Wednesday, March 03, 2010

Trading Links

Posted by Gary .....at 8:25 AM
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Tuesday, March 02, 2010

Wednesday Watch

Posted by Gary .....at 10:54 PM
Evening Headlines
Bloomberg:
  • Greece to Detail $6.5 Bln in Budget Cuts to Avoid 'Catastrophe'. Greek Prime Minister George Papandreou said his government is discovering “new holes” in the budget on a daily basis as it prepares to announce as much as 4.8 billion euros ($6.5 billion) in extra deficit cuts. Bowing to pressure from the European Union and investors to do more to tame the EU’s biggest budget gap, the steps to be unveiled today will include higher tobacco, alcohol and sales taxes and steeper reductions in public workers’ bonus payments, said a person familiar with the matter, who declined to be identified because the details aren’t yet public. Greece is signing up to even greater austerity measures two days before Papandreou meets Germany’s Angela Merkel, and the effort may help the chancellor justify aiding Greece to her taxpayers and political allies who say the country shouldn’t be bailed out after years of excess. Greek bonds advanced for a third day yesterday on the prospect that the deficit measures might ease the way for EU assistance. “We need the support of our partners,” Papandreou told his Pasok party in Athens yesterday. “To provide it they must convince their citizens, from whom they are also asking for sacrifices, that Greece is doing what must be done.”
  • Ten-Year Treasury Swap Spread Smallest Since 1988 on Greek Plan. The U.S. 10-year interest-rate swap spread narrowed to the smallest since 1988 as Greece prepared to unveil measures to cut the European Union’s largest deficit, fanning optimism credit risk will be contained. The difference between the rate to convert fixed payments to floating and similar-maturity Treasuries over 10 years declined to 6.13 basis points yesterday, the lowest since at least 1988, according to data compiled by Bloomberg. Reports today may show U.S. service industries expanded at a faster pace in February and companies cut fewer jobs. “The Greek plan will spur an unwinding of flight to quality, so yields may climb higher,” said Kazuaki Oh'e, a bond salesman in Tokyo at Canadian Imperial Bank of Commerce, the nation’s fifth-largest lender. The narrowing swap spread “means that short-term funding is not a problem and financial market conditions are now back to normal,” he said.
  • MIT Professor Diamond Said to Be Contacted for Fed Governor Job. The White House has contacted Peter Diamond, an economics professor at the Massachusetts Institute of Technology, about joining the Federal Reserve’s board of governors, according to two people familiar with the discussion. Diamond, a specialist in taxation and behavioral economics, has written widely on overhauling entitlement programs. His 2003 book “Saving Social Security” was co-written with Peter Orzag, director of the Office of Management and Budget. A third vacancy on the seven-person board opened up yesterday when Vice Chairman Donald Kohn announced he will leave in June when his term as the No. 2 Fed official expires. Diamond isn’t being considered for vice chairman, said the people, who requested anonymity to discuss a potential selection that is not final.
  • Gates Calls for 'Comprehensive' Review of Military Rule on Gays.
  • Novell(NOVL) Gets $2 Billion Takeover Bid From Elliott. Novell Inc., a seller of network software whose stock has slid 85 percent in the past decade, received an unsolicited takeover bid from shareholder Elliott Associates LP that values the company at about $2 billion. Novell’s shares jumped as much as 35 percent to $6.40 in extended trading, indicating that investors see the $5.75-a- share offer as too low. Elliott, a money management firm that owns about 8.5 percent of Novell’s shares outstanding, made the cash offer public in a letter today to the company’s board.
  • Pfizer(PFE) Said to Bid as Much as $4.08 Billion for Ratiopharm. Pfizer Inc., the world’s biggest drugmaker, is bidding as much as 3 billion euros ($4.08 billion) for German generic-drug maker Ratiopharm GmbH, said two people with knowledge of the talks.
