Monday Watch

Weekend Headlines
Bloomberg:

• MIT's Johnson Says Too-Big-to-Fail Banks Will Spark New Crisis. Alan Greenspan, the master of monetary mumbo jumbo, leaned back in his chair and grew uncharacteristically forthright. “If they’re too big to fail, they’re too big,” the former Federal Reserve chairman said when asked about the dangers of outsized financial institutions. “You know, break them up,” he told an audience at the Council on Foreign Relations in New York. “In 1911, we broke up Standard Oil. So what happened? The individual parts became more valuable than the whole.” Greenspan the bank buster crops up near the end of “13 Bankers,” Simon Johnson and James Kwak’s reasoned look at how Wall Street became what they call “the American oligarchy,” a group of megabanks whose economic power has given them political power. Unless these too-big-to-fail banks are broken up, they will trigger a second meltdown, the authors write. “And when that crisis comes,” they say, “the government will face the same choice it faced in 2008: to bail out a banking system that has grown even larger and more concentrated, or to let it collapse and risk an economic disaster.” The banks in their sights include Bank of America Corp.(BAC), JPMorgan Chase & Co.(JPM) and Goldman Sachs Group Inc.(GS) Though Wall Street may not like “13 Bankers,” the authors can’t be dismissed as populist rabble-rousers. Johnson is an ex-chief economist for the International Monetary Fund who teaches at the Massachusetts Institute of Technology. Kwak is a former McKinsey & Co. consultant. In September 2008, they started the Baseline Scenario, a blog that became essential reading on the crisis. When they call Wall Street an oligarchy, they’re not speaking lightly. Drawing parallels to the U.S. industrial trusts of the late 19th century and Russian businessmen who rose to economic dominance in the 1990s, the authors apply the term to any country where “well-connected business leaders trade cash and political support for favors from the government.” Oligarchies weaken democracy and distort competition. The Wall Street bailouts boosted the clout of the survivors, making them bigger and enlarging their market shares in derivatives, new mortgages and new credit cards, the authors say. The book’s title alludes to one Friday last March when 13 of the nation’s most powerful bankers met with Obama at the White House amid a public furor over bailouts and bonuses. They propose that no financial institution should be allowed to control or have an ownership interest in assets worth more than 4 percent of U.S. gross domestic product, or roughly $570 billion in assets today. A lower limit should be imposed on investment banks -- effectively 2 percent of GDP, or roughly $285 billion, they say. If hard caps sound unreasonable, consider this: These ceilings would affect only six banks, the authors say: Bank of America, JPMorgan Chase, Citigroup Inc., Wells Fargo & Co., Goldman Sachs and Morgan Stanley. “Saying that we cannot break up our largest banks is saying that our economic futures depend on these six companies,” they say. “That thought should frighten us into action.”
• Obama Paying More Than Buffett as Bonds Show U.S. Losing AAA. The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama. Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market. The $2.59 trillion of Treasury Department sales since the start of 2009 have created a glut as the budget deficit swelled to a post-World War II-record 10 percent of the economy and raised concerns whether the U.S. deserves its AAA credit rating. The increased borrowing may also undermine the first-quarter rally in Treasuries as the economy improves. “It’s a slap upside the head of the government,” said Mitchell Stapley, the chief fixed-income officer in Grand Rapids, Michigan, at Fifth Third Asset Management, which oversees $22 billion. “It could be the moment where hopefully you realize that risk is beginning to creep into your credit profile and the costs associated with that can be pretty scary.”
