Bloomberg:
- Company Debt Risk Falls to 7-Week Low on Greece: Credit Markets. The cost to protect against corporate defaults fell to the lowest in seven weeks as optimism builds that Greece’s budget crisis will be contained and Dubai moves closer to restructuring its debt. The Markit CDX North America Investment-Grade Index, linked to credit-default swaps on 125 companies, fell 2.5 basis points to 83 as of 9:41 a.m. in New York, according to broker Phoenix Partners Group. That’s the lowest since Jan. 14. A benchmark credit swaps index in Europe dropped to its lowest since Jan. 18, and Asia-Pacific credit indexes also fell. Credit-default swaps covering Dubai debt for five years fell 28 basis points to 479 basis points, the lowest in more than five weeks, according to London-based CMA DataVision. Contracts on Greece declined 11 basis points to 285, the lowest since Jan. 12.
- EU Works on IMF-Style Lender, Curbs on Derivatives. European leaders are in talks to establish a lender of last resort and limits on credit-default swaps to bolster the euro area and prevent a repeat of the Greek financial crisis. Plans for what may become the European Monetary Fund and a German-French push to curb the use of derivatives to bet against sovereign debt are to be ready by June, officials in Berlin and Brussels said today. In Greece, tax and trash collectors walked out as a week of strikes to protest austerity measures began.
- Papandreou Says Speculation May Fuel Spread of Crisis. Greek Prime Minister George Papandreou, drawing parallels with the 1947 fight to contain communism in Europe, called for trans-Atlantic cooperation to combat “unprincipled speculators” who threaten to bring a new global financial crisis. “Europe and America must say ‘enough is enough’ to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system,” he said in a speech today in Washington. “An ongoing euro crisis could cause a domino effect, driving up borrowing costs for other countries with large deficits and causing volatility in bond and currency rates across the world.” Papandreou called the market for credit-default swaps a “scourge” that “haunts Greece and all of us.” U.S. and European regulators need to bolster regulations to curtain such activities, he said, or “a small problem could be the tipping point in an already volatile system.”
- Corn Drops to Two-Week Low on Reduced Demand for Feed, Fuel. Corn fell to a two-week low after rain during the past two months boosted yield prospects for crops in Brazil and Argentina and a drop in ethanol prices eroded demand for grain to produce fuel.
- Gold Futures Fall Most in a Month as Greek Debt Concerns Ease.
- McDonald's(MCD) Sales Top Estimates on Chinese New Year. McDonald's Corp., the world’s largest restaurant company, said global sales rose 4.8 percent in February, topping some analysts’ estimates, as demand in Asia countered snow-hampered results in the U.S.
- WTO Has Obstacles to Trade In Retreat. Protectionism by national governments began to decline in the fourth quarter of 2009 but remains a major threat to the global economy, according to a World Trade Organization report.
- Energy Secretary Steven Chu on the Administration's Game Plan.
- The View From Big Oil. These days, giant oil companies find themselves trying to balance two big pressures on their business. Governments are trying to slash carbon emissions—but the world's thirst for oil is growing by leaps and bounds. Peter Voser, chief executive officer of Royal Dutch Shell PLC, is navigating the situation by joining a business-backed effort to push for global-warming laws, and making sure Shell has a strong exposure to natural gas and alternative fuels. Mr. Voser sat down with The Wall Street Journal's Alan Murray and Kimberley Strassel to talk about the future of climate-change legislation, the company's push beyond oil, the prospects for electric vehicles and more. Here are edited excerpts of their discussion.
- Wealth-Firm Prospects Take a Hard Line. The stock market may be up over 60% from last year’s lows, but clients are coming to wealth managers with harder questions than ever before–and some firms are retooling to meet these new demands.
- California Receives $700 Million in Federal Housing Aid. California will receive $700 million and Florida will take $400 million in federal aid to begin designing programs to ease foreclosures, under the Obama adminstration’s latest effort to ease the housing crisis.
- February Expected to Be a Great Month for Mac Sales. Munster continues to expect Mac sales in a range of 2.6 million to 2.8 million in first quarter of calendar 2010. That’s an 18 percent to 26 percent increase over the same period in 2009, which was down one percent year-over-year.
