Evening Headlines
Bloomberg:
- Rattner's Conduct Was 'Unethical," Quadrangle Says. Steven Rattner, co-founder of Quadrangle Group LLC, engaged in “inappropriate, wrong and unethical” conduct when he obtained a $100 million investment from the New York state pension fund, the company said. Rattner, who has since left the private-equity firm, paid $1.1 million in finder fees to Henry “Hank” Morris, the former chief political consultant to ex-New York Comptroller Alan Hevesi, according to state Attorney General Andrew Cuomo. In exchange, Quadrangle got the investment from the fund, said Cuomo, who today settled his probe of the firm for $7 million. “We wholly disavow the conduct engaged in by Steve Rattner,” the Manhattan-based firm said in Cuomo’s statement, adding that it didn’t admit or deny any wrongdoing. “That conduct was inappropriate, wrong and unethical.” Rattner served until July in the Obama administration’s Treasury Department as chief adviser on auto-industry restructuring.
- EU Finance Chiefs Meet as Greece Moves Closer to Aid Request. European Union finance ministers meet in Madrid today to discuss how to curb swelling budget deficits as Greece moved closer to asking for emergency aid to finance the region’s biggest shortfall. Greek Prime Minister George Papandreou yesterday asked for a meeting with the EU, the International Monetary Fund and the European Central Bank, which agreed last week to back a 45 billion-euro ($61 billion) rescue package for the cash-strapped nation. Talks will begin in Athens on April 19. The euro region is aiming to prevent the first default of a member nation and offered to put up two-thirds of the package to sustain Greece and protect the single currency. Greece needs to raise 11.6 billion euros by the end of May, and Papandreou has said borrowing at current market interest rates is “unsustainable.” “Greece is going to remain in recession for a number of years and that is going to make it very difficult for it to meet its deficit reduction plans,” said Jonathan Loynes, chief European economist at Capital Economics Ltd. in London. “It wouldn’t be at all surprising if it ultimately needs more support than the initial 45 billion euros.”
- Fed's Yellen Growing More Confident Economy 'On Right Track'. Janet Yellen, president of the Federal Reserve Bank of San Francisco, said she’s increasingly certain the U.S. economy is “on the right track,” and that officials will “at some point” need to lift borrowing costs. “We’ve been getting some pretty encouraging news,” Yellen said today in the text of a speech in San Francisco. “It’s been a long time coming and is very welcome indeed.” Still, “it’s important not to lose sight of just how fragile this recovery is,” she said, while reaffirming the Fed’s pledge to keep the benchmark U.S. interest rate low for an “extended period.” Yellen, President Barack Obama’s pick to be the central bank’s next vice chairman, voiced some of her most upbeat assessments since the start of the recession in December 2007. Three months of payroll gains reflect a “slow, but steady rebound” of jobs, and there aren’t signs of imbalances in U.S. stock prices, the Fed official said. “It’s fair to say that my own thinking has recently turned a corner and I am becoming more and more confident that the economy is on the right track,” said Yellen, who has led the San Francisco Fed since 2004. “At some point, though, as the economy continues to expand, the Fed will have to pull back some of this extraordinary stimulus,” she said in remarks before Financial Executives International, a group whose members include the chief financial officers of Southwest Airlines Co., Colgate- Palmolive Co. and Wal-Mart Stores Inc. “The latest indicators show a broadening and deepening of the recovery, and point to solid, if not spectacular, expansion in the first half of this year,” said Yellen, who expects growth of about 3.5 percent in 2010 and 4.5 percent in 2011. Credit flows remain “extremely weak” and one “bleak” area of the economy is commercial real estate, she said. The housing outlook “is somewhat better.” Yellen, 63, said she supports the “extended period” pledge because “the economy is operating well below its potential, inflation is subdued, and such conditions are likely to continue for a while.” Unemployment should remain “stubbornly high for the next few years,” or about 9.25 percent by year’s end and 8 percent at the end of 2011, she said. Inflation rates should fall to about 1 percent this year and next, below the 2 percent level that most policy makers regard as consistent with price stability, Yellen said. While stock and real-estate prices show no signs of “large imbalances relative to fundamentals,” the central bank is “closely monitoring” financial conditions, she said. Yellen said she expects a “gradual” return of the Fed’s balance sheet back to holdings of mostly Treasuries. Meanwhile, policy makers can use the interest rate on bank reserves to push up short-term rates before shrinking the balance sheet, she said.
