Monday, January 04, 2010

Today's Headlines

Bloomberg:

- The cost of insuring against losses on corporate bonds fell on the first trading day of 2010 as investors bet a rebound in Chinese and US manufacturing will help spur recovery in the global economy. The Markiet CDX North America Investment Grand Index fell 2.5 basis points to 82.75, according to broker Phoenix Partners Group prices at 11 am in NY. The Markit iTraxx Crossover Index of credit-default swaps on 50 European companies with mostly high-yield credit ratings dropped 15.5 basis points to 416.5, the lowest since May 2008.

- Barton Biggs, who piled into stocks at the bottom of the global bear market in March, is loading up on the biggest U.S. companies and speculating commodities will drop in 2010. The 77-year-old manager of Traxis Partners LP is buying household-product manufacturers, drugmakers and computer companies on speculation they will prove bargains as earnings surge. The hedge fund, which gained three times the industry average in 2009, is shorting raw materials and says banks will trail the Standard & Poor’s 500 Index for five years. “Big capitalization, high-quality U.S. stocks are very, very cheap compared to everything else,” said Biggs, who cited Procter & Gamble Co. and Johnson & Johnson in a Dec. 29 interview. He called commodities “an investment vehicle for maniacs” that will probably fall in 2010. “I don’t know what’s going to happen in the second half of next year. I’m just saying that in the next three to six months, the economy is going to keep recovering and stocks are going to go up again.”

- Novartis AG offered to buy the rest of Alcon Inc.(ACL), the world’s largest eye-care company, from Nestle SA and minority shareholders for about $39.3 billion, as Chief Executive Officer Daniel Vasella expands into eye surgery. Nestle will sell a 52 percent stake to the Basel, Switzerland-based drugmaker for an average of $180 a share, or a total of $28.1 billion, Novartis said today.

- Cold, windy weather enveloping the U.S. from the northern Plains to the East Coast may continue to break temperature records today. In south Florida, orange growers may escape most crop damage. The National Weather Service issued hard-freeze warnings for last night and this morning for southern Alabama and Georgia and the northern part of Florida, including the panhandle. Such warnings alert growers of temperatures that may fall below 32 degrees Fahrenheit (zero Celsius) for more than three consecutive hours. A low of 20 degrees was forecast for Jacksonville, Florida, overnight, which would break the existing record of 22 degrees, said Dave Samuhel, a meteorologist for AccuWeather.com Inc. in State College, Pennsylvania. Typical temperatures for Jacksonville this time of year are 42 degrees, he said. A cold blast expected next weekend “is supposed to be stronger” than the current weather pattern, Jack Scoville, a Price Group Inc. vice president in Chicago, said in an e-mail yesterday.

- The heaviest snowfall to hit Beijing and Seoul in more than half a century grounded hundreds of planes in the two capitals as temperatures in northern China were set to fall to the lowest in 50 years.

- Charlotte, North Carolina-based Bank of America(BAC) along with Citigroup(C), Morgan Stanley(MS) and Goldman Sachs Group Inc.(GS), all based in New York, added a combined $2.74 billion of the debt, for which there were few buyers as recently as March, to their short-term trading assets during the third quarter, up 13 percent from the second quarter, the most-recent data show. Prices of these securities may slump again, leaving the banks exposed to potential losses that the Treasury Department’s rescue plan was designed to mitigate, said Joshua Rosner, a managing director at New York-based Graham Fisher & Co., which advises regulators and institutional investors. “It’s a trade that will likely work out, but it’s still a speculative trade, which is not what a taxpayer should want from firms that have only recently come out of critical care,” Rosner said.

- Heating oil surged more than 3 percent amid a forecast that weather in the northeast U.S. will remain frigid through the middle of the month, increasing demand for home-heating fuel. The U.S. Climate Prediction Center forecast below-normal temperatures from Texas to Maine from Jan. 9 to Jan. 17. Distillate stockpiles were at the lowest level since July in the week ended Dec. 25, according to the Energy Department. “It’s all about the cold weather up and down the East Coast, which translates into greater demand for heating oil, so I’m expecting distillate inventories to have substantial draws over the next couple of weeks,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

- Crude oil’s rally to a two-month high may sputter around $82 a barrel as the commodity’s relative strength index signals that gains have been excessive, according to technical analysis by MF Global Ltd.

