Thursday, March 04, 2010

Bull Radar

Posted by Gary .....at 11:12 AM
Style Outperformer:
Small-Cap Value (+.12%)

Sector Outperformers:
I-Banks (+.54%), Hospitals (+.54%) and Education (+.49%)

Stocks Rising on Unusual Volume:
FDO, PETM, AIG, NYX, GS, UBS, BCS, HIG, ADS, OVTI, VQ, RMBS, CBEY, ZUMZ, PETM, SXCI, MIDD, LHCG, POWL, CTRP, DNDN, AIMC, VOLC, VRSN, BRLI, VLCM, RINO, HRBN, ARST, URBN, ENDP, EXXI, BCA, KWR, TRH, ANF, FL, ASI, VMI, AKS and STP

Stocks With Unusual Call Option Activity:
1) AKS 2) AMAT 3) CHS 4) ARIA 5) AEO
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Trading Links

Posted by Gary .....at 10:09 AM
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Wednesday, March 03, 2010

Thursday Watch

Posted by Gary .....at 11:51 PM
Evening Headlines
Bloomberg:
  • Greece Aid Plea Snubbed by Germany in 'Historic Moment' for EU. Greece’s pledge to ramp up planned budget-deficit cuts by half failed to yield commitments of financial assistance from Germany, Europe’s biggest economy, to help solve its financial crisis. German Chancellor Angela Merkel said a meeting tomorrow with Greek Prime Minister George Papandreou won’t be “about aid commitments.” Her finance minister, Wolfgang Schaeuble, said the deficit-reduction measures announced in Athens were probably enough to convince investors to buy Greek debt. While Papandreou is risking a backlash at home to meet European Union demands for more deficit cuts before allies even consider providing aid, Merkel is facing domestic opposition to tapping taxpayers to extend a financial lifeline to Greece. “There would be no understanding in Germany for bailing out Greece,” Henrik Enderlein, a political economist at the Hertie School of Governance in Berlin, said by phone. With public workers set to demonstrate in Athens today after the Cabinet yesterday backed 4.8 billion euros ($6.6 billion) of measures in the third round of deficit cuts this year, Papandreou said Greece was prepared to turn to the International Monetary Fund as a last resort. The Greek announcement “is as much about giving other EU governments more political capital in the event that they do eventually need to provide liquidity to Greece,” said Gary Jenkins, head of credit research at Evolution Securities Ltd. in London. “They can make the claim to their own taxpayers that Greece has taken further measures as suggested by the EU.”
  • Iraq Opening to BP, Exxon Mobil, Shell for First Time Since 1972. Iraq, with the world’s third- largest oil reserves, will earn about $200 billion a year. “We see this as the beginning of a long-term relationship with Iraq and will continue to look for further opportunities,” Andy Inglis, BP’s chief executive for exploration and production, said on a conference call March 2.
  • Clinton Says Iran Won't Negotiate Before Sanctions. Secretary of State Hillary Clinton, in Brazil to seek support for tougher United Nations penalties on Iran’s suspected nuclear weapons program, said the U.S. believes Iran won’t negotiate until sanctions are imposed. “Once the international community speaks in unison around a resolution, then the Iranians will talk and begin to negotiate,” Clinton said at a press conference today in Brasilia after talks with Brazilian Foreign Minister Celso Amorim.
  • Clinton Fails to Win Brazilian Support for UN Sanctions on Iran.
Wall Street Journal:
  • Paul Ryan v. the President. The Republican dissects ObamaCare's real costs. Democrats stay mute. 'Every argument has been made. Everything that there is to say about health care has been said, and just about everybody has said it," President Obama declared yesterday as he urged Democrats to steamroll his plan through Congress. What hasn't been heard, however, is even a shred of White House honesty about the true costs of ObamaCare, or its fiscal consequences. Nearby, we reprint Wisconsin Republican Paul Ryan's remarks at the health summit last week, which methodically dismantle the falsehoods—there is no other way of putting it—that Mr. Obama has used to sell "reform" and repeated again yesterday. No one in the political class has even tried to refute Mr. Ryan's arguments, though he made them directly to the President and his allies, no doubt because they are irrefutable. If Democrats are willing to ignore overwhelming public opposition to ObamaCare and pass it anyway, then what's a trifling dispute over a couple of trillion dollars?
