Zero Hedge
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Frontrunning: October 21

  • Total CEO de Margerie killed in Moscow as jet hits snow plough (Reuters)
  • China GDP Growth Rate Is Slowest in Five Years (WSJ)
  • Oil at $80 a Barrel Muffles Forecasts for U.S. Shale Boom (BBG)
  • Carney Faces Scrutiny on Worst Payments Outage Since 2007 (BBG)
  • Ebola crisis turns a corner as U.S. issues new treatment protocols (Reuters)
  • Gold Buying Rebounds in India on Diwali Jewelry Sales (BBG)
  • China-backed hackers may have infiltrated Apple's iCloud (Reuters)
  • Greece Said to Seek Recycling of Bank Funds for Exit (BBG)
  • Another merger-arb blows up: AbbVie to Pay Shire $1.64B Fee Over Nixed Merger (AP)
  • Because the market is unrigged: Forex-Rigging Fines Could Hit $41 Billion Globally (BBG)
  • Sears Seeks New Cash Via Two Paths (WSJ)
  • Oil Slump Rings Alarm Bells for Nigeria as Elections Loom (BBG)
  • SEC Is Steering More Trials to Judges It Appoints (WSJ)
  • Hong Kong leader indicates possible concession ahead of talks (Reuters)
  • Government Watchdog Recommends Review of Firm Facing Fraud Allegations (WSJ)
  • For More Teens, Arrests by Police Replace School Discipline (WSJ)
  • Staples says probing possible payment card data breach (Reuters)


Overnight Media Digest


* China's economy grew at its slowest pace for five years in the third quarter, suggesting the government's targeted easing measures to boost economic growth haven't yielded expected results. (

* French oil company Total SA said Chairman and Chief Executive Christophe de Margerie died Monday in a plane crash at a Russian airport. (

* The U.S. Government Accountability Office on Monday made a rare recommendation that the Department of Homeland Security consider stripping a $210 million contract from a major contractor, delivering a blow to the private company that once carried out most background security checks for the government. (

* Samsung Electronics Co said Tuesday the U.S. National Security Agency approved a number of its mobile devices for use by government officials to carry classified information, a positive step for the smartphone maker's struggling mobile division. (

* The Securities and Exchange Commission is increasingly steering cases to hearings in front of the agency's appointed administrative judges, who found in its favor in every verdict for the 12 months through September, rather than taking them to federal court. (

* Sears Holdings Corp is again turning to billionaire CEO Edward Lampert for funds, as the struggling retailer shores up its balance sheet ahead of the holiday season and seeks to reassure vendors worried about its health. (

* CVS Health Corp is offering a prescription-drug plan that charges patients more if they buy their medications at pharmacies that sell tobacco products, a plan that could benefit the company's own network of drugstores. (

* Inc and CBS Corp's Simon & Schuster publishing arm have reached a new multi-year print and digital contract, a pact that comes as the online retailer continues difficult negotiations with Hachette Book Group. (



Bank of England Governor Mark Carney launched an independent review on Monday into what is the worst disruption of Britain's banking payment system in seven years.

British Prime Minister David Cameron is under pressure by members of his own Conservative party and harried by the anti-EU UK Independence party to formulate a policy to tackle the issue  of curbing immigration - and fast. However, as the rest of Europe is in no mood to rip up the rules that allow freedom of movement within the European Union, the British prime minister risks angering everyone while pleasing no one.

An overnight fire at one of UK's biggest power stations has cut capacity to generate electricity, however the government on Monday insisted that there was no risk of blackouts during winter.
The head of U.S.-based pharma company AbbVie Inc, which had dropped its support last week for a $55 billion takeover of UK drugmaker Shire PLC, blamed the  U.S. Treasury for destroying the deal as both the companies took the final step to nullify the deal.



* A slowing in the pace of growth, partly by design, has made assessing the Chinese economy and predicting its prospects difficult. Chinese inflation is at its weakest levels in nearly five years and foreign investment is contracting. The overall economy, though, continues to chug along at a steady pace. (

* More than 14 million vehicles by 11 automakers that contain defective air bags made by Japan's Takata Corp have been recalled. At the heart of the defect is a faulty propellant that is intended to burn quickly and produce gas to inflate the air bag but instead is too strong and can rupture its container, shooting metal parts into the cabin. (

* Trinity Industries Inc, the highway guardrail maker accused of selling systems that can malfunction during crashes and slice through cars, was found by a Texas jury on Monday to have defrauded the federal government and as a result may need to pay $525 million in damages. (

