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Official
WHO Ebola toll near 5,000 with true number nearer 15,000 - (www.reuters.com) At
least 4,877 people have died in the world's worst recorded outbreak of Ebola,
and at least 9,936 cases of the disease had been recorded as of Oct. 19, the
World Health Organization (WHO) said on Wednesday, but the true toll may be
three times as much. The WHO has said real numbers of cases are believed to be
much higher than reported: by a factor of 1.5 in Guinea, 2 in Sierra Leone and
2.5 in Liberia, while the death rate is thought to be about 70 percent of all
cases. That would suggest a toll of almost 15,000.
Oil
Producers Cramming Wells in Risky Push to Extend Boom - (www.bloomberg.com) U.S.
shale producers are cramming more wells into the juiciest spots of their
oilfields in a move that may help keep the drilling boom going as prices
plunge. The technique known as downspacing aims to pull more oil at less cost
from each field, allowing companies to boost profit, attract more investment
and arrange needed loans to continue drilling. Energy companies see
closely-packed wells as their best chance to add billions more barrels of oil
to U.S. production that’s already the highest in a quarter
century. “We would be dealing with more than a decade of inventory,” said Manuj
Nikhanj, co-head of energy research for ITG Investment Research in Calgary. “If
you can go twice as tight, the multiplication effect is massive.”
2,447
Bottles of Wine on the Wall and State Plans to Dump Them All - (www.bloomberg.com) Christina
Turley’s father, Larry, produces California wine from vines that date back to the
late 1800s. Sought by collectors, several bottles may be dumped down a
Philadelphia sink. Pennsylvania plans to destroy 2,447 bottles seized from
Arthur Goldman, a Philadelphia-area lawyer who was charged this year with
illegally reselling wine. While he has agreed to penalties, he’s fighting the
jettisoning of his collection, which encompasses small-batch California
producers such as Turley Wine Cellars, Martinelli Winery and Kistler Vineyards.
For the authorities, destruction is the natural culmination of the case. For
Christina Turley and Regina Martinelli, a fifth-generation winemaker, it would
waste the products of years of devotion and passion.
Shale
Boom’s Allure to Wall Street Tested by Bear Market - (www.bloomberg.com) Falling
oil prices are testing investors’ commitment to the Wall Street-funded shale
boom. Energy stocks led the plunge earlier this month in U.S. equities and the
cost of borrowing rose. The Energy Select Sector Index is down 14 percent since the end of
August, compared with 3.8 percent for the Standard & Poor’s 500 Index. The
yield for 190 bonds issued by U.S. shale companies increased by an average of
1.16 percentage points. Investors’ sentiment toward the oil and gas industry
has “certainly changed in the last 30 days,” said Ron Ormand, managing director
of investment banking for New York-based MLV & Co. with more than 30 years
of experience in energy. “I don’t think the boom is over but I do think we’re
in a period now where people are going to start evaluating their budgets.”
‘Poker Player’ Putin Bluffed and Won, French
Envoy Says - (www.bloomberg.com) Vladimir
Putin has
outmaneuvered his opponents and humiliated Ukraine by continuing to back pro-Russian
separatists and flouting a cease-fire, making it crucial that sanctions on
Russia remain firm, France’s ambassador to the U.S. said. The Russian president
“has won because we were not ready to die for Ukraine, while apparently he
was,” Ambassador Gerard Araud said yesterday at a Bloomberg Government
breakfast in Washington,
in remarks he said represented his personal opinion. Echoing the view of other
European envoys in Washington, Araud expressed concern that the Ukraine
conflict has hit an impasse, leaving Putin the winner by default.
Living The Grecovery Dream: Two Jobless Parents,
Two Kids, One Cat All Living In A Car - (www.zerohedge.com) This
is in Greece (not the US), just so there is no confusion!! Squeezed between steering wheel, handbrake, door and dashboard, Katerina
reads in her history book, takes notes for school. Next to her, on the driver’s
seat, cat Eddy stares right in the camera lens. It may look like a cute
snapshot on a sunny day, if it wasn’t for a sad detail: a withering spring
stuck in a roll of toilet paper. A distinctive memory of a former normal
life that turned into a grim reality for a family of four. At night the
seat where Katerina sits during the day turns into a bed for her sister Fay. Cat Eddy
cuddles with Katerina on the back seat. Father Nikos and mother Maria sleep in
shifts on the driver’s seat. When the one parent is in the car, the other
spends the night on a bench of the park where the car has been parked, on a
side road of Irakleio suburb of West Athens. “It’s dangerous when it
gets dark,” Maria says “we have to watch out.” With both parents without a
job and all savings already spent, the family of four has been living in the
uncomfortable environment of an old car for the last two weeks. They
were evicted from the home they were renting due to a mountain of outstanding
debts to the landlord and utility companies.
