Bull Radar

Style Outperformer:
Small-cap Growth (-.37%)

Sector Outperformers:
Computer Hardware (+6.63%), Banks (+2.29%) and Restaurants (+1.57%)

Stocks Rising on Unusual Volume:
DRI, CAKE, SNDK, OLN, GEOY, SMTS, TLEO, BOBE, ADBE, NTAP, CBRL, PFCB, CERN, ALXN, GES and AIR

Stocks With Unusual Call Option Activity:
1) WDC 2) GES 3) LRCX 4) GIS 5) BK

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Wednesday Watch

Late-Night Headlines
Bloomberg:

- The cost of protecting Japanese corporate bonds from default fell after US housing starts unexpectedly snapped a streak of declines and the Bank of Japan said it may lend to banks to help them replenish capital. The Markit iTraxx Japan index of credit-default swaps plunged 20 basis points to 470 as of 10:05 am in Tokyo, Credit Suisse Group AG prices show. The benchmark has fallen from a record 565 basis points on March 12, CMA DataVision prices show.

- BlueScope Steel Ltd., Australia’s largest steelmaker, had its rating cut to “underperform” from “buy” by analysts at Merrill Lynch, who cited lower steel prices in Asia.

- Record high yields on the dollar bonds of China Properties Group Ltd. and Coastal Greenland Ltd. show some investors have no faith this year’s rebound in Chinese real estate stocks will last. While the China Se Shang Property Index of 24 developers’ shares is up 56 percent following a 65 percent plunge in 2008, prices of their dollar-denominated bonds have fallen to historic lows, according to data compiled by Bloomberg. Hong Kong-based China Properties’ $300 million of 9.125 percent notes due 2014 yield 45 percent, and Coastal Greenland, which builds in six Chinese regions, saw yields on its $150 million of 12 percent notes due 2012 rise as high as 85 percent in February. The prices show bond investors doubt China’s proposed $585 billion stimulus plan will boost the economy fast enough to prevent developers from defaulting as home prices fall.

- Goldman Sachs JBWere Pty deepened its contract iron ore price forecast to a record 40% decline because of slumping global steel production. It had forecast a 30% decline.

- Rio Tinto Group(RTP), the third-largest mining company, had its rating cut to “sell” from “hold” by Goldman Sachs JBWere Pty because of its “problematic” debt and forecast aluminum losses. “The outlook for aluminum is weak and we are forecasting losses in this division for the next two years,” analysts led by Neil Goodwill said in a report.

- It works for street traders. It can work for airlines, retailers and carmakers. But hedge funds? As the financial community staggers from disaster to disaster, some alternative-investment managers have decided that slashing their fees is the only way to salvage their business. Firms such as Centaurus Capital Ltd. and Harbinger Capital Partners are cutting the charges they levy on investors. As sales fall and redemptions increase, don’t be surprised if many others do the same thing.

- European Central Bank President Jean-Claude Trichet said policy makers are in an “ongoing process” of considering whether to adopt more unconventional monetary policies. The Frankfurt-based ECB is under pressure to outline a strategy for how it would help the euro-region economy once it runs out of room to cut interest rates.

- Treasury Secretary Timothy Geithner told leaders in Congress he will ensure taxpayers aren’t footing the bill for American International Group Inc.’s employee bonuses and indicated the firm’s “wind down” may accelerate.

Wall Street Journal:

- Rep. Barney Frank, chairman of the House Financial Services Committee, said he hopes to introduce legislation later this year to restructure government-backed mortgage investors Fannie Mae and Freddie Mac. "The current model is broken," the Massachusetts Democrat said in an interview Tuesday. One possibility, he said, is to separate the companies into entities serving two functions: one that would ensure adequate funding for the home-mortgage market as a whole and another that would provide government subsidies for housing low-income people.

- American International Group Inc. and a U.S. Federal Reserve financial vehicle agreed to pay $62 billion to settle derivative transactions with 16 investment banks, getting in return securities whose market value had fallen below $30 billion, according to a regulatory filing. The insurer and Maiden Lane III, a Fed vehicle created to bail out AIG, had previously disclosed their plan to settle AIG's credit default swaps, but hadn't disclosed ...

