Today's Headlines

Bloomberg:

- Nanya Technology Corp., Taiwan’s second-biggest maker of computer-memory chips, plans to raise prices of the semiconductors by 15% to 20% during the first half of April. Nanya plans to raise chip prices by at least 10% for the first half of April because of rising demand, the United Evening News reported.

- Archer Daniels Midland Co.(ADM), the world’s largest grain processor, declined in New York trading after a Citigroup Inc. analyst said weaker demand for agricultural products is hurting results in the oilseeds unit. “Slowing agricultural demand and overcapacity are negatively impacting volumes and margins in ADM’s oilseeds and agricultural-services businesses,” David Driscoll, a Citigroup analyst, said in a report today. Driscoll lowered his rating on the shares to “sell” from “hold.”

- Crude oil fell for a third day on speculation that a report tomorrow will show U.S. supplies increased as the recession curbs fuel demand. Stockpiles rose 1.5 million barrels last week, according to the median of 11 estimates by analysts in a Bloomberg News survey before the Energy Department report. “We still haven’t seen any evidence that the excess supply is being absorbed.” Crude-oil inventories climbed 2.84 million barrels to 359.4 million in the week ended March 27, the highest since July 1993, the Energy Department reported on April 1. It was the 23rd gain in 27 weeks. The increase left supplies 13 percent higher than the five-year average. The International Energy Agency, the Organization of Petroleum Exporting Countries and the Energy Department cut their 2009 forecast for oil demand in March. The IEA will probably lower its global demand forecast this month, given slowing world economic growth, Executive Director Nobuo Tanaka said April 2. The Paris-based agency is scheduled to release its next report on April 10.

- Members of the Organization of Petroleum Exporting Countries have split with developing nations over more stringent cuts in the burning of fossil fuels, fearing their economies will suffer from shrinking demand for oil. Most developing countries are calling for wealthier nations to reduce carbon-dioxide emissions 40 percent to 45 percent by 2020 at climate talks in Bonn, Chinese negotiator Su Wei said. Oil producers are concerned the cuts will shrink energy exports. “Whatever policies will be adopted will add to the uncertainties for the demand for oil,” said Mohammad Al Sabban, an adviser to Saudi Arabia’s Ministry for Petroleum and Mineral Resources, in an interview. “We share the concern for climate change but at the same time we don’t want to be a victim.”

- AMR Corp.’s American Airlines(AMR) and UAL Corp.’s United Airlines(UAUA) pared declines in traffic in March, suggesting that the industry’s slump in travel may be easing.

- European Central Bank council member George Provopoulos suggested the bank may cut its benchmark interest rate below 1 percent if the economy worsens and could also buy corporate debt to stimulate lending. “I do not see 1 percent as a threshold for the ECB benchmark rate,” Provopoulos, who heads the Greek central bank, said in a telephone interview in Athens late yesterday. “I do not exclude that the ECB could go down further from this level if the economic environment deteriorates further.”

- Colorado State University’s Atlantic hurricane forecast, the most-watched annual prediction, was lowered today to 12 named storms for the 2009 season, with six developing into hurricanes. Researchers William Gray and Philip Klotzbach cut the number from a preliminary estimate of 14 in December. Two of the hurricanes should reach major strength, meaning winds of 111 mph (178 kph) or more on the Saffir-Simpson Scale, they said today.

- Bayerische Motoren Werke AG, the world’s biggest maker of luxury vehicles, said March deliveries fell 17 percent, led by a drop in the U.S. and falling demand at the Mini small-car brand. Sales declined to 126,375 cars and sport-utility vehicles, Munich-based BMW said today in a statement. First-quarter deliveries fell 21 percent from a year earlier to 277,264. Shrinking European and U.S. car markets have prompted BMW and second-ranked competitor Daimler AG to scale back production, and the companies said last month that they’ll widen cooperation on parts to reduce costs. Daimler said today that its Mercedes Benz Cars division’s sales dropped 16 percent in March, with the U.S. also leading the decline.

Wall Street Journal:

- U.S. Energy Secretary Steven Chu raised the prospect Tuesday of getting the U.S. away from coal and nuclear power by the next century by relying more on renewable energy - and then backed away from the politically touchy position. "What I said is perhaps at the end of this century we could get renewables in a plane and energy storage and transmission that we can transition away from these others - but I don't see this happening any time soon," Chu told reporters after speaking at the Energy Information Administration's annual conference.

