Late-Night Headlines
Bloomberg:
- New York City will incur costs of more than $200 million a year for security during the planned trial of five suspects in the September 2001 terror attacks, Mayor Michael Bloomberg said. In a letter to Peter Orszag, director of the U.S. Office of Management and Budget, Bloomberg said the city would have to pay about $216 million in the trial’s first year and $206 million annually thereafter for personnel and equipment. “I want to assure you that our estimates, while significant, are real and not the result of any expectation that we will receive a ‘blank check,’” Bloomberg wrote in the letter, released by his office. “As 9/11 was an attack on the entire nation, we need the federal government to shoulder the significant costs we will incur.” Bloomberg’s letter to Orszag represents the city’s first specific cost estimate associated with the planned trial. The projection is $141 million more than U.S. Senator Charles Schumer’s November request that the federal government provide $75 million in annual security costs related to the trials. President Barack Obama announced in November his administration’s intention to move Khalid Sheikh Mohammed, the accused mastermind of the 2001 attacks, and four fellow Guantanamo Bay detainees to New York to stand trial about a quarter-mile from where the World Trade Center towers stood. “Not a nickel of these costs should be borne by New York taxpayers, because terrorism is a federal responsibility and this is a federal trial,” Schumer, a New York Democrat, said in a release today.
- Bed Bath & Beyond Inc.(BBBY), the largest U.S. home-furnishings retailer, said full-year profit would be higher than it previously forecast and reported third-quarter earnings that beat estimates. The shares rose 7 percent in late trading. The Union, New Jersey-based company said today 2009 profit may be as high as $2.11 a share compared with its previous projection of $1.79. Analysts predict annual earnings of $1.92. Bed Bath & Beyond climbed $2.77 to $42 at 4:28 p.m. New York time after the close of regular Nasdaq Stock Market trading. The shares surged 52 percent last year.
- Florida citrus growers braced for more nights of freezing temperatures as snow blanketed southern England, closing airports and roads, and Beijing suffered the coldest weather in almost four decades. Frigid air sweeping across the Northern Hemisphere sent orange-juice futures up as much as 4.3 percent to a two-year high in intraday trading on fears Florida’s citrus crop may be reduced. Natural gas jumped to a 13-month high amid forecasts for temperatures as much as 25 degrees below average. “The cold weather is hitting a lot of the more-populated areas, such as western and northern Europe, a lot of the eastern U.S.,” Bob Tarr, a meteorologist at AccuWeather Inc., said today in a telephone interview. “It’s a rare pattern, and unusual to see this cold weather affecting a number of major population centers and persisting for about three weeks.” Temperatures in New York City are forecast to be as much as 13 degrees below average by Jan. 10, according to MDA Federal Inc.’s EarthSat Energy Weather of Rockville, Maryland. The U.S. Northeast is responsible for about four-fifths of the country’s heating oil use. Temperatures will be 25 degrees below average in Houston and St. Louis on Jan. 9, EarthSat said. About 72 percent of households in the Midwest use natural gas for heat. Florida’s two largest citrus-producing counties had reports of record-low temperatures early today, said Richard Rude, a National Weather Service meteorologist near Tampa. Lakeland, in Polk County, recorded a low of 28 Fahrenheit (minus-2 Celsius), while at Archbold, the mercury fell to 18. The cold front in China was forecast to move south today, lowering temperatures by as much as 8 degrees Celsius, the China Meteorological Administration said. Temperatures in Beijing dropped as low as minus 20 degrees Celsius overnight, the coldest for this time of year since 1971, the agency said. Natural gas demand in Beijing has climbed “dramatically,” the city government said yesterday. French electricity demand may reach a record next week as temperatures are expected to drop as much as 7.7 degrees Celsius below average, the grid operator Reseau de Transport d’Electricite said today on its Web site. Temperatures were at or below freezing across most of northern and central France, sinking as low as minus 4 degrees Celsius in Paris, according to the French forecaster Meteo- France.