• Fed Ends Bank Exemption Aimed at Boosting Mortgage Liquidity. The Federal Reserve Board removed an exemption it had given to six banks at the start of the crisis in 2007 aimed at boosting liquidity in financing markets for securities backed by mortgage- and asset-backed securities. The so-called 23-A exemptions, named after a section of the Federal Reserve Act that limits such trades to protect bank depositors, were granted days after the Fed cut the discount rate by half a percentage point on Aug. 17, 2007. Their removal, announced yesterday in Washington, is part of a broad wind-down of emergency liquidity backstops by the Fed as markets normalize.
• The European Union's planned hedge fund rules won't lock U.S.-based funds out of the bloc's market, said Michel Barnier, the EU financial services commissioner. U.S. Treasury Secretary Timothy F. Geithner this month wrote to Barnier to express concern that the rules being debated could discriminate against U.S. funds.
• AIG's(AIG) Benmosche Awarded Salary of $7 Million, Feinberg Says. American International Group Inc. Chief Executive Officer Robert Benmosche, the highest-paid executive at the bailed-out insurer, will get a $7 million salary again this year, said paymaster Kenneth Feinberg. Benmosche, 65, secured a salary last year that includes $3 million in cash and $4 million in common stock. His compensation wasn’t changed this year, Feinberg, the Obama administration’s special master for executive pay, said in an interview yesterday.
• Goldman Sach's(GS) Blankfein Gets $9.8 Million Package for 2009. Goldman Sachs Group Inc. gave Chairman and Chief Executive Officer Lloyd Blankfein $9.8 million in total compensation for 2009, the firm said in a regulatory filing. Blankfein’s pay included a $600,000 salary, $9 million in restricted stock awards, and about $262,000 in other compensation, New-York based Goldman Sachs said in the filing. Blankfein also made $18.7 million from his participation in investment funds the firm offers to clients. Goldman Sachs allows some executives to invest alongside clients so they can benefit from merchant banking, venture capital and “similar activities,” according to the filing. The bonuses fell far short of the Wall Street record that Blankfein, 55, set with his $67.9 million bonus in 2007.
• Top 100 Political Donors From 1989-2010(Table). Following is a comparison of the top political donors from the 1989-2010 election cycle to political party as compiled by the Center for Responsive Politics. The last column is the difference in a firm’s average percentage of donations to Democrats from the 1989 to 2010 cycles compared to its 2010 cycle only donation. For example, Goldman Sachs(GS) has increased its percentage of donations from 64 percent to democrats to 75 percent in the latest cycle only.
• Bernanke Says Large Bank Bailouts 'Unconscionable,' Must End. Federal Reserve Chairman Ben S. Bernanke said government bailouts of big financial companies are “unconscionable” and must be ended as part of a regulatory overhaul following the worst financial crisis since the 1930s. “It is unconscionable that the fate of the world economy should be so closely tied to the fortunes of a relatively small number of giant financial firms,” Bernanke said yesterday in a speech in Orlando, Florida. “If we achieve nothing else in the wake of the crisis, we must ensure that we never again face such a situation.”
• India's Interest Rate Rise 'Sign of Things to Come'. India’s central bank will probably raise interest rates again next month as the first increase in two years is only the initial step in the battle against inflation, BNP Paribas SA and Standard Chartered Plc said.
• India Rate Rise to Hurt Priciest BRIC Stocks, Boost Rupee. Indian stocks, the most expensive in the largest emerging markets, may fall as a surprise interest rate increase hurts financial and consumer shares, while the rupee is poised to extend gains, EM Capital Management LLC and Prudential Financial Inc. said.
• Euro Falls Most Since January as Leaders Spar Over Greece Aid. The euro posted its biggest five- day drop against the dollar since January as European Union leaders sparred over financial assistance to Greece before a summit meeting next week, damping appetite for the currency.