- Total SA, Europe’s third-largest oil company, accelerated its expansion in unconventional energy by agreeing to buy a stake in Chesapeake Energy Corp.’s(CHK) assets in the biggest U.S. natural-gas field for as much as $2.25 billion. Total will pay $800 million for the 25 percent stake and as much as $1.45 billion over as long as six years by funding 60 percent of Chesapeake’s costs in the Barnett Shale formation of North Texas, the companies said today in separate statements. The Barnett field produces about half of all shale gas in the U.S., according to Oklahoma City-based Chesapeake. Shale-gas successes prompted the Potential Gas Committee, a group of industry, academic and government volunteers, to boost its estimate of U.S. gas reserves by 39 percent last year.

- China’s securities regulator may introduce futures contracts on the country’s stock indexes as early as March, an official with knowledge of the matter said.

- Warren Buffett recorded his worst performance against the stock market in a decade last year after committing $26 billion to a railroad takeover and lowering his expectations for investment returns.

- The Internal Revenue Service said it will regulate the tax-preparation industry for the first time, requiring companies including H&R Block Inc.(HRB) and Jackson Hewitt Tax Service Inc.(JTX) to register and pay a fee. The plan, which won’t take effect until at least next year, will require paid tax preparers to pass a competency test and supply an identification number when they file clients’ returns.

- U.S. manufacturing expanded in December at the fastest pace in more than three years, capping a late-2009 global factory rebound that helped pull the world out of the worst slump since the 1930s. The Institute for Supply Management’s factory index rose to 55.9, the highest level since April 2006, according to the Tempe, Arizona-based group. Readings greater than 50 signal expansion. Construction spending dropped for a seventh month, the Commerce Department said in a separate release. “There is a broad-based global manufacturing recovery occurring right now,” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. Maki was the No. 1 forecaster of economic growth from January through September in a Bloomberg News survey. “Manufacturing was picking up speed as we moved into the end of 2009, and we expect growth will be picking up further.” The production index climbed, while the new orders gauge rose to the highest level in five years. The employment index increased to 52 from 50.8, the third straight month of expansion.


Wall Street Journal:

- A veteran value manager is taking another step back from investment decision-making at his firm. Third Avenue Management LLC plans to announce Monday that Martin J. Whitman is relinquishing his role as the firm's co-chief investment officer, leaving protégé Curtis Jensen as the sole investment chief. Mr. Whitman, the firm's 85-year-old founder, will remain co-manager of the flagship Third Avenue Value Fund.

- Financial markets staged a remarkable recovery in 2009, coming back from the brink of disaster thanks to unprecedented rescue efforts by governments around the globe. The question now facing investors is how the markets will stand on their own in 2010.


MarketWatch.com:

- Global semiconductor sales rose 8.5% to $22.6 billion in November compared to a year earlier, a key trade group reported Monday, in a trend that reflects a recovering economy and improved demand for technology products.

- Retail stocks started the first day of trading in 2010 on a positive note as analysts projected December sales likely turned out better than Wall Street initially expected. Bolstered by last-minute shopping heading to Christmas and consumers snatching up post-holiday bargains in the last week of the month, retailers likely made or exceeded their plans for December, their biggest selling month of the year, analysts said.

- Wal-Mart(WMT) new favorite among top-performing advisers.


CNBC:

- Commerce Secretary Gary Locke told CNBC Monday that the US is not in a trade war with China but must enforce fair trade laws no matter the trading partner.


Barron’s:

- Google (GOOG)has gotten the year off to an impressive start, in part thanks to a bullish note this morning from FBR Capital analyst Heath Terry. Terry repeated his Outperform rating, and lifted his price target to $810, from $680. He also moved up his 2010 EPS estimate to $26.16, from $25.59. “We continue to believe that Google is the best-positioned of the large-cap Internet companies, particularly as the advertising environment continues to improve, online gains share of both advertising and commerce dollars, and overall online/mobile consumer activity increases,” he writes in a research note. “Our checks suggest that search advertising is strengthening - gaining share as advertisers return dollars to the highest ROI forms of advertising.” Terry thinks that the company should see “noticeable incremental revenue growth” from the mobile segment by year end.


NY Times:

- Even in the midst of a devastating real estate crash, Dubai pulled out all the stops Monday to celebrate the opening of the world’s tallest building: a rocket-shaped edifice that soars 828 meters, or 2,717 feet, with views that can reach 100-kilometers, or 60-miles.


The Business Insider:

- 10 Blasphemous Trade Ideas That Spit In The Face Of Conventional Wisdom.

- Wow. JP Morgan analyst Imran Khan is really, really optimistic about 2010. Check out his "key investment themes" from his 2010 Internet Sector Outlook:


LATimes:

- Commercial spots for the NFL championship game are nearly sold out. But the Internet is changing the advertising market.