- Senator Christopher Dodd’s retirement may offer Democrats their best chance to hold onto a seat in Congress they were in danger of losing. The party’s overall prospects this election year remain gloomy. The announcement by Dodd, a Connecticut Democrat trailing in the polls, opened the way for Richard Blumenthal, one of the state’s best-known Democratic officials, to declare his Senate candidacy. Still, it came a day after North Dakota Democrat Byron Dorgan said he would give up his seat, now likely to go to a Republican. That followed a string of retirement decisions by party lawmakers from vulnerable House districts, including John Tanner and Bart Gordon of Tennessee, Brian Baird of Washington and Dennis Moore of Kansas. And Alabama Representative Parker Griffith said last month he was defecting to the Republicans. “The key thing is the psychological element,” said Charlie Cook, publisher of the Cook Political Report. “It’s like a vicious cycle of bad news that feeds on itself,” he said. “It makes other wavering incumbent Democrats contemplating retirement look at it even more closely.”
- Hewlett-Packard Co.(HPQ), the world’s biggest personal-computer maker, is testing Qualcomm Inc.’s(QCOM Snapdragon chip for use in some of its machines, two people familiar with the matter said. The companies are expected to announce the collaboration later tonight at the Consumer Electronics Show in Las Vegas, said the people, who asked not to be identified because the information isn’t public.
Wall Street Journal:
- Pandora Inc. has struck a deal with electronics maker Pioneer Corp. that promises to make it easier for drivers to listen to its personalized radio service in cars—bringing Internet radio one step closer to snagging a built-in spot on dashboards. The development represents a direct challenge to broadcasters of satellite and traditional radio, who have long dreaded the arrival of Internet radio in cars.
- The "carried-interest" tax debate has re-emerged in Congress, threatening to more than double taxes on some of the country's wealthiest individuals—private-equity and hedge-fund managers. The issue flared in 2007, only to die when the financial crisis struck. This time around, amid soaring deficits and hostility over Wall Street pay, most fund managers have resigned themselves to higher tax bills. Still, they hope to delay or lessen the effect of proposed changes. Private-equity and hedge-fund lobbying groups are still girding for a fight. Lobbyists have issued statements aimed at heading off a tax increase, arguing that it would stifle risk-taking by shrinking potential rewards for fund managers. "Private equity will endure, but the draconian tax hike, if enacted, will unquestionably slow the flow of capital to companies struggling to get back on their feet during this very fragile economic recovery," said Doug Lowenstein, president of the Private Equity Council, a trade group. Adopting the change would hurt "the competitiveness of U.S. businesses, capital formation in the United States, and ultimately, U.S. job growth," Richard Baker, head of Washington, D.C.-based hedge-fund lobbying group Managed Funds Association, wrote to lawmakers. Defenders of the current law argue that carried interest should be treated as a capital gain, because it represents the distribution of proceeds from an investment that increases in value and is eventually sold for a profit. Certain oil-and-gas and real-estate partnerships also would be affected by the tax increase.
- As a threat to our nation's security, allowing imported drugs into our pharmacies ranks just below terrorism. Yet this idea refuses to die. Why is drug importation (and its twin the reimportation of American drugs from foreign countries) a bad idea? Aren't cheaper drugs good for low-income Americans? The Food and Drug Administration's response—reasserted last month by FDA Commissioner Margaret Hamburg—is that imported and reimported drugs can't be guaranteed to be safe. Studies have shown that a significant percentage of drugs thought to be American-made and reimported are actually counterfeit, ineffective or even toxic. In one sting in 2003, for example, FDA and Customs officials found that 88% of the imported drug packages they inspected did not meet FDA safety standards.
