Tuesday, March 01, 2011

Today's Headlines

Posted by Gary .....at 2:59 PM

Bloomberg:
  • Iran Rejects Western Criticism, Says Opposition Issue an Internal Affair. Iran’s Foreign Ministry said issues relating to the country’s opposition are “internal affairs” and rejected Western criticism after the reported arrests of two prominent dissidents. “These are internal affairs and no country has the right to interfere,” Ramin Mehmanparast, a ministry spokesman, told journalists in Tehran today. His comments were aired live by state television’s news channel. He was replying to a question about the reported arrests of opposition leaders Mir-Hossein Mousavi and Mehdi Karrubi. Mehmanparast, who didn’t mention the two men’s whereabouts, spoke before a planned opposition march in Tehran later today to protest the arrests.
  • Iran Arms Proxies to Destabilize Middle East, Mattis Says. Iran’s nuclear weapons ambitions and arming of proxy fighters still represent the “greatest long- term challenge” in the Middle East, the top U.S. commander for the region says. Iran, after four rounds of United Nations sanctions, still “appears determined to mature its nuclear weapons program -- an ambition that could lead to the proliferation of illicit nuclear materials and spark a nuclear arms race in the region,” Marine Corps General James Mattis, who leads the U.S. Central Command, said in testimony today to the Senate Armed Services Committee.
  • Saudi Stocks Slump Most Since 2008 on Concern Unrest to Spread. Saudi Arabia’s benchmark stock index plunged the most since November 2008 and entered bear-market territory on concern political unrest in the Middle East may spread to the kingdom. Al-Rajhi Bank fell to the lowest in a year and Saudi Basic Industries Corp., the world’s biggest petrochemicals maker, tumbled 7.8 percent. Saudi Arabia’s Tadawul All Share Index slumped 6.8 percent to 5,538.72 at the 3:30 p.m. close in Riyadh. The measure has lost 20 percent since reaching its 2010 high, the common definition of a bear market. Credit-default swaps linked to Saudi Arabia, used as a measure of confidence although they reference no debt, rose 4 basis points to 140, according to CMA prices in London. “Performance in Saudi exemplifies that geo-political risk still remains unresolved within the region,” said Omair Ansari, equity strategist at Gulfmena Alternative Investments in Dubai. Markets will continue to capitulate due to the inability to price in top-down risk.” Political turmoil in the region has spread to the Persian Gulf, with protests erupting in Oman and Bahrain inspired by popular uprisings that toppled leaders in Tunisia and Egypt. Websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said in a statement yesterday.
  • Libyan Rebels Face Pro-Qaddafi Army as No-Fly Zone Planned. Libyan rebels braced for possible renewed clashes with forces loyal to leader Muammar Qaddafi, who is attempting to regain control of major cities after the U.S. and European nations began planning for a no-fly zone. Armed rebels in Zawiyah, 28 miles (45 kilometers) west of Tripoli, the capital, were stationed at the entrances to the city after repelling an attack by pro-Qaddafi fighters overnight, Ibrahim al-Hajj, a 58-year-old resident, said by telephone. Many were armed with machine guns and rocket- propelled grenades taken from weapons depots, said Belgassem al- Zawee, a 50-year-old protester in the city.
  • Crude Oil Advances From a One-Week Low as Supply Concern Extends to Iran. Oil rose from the lowest price in a week as unrest in the Middle East threatened to spread from Libya to Iran, OPEC’s second-largest oil producer. Crude jumped as much as 1.9 percent after Iran arrested opposition leaders to derail demonstrations scheduled for today. “The focus has shifted to another country as we’ve seen problems arise in Iran with opposition leaders being relocated to prison,” said Matt Smith, a commodities analyst for Summit Energy in Louisville, Kentucky. “With the potential for negative developments in so many countries, we’re starting to see the risk premium return for crude after yesterday’s selloff.” Oil for April delivery rose $1.72, or 1.8 percent, to $98.69 a barrel at 10:55 a.m. on the New York Mercantile Exchange.
  • ISM Index of U.S. Manufacturing Rose to 61.4 in February. Manufacturing in the U.S. grew in February at the fastest pace in almost seven years, driven by gains in orders, employment and exports that signal factories will continue to propel the expansion. The Institute for Supply Management’s factory index increased to 61.4, exceeding the median forecast of economists surveyed by Bloomberg News and the highest level since May 2004, the Tempe, Arizona-based group said today. The ISM’s order gauge climbed to the highest level since January 2004 and its employment measure reached a 38-year high, today’s report showed. Exports accelerated at the fastest pace since December 1988, and the gauge of prices paid increased to a seven-year high.
