Late-Night Headlines
Bloomberg:
- China's November crude steel output gained 37.4% to 47.3 million metric tons, the statistics bureau said today.
- Most of the people who say they lost money with Bernard Madoff have had their claims denied because they invested with the con man indirectly or withdrew more money than they put in. Trustee Irving Picard has turned down about 9,900 of the 11,500 people whose claims he has analyzed, with another 4,500 cases still to be looked into. The 1,600 people whose claims he has approved have losses totaling $4.69 billion, though they’ll get at most $500,000 to begin with, pending the results of Picard’s suits against people he regards as beneficiaries of the biggest Ponzi scheme in history.
- Elpida Memory Inc., Japan’s largest computer-memory chipmaker, may post its first annual operating profit in three years as growth in demand outpaces industry production, Chief Executive Officer Yukio Sakamoto said. “Operating profit is easily within reach,” Sakamoto said in an interview in Tokyo yesterday, declining to give specific figures. “Supply is tightening already.”
Wall Street Journal:
- General Electric(GE) CEO Jeff Immelt’s speech on Wednesday at West Point was billed as “Renewing American Leadership.” But after I read his address, the only thing it renewed were my doubts over Immelt’s past leadership and where he was taking the company. It certainly is a remarkable speech. Under Immelt’s eight years at the helm, General Electric has lost almost two-thirds of its value. Earlier this year, GE was on the verge of a total meltdown. So was GE’s “leadership” to blame? Apparently not. Even more worrying to GE shareholders should be how Immelt talked about America’s future. “The world is being reset,” Immelt says. Later he adds, “We need a new strategy for the economy.” And in one of those wonderful coincidences, Immelt’s vision of the future just happens to be the same one held by some VIPs over at 1600 Pennsylvania Avenue. Both have seen the future, and to the best I can tell, it looks like a hybrid of France and China. Consider these remarks from the CEO of GE, the bluest of American blue chips. “We should welcome the government as a catalyst for leadership and change,” says Immelt. “I believe in the endless possibilities of individual choice and private initiative. But this isn’t the first time that business and government have had to work together for national ends. We should work together again today, setting goals for productivity, job creation and exports.” Got that? This sounds pretty close to what is called industrial planning. The last time the U.S. gave that a real go was in World War II. Lest you think that’s outdated, Immelt admires the modern variation of top-down planning. “The Chinese government…are executing their eleventh ‘five year plan.’ They do exactly what they say they will do. They will likely be the biggest economy in the world someday. Man, these guys are good.” Sure China is good. Authoritarian and with a per capita GDP under $4,000, but good. Now, it’s no surprise that Immelt’s speech is an ode to the glory of governments and businesses working together. Governments around the world are GE’s biggest customers. The U.S. government saved GE Capital. The U.S. government will need to approve GE’s sale of NBC Universal. And Immelt is a high-profile member of President Obama’s economic recovery board. But shareholders should ask themselves whether hitching GE to the Obama administration is the right strategy. Sure, GE and the White House may transform the U.S. economy into some new private/public manufacturing utopia. But given GE’s recent past and its current leadership, there are plenty of reasons to be skeptical about such a renewal.
- Bank of New York Mellon Corp. Chief Executive Robert Kelly's on-again, off-again candidacy for the top job at Bank of America Corp. is back on again as the Charlotte, N.C., bank's board nears a decision, according to people familiar with the matter.
- Seeking to accelerate the rollout of new air-traffic control technology, the top U.S. aviation regulator predicted that a satellite-based system designed to allow aircraft to fly shorter, more direct routes would largely pay for itself in fuel savings in just a few years. Testifying before a Senate aviation subcommittee Thursday, Federal Aviation Administration chief Randy Babbitt said the multi-billion-dollar modernization project -- dubbed NextGen -- would save travelers time, and carriers could "save a billion gallons of fuel a year.".
- In the high-stakes game of chicken the Obama White House has been playing with Congress over who will regulate the earth's climate, the president's team just motored into a ditch. So much for threats.
