The Australian Business Briefing -December 3, 2012-.: Retail Spending, Fall in Job Ads, Company Profits Point to Rate Cut

Retail spending flat, fall in job ads, company profits point to rate cut

• by: Adam Creighton
• From: The Australian
• December 03, 2011

 

Weak retail sales mean rate cut likely

A December interest rate cut is more likely after figures showed retail spending remained flat in October.

Play

 

 

0:00 / 0:29

Scrubber

mute

Share

Fullscreen

AN interest rate cut tomorrow now appears more likely as new data show consumer spending remains weak while business profits fell in the three months to September.

Separately, the number of job advertisements fell almost 3 per cent in November, the eighth consecutive monthly decline.
The Reserve Bank of Australia is widely expected to cut the official cash rate to 3 per cent tomorrow to help boost economic activity in the non-mining parts of the economy as the resource boom begins to peter out.
Australian household spending on food, the biggest component of retail trade, rose almost 1 per cent to $8.9 billion in October, but spending on discretionary items slumped. Spending on footwear, furniture and building and garden supplies each dipped around 2 per cent over the month, in seasonally adjusted terms. Spending at restaurants and cafes fell 1 per cent.

Start of sidebar. Skip to end of sidebar.

Recommended Coverage

Manufacturing slump continues

Inflation soft ahead of rate call

HSBC Australia chief economist Paul Bloxham said the figures meant it was more likely the Reserve Bank of Australia would cut the cash rate at its December board meeting tomorrow.
“The steady retail numbers give the RBA more motivation to cut interest rates tomorrow to provide a bit of support ahead of Christmas,” he said.

CommSec economist Savanth Sebastian agreed that weak retail numbers could push the central bank to consider a rate cut.

"All the data today really paves the way for the Reserve Bank to cut rates,'' he said. "There seems to be a lack of strength in retail - consumers remain conservative, and if anything, trading conditions continue to remain tough despite previous rate cuts.''
Meanwhile, total company profits dipped almost 3 per cent to $61.7 billion, dragged down mainly by mining companies, whose profits fell more than 12 per cent over the quarter as a result of falls in key commodity prices.

Mr Bloxham said those figures suggested national accounts figures released by the ABS on Wednesday would show a modest increase in gross domestic product (DGP) over the September quarter.
“This suggests that GDP when we see it on Wednesday is probably going to be a positive but modest number so there is little really standing in the way of the RBA (cutting the cash rate).”
The Reserve Bank surprised financial markets last month when it kept interest rates on hold, citing concerns about inflation.

Other data released today would tend to allay those concerns, helping pave the way for another rate cut. House prices rose only slightly in most capital cities over the month to November. A 1 percent drop in prices in Melbourne kept a key national house prices index at a standstill, according to RP Data’s monthly index.

A separate inflation survey showed consumer prices fell very slightly in November by 0.1 per cent, although they remain 2.5 per cent above their level the same time last year.

Trade With Precision | This week's Market Outlook and Videos -December 2, 2012-.

 




 Nick McDonald discuss the charts and outline where he sees equity and currency markets heading during the weeks and months ahead.

this week's market outlook videos

NYT Business News -december 2, 2012-.: ECB's Noyer Says Inflation Expectations Well-Anchored

Latest Business News

8:14 PM ET  

ECB's Noyer Says Inflation Expectations Well-Anchored

8:08 PM ET  

News Corp Int'l News Chief to Step Down

8:06 PM ET  

A Feisty Start-Up Is Met With Regulatory Snarl

GATA | THE GATA DISPATCH -December 2, 2012-.: Alasdair Macleod: The coming silver price eruption

Alasdair Macleod: The coming silver price eruption

Submitted by cpowell on 09:29AM ET Sunday, December 2, 2012. Section: Daily Dispatches 12:22p ET Sunday, December 2, 2012