- IMF Unveils Plan for Climate-Change Fund. The International Monetary Fund on Monday unveiled plans for an African "green fund," an effort that would move the group outside its traditional mandate to address what its director said is an unfilled need to help poorer nations cope with climate change. IMF managing director Dominique Strauss-Kahn said the fund would provide a potential aid buffer for countries on the continent that may bear the brunt of global climate change, and have the capacity to raise $100 billion per year by 2020.
CNBC:
- US Fiscal Path Unsustainable: Senior Budget Analyst. While the U.S. economy has benefited from government stimulus measures, further assistance from additional stimulus would also expand the yawning budget gap, Douglas Elmendorf, director of the Congressional Budget Office, said. The budget-saving approach used in the past several decades, paying for increases in retirement and health care programs through cuts in defense spending, is not feasible in the future, Elmendorf told the National Association of Business Economists. Defense cuts alone would be insufficient to rein in the shortfall, he said, adding that significant tax increases or spending cuts are likely to be necessary. Elmendorf described the outlook for the budget under current policies as "bleak." The CBO on Friday said President Barack Obama's budget plans would rack up $9.8 trillion more U.S. debt by 2020, or $1.2 trillion more than the White House has forecast. Elmendorf also warned about rising levels of debt. "It is truly worrisome that our ratio of debt to (gross domestic product) is entering territory that is so unfamiliar to us and to other countries," he said. U.S. debt will be larger over the next decade than it has been in more than half a century, Elmendorf said. "The key choices are not whether to change course, but how quickly and in what way," he said.
- Bull Market Survival Rate Increases After One Year.
- JPMorgan(JPM) Tops List of Biggest Hedge Fund Managers. JPMorgan Chase is the king of the hedge fund castle, at least in terms of heft, according to a recent ranking by Pensions & Investment. The bank’s two hedge fund units JPMorgan Asset Management and Highbridge Capital Management came out on top with a combined $53.5 billion in assets under management as of Dec. 31, the publication said. The figure represents an 18.9 percent increase for the banks’ hedge fund assets at the end of of 2007, when Pensions & Investments compiled its last industry ranking.
- Greece's Hidden Debt Soaring. The Greek debt tragedy currently unfolding -- the country's on-balance-sheet debt is 13 times its gross domestic product -- may be just the tip of the iceberg. More troubling, according to a report out last week, is the off-balance-sheet debt owed by the country, and its fellow, over-indebted nations Portugal, Italy, Ireland and Spain, the so-called PIIGS, representing the five-nation acronym. The off-balance-sheet debt, where countries guarantee the debt of private developments, many of which had gone bust, could multiply the problem many times -- putting further pressure on the euro, the report said.
- The Radar: 10 Brewing Stories You Need to Know Right Now.
- Gartman: Here Are The Two Reasons Small Businesses Are So Sick.
- Google(GOOG) Launches Tool for Searching Public Data. Google is building on its partnership with the World Bank and other statistics gatherers to present an array of data in visual form within Google Labs. Google Public Data Explorer went live Monday, accompanied by the requisite blog post. The site takes public data regarding schools, population, crime, and even names to construct charts and graphs that help illustrate trends.
- Interest in Buying State Offices in California is Building. Efforts to sell 24 state office buildings have drawn lots of interest from potential buyers -- as well as the ire of some former public officials who labored to get them built years ago in the belief that public ownership of the buildings would bring long-term financial benefits to taxpayers. "This seems to be very shortsighted economics," said Richard Rowe, a retired executive of the Los Angeles Community Redevelopment Agency, after he heard about plans to sell the Ronald Reagan State Building in downtown Los Angeles and other offices to investors.
State officials last week began accepting bids on 24 office buildings on 11 sites in Los Angeles, Sacramento, San Francisco, Oakland and Santa Rosa.
- GM CEO Whitacre Flying on AT&T(T) Jets. General Motors Co. dumped its corporate jets last year while in bankruptcy after being berated by lawmakers in late 2008 for flying top executives to Washington to ask for a bailout. But Chairman and CEO Edward Whitacre Jr.
still flies private, thanks to a little-known perk negotiated with his former employer, AT&T Corp., before he joined GM in 2009. Whitacre, 68, negotiated a lifelong deal with the telecommunications giant before he retired in 2007 with a $158 million package that allows him to fly, free, on AT&T corporate jets for up to 10 hours a month. That's the equivalent of two round-trip flights between his home in San Antonio and his apartment in Detroit. The perk costs AT&T, where Whitacre was chairman and CEO, about $20,000 a month, according to a filing with the U.S. Securities and Exchange Commission.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 22% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-one percent (41%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -19 (see trends).