- China has rolled out regulations that could curb billions of dollars worth of sales of high-tech gear to government agencies, raising cries from companies across the globe and from the U.S. government. More than 30 industry groups from North America, Europe and Asia -- representing most of the world's major technology companies -- sent a letter Thursday to Chinese ministries saying they were "deeply troubled" by a new Chinese rule they say discriminates against their products. The companies were responding to a notice the Chinese government posted on a Web site in late October, but didn't immediately publicize, requiring vendors to gain accreditation for their products before they can be included in a government procurement catalog of products containing "indigenous innovation." Companies that aren't listed in the catalog will theoretically be allowed to sell products to government agencies. But preference will apparently go to those listed. The office of the United States Trade Representative said several U.S. agencies had already raised "serious concerns" about the policy with the Chinese government. "It is in the interests of both the U.S. and Chinese governments to promote innovation, but innovation is no excuse for discrimination," said spokeswoman Carol Guthrie.
- ObamaCare Keeps Falling in the Polls.
MarketWatch:
- Citi(C) could exit TARP with strong capital ratios: analysts.
CNBC.com:
- Invest in America Week: Ford Motor(F)(video).
New York Times:
- Hedge Funds Tiptoe Toward an Uncertain Future.
IBD:
Business Insider:
- Remember How We Bailed Out The Banks So They Could Keep Lending? They missed that part(graph):
- US-Japan Rift Grows As Obama Snubs Prime Minister Hatoyama In Copenhagen.
Business Week:
- China's 'Made in China' Problem. The downside to Beijing's huge stimulus is a glut of factories and output that may spur trade frictions.
CNNMoney.com:
- The U.S. auto industry has spent nearly 78% of the taxpayer funds lent to it by the Treasury Department through the Troubled Asset Relief Fund, according to a report released Thursday by a bailout overseer. Neil Barofsky, special inspector general for the $700 billion TARP program said in his report that General Motors, Chrysler, GMAC and Chrysler Financial have spent $59.7 billion of the $76.9 billion that they received.
Rolling Stone:
- Obama's Big Sellout by Matt Taibbi. The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway. Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans." Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing. Then he got elected. What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy. What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside. How could Obama let this happen? Is he just a rookie in the political big leagues, hoodwinked by Beltway old-timers? Or is the vacillating, ineffectual servant of banking interests we've been seeing on TV this fall who Obama really is? Whatever the president's real motives are, the extensive series of loophole-rich financial "reforms" that the Democrats are currently pushing may ultimately do more harm than good. In fact, some parts of the new reforms border on insanity, threatening to vastly amplify Wall Street's political power by institutionalizing the taxpayer's role as a welfare provider for the financial-services industry. At one point in the debate, Obama's top economic advisers demanded the power to award future bailouts without even going to Congress for approval — and without providing taxpayers a single dime in equity on the deals. How did we get here? It started just moments after the election — and almost nobody noticed.
Forbes:
Politico:
- Senate moderates who are the linchpin to passing a health care reform bill raised fresh worries Thursday about a proposed Medicare expansion, complicating Majority Leader Harry Reid’s hopes of putting together a filibuster-proof majority for the legislation in the coming days. Two days ago, the Medicare proposal appeared to be the elusive bridge between liberals, who were being forced to give up a public health insurance option, and moderates, who said they couldn’t vote for a bill that included one. But by Thursday, the shine had dimmed, as senators grew restless over a lack of information and declined to commit their vote until they could review the legislative language and the Congressional Budget Office cost estimate. Republicans also stepped up their criticism of the plan.
Rasmussen:
- Americans remain overwhelmingly in favor of allowing religious symbols to be displayed on public land and feel even more strongly that public schools should celebrate at least some religious holidays. A new Rasmussen Reports national telephone survey finds that 76% of adults believe religious symbols like Christmas Nativity scenes, Hanukkah menorahs and Muslim crescents should be allowed on public land. Just 13% disagree.