- France to Seek Commodity Position Limits, Margin Calls at G-20.
- Tech Sector in Hiring Drive. The technology industry, an engine of innovation and U.S. prosperity for more than half a century, is accelerating its recovery from the recession with surging earnings that have spurred companies to sharply ramp up their hiring. The latest evidence for the rebound came Thursday, when Internet giant Google Inc. posted a 37% profit jump for the first quarter and chip maker Advanced Micro Devices Inc. reported a 34% revenue increase to record levels. The results follow the strong showing of bellwether Intel Corp., which Tuesday announced quarterly profit that nearly quadrupled on a 44% jump in sales. The trio of results kicks off what is likely to be a strong earnings streak as tech spending by companies and consumers picks up. Next week, Apple Inc., Amazon.com Inc. and Microsoft Corp., among others, are slated to report quarterly results. Tech-research firm ISI Group projects that overall revenues from such companies will rise more than 10% for the first quarter, compared with a 16% decline a year earlier. Meanwhile, Standard & Poor's forecasts a 79% increase in tech earnings for the quarter from year-ago levels.The growth has reached a level where tech companies are pushing to hire again, in some cases engaging in heated competition for talent.
- Immigration Raid Targets Vast Network. Authorities Arrest 47 Alleged Leaders of Human-Smuggling Chain Stretching From Mexico to Cities Throughout U.S. More than 800 federal agents fanned out across Arizona and other states Thursday to dismantle a loosely connected network that allegedly transported thousands of illegal immigrants from the Mexico border to cities across the U.S. Authorities arrested 47 alleged leaders of the human-trafficking chain in raids at shuttle-bus operations and more than 50 houses where illegal immigrants were held by smuggling gangs. Mexican authorities arrested four high-ranking smugglers in the operation that stretched as far as Tennessee. The operation, dubbed "In Plain Sight," was the largest human-smuggling enforcement action ever conducted by U.S Immigration and Customs Enforcement, authorities said. It followed a yearlong investigation that involved collaboration between ICE and Mexican federal police, as well as the participation of the Federal Bureau of Investigation, and state and local law enforcement. "We have dealt a severe blow to an alien-smuggling industry in Arizona that feeds thousands of aliens into the far reaches of the U.S., including New York, Chicago and Los Angeles," said ICE chief John Morton.
- Tragic Flaw: Graft Feeds Greek Crisis. Behind the budget crisis roiling Greece lies a riddle: Why does the state spend so lavishly but collect taxes so poorly? Many Greeks say the answer needs only two words: fakelaki and rousfeti. Fakelaki is the Greek for "little envelopes," the bribes that affect everyone from hospital patients to fishmongers. Rousfeti means expensive political favors, which pervade everything from hiring teachers to property deals with Greek Orthodox monks. Together, these traditions of corruption and cronyism have produced a state that is both bloated and malnourished, and a crisis of confidence that is shaking all of Europe.
- Icahn Boosts Offer To Buy Lions Gate; Mark Cuban Takes Stake. Activist investor Carl Icahn boosted his tender offer for 81% of Lions Gate Entertainment Corp. (LGF) by 17%, valuing the company at some $825 million. The announcement sent shares up 9.9% after hours to $7, the new offer price.
