more: The government shutdown probably kills 'Octaper')

"We believe the U.S. government shutdown over the continuing resolution should be primarily seen through one prism—does it increase or decrease the chances of a smooth resolution to the debt ceiling? For now, the markets seem to believe that this shutdown will cause only minor disruption and will, at the very least, not worsen the debt ceiling negotiations—and we agree," Barclays analysts Hamish Pepper and Ajay Rajadhyaksha said in a research note.

Negotiations continued in Washington as Senate Majority Leader Harry Reid reportedly sent a letter to and called House Speaker John Boehner offering budget talks. But the conversation did not seem to lead to a resolution on the ongoing shutdown.

President Barack Obama will address the government shutdown, the roll-out of the Affordable Care Act and the looming debt ceiling in an exclusive interview on CNBC. The interview will be aired at 4pm ET. 
(Read more: If you could ask the president anything, what would it be?)

Separately, Obama met with top banking CEOs at the White House.

Goldman Sachs CEO Lloyd Blankfein urged Congress not to use threats of defaulting on U.S. debt as a "cudgel" to get policy changes, adding that business leaders agree the failure to raise the debt ceiling would lead to "extremely adverse" consequences.

Michael Corbat of Citigroup, Jamie Dimon of JPMorgan and Brian Moynihan of Bank of America were among other high-profile bank CEOs at the meeting.

Meanwhile, Senate Majority Leader Harry Reid and House Speaker John Boehner spoke by phone, with Reid saying he wants "Clean" spending bill before the conference.

"Should any of these uncertainties and Washington wrangling fuel additional market pullback in the near term, we believe these dips would represent buying opportunities for investors," wrote Stuart Freeman and Scott Wren of Wells Fargo Advisors. "We believe that the breadth of growing within the economy is still likely to bring us roughly 5 percentage points of operating earnings growth next year and a further strength in investor confidence alongside some P/E expansions."

Wells Fargo Advisors maintained its 1,850 to 1,900 target range for the S&P 500 index for year-end 2014.

Equities were also pressured by a weaker-than-expected private-sector jobs report. Private employers added 166,000 jobs in September, according to the ADP National Employment Report, missing expectations for a gain of 180,000. The ADP data is usually seen as a preview to the widely-watched monthly government jobs report, which is likely to be delayed due to the shutdown.

"Employment growth picked up in the past two months, but it remains disappointing given all the fiscal and monetary stimulus that is still being pumped into the economy," said David Santschi, CEO of TrimTabs.

Blackberry reversed earlier losses after a report that the smartphone maker has drawn interest from private-equity firm Cerberus and at least one other investor, according to Dow Jones. The troubled smartphone company has shed more than 30 percent year to date.

Monsanto slumped after the agricultural biotechnology company posted quarterly results that missed expectations and handed in full-year earnings that also fell short of estimates.

Microsoft ticked lower after three of the top 20 investors in the software giant lobbied to press for Bill Gates to step down as chairman of the company he co-founded, according to sources.

Alcoa slid after Deutsche Bank cut its rating on the aluminum producer and former Dow component to "sell" from "hold."

Empire State Realty Trust rose in its trading debut on the NYSE after the owner of the Empire State Building priced at $13 a share, the lower end of of its expected range. And real estate brokerage franchiser RE/Max surged nearly 20 percent in its debut after pricing its 10-million-share initial public offering at $22 a share.

Also on the economic front, weekly mortgage applications slipped last week as a drop in demand for purchase loans outweighed an increase in refinancing demand, according to the Mortgage Bankers Association.

Investors will be looking ahead to third-quarter earnings results over the next several weeks. Companies issuing negative outlooks for the quarter outnumber positive ones by 5.2-to-1, the most negative since the 6.3-to-1 ratio in the second quarter, according to the latest data from Reuters.
Technology is the sector with the highest number of negative outlooks.

European shares remained in the red after the ECB left key its interest rates unchanged, as expected.
"We view this recovery as weak, as fragile, as uneven," said ECB president Mario Draghi at a press conference following the decision. He reiterated his previous commitment to keeping rates at present or lower levels for an extended period of time.

Meanwhile, Italian stocks traded higher after the government of Prime Minister Enrico Letta won a Senate confidence vote. The dramatic turnaround came after former Prime Minister Silvio Berlusconi said he would support Letta after an increasing number of his party members rebelled against the move to pull down the government.
—By CNBC's JeeYeon Park (Follow JeeYeon on Twitter:

BIV Today's Business News October 2, 2013: Mobile business licence finally comes to Metro Vancouver

Politics and Policy

Mobile business licence finally comes to Metro Vancouver

A long-awaited mobile business licence that will be accepted across six ... READ MORE

Economy and Finance


Claw back old age security for high-income working seniors: Fraser Institute

The Canadian government would have more money to allocate to working Canadians and low- and middle-income ... READ MORE

Retail and Manufacturing


Arc’teryx to open first Vancouver store

North Vancouver outerwear, climbing harness and backpack manufacturer Arc'teryx will scale the brick-and-mortar wall ... READ MORE

Mining and Energy


Mercator Minerals hires BMO Capital Markets to advise on possible sale

Citing weak commodity prices and a difficult market for luring investment capital, Vancouver’s Mercator Minerals (TSX:ML) has hired ... READ MORE

More News...


Canada requires a holistic approach to evaluating environmental-economic links: TD Economics

B.C. leads the country in Aboriginal educational outcomes: C.D. Howe Institute

This Week's Issue

But critics say removing the tunnel is the first step in turning the Fraser ... READ MORE