GoldMoney research director Alasdair Macleod reports today that the big commercial shorts in silver are approaching record levels again even as public demand seems to be at merely normal levels.
Macleod writes: "On this evidence, the bullion banks short in the silver market are potentially in serious trouble, unless somewhere there is a pot of physical silver they can dip into. There isn't, if we assume that iShares Silver Trust's 315 million ounces are unavailable. There is no other identifiable source of silver, other perhaps than some producer supply, and there is anecdotal evidence that on every dip, cash silver migrates from West to East, confirmed by silver being constantly in backwardation. The odds now favor a substantial bear squeeze. And as the managed funds that lost money on their shorts in June-July sniff sweet revenge, this could rapidly escalate."
Macleod's commentary is headlined "The Coming Silver Price Eruption" and it's posted at GoldMoney's Internet site here:

http://www.goldmoney.com/gold-research/alasdair-macleod/the-coming-silve...

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

GATA | THE GATA DISPATCH -December 2, 2012-.: Getting tough on gold imports won't work, two former Indian central bankers say

Getting tough on gold imports won't work, two former Indian central bankers say

Submitted by cpowell on 05:09PM ET Saturday, December 1, 2012. Section: Daily Dispatches From The Indian Express, New Delhi
Sunday, December 2, 2012

http://www.indianexpress.com/news/-being-tough-on-gold-imports-won-t-wor...
MUMBAI -- Two former governors of the Reserve Bank of India warned Saturday against taking tough measures to rein in gold imports -- a major reason for the persistently high current account deficit.

The chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan, said steps like banning gold imports would only push up its smuggling.

Rangarajan, who served as RBI governor, said there are already indications that illegal shipments of the precious metal have gone up in the last three months after the hike in the excise duty.

"That is an indication of how much gold is being smuggled in. I would say to some extent we should dissuade people from holding an asset that does not give a rate of return. However, you can't go beyond a particular point," Rangarajan said here at a function organised by the Indira Gandhi Institute of Development Research, an institution set up by the RBI.

Former governor Y.V. Reddy said, "If Mercedes Benz and aftershave lotion can be imported, why not gold? It is both an investment and consumption good. Many people seem to mistake that it is only a hedge against inflation. There is a demand for it. It is being imported. If you can, try to stop it."
The RBI Governor D. Subbarao said the central bank is "concerned about gold as means of saving because it blocks off savings."

"We are concerned about gold ... lending against gold by non-bank finance companies because of financial stability concerns. We have been concerned about gold from an external management perspective because of the pressure it puts on the current account or the capital account depending on your account for it," Subbarao said.

On growth and inflation, Bimal Jalan, Rangarajan's successor and Reddy's predecessor, said, "There are periods when growth is more important and you take policy measures to boost it. There are periods when you have to control inflation because that is the dominant public issue. So there will be periods when you take measures, however harsh they are, to control inflation."
Reddy added household savings, which was an achievement until recently, is now the most critical challenge for the future. "The behavior of household savings indicates that they do not have faith in financial markets except banks. It is a bad sign."

Rangarajan said, "If what has happened in the three-year period of decline is reversed either because of a fiscal consolidation program or because of inflation coming down, it is possible to get back ... if not the 9-percent but the 8-percent rate of growth."

* * *
Join GATA here:
Vancouver Resource Investment Conference
Sunday-Monday, January 20 and 21, 2013
Vancouver Convention Centre West
Vancouver, British Columbia, Canada
http://www.cambridgehouse.com/event/vancouver-resource-investment-confer...
* * *

NYT Breaking News -November 1, 2012-.: Special Report: As Companies Seek Tax Deals, Governments Pay High Price

Breaking News
The New York Times
Saturday, December 1, 2012
-----

As Companies Seek Tax Deals, Governments Pay High Price

A New York Times investigation into the incentives that governments offer businesses has found that states, cities and counties are giving up more than $80 billion a year to attract or keep the companies and the jobs that they provide. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

But the cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.