- Geithner Letter Could Steer Derivatives Debate Away From Ban on Banks. Treasury Secretary Timothy Geithner said Thursday in a letter that tight restrictions on derivatives is "at the core" of a sweeping overhaul of financial rules but didn't call for the outright ban on trading by banks that some Democrats are pushing. Mr. Geithner, in a letter to Senate Agriculture Committee Chairman Blanche Lincoln (D., Ark.), said new financial rules must create restrictions on how over-the-counter derivatives are traded "in order to curb abuses that were at the very center of the financial crisis." But he notably stopped short of endorsing a proposal from Ms. Lincoln to force large banks to spin off derivatives trading businesses entirely. Mr. Geithner's two-page letter could be an attempt to steer Ms. Lincoln's bill away from one of its most controversial elements – a requirement that large U.S. banks completely spin off their derivatives trading businesses. While he doesn't address this requirement in his letter, he does specify the exact requirements White House officials believe would accomplish tighter derivatives trading requirements. That could give Democrats cover to scale back her proposal while still toughening rules. Some Democrats are worried that her proposal might be so controversial it could imperil the broader chances of the bill's passage, people familiar with the matter said.
- Goldman Sachs's(GS) New Palace Creates Princes, Serfs. Goldman Sachs Group Inc.'s new headquarters in lower Manhattan has the kind of amenities befitting masters of Wall Street. The $2.1 billion steel-and-glass building has giant murals, opera-house ceiling heights, and a gym with overachiever fitness classes, like "Awesome Abs." But a new class of haves and have-nots has emerged—even at Goldman where the notion of have-nots is relative. Outside offices are now reserved only for the firm's more than 300 elite partners. Managing directors, next down in the Goldman hierarchy, almost always get windowless inside offices. And vice presidents, many of whom had offices before the move, now sit at open-space workbenches that in an earlier era would have been called a typing pool. They aren't thrilled. "I haven't had a desk like this since high school," said one employee who asked not to be named. Even some managing directors are grousing. Vice presidents, they note, often get a window seat at their bullpen desks, a sort of consolation prize for having lost an office. "I used to have an office with a view," explained one managing director. "Now I need binoculars to see sunlight." The company has been secretive about its new headquarters, especially as it tries to counter criticism that has hurt the company's sterling image. In 2005, Goldman received tax breaks and grants valued at more than $200 million toward the new building, which stands just across the street from Ground Zero. One of the building's most notable features is the Sky Lobby on the 11th floor. Flooded with light from a glass ceiling, the area resembles a massive auditorium-like space that houses banks of conference rooms, a cafeteria and employee gym. Henry Cobb, a partner at Pei Cobb Freed & Partners, the building's lead architect, calls the Sky Lobby the "living room" of the building. Baristas serve French Toast Baba pastries and lattes in the cafe, not to be confused with the Sky Lobby cafeteria that offers a deep panini lineup and deadly cupcakes, employees say. The 54,000-square foot gym, called the GS Wellness Exchange, has classes from 5:45 a.m. to 7:50 p.m. The new steam rooms for men and women are drawing mixed reviews. Some employees find the idea of "steaming" with co-workers objectionable. Others, not so much. "Once you have seen your colleagues naked in the locker room, steaming with them isn't that weird," says one employee. The employee reading lounge features Goldman-approved books, including "On the Brink," the bestseller by former Goldman Chairman and CEO turned Treasury Secretary Henry Paulson Jr. Employees also can thumb through "The Psychology of Persuasion: How to Persuade Others to Your Way of Thinking" by Kevin Hogan and Mitch Albom's "Have a Little Faith: A True Story." "If I had been at a bench my whole life, it would be fine," said one vice president, "but I used to have an office."
Marketwatch.com:
- BRIC Leaders Meet to Seek Change in Global Order. The presidents of Brazil, Russia, India and China will meet Thursday evening to discuss proposals for changes to the global financial system and multinational institutions. The summit of the BRIC group of emerging market giants was brought forward from Friday at the last minute after Chinese President Hu Jintao decided to rush back to China following a massive earthquake in Qinghai province early Wednesday. Earlier in the day, Hu and Brazilian President Luiz Inacio Lula da Silva had signed a wide-ranging, four-year bilateral action plan that was light on details but focused on increasing economic ties. They also agreed to jointly push for changes at the World Trade Organization, the Group of 20 nations and other international organizations. "At the G-20 and all other multilateral institutions, we seek progressive answers for this asymmetric and dysfunctional globalization that humanity is experiencing," Lula told reporters. Speaking at a joint press conference, Hu said China seeks changes in multinational institutions to safeguard the interests of developing nations.