  • China Says Police 'Properly Handled' Reporters at Protest Who Broke Rules. China’s Foreign Ministry said some journalists at the site of a planned protest in Beijing on Feb. 27 had broken reporting rules, disrupting “normal order,” and that police “properly handled” the situation. Several journalists said they were forcibly removed and detained without explanation as they tried to report from Wangfujing Street on protests called to demand an end to corruption and misrule. A Bloomberg News reporter was beaten by at least five plain-clothes men in front of uniformed police. Hundreds of uniformed police including paramilitary units, squads of dogs, and at least 100 vehicles, patrolled Wangfujing Street on Feb. 27. Three water trucks drove up and down the pedestrian-only thoroughfare, spraying water and soap on the road as police ushered crowds to the sidewalks. U.S. Ambassador Jon Huntsman yesterday said the illegal detention and harassment of foreign journalists in Beijing was “unacceptable and deeply disturbing.” The European Union’s delegation to China said it was “troubled” by accounts of physical intimidation or assault from journalists.
  • Goldman Sachs(GS) Lost Money From Trading on 25 Days in 2010. Goldman Sachs Group Inc., the fifth- biggest U.S. bank by assets, lost money from trading on 25 days during 2010, up from a record-low 19 days in 2009, according to a regulatory filing. After incurring losses on trades during 12 days in the first 9 months, the full-year figures indicate that Goldman Sachs lost money on 13 days in the fourth quarter. The firm’s traders also made $100 million or more on 68 days in 2010, down from the record 131 days in 2009, according to the New York- based company’s annual 10-K filing with the Securities and Exchange Commission.
  • SEC Says Ex-Goldman(GS) Director Gupta Tipped Rajaratnam. Rajat K. Gupta, a former Goldman Sachs Group Inc. board member, was sued by U.S. regulators on claims he passed inside information to Galleon Group founder Raj Rajaratnam ahead of deals including Berkshire Hathaway Inc.’s $5 billion investment in Goldman Sachs Group Inc. Gupta also tipped Rajaratnam on quarterly earnings at Goldman Sachs and Procter & Gamble Co., where he also served as a board member, according to a Securities and Exchange Commission administrative order filed today. Rajaratnam and others made more than $18 million trading on the tips, the SEC said.
  • Feldstein Says U.S. Economy Has Slowed as Consumers Cut Back. Harvard University economics professor Martin Feldstein said the U.S. economy has cooled at the start of this year as consumers cut back on spending amid higher gas prices and a decline in housing wealth. “There is a mixed picture now in terms of how much the economy is on track,” Feldstein said in an interview on Bloomberg Television’s “InBusiness With Margaret Brennan.” Growth “started slowing down toward the end of the fourth quarter. The January numbers are not very good at all.”
  • Health Overhaul May Raise States' Costs by $118 Billion, Republicans Say. The U.S. health-care law will cost states almost double the amount that congressional auditors estimate, Republican lawmakers said. Representative Fred Upton, a Michigan Republican who is chairman of the House Energy and Commerce Committee, said in prepared statements before a hearing today that states estimate the overhaul signed by President Barack Obama last year will increase health expenditures by about $118 billion through 2023. The Congressional Budget Office, the chamber’s accounting arm, has estimated the law would cost states about $60 billion. The additional expense stems mainly from an expansion of Medicaid under the law. The chief actuary for the Centers for Medicare and Medicaid Services, which supervises the program, has said the expansion may add 20 million Americans to Medicaid rolls starting in 2014. The law is “onerous and unsustainable” for states, Upton said in a statement prepared for the hearing to examine Medicaid’s effect on state budgets.
  • Cotton Soars as China Use Tightens World Supply. Cotton surged by the daily limit for a third straight session in New York on concern that global supplies are failing to keep pace with demand from China, the biggest consumer. Cotton for May delivery surged the exchange limit of 7 cents, or 3.7 percent, to $1.9823 a pound as of 9:55 a.m. in New York. Prices, up 12 percent since Feb. 24, reached a record $2.0893 on Feb. 18.
  • Gold Futures Approach Record High on Libyan Unrest; Silver Extends Rally. Gold climbed close to a record as unrest in Libya spurred demand for the metal as an investment haven. Silver advanced to the highest since 1980. Libya’s opposition gained support from the U.S. and European nations as leader Muammar Qaddafi sent forces to regain lost territory. Protests have spread in the Middle East and North Africa, partly because food prices have soared. Crude oil in New York topped $100 a barrel last week. Gold was up for the 10th time in 11 sessions. “The continued violence in the Middle East is bringing in new buyers and spurring gold to new territory,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “The rush to economic health is fading. Crude above $100 is an energy tax that will force governments to put more money into the system. Our old fear of stagflation returns.”