  • With Fistfuls of Cash, Firms on Hunt. One year removed from the trough of the recession, American corporations continue to hoard more cash than ever. There are now tentative signs that they are finally comfortable using the money to do some shopping. The 382 nonfinancial firms in the Standard & Poor's 500 that have reported results for the fourth quarter of 2009 are now holding $932 billion in cash and short-term investments, according to a Wall Street Journal analysis of data from Capital IQ. That sum is up 8% from the third quarter and up 31% from a year ago. At a time of low interest rates, reopened credit markets and growing optimism about the economy, CEOs and their boards seem to be questioning the wisdom of sitting on all that cash. And with the S&P 500 still trading 29% below its October 2007 peak, companies are deciding that cash is their preferred currency for acquisitions—rather than shares they see as undervalued. The cash hoard may also be untenable to institutional investors worried the cash is being used as a buffer to insulate management from bad decisions or a sign that CEOs can't figure out what to do with it all. That management-shareholder tension may explain why recent months have brought a bump in share buybacks and increased dividends, according to data provided by Thomson Reuters and S&P. There were 62 announced share buybacks valued at $40.1 billion in February, the biggest month for announced buybacks since September 2008. S&P estimates buybacks were up 37% in the fourth quarter from the third quarter. For the past three months, there were 79 dividends increased and two reduced, compared with 58 and 41 for the same period a year ago, according to S&P.
  • Did the Hedge Funds' Euro Bet Really Break the Law? The Justice Department is investigating whether hedge funds such as SAC Capital, Greenlight Capital and Soros Fund Management improperly colluded to bet against the Euro. The DOJ sounds serious, but can build the case? For prosecutors, the challenge is proving that the hedge funds privately agreed to drive down an otherwise healthy currency. The problem with that theory is that the Euro faced fundamental weakness, such as Greece’s debt crisis, and would have likely suffered value declines regardless of the hedge funds’ negative bets. “The chief argument against the collusion charge is that of size: according to the latest survey from the Bank for International Settlements, daily volumes in global currency markets totaled $3.2 trillion. For sure, not all of that is in euros. But the common currency is part of an estimated 37% of all transactions, or about $1.2 trillion, and that’s per day. How can anybody, even a group of well-funded and successful money managers, corner this colossal, unwieldy international market?” Casey points out that the hedge fund case makes for a better Oliver Stone movie, than grounds for a criminal complaint. “Regardless of its Hollywood appeal, the Justice Department’s suggestion that these funds may have colluded to drive down the euro is flimsy at best and absurd at worst, raising the suspicion that Washington regulators are focused in the main on improving a public image severely damaged by their failings during the financial crisis,’’ he adds. “The bigger damage,’’ writes the Journal’s Dennis Berman in his recent column. “Is that Washington loses its credibility and gumption as it embarks on the truly hard stuff of reform: establishing a way to monitor systemic risk; safely winding down financial reforms, better handling the trading of credit default swaps…”
CNBC:
  • Cramer: Why Overseas Investors Are Buying American.
  • NY's Cuomo Is 'Father of Subprime Crisis:' Bove. "One of the key reasons why [Fannie Mae and Freddie Mac are] bankrupt today, and why the government is spending hundreds of millions of dollars in supporting them, is because of the edicts pushed through by Mr. Cuomo," said Bove, of Rochdale Securities, in a live interview. "It's also thought by many that the hundreds of thousands of people who are losing their homes, are [doing so] to a great degree because of the actions taken by Mr. Cuomo at HUD," Bove added. Cuomo, who was secretary of Housing and Urban Development from 1997 to 2001, has been blamed in some quarters for helping to trigger the financial crisis by pushing Fannie and Freddie to buy more subprime mortgages to increase home ownership among the poor. Many of those homeowners eventually defaulted, and the mortgage-backed securities market later collapsed. Though Cuomo has not officially announced his candidacy for the seat, he is considered by many to be a favorite in the election after Gov. David Paterson's announcement last week that he will not run for full term. But if Cuomo does decide to run and is elected, Bove said he will quickly realize that his decisions thus far have had a negative effect on the state, and he'll need to change them. "His lack of financial acumen may prevent him from doing the right things even if he wants to," he said. "You just dont want someone with that type of lack of understanding of the financial system running a state as important as New York."
IBD:
Business Insider:
zerohedge:
  • Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware! There are broad indications hinting that Italy and Greece are not the only countries that have used SWAP agreements to manipulate its budget and deficit figures. France and Portugal may be two other European economies which have resorted to similar manipulations in the past in order to qualify as part of single currency member nations (Euro Zone). Below is a small subset of the research that I have been gathering as I construct a global sovereign default model.
Forbes:
SeekingAlpha:
Rasmussen Report:
  • 25% Say U.S. Heading In Right Direction, Lowest Since Obama Took Office. Just 25% of U.S. voters now say the country is heading in the right direction, the lowest level of voter confidence since early January 2009. Correspondingly, the latest Rasmussen Reports national telephone survey finds that 69% believe the nation is heading down the wrong track, the highest level measured in 14 months.
Politico:
  • Hoyer Knew of Massa Allegations. First-term Rep. Eric Massa announced Wednesday that he will not seek reelection, saying his doctors have told him that he can’t continue to “run at 100 miles an hour.” But several House aides told POLITICO that the House ethics committee has been informed of allegations that the New York Democrat, who is married with two children, made unwanted advances toward a junior male staffer.
Reuters:
  • Morgan Stanley(MS) Finds Buyer for CICC Stake. Morgan Stanley has found a buyer for its stake in Chinese investment bank China International Capital Corp, CICC Chairman Li Jiange said. Li made his comments on the sidelines of the Chinese People's Political Consultative Conference in Beijing. He declined to identify the buyer, and said the deal was awaiting regulatory approval.Sources previously told Reuters that private equity firms KKR [KKR.UL] and TPG [TPG.UL] were in late stage talks to buy Morgan Stanley's 34.3 percent stake in CICC for more than $1 billion.
  • Dendreon(DNDN): Provenge Boosts Survival by 40%.
  • Sina(SINA) Profit Falls Short of Expectations. Sina Corp, the largest Internet portal in China, posted lower than expected profit in the fourth quarter as revenue from its mobile services business declined. Shares of Sina fell nearly 5 percent to $35.69 in after-hours trade on Wednesday.
Financial Times:
  • Mandelson Knocks 'Volcker Rule' As Too Difficult. Barack Obama’s plan to limit deposit-taking banks from proprietary trading are “too difficult” to implement, Lord Mandelson said on Wednesday, as he called on the US president to refocus on G20 financial reforms. The business secretary’s strong public criticism of the Obama proposals ref­lects widespread frustrations among ministers at a “sweeping” overhaul that was conceived and announ­ced without consultation with the UK. Lord Mandelson’s comments will be especially unwelcome in the White House as they came on the day that the Obama administration sent legislative proposals to Capitol Hill that would create the so-called “Volcker rule”. Stressing that Britain’s preferred co-ordinated action on banking supervision, Lord Mandelson said: “President Obama’s proposals on banking regulation, I have to say, came as a bit of a surprise to people working on the G20 agenda and it’s important that we keep the multinational agenda firmly on track.” He argued that the so-called Volcker rule was overambitious, as he made the case for more effective regulation. “Trying to apply sweeping rules about the structure, content and range of activities of banking entities is too difficult to do,” he said. “Whatever their size, whatever their range of activities, you need good regulation. In an interview with the Financial Times, Michel Barnier, European Union internal market commissioner, also warned this week that the Volcker plan could not be imported in the same form to Europe.
Telegraph:
TimesOnline:
MailOnline:
  • Four Men Including Two British Airways Employees Arrested in 'Terror Plot' Raids. Three men were arrested in dawn raids this morning, taking to four the number being held over allegations of terrorism fundraising. It follows the arrest on Thursday of a 30-year-old British Airways employee in Newcastle. A second BA staff member was among the group arrested this morning. The three men, aged 31, 32 and 43, were seized by police at 5am today in Slough. The men are now being questioned about a plot to fund a terrorist attack. Police refused to clarify what positions the two BA employees had within the airline. Sources said the latest arrests were 'significant'.
Global Pensions:
  • Short-Selling Disclosure Proposals Raise Eyebrows. Hedge fund trade bodies have reacted with some dismay to the Committee of European Securities Regulators’ (CESR) proposal for a pan-European disclosure regime for short selling. CESR recommended short sellers be required to tell regulators when they have short economic exposure of 0.2% or more to shares listed in the European Economic Area, and when they change those positions by 0.1% or more. Once short exposure hits 0.5%, CESR said public disclosure will be necessary. In calculating their exposures, CESR said hedge funds should include exchange-traded and OTC derivatives as well as equities - a step-up in regulatory oversight, which has hitherto been largely confined to shares.
Handelsblatt:
  • Germany is considering more regulation for so-called "naked" shorting of shares, citing an internal strategy paper from the country's economy ministry. Transactions should be more transparent so regulators can intervene where appropriate and positions exceeding .5% of a company's share capital could be subject to regulatory disclosure, citing the paper.
DigiTimes:

  • Taiwan-Based Component Makers Doubt iPad Production Delay Rumors. In response to reports that initial volumes of Apple's iPad in late March will be lower than originally planned and the launch will be only in the US market because production by Foxconn Electronics has been delayed, Foxconn's component suppliers have said their supplies are on schedule and Foxconn should be able to ship 600,000-700,000 iPads in March and one million units in April. As for whether Apple will delay the launch of iPad, the sources believe plans are unlikely to change.

GulfNews.com:
Evening Recommendations
Citigroup:
  • Reiterated Buy on (ALTR), raised estimates, target $30.
Night Trading
  • Asian indices are -1.0% to +.25% on average.
  • Asia Ex-Japan Investment Grade CDS Index 108.0 +1.0 basis point.
  • S&P 500 futures -.33%
  • NASDAQ 100 futures -.30%
Morning Preview
Earnings of Note
Company/Estimate
  • (WEN)/.02
  • (CIEN)/-.07
  • (DLM)/.21
  • (URBN)/.40
  • (COO)/.51
  • (ARST)/.16
  • (SXCI)/.43
Economic Releases
8:30 am EST
  • Final 4Q Non-Farm Productivity is estimated to rise +6.3% versus a prior estimate of a +6.2% gain.
  • Final 4Q Unit Labor Costs are estimated to fall -4.5% versus a prior estimate of a -4.4% decline.
  • Initial Jobless Claims are estimated to fall to 470K versus 496K the prior week.
  • Continuing Claims are estimated to fall to 4600K versus 4617K prior.
10:00 am EST
  • Factory Orders for January are estimated to rise +1.8% versus a +1.0% decline in December.
  • Pending Home Sales for January are estimated to rise +1.0% versus a +1.0% gain in December.
Upcoming Splits
  • (ARO) 3-for-2
Other Potential Market Movers
  • The Fed's Bullard speaking, Fed's Evans speaking, retail monthly same-store-sales, BoE rate decision, ECB rate decision, weekly EIA natural gas inventory report, (A) analyst meeting, (OMX) investor day, (BMY) business update, Keybanc Consumer Conference, Morgan Stanley Tech/Telecom/Media Conference and the UBS Gas/Power/Coal Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and financial stocks in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
1 comments

Stocks Finish Slightly Higher, Boosted by Commodity, Education, Construction and Networking Shares

Posted by Gary .....at 4:01 PM
Evening Review
2 comments

Stocks Slightly Higher into Final Hour on Declining Sovereign Debt Angst, Short-Covering, Less Economic Fear

