- Egypt Army Suspends Constitution, Meets Protester Demand. Egypt’s ruling army council said it aims to hand power to a democratically elected government within six months, after almost three weeks of popular unrest ended 30 years of autocratic rule by President Hosni Mubarak. The Supreme Council of the Armed Forces yesterday dissolved parliament, suspended the constitution and said it would rule until general elections take place. The council also formed a committee to introduce constitutional changes, according to a statement read on state television yesterday. Protesters want the amendments to make it easier to run for president, set term limits on the presidency and cancel the constitutional authority for anti-terrorism measures such as arbitrary arrest, searches and military tribunals.
- Hedge Funds Increase Bullish Wheat Bets to Highest Since 2007. Hedge funds increased their bullish bets on wheat to the highest in more than three years amid shrinking global supplies and mounting concern that food inflation will accelerate. In the week ended Feb. 8 on the Chicago Board of Trade, the funds and money managers increased net-long positions, or wagers on rising prices, by 19 percent to 51,787 contracts, the highest since August 2007, government data showed on Feb. 11. On Feb. 9, wheat prices reached a 29-month peak of $8.9325 a bushel. “The sensitivity of the world’s populace to food inflation, the cost of a loaf of bread, is a concern and may actually be one of the catalysts for the groundswell of support for changing existing regimes around the world,” John Thorpe, a senior broker at Cannon Trading Co. in Beverly Hills, California, said in a telephone interview on Feb. 11. “Just from a macroeconomic view, that’s probably why hedge funds may be jumping on here.”
- Queensland Floods Spur U.S. Coal Exports to Highest in 15 Years. The biggest floods in Queensland, Australia, in half a century are turning into a windfall for U.S. coal mining companies anticipating record profits and the highest exports in 15 years. Shipments from the U.S. are poised to rise 8.8 percent this year to about 86.5 million tons, the most since 1996, the Energy Department in Washington said Feb. 8. Demand for American coal is increasing after floods devastated an area of Australia twice the size of Texas.
- Japan's GDP Contracts, Surpassed by China in 2010. Japan’s gross domestic product fell less than estimated in the fourth quarter in a pullback that may prove temporary as overseas demand revives production after the nation fell behind China as the world’s second-largest economy. The annualized 1.1 percent drop in GDP in the three months through December was driven by a slowing in exports and fading of government stimulus programs, Cabinet Office figures showed today in Tokyo. The median forecast of 26 economists surveyed by Bloomberg News was for a 2 percent drop.
- Pakistan's Government Will Help Court Execute Arrest Warrant for Musharraf. Pakistan’s government will assist courts seeking to implement an arrest warrant for former military leader General Pervez Musharraf, the Information and Broadcasting Minister Firdous Ashiq Awan said. Any court directions will be followed and all possible cooperation will be provided, the state-run Associated Press of Pakistan cited the minister as saying yesterday in the capital, Islamabad. The government will contact Interpol, the international police organization, requesting Musharraf be detained if a court order is issued, according to a report from the Associated Press.
- Emergency Medical(EMS) Said to Be Near $3.1 Billion Sale. Emergency Medical Services Corp. is near an agreement to be acquired by private-equity firm Clayton Dubilier & Rice LLC in a leveraged buyout valued at about $3.1 billion, three people familiar with the matter said.
- GE(GE) Agrees to Buy John Wood's Submersible Pump Unit for About $2.8 Billion. General Electric Co. said it entered an agreement to acquire the well-support division of John Wood Group Plc for about $2.8 billion, adding submersible pumps to its oil- and gas-production product lineup.
- Laffer Curve Pays Billions If Obama Just Asks: Kevin Hassett. The U.S. is about to have the highest corporate tax rate in the developed world because our competitors have noticed that revenue goes up as rates go down. Multinational corporations today nimbly move their profits to the friendliest environment, rewarding tax havens like never before. It looks as if President Barack Obama and congressional Democrats are going to miss out on the single biggest policy opportunity for the U.S. this year because of their ideological resistance to the idea that lower rates can increase revenue, also known as the Laffer curve.
- China Profits From Solar-Power Strategy as Europeans Backpedal. Europe, which attracted more than $65 billion in solar plant investment in 2010, is providing lessons for China. Germany, the largest panel market, together with Spain and France carried out four unscheduled subsidy cuts in 2010, trying to slow a torrent of projects by developers and speculators.
- Mideast Unrest Spreads. Protests Target Iran, Bahrain, Libya; Egypt Dissolves Parliament, Sets Elections. As Egypt's new military leadership suspended the constitution, dissolved parliament and promised fresh elections, demands for similar political reform swept across the Arab world—from Libya to Iran—following the resignation of President Hosni Mubarak. Egypt's dramatic moves incorporate many demands issued during the mass demonstrations by doing away with the institutional framework that buttressed Mr. Mubarak's three-decade rule. But the military's new road map for governing Egypt in the short term came down by fiat, without input from the political opposition, raising questions about how deeply the military understands the democratic process and the demands of modern politics.