- 53% Remain Opposed to Health Care Plan. As President Obama and his congressional allies search for a way to pass their proposed health care plan, most voters remain opposed to the legislative effort. The latest Rasmussen Reports national telephone survey finds that 42% favor the plan while 53% are opposed. These figures include just 20% who Strongly Favor the plan and 41% who are Strongly Opposed.
Real Clear Politics:
Reuters:
- Global Chip Gear Spending to Leap in 2010 - Gartner. Global chip equipment spending should grow by more than three-quarters in 2010, but companies will focus on upgrades and efficiency, keeping investment in capacity shy of pre-recession levels, two industry trackers said. Investment in chip manufacturing equipment is expected to reach roughly $30 billion this year, up more than 75 percent from a year ago, but still off the peak of about $45 billion seen before 2007, Gartner said on Monday. Another study released by the SEMI trade group, which comprises the world's leading makers of machines used to make microchips, estimated growth in chip gear spending could hit as much as 88 percent. "The semiconductor equipment industry will experience a very strong growth spurt in 2010, as we emerge from a very costly recession, and this growth is expected to continue throughout 2012," said Jim Walker, research vice president at Gartner.
- RIM(RIMM) Stock Surges on Upbeat Analyst Forecast.
- US Web Retail Sales to Reach $249 Billion by '14 - Study. Online retail sales in the United States could reach $248.7 billion by 2014, growing 60 percent from 2009, according to a study released on Monday. Driven by a 10 percent compound annual growth rate, the projected $248.7 billion is expected to account for 8 percent of total U.S. retail sales within five years, according to Forrester Research, which authored the study.
- Brazil and US Near Cotton Subsidies Showdown. Brazil takes another step towards a final showdown with the US in its long-running battle over cotton subsidies when it releases on Monday a list of about 50 American products it will punish with higher tariffs. Last year, Brazil won an eight-year long battle at the World Trade Organisation against the US after arguing that its cotton producers had been unfairly hurt by illegal subsidies to US cotton farmers. Brazil has already published a preliminary list of more than 200 US products on which it may raise tariffs as a result of the WTO victory, from sardines and cherries to shampoo and sunglasses to medical equipment, as well as cotton itself. On Monday, Brazil will announce a final, narrower list of 50 products – worth about $560m (€411m, £370bn) in total – that are slated for punishment. Those retaliatory measures will take effect in April. In addition, Brazil is expected this month to lay out its plans to impose a further $270m in penalties on the US through so-called “cross-retaliation”, which involves a tightening of non-tariff trade restrictions. Such a move, which is only rarely authorised by the WTO, would allow Brazil to take action over intellectual property rights, breaking patents in key sectors such as technology and pharmaceuticals. When Hillary Clinton, US secretary of state, visited Brazil last week, much of the attention was focused on the disagreement between the two countries over imposing sanctions against Iran. But in a sign that a deal over the cotton dispute was becoming urgent, Mrs Clinton said she would dispatch two high-level officials to Brazil to discuss what further concessions the US could make in order to avoid retaliation.
- Stephen King: Deflation... the next big surprise?
It's easy enough to argue that we're on the verge of a sustained recovery in economic activity. After all, interest rates are very low, plenty of money has been printed over the last couple of years, and governments have borrowed heavily in a bid to inject some vitality into the economic process. Yet much the same could have been said about Japan over the last 20 years. In Japan's case, how-ever, these "loose" policies just didn't work.
- Former German Finance Minister Theo Waigel said any aid for Greece should come from the International Monetary Fund and not the European Union and its member states, citing an interview. The IMF is a "suitable institution with expertise to help Greece," Waigel said. "The Greeks wouldn't accept the seriousness of their situation" if they relied on financial support from the EU, and the "collateral damage would be huge," he said.
- New World Development Co. Managing Director Henry Cheng said parts of Hong Kong's property market shows signs of "overheating."
- Iraqi voter turnout in the parliamentary elections reached 62%.
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