Today's Headlines

Bloomberg:

- The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive. The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more. William Isaac, chairman of the Federal Deposit Insurance Corp. from 1981 to 1985, has called fair value “extremely and needlessly destructive” and “a major cause” of the credit crisis.

- World leaders agreed on a regulatory blueprint for reining in the excesses that fed the worst financial crisis in six decades and pledged more than $1 trillion in emergency aid to cushion the economic fallout. The Group of 20 policy makers, meeting in London, called for stricter limits on hedge funds, executive pay, credit-rating companies and risk-taking by banks. They also boosted the resources of the International Monetary Fund and offered cash to revive trade to help governments weather the economic and social turmoil. They sidestepped the question of whether to deliver more fiscal stimulus in their own economies.

- Fixed mortgage rates in the U.S. fell to a record low for the second consecutive week, signaling that Federal Reserve Chairman Ben Bernanke’s effort to spur the housing market is gaining traction. The 30-year rate dropped to 4.78 percent from 4.85 percent a week earlier, the lowest since records began in 1971, Freddie Mac said today in a statement. Rates are falling to historic lows as the Federal Reserve ramps up purchases of mortgage-backed bonds to support home lending. Mortgage applications in the U.S. rose for a fourth consecutive week as a decline in borrowing costs prompted more refinancing. “Lower rates will help increase demand for homes,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “We need to see stronger demand for homes to help end the housing correction.”

- The cost to protect against a default by banks including Citigroup Inc.(C) and Bank of America(BAC) fell as accounting regulators approved a rule change that may limit writedowns and boost profits. Credit-default swaps on NY-based Citigroup dropped 55 basis points to 610 basis points as of 11:57 am in NY, according to broker Phoenix Partners Group. Contracts on Bank of America fell 55 basis points to 345 basis points. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 12, linked to the bonds of 125 companies in the US and Canada, fell 9 basis points to 193 basis points. The Markit iTraxx Financial Index of 25 European banks and insurers declined 16 basis points to 169, JPMorgan prices show.

- Gold fell the most in more than a week on speculation the world economy will improve, eroding the appeal of the precious metal as a haven. Silver also declined. Global equity indexes rallied as Group of 20 leaders met to discuss economic stimulus plans amid mounting evidence the worst of the recession may be over. Manufacturing in China increased last month and home prices in the U.K. rose. “The fear is coming down, and so is gold,” said Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois. “If gold is an indicator of fear and trepidation, as fear diminishes, people will sell gold.” “The mere mention of the possibility of IMF gold sales making the rounds at the G-20 today is pressuring gold prices,” said Ralph Preston, a commodity analyst at Heritage West Futures Inc. in San Diego. A drop below $890 may trigger more selling, he said. The IMF is the third largest holder of gold reserves after the U.S. and Germany, according to the producer-funded World Gold Council. “You’ve got the IMF selling gold -- maybe it’s not a lot, but psychologically it would weigh on the market,” Prospector’s Kaplan said.

- Crude oil rose the most in three weeks as leaders of the Group of 20 nations meeting in London agreed on measures to fight the global recession.

- The European Central Bank cut interest rates less than economists forecast and deferred a decision on what other tools it can use to rescue its ailing economy, suggesting a split on the bank’s Governing Council. The Frankfurt-based ECB lowered its benchmark rate by a quarter-point to 1.25 percent, less than the half-point reduction expected by 49 of 55 economists in a Bloomberg survey. President Jean-Claude Trichet indicated the bank may lower the rate further next month, when he said it will also decide on any new “non-standard measures.” “There was almost certainly a split,” said Nick Kounis, chief European economist at Fortis Bank in Amsterdam and a former U.K. Treasury official. “They can’t decide on what to do next so they’re buying time.” The ECB is lagging counterparts such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan, which have cut their key rates to almost zero and are pumping money into their economies by buying government and company securities.

- Treasuries dropped as accounting regulators approved a rule change that may boost bank profits and world leaders at the Group of 20 nations summit agreed on measures to fight the recession. Ten-year notes dropped for the first time in four days as the Financial Accounting Standards Board voted to relax the “mark-to-market” rule. The Dow Jones Industrial Average exceeded 8,000 for the first time since February. The difference between what banks and the Treasury pay to borrow money for three months, the so-called TED spread, narrowed to 95 basis points from 2008’s high of 4.64 percentage points in October. The average gap for the past decade is 55 basis points.