ABCNews:

- President Obama recently named Amanda Simpson to be a Senior Technical Advisor to the Commerce Department. In a statement, Simpson, a member of the National Center for Transgender Equality's board of directors, said that "as one of the first transgender presidential appointees to the federal government, I hope that I will soon be one of hundreds, and that this appointment opens future opportunities for many others." A 2004 YWCA "Woman on the Move," Simpson recently served as Deputy Director in Advanced Technology Development at Raytheon Missile Systems in Tucson, Arizona. At Raytheon, Simpson -- a former test pilot who had worked for the company for more than a generation -- transitioned from male to female and was instrumental in convincing the military contractor to add gender identity and expression to its equal employment opportunity policy. She later ran unsuccessfully for Congress and was a delegate for then-Sen. Hillary Clinton, D-NY, to the Democratic National Convention in 2008.


MacRumors.com:

- In a brief report [Google translation], French site Mac4Ever claims that Apple's special media event now reportedly scheduled for January 27th will see both the introduction of the company's much-rumored tablet device and the launch of beta versions of iPhone OS 4.0 and the associated Software Development Kit for developers. According to the report, the SDK will include a "simulator" to assist developers in adapting their existing App Store applications to support the tablet's screen resolution. The deployment of tools for supporting multiple screen resolutions could also pave the way for a higher-resolution iPhone in the future.


paidContent.org:

- The juggernaut called Politico keeps on rolling, nevermind the recession, thank you. And some changes in company structure may hint at what could come next for it. The site and print paper, started in January 2007 by Allbritton Communications (ACC), has in two years grown to be a $20 million operation, according to paidContent figures, and finish calendar 2009 with operating profits of about a million or more.


San Francisco Chronicle:

- California's political leaders, who are facing the daunting challenge of closing an estimated $20.7 billion budget deficit this year, are looking to Washington for help. Just don't call it a bailout. Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he plans to head to the nation's capital "early and often" seeking federal assistance. Gov. Arnold Schwarzenegger already has put the federal government on notice that he wants billions he says the state is owed. And outgoing Assembly Speaker Karen Bass, D-Baldwin Vista (Los Angeles County), said she would head east as soon as this month. It is not just cash that California wants. Schwarzenegger is calling for permanent changes to the formula that determines the amount of money the federal government contributes to Medi-Cal, California's Medicaid program, noting that the state is among the lowest in the country in reimbursement rates. He also wants money for the costs of providing special education in schools and incarcerating illegal immigrants, both unfunded federal mandates.


Rassmussen:

- A new Rasmussen Reports national telephone survey shows just 27% of voters nationwide believe the federal government should provide bailout funding for California. Fifty-five percent (55%) think the federal government should let the state go bankrupt instead.


Politico:

- After four relatively low-profile years pushing the official party line as chairman of the Democratic National Committee, Dean is once again the tribune of frustrated liberals. And after he called out President Barack Obama and his congressional allies over their concessions on health care, those close to him predict he’s just getting warmed up. Dean’s health care stand has infuriated party leaders, who have alternately tried to marginalize him and to bring him on board. Yet at the same time, his provocative approach has re-energized the political group he founded and thrilled legions of progressive activists, many of whom were drawn to politics by Dean's insurgent 2004 presidential campaign, then deflated when he didn’t land an Obama Cabinet post. They have grown increasingly disenchanted with Obama’s presidency.

- In governor’s races across the country, top GOP candidates are concentrating their attacks on the White House, the surest sign yet that Republicans see opportunity in nationalizing the 2010 election and a departure from the strategy that elected two Republicans to governorships in November. While Chris Christie in New Jersey and Bob McDonnell in Virginia both refrained from overt criticism of President Barack Obama in their successful 2009 races, the current crop of GOP gubernatorial contenders seems intent on making the 2010 election a referendum on Obama’s policies.


zerohedge:

- Is The US Government Buying Stocks?


HedgeCo.Net:

- Trends in Hedge Fund Capital Raising for 2010.


Reuters:

- Amsterdam airport operator Schiphol Group said on Monday it would buy 60 body scanners and denied allegations of lax security after a Nigerian was charged with trying to blow up a plane that took off from Schiphol.


National Post:

- A new study by the Alzheimer Society of Canada says the country urgently needs a strategy to minimize the impact of the Baby Boomers' march toward dementia. The study, Rising Tide: The Impact of Dementia on Canadian Society, suggests that 1.1 million Canadians will have Alzheimer's disease, or a related dementia, by 2038. If not mitigated, dementia's prevalence will create a tenfold increase in the demand for long-term care beds and cost the Canadian economy a staggering $97-billion annually, the study found. It also suggests the amount of time Canadians spend caring for parents and spouses with dementia will triple in the next three decades, to 756 million hours a year. "If we do nothing, dementia will have a crippling effect on Canadian families, our health-care system and economy," said Richard Nakoneczny, president of the Alzheimer Society of Canada.