- There was much to celebrate in the providential combination of an incompetent terrorist and surpassingly brave passengers and crew who saved 288 people aboard Northwest Airlines flight 253 on Christmas Day. There is a lot less to applaud in the official reaction. Well-deserved mockery has already been heaped on the move-along-folks-nothing-to-see-here tone of the administration's initial pronouncements—from Janet Napolitano's "the system worked," to President Obama's statement that Umar Farouk Abdulmutallab was an "isolated extremist." This week brought little improvement.
MarketWatch.com:
IBD:
- Darrell Webb had his work cut out for him when he took the helm of Jo-Ann Stores (JAS) in July 2006.
CNNMoney.com:
- 10 of the year's coolest gadgets.
Business Insider:
- Menacing Russian oligarch Roman Abramovich threw the banging-est celebrity-filled NYE party in St. Bart's. We've read about the St. Bart's bash, but now we have pictures! All thanks to grim economist Nouriel Roubini, who despite our impending economic doom, partaayyyed. The party was lavish — about 250 celebrities and their hangers-on were flown, on private jets, to Abramovich's Caribbean winter palace, where they ate millions of dollars worth of gourmet snacks and enjoyed the musical stylings of Gwen Stefani, Beyoncé, and Prince.
- Warren Buffett Accused Of Purposefully Sinking Cadbury Shares.
Business Week:
- The White House was put on the defensive Wednesday after President Barack Obama pushed congressional leaders to fast-track health care legislation behind closed doors despite his campaign promises of an open process. "The president wants to get a bill to his desk as quickly as possible," Press Secretary Robert Gibbs said as reporters questioned him repeatedly about Obama's decision to go along with House and Senate leaders in bypassing the usual negotiations between the two chambers in the interest of speed. The decision was made in an Oval Office meeting Tuesday evening with House Speaker Nancy Pelosi and House Majority Leader Steny Hoyer. Senate Majority Leader Harry Reid and his No. 2, Sen. Dick Durbin, D-Ill., joined in by phone. Gibbs told reporters Wednesday to "ask the leaders in Congress" about the fast-track approach, even though Obama was involved in making the decision and the closed nature of the proceedings is at odds with a promise he made while campaigning for president. In a January 2008 debate, Obama said that his approach to health care talks would involve "bringing all parties together, and broadcasting those negotiations on C-SPAN so that the American people can see what the choices are." Republicans have jumped on the contradiction to accuse Obama and Democrats of operating in secret, an assertion Democrats dispute. "There has never been a more open process for any legislation in anyone who serves here's experience," Pelosi declared at a news conference Tuesday. Asked about Obama's campaign trail promise, Pelosi remarked, without elaboration, "There are a number of things he was for on the campaign trail."
- On Jan. 6, Qualcomm(QCOM) announced that accessories maker mophie has built an antenna to catch Qualcomm MediaFlo TV’s programming into its cases for the iPhone and iPod touch. The move will allow Qualcomm to sell its TV service while bypassing wireless service providers, which haven’t been as successful as hoped in pushing the service thus far.
Politico:
- Sen. Ben Nelson (D-Neb.) continued the long Washington tradition Tuesday of lawmakers returning to their home states for recess and making unusually blunt statements. In an interview with the Fremont Tribune, Nelson took a shot at President Barack Obama's priorities, saying the White House should not have put health care ahead of dealing more directly with jobs and the economy. “I think it was a mistake to take health care on as opposed to continuing to spend the time on the economy,” Nelson said. Then, he defended the so-called Cornhusker Kickback, which was the special Medicaid funding deal in which the federal government would forever pick up Nebraska's share of the Medicaid expansion. Nelson said it really was an attempt to provide the same treatment for other states down the road.