- General Motors Corp.'s(GM) chief executive, once a staunch opponent of bankruptcy as a way of reorganizing the ailing auto maker, has softened his view, suggesting the company could possibly emerge from a Chapter 11 filing. Rick Wagoner's comments came as GM is bogged down in talks with the United Auto Workers union over labor cost cuts and discussions with bondholders about reducing the company's debt. Signaling that GM no longer views bankruptcy as off the table could strengthen the company's hand in those negotiations.

CNBC.com:
- Call off Depression 2.0. While still far from health, the U.S. economy is showing some encouraging signs of life as consumers tiptoe back to the shopping mall, home builders pick up their hammers, and manufacturers clear out inventory. That suggests the soon-to-be-completed first quarter will be as bad as it gets, and apocalyptic fears of another lengthy, painful Great Depression look unwarranted.

NY Times:

- Warren Buffett Unusually Silent on Credit Rating Agencies. Berkshire owns a stake of roughly 20 percent in the Moody’s Corporation(MCO), parent of one of the three rating agencies that grade debt issued by corporations and banks looking to raise money. In recent months, Moody’s Investors Service and its rivals, Standard & Poor’s and Fitch Ratings, have featured in virtually every account of the What Went Wrong horror story that is the financial crisis. The agencies put their seals of approval on countless subprime-mortgage-related securities now commonly described as toxic. The problem, critics contend, is that the agencies were paid by the corporations whose debt they were rating, earning billions in fees and giving the agencies a financial incentive to slap high marks on securities that did not deserve them. Moody’s rated Lehman Brothers’ debt A2, putting it squarely in the investment-grade range, days before the company filed for bankruptcy. And Moody’s gave the senior unsecured debt of the American International Group, the insurance behemoth, an Aa3 rating — which is even stronger than A2 — the week before the government had to step in and take over the company in September as part of what has become a $170 billion bailout. Mr. Buffett, 78, one of the world’s richest men, is known for piquant and unsparing criticism of his own performance, as well as the institutional flaws of Wall Street. But on the subject of the conflict of interest built into the rating agencies’ business model, Mr. Buffett has been uncharacteristically silent — even though that conflict is especially glaring in his case because one of the companies that Moody’s rates is Berkshire.

PCWorld:
- Apple Inc.(AAPL) Tuesday previewed the next generation of its iPhone software, which will add several long-awaited features, including copy/paste, MMS and search to the smartphone and its iPod Touch cousin. Those are among the more than 100 new features slated to debut when the company launches the update this summer. iPhone 3.0 will be a free update to iPhone owners, but will cost iPod Touch users $9.95, the same price Apple used when it rolled out iPhone 2.0 last year.

Rasmussen Reports:

- Support for the Democratic Congressional candidates fell to a new low over the past week, allowing the GOP to move slightly head for the first time in recent years in the Generic Congressional Ballot. The latest Rasmussen Reports national telephone survey found that 41% said they would vote for their district’s Republican candidate while 39% would choose the Democrat. Investors now favor Republicans by a 46% to 36% margin, while non-investors would vote Democratic by a 45% to 33% margin.

- The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 37% of the nation’s voters now Strongly Approve of the way that Barack Obama is performing his role as President. Thirty-two percent (32%) now Strongly Disapprove giving Obama a Presidential Approval Index rating of +5 (see trends).

IBD:

- Whatever the shape of the Obama administration's health care plan, it's a good bet that pharmacy benefit managers will continue to play a big role. Those are companies, like Medco Health Solutions (MHS), that bargain for lower drug prices on behalf of employers and health insurers.

Politico:

- Fallout: Dems in disarray over AIG. Congressional Democrats careened between the circular firing squad and the three-ring circus Tuesday as they struggled with their new reality: playing defense on the economy. Sen. Robert Menendez (D-N.J.) blamed Treasury Secretary Timothy Geithner for letting bailed-out insurance giant American International Group pay $165 million in bonuses to its employees, saying he wrote a letter to Geithner two weeks ago warning him of just such a possibility. Sen. Chris Dodd (D-Conn.), tagged by Republican aides for sponsoring an amendment to the stimulus bill that allowed the bonuses, shifted the blame to the Treasury Department and “the bill conferees,” saying he had no idea that the AIG bonuses were coming. Sen. Max Baucus (D-Mont.), joined by Sen. Chuck Grassley (R-Iowa), introduced a bill that would impose a 70 percent tax on “excessive” compensation paid to employees of all bailed-out companies.