- U.S. President Barack Obama made a surprise visit to Baghdad, saying such a trip was critical because progress in Iraq, which has been rocked by a new round of bombings, lies "in political solutions." Meeting with Gen. Raymond Odierno and about 600 U.S. troops at Camp Victory, outside Baghdad, on Tuesday, Mr. Obama said that "we've made significant political progress" in Iraq. But, he added, "with the national elections coming up, many of the unresolved issues may be brought to a head."

- A federal judge set aside the conviction of former Alaska Sen. Ted Stevens and appointed a special prosecutor to investigate possible criminal-contempt charges against federal prosecutors who the judge said repeatedly withheld evidence from defense attorneys. U.S. District Court Judge Emmet G. Sullivan said, "In 25 years on the bench I have never seen anything approach the mishandling and misconduct I have seen in this case." Attorney General Eric Holder last week unexpectedly announced that the Justice Department wanted to drop charges against the 85-year-old Mr. Stevens, citing multiple missteps by prosecutors in failing to turn over key evidence to the defense. Mr. Stevens was convicted by a federal jury last October, just eight days before Election Day. The Republican lost his re-election bid by fewer than 4,000 votes, handing Democrats a crucial seat in the Senate.

CNBC:

- The US stock-market is about halfway or one-third into its rebound, though not necessarily at the start of a “secular bull market,” Barton Biggs, the managing partner at Traxis Partners LLC, said. The rebound in stocks might resemble the recovery seen in 1938, Biggs said. The Dow Jones Industrial Average rallied 28% that year. (video)

MarketWatch:
- Believing that the first quarter marked a "nadir" for software stock fundamentals, RBC Capital Markets upgraded several major players in the sector to buy ratings on Tuesday.

NY Daily News

- The Manhattan district attorney's office has smashed a sinister plot to smuggle nuclear weapons materials to Iran through unwitting New York banks, the Daily News has learned. fficials plan to unseal a 118-count indictment Tuesday accusing a Chinese national of setting up a handful of fake companies to hide that he was selling millions of dollars in potential nuclear materials to Tehran. This case will cut off a major source of supply to Iran and it shows how they are going ahead full steam to get a nuclear bomb. Long-range missiles they pretty much have already," a law enforcement source close to the case said.

Boston Globe:

- Citigroup Inc.'s(C) new board chairman, Richard Parsons, said financial institutions are being targeted for creating the nation's financial crisis, but they aren't the only ones responsible. "Everybody participated in pumping up this balloon. Now the balloon has deflated," he said Monday. "Everybody, in reality, has some part of the blame. But it's much more in the culture to find a villain and vilify the villain." Besides banks, there was reduced regulatory oversight, loans to unqualified borrowers were encouraged and people took out mortgages or home-equity loans they couldn't afford.

LA Times:

- Eight months after their surprising embrace of offshore oil drilling, Santa Barbara County supervisors are set today to resume their decades-old opposition to the practice. The board's majority has shifted from Republican to Democratic, the Obama administration has taken over in Washington, and the price of crude oil has plunged from nearly $150 a barrel last summer to about $52 a barrel on Monday. With an Interior Department hearing on offshore drilling planned next week in San Francisco, the supervisors are to consider a resolution urging a ban on new offshore drilling. "I feel strongly that we've been a national leader in conservation and alternative energy," Farr said. "That's the direction we need to go. We can't drill our way out of this." As gas prices soared toward $5 a gallon last year, Congress and the Bush administration lifted long-standing bans on expanding offshore drilling. Two months ago, Interior Secretary Ken Salazar slowed the process for granting new offshore leases, criticizing the previous administration's "headlong rush." But many Santa Barbara County residents have no problem with tapping into undersea resources, contending that evolving technology has minimized the risk of catastrophic spills. "It's irresponsible not to develop offshore drilling and production, with a serious eye to making certain it's safe -- which it can be," said Joni Gray, a supervisor who represents the Santa Maria and Lompoc areas. To some, the conflict mirrors a county split between its conservative, agricultural north and its liberal, more affluent south. "It's two different worlds," Gray said. "A lot of people in the north came here because their parents or grandparents worked in the oil industry. That was a good job. If you weren't fortunate enough to have a master's or a Ph.D. or a large inheritance, it was a way of working yourself out of the fields or washing dishes.