- California Gov. Arnold Schwarzenegger savaged congressional plans for health reform in his 2010 State of the State address on Wednesday, calling the legislation "health care to nowhere" that's infected with "bribes, deals and loopholes." With the nation's largest state enduring a fiscal crisis, Schwarzenegger said California's lawmakers should vote against the bill or push to get the Medicaid subsidies that were written into the Senate bill in order to secure Sen. Ben Nelson (D-Neb.) as the 60th and passing vote for that chamber's version of reform. The deal has been attacked as the "Cornhusker Kickback." "While I enthusiastically support health care reform, it is not reform to push more costs onto states that are already struggling while other states get sweetheart deals," Schwarzenegger said before a joint session of the California State Legislature. "Health care reform, which started as noble and needed legislation, has become a trough of bribes, deals and loopholes. You've heard of the bridge to nowhere. This is health care to nowhere. California's congressional delegation should either vote against this bill that is a disaster for California or get in there and fight for the same sweetheart deal Senator Nelson of Nebraska got for the Cornhusker State. He got the corn; we got the husk."
Forbes:
- Video Conferencing Is Within Your Reach.
Reuters:
- Youth apparel retailer rue21 Inc (RUE) raised its fourth-quarter outlook, citing stronger-than-expected total sales and gross margin. Rue21, which went public in November 2009, expects earnings for the fourth quarter ending Jan. 30 to be between 28 cents and 30 cents a share, up from its previous range of 17 cents to 20 cents a share. The company's shares, which have risen about 23 percent since their debut on Nasdaq on Nov. 13, were trading up about 2 percent after the bell at $30.
Financial Times:
- The Bank for International Settlements will gather top central bankers and financiers for a meeting in Basel this weekend amid rising concern about a resurgence of the “excessive risk-taking” that sparked the financial crisis. In its invitation, the BIS cited concerns that “financial firms are returning to the aggressive behavior that prevailed during the pre-crisis period”. The BIS, known as the central banks’ bank, outlined in a restricted note to participants some specific proposals that it believes could create a healthier financial system. Those proposals including lowering return-on-equity targets for the banks as a way to discourage such risk taking. Private sector bank chiefs attending the meeting at the BIS in Basel include Larry Fink of BlackRock, Vikram Pandit of Citigroup, and John Stumpf of Wells Fargo. Lloyd Blankfein, Goldman Sachs chief executive, and Jamie Dimon, chief executive of JPMorgan Chase, were invited but are not planning to attend. “The concern here is that the prolonged assurance of very cheap and ample funding may encourage excessive risk-taking,” the BIS invitation note says. The note also expresses concern about deteriorating public finances and warned that doubt about fiscal prudence “could seriously disrupt bond markets if it triggered concerns about creditworthiness or inflation because of concerns with government incentives to inflate debt away.”
- US banks’ contributions to a multi-billion dollar fund that insures depositors’ savings could be linked to regulators’ assessment of bank pay plans, under preliminary discussions being held by top banking watchdogs. People familiar with the situation said that the talks were at an early stage and no decision had been made. One of the issues under consideration is whether regulators should seek information about lenders’ compensation policies; how they affect banks’ risk profiles and whether certain pay structures should be taken into account when assessing FDIC insurance fees, according to people briefed on the discussions. Any proposals are likely to be targeted to specific structures that are deemed to increase or reduce risk.
Economic Daily News:
- The flat panel industry will remain positive for the whole of 2010, citing Compal Electronics Inc. President Ray Chen, who is also a board director of Chunghwa Picture Tubes Ltd. There will be a shortage of laptop computer panels in March and April and there's already a lack of television panels currently.
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Asian indices are -.25% to +.50% on avg.
S&P 500 futures -.14%.
NASDAQ 100 futures -.09%.
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Economic Releases
8:30 am EST
- Initial Jobless Claims for last week are estimated to rise to 440K versus 432K the prior week.
- Continuing Claims are estimated to fall to 4975K versus 4981K prior.
Upcoming Splits
- None of note
Other Potential Market Movers
- The Fed's Bullard speaking, Fed's Hoenig speaking, JPMorgan Tech Forum, Citi Entertainment/Media/Telecom Conference, BoE interest rate decision, weekly EIA natural gas inventory report and the Las Vegas Consumer Electronics Show could also impact trading today.
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