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Bloomberg:
- McMoRan Exploration Co.(MMR) and Energy XXI (Bermuda) Ltd. said they discovered what may be one of the biggest oil and gas finds in decades in the shallow waters of the U.S. Gulf of Mexico. Shares of both companies rose more than 25 percent. The companies are aiming for the same layer of rocks and sand that London-based BP Plc tapped to find the Tiber field earlier this year. BP said in September that its Tiber discovery may hold 3 billion barrels of crude oil and natural gas. “The Davy Jones discovery verifies the ultra-deep potential of the Gulf of Mexico shelf and opens this horizon as a major exploration frontier,” John Schiller, chief executive officer of Hamilton, Bermuda-based Energy XXI, said in the statement. McMoRan, the majority owner of the prospect, plans to drill the well to 29,000 feet to search for more zones, the New Orleans-based company said in a separate statement. Additional drilling and testing may indicate Davy Jones is “one of the largest discoveries on the shelf of the Gulf of Mexico in decades,” James Moffett, co-chairman of McMoRan, said in the statement.
- Treasury Secretary Timothy Geithner retains the confidence of President Barack Obama as he faces questions about why the Federal Reserve Bank of New York tried to withhold details of the government’s financial-industry rescue, administration officials said. Aides to top congressional Democrats also said that Geithner has support on Capitol Hill as lawmakers prepare hearings into why the New York Fed in December 2008 asked American International Group Inc. to scale back disclosures of the government’s $182.3 billion bailout of the New York-based insurer.
- The cost to protect against defaults on U.S. corporate bonds declined to the lowest in more than two years as investors wager that earnings will beat analysts’ expectations amid an “improving” U.S. economy. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 13, which is linked to 125 companies and used to speculate on creditworthiness or to hedge against losses, fell 1.25 basis point to a mid-price of 76 basis points as of 9:37 a.m. in New York, according to Phoenix Partners Group. The index is trading at the lowest level since Dec. 14, 2007, when it was 75.2 basis points, according to CMA DataVision prices.
- U.S. venture-capital firms raised 7.4 percent more from institutional investors last quarter, signaling pension funds and universities are starting to invest in startups again after curbing such outlays in the recession. Venture firms raised $3.82 billion, up from $3.56 billion a year earlier, the National Venture Capital Association said in a statement today. Even with the fourth-quarter gain -- the first in 2009 -- last year was the worst since 2003, the NVCA said. Full-year fundraising fell by almost half to $15.2 billion.
- No U.S. industry has faster profit growth than banks and brokers, and no group is more hated by investors. Analysts say earnings at financial companies rose 120 percent in the fourth quarter, accounting for all of the income increase in the Standard & Poor’s 500 Index, and will triple by 2011, climbing four times as fast as the market. Should the estimates prove correct, the shares are trading at a 15 percent discount to the index, data compiled by Bloomberg show. That’s not enough for money managers burned by the 84 percent drop in the stocks from February 2007 through March and more than 160 U.S. bank failures in the past two years. Financial companies are the least-favored equities, according to a Bank of America Corp. survey of investors with $617 billion in assets that showed 38 percent of 123 money managers are holding fewer shares than are in benchmark indexes. “The stocks are clearly too cheap,” said Mark Giambrone, a fund manager who bought PNC Financial Services Group Inc. and Bank of America stock for USAA Investment Management Co., which oversees about $74 billion in San Antonio. “There may be some bumps in the road ahead, but for the most part those are reflected in the valuations.”
- London Mayor Boris Johnson said that as many as 9,000 bankers may leave the U.K. as a result of a 50 percent tax on bonuses announced last month. The levy, which will be paid by banks that offer bonuses of more than 25,000 pounds ($40,400), along with a new 50 percent rate of tax on the incomes of all British residents earning more than 150,000 pounds, may permanently damage London’s competitiveness, Johnson said today in a statement. “Such ill-thought-out plans come at a time when there is light at the end of the recessionary tunnel and London is excellently placed to compete and prosper,” Johnson said. “That prosperity will be threatened and the whole U.K. economy will suffer if our financial sector is denied a stable tax and regulatory regime.”
- Prices for U.S. home-loan bonds without government-backed guarantees soared, pushing one class of debt almost 20 percent higher than a month ago. The most-senior securities backed by option adjustable-rate mortgages jumped 9 cents on the dollar from mid-December to 58 cents last week, according to Barclays Capital Inc. That’s almost double their bottom of 33 cents in mid-March. So-called non-agency home-loan bonds have been “leading the pack” as asset prices rally to start the year, Barclays analysts led by Ajay Rajadhyaksha in New York wrote in a Jan. 8 report.
- Short Sellers Home In on China’s Balance Sheet.