Nikkei English News:
- Panasonic Corp., in partnership with Skype Technologies SA, plans to introduce plasma televisions equipped with videoconferencing functions.

Bear Radar

Style Underperformer:
Mid-Cap Value (+1.42%)

Sector Underperformers:
REITs (-.40%), Airlines (+.21%) and Education (+.29%)

Stocks Falling on Unusual Volume:

ANN, RMBS, ABFS, ODFL and ACL


Stocks With Unusual Put Option Activity:
1) ACL 2) JTX 3) ESV 4) BUCY 5) STP

Bull Radar

Style Outperformer:
Small-Cap Growth (+2.05%)

Sector Outperformers:
Coal (+5.90%), Disk Drives (+3.50%) and Gaming (+3.02%)

Stocks Rising on Unusual Volume:
BEXP, FTO, IVN, NIHD, MICC, BW, STO, SHOO, TSCO, WGO, CALM, OSIS, HMIN, ASEI, CAGC, SCHS, IART, ARST, SEED, PRAA, IVAC, MINI, VOLC, ULTA, KONG, SHLD, MASI, TKTM, HTCH, SYNA, FSYS, DSC, TEX, RGR, TDG, CUK, BSI, KSP, DSG, CFI and IYW


Stocks With Unusual Call Option Activity:
1) FTO 2) RDN 3) ELN 4) MED 5) KBH

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Sunday, January 03, 2010

Monday Watch

Weekend Headlines
Bloomberg:

- The U.S. East Coast faces the coldest night of the season as frigid air spills south and threatens agriculture in Georgia, Alabama and the orange crop in Florida. Freeze warnings were posted by the National Weather Service as far south as the Orlando area, which may be as many as 20 degrees below normal tonight, the National Weather Service said. The advisory alerts growers that subfreezing temperatures are imminent and may kill crops or other sensitive vegetation. Tampa and others cities in the central part of the state are under a freeze warning from 1 a.m. to 9 a.m. local time tomorrow. Temperatures may fall below 32 degrees Fahrenheit (zero Celsius) for more than three consecutive hours, the National Weather Service in Tampa said on its Web site. “This is a pretty significant cold snap,” Matt Keefe, a meteorologist with AccuWeather.com Inc. in State College, Pennsylvania, said in a telephone interview. The next freeze may come next week when another wintry blast may push temperatures as much as 20 degrees below normal for the central Plains through northwestern Florida, Reppert said. From Houston across to Atlanta could be 20 degrees colder than normal by the morning of Jan. 8, he said.

- News Corp.’s Fox network and Time Warner Cable Inc. resolved a fee dispute that threatened to keep football bowl games and dramas such as “24” off the air in the cable operator’s two largest markets.

- Federal Reserve Vice Chairman Donald Kohn said tight bank credit and caution among households and businesses may impede spending amid an improvement in financial markets. “Lingering credit constraints are a key reason why I expect the strengthening in economic activity to be gradual and the drop in the unemployment rate to be slow,” Kohn said today in a speech to the American Economic Association in Atlanta.


Wall Street Journal:

- The suicide bomber who killed eight Americans, including seven CIA officers, this week might have been able to get through multiple layers of security at the U.S. compound aided by an Afghan informant with the agency, a Western official said Friday. If this is true, it suggests insurgents had turned the tables on the CIA and been able to place their own agents close to the facility the CIA used to cultivate informants. On Wednesday, CIA officials had invited the attacker onto the base with the hopes of recruiting him as an informant. They used an Afghan intermediary to arrange the meeting. The attacker arrived, wearing an Afghan army uniform, officials said.

The assault shows a strategy the insurgency has increasingly employed here in recent months: using the uniforms and vehicles of the Afghan army and police to carry out attacks.

- The Yemeni government ordered an "unprecedented" number of troops into a region controlled by a branch of al Qaeda, as the U.S. and Britain, concerned about the threat of terrorism, both closed their embassies in the capital of Sana. The Obama administration increased the pressure on Islamic militants in Yemen Sunday after the Yemeni branch of al Qaeda claimed responsibility for plotting the failed attempt to blow up Northwest Airlines Flight 253 on Christmas Day. The White House's top counterterrorism official didn't rule out U.S. military action.

