Bloomberg:
- Draghi-Inspired Rally Risks Nations Dodging Reforms: Euro Credit. ECB President Mario Draghi's success in driving down borrowing costs for the most indebted euro nations risks lowering their incentives to tackle budget deficits, revive growth and reduce unemployment. "Having taken away the breakup risk for Europe, what they've got now is a crisis that is chronic rather than acute," said Stuart Thomson, who helps oversee $109 billion at Ignis Asset Management in Glasgow. "Europe is doing exactly what Japan has done. When there is a crisis, there will be a response, improvement and then complacency. Europe is in a complacency period now."
- ECB Said to Object to 15-Year Commitment on Anglo Irish Rescue. European Central Bank policy makers rejected an Irish government plan designed to fund the rescue of the former Anglo Irish Bank Corp. for at least 15 years, according to three people with knowledge of the discussions.
- Monti Minister to Defend Paschi Bailout After Losses Uncovered. Finance Minister Vittorio Grilli today will defend Italy’s planned 3.9 billion-euro ($5.3 billion) rescue of Banca Monte Paschi di Siena SpA as lawmakers question whether the lender deserves aid after hiding losses.
- China Communists to Control Size of Party Amid Corruption Fight. China’s ruling Communist Party will control the size of the organization as it seeks to weed out “unqualified members,” the official Xinhua News Agency said, citing a meeting overseen by party leader Xi Jinping. Some party members are “corrupt and degenerate,” members of the ruling Politburo said, affecting the party’s “vigor and vitality,” according to the Xinhua report. The party had 82 million members as of last year.
- Beijing Recommends Residents Stay Indoors as Pollution ‘Serious’. Beijing recommended the city’s residents stay indoors today to avoid exposure to “serious” levels of air pollution in the Chinese capital.
- IMF Set to Pare South Korea 2013 Growth Estimate to About 3%. The full-year expansion may be about 3 percent, compared with a 3.9 percent estimate in September last year, country mission chief Hoe Ee Khor said in an interview in Seoul after meeting with South Korean officials last week.
- Tanker Glut Worsening as OPEC Cuts Most Since Recession: Freight. OPEC's deepest output cut since the global recession in 2008 is creating the biggest surplus of oil tankers in the Persian Gulf in at least three years and lowering earnings for Frontline Ltd. and other ship owners. OPEC reduced daily supply by almost 1 million barrels in the four months through December, equal to one fully loaded supertanker every two days, Bloomberg data show. Saudi Arabia, Iran and Iraq led the retreat, leaving 22% more ships than cargoes in the world's largest oil-producing region, the most for the time of year since at least 2010, according to weekly surveys of shipbrokers and owners by Bloomberg.
- Dubai Suitcases of Cash Circumvent Loan Rules: Mortgages. Cash is king in the Persian Gulf emirate’s rebounding property market, limiting the power of regulators to control rising prices that fueled the last property bubble by imposing restrictions on mortgage loans to foreigners. Buyers from Iran to Russia to Greece are paying cash in as many as 70 percent of Dubai home purchases, up from 49 percent in 2007, according to researcher Reidin.com.
- Egyptians Protest for Fifth Day, Opposition Spurns Talks. Egyptian security forces clashed yesterday with protesters for a fifth day as the main opposition leaders snubbed a call for dialogue by President Mohamed Mursi. The violence came hours after Mursi instituted a state of emergency in three restive provinces and said transgressors would be dealt with firmly. Protests were held to mark the anniversary of the bloodiest day in the 2011 uprising that ousted Hosni Mubarak. At least one person was killed, adding to a death toll of about 50 since Jan. 25.
- Caterpillar(CAT) Considers ‘All Options’ as Probe Continues. Caterpillar Inc., the largest maker of construction and mining equipment, said it’s considering “all options” to recover losses from false accounting at a Chinese business that led to a $580 million writedown. The company is also seeing how it can hold those responsible to account for the “multiyear, coordinated accounting misconduct,” Chairman and Chief Executive Officer Doug Oberhelman said yesterday. “We are not done,” Oberhelman said on the company’s fourth-quarter earnings conference call with analysts. “We are putting in more effort to finish our investigation.”
- Watchdog Says U.S. Treasury Failed to Curb AIG(AIG), GM(GM) Pay. The U.S. Treasury Department “failed to rein in excessive pay” at bailed-out American International Group Inc. (AIG), General Motors Co. (GM) and Ally Financial Inc. (ALLY), the rescue program’s inspector general said. Sixteen of the 69 top employees at the three companies had 2012 pay packages worth at least $5 million and all but one had total compensation of $1 million or more, the Special Inspector General for the Troubled Asset Relief Program said in a report today.
