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from Anatole Kaletsky:

Why markets ignore good news from U.S. to focus on bad news from Europe

A trader watches the screen at his terminal on the floor of the New York Stock Exchange in New York

What’s spooking the markets?

One thing we can say for sure is that it is not the slightly weaker-than-expected retail sales that triggered the mayhem on Wall Street on Wednesday morning. Most U.S. economic data have actually been quite strong in the month since Wall Street peaked on Sept. 19.

So to find an economic rationale for the biggest stock-market decline since 2011, we have to consider two other explanations.

The first is the collapse of oil prices, down almost 30 percent since late June in response to Saudi Arabia’s apparent decision to wreck the economics of U.S. shale oil. Falling oil prices are generally beneficial for the world economy -- and for most businesses outside the energy sector.  But investors now fleeing from natural-resource stocks will take time to recycle their money into other industries, such as airlines, retailers and auto manufacturers. Until this rotation happens, broad stock-market indices are dragged down by the plunging oil shares, a process visible almost every day in the past two weeks, especially in the last hour of trading.

A trader watches the screen at his terminal on the floor of the New York Stock Exchange in New YorkIf falling oil prices were the main causes of the market setback, it would not be a big problem. There is, however, a far more worrying explanation: Europe. Not just the obvious weakness of the European economy, but the inability or unwillingness of European Union policymakers to agree on a sensible response.

from The Great Debate:

Is Ebola the real ‘World War Z?’ (Spoiler alert: It’s not)

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In 2006, I released a novel about a global zombie plague that drives humanity to the brink of extinction. While the zombies may have been fake, I tried to anchor the human response (political-military-economic-cultural) in reality. I studied the history of pandemics, natural disasters and industrialized warfare. I interviewed doctors, soldiers, journalists and someone who “has never gotten a check from the CIA” in an attempt to illustrate the fragile global systems that shield our species from the abyss. As a result, I’ve been repeatedly asked if the current outbreak of Ebola is the real-life incarnation of my novel. As much as any author would love to crow about how “I predicted this!”, this time, I’m happy to say, my fictional plague could not be more different from the truth.

It could be argued that there are some similarities between the initial Ebola outbreak in West Africa and my fictional virus. Early on, there were missed warnings, such as a U.S. intelligence group’s failure to mine data that was written in French. There was also an obvious lack of interest on the part of the industrialized world. Not only were the headlines already taken up by Islamic State and the war in Ukraine but, let’s be honest, ignoring the plight of Africans is shamefully commonplace in the First World.

from Global Markets Forum Dashboard:

Activist investors don’t wait for red to sell

Stocks bleeding red are generally a good play for a short seller, who is betting on falling values. Yet activist investors do not wait for rattled markets the likes of which befell markets on Wednesday to sell short a particular company’s stock. Embedded in their sales pitch are well-crafted theories that attempt to challenge Wall Street’s sell-side mentality and, with that, reap a potential cash windfall.

Sahm Adrangi, founder, Kerrisdale Capital Mgmnt

Sahm Adrangi, founder, Kerrisdale Capital Mgmnt

Sahm Adrangi, founder and chief investment officer of Kerrisdale Capital, is among a group of small social media savvy funds who pitch some of their research to the public. Before stocks sank on Wednesday, Adrangi had been pounding the media circuit to get his message out about satellite communications company Globalstar (GSAT), which, he says, has no equity value.

from Breakingviews:

Rampant market fear clarifies global divide

By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Suddenly, fear has overwhelmed greed. Yields on 10-year U.S. Treasury bonds slumped below 1.9 percent at one stage on Wednesday, and the 2 percent slide in the S&P 500 Index erased what remained of this year’s gains, although the index ended the trading day down just under 1 percent. It all augurs poorly for the expected end next month of the Federal Reserve bond-buying program. Yet the domestic economy has been steadily improving. Slowing growth elsewhere presents the bigger worry.

from Alison Frankel:

Keep Eric Cantor out of terror-funding case: U.S. Congress, Bank of China

Who would ever have predicted that convicted al Qaeda operative Zacarias Moussaoui would be more eager to provide testimony to help terror victims than former Virginia congressman and House majority leader Eric Cantor? Moussaoui, as I told you yesterday, has contacted the federal district court in Brooklyn, offering to provide information about al Qaeda funding to plaintiffs suing Arab Bank and other financial institutions. Cantor, meanwhile, has been subpoenaed in a different terror-funding case - accusing Bank of China of financing Palestinian Islamic Jihad - to testify about his meeting in Israel with Israeli Prime Minister Benjamin Netanyahu in August 2013. On Sept. 30, the U.S. House of Representatives' general counsel moved to quash the subpoena.

Lawyers for the House argued on Cantor's behalf that the subpoena is precluded by the Speech or Debate Clause of the U.S. Constitution, which is supposed to shield government officials from testifying about their actions as lawmakers. "It is difficult to overstate how crippling it would be to federal officials' efforts to carry out sensitive discussions with foreign officials if those discussions were to be readily exposed to discovery," the House quash motion said.

from Photographers' Blog:

A rescue at sea

Mediterranean Sea

By Darrin Zammit Lupi

A barely perceptible dot on the horizon, disappearing every few seconds behind the rolling waves, a rubber dinghy carrying a group of migrants is very easily missed if you don’t know where to look.

Handout photo shows a group of 104 sub-Saharan Africans on board a rubber dinghy wait to be rescued by the NGO Migrant Offshore Aid Station some 25 miles off the Libyan coast

The Migrant Offshore Aid Station (MOAS) ship Phoenix set off from the Italian island of Lampedusa the night before in the middle of a lightning storm and had, for the past five hours, been making its way towards the dinghy’s last known position.

from James Saft:

Fed magic fades as risk assets slide

Oct 15 (Reuters) - What matters isn't so much the proximate
cause of the recent downdraft in stocks, but the underlying
logic.

Ebola, European weakness and some bad data out of the U.S.
have all played their role in sparking a fall of more than 9
percent in the S&P 500 in less than a month. What's truly
remarkable isn't that there was bad news, but that this time the
bad news seems immune to the tonic of central bank promises.

from Breakingviews:

Qualcomm signals $2.5 bln belief in Bluetooth

By Dominic Elliott

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Qualcomm’s 1.6 billion pound ($2.5 billion) deal to buy Britain’s CSR sends a positive signal to rivals on Bluetooth. The U.S. chipmaker’s $120 billion market cap means the purchase isn’t a stretch - but it comes at a high price and an odd time.

from Reuters FYI:

Texas won’t leaf voters alone

Visitors view the autumn foliage of acer trees in the Old Arboretum at Westonbirt in southwest England October 14, 2014. REUTERS/Toby Melville

Visitors view the autumn foliage of acer trees in the Old Arboretum at Westonbirt in southwest England October 14, 2014. REUTERS/Toby Melville

 

Gallery: Fall - it's not just for screensavers anymore

Save yourself the three-hour leaf-peeping tour and check out Reuters pictures of beautiful fall foliage.

from Data Dive:

Finger pointing doesn’t bring back Iraq’s dead

Last night The New York Times released an astounding report detailing the U.S. military's discovery and subsequent cover-up of secret caches of chemical weapons in Iraq from 2003 to 2011. 

Almost immediately, partisans on the right took to the Web to vindicate President Bush's justification for the 2003 invasion, and just as quickly, those on the left rebutted the assertion.

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