- Global-warming policies being considered by the U.S. and Japan risk provoking trade barriers, Chinese and Indian officials said in interviews. Protectionism, rejected yesterday by world leaders meeting in London, has been discussed in the U.S. Congress and in France as a response to the competitive advantage of developing nations like China that refuse to regulate greenhouse gases. Potential import fees could prompt trade retaliation, said Su Wei, China’s lead negotiator for a new global climate-protection treaty. “If there’s going to be a border tax imposed, that would very much have the danger of triggering a trade war,” Su said in a telephone interview from Beijing. “That’s not something that we would be happy to see,” he said before the start of United Nations-led treaty talks in Bonn running to April 8. China and the U.S., the biggest greenhouse-gas producers, are negotiating a new agreement to stem greenhouse gases with 190 countries. India and China reject emissions limits for developing nations, saying rich nations must act first.

- The Federal Deposit Insurance Corp. is considering giving banks the chance to share in future profits on loans sold into a U.S. government-financed program to remove distressed assets. The FDIC may allow the sellers of a loan to get an equity interest in the vehicle that buys it, meaning they would gain from any future increase in the asset’s value. The aim is to give healthier banks an incentive to sell loans at a cheaper price, encouraging more investors to make bids.

- The Fed’s commitment to buy $1.25 trillion of bonds backed by US home loans is succeeding where $11.6 trillion of government lending, spending, and guarantees so far have failed. “This has been the most successful effort, at least so far in this crisis, to shore up the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s reasonable to expect refinancings will reduce mortgage payments by about $25 billion, and most of that cash will go into spending.”

- Investors favored mutual funds over hedge funds for commodity investments in the first quarter, seeking the protection of regulated money managers, data from EPFR Global and Gardner Finance AG show. Mutual funds investing in commodities attracted a net $3.2 billion through March 25, swelling combined assets by 10 percent from the end of last year, Cambridge, Massachusetts-based researcher EPFR said. Commodity hedge funds’ assets were flat, said Michael Laznicka, chief executive officer of Gardner. Commodity mutual funds now manage about $34.4 billion, according to Ian Wilson, a managing director at EPFR. Last quarter’s growth in new money was the fastest since 2006, he said. Assets peaked at $68.8 billion in May 2008. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, are at a record 1,127.44 metric tons, more than the amount of bullion held by Switzerland’s central bank. The Reuters/Jefferies CRB Index of 19 commodities fell 4 percent in the first quarter, for the longest losing streak on a quarterly basis since 2001. Exchange-traded commodity products attracted $21 billion in the first quarter, the most since Barclays started collecting the data in 2005. The figure includes medium-term notes, which track commodities over a specific time period. Including index-linked investments, commodities attracted $24 billion of new money, taking total assets under management to $176 billion, according to Sen. Commodity hedge funds’ assets under management were $190 billion to $210 billion at the end of March, according to Gardner Finance.

- Mexico’s economy will shrink 2.8 percent this year as the global financial crisis deepens, the Finance Ministry said in a report. Investment may fall 8.4 percent and consumption may drop 2.2 percent, the ministry said. Mexico will miss out on 145.5 billion pesos ($10.5 billion) of oil revenue this year because of falling crude prices, the report said.

- Fannie Mae and Freddie Mac, the mortgage-finance companies that have taken $60 billion in taxpayer-funded capital, will have less need for additional aid under new accounting rules for losses, their regulator said.

- Boeing Co.(BA) said airplane deliveries rose 5.2 percent from a year earlier to 121 in the first quarter as the world’s second-largest commercial-plane builder benefited from airlines seeking more fuel-efficient jets.

Wall Street Journal:

- Leaders of the Group of 20 nations Thursday announced a host of measures they said would help to reignite world growth but left themselves a long list of follow-up steps to turn their words into action. The summit of many of the world's leading economies in London announced a tripling of the lending power of the International Monetary Fund to around $750 billion. They also unveiled a $250 billion expansion in the IMF's reserve currency -- the special drawing right -- to boost liquidity in the global financial system by expanding member countries' foreign exchange reserves. They committed to selling IMF gold to help poor countries.