The Daily Beast:

- Did former AIG CEO Martin Sullivan quietly engineer AIG's outrageous bonus structure? Allan Dodds Frank says we're blaming the wrong guys—and Hank Greenberg is fuming.

Charlotteobserver.com:

- Bank of America Corp.(BAC) could pay back its $45 billion in government capital by late this year or early next year depending on the economy, chief executive Ken Lewis said in an interview today with the Observer. The Charlotte-based bank may also pay back the government's money piecemeal, Lewis said. The Charlotte-based bank could actually pay back the money now if it weren't maintaining higher-than-normal capital cushions because of the “fragile” state of the financial system, he said. Lewis, CEO since 2001, also told the Observer that he expects his bank to be profitable this year “absent some unexpected meltdown” and to pass the government's stress test. “If I look out over an intermediate timeframe such as the next three to five years or a longer timeframe of five to 10 years, I think Merrill will prove to be one of the best acquisitions we've ever made.” “This will be an interesting time because I think over the next six months there will be enough signs to show we're getting close to the bottom so people will have to make that decision as to whether they will invest in the business or invest in the stock market,” he said.

AP:

- President Barack Obama's computer chief is being reinstated from a leave he was put on after an FBI raid at his old job. At the same time, the White House is labeling as a "youthful indiscretion" a misdemeanor theft the man committed 13 years ago. White House spokesman Nick Shapiro late Tuesday announced the reinstatement of Vivek Kundra as White House chief information officer in charge of federal computer purchasing. Shapiro also said Kundra had done community service for the 1996 theft and the White House was satisfied that he had fully resolved the matter. Kundra was put on leave March 12 after the FBI raided the District of Columbia technology office that he headed until recently. Two people arrested on corruption charges.

- The Obama administration plans to send reinforcements to the Southwest border to help contain the rampant violence of the Mexican drug cartel wars. Thirty-seven agents from the Bureau of Alcohol, Tobacco and Firearms are being deployed to the region. An official familiar with the plan said the Immigration and Customs Enforcement Agency is considering reassignment of at least 90 officers to the border.

Reuters:

- American International Group(AIG) funneled over $90 billion of taxpayer bailout funds to various U.S. and European banks, but the biggest beneficiary was politically connected Goldman Sachs Group Inc (GS). Suspicions of potential conflicts of interest and favoritism have been fueled by $12.9 billion AIG paid to Goldman Sachs -- where then-Treasury Secretary Henry Paulson had previously worked as chief executive -- in the months after the insurer was rescued by the government last September. Asked why Goldman Sachs took $12.9 billion of taxpayer money if it was collateralized and hedged on its AIG positions, DuVally said it was because AIG was not allowed to fail, so Goldman did not get money from hedges that would have paid out if the insurer had collapsed. And, he said, under the terms of its contracts with AIG, Goldman was entitled to collateral. The payments to counterparties like Goldman Sachs dwarfed the bonuses, and some experts contend that these companies should have been made to share some of the losses resulting from the giant insurance firm's near collapse. "People see that the guys that ruined AIG are getting paid more money, and that creates outrage," said Porter Stansberry, managing director of Stansberry & Associates Investment Research. "If you want to be outraged, be outraged that the counterparties got paid out full value." The bailout has stirred resentment not just in the U.S. Congress, but on Wall Street, where investors have speculated that Goldman and its connections helped it get a better deal. In recent years, many former Goldman executives have moved into government. Paulson left Goldman in 2006 as chief executive. The chairman of the New York Federal Reserve is former Goldman Chairman Steve Friedman.