Posted by Gary .....at 3:46 PM
BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Technology longs, Medical longs and Biotech longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is slightly positive as the advance/decline line is about even, sector performance is mostly positive and volume is above average. Investor angst is high. Today's overall market action is neutral. The VIX is rising +.52% and is around average at 19.15. The ISE Sentiment Index is around average at 138.0 and the total put/call is around average at .86. Finally, the NYSE Arms has been running below average most of the day, hitting .49 at it intraday trough, and is currently .79. The Euro Financial Sector Credit Default Swap Index is falling -4.94% to 80.26 basis points. The North American Investment Grade CDS Index is falling -.48% to 87.37 basis points. The TED Spread is down -2 basis points at 12.0 basis points. The 2-Year Swap Spread is falling -4.76% to 22.50 basis points. The Libor-OIS Spread is rising +1 basis point to 11.0 basis points. The 10-Year TIPS Spread is up +1 basis point to 2.17%. The 3-Month T-Bill is yielding .13%, which is up +1 basis point today. Restaurant, semi and financial shares are relatively weak today. (IYR) has also lagged throughout the day. The euro is finally seeing some short-covering, which is helping to boost energy prices despite another bearish energy inventory report. The euro likely has further near-term upside before resuming its downtrend. On the positive side, Education, HMO, Networking, Gold and Oil Service shares are especially strong, rising 1.0%+. Market leading stocks are also outperforming. The Western Europe Sovereign CDS Index is dropping another -2.57%, which is a big positive. Given the drop in CDS today and some better-than-expected economic data, the market's lethargic reaction is a bit concerning. However, it is probably too soon to conclude that this tired action is indicative of anything more than a healthy consolidation after recent gains. There is noteworthy action in two of my longs today. (ISRG) hit a new all-time high and (HGSI) is surging 4%, which is near a 52-week high. I would be a buyer of both on any market-related pullback in the shares from current levels. Nikkei futures indicate an +32 open in Japan and DAX futures indicate a down -29 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, technical buying, declining sovereign debt angst and less economic fear.
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Today's Headlines