Wall Street Journal:
- The alleged failed Christmas Day airline bomb attempt is opening the door to wider deployment of full-body-imaging machines at airports across the U.S. and possibly Europe, despite reservations from some members of Congress, privacy advocates and airlines. The U.S. Transportation Security Administration now plans to buy a total of 450 body-scanning machines -- more than ten times the number now in use. Following the alleged bombing attempt, the Department of Homeland Security announced it would buy 300 body-scanning machines this year. The government had earlier announced plans to buy 150 machines. There are about 40 full-body scanners in use as part of a pilot program at 19 U.S. airports. European Union officials also are discussing plans to expand the use of body-imaging scanners.
MarketWatch.com:
CNBC:
- Ten months into President Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found. Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama's argument that more road money would address an "urgent need to accelerate job growth." Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are "at the heart of our effort to accelerate job growth."
- Ford(F) remains conservative on its outlook for 2010, but sees the company making money in 2011, Alan Mulally, Ford CEO, told CNBC Monday.
Barron’s:
NY Times:
- Former Gov. Sarah Palin of Alaska has signed on as a contributor to the Fox News Channel.
NYPost:
- So, despite all the money spent on stimulus, the economy continues to lose jobs and unemployment remains at a staggering 10 percent. That grim news appeared to catch the Obama administration by surprise last week -- but it shouldn't have. The number-crunchers at the Treasury Department have been celebrating what appears to be the end of the Great Recession as told through rising GDP, higher business profits and a buoyant stock market. But owners of small businesses -- the usual engines of economic growth -- are still refusing to hire back workers as they normally do when the economy turns up from a sharp decline. Talk to them, and they'll gladly tell you why:
The Business Insider:
- Look Out: Goldman Sachs(GS) Is Now Dumping Shanghai Property.
Lloyd’s List:
Rassmussen:
- Voter expectations that the health care legislation before Congress will become law have reached a new high, but most are still opposed to the plan. The latest Rasmussen Reports national telephone survey shows that just 17% believe passage of the legislation will achieve the stated goal of reducing health care costs. Fifty-seven percent (57%) think it will lead to higher costs. Fifty-two percent (52%) also believe passage of the legislation will lead to a decline in the quality of care. Overall, 40% of voters nationwide favor the health care reform plan proposed by President Obama and congressional Democrats. Fifty-five percent (55%) are opposed.
- Looking back, most U.S. voters still don't approve of the government bailouts of the financial industry and troubled automakers General Motors and Chrysler. A new Rasmussen Reports national telephone survey finds that just 30% of voters think it was a good idea for the government to provide bailout funding for banks and other financial institutions. Fifty-six percent (56%) hold the opposite view and believe it was a bad idea. These findings are virtually unchanged from April of last year. The new numbers are similar when it comes to the bailout funding for GM and Chrysler. Thirty-two percent (32%) like the idea of the auto bailouts, but 58% don't.
Politico:
- Sen. John Cornyn (R-Texas) said on Monday he doesn’t expect Sen. Harry Reid to yield to calls for him to step down as majority leader. Cornyn, who told POLITICO Sunday it would be “entirely appropriate” for the Nevada Democrat to step down over his “Negro dialect” remark as reported in a new book, attacked Reid again on Monday during an interview on MSNBC. “It’s not just limited to this racially insensitive comment. It is about a series of bad judgments that is reflecting itself in the public opinion polls in Nevada, which make him an endangered incumbent in the upcoming election. I think it's just part of that overall picture,” said Cornyn, who chairs the National Republican Senatorial Committee.
AJC.com:
- The foreclosure picture improved in metro Atlanta with the first January-to-January decline in 10 years, according to data released today. A total of 8,181 foreclosure notices were published in January in a 13-county metro area — down 3 percent from last January and 21 percent from December, according to Alpharetta-based Equity Depot. The notices published this month are for public auctions scheduled in February. Equity Depot President Barry Bramlett said one reason is that the “sub-prime” mortgage crisis is getting cleaned up. The majority of foreclosures are now related to the economy and unemployment.
NYDailyNews:
- Ousted Illinois Gov. Rod Blagojevich says he's "blacker than Barack Obama" and tells Esquire magazine that he was a real person in a political arena dominated by phonies. Blagojevich, referring to the president as "this guy," says Obama was elected based simply on hope. "What the (expletive)? Everything he's saying's on the teleprompter," Blagojevich told the magazine for a story in its February issue, which hits newsstands Jan. 19. "I'm blacker than Barack Obama. I shined shoes. I grew up in a five-room apartment. My father had a little laundromat in a black community not far from where we lived," Blagojevich said. The twice-elected Democrat was impeached and removed from office last year after federal prosecutors arrested him on corruption charges that included trying to sell Obama's old U.S. Senate seat. Blagojevich is appearing on NBC's "Celebrity Apprentice" this spring and his trial is expected to start later this year.
FINalternatives:
- 5 Capital Raising Strategies For Hedge Funds and CTAs.