Wall Street Journal:
  • Abuse of Power. A string of electoral defeats and the great unpopularity of ObamaCare can't stop Democrats from their self-appointed rendezvous with liberal destiny—ramming a bill through Congress on a narrow partisan vote. What we are about to witness is an extraordinary abuse of traditional Senate rules to pass a bill merely because they think it's good for the rest of us, and because they fear their chance to build a European welfare state may never come again. The vehicle is "reconciliation," a parliamentary process that fast-tracks budget measures and was created in 1974 as a deficit-reduction tool. Limited to 20 hours of debate, reconciliation bills need a mere 50 votes in the Senate, with the Vice President as tie-breaker, thus circumventing the filibuster. Both Democrats and Republicans have frequently used reconciliation on budget bills, so Democrats are now claiming that using it to pass ObamaCare is no big deal.
  • Dubai World Coughs Up the Knickbocker. The former Knickerbocker Hotel site near the heart of Times Square has become the latest Dubai World investment to go belly up, as well as the target of investors wanting to pick up the property at a discount price. Istithmar World Capital, the private-equity arm of the Dubai government's investment fund, recently handed back the keys to the 300,000-square-foot building at 42nd and Broadway to its lender, Danske Bank A/S, after defaulting on its $300 million mortgage.
  • U.S. Probes Bearish Euro Bets. SAC, Greenlight, Soros, Paulson Told to Retain Records; a Collusion Question. The Justice Department has launched an investigation into whether hedge funds might have banded together to drive down the value of the euro, people familiar with the matter say. One of the questions investigators are likely to examine is whether such information-sharing constitutes collusion, the people say. Charges relating to collusion on Wall Street have been a rarity because of the difficulty of proving that firms intentionally sought to act together and acted nefariously. The Justice Department inquiry comes amid a sharp decline in the value of the euro, which has fallen about 10% in value since December. In recent days, some traders may have reduced the size of their bearish bets.
  • Another Step Forward for Iraq by Fouad Ajami. A democratic country is emerging that answers neither to Sunni Arab states nor to Iranians.
Marketwatch.com:
  • Vanke Expects More Uncertainty. Vanke Co., China's leading property developer, said it anticipates more uncertainty in China's real-estate market due to the government's property market adjustment policies. In its annual financial report issued March 1, Vanke said that the government's introduction of adjustment policies in the property market would impact market sentiment and raise uncertainties in the credit and financing environment for developers.
CNBC:
 NY Times:
Forbes:
TheStreet.com:
  • Goldman(GS) Cut by Bove; Rivals Next? Rochdale Securities analyst Richard Bove cut his 2010 estimates on Goldman Sachs (GS), following through on comments he made to TheStreet.com a week ago.
Politico:
  • House GOP targets EPA Rules. House Republicans are pushing a resolution that would block the EPA's regulation of greenhouse gases, throwing a wrench in the Obama administration's attempts to bypass Congress and regulate carbon emissions. The announcement comes as a growing chorus of lawmakers—mostly Republicans, but some coal state Democrats as well— have criticized the EPA’s decision to move forward on carbon regulations. Last year, the EPA issued a finding that the heat-trapping gases were harmful to the public, paving way for regulation under the Clean Air Act. Republicans say they’re concerned the regulations will hurt the economy. “The last thing we need in this economy is new jobs that amount to a new tax on energy,” said Minority Leader John Boehner (R-Ohio). “This really amounts to an attack on the private sector.”
  • Charlie Rangel on the Brink. Charlie Rangel is on the verge of losing his Ways and Means gavel – by choice or by force, permanently or temporarily – and is taking the night to review his options, according to Democratic insiders. As he emerged Tuesday night from a meeting in Speaker Nancy Pelosi’s ceremonial office – sometimes known on Capitol Hill as “the woodshed” – the New York Democrat insisted that he is still the chairman of the powerful tax-writing committee. But he couldn’t guarantee that would be the case by Wednesday. “I can’t make all those promises at my age,” the 79-year-old Rangel said. Republicans plan to force a House floor vote this week on whether to remove Rangel from the chairmanship following last week’s finding that he violated House gift rules by accepting a corporate-sponsored trip to the Caribbean. Democratic lawmakers and aides said Tuesday that the party’s most vulnerable incumbents are not willing to risk the electoral fallout that would come from standing by the 39-year House veteran. If all House members vote and all 178 Republicans favor removing Rangel, the GOP would need 39 Democrats to turn against the chairman to win the vote.
Real Clear World:
  • The Unthinkable U.S.-Iran Deal by George Friedman.