McDonald’s
Gets More Expensive, Turning Off Some Diners - (www.bloomberg.com) Mike
Hiner used to take his grandsons to McDonald’s (MCD)when
they wanted a treat. With higher wage and food costs pushing up prices at the
Golden Arches, he’s increasingly taking them to IHOP, Denny’s and Chili’s
instead. “Those meals are the same price,” said Hiner, a 58-year-old geologist
in Houston. “And they’re better.” The loss of bargain-seeking customers like
Hiner underscores a growing challenge for McDonald’s Corp.: While the company
still offers several items for $1, its menu is quietly getting more expensive.
Oil
Workers Earning $179,000 Expose Norway to Crude Crash - (www.bloomberg.com) Norway, where oil helped create one of the world’s
most stable and prosperous societies, is among the most exposed to falling
crude prices. Though the blessings of energy wealth have hardly turned to a curse,
the industry’s labor costs, which saw the average offshore worker earn $179,000
last year, threaten to curb investment in new projects as oil tumbles. The
country has already been coping with 13 years of production declines from its
aging North Sea fields
and reduced revenue will imperil further developments to replace that oil.
Three projects led by state-owned Statoil ASA (STL), which is borrowing and selling assets to
cover dividend payments, are at risk of being delayed or shelved, said Jarand
Rystad, managing partner of Oslo-based consultant Rystad Energy.
FHFA
Said to Plan Steps to Ease Lending to Riskier Buyers - (www.bloomberg.com) Fannie Mae (FNMA),Freddie Mac and their regulator are nearing agreement
with mortgage issuers on efforts to boost lending and ease banks’ concerns that
they will get stuck with bad loans when borrowers default. The initiatives
include a consensus on when defaulted loans are so flawed that lenders must buy
them back from the two mortgage-finance companies, a key sticking point in
efforts to unlock credit, according to three people familiar with the
discussions. The steps are part of a broader push to increase lending after
banks had to repurchase billions of dollars of mortgages that were issued
during the housing bubble.
A
Scary Sentence From IBM ... - (www.businessinsider.com) "We
saw a marked slowdown in September in client buying behavior, and our results
also point to the unprecedented pace of change in our industry." CEO Ginni
Rometty said this in IBM's Q3 earnings announcement, which revealed tumbling revenue and profits
at the company. The statement is troubling because as a global provider of
business software and services, IBM is a bellwether of business spending. And a
boom in business spending is central to the bullish outlooks of many economists
and market strategists.
Leveraged
Money Spurs Selloff as Record Treasuries Trade - (www.bloomberg.com) When
markets are buckling and volatility is signaling a crisis, you sell what you
can, not what you want. That’s what happened last week on Wall Street, where
slowing economic growth in Europe, Ebola anxiety and escalating conflicts in
the Middle East and Ukraine tore through the calm with a force not seen in
three years. Loath to find out what their record holdings of corporate bonds
and leveraged loans were worth as liquidity thinned and markets slid,
professional traders turned to stocks and Treasuries to defuse risk. The result
was a frenzy. U.S. government debt volume surged
to an all-time high of $946 billion at ICAP Plc, the world’s largest
interdealer broker, more than 40 percent above the previous record.
Two
Female Japan Ministers Resign in a Day in Blow to Abe - (www.bloomberg.com) Japanese
Prime Minister Shinzo Abe rushed to appoint two new members of his cabinet
yesterday, after two female ministers were forced to resign as he confronts
some of the most difficult decisions since he took office. Trade and Industry
Minister Yuko Obuchi, 40, and Justice Minister Midori Matsushima, 58, quit over
allegations of financial impropriety. Abe picked Yoichi Miyazawa, a 64-year-old
man, for the trade position and Yoko Kamikawa, a 61-year-old woman and former
gender equality minister, for the Justice Ministry.