AP:
- Debating Wall Street regulations not easy for Dems. After banks and their House allies won limits in the reach of state consumer banking laws, Democratic leaders on Thursday prepared to fight off efforts within their party to further weaken a crisis-driven financial overhaul bill. A final vote on the sweeping overhaul of Wall Street regulations was expected Friday. Before that, however, Democrats were hoping to fend off a key amendment that would eliminate the creation of an independent Consumer Finance Protection Agency. The agency is a central element of the Democrats' legislation and of the Obama administration's proposed regulatory changes. The change was being offered by Rep. Walt Minnick, a conservative Democrat from Idaho, and seven other centrist Democrats. The U.S. Chamber of Commerce, which has been running national television ads against the creation of a consumer agency, said it would base its support for lawmakers in next year's elections, in part, on how they voted on the amendment. "I think we're going to beat the Minnick amendment, but it's a real test," House Financial Services Committee Chairman Barney Frank, D-Mass., said Thursday. Creating a consumer agency is a top priority for consumer groups and for labor organizations such as the AFL-CIO. Democratic leaders also were pushing changes that would add further restrictions on banks and financial institutions. One, vigorously opposed by banks, would let bankruptcy judges rewrite mortgages to lower homeowners' monthly payments.
Reuters:
- Dubai might hold some promise for distressed debt investors, even if the U.S. vulture funds who rushed in following Nakheel's [NAKHD.UL] debt standstill have played a very risky game, industry insiders said. "Iceland is something we have been involved in and there may be something to do in Dubai," said Mans Larsson, vice president of Canyon Capital Advisors. "There are some potentially interesting assets there as everything has traded down after the announcement on Nakheel." However, those who have tried to play developer, Nakheel, too early were criticized. "It's one of the worst investments I've seen in my career," said one hedge fund manager at IIR's Distressed Debt conference on Wednesday.
- Russia widened its ban on U.S. pork imports on Thursday, citing the presence of an antibiotic, and the country also threatened to completely seal its borders to pork from the United States. Russia's expansion of its ban to four more U.S. meat plants comes at a time when U.S. hog producers were turning the corner after more than two years of losses estimated by industry at more than $5 billion. U.S. trade officials called the bans unjustified.
Telegraph:
Nikkei English News:
- Japan's Cabinet Office may raise its forecast for real gross domestic product growth for fiscal 2010 to the mid-1% level from July's .6% estimate.
South China Morning Post:
- Hong Kong toymakers are battling to replenish stocks as United States retailers place orders earlier than expected, citing a trade group official. Overseas retailers were too cautious with placing orders in the first half of the year, leaving their inventories 10% below normal levels, the report quoted Yeung Chi-kong, a toymaker and an executive vice-president of the Toys Manufacturers' Association of Hong Kong, as saying.
Late Buy/Sell Recommendations
Citigroup:
- Reiterated Buy on (UTX), target $76.
- Reiterated Buy on (LLY), target $41.
FBR Capital:
- Rated (EMC) Outperform, target $21.
Sanford Bernstein:
- Rated (AOL) Outperform, target $31.
Piper Jaffray:
- Rated (IPXL) Overweight, target $16.
- Rated (TEVA) Overweight, target $63.
- Rated (WPI) Underweight, target $34.
Night Trading
Asian Indices are +.25% to +1.50% on average.
Asia Ex-Japan Inv Grade CDS Index 103.50 -1.50 basis point.
S&P 500 futures +.28%.
NASDAQ 100 futures +.21%.
Morning Preview
BNO Breaking Global News of Note
Yahoo Most Popular Biz Stories
MarketWatch Pre-market Commentary
US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar
Who’s Speaking?
Upgrades/Downgrades
Politico Headlines
Rasmussen Reports Polling
Earnings of Note
Company/EPS Estimate
- None of note
Economic Releases
8:30 am EST
- The Import Price Index for November is estimated to rise +1.2% versus a +.7% gain in October.
- Advance Retail Sales for November are estimated to rise +.6% versus a +1.4% gain in October.
- Retail Sales Ex Autos for November are estimated to rise +.4% versus a +.2% gain in October.
10:00 am EST
- Preliminary Univ. of Mich. Consumer Confidence for December is estimated to rise to 68.8 versus a reading of 67.4 in November.
- Business Inventories for October are estimated to fall -.2% versus a -.4% decline in September.
Upcoming Splits
- None of note
Other Potential Market Movers
- The (ITW) investor day and the (HSC) analyst conference could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by automaker and technology shares in the region. I expect US equities to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
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