Wall Street Journal:

• Historic Vote on Health. The biggest transformation of the U.S. health system in decades won approval on Capitol Hill late Sunday, the culmination of efforts by generations of Democrats to achieve near-universal health coverage. Facing voters' judgment in the fall, Democrats bet they could overcome public misgivings on a bill that reshapes one-sixth of the U.S. economy. The final battle on the House floor exposed again the divisions that have riven Congress and the nation over the past year. The House gave final passage to the Senate's health legislation on a climactic 219-to-212 vote, as Democrats muscled the measure through on the strength of the party's big majority. In the final roll call, no House Republican voted for the bill, and 34 Democrats voted no, many of them representing Republican-leaning districts. A short while later, the House, voting 220 to 211, approved a companion bill making changes to the Senate bill, a measure necessary to attract support in the House. Those changes now head to the Senate, where action is expected this week. All Republicans voted against the companion bill, as did 33 Democrats.
  
• U.S. Firms Feel Shut Out in China. A growing number of U.S. companies feel unwelcome in China, according to a new survey by the American Chamber of Commerce in China, as measures aimed at squeezing foreign technology companies out of the vast government-procurement market start to bite. The survey of Amcham's members adds to evidence of a darkening mood among multinational companies in one of their most important global markets. Negative sentiment among Amcham's members, which traditionally have been a strong lobby in Washington arguing for more engagement with China, adds to wider risks in U.S.-China relations. On Sunday, China's commerce minister, Chen Deming, warned that China "will not sit back" if the U.S. Treasury Department labels China a currency manipulator and trade sanctions follow. People with close links to the U.S. business community in China say a number of multinationals are starting to rethink their China strategy, and may consider diversifying future investments to other parts of the world. Amcham's survey polled 230 members about planned government-procurement regulations, and also repeated a question asked in annual surveys about the general business climate. The percentage of companies that feel they are unwelcome to participate and compete in the Chinese market jumped to 38%, up from 26% in the 2009 annual survey released just a few months ago in December, and 23% in 2008. It was the highest level of dissatisfaction recorded in the four years since Amcham, which lobbies for U.S. businesses in China, began polling its members on this question, and indicated that sentiment is rapidly deteriorating. Amcham conducted the latest survey because it was concerned about the deteriorating investment environment and the impact of the rules on indigenous innovation. In late October, three Chinese ministries posted a joint notice requiring technology vendors to gain accreditation for their products before they could be included in a government-procurement catalog of products containing "indigenous innovation." The catalog will cover dozens of products sold by foreign companies, including servers, mobile base stations, security and finance software, and wind-power generators. Among technology companies questioned about the new policy, 57% said they believed it would negatively affect their China operations in the future, while 37% said it was already having an impact—even though the regulations haven't officially taken effect. "In just the last few months we've witnessed a growing level of concern from American tech companies as a result of the new rules and product catalogs," Amcham-China President Michael Barbalas said in written comments. Such policies "discriminate against foreign companies and narrow market opportunities." The notice gave companies only weeks to apply, but many foreign companies balked because the application required all products to "have Chinese intellectual property and proprietary brands," and be "totally independent of overseas organization or individuals." More than 30 industry groups representing technology concerns such as Microsoft Corp., Adobe Systems Inc. and Cisco Systems Inc. have complained to the government that the rules make it virtually impossible for any products copyrighted by foreign companies to qualify, and if implemented would shut the companies out of a rapidly growing market valued at billions of dollars. It's unclear whether the rules will apply only to central government agencies, or whether they will influence purchasing by China's state-owned companies and local governments. However, this broader push for "indigenous innovation" has already been interpreted and implemented in different ways across the country, and industry groups say that in some cases provincial-level officials have taken it upon themselves to implement their own preferential purchasing practices. That explains why some companies in the Amcham survey say their businesses are already taking a hit. Among such companies, 32% are in the high-technology and information-technology sector. However, 30% are in manufacturing and 27% in services, demonstrating that the impact is being felt far beyond the technology sector.
• Online Sales Weather Recession as People Seek Out Deals. The economic downturn may have kept many European consumers away from stores, but online shopping stayed resilient through the crisis as people spent more time at home and strove to find the best deals through Internet research.
• Four Seasons Maui on Ropes. The Four Seasons Maui has gone delinquent on its $425 million of mortgages just as the Four Seasons New York and others have reached compromises with their lenders.
• The Doctors of the House. A landmark of liberal governance whose price will be very steep. House Democrats last night passed President Obama's federal takeover of the U.S. health-care system, and the ticker tape media parade is already underway. So this hour of liberal political victory is a good time to adapt the "Pottery Barn" rule that Colin Powell once invoked on Iraq: You break it, you own it. This week's votes don't end our health-care debates. By making medical care a subsidiary of Washington, they guarantee such debates will never end. And by ramming the vote through Congress on a narrow partisan majority, and against so much popular opposition, Democrats have taken responsibility for what comes next—to insurance premiums, government spending, doctor shortages and the quality of care. They are now the rulers of American medicine.