* Wall Street's main regulator on Monday stepped up his campaign to improve the ethical culture of large banks. William C. Dudley, president of the Federal Reserve Bank of New York, told bankers assembled at the New York Fed that continued ethical lapses would be a sign that their institutions were too big to manage - and that they might need to be reduced in size. (

* Apple Inc's biggest cash cow, the iPhone, is gaining weight. Sales of iPhones, including the new, big-screen iPhone 6 models released last month, helped carry Apple to a record-breaking quarter and offset slowing sales of one of Apple's other major products, the iPad, the company announced Monday. (




** The Conservative government is weighing changes to its key income-splitting promise that would respond to critics who say the tax cut would mostly benefit well-off Canadians. Conservative sources say the notion of capping access to the tax cut so that it is less available to higher-income Canadians is under consideration. (

** A company's willingness to become a sponsor of the 2015 Toronto's Pan American/Parapan Games will be considered in the awarding of a new security contract, according to a request for proposals document issued by the TO2015 organizing committee. (

** Canada is looking at slapping duties on iconic U.S. products ranging from California wine to ketchup after the World Trade Organization found the country's meat-labelling laws offside for a third time in five years. (


** Toronto Mayor Rob Ford is once again accused of breaking city rules after he was kicked out of three advance polling stations late last week. (

** Evan Siddall, the president of Canada Mortgage and Housing Corp, acknowledges that there may be a "data gap" when it comes to the degree of foreign ownership in the marketplace, as debate swirls over whether overseas buyers are inflating house prices in markets like Vancouver and Toronto. (

** Questions from the progressive conservatives about the possible sale of public assets and a government loan to a charity to expand a medical research center dominated the return of the Ontario legislature on Monday. (




- Beijing Tongchuang Jiuding Investment Management Co Ltd, a private equity firm, recently said it invested 3.64 billion yuan ($594.43 million) in Tianyuan Securities, making Tongchuang the first PE company to hold stock in a brokerage in China.


- China plans to publish the first regulations on the online insurance industry by the end of this year, according to a document obtained by the newspaper from authorities who are familiar with the matter.


- Information transparency is of great importance for the accountability of the Chinese government and is fundamental to the rule of law, the newspaper said in an editorial.


- The dean of the Executive Master of Business Administration (EMBA) course at Fudan University said student enrolment has fallen 10 percent after the Chinese government rolled out a series of anti-corruption campaigns, including banning government officials from using public funding to take EMBA courses.


- The rule of law has the power to push China going forward. The ongoing fourth Plenary Session of the 18th Central Committee of the ruling Communist Party is a historically important moment to realize this goal, the government's mouthpiece said in an editorial on Tuesday.


The Times

SIGNALS OF DECLINE MOUNT FOR RAIL ROUTE The TransPennine Express is a microcosm of the British railway industry, at once enjoying unprecedented growth but with old, overcrowded trains that create a bar to economic progress. It is the railway that lives up to only half its name. Its core route is transporting people across the Pennines between Leeds and Manchester, but it does so at non-express average speeds of 40mph. ( CGI EXPANSION GIVES WALES HIGH-TECH JOBS BOOST The burgeoning Welsh high-tech sector is set for a major boost after CGI Group Inc, the Canadian company that bought Logica, announced plans to create 620 skilled jobs in south Wales. CGI, which is the largest tech employer in the region with 900 employees, has announced plans to create hundreds of positions over the next five years after receiving a 3.2 million pound grant from the Welsh Government. (

The Guardian


David Walker, appointed chairman of Barclays Plc in the wake of the Libor-rigging scandal in 2012 said on Monday that big fines on banks were making it harder for the industry to win back public trust. He also suggested fines were being levied for activities that in the past might have been regarded as acceptable, though he acknowledged past conduct issues needed to be dealt with. ( FORMER JJB SPORTS CHIEF FAILS TO GIVE EVIDENCE AT 1 MLN STG FRAUD TRIAL Christopher Ronnie, former chief executive of JJB Sports Plc, accused of a 1 million pounds ($1.62 million) fraud has chosen not to give evidence in his defence at his trial. Ronnie was warned by the judge that jurors may "draw such inferences as appear proper" by his failure to take to the witness box. Ronnie is accused of receiving three payments from two sporting goods companies and failing to declare them to JJB's board of directors. Southwark crown court heard he used some of the cash to buy property in Florida. It had been anticipated that he would give evidence in his defence, but his barrister, Jim Sturman QC, told the jury on Monday: "We are calling no evidence at all for Ronnie." (