- Independent financial advisers are gaining ground from Wall Street brokers in the competition to manage more than $5 trillion in Americans' savings. The ranks of brokers at major Wall Street firms have been shrinking, along with those firms' share of the retail-investing market. At the same time, independent advisers are growing in number and market share. The financial turmoil of the past 18 months is fueling the shift.

- Chinese companies banned from doing business in the U.S. for allegedly selling missile technology to Iran continue to do a brisk trade with American companies, according to an analysis of shipping records. A unit of state-owned China Precision Machinery Import-Export Corp., for example, has made nearly 300 illegal shipments to U.S. firms since a ban was imposed on CPMIEC and its affiliates in mid-2006, according to an analysis of shipping records by the Wisconsin Project on Nuclear Arms Control, a nonprofit proliferation watchdog. A Wall Street Journal review of the records and interviews with officials at some of the American companies indicate that the U.S. firms likely were unaware they were doing business with banned entities, and in many cases were tripped up by altered company names.

- Exxon Mobil Corp.'s(XOM) $31 billion purchase of XTO Energy Inc. is seen as a big endorsement of the future value of natural gas. But many gas producers aren't so optimistic. After years of volatile gas prices, and last year's dismal performance, dozens of small gas companies are expanding into crude oil, taking the opposite tack of Exxon, which last month agreed to buy XTO.

- The U.S. Commodity Futures Trading Commission finalized rules on Thursday that will raise capital standards for commodity brokers and require firms to incorporate over-the-counter derivatives positions into their risk-based capital calculations. Under the new rules, published in the Federal Register, futures commission merchants will have to raise their adjusted net capital from a minimum of $250,000 to $1 million. Adjusted net capital requirements for introducing brokers, meanwhile, will increase from $30,000 to $45,000. Introducing brokers can take orders to buy or sell futures, but don't hold customer funds. In addition, the rules will also stiffen margin requirements for commodity-brokerage firms trading on their own accounts, forcing them to raise the percentage used to calculate so-called maintenance margin requirements from 4% to 8%. That puts the requirement on par with the amount customers are required to maintain.

- Iranian media reported Tehran would conduct a large-scale defensive military exercise next month, coinciding with what Tehran officials now say is a deadline for the West to respond to its counter-offer to a nuclear-fuel deal. The commander of Iran's ground forces, Brig. Gen. Ahmad-Reza Pourdastan, said the drill would be conducted by Iran's army, in conjunction with some units of the Islamic Revolutionary Guard Corps in order to improve "defensive capabilities," Press TV, the English-language, state-run media outlet reported Sunday.

- Higher cotton-futures prices could lead U.S. producers to plant more acres in the spring, after three years of lower acreage.

- Hedge funds started the year down on their heels and spent much of it trying to regain their footing. The result going into 2010 is a global industry still well off its peak size, but growing once again as investors get back to writing checks and a performance comeback boosts fund assets.

- Watching live television broadcasts on mobile devices is common in some countries, but not the U.S. A new effort is taking shape to change that. A group of broadcasters plans to use this week's Consumer Electronics Show to promote their plans to deliver news, sports, weather and other local content to users on the go. While cellphones are an obvious target, backers of the effort also expect users to receive local programming on laptop computers, portable DVD players and devices in cars.

- Happy New Year, readers, but before we get on with the debates of 2010, there's still some ugly 2009 business to report: To wit, the Treasury's Christmas Eve taxpayer massacre lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. The Treasury is hoping no one notices, and no wonder. Taxpayers are continuing to buy senior preferred stock in the two firms to cover their growing losses—a combined $111 billion so far. When Treasury first bailed them out in September 2008, Congress put a $200 billion limit ($100 billion each) on federal assistance. Last year, the Treasury raised the potential commitment to $400 billion. Now the limit on taxpayer exposure is, well, who knows?

- Chip maker Advanced Micro Devices Inc.(AMD) has won a place in one of the best-known laptop personal-computer lines, the ThinkPad.


Barron’s:

- Cloud computing, which shifts tech tasks into cyberspace, will be as revolutionary as the Internet itself. Why Salesforce(CRM), Apple(AAPL), Google(GOOG), Cisco(CSCO) and others could be winners.


MarketWatch.com:

- Shares of Japan Airlines Corp. soared by more than a third of their value Monday, after reports the ailing national carrier's credit line will be extended, staving off bankruptcy fears for now.

- As we start a new decade there appears to be increasingly polarized forecasts for China's economy, ranging from it leading the world out of recession to teetering on the precipice of collapse.


CNBC.com:
- Phones, PCs to Drive Tech Rally Into 2010.