  • Why Americans Hate Washington. In January, the Senate joined the House in passing "pay-as-you-go" rules to require Congress to pay for new discretionary spending. On Feb. 12, President Obama signed the bill. "Now Congress will have to pay for what it spends, just like everybody else," Obama crowed. Less than a month later, Obama and fellow Democrats are busily demonizing a lone senator for pushing Washington to spend responsibly. It seems this administration is all for fiscal restraint -- as long as you don't mean it. The story began last week when Sen. Jim Bunning, R-Ky., blocked Senate passage of a bill to extend one month unemployment and COBRA health insurance benefits, and other spending, because it did not comply with PAYGO. As the Baseball Hall-of-Famer explained, "When 100 senators are for a bill, and we can't find $10 billion to pay for it, there's something the matter, seriously the matter, with this body." For that, he is Satan.
Financial Times:
  • Pru Shares Plunge Over AIA Deal Fears. Prudential’s shares have fallen almost 20 per cent since it agreed a $35.5bn takeover of the AIG’s Asian life business, raising concerns about the UK insurer’s ability to close the deal. Hedge funds betting against the stock were blamed by some in the market for the drop in the shares, while others said investors were growing increasingly nervous about the stock and currency market risks over the next two months.
  • We Need a Plan B to Curb the Debt Headwinds. Policymakers have responded to successive economic downturns in essentially the same Keynesian way since the 1950s. Fiscal deficits have been allowed to rise and interest rates to fall to stimulate aggregate demand. Though Keynes hardly anticipated such repeated use of macro instruments, these policies have worked. As a result, the policy response to the current crisis has been “more of the same”. Many policymakers remain confident that this will eventually generate a sustained recovery. Yet it is worth reflecting on why it might not work this time, and what other public policies might help foster recovery. In short, what is Plan B? An unsustainable level of private sector debt is the main factor explaining the present severe downturn, as well as many previous downturns in history. Today, the problem principally resides in the household sector in many advanced market economies. In Japan in the 1980s, corporations went on a similar spree of spending which was almost wholly funded by debt. However, the problem with debt is that it constitutes a claim on future earnings, which cannot be met if earnings expectations fail to materialise. Although debt problems traditionally originate in the private sector, the public sector cannot be held blameless. Today’s unsustainable debt levels have much to do with the repeated use of monetary easing to stimulate consumer demand in successive cycles. The repeated use of fiscal measures to support demand made private debt more supportable, but also increased public debt levels. With respect to both monetary and fiscal policy, tightening in the cyclical upturns never matched the vigour of the easing in the downturns. Both monetary and fiscal policies may now have reached the limits of their effectiveness.
Australian Financial Review:
  • Australia's personal tax rate should be capped at 35% to help boost productivity, citing a report from think-tank Centre for Independent Studies. The Medicare levy should also be scrapped.
China Securities Journal:
  • China's government should put a limit on property prices, according to a proposal by Yan Qingmin, a delegate to the Chinese People's Political Consultative Conference. The Chinese government will strictly scrutinize loans to housing developers in 2010 and control lending to companies that build properties as "a side business," citing Yan.
Evening Recommendations
Citigroup:
  • Reiterated Buy on (TECD), target $56.
Night Trading
  • Asian indices are unch. to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 107.0 -2.0 basis points.
  • S&P 500 futures -.09%
  • NASDAQ 100 futures -.11%
Morning Preview
Earnings of Note
Company/Estimate
  • (BIG)/1.29
  • (JOYG)/.64
  • (BWS)/.16
  • (BJ)/.96
  • (PETM)/.56
  • (FL)/.25
  • (COST)/.71
Economic Releases
8:15 am EST
  • The ADP Employment Change for February is estimated at -20K versus -22K in January.
10:00 am EST
  • The ISM Non-Manufacturing Composite for February is estimated to rise to 51.0 versus a reading of 50.5 in January.
10:30 am EST
  • Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,275,000 barrels versus a +3,034,000 barrel increase the prior week. Gasoline supplies are expected to rise by +300,000 barrels versus a -895,000 barrel drawdown the prior week. Distillate inventories are estimated to fall by -1,050,000 barrels versus a -591,000 barrel decline the prior week. Finally, Refinery Utilization is expected unch. versus a +1.42% gain the prior week.