BusinessWeek:

• How Nemazee Used Harvard Degree Swindling Banks of $292 Million. On the evening of March 13, 2007, limousines lined up outside the Cipriani restaurant in Manhattan’s Chelsea neighborhood. Inside, Hassan Nemazee, surrounded by New York’s deep- pocketed donors, was orchestrating one of the year’s major fundraisers for Hillary Clinton’s presidential bid. As guests dined on steak and beet salad, Nemazee introduced the senator and her husband, former President Bill Clinton. Harvard-educated Nemazee, a scion of one of Iran’s wealthiest families, helped raise more than $500,000 that night. Three years later, on March 18, Nemazee stood in a federal courthouse 2 miles (3 kilometers) away and confessed to a 12- year scheme to defraud banks of $292 million, Bloomberg Markets reports in its May issue. He faces up to 19 and a half years in prison after pleading guilty to three bank fraud charges and one wire fraud charge. He must report to jail on April 30 and will be sentenced on June 30.
• Nuance(NUAN) Wins Big After Risky Bet on Voice Recognition. The software maker has a raft of standalone voice applications and a history of timely acquisitions. Is there a buyer that could digest Nuance?
• Shell, PetroChina to Acquire Arrow for A$3.5 Billion.
  

CNBC:

• Trial of Four Rio Tinto Employees Opens in Shanghai.

IBD:

• Yoga Shops Massage Recessionary Cramp, Reach Profitable Balance. Like a lot of its customers, Lululemon Athletica(LULU) has been gaining muscle.
  

NY Times:

• Rethinking Sex Offender Laws for Youth Texting.
• Does Icahn Still Make Them Tremble?
  

NY Post:

• As Marts Rise, Wal-Mart's(WMT) US Stores Fall. As US equity markets recover and consumers regain a bit of their swagger, shoppers are abandoning Wal-Mart's US stores in droves.
• The Dems Bring the Pain. The real cost of the health care bill is about more than just money.
  

CNNMoney:

• 35 Cities Suffer Unemployment Above 15%.

Business Insider:

• Did Germany Just Kill The Dream Of A European Super-State?

zerohedge:

• One Very Tragic Death. Even as the Lehman scapegoating campaign is on in full force, there is little doubt that the man who somehow was in the middle of virtually everything, was not Dick Fuld, or any of the bevy of rotating Lehman CFOs, but Lehman's very much under the radar Global Product Controller, Gerard Reilly. Reilly was the point man on Repo 105, the point person for E&Y's "investigation" into the Matthew Lee whistleblower campaign, Lehman's Level 2 and Level 3 asset valuation, the brain behind the idea to spin off Lehman's commercial real estate business, Lehman's Archstone investment, and likely so much more. Reilly stayed on at Lehman, solid as a rock, even as the CFO's above him rotated one after another. Tragically, on December 29, 2008, a 44-year old Gerald [sic] Reilly died while skiing alone on New York's Whiteface mountain, while on a trip with his wife, 4 small children, and two other families. Here are the facts.

Philly.com:

• Marcellus Shale Sends Short-Line Railroad Booming. Nobody knew there was gold in the sand. When A.T. "Tom" Myles approached officials in this town three years ago about taking over the ailing Wellsboro & Corning Railroad, he thought the 35-mile short line had potential for transporting lumber to market from northern Pennsylvania. But that was before the Marcellus Shale natural-gas boom took off and exploration companies were clambering to import sand into Pennsylvania - millions of pounds of special sand used to develop gas wells.

Institutional Investor:

• Trillion-Dollar Pension Crisis Looms Large Over America.