- No Cap for this Rally. Mark Coffelt, manager of Empiric Core Equity Fund, said he believes the U.S. stock market has "a long way to go" before the rally is finished, but noted that leadership is changing.
- S&P to Reach 1,300 by Mid-Year: Byron Wien. (video) “The news on the economy is really pretty good,” Wien told CNBC. “It’s been flowing better than expected since the beginning of the year.” Eventually, the good economic data will lead to job creation, said Wien. He also predicted that the S&P will reach 1,300 during the first half of the year. Among his sector picks, Wien likes technology, oil, materials and health care.
- Video Game Sales Rebound - Good News for Earnings? The turnaround may finally have arrived for the video game industry. March sales were up 6 percent compared with the 2009 numbers, marking the only positive growth the industry has seen since September 2009—and just the second month in the last 12 to show improvement. It’s widely expected to be the start of a series of year-over-year improvements, though, as comparisons get easier. And it could be the start of a revival in video game stock prices.
- B. of A. Merrill Lifts S&P 500 Target to 1,350. Bank of America Merrill Lynch on Thursday raised its 12-month price target on the S&P 500 index to 1,350, at the same time as it lifted the S&P's earnings per share estimates for 2010, 2011 and 2012.
- Tea Parties' Tax Day Message.
NY Times:
NYPost:
Forbes:
- Bank of America(BAC): Stock of Opportunity. It's a long way from $2.50 to $20, but Bank of America has the wind at its back and investors are buying in.
- Taxes on the Rich Are The Poor Man's Burden. When the wealthy are fleeced, it is the less well-off who truly suffer.
- Google(GOOG) Earnings Soar 38%. Google posted quarterly sales and profit that trumped Wall Street expectations Thursday, boosted by a rebounding advertising market. The search giant's net income was $1.96 billion, or $6.06 per share, in the first quarter, up 38% from $1.42 billion from the same period last year. Excluding one-time charges, the Mountain View, Calif.-based company earned $2.18 billion in the first quarter, or $6.76 per share, up from $1.64 billion a year earlier. That easily beat analysts expectations, which called for earnings of $6.60 per share. Google's revenue surged 23% to $6.77 billion. Excluding traffic acquisition costs, which are the advertising sales that Google shares with partners, the company reported sales of $5.06 billion, beating the $4.95 billion in revenue expected by analysts. The number of paid clicks on ads served on Google's Web site and its partner Web sites increased 15% from last year and 5% from the fourth quarter of 2010. Additionally, "large advertisers have come back in force," Patrick Pichette, Google's CFO, said in an earnings call. Advertisers paid 7% more per click for ads on sites owned by Google and its partners in the first quarter than they did a year ago, though the cost per click was down 4% from the fourth quarter of 2009. "Google performed very well in the first quarter," said Pichette in a statement. "Going forward, we remain committed to heavy investment in innovation -- both to spur future growth in our core and emerging businesses as well as to help build the future of the open web." To ease worries about the impact this decision may have on business, Pichette told investors that leaving mainland China was the "right call" and wouldn't affect future sales. The decision "clearly has us staying in China; we have just changed our strategy," he said. "What we've really done is, we've stopped censoring, but the access to Google is still available." Huber added that Google is seeing more than 60,000 Android smartphones sold and activated daily. Pichette announced that Google CEO Eric Schmidt will no longer be participating in the company's earnings calls. However, he said investors should not read into this decision. "Eric is everywhere, he's very public," said Pichette. "The fact that we've decided to streamline our process just for earnings doesn't mean that [Eric] is not available." Despite the company's positive first quarter results, shares of Google were down more than 4% in after hour trading.