Business Insider:

- A few days earlier, a bomber had almost succeeded in blowing a plane out of the sky. The airline in question, Delta, had followed the TSA's procedures. The US government--and, presumably, the TSA--had been given some warning about this particular bomber, which it had declined to pursue. The TSA responded to what may have been a monumental screw-up by tightening security procedures (fine) and then not telling the public about them (outrageous). Then, far worse, when it discovered that someone else had told the public, the TSA sent the proverbial jack-booted thugs to threaten individuals into revealing who sent them a document that had been distributed to thousands of airline and government employees. In what universe is this a good use of government resources?


NY Times:

- Along with Wall Street’s resurgent bonuses will come a jump in an ancillary benefit: tax breaks. For all banks and Wall Street firms, “I’m sure we’re talking $200 billion total compensation, which would create a tax savings for the firms of $80 billion,” said Robert Willens, an accounting and tax analyst in New York who runs a consulting firm, Robert Willens LLC. Many American banks already pay minuscule federal income taxes, because of various deductions and clever tax planning; the payout-related breaks will reduce their tax bills further in coming years. The biggest tax break will go to Goldman Sachs(GS). It expects to award its employees $23 billion in bonuses — the most in its history — after having paid back $10 billion. Because most employee compensation is a deductible expense under tax laws, Goldman Sachs, which is technically taxed at a top corporate rate of 39 percent, will save about $9 billion in federal income taxes on the bonuses it pays out for 2009, Mr. Willens said.

- With the Jan. 2 deadline for applications fast approaching, the dean of admissions at the University of Chicago sent out a sample essay last week to thousands of high school seniors in hopes “that it lightens your mood, reduces any end-of-the-year stress and inspires your creative juices in completing your applications.” But the essay, comparing the college to an elusive lover, has had a very different effect. “Dear University of Chicago, It fills me up with that gooey sap you feel late at night when I think about things that are really special to me about you,” the essay began. “Tell me, was I just one in a line of many? Was I just another supple ‘applicant’ to you, looking for a place to live, looking for someone to teach me the ways of the world?” In the 10 days since the dean’s e-mail message went out, more than 100 postings appeared on College Confidential, a popular Web site for those applying to college, some questioning his decision to send out the essay.

- The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good.

- What is a Bailed-Out Banker Really Worth?

- Over the last two years, Mr. Weill has watched Citi — a company he built brick by brick during the final act of a 50-year career — nearly fall apart. Although every taxpayer in the country has paid for Citi’s outsize mistakes, for Mr. Weill the bank’s myriad woes are a commentary on his life’s work.

- Simple technology, including video chatting services like Skype, is making it possible for far-flung friends to watch shows together, even if they can’t share the same bowl of popcorn.

- After hibernating for the last year, Silicon Valley’s venture capitalists are beginning to stir. Technology financiers raised about $14 billion to finance new companies in 2009, a sharp drop from $36 billion in 2007. But as the economic freeze begins to thaw, investors are once again writing checks to entrepreneurs.


NY Post:

- A Democrat strategist told Bryon York of the Washington Examiner that House empress Nancy Pelosi was comfortable with losing “20 to 40” seats in the lower chamber as the price for getting health care “reform” passed. A loss of 40 seats would mean flipping the House to GOP hands.


CNNMoney.com:

- Companies Google(GOOG) should buy in 2010.


Business Week:
- Trial Lawyers Sidestep Malpractice Curbs. Senate health reform bill shows how trial lawyers' lobbying helped end drive for damage award caps.

- The U.S. Commodities Futures Trading Commission, criticized for its alleged failure to curb 2008's historic runup in oil prices, will soon propose caps on how much any single investor can hold in a set of commodity futures, says an official. In an e-mail answering questions from Bloomberg BusinessWeek, Bart Chilton, one of the CFTC's five commissioners, says the commission will soon propose a rule aimed at preventing any one entity from "controlling too much of a given market."


Washington Post:

- Opponents of the health-care reform bill are not giving up the fight, and some think their last, best hope to halt the legislation lies not in the U.S. Capitol but in the court across the street. A small but vocal contingent of legal scholars and many Republican lawmakers argue that the measures passed by both chambers are unconstitutional and will be ruled so by the Supreme Court. Their primary target: the individual mandate, which requires people to get health insurance or pay a financial penalty of at least 2 percent of their income to the government.