Read More:
http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?emc=na

Copyright 2012 The New York Times Company

NYT Today's Headlines -December 1, 2012-: Housing Move in Israel Seen as Setback for a Two-State Plan

December 1, 2012

Today's Headlines

TOP NEWS Housing Move in Israel Seen as Setback for a Two-State Plan By JODI RUDOREN and MARK LANDLER Two settlement actions seemed timed to punish the Palestinians for securing upgraded status at the United Nations, and appeared to show that hard-liners had prevailed in the debate over a response. A Hospital War Reflects a Bind for Doctors in the U.S. By JULIE CRESWELL and REED ABELSON With fewer providers competing aggressively for health care business, doctors who sell their practices are feeling pressed to meet financial targets. Young Immigrants Say It's Obama's Time to Act By JULIA PRESTON A group that had worked effectively but largely under the radar to advance the prospects of undocumented youths learns to be more comfortable in the spotlight.  Video: Pushing the Dream • NYTimes.com Home Page » QUOTATION OF THE DAY "People are not going to hug the president right now. They are waiting for him to take some action." CARLOS SAAVEDRA, national coordinator of United We Dream, on a rejuvenated push for among the young for immigration reform.

World Multimedia Feature: Challenges in Defining an Israeli-Palestinian Border There are major hurdles in drawing borders between Israel and a future Palestine. Opinion Op-Ed Contributor The Monster of Monticello By PAUL FINKELMAN The ugly truth about our slave-owning third president.

POLITICS In Latest Campaign, Obama Takes Deficit Battle to the Public By PETER BAKER and JONATHAN WEISMAN Visiting a toy factory in Hatfield, Pa., President Obama used a campaign tactic to turn up the heat on Republicans as he promotes his tax plan. Debt Reckoning: Pelosi Backs Limiting Oversight of Debt Ceiling News Analysis: Simpler Taxes Now, Growth Later House Votes to Ease Visa Limits for Some Foreign Workers By JEREMY W. PETERS A measure that passed with mostly Republican support - many Democrats found it too narrow - previewed a fight over how far Congress should go in changing immigration laws. Senate Votes to Curb Indefinite Detention By CHARLIE SAVAGE Senators voted to prohibit the government from imprisoning American citizens and green card holders apprehended in the United States in indefinite detention without trial. • More Political News » BUSINESS Solar Industry Borrows a Page, and a Party, From Tupperware By DIANE CARDWELL Solar parties, like Tupperware parties, are being used by solar companies to sell their products to neighbors of homeowners who have installed the arrays. Retail Frenzy: Prices on the Web Change Hourly By STEPHANIE CLIFFORD Retail price wars online have entered a new era of speed and precision, creating a confusing landscape for shoppers in which prices leap and plummet on short notice. Small Employers Weigh Impact of Providing Health Insurance By REED ABELSON and STEVEN GREENHOUSE Businesses like restaurants and hotels that rely heavily on low-income workers are trying to decide how to change their business models for the new health care law. • More Business News » EDITORIALS Editorial Measured Approach to the Syrian Crisis It is necessary to look for ways to raise the pressure on President Bashar al-Assad and encourage a stable postwar Syria without arming the rebels. Editorial What's Missing in the Latest Greek Bailout The deal offers temporary debt relief, but no way forward for a shrinking economy. Editorial Ultimate Culpability for a Mine Disaster Federal prosecutors are wise to pursue the path of corporate responsibility in their investigation of the West Virginia mine disaster. • More Opinion » ON THIS DAY On Dec. 1, 1959, representatives of 12 countries, including the United States, signed a treaty in Washington setting aside Antarctica as a scientific preserve, free from military activity. • See This Front Page • Buy This Front Page

DealBook | P.M. Edition -November 30, 2012-.: Week in Review: Portraits of a Hedge Fund Titan

Friday, November 30, 2012

TOP STORY

Week in Review: Portraits of a Hedge Fund Titan Even before Steven A. Cohen's very bad week, the media narrative surrounding the hedge fund billionaire was well known: an intimidating temper that has mellowed with age, a bad back enflamed by the same, a hedge fund with a track record better than the Yankees and partial ownership of a baseball team whose standing is decidedly less stellar. This week, we review the highlights.