- A federal judge ruled on Thursday that prisoners in the war on terror can use U.S. civilian courts to challenge their detention at a military air base in Afghanistan. U.S. District Judge John Bates turned down a U.S. motion to deny the right to three foreign detainees at Bagram Airfield in Afghanistan.

CNBC:

- The S&P 500, which closed yesterday at 811.08 after falling as low as 666 this year, is a “safe zone” for buying stocks, Bob Doll of BlackRock Inc.(BLK) said.

- New orders received by U.S. factories rose in February, government data showed on Thursday, breaking a six-month streak of declines and bolstering hopes the economy may be beginning to crawl out of the depths of a recession. The Commerce Department said factory orders rose 1.8 percent in February after a revised 3.5 percent drop in January, initially reported as a 1.9 percent decline. Economists polled by Reuters had expected a February increase of 1.5 percent.

- Schork Oil Outlook: We’re In Bear Country.

NY Times:

- Secretary of Education Arne Duncan told the nation’s governors on Wednesday that in exchange for billions of dollars in federal education aid provided under the economic stimulus law, he wants new information about the performance of their public schools, much of which could be embarrassing. In a “Dear Governor” letter to the 50 states, Mr. Duncan said $44 billion in stimulus money was being made available to states immediately. To qualify for a second phase of financing later this year, however, governors will need to provide reams of detailed educational information.The data is likely to reveal that in many states, tests have been dumbed down so that students score far higher than on tests administered by the federal Department of Education. It will also probably show that many local teacher-evaluation systems are so perfunctory that they rate 99 of every 100 teachers as excellent and that diplomas often mean so little that millions of high school graduates each year must enroll in remediation classes upon entering college.

MarketWatch:
- International Business Machines Corp.(IBM) reportedly has cut its bid price for Sun Microsystems Inc. to the $9 to $10 range, in return for assurances that the buyout would go through, according to a media report Thursday.

- While he's seeing "mixed signals," Bank of America Corp.'s(BAC) chief executive says he expects the U.S. economy to bottom in the second half of this year, and he doesn't anticipate the government to ask the company to raise more capital.

- Viacom Inc. Chief Executive Philippe Dauman said Thursday that there's unlikely to be significantly negative consumer backlash against "TV Everywhere," a plan to tie online TV show viewing to a subscription to a cable, satellite or telecommunications service.

NY Post:

- Billionaire Steve Schwarzman's Blackstone Group is trying to roll out a new fund geared toward providing funds to companies on death's door. Sources tell The Post that Schwarzman is hoping to raise as much as $3 billion for a rescue fund that would provide financing to cash-strapped entities in or on the verge of bankruptcy.

Detroit Free Press:

- Three days into his new job, GM(GM) chief executive Fritz Henderson on Wednesday said he wouldn't rule out asking the UAW to restart labor contract talks -- again -- but emphasized that the automaker had not taken that step. "I don't think it's a real good idea at this point for us to take anything off the table," Henderson said in his first interview with the Free Press since taking the top job following Rick Wagoner's ouster by the White House. Henderson also said General Motors Corp. expects to keep its new focus on four core brands: Chevrolet, Cadillac, Buick and GMC. "Why on Earth would we rid ourselves of the Buick brand?" he said in response to speculation about the brand's future. Buick, he noted, is a top seller in the crucial Chinese market.

OrlandoSentinel.com:

- With a federal corruption indictment expected against him as early as Thursday, former Illinois Gov. Rod Blagojevich apparently was taking refuge in Fantasyland -- the Disney World resort in Florida. U.S. Attorney Patrick J. Fitzgerald has until Tuesday to get an indictment that would replace a complaint charging Blagojevich with plotting to trade or sell President Barack Obama's former U.S. Senate seat and a host of other crimes.

HedgeFundBlogger:

- The 25 Highest Paid Hedge Fund Managers.