The Telegraph PUBLIC VOTE ON EU MEMBERSHIP WOULD 'RESOLVE UNCERTAINTY' FOR BUSINESS, SAY CONSERVATIVES A referendum on Britain's membership of the European Union would end companies' concerns over the country's increasingly fractious relations with Brussels, according to Matthew Hancock, Business Minister. Speaking at a CBI event on Monday about Britain's industrial strategy, Hancock denied that the Conservatives' pledge to put the decision on EU membership to voters would create problems for companies. ( EUROZONE STARTS QE-LITE AS CURRENCY BLOC FACES FRESH CRISIS The European Central Bank (ECB) has begun purchases of some French assets, in an attempt to revive a flagging eurozone. Monday's purchases marked the start of the covered bond purchase programme (CBPP3), and is one of three new tools intended to stimulate the euro area economy. By buying covered bonds - bonds backed by underlying loans - the ECB intends to expand its balance sheet, and boost demand in the region. (

Sky News

ROYAL MAIL AND AMAZON CREATE 32,000 XMAS JOBS More than 30,000 temporary jobs are to be created for the Christmas postal rush, it has been announced. Royal Mail Plc said it would take on 19,000 additional workers and online retailer Amazon Inc wanted 13,000 staff. Privatised last October, Royal Mail said the jobs will start in the middle of November and end in January, with the peak staffing period in December. The roles will be in support of the company's 124,000 full-time sorting and delivery personnel. (

The Independent


Greene King and Spirit Pub Company Plc have agreed a 723 million pound takeover to create a pub company with the highest sales in Britain. Together the two will own just over 3000 pubs nationwide, which places them behind rivals Enterprise with 5500 and Punch with 4000. (

GOOGLE COMMITS EXTRA $25M TO EUROPE'S TECH START UPS Google Inc has committed a further $25 million to invest in Europe's tech start ups, with the head of the search giant's venture capital arm revealing the company could be on the verge of investing in a London start-up. Bill Maris, who founded Google Ventures in 2009, revealed that the size of Google Ventures Europe's inaugural fund has been raised from $100 million to $125 million. The European arm was announced in July and is based in Clerkenwell. (

SHIRE CFO LEAVES FOR SEVERN TRENT AFTER ABBVIE BUYOUT FALLS THROUGH FTSE 100 pharmaceuticals giant Shire Plc has had its finance director poached by water firm Severn Trent Plc, days after the collapse of its $55 billion by US rival AbbVie Inc. ( BALFOUR BEATTY WANTS 'EXTRA 50 MILLION STG' TO FINISH WEST HAM STADIUM CONVERSION Taxpayers could have to find tens of millions more to fund the conversion of the Olympic Stadium into West Ham United 's home as building firm Balfour Beatty Plc presses for more cash. Balfour Beatty - hit by a string of calamitous profit warnings and without a chief executive - won the deal to convert the stadium with a bid of 154 million pounds. But according to the industry website Construction Enquirer, Balfour has been pushing for around 200 million pounds to complete the deal due to the technical complexity of the contract in a series of meetings with the client. Sources told the Enquirer that builder Balfour Beatty is pushing for up to 50 million pounds more to complete the job. ( (


Fly On The Wall Pre-Market Buzz


Domestic economic reports scheduled for today include:
Existing home sales for September at 10:00--consensus up 1% to 5.1M rate



Belden (BDC) upgraded to Buy from Hold at Stifel
Brandywine Realty (BDN) upgraded to Outperform from Market Perform at Wells Fargo
Cabot Oil & Gas (COG) upgraded to Outperform from Market Perform at Bernstein
EOG Resources (EOG) upgraded to Buy from Neutral at Guggenheim
Eagle Materials (EXP) upgraded to Buy from Hold at Stifel
Halliburton (HAL) upgraded to Buy from Neutral at Guggenheim
Pioneer Natural (PXD) upgraded to Buy from Neutral at Guggenheim
Post Holdings (POST) upgraded to Buy from Neutral at Goldman
Rouse Properties (RSE) upgraded to Buy from Hold at MLV & Co.
TECO Energy (TE) upgraded to Equal Weight from Underweight at Barclays


AbbVie (ABBV) downgraded to Neutral from Buy at Guggenheim
BHP Billiton (BHP) downgraded to Hold from Buy at Jefferies
Bank of Marin (BMRC) downgraded to Market Perform from Outperform at Keefe Bruyette
Consolidated Edison (ED) downgraded to Underweight at Morgan Stanley
HCP (HCP) downgraded to Hold from Buy at Jefferies
IBM (IBM) downgraded to Hold from Buy at Evercore
Inland Real Estate (IRC) downgraded to Underperform from Neutral at BofA/Merrill
Universal Forest (UFPI) downgraded to Neutral from Buy at Sterne Agee