- BMC Software(BMC) Drops on Profit Forecast Miss. BMC Software Inc. (BMC), a maker of programs that help companies update servers and personal computers, fell in late trading after forecasting fiscal 2013 profit that missed analysts’ estimates, a sign it’s struggling to clinch big contracts. Shares declined as much as 9.5 percent to $40.26 in late trading after saying in a statement that profit excluding some items will be $3.35 to $3.45 a share for fiscal 2013, which ends in March.
- U.S. Wants Criminal Charges for RBS. U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland Group that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks.
- U.S. to Expand Role in Africa. Military Pact With Niger Brings American Forces Closer to Conflict in Mali. The U.S. signed an agreement Monday with the West African country of Niger that clears the way for a stepped-up American military presence on the edges of the conflict in neighboring Mali. The U.S. and France are moving to create an intelligence hub in Niger that could include a base, near Mali's border, for American drones that could monitor al Qaeda-linked militants in Mali's vast desert north, U.S. officials said. The moves show the extent to which the U.S. and France are girding for what could be an open-ended campaign against the militants in North and West Africa.
- Media Firms Probed on Data Release. Investigators Examined if Economic Figures Were Given Early to Clients; No Criminal Charges Seen. Law-enforcement authorities have conducted a wide-ranging investigation into whether media companies facilitated insider trading on Wall Street by prematurely releasing market-moving government data, according to people familiar with the probe. The federal investigation examined whether news organizations used high-speed transmission systems to give some investors access to economic data a fraction of a second before the official release time, according to officials familiar with the probe. Among the media companies investigated were Bloomberg LP, Thomson Reuters Corp. and the Dow Jones & Co. unit of News Corp, which are the leading conduits of federal economic data to traders right after release, though not the sole ones.
- Room for Favors in 'Cliff' Deal. The New Year's Day legislation that averted tax increases for
millions of Americans brought an unwelcome surprise for Elekta AB, a
Swedish maker of radiation tools designed to battle brain tumors.
A provision, inserted at the last minute, sharply cut Medicare payments for the company's product while leaving unchanged those of its direct competitor, Varian Medical Systems Inc., of Palo Alto, Calif. - Too Soon to Celebrate for Europe's Banks. The rosy tint was nowhere more apparent than in the Davos-thinking about battered European banks. The financial cognoscenti were uttering phrases like "the beginning of the end" and "the worst is over," while bank executives pointed to their companies' resilient dynamism, to coin a phrase, in the face of adversity. "The trust in the euro and the European banking sector has come back," proclaimed the head of a large European lender. I wouldn't pop the champagne, spumante and cava just yet.
- Immigration Breakout. A promising Senate framework, if Obama really wants a deal.
- John Taylor: Fed Policy Is a Drag on the Economy. While borrowers like near-zero interest rates, there is little incentive for lenders to extend credit at that rate. As they meet this week, Federal Reserve Chairman Ben Bernanke and his colleagues will be looking at an economic recovery that has been far weaker than expected. Early in 2010 they predicted that growth in 2012 would be a robust 4%. It turned out to be a disappointing 2%. And as the recovery fell short of their expectations, they continued and then doubled down on the emergency interventions used in the panic in 2008.
- Boy Scouts considering dropping nationwide ban on gay members, leaders. The Boy Scouts of America is considering dropping a longtime ban on gay members, leaving such membership and leadership decisions up to local sponsors. “The BSA is discussing potentially removing the national membership restriction regarding sexual orientation,'' spokesman Deron Smith said in a statement obtained by FoxNews.com. "This would mean there would no longer be any national policy regarding sexual orientation, but that the chartered organizations that oversee and deliver Scouting would accept membership and select leaders consistent with their organization’s mission, principles or religious beliefs."
- Draft UN climate report shows 20 years of overestimated global warming, skeptics warn. A preliminary draft of a report by the U.N.’s Intergovernmental Panel on Climate Change was leaked to the public this month, and climate skeptics say it contains fresh evidence of 20 years of overstated global warming. The report -- which is not scheduled for publication until 2014 -- was leaked by someone involved in the IPCC’s review process, and is available for download online. Bloggers combing through the report discovered a chart comparing the four temperature models the group has published since 1990. Each has overstated the rise in temperature that Earth actually experienced. “Temperatures have not risen nearly as much as almost all of the climate models predicted,” Roy Spencer, a climatologist at the University of Alabama at Huntsville, told FoxNews.com. “Their predictions have largely failed, four times in a row... what that means is that it's time for them to re-evaluate,” Spencer said.
- Yahoo(YHOO) Earnings Beat; Revenue Outlook Is Light. Yahoo reported fiscal fourth-quarter earnings that topped expectations, but its first-quarter revenue guidance was a bit lower than analyst estimates. The stock remained higher after-hours as Wall Street cheered the search giant's revenue growth.
- Mark Spitznagel On Confusing Means With Ends.
- BoE's Haldane: "Too Big To Fail Is Far From Gone".
