The Closer | FT Alphaville

The Closer

ROUND-UP

US stocks fell, insert fiscal cliff explanation here. The S&P 500 fell 0.2 per cent to close at 1,407.05. Gold fell below $1,700 a troy ounce (Financial Times).

Republicans are fighting against including dividend or capital gains tax increases in any fiscal cliff deal. “We are opposed to raising rates on investment income,” one senior aide to House Republican leader said, amid continued clashes on the tax element of an agreement on averting the cliff. Companies have reacted to the prospect of rising dividend tax rates by rushing out investor payouts early, in 2012 rather than 2013 (Financial Times). President Barack Obama has meanwhile said that a deal must include increased tax rates for higher earners, setting himself against the latest House GOP plan which rules out any such tax rise. “When you look at the math, it doesn’t work,” Obama told Bloomberg TV (Wall Street Journal, Bloomberg TV).

US bank revenues have posted their largest gain in three years. Revenues rose 3 per cent on a year-on-year basis in the third quarter, according to FDIC data. Traditional banking businesses also now account for more profit than releasing loan-loss reserves, again for the first time in three years (Wall Street Journal).

The FBI has arrested a former Rochdale trader whose Apple trades almost brought down the broker. A criminal complaint alleges that David Miller bought Apple stock for himself ahead of an October earnings announcement and reported the trades as coming from a customer. Rochdale sold the stock for a $5m loss after Apple’ share price fell (Reuters, Wall Street Journal).

The Fed is considering pushing banks to issue more long-term debt. The idea, which would oblige banks to hold minimum levels of long-term debt, “did not immediately suggest any unfavourable unintended consequences, thereby perhaps strengthening its appeal as a near-term policy priority,” said Dan Tarullo, the Fed’s main official for financial regulation. The move would follow in the footsteps of other proposals to make failing banks easier to break apart and wind down (Financial Times).

Disney has signed an exclusive distribution deal with Netflix. The agreement, which starts in 2016, will give Netflix streaming rights to Disney’s stable of TV and movies, including Pixar, Marvel and recently-acquired Lucasfilm, home of the Star Wars franchise. Netflix shares rose more than 12 per cent after the deal’s announcement (Reuters).

Shipping lines have diverted their cargoes to Mexico after port strikes at Los Angles and Long Beach. Maersk Line and Hapag-Lloyd both said they had moved some sailings to Mexican ports. Companies are also slowing down shipping currently moving across the Pacific in response to the strike (Financial Times).

FURTHER FURTHER READING

- A fresh IMF paper on safe assets and shadow banking.

- ANOTHER paper on Target2 balances in the eurozone. A really interesting one.

- Robots stealing our jobs, dolphin edition.

- Pimco patents a GDP-weighted sovereign bond index. Matt Levine weighs in.

- A market monetarist flies to Iceland, by way of Singapore.

- “And even Warren Buffett can’t consistently outperform the market any more…”