- Trouble in Acapulco's Paradise. A string of gruesome drug-war murders has made tourists think twice about visiting the fabled beach town. Acapulco was once the playground for Hollywood's jet set. Nowadays, the resort has become a battleground for Mexican drug cartels. Last year, more than 400 people died as rival drug gangs fought for control of the port city of more than one million. On a recent blood-soaked weekend, more than 30 bodies were found dumped in parts of the city, many missing their heads.
- Pro-Democracy Activists turn Attention to Gadhafi. In the wake of the resignation of Egypt's Hosni Mubarak, online activists are threatening to test one of the Arab world's most repressive regimes: Col. Moammar Gadhafi's Libya. Expatriate activists and an amorphous group of bloggers and social-network users—it isn't clear how many of them are in Libya—are calling for protests across the oil-rich North African nation on Thursday.
- Public-Worker Unions Steel for Budget Fights. Public-sector unions have begun using their clout against efforts to roll back government workers' wages and benefits, cut jobs and curtail contract bargaining rights as political leaders from both parties look for ways to cut spending.
- GOP to Block Renewal of Build America Bonds Program. Key Republicans signaled they would block renewal of the Build America Bonds program as the Obama administration prepared to reinstate the bonds in the 2012 budget plan due Monday. Build America Bonds were originally introduced as part of the $787 stimulus program in 2009 but expired at the end of last year. They allowed states and localities to sell taxable bonds and receive a federal subsidy payment from the Internal Revenue Service equal to 35% of the interest costs on their bonds. But Sen. Orrin Hatch (R., Utah), the ranking Republican on the Senate Finance Committee, said late Friday that BABs were "simply a disguised state bailout." "These bonds rightly expired at the end of 2010 and it is my hope the Obama administration does not try to resurrect such a nonsensical provision in their upcoming budget," he said. The Obama administration will propose reintroducing BABs, according to three people outside the administration who were briefed on the matter.
- Zynga's Talks With Investors Value Gaming Concern at Over $7 Billion. Social-gaming company Zynga Inc. is holding discussions with potential investors about raising around $250 million in new funding in a deal that could value the three-year-old start-up at between $7 billion and $9 billion, according to people familiar with the matter.
- For Big Board Chief, It's Hero or Goat. When Duncan Niederauer took over as chief executive of the New York Stock Exchange's parent company, NYSE Euronext(NYX), he claimed he wasn't a big deals guy. Three years later, Mr. Niederauer is closing in on what is likely to be the NYSE's largest, most controversial, and probably last, transaction.
- China Plans Panel to Scrutinize Foreigners' Local Acquisitions. China plans to create a ministerial panel to review takeovers of local companies by foreign investors. The panel will be led by the National Development and Reform Commission and the Ministry of Commerce and will be overseen by the State Council, according to a statement published today on the council’s website. Coming under scrutiny will be acquisitions involving military industrial companies and others relating to national defense, the statement said. It also will look at takeovers involving producers of agricultural goods, energy and natural resources, as well as companies in some parts of the infrastructure and transportation-services industries.
- The Queen of All Media Needs a Cash Infusion. is pumping another $50 million into a joint venture for Oprah's new cable channel, bringing its total investment to $239 million, less than two months after OWN launched to much fanfare. Nearly three years in the making, OWN: The Oprah Network debuted on Jan. 1, taking over the slot occupied by the Channel. After a big debut that averaged 583,000 viewers in primetime the first week, OWN has seen its ratings fall below those of the channel it replaced.
- Ray Dalio and Bridgewater Associates' Top 30 Stock Picks.
- Jim Simons and Renaissance Institutional Equities Fund's 30 Largest Holdings.
- Consumer Credit: The Final Piece Of The Recovery Pie Or Hair Of The Dog? (graph)
- A Terrorist Involved In The London Subway Bombing Is Back On The Street After Helping The FBI. An American jihadist who set up terrorist training camps in Pakistan has been freed after less than five years in jail, according to a Guardian investigation. Mohammed Junaid Babar was sentenced last December to "time served" due to "exceptional co-operation" with the FBI. This means he was released after four and a half years in jail. Babar is also rumored to have been working with the US government as an informant before his arrest. Needless to say, the British are furious that a man who trained the perpetrators of the London Subway Bombing has been freed. Americans won't like to hear it either.
- Bahrain Now Bracing For Its Own Day of Rage After Giving Every Family $2,660 Fails.
