Today's Headlines

Bloomberg:

• Greek Budget Predicts Economy Will Shrink for Sixth Year. Greece’s economy will contract for a sixth year in 2013 as the government prepares further cuts to pensions, wages and social benefits to meet the terms of its bailout packages. Gross domestic product will shrink 3.8 percent next year after contracting 6.5 percent in 2012, according to the 2013 draft budget, e-mailed by the Finance Ministry in Athens and submitted to parliament today. This compares with a prediction in Greece’s March rescue agreement with the European Union and the International Monetary Fund that the economy would contract 4.8 percent this year before stabilizing in 2013.
• Analysts Cut Profit 52% as Europe Valuations Hit 2-Year High. Analysts are lowering estimates for European earnings growth by 52 percent, clashing with investors whose confidence in the European Central Bank helped send equity valuations to a 2 1/2-year high.  
• Global Factory Weakness Spreads as Debt Crisis Persists. Manufacturing from Europe to China contracted in September as the euro region’s fiscal crisis eroded investor confidence and clouded global growth prospects. A gauge of manufacturing in the 17-nation euro region was at 46.1, above an initial estimate of 46 on Sept. 20, Markit Economics in London said today. A reading below 50 indicates contraction. A Chinese factory index was at 49.8 for September, a statistics bureau report showed.  
• U.S. Households Face Tax Increase From 2013 Fiscal Cliff. U.S. households are facing an average tax increase of $3,446 in 2013 if Congress doesn’t avert the so- called fiscal cliff, the nonpartisan Tax Policy Center said in a study released today. The top 1 percent of households face some of the largest tax increases in 2013 and would see their after-tax incomes fall by 10.5 percent if Congress does nothing. That would translate to an average tax increase of $120,537 for that group. A typical middle-income household earning between about $40,000 and $60,000 would face a tax increase of about $2,000. “This is a very large tax increase,” Donald Marron, the center’s director, told reporters in Washington today. If Congress does nothing, tax rates on income, capital gains, dividends and estates would increase, and the alternative minimum tax would spread to 21.7 million households, up from 4 million this year. The top statutory tax rate on ordinary income would reach 39.6 percent, up from 35 percent, and the top rate on capital gains would be 23.8 percent, up from 15 percent. A 2 percentage point payroll tax cut is set to expire at the end of 2012.
• Jobs Outlook Seen Weak as U.S. Companies Reporting Cost Cuts. Weakening demand is forcing new and accelerated cost reductions at companies from Bank of America Corp. and Hewlett-Packard Co. (HPQ) to Staples Inc. (SPLS) and Eastman Kodak Co. (EKDKQ), dimming the outlook for an already struggling U.S. labor market. Sales for businesses in the Standard & Poor’s 500 Index fell 0.9 percent from a year earlier in July through September, the second consecutive quarterly drop and biggest decline since 2009, according to analyst forecasts compiled by Bloomberg. A 1.2 percent gain projected for October-December still is smaller than the 5.4 percent rise in this year’s first three months.   
• Manufacturing in U.S. Expands Unexpectedly as Orders Rise. The Institute for Supply Management’s factory index rose to 51.5 last month from 49.6 in August, the Tempe, Arizona-based group said today. Readings above 50 show expansion, and the September measure exceeded the most optimistic forecast in a Bloomberg survey.  
• Bernanke Says Fed to Keep Rates Low Even as Growth Rises. “We expect that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economy strengthens,” Bernanke said today in a speech in Indianapolis. Policy makers’ forecast to hold the main interest rate near zero until at least mid-2015 “doesn’t mean that we expect the economy to be weak through” that year. 
• Google(GOOG) Passes Microsoft’s(MSFT) Market Value as PC Loses to Web. Google Inc. has surpassed Microsoft Corp. to become the world’s second-largest technology company as computing over the Internet reduces demand for software installed on desktop machines. 

Wall St. Journal:

• Is France Really Spain in Disguise? Having taken over from Greece, Spain’s economic trauma has had most of the airplay over the past few months. Is it France’s turn next?  
• SAC Portfolio Manager Placed On Leave.

CNBC: 

• Euro Zone Factory Data Flag ‘New Recession’. Euro zone manufacturing put in its worst performance in the three months to September since the depths of the Great Recession, with factories hit by falling demand despite cutting prices, a business survey showed on Monday — pointing to a new recession. Factories helped lift the 17-nation bloc out of its last recession, but the survey suggests a downturn that began in smaller periphery countries has taken root in core members Germany and France. "Despite seeing some easing in the rate of decline last month, manufacturers across the euro area suffered the worst quarter for three years in the three months to September," said Chris Williamson, chief economist at data collator Markit. "The sector will act as a severe drag on economic growth. It therefore seems inevitable that the region will have fallen back into a new recession in the third quarter."   
• 'Disappointing Earnings' Season Ahead: Pro.

Zero Hedge:

• Presenting Einstein's Definition Of Insanity In A Taxpayer Funded Suit. 
• European Car Sales Datapoints.   
• Euro-Zone 'Misery' Has Never Been Higher.  
• Goldman(GS) Lowers Q3 GDP Forecast Again, From 1.9% To 1.8%. 
• Santelli On QEternity: "Deflation Vacation Or Inflation Gestation". (video)

Business Insider:

• Experts Believe Russia Is Bankrolling A Plan To End Shale Gas.  
• This Is The Devastating Ad Republicans Are Using To Hammer Obama On Libya. (video) 
• Some Time Soon Earth Will Enter A New Ice Age.  
• And Now Let Us Gasp In Horror At The Dismal Economic Situation In Spain.  
• We're Getting Close To A Real Freakout About France... (graph) 
• Car Sales Collapse In Spain And France. 
• Iran Reported To Have Given Syrian Regime Up To $10 Billion.
• CHART OF THE DAY: The Divergence Between Stocks And Earnings Guidance Is Driving The Bears Absolutely Crazy.

Reuters:

• Greece says troika wants more detail on austerity cuts. 
• Germany says banking union won't happen by start of 2013.

Telegraph:

• Spanish banks will need up to €105bn, warns Moody's. Fears for Spain escalated after rating agency Moody’s warned that the country’s stricken banks may need almost twice as much capital as the official estimate and Catalan’s separatists stepped up their rhetoric against Madrid. 
• G7: Europe will tell US to deal with 'fiscal cliff'. Europe will tell the US, Japan and Canada next week that it is acting to resolve its sovereign debt crisis, but that US fiscal policy and slowing growth in Japan and China also pose risks to the global economy, according to reports. 

El Mundo:

• Spain Considers Tax on Stock Market Trades, Energy. Spain's Budget Minister Cristobal Montoro considers in 2013 introduction of tax on stock market trades, new "green" taxes on energy and reform of corporate tax.