Financial Times:
- US proposals to ease controversial fair value accounting rules could alter practices around the world after the international accounting standard setter said it would also discuss the changes. The US Financial Accounting Standards Board was poised on Tuesday to publish two staff papers that would allow banks and other companies more freedom in how they value financial assets. More securities would be valued by computer models rather than current market prices and many are expected to go up in value. A rule change could come into effect as early as next month. The International Accounting Standards Board agreed on Tuesday to put out the papers for comment by those who follow its rules – a list of more than 100 countries. “I’ve been wondering for about two years why they haven’t done it already ... to me it seems to be the simplest, fastest, cheapest way to deal with the heart of the problem which is the negative feedback loop between the economy and marking asset values in illiquid markets,” said Ed Yardeni of Yardeni Research. “Mark to market implies that there is a market that provides accurate information, but that assumption clearly fell apart even in early 2007.”

- Tim Geithner, America’s beleaguered Treasury secretary, faces a critical test of his credibility when he unveils a much-awaited plan to take toxic assets off bank balance sheets – in an announcement expected in the coming days. Mr Geithner, whose initial announcement last month on the troubled asset purchase plan disappointed the market, has become the target of criticism in Washington and on Wall Street, with some questioning whether he can deliver. Speaking on condition of anonymity, senior Democratic figures questioned whether Mr Geithner has the credibility with the markets and Capitol Hill to push through a new request for funds. “The more time passes, the more convinced I am that Tim Geithner is becoming a liability for the administration,” said one Democratic lawmaker.

Late Buy/Sell Recommendations
Citigroup:

- Upgraded (LLY) to Buy, target $41.

Thomas Weisel:

- Upgraded (LEAP) to Overweight.

Night Trading
Asian Indices are unch. to +1.50% on average.
S&P 500 futures -.28%.
NASDAQ 100 futures -.23%.

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Earnings of Note
Company/EPS Estimate
- (GIS)/.97

- (NKE)/.79

- (MLHR)/.21

- (CTAS)/.48

- (IHS)/.54

- (ORCL)/.32

Economic Releases

8:30 am EST

- The Consumer Price Index for February is estimated to rise .3% versus a .3% gain in January.

- The CPI Ex Food & Energy for February is estimated to rise .1% versus a .2% gain in January.

- The Current Account Balance for 4Q is estimated at -$137.1B versus -$174.1B in 3Q.

10:30 am EST

- Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,500,000 barrels versus a +749,000 barrel gain the prior week. Gasoline supplies are expected to fall by -1,500,000 barrels versus a -2,993,000 barrel decrease the prior week. Distillate inventories are estimated to rise by +1,000,000 barrels versus a +2,108,000 barrel rise the prior week. Finally, Refinery Utilization is expected to fall by -.10% versus a -.43% decline the prior week.

2:15 pm EST

- The FOMC is expected to leave the benchmark fed funds rate unch. at .25%.

Upcoming Splits
- None of note

Other Potential Market Movers
- The Fed’s Cole Testifies on Risk Mgmt Oversight, weekly MBA mortgage applications report, (INTC) Software Strategy, Cowen Healthcare Conference, (AIZ) Investor Day, (NEM) Analyst Day, (CRI) Analyst Meeting, (KMT) Analyst Meeting, Jeffries Global Clean Tech Conference and the JPMorgan Gaming/Lodging/Restaurant/Leisure Conference could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by financial and automaker stocks in the region. I expect US equities to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 100% net long heading into the day.

Stocks Finish at Session Highs, Boosted by Technology, Financial, Homebuilding, REIT and Education Shares

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In Play

Stocks Higher into Final Hour on Less Economic Fear, Short-Covering, Diminishing Financial Sector Pessimism