- Main Street Left Out of Recovery. The economy may be showing halting signs of recovery, but the turnaround hasn't reached Main Street yet: A pair of recent small business surveys found that most owners are skeptical or downright gloomy about their business prospects this year. "Something isn't sitting well with small business owners," Bill Dunkelberg, chief economist of the National Federation of Independent Business, said in a written statement accompanying the latest edition of his organization's monthly "Small Business Optimism" report. "Poor sales and uncertainty continue to overwhelm any other good news about the economy." Capital expenditures remain near record lows, sales are still weak, and credit lines are hard to find, according to the around 950 business owners NFIB surveyed in March. While job cuts have slowed, few businesses say they plan to hire new workers within the next three months. NFIB's findings dovetail with those from American Express, which recently polled owners of firms with 100 or fewer employees. One in five businesses said their companies are "sinking ships," while more than half said they were merely "staying afloat." Just 21% reported that their business was healthy or growing.
zerohedge:
L.A. Times:
Institutional Investor:
- Big Hedge Funds Have Small Gains This Year. Get ready to pass around the hat. Many of the large, well recognized hedge fund names are having a tough time so far this year, especially the large macro managers. Several of them are even losing money while others are barely in the black. If performance does not pick up soon, those managers who are still far from their high water marks may soon have to deal with restless impatient investors who would like to make back their losses already and employees who would like a nice bonus for their huge efforts. At the moment, both groups will have to wait even longer than they had hoped. For example, Citadel Investment Group’s two main funds — Wellington and Kensington — are flat so far this year, according to sources. Sure, they were up more than 60 percent last year. But, it still put them well below break-even since they lost 50 percent in 2008. As a result, the Chicago firm, founded by Ken Griffin in 1990, has shrunk to $13 billion from a high of $20 billion two years ago, say sources.
- Pimco's McCulley Calls for Money Market Fund Reform. A top executive at the world's largest bond fund said on Thursday that money market mutual funds should not exist in their current form. Pacific Investment Management Co's (PIMCO) Paul McCulley told a Levy Economics Institute conference that money market funds contributed directly to the instability of the financial system by acting as foundation for the shadow banking system. McCulley's remarks followed a similar call by former Federal Reserve Chairman Paul Volcker at the same conference. Volcker proposed money market funds be regulated in a fashion similar to banks. He called for tighter restrictions on the types of assets in which they could invest.
- 51% in New Jersey Favor Repeal of Health Care Bill. Fifty-one percent (51%) of voters in New Jersey, a state Barack Obama carried handily in 2008, now favor repeal of the recently-passed national health care bill. That includes 41% who strongly favor repeal. A new Rasmussen Reports telephone survey of voters in the Garden State finds that 45% oppose repeal of the health care plan, with 38% who strongly oppose it. Support for repeal is lower in New Jersey than it is nationally. Three weeks after passage of the health care bill, 58% of voters nationwide favor its repeal.
- 40 GOP Senators Sign McConnell's Letter Opposing the Democratic Wall Street Bill. Sen. Susan Collins (R-Maine) remained the lone GOP holdout Thursday night in a push by Senate Minority Leader Mitch McConnell to line up all 41 Republican senators behind a letter opposing the Democratic Wall Street reform bill. The resistance from Collins slowed efforts by the Republican leadership to throw up a united front that would thwart a plan by Democrats to bring the financial regulatory bill to the floor as early as next week. Senate Majority Leader Harry Reid (D-Nev.) needs support from at least one Republican to open debate on the bill. “I am still talking with my colleagues about whether a letter is the most effective way to send the message, or whether there are better ways, and those discussions are still ongoing,” Collins told reporters at the Capitol. “I agree with my colleagues that the Dodd bill is deeply flawed. But, as a former financial regulator, I also feel strongly that the current system is very flawed. We need a financial regulatory bill, just not this one.” Collins told POLITICO Thursday night that she “would like to see both sides come back together and work out a bipartisan bill because this should not be a partisan issue.” Collins targeted the inclusion in the bill of a $50 billion fund, financed by financial firms, to wind down failing institutions. “We’re essentially telling these big institutions that there still will be funding to bail them out if they continue to pursue high-risk practices and that just doesn’t make sense to me,” she said. Other moderate Republican targets, including Maine Sen. Olympia Snowe, Ohio Sen. George Voinovich and Massachusetts Sen. Scott Brown, have signed the letter.