IBM
Plunges as CEO Abandons 2015 Earnings Forecast - (www.bloomberg.com) International Business Machines Corp. (IBM) plunged the most in more than four years
after abandoning an earnings forecast for 2015, as the company struggles to
transform fast enough to handle the shift to cloud computing. IBM said it will
provide an update on its projections in January, ditching a five-year plan to
boost profit. The shares tumbled as
much as 8.4 percent, dragging down the Dow Jones Industrial Average. Warren
Buffett,
IBM’s biggest shareholder, had as much as $1 billion of his investment wiped
out. While Chief Executive Officer Ginni Rometty had been banking on a strong
second half of the year, IBM instead faced weaker-than-expected software sales
and lower productivity in services in the third quarter. With technology
customers moving from owning hardware to storing data in the cloud, IBM is now
cutting more jobs, reducing its forecast for free cash flow and offloading an
unprofitable chip unit to Globalfoundries Inc.
Ebola
Front-Line Doctors at Breaking Point - (www.bloomberg.com) At 3:30 a.m. in the world’s biggest Ebola
treatment center, Daniel Lucey found the outbreak reduced to its essentials: patients
lying on mattresses on the floor and vomiting in the dark, visible only by the
wavering flashlight beam of a single volunteer doctor. “I don’t see a light at
the end of the tunnel,” said Lucey, a physician and professor from Georgetown Universitywho is halfway through a five-week tour in
Liberia with Medecins Sans Frontieres, the medical charity known in English as
Doctors Without Borders. “The epidemic is still getting worse,” he said by
phone between shifts.
OPEC
Finding U.S. Shale Harder to Crack as Rout Deepens
- (www.bloomberg.com) OPEC is resisting pressure to cut oil
production while demand slumps as it tests how low prices must go to make U.S.
shale oil unprofitable. As producers become more efficient, that floor is
sinking. The Organization of Petroleum Exporting Countries boosted output by
the most in 13 months in September, even as crude plunged into a bear market
and demand growth weakens to a five-year low, according to the International
Energy Agency. Saudi Arabia and Kuwait, the largest and third-largest members
of OPEC, indicated the price slump doesn’t warrant immediate production cuts,
the IEA said. While OPEC acted as a “swing producer” over the past decade,
responding to surpluses by cutting output, it’s now letting oil slide to see if
North American production can withstand lower prices, said Antoine
Halff,
head of the IEA’s oil industry and markets division. So far drillers are
showing no signs of cracking, with the U.S. government forecasting record
shale output in November, helping boost the nation’s crude supply to
the highest level since 1986.
Debt
Crisis Reawakens in European Bonds as Greece Roils Market - (www.bloomberg.com) European
government-bond traders would be forgiven for thinking they’d stepped back in
time to 2012. Today’s selloff in Greek securities, the biggest since July of
that year, triggered a schism in sovereign debt evocative of those days before
European Central Bank President Mario Draghi pledged to do whatever it took to
defend the euro. Yields on 10-year securities from Europe’s most-indebted
nations surged, led by Greece and sweeping up Portugal, Ireland and Italy. At
the same time, benchmark yields in the so-called core, which includes Germany
and France, tumbled to records as investors sought the safest assets.
Nurses
Say No Ebola Protocol Meant Tape to Cover Skin - (www.bloomberg.com) Texas
Health Presbyterian Hospital inDallas, where two health-care workers contracted Ebola after
treating a patient with the deadly illness, lacked protocols for dealing with
the virus and resisted employee calls for stricter isolation and sanitation
measures, a nurses union said. National Nurses United said there was inadequate
protective equipment for the nurses who initially cared for Thomas Eric Duncan,
the Ebola patient from Liberia who died in Dallas last week. The union said the
allegations came from nurses who were reluctant to be identified for fear of
retaliation.
Abnormal
bond market move signals bears capitulating - (www.cnbc.com) A
wild and historic move in the Treasury market Wednesday stunned traders and
signaled capitulation by some investors who have been clinging to bearish
positions. The dramatic buying and big swing in rates coincided with a swift
downdraft in stocks and was blamed on a combination of factors. The weakness in
Europe, worries Greece would exit its bailout, the possible breakdown of the AbbVie-Shire merger, Ebola concerns, and weak U.S. retail
sales data were all cited as factors for the jump in bond prices and slide in
yields. The yield on the 10-year slid to 1.86 percent in a quick move down—its
lowest level in intraday trading since May 2013—before later reversing to 2.1
percent in the biggest one day move since November 2008, according to
Jefferies. "We've had our shock and awe short-covering rally, and all
that, but something has changed," said David Ader, chief Treasury
strategist at CRT Capital.