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Medical longs, Retail longs and Biotech longs. I covered all my (IWM)/(QQQQ) hedges this morning, thus leaving the Portfolio 100% net long. The tone of the market is very positive as the advance/decline line is substantially higher, almost every sector is rising and volume is below average. Investor anxiety is about average. Today’s overall market action is very bullish. The VIX is falling 5.62% and is very high at 41.34. The ISE Sentiment Index is around average at 153.0 and the total put/call is around average at .82. Finally, the NYSE Arms has been running low most of the day, hitting .23 at its intraday trough, and is currently .71. The Euro Financial Sector Credit Default Swap Index is falling 1.36% today to 180.33 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is rising 4.17% to 239.50 basis points. This index is still below its Dec. 5^th record high of 285.99. The TED spread is falling 1.52% to 107 basis points. The TED spread is now down 356 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is unch. at 68.75 basis points. The Libor-OIS spread is falling 1.41% to 106.0 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is rising 4 basis points to 1.16%, which is down 148 basis points since July 7th. The 10-year TIPS spread bottomed at .65% in October 1998 during the Asian financial crisis and at 1.24% in October 2001 during the technology bubble-bursting meltdown. The 3-month T-Bill is yielding .22%, which is down 1 basis point today. Market leading stocks have substantially outperformed the market throughout the day. REITs(IYR), which had recently been lagging the financials, are jumping 6.2% today. Retailers are also outperforming today, rising almost 4%. The weekly retail sales index fell 1.2% this week, which was up from a 1.4% decline the prior week and up from a low reading of a 2.3% decline the week of Feb. 3^rd. This could become a large positive if the improvement persists into the Spring. I would expect to see further gains in Asia tonight. Nikkei futures indicate an +66 open in Japan and DAX futures indicate an +26 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less economic fear and diminishing financial sector pessimism.

Today's Headlines

Bloomberg:

- The 17-month U.S. stock market decline may be at or near an end after investors exhausted their will to sell, according to Tobias Levkovich, the chief U.S. equity strategist at Citigroup Inc. Investors withdrew $8.4 billion from stock funds, including Exchange Traded Funds, in the week ended March 11, according to AMG Data. The selling is a sign they have given up hope for a rally and a contrarian signal that stocks may advance, Levkovich said. “We are seeing many of the classic signs of a capitulation,” Levkovich said in an interview with Bloomberg Radio. “We’ve gotten anecdotal evidence that individual investors are throwing in the towel, telling their brokers ‘Sell me out.’” Levkovich expects the S&P 500 to rally 33 percent from yesterday’s close of 753.89 to 1,000 by the year-end.

- President Barack Obama’s economic team finally found its voice -- and it belongs to Federal Reserve Chairman Ben S. Bernanke. Bernanke’s March 15 appearance on CBS Corp.’s “60 Minutes” -- the first televised interview by a Fed chief since 1987 -- gained praise from experts who drew a contrast between his defense of government efforts to fix the financial system and the sometimes-floundering efforts of Obama’s top economic aides to explain to the public what they were doing, and why. “I have been waiting for months for someone in authority to give a straight-talk speech to the American people about how we got into this mess and how we’re going to get out of it,” said Alan Blinder, a former Fed vice chairman who is now a professor at Princeton University in New Jersey.

- Nucor Corp.(NUE), the largest U.S. steelmaker by market value, fell the most in three months in New York after revising its first-quarter forecast from a profit to a loss because of lower-than-expected demand. Nucor fell $4.26, or 12 percent, to $32.69 at 10:59 a.m. in New York Stock Exchange composite trading. A close at that price would be the biggest one-day drop since Dec. 1. The shares declined 20 percent this year through yesterday.

- Venezuela, holder of the world’s second-biggest oil reserves, increased its proved reserves by 14 percent last year, edging closer to leader Saudi Arabia.

- Crude oil rose on optimism about the U.S. economy after a report showed that housing starts in the world’s biggest energy-consuming country surged in February. Prices climbed as much as 3 percent after the Commerce Department report showed that work began on 583,000 homes at an annual rate, a 22 percent increase from January.

Wall Street Journal:

- The Real AIG Outrage. President Obama joined yesterday in the clamor of outrage at AIG for paying some $165 million in contractually obligated employee bonuses. He and the rest of the political class thus neatly deflected attention from the larger outrage, which is the five-month Beltway cover-up over who benefited most from the AIG bailout. Taxpayers have already put up $173 billion, or more than a thousand times the amount of those bonuses, to fund the government's AIG "rescue." This federal takeover, never approved by AIG shareholders, uses the firm as a conduit to bail out other institutions. This includes at least $20 billion to European banks. The list also includes American charity cases like Goldman Sachs(GS), which received at least $13 billion. This comes after months of claims by Goldman that all of its AIG bets were adequately hedged and that it needed no "bailout." Why take $13 billion then? This needless cover-up is one reason Americans are getting angrier as they wonder if Washington is lying to them about these bailouts. The politicians also prefer to talk about AIG's latest bonus payments because they deflect attention from Washington's failure to supervise AIG. The Beltway crowd has been selling the story that AIG failed because it operated in a shadowy unregulated world and cleverly exploited gaps among Washington overseers. Said President Obama yesterday, "This is a corporation that finds itself in financial distress due to recklessness and greed." That's true, but Washington doesn't want you to know that various arms of government approved, enabled and encouraged AIG's disastrous bet on the U.S. housing market. Scott Polakoff, acting director of the Office of Thrift Supervision, told the Senate Banking Committee this month that, contrary to media myth, AIG's infamous Financial Products unit did not slip through the regulatory cracks. Mr. Polakoff said that the whole of AIG, including this unit, was regulated by his agency and by a "college" of global bureaucrats. It is on Mr. Liddy's watch that AIG has lately been conducting a campaign to stoke fears of "systemic risk." To mute Congressional objections to taxpayer cash infusions, AIG's lobbying materials suggest that taxpayers need to continue subsidizing the insurance giant to avoid economic ruin. The Washington crowd wants to focus on bonuses because it aims public anger on private actors, not the political class. But our politicians and regulators should direct some of their anger back on themselves -- for kicking off AIG's demise by ousting Mr. Greenberg, for failing to supervise its bets, and then for blowing a mountain of taxpayer cash on their AIG nationalization. (very good article)

- A broad series of changes at Starbucks Corp.(SBUX), from instant coffee to new menu boards that leave off drink prices, show how the company is adjusting its upscale formula to the economic downturn. Investors hope to learn Wednesday whether the moves are working, when Starbucks conducts its annual meeting in Seattle.

- Florida Tourism Industry Suffers as Businesses Cancel or Scale Back Events in the Sunshine State. Luxury resorts are accustomed to unusual requests. But Amelia Island Plantation was surprised to get this one from a corporate event planner worried about a function appearing too extravagant: could the resort drop the word "island" from its address? Another potential client said it wouldn't consider any hotel with the words "spa" or "resort" in its title. A construction trade association canceled its 400-person annual convention at the resort scheduled for June, citing similar worries. For tourism officials in Florida, the drop-off at Amelia Island Plantation is an ominous sign that the tourism industry, the state's lifeblood, is in for a brutal year. Executives at the resort say they have lost about $750,000 in revenue since January, as businesses and trade groups shun the negative publicity associated with anything even remotely resembling a boondoggle. In the final quarter of 2008, the number of out-of-state visitors to Florida dropped 13.6% from a year earlier, the largest quarterly decline since the quarter following the Sept. 11, 2001, terrorist attacks. "We're hoping that eventually this hysteria goes away," said Visit Florida's Mr. Goldman, who is also the ocean resort's chief marketing officer. The resort's entire salaried staff recently took a 20% pay cut. The loss of business has rippled throughout the island's economy. Four restaurants on the island have closed in the past three months, Mr. Langley said.

- Financial institutions that are not large enough to be designated as systemically significant will gradually lose out in the marketplace to the larger companies that are perceived to have government backing, just as Fannie and Freddie were able to drive banks and others from the secondary market for prime middle-class mortgages. A small group of government-backed financial institutions will thus come to dominate all sectors of finance in the U.S. And when that happens they shall be called by a special name: winners.

CNBC.com:
- Live Blog: iPhone 3.0 Set for Release.

NY Times:

- Goldman Sachs(GS) got its bailout. Now some of its bankers, those aristocrats of Wall Street, apparently need a bit of a bailout too. Goldman, which accepted billions of taxpayer dollars last fall and, as learned Sunday, was also a big beneficiary of the rescue of the American International Group, is offering to lend money to more than 1,000 employees who have been squeezed by the financial crisis. The loans, offered via e-mail last week, could range from a few thousand dollars to hundreds of thousands. Properties like the Helmsley building, which Goldman helped purchase in 2007, have nose-dived in value. Stuart Rothenberg, the former head of Goldman’s real estate group, warned just before he retired last year about Goldman’s real estate exposure and said Goldman became “for all intents and purposes, almost an enlarged hedge fund,” according to Reuters.