Wall Street Journal:
  • Yemeni President Says U.S. Behind Unrest. Yemeni President Ali Abdullah Saleh accused U.S. President Barack Obama of fomenting unrest in the Arab world, in a speech on a university campus here, as around 10,000 protesters nearby called for his resignation. Mr. Saleh told his audience of around 500 students and academics that he would "reveal a secret" that there is an "operations room in Tel Aviv with the aim of destabilizing the Arab world." He said the White House ran the operations room. The U.S. has viewed Mr. Saleh as a key counterterrorism ally, and has given his government millions of dollars in military aid.
  • Overcapacity Weighs on Europe's Auto Makers. Europe's auto industry suffers from excess manufacturing capacity and is unlikely to see relief anytime soon, the head of Ford Motor Co.'s(F) European operations said on Monday. Few European auto plants were closed during auto industry's deep downturn in 2009 and 2010, a contrast to North America where the industry was overhauled, in large part because of the bankruptcy-court restructurings at General Motors Co. and Chrysler Group LLC.
  • India Insists on BlackBerry Monitoring. India Tuesday reiterated that companies that offer encrypted communication services will have to allow monitoring of such services by security agencies if they want to operate in the country.
  • Highbridge's Asia Chief Departs. The head of Highbridge Capital Management's Asia investments is leaving the multibillion-dollar hedge-fund firm owned by J.P. Morgan Chase & Co., say people familiar with the matter.
  • Fifth Third(FITB) CFO: Specific Nature of SEC Probe Remains Unclear.
CNBC.com:
Business Insider:
Consumer Reports:
TheStreet.com:
  • Las Vegas Sands(LVS) Receives SEC Subpoena. Las Vegas Sands is in the red Tuesday morning, after it received a subpoena request from the Securities and Exchange Commission requesting the company provide compliance documents related to the Foreign Corrupt Practices Act. The casino giant also noted that it is the subject of an investigation by the Department of Justice.
USGS:
Reuters:
Telegraph:
Vancouver Sun:
  • China's Bank Chief Issues Warning on Excessively Fast Lending. Lending by Chinese banks has been excessively fast, topping the "extreme upper limit" set by regulators, the country's banking chief said at an internal meeting at the start of this year, a source told Reuters on Tuesday. The unusually sharp warning by Liu Mingkang, head of the China Banking Regulatory Commission, highlighted deep official unease about the threat to the Chinese financial sector and the broader economy posed by rampant credit growth. "Over the past two years, to confront the financial crisis loan growth has been abnormally explosive," he said, according to the source, who attended the meeting. "It has exceeded the extreme upper managed limits," he added, apparently referring to the lending caps that China imposes on its banks. Chinese banks issued a combined 17.5 trillion yuan ($2.7 trillion) of new local currency loans in 2009 and 2010, almost a quarter of the economy's total output during that time. The government kick-started the lending binge at the height of the global financial turmoil, when it called on banks to unleash a blast of credit to power the Chinese economy to recovery. But with growth once again soaring, it has struggled to pull credit issuance back to a more normal pace. Liu's words captured that sense of exasperation. "The scale of new loans has increased incredibly fast, even doubling, in just a short period, but the expertise and efficiency of loan officers can't have doubled at the same time," he said. Liu warned that "irrational factors" in the Chinese real estate market had increased and that credit risks were accumulating. "Banks must pay close attention to the potential impact of a sharp decline in property demand," he said. "Banks should explore ways of conducting comprehensive stress tests on real estate loans."
Shanghai Daily:
  • High-Speed Railways 'Too Expensive'. CHINA should rein in the current pace of high-speed railway construction and revamp operational policies, a member of the China Public Interest Party urged yesterday. The proposal will be discussed during the upcoming national session of the Chinese People's Political Consultative Conference which begins in Beijing tomorrow. Some 10,000-plus kilometers of high-speed railways are under construction or planned at present while the service nationwide now extends to more than 7,500 kilometers. Bullet trains on the special tracks can reach speeds of 350kph and will be quicker on lines still be completed. But high-speed railway development has gone far beyond the current economic situation of Chinese society, said Wu Youying, a leader of the party's Shanghai committee. Passenger traffic is slack on many high-speed trains because fares are too expensive, she said. "But considering the large income gap between average Chinese people and residents in these countries, China's current high-speed railway service is unaffordable for ordinary people," Wu said in her proposal.
Globes:

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