Like many billionaires Mr. Cohen, who has not been accused of any wrongdoing, shuns the media spotlight, but that hasn't stopped journalists and colleagues from painting colorful portraits that compare him to characters from Henry Melville and Miguel de Cervantes.
"It's a Darwinian and pressure-packed culture with ridiculous amounts of money at stake," a former employee of SAC Capital told DealBook last year.
The closest Mr. Cohen has gotten to a media grilling recently was a sit-down with Paul Tudor Jones, another hedge fund manager, at a Wall Street-sponsored conference. Mr. Cohen is "almost as secretive as Howard Hughes," one source told Businessweek in 2003. The comparison has stuck with the money manager despite his prominent forays into worlds of art, sports and politics.
In 2006, his hedge fund was focus of a widely criticized "60 Minutes" report on short sellers. His ex-wife, Patricia Cohen, told New York magazine that the television report was the impetus for her lawsuit over money involved in their 1990 divorce. The suit was later dismissed.
As the charges against former traders at his $14 billion hedge fund mounted, Mr. Cohen gave a rare interview in 2010 to Vanity Fair, saying that "in some respects I feel like Don Quixote fighting windmills."
Or perhaps Mr. Cohen is, as Reuters described last year, the Feds' Moby Dick, an allegory that would make Robert S. Mueller, director of the Federal Bureau of Investigation, a modern-day empty-handed Captain Ahab.
In the end, the high-minded literary references may not capture Mr. Cohen's story as well as a man who inspired Bruce Springsteen, New Jersey's true poet laureate. It could be that Preet Bharara, the United States attorney in Manhattan, could write the hedge fund titan's final chapter.
A look back on our reporting of the past week's highs and lows in finance.

Mergers & Acquisitions

Two Firms Make Offers for Knight Getco and Virtu Capital are said to be keenly interested in Knight's market-making trading operations, though they may sell less desirable parts of the company, Michael J. de la Merced and Nathaniel Popper reported.

• DEALBOOK »

ConAgra to Buy Ralcorp, Solidifying Market Share ConAgra is betting that private-label goods - made for bakeries, grocery chains and other customers - will be a higher source of growth worldwide, Mr. de la Merced and Stephanie Strom reported.

• DEALBOOK »

Lehman Sells Property Firm in a Deal Worth $6.5 Billion The deal that helped sink Lehman Brothers will play an important role in paying off the failed investment bank's creditors, Mr. de la Merced reported.

• DEALBOOK »

I.P.O./Offerings

MegaFon Shares Fall After I.P.O. "The new listing, which is the largest Russian I.P.O. since the aluminum maker Rusal raised $2.2 billion in 2010, comes at a difficult time for European financial markets," Andrew E. Kramer and Mark Scott reported.

• DEALBOOK »

Venture Capital

Despite Setbacks, Investor Is Bullish on Clean Tech His stakes, once worth as much as $1.3 billion, are now valued at roughly $378 million, but Vinod Khosla seems unwavering in his commitment to the clean energy industry, Randall Smith reported.

• DEALBOOK »

Legal/Regulatory

S.E.C. Weighs Suing SAC Capital Steven A. Cohen is defending his $14 billion hedge fund against an intensifying government investigation into insider trading, Peter Lattman reported.

• DEALBOOK »

	SAC Capital to Try to Reassure Investors Only 40 percent of the money managed by the hedge fund comes from outside clients. DEALBOOK »
	Former SAC Analyst Freed on Bail in Insider Case Mathew Martoma appeared in Federal District Court in Manhattan to face the charges against him. DEALBOOK »
	DealBook Column: Knowledge Is Money, but the Peril Is Obvious Andrew Ross Sorkin says that so-called expert network firms link hedge fund investors with experts in various fields, but another insider trading case has brought scrutiny on a business model that some say is tailor-made to foster insider trading on Wall Street. DEALBOOK »
	New Breed of SAC Capital Hire Is at Center of Insider Trading Case Former employees of Mr. Cohen said that the case against Mr. Martoma highlighted SAC's high-stress, pressure-packed culture. DEALBOOK »

As Official Drops Outs, Race Shifts for S.E.C. With Mary J. Miller, a senior Treasury Department official, withdrawing, Sallie L. Krawcheck, a longtime Wall Street executive, has emerged as a potential front-runner, Ben Protess and Susanne Craig reported.