2:00 pm EST
  • Fed's Beige Book
Upcoming Splits
  • (ARO) 3-for-2
Other Potential Market Movers
  • The Challenger Job Cuts report, Fed's Fisher speaking, Fed's Rosengren speaking, Fed's Lockhart speaking, weekly MBA mortgage applications report, CSFB Aerospace & Defense Conference, Deutsche Bank Hospitality/Gaming Conference, (SWY) investor day, (TAP) investor day, UBS Natural Gas/Electric Power/Coal conference, RBC Healthcare Conference, Morgan Stanley Tech/Media/Telecom Conference, Keybanc Consumer Conference, BMO Metals/Mining Conference, (NYX) investor day and the (MYGN) investor day could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by commodity and technology stocks in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
3 comments

Stocks Finish Slightly Higher, Boosted by Gold, Coal, Wireless and Hospital Shares

Posted by Gary .....at 4:16 PM
Evening Review
1 comments

Stocks Reversing Lower into Final Hour on Profit-Taking, More Shorting

Posted by Gary .....at 3:49 PM
BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Medical longs and Biotech longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short today, thus leaving the Portfolio 75% net long. The tone of the market is mildly positive as the advance/decline line is higher, sector performance is mostly positive and volume is above average. Investor angst is high. Today's overall market action is slightly bullish. The VIX is falling -1.66% and is around average at 18.94. The ISE Sentiment Index is below average at 113.0 and the total put/call is slightly below average at .77. Finally, the NYSE Arms has been running above average most of the day, hitting 1.42 at it intraday peak, and is currently 1.27. The Euro Financial Sector Credit Default Swap Index is falling -5.92% to 83.26 basis points. The North American Investment Grade CDS Index is falling -2.10% to 87.80 basis points. The TED Spread is unch. at 14.0 basis points. The 2-Year Swap Spread is falling -3.84% to 23.50 basis points. The Libor-OIS Spread is unch. at 10.0 basis points. The 10-Year TIPS Spread is up +1 basis point to 2.17%. The 3-Month T-Bill is yielding .12%, which is unch. today. Nikkei futures indicate an +29 open in Japan and DAX futures indicate a down -24 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on profit-taking, more shorting and technical selling.
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Today's Headlines

Posted by Gary .....at 3:12 PM
Bloomberg:
  • Ford(F) Beats GM in U.S. Sales for First Time Since 1998. Ford Motor Co., buoyed by redesigned cars and a rebound in truck demand, posted a 43 percent jump in U.S. sales in February to beat General Motors Co. in monthly deliveries for the first time since 1998. Ford’s tally was 142,285 compared with 141,951 for GM, the automakers said today. The Dearborn, Michigan-based automaker hadn’t topped GM in domestic sales since a strike idled the biggest U.S. automaker almost 12 years ago, and the last time before that was during a 1970 walkout, based on Ford data. “This is huge because it’s the classic rivalry like Pepsi and Coke, the Red Sox and the Yankees,” said John Wolkonowicz, an analyst at IHS Global Insight in Lexington, Massachusetts. “They’re doing it with the stuff that matters -- quality, products and reputation. It could be a turning point.” Ford exceeded analysts’ projections of a 33 percent advance, based on the average of 5 estimates, for a month in which snowstorms damped U.S. showroom traffic. Chief Executive Officer Alan Mulally has been working to cut costs and develop new vehicles and kept Ford out of bankruptcy last year. Ford said sales of its Fusion more than doubled, vaulting past the Focus to claim the top spot among the Dearborn, Michigan-based automaker’s cars, and Taurus sales almost doubled. Both sedans were redesigned in the past year. Pickup and sport-utility vehicle deliveries also rose.
  • Derivatives Reform Would Have Dissuaded Greece. Greece would have been dissuaded from using swaps to obscure the country’s deficit if the $605 trillion derivatives industry were properly regulated, U.S. Commodity Futures Trading Commission Chairman Gary Gensler said. “Derivatives reform would have made it more difficult for Greece to hide their embedded loan,” Gensler said in a speech to be delivered today to Women in Housing and Finance, a Washington-based professional society. Derivatives rules proposed in the U.S. would have required Greece to post collateral against its derivatives transactions, “thus canceling out the embedded loan and discouraging the country from entering into such a transaction in the first place,” he said.