- Soaring Debt Precedes Financial Crises...
- "We Are Doneski Gorgeous!" - How Bond Trading On Wall Street Really Works.
- Department of Homeland Security to Purchase 7,000 "Assault Weapons".
Forbes:
- The Next Great(er) Recession Now Baked In The Cake? It’s basic cause and effect. Monetary inflation causes economic busts. And the larger the monetary inflation, the larger the bust. As brilliantly explained by the Austrians (see here), monetary inflation distorts interest rate and price signals. As a consequence, businesses embark on projects and consumers make purchases and/or investment decisions that turn out to be mistakes, malinvestments if you will, that sooner or later must be liquidated.
- Gun background checks surged in last 6 weeks. Gun sales soared at the end of last year, and the trend has continued into 2013. Since 1998, eight of the 10 highest days for gun background checks have taken place since the school shooting in Newtown, Conn., on Dec. 14, according to the FBI.
- Report: Hedge Funds Quit New York For Florida, Low Taxes. While New York may be irresistible to new hedge funds compared to nearby Greenwich, Conn., it's got nothing on southern Florida, according to one tabloid report. Hedge funds are flocking to Palm Beach County, drawn by low tax rates and, of course, the weather, the New York Post reports. The county, located about 40 miles north of Miami, has recently opened an office charged with luring hedge funds down from New York. "We're not doing a multi-million-dollar marketing campaign," Kelly Smallridge, head of the Palm Beach County Business Development Board, told the Post. "We don't need to. They're coming to us."
- Seagate(STX) results beat estimates; sees lower 3rd-qtr revenue. Seagate Technology Plc forecast third-quarter revenue below analysts' estimates, on muted demand for its hard disk drives as consumers pick smartphones and tablets over PCs, sending its shares down 4 percent after the bell.
- Mali to receive $18.4 million loan from IMF. Mali, the strife-torn West African nation, has been approved to receive an $18.4 million loan from the International Monetary Fund to help stabilize its economy over the next 12 months, the IMF said on Monday.
- VMware(VMW) to cut jobs, disappoints with 2013 outlook. Software maker VMware Inc plans to cut about 7 percent of its workforce as part of a restructuring, and it gave a cautious outlook for 2013 due to a decline in U.S. federal government spending and the likelihood of more tough economic times in Europe. The company's shares fell 14.6 percent in after-hours trading.
- Hedge fund managers raise bets on stocks. Hedge funds raised their bets on stocks in January, according to Credit Suisse, adding to the sense of optimism on Wall Street as traders become willing to take more risk. It comes as TrimTabs predicted inflows of $55bn to US equity mutual funds and exchange traded fund for January, an all-time record for the first month of the year, suggesting broad based support for the stock market rally among investors. Gross leverage of hedge funds trading with the bank was 2.65 times their underlying assets, above the highs of last year, he said. The net proportion of trades that are long stocks, rather than short, is at its highest since early 2011, before the European debt crisis began to roil markets.
- Davos: Britain faces up to reality as Europe clings to dreams. One of the most refreshing things about going to the World Economic Forum in Davos is that it reminds you just how irrelevant to much of the rest of the world the political and economic concerns of our little island really are.
- France 'totally bankrupt', says labour minister Michel Sapin. France's labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”. Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage. “There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”
Oppenheimer:
- Rated (DGX) Underperform, target $53.
- Asian equity indices are unch. to +1.0% on average.
- Asia Ex-Japan Investment Grade CDS Index 106.0 +.5 basis point.
- Asia Pacific Sovereign CDS Index 84.0 -1.0 basis point.
- FTSE-100 futures +.12%.
- S&P 500 futures +.04%.
- NASDAQ 100 futures unch.
Earnings of Note
Company/Estimate
- (AKS)/-.35
- (EMC)/.52
- (IP)/.65
- (VLO)/1.20
- (DHR)/.86
- (CIT)/.61
- (LLY)/.79
- (LXK)/.90
- (BSX)/.11
- (HOG)/.31
- (TUP)/1.68
- (F)/.25
- (PFE)/.44
- (DHI)/.14
- (GLW)/.32
- (X)/-.76
- (BTU)/.26
- (ITW)/.91
- (NUE)/.30
- (RHI)/.41
- (AMZN)/.27
- (BRCM)/.74
- (RYL)/.50
- (BXP)/1.24
- (JLL)/2.62
- (PII)/1.23
- (GNTX)/.26
- (AMG)/2.43
9:00 am EST
- The S&P/CS Home Price Index 20 City MoM% SA for November is estimated to rise +.7% versus a +.66% gain in October.
- Consumer Confidence for January is estimated to fall to 64.0 versus 65.1 in December.
- None of ntoe
- The $35 Bln 5Y T-Note auction, weekly retail sales reports, German consumer climate index and the TD Securities Mining Conference could also impact trading today.
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