- The chief executive of Goldman Sachs Group Inc. on Tuesday called for new standards on how Wall Street executives are compensated and new regulation of large hedge funds and private equity funds. Lloyd Blankfein, who received compensation valued at nearly $43 million last year, said lessons from the financial crisis include the need to "apply basic standards to how we compensate people in our industry." He suggested a handful of guidelines, including only junior employees being paid mostly in cash and that the percentage of pay awarded as company stock increase significantly along with a worker's total compensation. Public anger over the financial distress and taxpayer bailout of the banking industry spilled over to Blankfein's appearance. As he began his address to the gathering in a hotel ballroom, two women appeared on the stage with a large purple sign saying, "We want our $$$$$ back." Blankfein asked them to leave and they did so. But the women later charged onto the stage and podium yelling protests against the bailout. While criticizing their demeanor, Blankfein acknowledged the legitimacy of the widespread anger they expressed.

Politico:

- President Barack Obama, after a lightning-quick start for his agenda on Capitol Hill, is bracing for a much slower pace and big changes in his proposals as early urgency and excitement give way to the more languid rhythms that are the norm for Congress. Officials are most pessimistic about his energy and global warming plan, with many aides doubting he will win passage of a cap-and-trade emissions reduction system, which is strongly opposed by business and Republicans. The White House is most optimistic for passage this year of his plans to overhaul the nation’s financial regulations, and aides also see a strong chance that a gradual version of his health care overhaul will get through Congress this fall.

Reuters:
- OPEC can live with oil prices of $50-$60 a barrel for the rest of 2009, a source close to the organization's Angolan presidency said on Tuesday. The comments fit with an emerging consensus in OPEC that it will accept lower prices than it would like to help nurse the global economy back to health and mark a retreat from OPEC President Jose Botelho de Vasconcelos' remarks in March that oil could reach $75 a barrel this year. hey also imply Angola is unlikely to argue for an output cut when the group next meets on May 28. The current oil price is not ideal but we can live with it. Taking into account the current economic crisis, OPEC will be comfortable with a price of $50 to $60 per barrel until the end of the year," the source told Reuters. We don't expect prices to reach $75 per barrel this year under the current economic climate." OPEC Secretary General Abdullah al-Badri said in Paris last week the group might be able to live with oil around $50 for the rest of this year.

- The U.S. Treasury Department is planning to delay the release of any completed bank stress test results until after the first-quarter earnings season to avoid complicating stock market reaction, a source familiar with Treasury's discussions said on Tuesday. The Treasury is still talking about how results of the regulatory stress tests on the 19 largest U.S. banks will be released, and may disclose them as summary results that are not institution-specific, the source said.

- General Motors Corp is in "intense" and "earnest" preparations for a possible bankruptcy filing, a source familiar with the company's plans told Reuters on Tuesday. A plan to split the corporation into a "new" company made up of the most successful units, and an "old" one of its less-profitable units, is gaining momentum and is seen as the most sensible configuration, said another source familiar with the talks. If the plan goes through, the new GM is expected to assume some previous creditor debt from bankruptcy proceedings, such as secured debt, said the second source, adding that GM bondholders are likely to lose substantial value in bankruptcy.

Financial Times:
- Hedge funds wanting loans from the Federal Reserve to buy securities backed by consumer loans – a key plank in the government’s efforts to revive the financial system – are seeking ways to circumvent restrictions on hiring skilled foreign workers to which they will be subject if they borrow government money. Authorization for the Talf is granted through the US’s recent stimulus bill. Inserted in an effort to boost jobs for American employees, the stimulus bill imposes restrictions on recipients of funds on the number of foreign workers that can be employed using H1B visas. These restrictions also apply to investors borrowing money from the Talf. Lawyers are working on setting up legal entities – a type of special purpose vehicle (SPV) – in which hedge funds can take stakes. These SPVs can then borrow money from the Fed. If investor stakes in the SPVs are small enough, then the limits on the number of workers employed under H1B visas might be avoided. Lawyers said they are still unsure whether such SPVs will actually avoid H1B visa restrictions. Last week, the US Citizenship and Immigration Services, part of the Department of Homeland Securities, said the restriction ”applies to the SPV and to any entity that owns or controls 25 per cent or more of the total equity of the SPV”. Whether the term ”controls” includes, for example, having some voting stakes in the entity is unclear, lawyers said.

Shanghai Securities News:

- Shanghai’s residential property sales fell 5% last week form the previous week, citing data from real estate agency E-House Holdings Ltd. The average price of Shanghai homes declined 3.8% last week to $1,932 per square meter from the March 22-29 period.

Efe:
- Repsol YPF SA, Eni SpA and Nippon Oil Corp have submitted bids to help develop the Nasiriyah oil field in Iraq, citing Iraqi officials. The field is one of the world’s largest, with estimated reserves of 4 billion barrels.