  • Pimco's Gross Raises Bet on Sovereign Debt With Abu Dhabi Swaps. Bill Gross, portfolio manager for the Pimco Total Return Fund, raised his bet on foreign- government bonds in the fourth quarter by entering into credit- default swaps on debt from Abu Dhabi and Brazil. Pimco Total Return, the world’s largest mutual fund with almost $210 billion in assets, sold swaps on Abu Dhabi bonds with a face value of $55 million, according to a portfolio report filed Feb. 26 with the U.S. Securities and Exchange Commission. The tradable insurance contracts mature in December 2014, according to the filing by Pacific Investment Management Co. of Newport Beach, California. The fund had sold credit-default protection on about $472 million of Brazilian government debt as of Dec. 31, the filing shows. That compared with swaps written on $212 million of Brazilian sovereign debt as of Sept. 30, according to an earlier filing.
  • AIG(AIG) Top-Earning Executives May Get Salary Raises This Year. American International Group, the bailed-out insurer, may be allowed by the U.S. paymaster to boost salaries for some of its highest-compensated executives, two people with knowledge of the matter said. “Feinberg realizes that to retain talent, you can’t be as confining as they were last year,” said Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. in New York. “For AIG to be successful and pay back the government, it’s all about their people.” “AIG owes the taxpayer a huge amount of money and we want to make sure that my compensation practices take into account the need for AIG to thrive,” Feinberg said in a Dec. 11 interview with Bloomberg Television.
  • CF(CF) Bids $4.73 Billion for Terra(TRA) in Challenge to Yara. CF Industries Holdings Inc. offered to buy rival Terra Industries for $4.73 billion, challenging a bid from Yara International ASA and seeking to form the largest U.S. maker of nitrogen-based crop fertilizers. The proposal includes $37.15 in cash and 0.0953 of a CF share for each Terra share, CF said today in a statement. Based on yesterday’s closing prices, the offer is valued at $47.40 a share, representing a 15 percent premium to Terra’s share price.
  • Geithner, Summers Leading Search for Successor to Fed's Kohn. The search to fill vacancies at the Federal Reserve is being led by President Barack Obama's Treasury secretary and chief economic adviser, indicating Chairman Ben S. Bernanke will get support for his policies as he tries to sustain growth while withdrawing monetary stimulus.
  • Qualcomm(QCOM) Says Sales, Profit Will Be at High End of Forecasts.
Wall Street Journal:
  • Greece Set to Outline New Austerity Measures Wednesday. The Greek government is expected to outline Wednesday a new austerity package of about €4 billion ($5.42 billion) in an effort to cut its huge budget deficit by four percentage points this year, government officials said Tuesday. "The new package will most likely be announced on Wednesday. First there will be a cabinet meeting to seal the measures and an announcement will follow," one official said. Another official said Greece's debt management agency is preparing a 10-year bond hoping to raise between €3 billion and €5 billion, taking advantage of the expected positive market reaction after the measures are announced. Petros Christodoulou, head of Greece's debt management agency, said that Greece "does not have to access the market any time soon and this allows us to access it when conditions are favorable." But another senior government official said the bond issuance "will be within days of the announcement of the austerity package." "We need to go to the market very soon with the 10-year note because we risk ending up with no money." he said, adding that the bond "was originally planned for last week". Separately, Greece's civil servants union ADEDY said that it would stage a 24-hour strike on March 16 to protest against the new measures.
  • Democrats Press New York's Paterson to Resign. Democratic Party officials are putting pressure on New York Gov. David A. Paterson to resign from office as additional details emerge about his alleged effort to intervene in a domestic-violence case involving a senior aide. The state Democratic chairman, Jay Jacobs, headed to Albany Tuesday morning to meet with Mr. Paterson and encourage him to step aside, according to a source. Mr. Jacobs declined to comment, as did the Paterson administration. Mr. Paterson suspended his campaign for governor Friday but said he is determined to complete the remaining 10 months of his term. Democrats are urging him to transfer power to his lieutenant governor, Richard Ravitch, whom Mr. Paterson appointed last year.