- Obama: Change Taking Hold. President Obama made the case to Democrats Thursday night that the change they voted for in 2008 is “beginning to take hold,” even as the chairman of the party predicted a fierce fight with Republicans in the mid-term elections this November. Obama’s 30-minute speech at a DNC fundraiser at the Arsht Center for the Performing Arts focused heavily on the economy, an issue he said Democrats can proudly run on this fall. “One year later, we can say that the financial system is stabilized,” Obama said. He touted his proposed bank fee and said while the economic stimulus bill got confused with the bank bailout signs show it is working. “The change you fought for is beginning to take hold.” Over 1,000 people attended the $250-$2,500 a ticket event, which followed a $30,000-per-couple fundraiser at the house of Gloria and Emilio Estefan, which was closed to the press.
Real Clear Politics:
Huffington Post:
ars technica:
- Early Numbers Show Surprisingly High iPad Browser Share. The iPad's presence on the Web—or at least certain parts of it—is already rivaling that of much more prevalent devices. According to initial data from Web metrics firm NetApplications (via IDG), Apple's tablet device has averaged about 0.03 percent of all Web traffic per day in the first 10 days after launch, nearly matching the March numbers for the BlackBerry and catching up quickly to other mobile devices.
- Senate Panel Says Regulators Ignored Risks at WaMu. Federal bank regulators failed to stop shoddy lending and excessive risk-taking at Washington Mutual Inc. for years because they were too chummy with WaMu executives, a Senate panel says. WaMu's primary regulator, the Office of Thrift Supervision, failed to properly oversee the bank, according to a report released Thursday by the Permanent Subcommittee on Investigations. The OTS' lax oversight led to WaMu's failure, the biggest by a U.S. bank, the report says. "OTS' failure to act allowed Washington Mutual to engage in unsafe and unsound practices that cost borrowers their homes, led to a loss of confidence in the bank and sent hundreds of billions of dollars of toxic mortgages into the financial system," contributing to the financial crisis, the report says. Panel chairman Sen. Carl Levin, D-Mich., says the OTS' chief, John Reich, called the bank his "biggest constituent" when preparing for a meeting with WaMu CEO Kerry Killinger.
- Schlumberger(SLB) Starts Staffing in Iraq - WSJ. Schlumberger Ltd (SLB) has begun staffing an operation in Iraq, one of the first such moves by a Western energy company in decades, according to The Wall Street Journal. The world's largest oilfield service company is finishing work on a 40-acre compound near Basra, the Journal said. Schlumberger told the Journal it expected to have 300 employees there by July and almost 600 by the end of the year.
- Intuitive(ISRG) Profit Tops Expectations But Shares Fall. Intuitive Surgical Inc reported much better-than-expected first-quarter profit on increased U.S. demand for its expensive da Vinci surgical robot systems and robotic procedures. Based on the strong first quarter results the company said it now expects 2010 revenue to rise by 27 percent to 29 percent, up from its previous forecast for 25 percent growth. Intuitive posted a net profit of $85 million, or $2.12 per share, compared with a profit of $28.1 million, or 72 cents a share, a year ago, when a revenue deferral reduced results by 30 cents. That blew past analysts' average expectations by 44 cents, according to Thomson Reuters I/B/E/S. But after initially climbing, shares in the company fell nearly 3 percent after-hours despite the earnings beat. "It was a great quarter, but in the last three days the stock has run from $353 to (an intraday price of) $393, so a little sell on the news shouldn't be out of the question," Funtleyder said. Intuitive's share price has more than tripled in the last year and is up some 26 percent so far this year. While procedure growth in Europe was strong, the company said pressure on hospital capital spending in Europe was taking a toll on da Vinci sales there. Gynecological procedures were an especially strong growth area, the company said. Instruments and accessories revenue rose to $123 million from $80 million a year ago, helped by higher initial instrument and accessory stocking orders, and da Vinci procedures increased about 37 percent. Revenue rose to $329 million from $188 million a year ago, exceeding analysts' estimates of $294.8 million. Intuitive sold 104 da Vinci surgical systems in the quarter, up from 66 in the year-ago quarter. Systems revenue was $155 million compared with $70 million a year ago. Of those 104 systems, 80 were sold in the United States, but just 11 new systems were sold in Europe. Intuitive told analysts on a conference call that it still expects 35 percent procedure growth in 2010.