The American Spectator:

• Obama Restores Cash-Strapped ACORN's Funding As Reward For HealthCare Support. President Obama has quietly moved behind the scenes to restore full funding to the radical group ACORN, which was his former employer and legal client. In a move ignored by the media, OMB director Peter Orszag circulated a directive to federal agencies ordering them to begin funding ACORN again. ACORN is the hyperpartisan lead group in the Health Care for America Now (HCAN) coalition and has long supported a government takeover of the U.S. health care system. The fiscal floodgates will soon re-open for ACORN despite a congressional ban on funding the activist group that has long been a practitioner of election fraud. In a March 16 memo Office of Management and Budget (OMB) director Peter Orszag ordered federal agencies to resume funding the group whose employees were caught on hidden camera videos last year condoning and encouraging a variety of crimes including child prostitution and tax evasion.

Forbes:

• Fiddling While Athens Burns. The woeful lack of common ground over Greece makes you wonder how the European Union gets anything done.
• Will Your Next PC Be Virtual?
  

L.A. Times:

• President Obama's Approval Rating Falls in California. Since 1992, California has been a reliably Democratic state when it comes to presidential politics. But a new survey shows President Obama's approval rating has fallen 13 points in the last year. Obama's overall approval rating in the state is at 52%. That's down from 65% shortly after he took office last year. Voters are evenly split on the president's handling of the healthcare issue, with 45% of voters saying they approve and another 45% saying they disapprove of the president's healthcare stance. Earlier this year, 53% of those surveyed said they disapproved of the president's work on healthcare. Congress had just a 12% approval rating in the survey, with 79% of respondents saying they do not like the job Congress is doing. You can download the entire survey here.
• Option ARMs Pose Threat to Housing Market. Easy terms on the adjustable-rate mortgages, popular during the housing boom, are expiring. Higher bills could lead to more foreclosures, industry experts warn.

DenverPost.com:

• Moody's Warns U.S. May Lose Triple -A Rating. It's the financial equivalent of a high medal count at the Olympics or a seat on the U.N. Security Council — a triple-A credit rating, the seal of approval that lets investors know a country's bonds are safe. The U.S. is one of a small number of nations with the coveted rating — for now. Moody's Investors Service warned this week that the government's massive debt burden could cost the country its triple-A. "It's a little scary," says Benn Steil, a senior fellow at the Council on Foreign Relations. The U.S. debt situation "is serious, and it needs to be addressed now." Japan dropped out of this elite group in 2001. In March, Ireland was downgraded. Spain lost bragging rights in January. The next step down at Moody's is Aa1. At S&P, it's called AA+. Either one would be far ahead of most other countries but still something of an embarrassment for the United States.

Rasmussen Report:

• 54% Say Cost Is Biggest Problem With Health Care. Most voters still believe cost is the biggest problem with health care in America today, but most also think passage of the health care plan proposed by President Obama and congressional Democrats will drive costs even higher.
• 52% in California Say Public Employee Unions Significantly Strain Budget. Most likely voters in California (52%) believe public employee unions place a significant strain on the state’s struggling budget, according to a new Rasmussen Reports telephone survey in the state. Just 24% disagree and say the unions are not a budget strain.

Politico:

• Some Dems Walk Plank With 'Yes' Vote. Even before debate on the health care bill concluded — and even with some members remaining mum on their positions in the final hours — it was already clear that the polarizing House votes Sunday will have a profound effect on reelection campaigns across the nation. Some members of Congress will end up with primary challenges as a result. Others may have signed their own political death warrant. Here is POLITICO’s rundown of lawmakers whose reelection prospects have been significantly imperiled by their announced support of or opposition to health care reform.

