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Bloomberg:
- Raw-materials producers that sell to China may be hurt by slowing demand because the nation’s real estate market is poised for a “stumble,” according to hedge fund manager James Chanos. A Chinese credit-driven property bubble with “far-reaching impact” may be overheating, threatening demand for industrial materials used in buildings, Chanos said. “One needs to look at building materials globally, increasingly they’re priced on the margin for the China bid,” Chanos, the founder of Kynikos Associates Ltd., said today at a conference in London. “If the China bid turns into a China offer, there’s going to be an air pocket in the prices of many of these industrial commodities that are used in constructing homes and office buildings.” China’s property-market data may be masking the degree that speculation is driving prices in some of the larger cities, Ardo Hansson, the World Bank’s chief economist for China, said today in an interview. Government data this month showed Chinese real- estate prices climbed the most in 18 months in December, highlighting a struggle to rein in speculation while sustaining an economic rebound. Steel prices in China, the world’s biggest producer of the metal, dropped the most in four months last week as inventories piled up and concerns grew that the government may curb lending. Inventories of steel products, including holdings by traders, producers and end users, are estimated to exceed 50 million metric tons, setting a record, said Ma Haitian, an analyst with Beijing Antaike Information Development Co. That’s compared with an estimated 18 million tons a year ago, he said.
- The supply of supertankers waiting to collect 2 million-barrel cargoes of Middle East crude oil expanded for the first time in three weeks after demand for the vessels dropped. There are 10% more very large crude carriers, or VLCCs, for hire than there are likely cargoes over the next 30 days, according to a Bloomberg News survey of five shipbrokers and two owners today. For the past two weeks, supply was equal to respondents’ expectations for demand.
- OPEC members likely will keep increasing production in the months ahead without triggering a price drop as investors pour money into commodity markets. Output by OPEC grew 4.7% to 28.965 million barrels a day in the last nine months of 2009 as oil rose 60% to $79.36 a barrel. The sliding dollar has prompted investors to purchase raw materials such as oil because they offered better returns than stocks and bonds. “Oil has become a financial asset, fulfilling the role once played by precious metals, treasuries and currencies, which leaves OPEC out of the loop,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “They will continue to pump additional oil and reap the benefits.” Speculative crude oil net-long positions rose 25% to a record 135,669 contracts in the week ended Jan. 12, according to a report from the US CFTC.
- Carbon markets are under a “big, dark cloud” of uncertainty about future regulation and falling natural-gas prices, analysts at Bank of America Merrill Lynch said in a research report. European Union carbon dioxide emission volumes from fossil fuels probably dropped 9.5 percent last year, reducing demand for EU permits, Merrill analysts including Sabine Schels said today. The EU market probably has 166 million too many allowances in the five years through 2012, they said. Prices are holding up because allowances can be saved and used after 2012, the report said, without giving a specific forecast. “A string of bearish signals is currently hanging over the European and global carbon markets like a big, dark cloud,” Merrill said. “Last week’s resilience in pricing seems particularly remarkable in light of the energy complex selling off and temperatures warming up.”
- The retreat in the dollar that sent the currency down as much as 17 percent from its 2009 peak against six main trading partners may be over, according to Pacific Investment Management Co.’s Paul McCulley. The Dollar Index has rebounded 5.3 percent from last year’s low in November on signs of economic recovery. The U.S. currency is unlikely to resume declines “particularly against sterling, the euro and the yen” as the world’s biggest economy improves, McCulley, a portfolio manager and member of the investment committee at Pimco, said in an interview in Johannesburg today.
Wall Street Journal:
- Another scoop for Mark Kleinman at Sky, with the revelation that Tony Blair is to join Landsdowne Partners, the London-based hedge fund group. Initially Blair will have a speaking role, turning up at four events this year representing Landsdowne. If it works out, he could become an adviser at a later date.
MarketWatch.com:
CNBC:
NY Post:
- AT&T(T) may have a bitter tablet to swallow. Apple(AAPL) is expected to name Verizon Wireless as one of its carriers with its anticipated unveiling of a new tablet device on Wednesday, sources told The Post. That means Apple head Steve Jobs will probably introduce a Verizon iPhone, ending AT&T's exclusive hold on the hot smartphone. "It's almost a certainty," said telecom consultant Dunston Almeida. "AT&T losing
FoxNews:
- The Obama administration this month awarded a $25 million federal contract for work in Afghanistan to a company owned by a prominent Democratic campaign contributor without entertaining competitive bids, Fox News has learned. The contract, awarded on Jan. 4 to Checchi & Company Consulting, Inc., a Washington-based firm owned by economist and Democratic donor Vincent V. Checchi, will pay the firm $24,673,427 to provide "rule of law stabilization services" in war-torn Afghanistan. A synopsis of the contract published on the USAID Web site says Checchi & Company will "train the next generation of legal professionals" throughout the Afghan provinces and thereby "develop the capacity of Afghanistan's justice system to be accessible, reliable, and fair." The legality of the arrangement as a "sole source," or no-bid, contract was made possible by virtue of a waiver signed by the USAID administrator. "They cancelled the open bid on this when they came to power earlier this year," a source familiar with the federal contracting process told Fox News. "That's kind of weird," said another source, who has worked on "rule of law" issues in both Afghanistan and Iraq, about the no-bid contract to Checchi & Company. "There's lots of companies and non-governmental organizations that do this sort of work." Contacted by Fox News, Checchi confirmed that his company had indeed received the nearly $25 million contract but declined to say why it had been awarded on a no-bid basis, referring a reporter to USAID.
