Treasuries Dip as Equities Rise (Bloomberg) "Treasuries declined as Asian and European stocks gained, and before a report today that economists forecast will show improved U.S. factory orders. Investor demand for higher-yielding assets sent equities to levels not seen since 2008 and pushed gold and copper to record highs. An index of corporate debt yielded 2.49 percentage points more than Treasuries, the least in eight months, Bank of America Merrill Lynch data show."
"Deal or No Deal—What New Congress Might Actually Do"(CNBC) CNBC's John Harwood looks ahead to the next Congress: "The 112th Congress convenes this week with a surge of new Republican energy—and big questions about where that energy will go. The lame-duck Congress was surprisingly productive, but as the 112th Congress convenes there remain questions about the types of actions they will be able to take. Will that energy pour into renewed partisan warfare, with President Obama battling a Republican-led House infused with Tea Party fervor? That's what most of America's recent political history would suggest. Or will it go into a bold, bipartisan push for action on reducing America's long-term budget deficit, and perhaps overhauling the tax system at the same time?"
Obama Seeks to Broaden His Economic Coalition (Reuters) "President Barack Obama appealed to Republican congressional leaders on Tuesday to put politics aside and work to revive the U.S. economy. Speaking to reporters aboard Air Force One on his way back to Washington from a vacation in Hawaii, Obama said "we've started to make good progress" on the economy, adding: 'I expect to build on that progress when I get back.' In Washington, newly empowered Republicans in Congress were preparing challenges to Obama. Republicans made strong gains in November's U.S. congressional elections. They are set to take control of the House of Representatives from Obama's Democrats and increase their numbers in the Senate, with the 2012 U.S. presidential election on the horizon."
Buffet Locks Down a Rate (Bloomberg) "Warren Buffett’s Berkshire Hathaway Inc. sold $1.5 billion of mostly fixed-rate debt to retire floating-rate notes at a time when government bond yields are rising and the U.S. is showing signs of economic improvement. A unit of Buffett’s Omaha, Nebraska-based holding company issued $750 million of 4.25 percent, 10-year notes yesterday priced to yield 95 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. It also sold $375 million of three-year, 1.5 percent notes and the same amount of floating-rate debt yielding 33 basis points more than the three-month London interbank offered rate, the data show."
"Obama Talked With JPMorgan Executive About Top Post" (New York Times DealBook) "President Obama has approached William Daley, a former commerce secretary and a senior JPMorgan Chase executive, about the possibility of becoming the next White House chief of staff, Michael D. Shear and Jeff Zeleny of The New York Times reported on Tuesday, citing people familiar with the conversation. The hiring of Mr. Daley, the brother of Chicago’s outgoing mayor and a scion of the powerful Daley dynasty, is not imminent and depends on whether the president decides to keep his current chief of staff, Pete Rouse."
Inflation is Rising in Europe (New York Times) "Higher prices for food, oil and other commodities are starting to stoke inflation in the euro area, data released Tuesday indicated, while British residents got their first taste of higher taxes on retail goods and services. Annual inflation in the euro area jumped to 2.2 percent in December from 1.9 percent in November, according to an initial estimate from Eurostat, the European Union’s statistics agency. The release was significant because it means that inflation has breached the European Central Bank’s target of just below 2 percent for the first time since November 2008."