- Merkel Demands Cyprus Action Amid Clashes on Haircuts. German Chancellor Angela Merkel said Europe must act to support Cyprus as euro-area officials scrambled to overcome differences on losses for investors and the role of the International Monetary Fund in a bid to end nine months of bailout talks. Making way for the bloc’s 17 finance ministers in Brussels, Merkel said that while euro countries won’t provide assistance “under any conditions,” the currency union needed to prevent Cyprus from lurching toward insolvency.
- Prodi Says Europe Hurt by Too Much Austerity Amid Very High Euro. Former Italian Prime Minister Romano Prodi said fiscal austerity measures in Europe have been excessive and called the euro too high. “The euro has a very high rate of exchange,” Prodi, a former European Commission president, said in an interview with Sara Eisen airing on Bloomberg Television today. “I do think that it’s stronger than needed.”
- Singapore’s February Home Sales Decline to 14-Month Low on Curbs. Singapore’s home sales plunged 65 percent to a 14-month low in February after the government introduced its seventh round of cooling measures to cool record home prices. Home sales dropped to 708 units in February from a revised 2,016 units in January, according to data released by the Urban Redevelopment Authority today. That’s the smallest number of residences sold since December 2011, when sales declined to a two-year low of 632 units.
- El-Erian Say Fed ‘Forced’ Central Banks to Ease Policy. The Federal Reserve’s record monetary stimulus has compelled central banks from Mexico to Japan to follow suit, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co. The Fed’s “artificially low” benchmark interest rate has put upward pressure on several currencies, threatening to erode the competitiveness of those nations’ economies, El-Erian said in a speech today in Stanford, California. “Ultimately, they are forced -- Mexico has been forced, Brazil has been forced, Korea has been forced, Japan has been forced -- into doing exactly the same thing” as the Fed.
- Eagle Ford Shale Boom Fuels ‘Madhouse’ in South Texas Counties. The shale boom has changed all that here and throughout an oil-rich swath of counties extending to the Canadian border. Figures released yesterday by the U.S. Census Bureau show counties in south and west Texas are now among the fastest- growing places in the U.S. as oilfield workers rush to the Eagle Ford Shale. The underground formation holds an estimated 3 billion barrels of oil and 150 trillion cubic feet of natural gas reserves.
- No-Bid U.S. Government Contracts Jump 9% Defying Obama Direction. President Barack Obama in 2009 told federal agencies that no-bid contracts were “wasteful” and “inefficient.” Four years later, his administration spent more money on non-competitive contracts than ever before. Federal agencies awarded $115.2 billion in no-bid contracts in fiscal year 2012, an 8.9 increase from $105.8 billion from 2009, according to data compiled by Bloomberg. The jump unfolded even as total contract spending decreased by about 5 percent. Lockheed Martin Corp., Boeing Co. and Raytheon Co. were top recipients of sole-source contracts.
- Obama Will Use Nixon-Era Law to Fight Climate Change. President Barack Obama is preparing to tell all federal agencies for the first time that they should consider the impact on global warming before approving major projects, from pipelines to highways. The result could be significant delays for natural gas- export facilities, ports for coal sales to Asia, and even new forest roads, industry lobbyists warn. “It’s got us very freaked out,” said Ross Eisenberg, vice president of the National Association of Manufacturers, a Washington-based group that represents 11,000 companies such as Exxon Mobil Corp. (XOM) and Southern Co. (SO) The standards, which constitute guidance for agencies and not new regulations, are set to be issued in the coming weeks, according to lawyers briefed by administration officials. In taking the step, Obama would be fulfilling a vow to act alone in the face of a Republican-run House of Representatives unwilling to pass measures limiting greenhouse gases. He’d expand the scope of a Nixon-era law that was first intended to force agencies to assess the effect of projects on air, water and soil pollution.
- Obama to Press Congress for $2 Billion Clean-Energy Fund. President Barack Obama is pressing Congress to create a $2 billion clean-energy research fund with fees paid by oil and gas producers to help lower U.S. dependence on oil. Obama will announce the congressional challenge today at the Argonne National Laboratory in Lemont, Illinois, one of the Energy Department’s largest labs for scientific and engineering research.