- The United States and China are headed for a rough patch in the early months of the new year as the White House appears set to sell a package of weapons to Taiwan and as President Obama plans to meet the Dalai Lama, U.S. officials and analysts said. The Obama administration is expected to approve the sale of several billion dollars in Black Hawk helicopters and anti-missile batteries to Taiwan early this year, possibly accompanied by a plan gauging design and manufacturing capacity for diesel-powered submarines for the island, which China claims as its territory. The president is also preparing to meet the spiritual leader of Tibet, who is considered a separatist by Beijing. Obama made headlines last year when the White House, in an effort to generate goodwill from China, declined to meet the Dalai Lama, marking the first time in more than a decade that a U.S. president did not meet the religious leader during his occasional visits to Washington.


Houston Chronicle:

- Climategate: You Should Be Steamed by Neil Frank. Now that Copenhagen is past history, what is the next step in the man-made global warming controversy? Without question, there should be an immediate and thorough investigation of the scientific debauchery revealed by “Climategate.”


TheStreet.com:

- 2010 Stock Picks.


Politico:

- All travelers flying into the U.S. from foreign countries will receive tightened random screening, and 100 percent of passengers from 14 terrorism-prone countries will be patted down and have their carry-ons searched, the Obama administration was notifying airlines on Sunday. The more stringent Transportation Security Administration rules, to take effect at midnight, follow the attempted Christmas Day bombing of a U.S. airliner headed into Detroit from Amsterdam.


Rasmussen Reports:

- In December, the number of Americans identifying themselves as Democrats fell to the lowest level recorded in more than seven years of monthly tracking by Rasmussen Currently, 35.5% of American adults view themselves as Democrats. That’s down from 36.0 a month ago and from 37.8% in October. Prior to December, the lowest total ever recorded for Democrats was 35.9%, a figure that was reached twice in 2005. See the History of Party Trends from January 2004 to the present.

- Fifty-three percent (53%) of voters favor a ban on abortion coverage in any health insurance plan that receives federal subsidies. A new Rasmussen Reports national telephone survey finds that 40% are opposed to such a ban in the proposed health care legislation now before Congress.


LA Times:

- TV makers hope viewers will embrace 3-D-enabled sets. Advances in technology have made home versions of the format viable.


Slate:

- America's economic recovery will be twice as big as experts predict.


Engadget:

- Exclusive: Google(GOOG) Nexus One hands-on, video, and first impressions.


zerohedge:

- Origins of an American Keptocracy. Some days ago we wondered aloud at the blank check extended to Fannie and Freddie along with the suspiciously convenient timing of those announcements on Christmas Day. Back then we wondered if we had been told the entire story. To wit: So. Let us summarize:


Reuters:

- Somalia's hardline Islamist rebel group al Shabaab said on Friday it was ready to send reinforcements to al Qaeda in Yemen should the U.S. carry out retaliatory strikes, and urged other Muslims to follow suit. Yemen-based al Qaeda groups have come under intense scrutiny since the Nigerian who tried to explode a bomb aboard a Detroit-bound Christmas Day flight from Amsterdam was linked to the country. Yemeni and American officials are reported to have mulled targets for retaliatory strikes against such groups inside Yemen. "We call upon all Muslims to give a hand to our brothers in Yemen and we, al Shabaab, are ready to send them reinforcements ... and Inshallah we shall win over America," said Sheikh Mukhtar Robow Abuu Mansuur, a senior al Shabaab official.

- A Somali man armed with an axe and suspected of links with al Qaeda broke into the home of a Danish cartoonist whose drawings of the Prophet Mohammad caused global Muslim outrage and was shot and wounded by police.

- Cable operator Cablevision Systems Corp, (CVC) on Sunday accused Scripps Networks Interactive (SNI), the provider of the HGTV and Food Network channels, of holding viewers hostage as it seeks a 200 percent fee hike.

- Shares of Japan Airlines Corp (9205.T) jumped 36 percent to bounce back from a plunge last week after the government sought to boost the amount of funds available to the struggling carrier.

- Goldman Sachs Group Inc (GS) has begun a review of its London operations that could result in entire departments going overseas to avoid paying increasing British taxes, the Daily Telegraph reported in its Monday edition.


Financial Times:

- Britain is in danger of succumbing to a budgetary crisis this year, with the economy likely to stay in the doldrums until at least the end of 2010, a Financial Times survey of economists warns. Asked to name the three biggest risks to the economy, 37 of the 79 economists polled said the UK was threatened by a fiscal crisis that could derail any revival.

- The shipbuilding industry looks set for a rash of insolvencies as one of the sharpest-ever collapses in order levels combines with banks’ reluctance to finance ship construction to starve many yards of cash.