  • Battle Brews Over Tactic to Win Passage of Health Bill. The White House said Monday the leading tactic to win passage of the health-care bill was nothing extraordinary, rehearsing a key argument in the final public-relations battle over the bill. For their part, Republicans accuse the Democratic majority of trying to ram through legislation using a parliamentary trick that Republicans say was never designed for such a big bill.
MarketWatch:
  • FSA Chair Contemplates CDS Restrictions. Adair Turner, chairman of the U.K.'s Financial Services Authority, said Tuesday that regulators need to consider restrictions on the use of credit-default swaps following the financial crisis.
CNBC:
 NY Times:
  • Hedge Funds Heart Pfizer(PFE). It seems that some hedge funds are feeling the love for Pfizer. While Pfizer has seen its glory fade over the last decade, its $68 billion purchase of Wyeth last year gave the company a whole new range of biotechnology drugs and vaccines and has apparently won the admiration of some big-name hedge funds, Reuters reports.
NY Post:
  • Goldman(GS) Profits on Both AIG's(AIG) Collapse, Breakup. For Goldman Sachs, AIG -- and by extension, the American taxpayer -- is a gift that keeps on giving. A year and a half after Goldman pocketed billions of dollars that Uncle Sam funneled into American International Group when it was on the verge of collapse, Lloyd Blankfein's gold-plated investment bank is set to fetch as much as $100 million by selling off pieces of the insurance giant. Goldman is reaping fees from helping AIG unload billion of dollars worth of assets in an attempt to return the roughly $182 billion the insurer borrowed from average folk. Goldman played a key advisory role in the sale of AIG's Asian unit, American International Assurance, to the British firm Prudential for $35 billion, which was announced yesterday. The deal, which represents AIG's largest divestiture since it was bailed out, could result in a $25 million check for Goldman. Citigroup and Blackstone Group also advised AIG on the AIA sale. Sources told The Post that Goldman is also advising AIG, which is headed by CEO Robert Benmosche, on its planned sale of American Life Insurance to MetLife for about $15 billion. The sale may come as early as next week, and could net Goldman another $35 million to $50 million in fees, sources said. Benmosche retired as CEO of MetLife in 2006. Then there are fees that Goldman could collect from related transactions and other plum assignments it has been lobbying for at AIG that could earn the firm millions more.
  • Al's Latest Global-Warming Whopper.
The Business Insider:
 Washington Post:
  • Reconciliation on Health Care Would Be an Assault to the Democratic Process by Orrin Hatch. America's Founders gave us a system of governance designed to limit government power and maximize liberty. The legislative branch is different from the executive, and the Senate is different from the House. No single branch has all the power. That can be frustrating for those with ambitious agendas, but everyone benefits by respecting those checks and balances even as we fight over policies. While the House is designed for action, the Senate is designed for deliberation. That is why Senate rules and procedures give a minority of senators the power to slow or even stop legislation. Both parties do it when in the minority, and both find it frustrating when they are in the majority. But such checks are central to the nature of the institution and to the Senate's place in our constitutional system. These rules temper majority power and generate strong incentives to develop mainstream legislation that commands broad, bipartisan support. To impose the will of some Democrats and to circumvent bipartisan opposition, President Obama seems to be encouraging Congress to use the "reconciliation" process, an arcane budget procedure, to ram through the Senate a multitrillion-dollar health-care bill that raises taxes, increases costs and cuts Medicare to fund a new entitlement we can't afford. This is attractive to proponents because it sharply limits debate and amendments to a mere 20 hours and would allow passage with only 51 votes (as opposed to the 60 needed to overcome a procedural hurdle). But the Constitution intends the opposite process, especially for a bill that would affect one-sixth of the American economy. This use of reconciliation to jam through this legislation, against the will of the American people, would be unprecedented in scope. And the havoc wrought would threaten our system of checks and balances, corrode the legislative process, degrade our system of government and damage the prospects of bipartisanship. Less than a year ago, the longest-serving member of the Senate, West Virginia Democrat Robert Byrd, said, "I was one of the authors of the legislation that created the budget 'reconciliation' process in 1974, and I am certain that putting health-care reform . . . legislation on a freight train through Congress is an outrage that must be resisted." Senate Budget Committee Chairman Kent Conrad, also a Democrat, said last March, "I don't believe reconciliation was ever intended for the purpose of writing this kind of substantive reform legislation." They are both right. Reconciliation was designed to balance the federal budget. Both parties have used the process, but only when the bills in question stuck close to dealing with the budget. In instances in which other substantive legislation was included, the legislation had significant bipartisan support.