Reuters:

• US House Backs Obama's Bid to Revamp Student Loans. The Democratic-led U.S. House of Representatives on Sunday approved President Barack Obama's bid to implement what would be the biggest overhaul in decades of the federal student loan program. Under the legislation, federal subsidies to private student loan lenders would stop and the government's role in lending would increase -- creating billions of dollars in projected savings that would go largely in grants to needy students. The measure, opposed by private lenders and critics of an expanding federal government, was included in a package of proposed changes to an overhaul of the U.S. healthcare system. The House passed the package after giving final approval to the healthcare bill that is ready for Obama to sign into law. The package of changes now goes to the Democratic-led Senate for needed concurrence. A vote is expected this week.
• Obama Abortion Order Lures Votes, Riles Rebpublicans. President Barack Obama announced on Sunday he will reaffirm a ban on using federal funds to pay for abortions, which convinced some holdout Democrats to support the healthcare overhaul but riled Republicans who said the decision could be easily reversed. Representative Chris Smith, a longtime Republican opponent of abortion, called the order a "trick" and said the bill included a "congressionally mandated tax to support abortion." "An executive order issued by the president is not worth the paper it is printed on," said Republican Representative Jean Schmidt. "It can be rescinded in the blink of an eye." The National Right to Life Committee, which opposes abortion, said the executive order was being issued for political effect: "It does not correct any of the serious pro-abortion provisions in the bill. The president cannot amend a bill by issuing an order, and the federal courts will enforce what the law says."
• Nanotech Robots Deliver Gene Therapy Through Blood.
  

Financial Times:

• Tung Gloomiest Yet on Shipping. The chairman of one of Asia’s biggest container shipping companies has given the gloomiest assessment yet of the sector’s future by a senior industry figure, after Orient Overseas International CC announced $401m losses for 2009. Tung, whose family controls the Hong Kong-listed company, warned that the recovery of the world economy and consumer demand were likely to be sluggish, while there continued to be an excess supply of ships worldwide. The excess ships, either under construction at shipyards or laid up out of use, would need to be absorbed over the next three to four years, he said. Prices would fall further if operators brought currently idle ships – which account for about 10 per cent of current world capacity – back into service too quickly. “An imprudent reintroduction of capacity currently idling or laid up, if mismatched to demand, could see fresh rounds of rate cutting,” Mr Tung said. In January, OOIL announced the sale of most of the mainland Chinese property interests for $2.2bn. The sale would allow the company to redeploy capital and become a focused container shipping and logistics group, Mr Tung said.
• Hot Spots Keep Heritage on the Boil. Heritage Oil, which this month will sell its Ugandan operations for $1.35bn after more than a decade of development work, is confident it will be proved right again. That cash will be used to pay investors a special dividend of between 75p and £1 per share, and to delve into fresh projects in Africa and the Middle East. In particular, Heritage will switch its attention to its operations in the oil-rich autonomous Kurdish region of northern Iraq, an area that Paul Atherton, chief financial officer, predicts could deliver Ugandan-like returns. Heritage estimates that the Lake Albert basin could contain 2bn barrels of oil and will attract billions of dollars of foreign investment, which could transform the local population’s standard of living. Heritage was one of the first companies to enter Iraq after the 2003 war and one of the first to be awarded an exploration licence there in October 2007. “There are very few places left in the world where you have the ability to go and drill and find a billion barrels of oil. Kurdistan is clearly one of those areas,” he says. “We were able to cherry-pick what we considered to be the best assets.” The region, controlled by the Kurdish regional government, has huge potential. In May last year Heritage discovered reserves of 2bn-4bn barrels at its Miran West project, sending its share price soaring. “Without question there are still billions of barrels to be found out there and Heritage is very well placed to find them.”
• Sixty-one percent of Germans are opposed to their government providing financial aid to Greece, with just 20% supporting the proposal, citing an FT/Harris poll. The poll found that 56% in the U.K. were against support, while 45% backed it in Spain and 40% in Italy, the FT said.
• Darling to Reveal Where Cuts Will Fall. Alistair Darling will announce which government departments will be forced to bear the initial burden of cutting borrowing on Wednesday, in a Budget designed to add clarity and credibility to the government’s deficit reduction plan. To counter the widespread view Labour’s heart is not in the painful business of cutting the deficit, Mr Darling will reveal where he intends to make savings in Whitehall costs after 2011, effectively giving departments the starting points for spending negotiations with the Treasury. Mr Darling accepts the government was not “upfront” about the need to tackle the deficit, not least in the first half of 2009 when Gordon Brown continually framed the economic argument as “Labour investment versus Tory cuts”. The tough message on the deficit was obscured again in the pre-Budget report, which was dominated by Labour’s vow to protect frontline spending on health, schools and police from cuts.