Telegraph:

- Britain facing one of the coldest winters in 100 years, experts predict. Britain is bracing itself for one of the coldest winters for a century with temperatures hitting minus 16 degrees Celsius, forecasters have warned. They predicted no let up in the freezing snap until at least mid-January, with snow, ice and severe frosts dominating. And the likelihood is that the second half of the month will be even colder. Weather patterns were more like those in the late 1970s, experts said, while Met Office figures released on Monday are expected to show that the country is experiencing the coldest winter for up to 25 years. The cold weather comes despite the Met Office’s long range forecast, published, in October, of a mild winter. That followed it’s earlier inaccurate prediction of a “barbecue summer”, which then saw heavy rainfall and the wettest July for almost 100 years. Paul Michaelwaite, forecaster for NetWeather.tv, said: “It is looking like this winter could be in the top 20 cold winters in the last 100 years. “It’s going to be very cold the for the next 10 days and although there could be a milder spell at some stage the indications are that the second half of the month will be even colder.”


Seoul Economic Daily:
- Samsung Electronics Co., Hynix Semiconductor Inc. and LG Display Co. of South Korea plan to boost combined capital expenditure this year by about 32% from 2009 to more than 14.3 trillion won.


Yonhap News:

- South Korean electronics giant Samsung Electronics Co. said Sunday it aims to nearly quadruple its sales of light emitting diode (LED) TVs in the global market to around 10 million units this year.


Aljazeera.net:

- Mir Hossein Mousavi, the Iranian opposition leader, has called for an immediate end to the government crackdown on opposition activists, saying he was ready to die in defence of people's rights. In a statement on his Kaleme website on Friday, Mousavi also said that the Islamic Republic was in "serious crisis" following the disputed presidential election in June. "I am not afraid to die for people's demands ... Iran is in serious crisis ... Harsh remarks ... will create internal uprising ... the election law should be changed ... political prisoners should be freed," his statement added. He accused the government of making more mistakes by resorting to "violence and killings" to quell the protests over the poll outcome, that saw Mahmoud Ahmadinejad, the incumbent president, re-elected for another term. "Arresting or killing Mousavi, [another opposition leader Mehdi] Karoubi ... will not calm the situation," Mousavi, who lost the election, said in the statement. Mousavi also demanded that the government "take responsibility for the problems it has created in the country... and recognise people's right to lawful assembly". "I say openly that until there is an acknowledgement of the existence of a serious crisis in the country, there will be no possibility of resolving the problems and issues."


Weekend Recommendations
Barron's:
- Made positive comments on (AAPL), (GOOG), (CRM), (RVBD), (CVX), (LPS) and (AMGN).


Citigroup:

- Reiterated Buy on (ESRX), raised target to $112.

- Our high level investment thesis into 2010 is that we expect money to rotate into healthcare stocks after federal healthcare reform efforts conclude(by March), and Managed Care in particular has been under-owned by large mutual funds. We maintain a positive rating on all 9 covered Managed Care stocks that we expect will continue to rebound in 2010 from historic low valuations in 2009. Buy (AET), our top pick in Managed Care, followed by (WLP). Upgrade (UNH) to Buy from Hold, target $39.

- Reiterated Buy on (MHS), raised target to $77.

- Reiterated Buy on (MRK), raised target to $45.


Night Trading
Asian indices are -.25% to +1.0% on avg.

Asia Ex-Japan Inv Grade CDS Index 94.50 -3.50 basis point.
S&P 500 futures +.44%.
NASDAQ 100 futures +.58%.


Morning Preview
BNO Breaking Global News of Note

Google Top Stories

Bloomberg Breaking News

Yahoo Most Popular Biz Stories

MarketWatch News Viewer

Asian Financial News

European Financial News

Latin American Financial News

MarketWatch Pre-market Commentary

U.S. Equity Preview

TradeTheNews Morning Report

Briefing.com In Play

SeekingAlpha Market Currents

Briefing.com Bond Ticker

US AM Market Call
NASDAQ 100 Pre-Market Indicator/Heat Map
Pre-market Stock Quote/Chart
WSJ Intl Markets Performance
Commodity Futures
IBD New America
Economic Preview/Calendar
Earnings Calendar

Conference Calendar

Who’s Speaking?
Upgrades/Downgrades

Politico Headlines
Rasmussen Reports Polling


Earnings of Note
Company/Estimate
- None of note


Upcoming Splits

- None of note


Economic Releases

10:00 am EST

- The ISM Manufacturing Index for December is estimated to rise to 54.0 versus 53.6 in November.

- The ISM Prices Paid for December is estimated to rise to 58.8 versus 55.0 in November.

- Construction Spending for November is estimated to fall -.5% versus unch. in October.


Other Potential Market Movers
- The Fed's Lockhart speaking and the Fed's Duke speaking
could also impact trading today.


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