Politico:

- Here’s the poll shocker of the day. Embattled Sen. Chris Dodd (D-Conn.) is in severe political danger, trailing former GOP congressman Rob Simmons by 16 points, 50 to 34 percent, according to a new Quinnipiac poll. Among independent voters, Simmons leads Dodd by 31 points -- 56 to 25 percent. Dodd also trails little-known state senator Sam Caligiuri by four points, 41 to 37 percent. Dodd’s approval ratings are in the tank, with 58 percent of Connecticut voters disapproving of his job performance and only 33 percent viewing him favorably. He doesn’t even have support within his own party – only 51 percent of Democrats approve of him. “A 33 percent job approval is unheard of for a 30-year incumbent, especially a Democrat in a blue state. Sen. Christopher Dodd's numbers among Democrats are especially devastating,” said Quinnipiac pollster Douglas Schwartz. Voters are taking their anger out on Dodd for his involvement in legislation that allowed AIG executives to receive millions in bonuses. A whopping 74 percent of voters said they blamed Dodd for the bonuses. Meanwhile, 54 percent said they don’t believe Dodd is honest and trustworthy.

GlobeNewswire:

- Intuitive Surgical, Inc. (ISRG), the global leader in robotic-assisted minimally invasive surgery, today announced a new addition to its da Vinci(r) product line -- the da Vinci(r) Si(tm) Surgical System. The da Vinci Si System introduces several new features designed to provide additional clinical benefits and operational efficiencies: Enhanced 3D HD resolution offers superior visual clarity of target tissue and anatomy, potentially allowing for greater surgical precision; an updated and simplified user interface enhances operating room efficiency; newly upgradeable architecture and compatibility with existing OR suite technology facilitates the seamless integration of the da Vinci Si System into the OR of the 21st century; an optional dual console allows a second surgeon to provide a da Vinci-enabled assist and may also facilitate teaching da Vinci Surgery; and finally, the addition of new ergonomic settings to the surgeon console allows greater surgeon comfort during procedures.

Reuters:
- General Electric Co (GE) and Intel Corp (INTC) have joined forces to develop devices to help doctors monitor patients' health remotely, an area they believe could become a multibillion-dollar business. The U.S. conglomerate and the world's largest chip maker will develop devices that they expect to save money by allowing healthcare workers to monitor the sick and the elderly outside of hospitals or medical offices. They plan to invest $250 million in the field over the next five years.

- The start of the new quarter and growing signs that the global economy might have hit a trough are bringing a rally in stocks and other risky assets which many believe has stronger legs than before. World equities, measured by MSCI, have risen more than 6 percent in the past two days, having made their best monthly gains in March since December 1999. They are also up around 24 percent after hitting a 5-1/2 year low in mid-March. A combination of factors is behind the latest rally.

- Saudi Arabia did not contribute to the $500 billion of extra funds pledged to the International Monetary Fund at a G20 summit of world leaders, its finance minister said on Thursday.

RBC Daily:

- Moscow shopping mall vacancies are now at 10%.

Hong Kong Govt:

- The Hong Kong Land Registry today (April 2) released the land registration statistics for March 2009. The total number of sale and purchase agreements for all types of building units received for registration in the Land Registry in March 2009 was 8,062. This was 59.9% higher than in February 2009 but a decrease of 26.7% compared with March 2008. Using a 12-month moving average, the figure for March 2009 represented a decrease of 3.2% from February 2009 and 44.1% compared with March 2008. The total consideration of these agreements in the month was $28.6 billion, 80.1% higher than that in February 2009 but a decrease of 35% compared with the amount for March 2008.

CCTV:
- A strong US dollar is in the US’s interest, US Treasury Secretary Tim Geithner said. “I’ll make it crystal clear that a strong dollar is in America’s interest,” Geithner said. “We’re going to do what’s necessary to make sure that our markets remain the deepest, most liquid, safest markets in the world,” he said.

Haaretz.com:

- As early as this month, Prime Minister Benjamin Netanyahu and Foreign Minister Avigdor Lieberman could face international pressure to clarify their position on the creation of a Palestinian state. At a closed-door dinner of European Union diplomats held Friday in the Czech Republic, several senior officials said Israel must be required to present an explicit commitment accepting the principle of "two states for two peoples," and if it fails, the process of upgrading Israel-EU relations should be frozen.