• DEALBOOK »

Outgoing S.E.C. Leader Fortified Wall St. Watchdog Mary L. Schapiro "leaves behind a stronger S.E.C., an overhaul characterized by her attention to detail and meticulous preparation." DEALBOOK »

The Trade: Fledgling Monitor for Wall St. Risks an Early Compromise Jesse Eisinger of ProPublica says that the Office of Financial Research "is looking as if it will be a tool of the financial services industry, instead of a check on it."

• DEALBOOK »

Deal Professor: In Battle With Hedge Funds, a Small Victory for Argentina Steven M. Davidoff says that a stay of a federal judge's order on debt payment may provide an opportunity for Argentina's lawyers to raise questions that an appeals court may not have fully considered before.

• DEALBOOK »

Autonomy's Ex-Chief Calls on H.P. to Defend Claims "In the fight between Hewlett-Packard and the founder of its Autonomy unit, the gloves are well and truly off," Mr. de la Merced reported.

• DEALBOOK »

News Analysis: A Tax Break Once Sacred Is Now Seen as Vulnerable "As President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion," Peter Eavis reported.

• DEALBOOK »

Cravath Sets the Tone for Law Firm Bonuses "Cravath kicked off bonus season by announcing year-end bonuses that were substantially higher than they had been the previous two years," Mr. Lattman reported.

• DEALBOOK »

Intrade Bars U.S. Bettors After Regulatory Action The Commodity Futures Trading Commission took aim at the Dublin company and an affiliate in a civil complaint filed in federal court in Washington, Mr. Protess reported.

• DEALBOOK »

UBS Fined $47.5 Million in Rogue Trading Scandal Britain's Financial Services Authority fined UBS £29.7 million for failing to prevent a $2.3 billion loss caused by a former trader, Mark Scott reported.

• DEALBOOK »

DEALBOOK HIGHLIGHTS

Berkshire Moves Into Spain With CaixaBank Reinsurance Deal Warren Buffett and his sizable insurance team are betting that at least one Spanish firm is in good financial shape, even as its home country remains on shakier economic ground.

• DEALBOOK »

Duke Energy's Latest C.E.O. Drama Duke Energy's chairman and chief executive, James E. Rogers, will retire at the end of 2013 as part of a wide-ranging settlement with regulators in North Carolina.

• DEALBOOK »

U.P.S. Offers Concessions to Secure TNT Express Takeover United Parcel Service has submitted concessions to European antitrust authorities as it seeks regulatory approval for its proposed $6.8 billion takeover of the Dutch shipping company TNT Express.

• DEALBOOK »

China Insurer Raises $3.1 Billion in I.P.O. The deal ranks as Hong Kong's biggest of the year, but more than half of the shares sold by the People's Insurance Company (Group) of China went to 18 so-called cornerstone investors, many of them state-owned companies.

• DEALBOOK »

Muddy Waters Offers to Pay for Olam Debt Rating The short-seller introduced an unusual twist in its battle against the Singapore commodity company: an offer to pay for the company to get its debt rated by Standard & Poor's.

• DEALBOOK »

Buzz Tracker

H.P.'s Blunder for the Record Books Until now, it seemed likely that a deal like AOL's acquisition of Time Warner would never be repeated, rivaled or surpassed, reports James B. Stewart, the Common Sense columnist for The New York Times. The New York Times

DealBook Video

Week in Verse: 'I Don't Know, Krawcheck, It Sounded a Little Pitchy, Dawg.' DealBook commenters are tough judges. They've reacted to the candidates to lead the S.E.C. as if they were watching a bad audition on American Idol.

