Today's Headlines

Bloomberg:
- Eliot Spitzer resigned as governor of New York, brought down by allegations that he patronized a ring of high-price prostitutes.
- Investors should boost holdings of mortgage-backed bonds to benefit form a rally to follow the Federal Reserve’s decision to purchase as much as $200 billion in mortgage debt, according to Lehman Brothers(LEH). The Lehman analysts advised holders to move their US mortgage-backed allocation from 3% underweight to 5% overweight of their portfolios. “These plumbing maneuvers to promote greater liquidity, followed by another round of Fed easing on March 18, create a base for improved market sentiment,” Lehman analysts led by Jack Malvey in NY said. With spreads on US mortgage-backed securities at record highs, investors should take advantage of cheap prices before the improved liquidity that will result form the Fed’s move, the analysts said.
- The SEC may let borrowers bid on their own auction-rate securities amid a surge in failed auctions that have increased debt costs for state and local governments. The SEC is preparing “guidance” that would permit issuer bids as long as they disclosed “certain facts related to price and quantity.” The SEC “anticipates that the guidance should remove any hesitancy on the part of broker dealers and auction agents to allow municipal insurers to bid.”
- ING Groep NV’s real-estate unit, the world’s largest real estate investor, may invest as much as $1 billion in commercial mortgage-backed securities this year because the potential returns are so high. “There is enormous opportunity for CMBS investment,” said Bill Krauch, head of global marketing. The difference in yield between US Treasuries and commercial mortgage-backed debt is now five times wider than in the 1998 Asian financial crisis, Krauch said.
- GO Capital Asset Management BV blocked clients from pulling cash from its Global Opportunities Fund, at least the seventh hedge fund in the past month forced to take steps to protect itself from market fluctuations.
- Drake Management LLC, the NY-based firm started by former BlackRock Inc.(BLK) money managers, may shut its largest hedge fund after a 25% decline last year, according to a letter to investors.
- Thornburg Mortgage(TMA), the “jumbo” home lender struggling to meet margin calls, more than doubled for a second day after Bear Stearns(BSC) upgraded its rating and said chances of survival have improved.
- Dong Energy A/S plans to spend as much as $10.3 billion on oil and wind-power projects in the next three years, citing CEO Anders Eldrup. The company is embarking on “historically big” investments in oil and gas exploration and new wind turbines.
- Bob Parker, deputy chairman of Credit Suisse Asset Management, says stocks ‘cheap’, commodities to decline. (video)
- Stock investors in the world’s biggest markets are growing more convinced equities will fall in the next six months, a survey of Bloomberg users showed.
- Apple Inc.(AAPL), striving to lure customers away from the BlackBerry e-mail device, said more than 100,000 developers have downloaded the kit to make programs for its iPhone since last week.
- Investor pessimism about US stocks surged to the highest since September 1998 last week, NY-based Investors Intelligence said. The proportion of newsletter writers who were bearish increased to 43.3% from 36.6% the prior week. Optimism fell the most on record to 31.1%.
- Freddie Mac(FRE), the second-biggest source of money for US home loans, said it has no plans to raise capital in a way that would dilute shareholder equity.
- Bear Stearns(BSC) rose the most in seven weeks in NY trading after CEO Schwartz denied again that the securities firm faces a cash shortage, saying the company’s “liquidity cushion” is sufficient to weather the credit-market contraction.
- OPEC may earn $927 billion from oil exports this year, the US government’s EIA said, raising its estimate 9%.
- The risk of US companies defaulting is falling, according to traders of credit-default swaps. Contracts on the Markit CDX North America Investment-Grade Index of 125 companies in the US and Canada dropped 1.5 basis points to 175.5, according to Phoenix Partners Group.

Wall Street Journal:
- US Real Estate Companies Turn to Mideast Investors.
- The fall of New York Governor Eliot Spitzer holds many lessons, and the press will surely be examining them in coming months. But don’t expect the press corps to delve into the biggest lesson of all – its own role as his enabler.

NY Times:
- Obama, Clinton Argue Over How to Define Winning.
- Aetna Inc.(AET), the third-largest US healthy insurer, plans an online service that uses a patient’s medical history to answer questions on treatments and symptoms, citing a company vice president.
- Spitzer Allegations Leave Women’s Groups ‘Betrayed.’

LA Times:
- Army to Turn Trash Into Power in Iraq. The water bottles, plastic foam plates and other trash discarded by American troops in Iraq’s mess halls may soon be serving double-duty – as an unlikely power source to illuminate barracks and power up laptops.

CNNMoney.com:
- Junked stocks that could fly again. The mortgage crisis has relegated the stocks of once high-flying industries to Wall Street’s scrap yard. But some of them may be ready to take off again.

NY Observer:
- ‘Money Honey’ Indeed! Maria Bartiromo Sells Book to Crown At Auction For About Half a Million.

Financial Times:
- Citadel Investment Group, the $20 billion Chicago hedge fund, has hired Kaveh Alamouti from rival Moore Capital to spearhead a push into global macro, the booming hedge fund strategy involving free-wheeling bets on currencies, markets and interest rates.