- Goldman’s O’Neill Says S&P 500 Beyond 1,600 Needs Growth. U.S. economic growth will have to accelerate to “ridiculously strong levels” to justify any advance for the Standard & Poor’s 500 Index (SPX) above 1,600, said Jim O’Neill, chairman of Goldman Sachs Asset Management. After gaining 9.6 percent this year, the S&P 500 is trading at 1,563.23, less than 2 points from a record and within 3 percent of 1,600. O’Neill, who coined the term BRIC in describing the rise of Brazil, Russia, India and China, has an estimate of 1,575 for the U.S. equity benchmark this year. The world’s biggest economy is forecast to grow 1.9 percent in 2013 and 2.7 percent next year. “In order to justify the S&P above 1,600, we’d have to see growth expectations go to something like 4 percent and beyond,” O’Neill said in a Bloomberg Television interview in Singapore. “I don’tsee persistent upside from those kind of levels without some more evidence that the economy would be growing by ridiculously strong levels.”
- BYD Said to Be Planning Sale of New Stock; Shares Tumble. BYD Co., the struggling Chinese carmaker partially owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), fell on concern existing investors will be diluted after two people familiar with the matter said the company plans to issue new stock. BYD, China’s biggest maker of electric vehicles, fell 9.8 percent to $3.03 at 2:34 p.m. in New York, erasing the year-to- date gains.
- IMF Says EU Banks Face Further Losses. With anemic economic growth likely to lead to more losses on loans, risks to the financial stability of the European Union remain "elevated," and urgent action is needed to adequately capitalize the bloc's banks and establish a shared system for closing down or restructuring failing institutions, the International Monetary Fund said Friday. In its first-ever review of the health of the financial system across all 27 EU members, the IMF said the bloc has made some progress in addressing the weaknesses that have exacerbated its fiscal crisis and stalled its economic recovery. But it said much work remains to be done, with banks likely to face higher losses on loans to households and businesses to add to the losses they have suffered on their holdings of government bonds. The Fund added that low economic growth and low interest rates may also weaken insurance companies and pension funds.
- Two SAC Affiliates Agree to Settle Insider Suits. Two affiliates of Steven A. Cohen's embattled SAC Capital Advisors agreed to pay more than $614 million to settle separate civil insider-trading probes, the Securities and Exchange Commission said Friday. One of those affiliates, CR Intrinsic Investors, agreed itself to pay more than $600 million to settle a civil lawsuit filed by the SEC in November, representing the largest settlement ever for allegations of insider trading, the regulator said.
- Inflation highest in more than three years. U.S. consumer prices rose 0.7% in February for the largest gain since June 2009. Gasoline prices rose 9.1%, also making the largest jump since June 2009, and accounted for almost three-fourths of February’s gain in the consumer price index. The broader price category for energy increased 5.4%.
- Obamacare will reduce U.S. employment. Commentary: Mandating health care will hurt workers.
- Inside Dell: Merger Proxy Will Show Business in Free Fall. (video) The leveraged buyout of Dell requires that only 42 percent of existing shareholders vote against the deal for it to be abandoned. Given the present opposition it faces from large shareholders—such as Southeastern Asset Management and Carl Icahn, who favor a leveraged recapitalization, or the many event driven investors who may simply be betting on a raised offer and have bought stock above the deal price—it is fair to say the LBO is in doubt.
- Is China's 'Real' Economy Crashing? (graphs)
NBCNews.com:
- US to deploy more ground-based missile interceptors as North Korea steps up threats. Defense Secretary Chuck Hagel will announce Friday that the U.S. is deploying 14 new ground-based missile interceptors, probably in Alaska, defense officials told NBC News.
- In Reality, Debt Matters. It Matters a Lot. Right now, public debt is more than 75 percent of gross domestic product. So when do we get to worry? At 100 percent? Demographics? Right now, most baby boomers are on the verge of retirement. But don't worry. It would be nice if some reporter asked the president what happened. Why did debt matter in 2006 but not now? Why in 2009 did the president promise to cut the deficit in half if it's nothing to fret over? He was right then, not now. And surely, even he can't argue that our situation has improved. Actually, reality rarely holds him back.
Handelsblatt:
- A one-time levy of 15% on financial assets might suffice to push Italy's debt to below 100% of gdp, citing Commerzbank chief economist Joerg Kraemer.
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