- Former Sun CEO Says Silicon Valley No Longer Best Place To Start A Business, Government Crushing Job Growth. Scott McNealy, ex-CEO of Sun Microsystems, is concerned about job prospects in Silicon Valley. However, what he has to say applies to jobs in general, not just high technology, and not just in California.
- Fed's Losses Since The Start Of QE2: $76,814,152,246.00. How do you hedge the interest rate risk of a $2.5 trillion dollar fixed income portfolio that has a modified duration of 4 and is levered 50 to 1?
- What Part of Bernanke's Secret FCIC Interview Constitutes a Disclosure of National Secrets? Now that the FCIC has declassified all of its interviews with the people responsible, or profiting, for the housing crisis (among which are those of John Paulson, Hank Paulson, Lloyd Blankfein, Dick Fuld, Jonathan Egol (the man who helped Fab Tourre construct Abacus), Alan Greenspan and of course Agent Orange himself - Angelo Mozilo), there is one interview strangely withheld. That of the man largely at the heart of everything - Ben Bernanke.
- Rice Speculators Expect 50% Jump In Price. (graph)
- Paulson Denies Culpability in Crisis, Yet Even Bear Turned Down His Deals. This serves to illustrate that many conventional analyses even now tend to miss the dramatic deterioration in underwriting standards. The use of low and no doc loans rose rapidly from 2004 onward, and these pools were particularly favored by the subprime shorts. Moreover, we now know how some aspects of the underwriting were abused, for instance, by the use of inflated appraisals, so analyzing historical data will not provide a full measure of the fall in underwriting standards. Yet digging into the comfortable narrative of the subprime shorts as heros, or at least harmless, would reveal yet another viper’s nest of bad practices and abuses. The officialdom seems determined to push onward with its “look forward, not back” stance, which means the perps will be able to engage in similar types of looting when the opportunity next presents itself.
- Tablets Get High Definition "Telepresence' Mobile Chat. Mobile video chat is one of those ideas that is attractive in theory but little-used in the real world due to poor experience, device limitations and data consumption. A new service aims to spur adoption by increasing videoconferencing quality on tablets and smartphones and opening up the range of applicable devices while keeping bandwidth usage low.
- Apple's(AAPL) iPad "running far ahead" in Enterprise Adoption. Apple has taken a significant lead in the corporate world with the success of its iPad tablet, said one analyst, while predicting the company will sell 33.7 million iPads this year. Barclays analyst analyst Ben Reitzes said Friday that when it comes to the corporate world, the iPad is "running far ahead of its tablet competition and its their game to lose," Barrons reports. Reitzes' report stems from a conference call with a research Forrester Research analyst. According to Reitzes, Apple hasn't established an enterprise salesforce, but the iPad maker is "listening to enterprise customers." The report noted that Forrester's research indicates that corporate users are "buying devices and bringing them into work" in increasing numbers. Apple is the "winner in the consumerization of IT," said Reitzes. Reitzes sees Apple ending the calendar year with sales of 33.7 million iPads, a more than 70 percent share of the 47 million tablets he predicts will sell in 2011. He has an Overweight rating on Apple stock, with a $450 price target.
- Pandora: Oakland Music Site Files for IPO of Up to $100 Million. Pandora, the pioneering online music service that creates personalized "radio stations" based on songs that users like, filed documents late Friday for an initial public stock offering worth up to $100 million. The filing makes Oakland-based Pandora the second well-known Internet startup to announce plans to go public in as many weeks, after a similar filing last month by LinkedIn, an online networking and résumé service for professionals. Pandora, which launched in 2000, says it has 80 million registered users and delivered 3.9 billion hours of music to listeners in its last fiscal year.
- Ugandan opponents to President Yoweri Museveni are threatening protests similar to those in Egypt if elections scheduled for next week are manipulated. Opposition candidate Kizza Besigye said the vote will be flawed because the electoral commission favors Museveni.
- China should use "quantitative tightening" to counter the effects of the U.S.'s second round of quantitative easing, citing Li Yang, a researcher at the Chinese Academy of Social Sciences. China should "actively participate" in the building of a new global financial order, Li said.
- Made positive comments on (DVN).
- Reiterated Buy on (HOLX), target $24.
- Asian indices are +.75% to +1.50% on average.
- Asia Ex-Japan Investment Grade CDS Index 107.50 -1.5 basis points.
- Asia Pacific Sovereign CDS Index 121.0 -.75 basis point.
- S&P 500 futures +.09%.
- NASDAQ 100 futures +.08%.
Earnings of Note
- None of note
- (BLL) 2-for-1
- (SFUN) 4-for-1
- The Fed's Dudley speaking, $32 Billion 3-Month and $30 Billion 6-Month Treasury Bills Auctions, BIO Investor Conference and the Mobile World Congress could also impact trading today.