• YouTube

MarketWatch | Wall Street at Close Report -November 30, 2012-. Nasdaq tallies best November in 3 years

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch) — U.S. stocks ended little changed Friday, with the Nasdaq Composite scoring its first positive November since 2009 as the political rhetoric over the budget continued. 

Week ahead: Cliff talks continue The fiscal cliff talks continue in Washington. Plus, November's unemployment rate is reported and the ECB meets. 

“I don’t think there is a politician out there that wants on their watch an adverse economic outcome. But they could wait for the 11th hour,” Nick Raich, director of Key Private Bank in Cleveland, said of the possible repercussions of not reaching an agreement to block billions in automatic spending cuts and tax increases early next year. 

“Our base case is there will be some sort of solution, but it may not occur by or on Dec. 31, so the market is not pricing completely going off the cliff, but more of a roll down the hill,” Raich added.

The Dow Jones Industrial Average DJIA +0.03%  rose 3.76 points to 13,025.58, leaving it 0.1% higher for the week and off 0.5% from the month-ago close. Read: November’s 5 best and worst Dow stocks. 

 

Up 0.5% for the week and 0.3% for the month, the S&P 500 Index SPX +0.02%  finished with a fractional gain at 1,416.18, with the technology sector hardest hit and defensive industries the best performing. 

The Nasdaq Composite COMP -0.06%  fell less than 2 points to 3,010.24, up 1.5% for the week and 1.1% for the month. 

Advancers edged just ahead of decliners on the New York Stock Exchange, where nearly 1.2 billion shares traded. Composite volume neared 3.9 billion. 

The U.S. dollar DXY +0.03%  edged lower against other currencies, excluding the Japanese yen USDJPY -0.0169% , which fell to its lowest level against the greenback since the spring.

Treasury prices were mixed, with the yield on the benchmark 10-year note 10_YEAR +0.19%  used in determining mortgage rates and other consumer loans at 1.62%. 

Friday’s economic reports had consumer spending unexpectedly falling and incomes flat in October as Hurricane Sandy and its aftermath prevented many from working and shopping in the Northeast.

“All the focus for December is going to be the cliff. Data is what happened in the past, but if we go off the cliff, what does it mean for the future? Stocks are worried about what is going to happen to 2013-14 earnings estimates,” according to Raich. 

President Barack Obama on Friday traveled to a Pennsylvania toy factory where he warned “prolonged negotiations” were likely ahead, and reiterated his call for lawmakers to extend Bush-era tax cuts for middle-income Americans. In Washington, House Speaker John Boehner held a news conference not long after Obama spoke, with the Ohio Republican declaring the budget talks at a “stalemate,” and criticizing the White House for not making a serious offer for a compromise. 

“Taxes are going higher and spending cuts are coming. [Federal Reserve Chairman] Ben Bernanke has given us almost 100% clarity on monetary policy, and the market appears to want to go higher if we get some clarity on the fiscal side,” said Raich. 

Kate Gibson is a reporter for MarketWatch, based in New York.

Business in Vancouver | BIV Today's Business News -November 30, 2012-.: First Nation files for judicial review of Jumbo ski resort

Hospitality and Tourism

First Nation files for judicial review of Jumbo ski resort

The Jumbo Glacier ski resort, which has faced two decades of legal and regulatory delays and roadblocks, is facing yet another ... READ MORE

Politics and Policy

Exclusive: Government admits booze price hikes were a risk of privatization

Was the doomed plan to privatize liquor warehousing and distribution too risky for ... READ MORE

Mining and Energy

B.C. plans international LNG conference in February

As opponents ramp up anti-LNG efforts, the B.C. government has announced it will host the first international conference on the ... READ MORE

More News...

Another Vancouver law firm goes global with merger

“Keep investing”: Deloitte’s advice to miners

Three thousand expected at province’s Vancouver job fair today

Province concludes public service bargaining