Vanity Fair:
  • Larry Fink's $12 Trillion Shadow. Though few Americans know his name, Larry Fink may be the most powerful man in the post-bailout economy. His giant BlackRock(BLK) money-management firm controls or monitors more than $12 trillion worldwide—including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year. How did Fink rebound from a humiliating failure to become the financial fulcrum of Washington and Wall Street? Through a series of interviews, the author probes his role in the crisis, his unique risk-assessment system, and the growing concern he inspires.
Point Carbon:
  • Japan may delay measures to limit emissions as it consults with business lobbies, citing Environmental Minister Sakihito Ozawa.
Rasmussen:
  • Confidence In Economy's Future Is At Lowest Point of Obama's Presidency. Views of the country's short- and long-term economic future are gloomier these days than they have been at any time since President Obama took office in January of last year. Forty-two percent (42%) of American adults now expect the U.S. economy to be weaker in one year’s time, up three points from January and the highest level found in 14 months of regular tracking on the question, according to a new Rasmussen Reports national telephone survey. Thirty-six percent (36%) believe the economy will be stronger in a year, down two points from last month. That’s the lowest level of confidence measured since tracking began in January 2009.
Politico:
  • Harold Ford: Democrats are 'Scared'. Former Rep. Harold Ford Jr. said Tuesday that Democrats are “scared” heading into this fall’s election and that he decided not to run for the Senate from New York because he feared his party would lose the seat after a tough primary. “The fall is going to be a tough, tough fall for whatever Democrat emerges,” Ford said during an appearance on MSNBC's “Morning Joe,” his first announcing Monday night that he is not running. “It would have been a tough brutal fight.”
Reuters:
  • China Top 4 Banks Had 294 Bln Yuan in New Loans in February. China's four-biggest state-owned banks issued net new loans in February of about 294 billion yuan, down about 39% from January, citing banking sources.
  • U.S. Monitoring Banks' Sovereign Risk Exposures. "You can be sure that regulators are looking at this very closely," Dugan, whose agency regulates the largest U.S. banks, said in an interview with Reuters Insider."When there's any issue like this that is newly emergent and presents new kinds of risk, there are steps that we take to assess and monitor what is going on." Last week Federal Reserve Chairman Ben Bernanke said U.S. regulators are probing how Wall Street firms like Goldman Sachs (GS) helped Greece arrange derivatives deals that critics say were used to disguise the size of its budget deficits. Regarding regulatory reform, Dugan said that banks will likely change their business models to focus less on risky trading, even if Congress does not take up the so-called "Volcker rule" that would ban banks from proprietary trading and owning or sponsoring a hedge fund.
Telegraph:
Guardian:
  • Greece Puts Bond Sale on Hold. Greece has put its planned bond sale on hold amid expectations that further support from European countries will cut the premium investors demand to lend money to the troubled country. "Normally they would test the market but now nothing has been fed [into the market] it's all on hold," said Ashok Shah, chief investment officer of London & Capital, a sovereign bond investor. Greek officials insist, however, that Greece does "not have to access the market any time soon". Petros Christodoulou, head of the country's public debt management office, told the Guardian: "This allows us to access it when conditions are favourable for the benefit of the Hellenic republic and our investors." Greece had planned to raise €5bn, as it needs to refinance €20bn before the end of May, but changed its mind after reports of German resistance to any potential bailout. The Greek prime minister, George Papandreou, is to meet Germany's Angela Merkel on Friday, hoping to gain more support from Europe's largest economy. "It's likely they will wait until after the Merkel meeting," said Elisabeth Afseth, a credit analyst at Evolution Securities. "It might be a bit suspicious if they came tomorrow saying they were raising money, just before a big announcement."
Kathimerini:
  • Greek Finance Minister George Papaconstantinou will meet with a Standard & Poor's Ratings Services team today in Athens.
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