ValleyWag:

- In the annals of vetting, this will go down as the most laughable miss ever: Vivek Kundra, the D.C. official tapped by Obama to run government technology, pleaded guilty to a theft charge in 1997. Kundra is currently suspended from his White House job as Yusuf Acar, a manager in the D.C. office Kundra headed, faces bribery charges unrelated to Kundra's 12-year-old theft.

Seeking Alpha:

- Could the Housing Market Be at a Bottom?

- Here's an excellent explanation of the problems with mark-to-market accounting from William Isaac, in recent testimony to a House financial services committee. Isaac knows of what he speaks, being the former chairman of the FDIC. HT: Bob McTeer's blog. Amidst all the gnashing of teeth and wringing of hands, we tend to forget that the maximum losses from subprime loans could have been easily absorbed by the global financial system. Because of MTM, the write-downs and capital losses have been orders of magnitude more than they should have been.

NY Post:

- Recent moves by the Securities and Exchange Commission to tighten its grip on so-called registered investment advisers (RIAs) is being viewed as a possible precursor to mandatory registration of hedge funds, industry watchers said. As the SEC steps up its enforcement in the wake of embarrassing missteps involving convicted Ponzi-schemer Bernard Madoff, the agency has tightened rules surrounding audits of RIAs - commonly known as money managers - under its purview. In order to improve its audits and investigations, the SEC now plans to independently verify the information given to it by RIAs with information from independent third parties, including auditors, accountants and even investors.

The Washington Post:

- A Pennsylvania defense research center regularly consulted with two "handlers" close to Rep. John P. Murtha (D-Pa.) as it collected nearly $250 million in federal funding through the lawmaker, according to documents obtained by The Washington Post and sources familiar with the funding requests. The center then channeled a significant portion of the funding to companies that were among Murtha's campaign supporters.

The Detroit News:

- A top adviser to the Obama administration's auto task force warned that the government won't provide indefinite financial support to the struggling auto industry, while saying the group had made no decision on whether to approve a Chrysler tie-up with Fiat SpA. "We're not going to put these companies on some kind of indefinite intravenous drip feed of money," Steve Rattner told The Detroit News on Monday.

USAToday.com:

- Used car salesmen are becoming the kings of the lot as demand for such vehicles is starting to rise. While new car sales continue to fall, many dealers are finding buyers are willing to spring for a good used car instead. The volume of used cars sold through dealers rose 3.1% in February compared with last year, the first year-over-year increase in 12 months, reports CNW Marketing Research.

Reuters:
- China's official foreign exchange reserves recorded their biggest monthly drop in at least nine years in January, a source familiar with the situation told Reuters on Tuesday. The source, who asked not to be identified, declined to say exactly how big the drop was. But he said provisional figures showed it was greater than the $25.9 billion fall last October, a decline that surprised markets by its magnitude. The source said the decline partly reflected the rise in the dollar due to safe-haven demand and repatriation of funds by banks, companies and investors hit by the financial crisis. If there has, however, been a sustained outflow of capital from China, then the drop in reserves could turn even sharper in February, when the country's trade surplus shriveled to $4.84 billion.

- General Electric Co. (GE) may live to regret ill-timed investment raids on the European real estate market, that are now one of the major headaches for the U.S. conglomerate's GE Capital financial arm. GE Capital has spent billions of dollars on real estate in Eastern and Central Europe between 2005 and 2008, becoming one of the heaviest spenders on the sector late in the property cycle, just when prices were peaking.

The Guardian:

- Google(GOOG) is ramping up its efforts to make money from its controversial Google News service by striking deals with eight European news agencies, and launching a contextual ad service to display adverts around their stories. Google said today it had struck news content hosting deals with news agencies EFE, which services Spain and Latin America; LUSA, across Portugal and Brazil; Switzerland's Keystone; APA in Austria; Poland's PAP; MTI in Hungary; ANA in Greece and Belga in Belgium.

AFP:

- Cuba’s oil reserves in its portion of the Gulf of Mexico “continue increasing,” citing Yadira Garcia, the island nation’s minister for basic industries. Cuba may have 21 billion barrels of probable oil reserves, including onshore and offshore discoveries.

Arab News:
- Saudi Arabia hasn’t changed its investment and spending plans because of the global credit crunch, citing King Abdullah.