- New York City Mayor Michael Bloomberg’s charitable foundation started investing in hedge funds at precisely the wrong time. Bloomberg won the right to move his foundation’s money from mutual funds into riskier investments, including hedge funds, in December 2007. He did, just in time for those investments to be hammered by one of the worst years in the history of the hedge fund industry. The Bloomberg Foundation lost $279 million on its investments in 2008, thanks almost entirely to its investment with Quadrangle Group, the hedge fund and private equity firm founded by former Obama administration auto czar Steven Rattner.
Tradersmagazine:
- A top official in the Securities and Exchange Commission's Division of Trading and Markets will leave the agency, sources tell Traders Magazine. Dan Gallagher, who became a deputy director in the Division in July 2008, will depart the SEC sometime soon, according to sources. He will join a law firm, sources say, returning to the private and the increased compensation.
USAToday:
- Air travelers strongly approve of the government's use of body scanners at the nation's airports even if the machines compromise privacy, a USA TODAY/Gallup poll finds. In the poll, 78% of respondents said they approved of using the scanners, and 67% said they are comfortable being examined by one. Eighty-four percent said the machines would help stop terrorists from carrying explosives onto airplanes. The survey was taken Jan. 5-6 of 542 adults who have flown at least twice in the past year.
Reuters:
- Most banks have increased basic salaries and cut bonuses for executives in response to calls for leaner compensation packages after the financial crisis, according to a survey by consultancy Mercer.
- U.S. retailers are in for a better holiday shopping season this year as the economy improves, Moody's Economy.com (MCO) Chief Economist Mark Zandi said on Monday. Zandi, who said the economy's improvement would pick up speed this year, forecast sales for the 2010 holiday season would rise 3 percent to 4 percent, an improvement from 2009. "We're going to be pleasantly surprised by Christmas 2010," Zandi said at a National Retail Federation conference in New York.
Risk.net:
- Four people have been formally charged by the Belgian authorities for money laundering, in an investigation into fraudulent trading in carbon emissions permits, according the Reuters news agency. Last month, the European police agency Europol reported that the European Union's Emissions Trading Scheme (EU ETS) had fallen victim to fraudulent trading activities over the past 18 months, worth €5 billion for several national tax revenues. It estimates that in some countries, up to 90% of the whole market volume was caused by fraudulent activities.
Telegraph:
- Climate Change: The True Price of the Warmists’ Folly is Becoming Clear. From the Met Office's mistakes to Gordon Brown's wind farms, the cost of 'green' policies is growing, warns Christopher Booker. Impeccable was the timing of that announcement that directors of the Met Office were last year given pay rises of up to 33 per cent, putting its £200,000-a-year chief executive into a higher pay bracket than the Prime Minister. As Britain shivered through Arctic cold and its heaviest snowfalls for decades, our global-warming-obsessed Government machine was caught out in all directions. At last, in all directions, we are beginning to see the terrifying cost of that obsession with “global warming” and “green energy” which for nearly 20 years has had all our main political parties in its grip. For years governments, including the EU, have been shoveling millions of pounds into the coffers of “green” lobby groups, such as Friends of the Earth and the WWF, allowing them in return virtually to dictate our energy policy. Not for nothing is a former head of WWF-UK now chairman of the Met Office. The bills for such follies are coming in thick and fast. Last winter’s abnormal cold pushed Britain’s death rate up to 40,000 above the average, more than the 35,000 deaths across Europe that warmists love to attribute to the heatwave of 2003. Heaven knows what this winter will bring. And remember that the cost of the Climate Change Act alone has been estimated by our Climate Change Secretary Ed Miliband at £18 billion every year until 2050 – a law that only three MPs in this Rotten Parliament dared oppose. Truly have they all gone off their heads.
Style Underperformer:
Large-Cap Growth (-.58%)
Sector Underperformers:
Coal (-3.25%), Oil Service (-1.47%) and Software (-1.18%)
Stocks Falling on Unusual Volume:
ATPG, BRY, MDRX, UIS, ASBC, MELI, HOGS, WFSL, DBRN, SNIC, LIWA, SWSI, FMX and KOF
Stocks With Unusual Put Option Activity:
1) MELI 2) CX 3) PXP 4) IOC 5) MEE
Style Outperformer:
Large-Cap Value (+.41%)
Sector Outperformers:
Oil Tankers (+3.96%), Gold (+1.39%) and Drugs (+.80%)
Stocks Rising on Unusual Volume:
AMAG, PRXL, BP, TYC, LGCY, NVS, AZN, MMR, RDEN, PXP, SAP, RDC, ECL, MAPP, RICK, VOLC, PRXL, CAAS, MEOH, SOLF, SONO, VLCCF, CAGC, BWLD, HEAT, LRCX, CTRN, CPHD, VVUS, ZRAN, IDXX, VPRT, SJT, TNP, TFX, CGV, UPS, NAT and CAT
Stocks With Unusual Call Option Activity:
1) MMR 2) VMED 3) MED 4) SPLS 5) CECO
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