Hawkish Hoenig Still Says 'No'
Fed Reviews QE2 at Last Scheduled Meeting of 2010 (Yahoo Finance via AP) Many investors believe policies will remain unchanged—but will focus on modifications in language to signal future actions. "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend. On the other hand, rates on mortgages have risen, defying one of the Fed's stated goals of the bond-buying program. The average rate on a 30-year fixed mortgage has climbed to 4.61 percent. It's up sharply from 4.17 a month ago, the lowest rate in in some 40 years of recordkeeping. And "Since the Fed announced its second round of stimulus on Nov. 3, stocks have risen. That's encouraging for the economy because larger stock portfolios make people, especially the wealthy, more inclined to spend."
Spanish Bonds Down (Again); Borrowing Costs Rising (Bloomberg) "Spanish government bonds fell for a seventh day as the country paid higher costs to sell more than 2.5 billion euros ($3.3 billion) of securities and prepared to issue more debt later this week."And: "The yield on the 10-year Spanish bond rose eight basis points to 5.57 percent at 12:27 p.m. in London. The 4.85 percent security due October 2020 fell 0.58, or 5.8 euros per 1,000-euro ($1,346) face amount, to 94.61. German 10-year yields were one basis point lower at 2.96 percent, while two-year yields fell two basis points to 1.04 percent."
Distressed Assets Funds Trade Madoff Settlement Claims (DealBook New York Times) "The lawsuits filed by the trustee seeking money for Bernard L. Madoff’s fraud victims may be a blow for the defendants — but they are catnip for an obscure breed of Wall Street traders speculating on the outcome of the enormous Madoff bankruptcy case. In recent months, hedge funds and other investment firms have been quietly contacting Madoff victims whose loss claims have been approved by the trustee, Irving H. Picard. These funds — specialists in beaten-down assets known as distressed securities — are offering to buy those claims immediately for cash, but at a sharp discount from their face value. With the latest round of big-ticket lawsuits, however, that quiet market has started to sizzle."
Hawkish Hoenig Still Says 'No' (CNBC via New York Times) "All year, Thomas M.Hoenig has been saying no. As the lone dissenter on the Federal Reserve committee that sets interest rates, Mr.Hoenig, the president of the Federal Reserve Bank of Kansas City, has been a persistent skeptic of just about everything the Fed’s chairman, Ben S.Bernanke, has done to try to stimulate the flagging recovery."
"Icahn Pulls Lions Gate Bid" (TheStreet) "Activist investor Carl Icahn has pulled his bid for Lions Gate Entertainment after the New York State Supreme Court ruled that director Mark Rachesky can keep his increased voting power."
Differing Views of QE2, Ahead of Fed Meeting (Bloomberg) "Some investors see a “conspiracy theory” that the central bank causes a stock rally on days of its purchases, Bank of America Merrill Lynch strategists led by Jeffrey Rosenberg said in a Nov. 2 report. While the report showed stocks rose on 15 of the 24 days the New York Fed bought Treasuries from Aug. 17 through the beginning of last month, Rosenberg said he’s skeptical of a direct relationship because of positive economic indicators on some days. "
Berlusconi Survives (Wall Street Journal) "Prime Minister Silvio Berlusconi narrowly won a confidence vote in the lower house of the Italian Parliament on Tuesday, surviving a crucial political and personal challenge, but seeing his ability to govern Italy crippled at a time when European leaders are facing major fiscal turmoil."