Good morning New York,
FT ALPHAVILLE
Greenspan's dilemma revived again: Izzy notes that the famous dilemma keeps resurfacing, but wonders... since we know what happened last time we ignored the benign inflation issue, perhaps the best path to follow this time is a different one?
NEWS
Brussels warns Spain and Italy on 2014 budgets: Brussels has warned Spain and Italy that their budget plans for 2014 may not comply with the EU's tough new debt and deficit rules, a move that could force both countries to revise their tax and spending programmes before resubmitting them to national parliaments. (Financial Times)
Disappointing growth figures in the eurozone and Japan driven by weak export numbers have dashed hopes that a global economic recovery would gather pace in the second half of the year. Growth in the eurozone faltered in the third quarter, expanding 0.1 per cent following growth of 0.3 per cent in the second quarter. In Japan, the rate of growth roughly halved to an annualised rate of 1.9 per cent. (Financial Times)
Iran has sharply slowed down the expansion of its nuclear programme over the past three months, the international nuclear watchdog said on Thursday, providing a potential boost to ongoing nuclear talks with Tehran. (Financial Times)
Investors in Fannie Mae and Freddie Mac could accept less than full value for their preferred shares in a mooted restructuring plan for the bailed out US housing finance agencies, says one of the plan's architects. (Financial Times)
Warren Buffett's Berkshire Hathaway has taken a $3.7bn stake in ExxonMobil, handing a vote of confidence from one of the world's most famous investors to a company that has underperformed relative to its smaller peers in the US oil industry. The purchase, disclosed in a regulatory filing late on Thursday, was funded in part by the sale of $500m of Berkshire's shares in Exxon's rival, ConocoPhillips. (Financial Times)
Moody's has cut the credit ratings of big US banks including Goldman Sachs, Morgan Stanley and JPMorgan Chase, after deciding that the federal government is less likely to bail the financial institutions out if they get into future difficulties. They had the ratings on their long-term senior unsecured debt lowered one notch to Baa1, Baa2 and A3, respectively. (Financial Times)
"Top U.S. hedge fund managers in the third quarter zoned in on the consumer sector, with investment plays ranging from Sotheby's, a high-end auction house that caters to millionaires, to J.C. Penney, the struggling department store chain." (Reuters)
"Activist investor Carl Icahn disclosed Thursday that he owned about 3.88 million shares of technology giant Apple at the end of September, a regulatory filing showed.Icahn's stake in the company at the end of the third quarter was worth about $1.85 billion." (Reuters)
ABG Shipyard, the Indian group, has told shareholders that "problems" servicing its loans in a timely manner have led it to seek a debt restructuring agreement with its lenders. ABG told the stock exchange that its banks are "supportive of the restructuring", which it asked for after its financial position weakened and it had "problems in servicing its debt in a timely manner." (FastFT)
"A wrong-way bet on global oil prices has hit some of the crude market's most high-profile investment firms, including hedge funds run by former Goldman Sachs traders, worsening what has been a dismal year for commodity-fund returns. Wagers that the gap between Brent and West Texas Intermediate crude-oil prices would narrow were upended when the "spread" between these two prices instead diverged during September and October." (WSJ)
"China's benchmark money-market rate jumped the most in almost five months as the central bank drained cash from the financial system for a second week." (Bloomberg)
Markets: Japanese equities have hit a six-month high as investors around the world cheer the prospect of more loose monetary policy from the Federal Reserve. But while Asian and US bourses notched up strong gains in the wake of testimony from Janet Yellen, the nominee for chairman of the Federal Reserve, European investors are showing less exuberance. The FTSE 100 is up just 0.3 per cent, while France's CAC 40 and Germany's Xetra Dax are both marginally lower. That follows a punchy end to the week on Asian bourses, with Japan's Nikkei 225 rising 2.1 per cent to its highest level in six months amid a 1.2 per cent rally for the FTSE Asia Pacific benchmark. Ms Yellen reassured investors by striking a relatively dovish tone at her confirmation hearing before the Senate banking committee, mounting a robust defence of the Fed's quantitative easing programme and telling lawmakers it was "imperative to do what we can to promote a strong economic recovery". But the enthusiasm has found little follow-through this morning in Europe, where investors are still worried about the outlook for growth. (Financial Times)