As
US Politicians Consider Travel Bans, Istanbul Quarantines Hospital Of Suspected
Ebola Patient - (www.zerohedge.com) Istanbul's Marmar University Training and
Research Hospital is not accepting new patients after, as Daily Sabah reports,
a person suspected of being infected with Ebola has been quarantined. The
patient, who arrived by plane from Ivory Coast, is suffering high fever and
nausea. While Lagos, Nigeria was CDC Director Frieden's worst nightmare with
regard Ebola contagion, we suspect Istanbul is a close second with over 14
million people living there. This news comes as US politicians begin to
call for visa restrictions and travel bans from infected nations.
Oil
Slump Heaps Losses on Energy Debt in $50 Billion Glut - (www.bloomberg.com) Gobbling
up $50 billion of high-yielding U.S. junk-bond offerings by energy companies
this year may have seemed like a good idea when oil was above $100 a barrel and
yields were at record lows. With prices falling toward $80, bond buyers have
instead been saddled with more than $2 billion of lost market value and growing
concern that too much credit has been extended too fast amid America’s shale
boom. Prices on $1.6 billion of speculative-grade bonds sold by the upstart
exploration firm of former Chesapeake Energy Corp. chief Aubrey McClendon have
plunged as much as 19 percent since being issued in July. Another $1.1 billion
issued the same month by Paragon Offshore Plc are down as much as 28 percent.
Texas
college bans students from 'Ebola countries' - (www.cnbc.com) At
least two students from Nigeria who applied to a Texas college were told they
wouldn't be admitted because of Ebola. Kamorudeen Abidogun, a Texas man
originally from Nigeria, said he received two letters from Navarro College, a
two-year community college with a campus about 58 miles from Dallas. Abidogun
has five relatives in Nigeria who were applying to the school and who were
using his home in Richmond, Texas, as a U.S. mailing address, he told CNBC. The
college rejected the applications, citing confirmed Ebola cases in the country
as the reason for the admissions decision.
Venezuela
Bonds Fall as Harvard Team Says Default Likely - (www.bloomberg.com) Venezuela’s
bonds declined to a three-year low after oil fell and Harvard University
economists Carmen
Reinhart and Kenneth
Rogoff said
the South American country will probably default on its foreign debt. The price
on the country’s benchmark dollar bonds due 2027 tumbled 2.4 cents to 62.17
cents on the dollar at 1:45 p.m. in New York, the lowest level since October 2011. Yields
climbed 0.63 percentage point to 16.37 percent. Borrowing costs are surging as
oil prices fall and a shortage of dollars makes it harder for the government to
meet its citizens’ basic needs.
Oil
and Junk Don’t Mix as Worst Bonds Sink as Much as 19% - (www.bloomberg.com) If
you’re wondering why junk bonds keep selling off, consider this:Oil prices are tanking and energy companies now
account for a record proportion of the below investment-grade market. Debt of
high-yield energy companies has tumbled 4.6 percent since August, leading the
market down as the price of Brent crude futures plummeted to the lowest in
about four years. Some securities have fared much worse, like the 19 percent
plunge in oil and gas producer Samson Investment Co.’s bonds. “It’s been a
pretty sharp move,” said Matt Eagan, a fund manager at Loomis Sayles & Co. in Boston. “This is the first time in a long time where
a sector has seen a big setback.”
If
The Oil Plunge Continues, "Now May Be A Time To Panic" For US Shale
Companies - (www.zerohedge.com) Over
the past 5 years, the shale industry, fabricated or real reserves notwithstanding, has been a significant boon to the US economy
for four main reasons: it has been the target of billions in fixed investment
and CapEx spending, it has resulted in tens of thousands of high-paying jobs,
its output has been a major tailwind for the US trade deficit, and has
generally been a significant contributor to GDP (not to mention various
Buffett-controlled or otherwise railway corporations). And perhaps, most
importantly, it has become a huge buffer to the price of global oil, as the cost
curve of US shale is horizontal, with a massive 10,000 kbls/day available
within pennies of $85/bl.