Telegraph:
- Morgan Stanley Fears German Exit from EMU. Morgan Stanley has warned that the Greek debt crisis is setting off a chain of events that may prompt German withdrawal from the eurozone, with grim implications for investors caught off-guard. "The backstop package for Greece and the ECB's climb-down on its collateral rules set a bad precedent for other euro area states and make it more likely that the euro area degenerates into a zone of fiscal profligacy, currency weakness, and higher inflationary pressures over time," said Joachim Fels, head of research, in a note to clients. The US bank said a bail-out for Greece may be necessary to avoid a crisis for Europe's financial system, but warned that it also "sows the seeds for potentially even bigger problems further down the road". Mr Fels said weak states cannot easily leave EMU because they would pay a stiff penalty in higher rates, would be stuck with euro debt contracts, and might need controls to stem capital flight. It is a different calculus for Germany, which would see lower rates and might view EMU exit as the only way to ensure monetary stability. "Obviously, we have not reached the end game yet. However, with the latest developments, such a break-up scenario has clearly become more likely. The risk is far from negligible and the consequences for financial markets would be very severe. Investors ignore the break-up risk at their peril," he said. Jürgen Stark, the European Central Bank's chief economist, vowed on Thursday to resist pressure to help spendthrift governments out of their troubles by resorting to easy money. "Let me stress that any call to reduce the real value of public debt through higher inflation will be firmly opposed by the ECB," he said. Dr Stark said the global credit crisis is starting to metamorphose into a deeper solvency threat to highly-indebted states. "We may already have entered into the next phase of the crisis: a sovereign debt crisis following on the financial and economic crisis. Most governments in the advanced countries will exit from recession with the highest deficit and debt-to-GDP ratios recorded in times of peace. It is essential to prevent public finances from running out of control," he said. Dr Stark said public debt will reach 88pc of GDP next year in the eurozone and the UK, 100pc in the US and 200pc in Japan. "There is no doubt that fiscal policies have been put on a path that is not sustainable," he said. He did not name the eurozone's main sinners, but his warnings are clearly directed at Greece, Spain, Portugal, Italy, and Ireland.
Guardian:
Frankfurter Rundschau:
The Age:
Xinhua:
EE Times:
Haaretz:
Evening Recommendations
Citigroup:
- Reiterated Buy on (PPG), target $80.
- Reiterated Buy on (FCS), boosted target to $22.
- Reiterated Buy on (AAPL), target $300.
- Reiterated Buy on (GOOG), target $640.
- Rated (OCR) Positive, target $36.
- Rated (HSIC) Positive, target $70.
- Rated (PDCO) Positive, target $38.
- Asian indices are -1.0% to -.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 88.5 +1.0 basis point.
- S&P 500 futures -.49%.
- NASDAQ 100 futures -.44%.
Earnings of Note
Company/Estimate
- (GCI)/.41
- (MAT)/-.03
- (WERN)/.16
- (GE)/.16
- (BAC)/.10
- (GPC)/.62
8:30 am EST
- Housing Starts for March are estimated to rise to 610K versus 575K in February.
- Building Permits for March are estimated to rise to 625K versus 612K in February.
- Preliminary Univ. of Mich. Consumer Confidence for April is estimated to rise to 75.0 versus a reading of 73.6 in March.
- None of note
- The Fed's Warsh speaking and the Fed's Hoenig speaking could also impact trading today.
No comments:
Post a Comment