Washington Post:
The Business Insider:
- The 23 New Taxes Floated By The Obama Administration.
- Exxon(XOM) Locks-In Iraq Deal To Produce 20% Of Saudi Arabia Out Of A Single Reserve. Iraq's shake-up of global energy markets is picking up steam. Exxon (XOM) and Shell just finalized their deal with the Iraqi government to increase the output of the massive West Qurna 1 field by seven-fold. The field has the capacity to produce more oil than the entire nation of Nigeria, which only produces 2.17 million barrels per day, and more than 20% of Saudi Arabia which produces 10.78 million per day based on the CIA World Factbook.
FINalternatives:
- The trader that brought down hedge fund Amaranth Advisor tried to manipulate the natural gas market, an administrative law judge has ruled. Brian Hunter, whose bad bets on natural gas cost Amaranth more than $6 billion in just a week in August 2006, leading to the demise of the firm a month later, intended to manipulate the price of natural gas futures contracts on the New York Mercantile Exchange in the first half of 2006, Judge Carmen Cintron ruled. The judge called Hunter’s explanations of his actions not credible.
Cleaveland.com:
Politico:
- Rep. Marion Berry's parting shot, published in the Arkansas Democrat-Gazette [no link, subscription only] offers a warning to moderate Democrats and border state moderates — warning of a midterm bloodbath comparable to the 54-seat D-to-R swing in 1994. But the jaw-dropper is Berry's claim that President Obama personally dismissed any comparison between Democrats now and under Bill Clinton 16 years ago — by saying his personal popularity would bail everybody out. “I’ve been doing that with this White House, and they just don’t seem to give it any credibility at all,” Berry said. “They just kept telling us how good it was going to be. The president himself, when that was brought up in one group, said, ‘Well, the big difference here and in ’94 was you’ve got me.’ We’re going to see how much difference that makes now.”
- The same congressman who whacked “
- In the wake of Republican Scott Brown’s stunning victory in the Massachusetts Senate race, Majority Leader Harry Reid and the White House have struggled to win over moderate Democrats in order to increase the Treasury Department’s borrowing authority. Thirteen Democrats — including five up for reelection in November — have defected from the White House and joined a Republican effort to end the Troubled Asset Relief Program. And grumbling Democratic senators have created a scare over Ben Bernanke’s confirmation for a second term as chairman of the Federal Reserve.
ABC News:
Financial Times:
Expansion:
- Spain must present a convincing fiscal consolidation program this year as it faces the greatest debt reduction challenge among the AAA-rated countries, citing Fitch Ratings director Paul Rawkins. Spain’s rating is not “unchanging” and it’s important the government presents “a much more convincing consolidation program during 2010,” he said. “Spain’s economy and public finances have seen one of the worst deteriorations and Spain faces the greatest challenge to stabilize and reduce public debt among the AAA-rated countries,” Expansion reported.
La Gaceta:
Style Underperformer:
Small-Cap Value (+.28%)
Sector Underperformers:
Gold (-1.20%), Education (-.99%) and Restaurants (-.72%)
Stocks Falling on Unusual Volume:
SA, SSRI, TRGL, CRESY, LINE, WPRT, WCRX, UMPQ, TSTC, NFLX, MNTA, BOH, DCP, WBD and COF
Stocks With Unusual Put Option Activity:
1) UNP 2) BRK/B 3) CMA 4) HES 5) JDSU
Style Outperformer:
Large-Cap Growth (+.54%)
Sector Outperformers:
Oil Tankers (+2.45%), Semis (+1.19%) and Insurance (+1.04%)
Stocks Rising on Unusual Volume:
PHG, BCS, ROSE, AIXG, GDP, CTEL, DB, CHA, SWC, PCU, PVTB, ACXM, COLB, HME, LBTYK, LBTYA, QSII, ASML, XLNX, CSIQ, AMAG, GIII, AAPL, ROSE, INTC, VLTR, SNDK, ATHR, VSEA, CAGC, MSFT, KSP, SI, PHG, RKT and GNI
Stocks With Unusual Call Option Activity:
1) CTXS 2) FITB 3) NOK 4) HSY 5) TNDM
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