American Axle (AXL) initiated with a Neutral at Susquehanna
American Eagle (AEO) initiated with an Outperform at BlueFin
Autoliv (ALV) initiated with a Neutral at Susquehanna
BorgWarner (BWA) initiated with a Positive at Susquehanna
CONE Midstream (CNNX) initiated with an Overweight at Barclays
Dana Holding (DAN) initiated with a Neutral at Susquehanna
Delphi Automotive (DLPH) initiated with a Positive at Susquehanna
Ford (F) initiated with a Neutral at Susquehanna
General Motors (GM) initiated with a Neutral at Susquehanna
Lear (LEA) initiated with a Neutral at Susquehanna
Liberty TripAdvisor (LTRPA) initiated with an Outperform at Oppenheimer
Medley Management (MDLY) initiated with a Buy at Gilford Securities
Medley Management (MDLY) initiated with a Neutral at Goldman
Medley Management (MDLY) initiated with an Outperform at Keefe Bruyette
PC Connection (PCCC) initiated with a Neutral at B. Riley
PCM, Inc. (PCMI) initiated with a Buy at B. Riley
RealNetworks (RNWK) initiated with a Buy at B. Riley
Retail Opportunity (ROIC) initiated with a Market Perform at Wells Fargo
Rexford Industrial (REXR) initiated with a Buy at MLV & Co.
Tenneco (TEN) initiated with a Positive at Susquehanna
Textron (TXT) initiated with an Outperform at Wells Fargo
TripAdvisor (TRIP) initiated with an Outperform at Oppenheimer
Twitter (TWTR) initiated with a Neutral at Citigroup
Visteon (VC) initiated with a Positive at Susquehanna


AbbVie (ABBV), Shire (SHPG) announced termination of proposed merger. AbbVie will pay Shire a $1.64B break up fee
AbbVie (ABBV) announced new $5B stock repurchase program, raised dividend nearly 17% to 49c per share
Total (TOT) confirms death of CEO Christophe de Margerie. de Margerie was killed in a private plane crash at Vnukovo Airport in Moscow, following a collision with a snow removal machine
Chipotle (CMG) sees FY15 low to mid-single digits comparable restaurant sales gains
DISH Network (DISH) announced that Monday night Turner Networks (TWX) removed Boomerang, Cartoon Network, CNN, CNN en Español, HLN, truTV and
Turner Classic Movies from the DISH programming lineup. The two companies have been unable to negotiate the terms of a renewed distribution agreement
Rhino Resources (RNO) lowered quarterly dividend to 5c per share from 44c per share


Companies that beat consensus earnings expectations last night and today include:
Apple (AAPL), Customers Bancorp (CUBI), Lexmark (LXK), Regions Financial (RF), Carlisle (CSL), Signature Bank (SBNY), Steel Dynamics (STLD), First Defiance Financial (FDEF), Helix Energy (HLX), Celanese (CE), East West Bancorp (EWBC), BancorpSouth (BXS), Healthstream (HSTM), Texas Instruments (TXN), Rent-A-Center (RCII), Rambus (RMBS), Illumina (ILMN), Hexcel (HXL), Cadence Design (CDNS), Washington Trust Bancorp (WASH), ServisFirst (SFBS), Chipotle (CMG)

Companies that missed consensus earnings expectations include:
BBCN Bancorp (BBCN), GulfMark Offshore (GLF), Steel Dynamics (STLD), Potlatch (PCH), Kaiser Aluminum (KALU), Ultra Clean (UCTT), Zions Bancorp (ZION), Wilshire Bancorp (WIBC)

Companies that matched consensus earnings expectations include:
Brown & Brown (BRO), Packaging Corp. (PKG), Werner (WERN)


Staples (SPLS) may be latest retailer to be hacked, Krebs reports (TGT, HD)
Lawyers for Ackman, Valeant (VRX) say Allergan (AGN) CEO oversaw campaign to discredit Valeant, Reuters reports
Actavis (ACT), Sanofi (SNY) among bidders for Omega Pharma, Bloomberg reports (PRGO)
Yahoo (YHOO) in talks to acquire BrightRoll, TechCrunch reports
Apple (AAPL) iCloud may have been attacked by Chinese hackers, Reuters reports
Apple (AAPL) to supply more iPhone 6 Plus to satisfy China demand, DigiTimes reports
Investigators say plough driver in Total (TOT) crash was inebriated, Reuters says


CEL-SCI (CVM) announces proposed offering of common stock, warrants
Tesoro Logistics (TLLP) 20M share Secondary priced at $57.47