Telegraph:

• Budget 2010: Government Set to Approve Banking 'Pollution Tax'. The Government is to give the go-ahead to a banking "pollution tax" that will be levied on the highest risk activities of any banks based in the UK. The new tax will be the centre piece of Alistair Darling's Budget on Wednesday with any money raised being returned to the Government. It will mostly affect investment banking operations and will leave "vanilla" retail banking to continue under the tax regime they currently face. Although the Treasury said it had yet to make an estimate how much money the new tax would bring in, it could well be tens of billions of pounds.

TimesOnline:

• Dubai World Wants Eight Years to Pay Debts. DUBAI WORLD, the troubled Gulf investment fund that owns the QE2 cruise liner and Cirque du Soleil dance troupe, is to ask its creditors for up to eight more years to pay back a $22 billion (£15 billion) debt mountain. The crisis-hit investment empire, owned by the Dubai state, will promise its lenders it will be able to pay back all the money it owes if it can get the extension. The debt restructuring proposals will be put to a seven-strong committee of the group’s senior creditors in Dubai this week.

NRC Handelsblad:

• Otmar Issing, former chief economist of the European Central Bank, said Greece should "do its homework" and then seek assistance from the International Monetary Fund.The IMF is "the ideal scapegoat" to take the blame for tax increases and budget cuts, Issing said. "The European Union is not a good scapegoat," the newspaper quoted him as saying.

O Estado de S. Paulo:

• General Motors Co. will announce an investment of $888 million in the Brazilian state of Sao Paulo. GM will announce its investment plan for Brazil March 22.
  

TheStarOnline:

• 'Big Oil Field Find by Petronas'. Petronas has discovered a huge tract of oil reserves that could significantly reduce oil prices, claimed former Petronas chairman Tengku Razaleigh Hamzah. “I was told it is the biggest oil field this part of the world, and enough to depress oil prices,’’ he told a forum titled “Oil Royalty: A Constitutional Right?” yesterday. Razaleigh said it was the prerogative of the Prime Minister to give Petronas the green light to start extracting oil from the newly-discovered field.

Ming Pao Daily:

• Investment companies set up by local governments in China have run up more than 6 trillion yuan($879 billion) of debt, citing ministry of finance researchers. Debt amassed by the financing arms of local governments now amounts to 16.5% of the country's gross domestic product, citing the Research Institute for Fiscal Science as saying. Liabilities have swelled from more than 1 trillion yuan at the beginning of 2008, the report said.

Weekend Recommendations
Barron's:
- Made positive comments on (HAS), (FAST), (APC), (MSFT), (AMTD) and (GME).

Citigroup:
- Reiterated Buy on (GOOG), target $640.

Night Trading
Asian indices are -1.25% to -.25% on average.
Asia Ex-Japan Investment Grade CDS Index n/a.
S&P 500 futures -.52%
NASDAQ 100 futures -.49%

Morning Preview Links

Earnings of Note
Company/Estimate

• (TIF)/1.13
• (WSM)/.74
• (PVH)/.59

Economic Releases

• None of note

Upcoming Splits

• None of note

Other Potential Market Movers

• The Chicago Fed National Activity Index, Fed's Lockhart speaking, Treasury's Geithner speaking, Senate mark-up of Dodd financial reform bill, $57B T-Bill auctions, (NZ) analyst meeting, Howard Weil Energy Conference and the (KMB) Investor Day could also impact trading today.

BOTTOM LINE: Asian indices are lower, weighed down by commodity and financial stocks in the region. I expect US stocks to open modestly lower and to maintain losses into the afternoon. The Portfolio is 75% net long heading into the week.