Posted by Gary .....at 3:04 PM
Bloomberg:
  • U.S. Corporate Credit Risk Index Falls as Greece Concerns Calm. A gauge of company credit risk in the U.S. fell to near a six-week low as concerns that Greece’s budget strains will abate helped investors regain an appetite for corporate bonds. The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt, fell 2 basis points to a mid- price of 87.5 basis points as of 11:01 a.m. in New York, according to Barclays Capital. “New issues have been well received and people are convinced the risk of Greek contagion has been mitigated,” said Brian Yelvington, head of fixed-income strategy at broker-dealer Knight Libertas LLC in Greenwich, Connecticut. In London, the Markit iTraxx Europe index of 125 companies with investment-grade ratings fell 2.5 basis points to 79.25 basis points, the lowest since Jan. 26, JPMorgan Chase & Co. prices show.
  • Euro May Not Sustain Gains After Greek Budget Cuts, Lloyds Says. The euro may not sustain the gains it made against the US dollar after Greece announced additional deficit cuts, as investors take advantage of gains to sell the currency, according to Lloyds Banking Group Plc. "The market is trying to find a bit of support, though there's no big conviction to push the euro higher," Kenneth Broux, a senior market economist at Lloyds in London, said today. Increases have been "met with some profit taking, so it's not clear to me that we'll see a sustained rally."
  • Service Industries Expand More Than Anticipated. The Institute for Supply Management’s index of non- manufacturing businesses, which covers almost 90 percent of the economy, increased to 53 from 50.5 in January. Last month’s reading was the highest since October 2007 and exceeded all estimates of 73 economists surveyed by Bloomberg News.
  • Phillips-Van Heusen(PVH) in Talks to Buy Hilfiger. Phillips-Van Heusen Corp. is in exclusive talks to acquire Tommy Hilfiger from Apax Partners LLP for as much as $4 billion, the New York Post reported, citing unidentified persons.
  • Battle Against 'New Normal' Drives Companies to M&A, Doll Says. Companies grappling with disappointing economic growth will use takeovers this year to try to improve their earnings prospects, said Bob Doll, BlackRock Inc.’s vice chairman and chief investment officer for global equities. Agreements to buy U.S. companies have totaled $121.7 billion this year, 7.9 percent more than during the same period in 2009, according to data compiled by Bloomberg.
  • China Economic Growth May Slow, Billionaire Zong Says. China's economic growth will probably slow in the second quarter alongside a decline in housing prices, said billionaire Zong Qinghou, the nation’s third-richest man. The property market will probably weaken because the government has signaled it wants prices to fall, Zong, the billionaire founder and chairman of Hangzhou Wahaha Group Co., said in an interview in Beijing today. Real estate has become China’s most important industry, he said. While growth in China’s property prices is “not as extreme as a bubble,” the real estate industry is “not healthy,” said Zong, who had a fortune of $4.8 billion according to Forbes Magazine last year. The government has “clearly taken efforts to slow lending and liquidity, so the headline growth will be slowing,” Glenn Maquire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong, said in a phone interview today.
  • Facebook Valued at $11.5 Billion in Debut of SharesPost Index. Facebook Inc., the largest social- networking site, was valued at $11.5 billion in a new index created by SharesPost Inc., a marketplace for trading in private companies. The SharesPost Venture-Backed Index tracks seven companies from Zynga Game Network Inc. and Twitter Inc. to LinkedIn Corp., Santa Monica, California-based SharesPost said in a release. The March 1 valuation of Facebook, the most-popular social networking site, is almost double what Russia’s Digital Sky Technologies offered to pay for common shares in July.
  • Ford(F) Beating GM May Be 'New Normal' on Vehicle Lineup. Ford Motor Co. beating General Motors Co. in U.S. sales in February may signal a new automaker atop the industry as Chief Executive Officer Alan Mulally pares operating costs and refreshes the vehicle lineup. “Ford’s advantage over GM could be the new normal,” said Shelly Lombard, a debt analyst for more than two decades who is now at Gimme Credit LLC in New York. “GM is still in turnaround mode and Ford is six steps ahead. Ford has the products, a new reputation for solid quality and management focus.”
  • RadioShack Options, Shares Jump on Buyout Speculation. Trading of bullish RadioShack Corp. options surged to a record following speculation that private- equity investors may be seeking to acquire the company. More than 31,000 calls to buy the stock changed hands, 10 times the four-week average and 12 times the number of puts to sell, as the shares rose 6 percent to $21.07 at 11:38 a.m. New York time. The most-active constracts were March $20 calls, which more than tripled to $1.40 and accounted for about a third of all call volume. “Investors have been aggressively buying the March $20 calls,” Patrick Mortimer, director of options trading at Pipeline Trading Systems LLC in New Hope, Pennsylvania, wrote in a report to clients. He cited speculation “that Apollo Management and another private equity firm had expressed interested in buying the company.”
  • Greek Bank Ratings May Be Lowered by Moody's on Economic Slump. Five Greek banks, including National Bank of Greece SA and EFG Eurobank Ergasias SA, had their credit ratings put on review for a possible cut by Moody’s Investors Service, which said the country’s economic slump may hurt asset quality and profitability. Moody’s also put Alpha Bank AE, Piraeus Bank SA and Emporiki Bank of Greece SA under review for a possible reduction, the ratings firm said in a statement today. “These banks have been facing growing pressures on their financial performance and fundamental creditworthiness as a result of the economic slowdown in Greece,” Moody’s said. “Volatility in the financial markets has also given rise to funding challenges and has led to an increased dependence on short-term market funding.”
Wall Street Journal:
  • Obama Calls for 'Up or Down' Vote on Health. He called for Congress to press ahead with a comprehensive bill, which means using a legislative vehicle called reconciliation, which requires just 51 Senate votes. But he didn't use the term reconciliation, instead calling for a simple "up or down vote."
  • Ingersoll-Rand Targeted Over Equipment Sales In Iran. Ingersoll-Rand PLC (IR) is being targeted over its ties to Iran by a lobby group that has already helped push other industrial groups to sever their business interests in the country. Washington D.C.-based United Against Nuclear Iran has called on the diversified industrial company to stop servicing Iran's energy sector and accused the company of failing to adequately disclose its business activities in the country. The lobby group has claimed credit for the recent decision by Caterpillar Inc. (CAT) to prohibit its non-U.S. subsidiaries from accepting orders known to be headed to Iran.
BuinessWeek:
  • Fed's Fisher Calls for Accord to Break Up Big Firms. Federal Reserve Bank of Dallas President Richard Fisher called for an international pact to break up banks whose collapse would threaten the financial system, a position that goes beyond other Fed officials. “The disagreeable but sound thing to do” for firms regarded as “too big to fail” would be to “dismantle them over time into institutions that can be prudently managed and regulated across borders,” Fisher said in a speech at the Council on Foreign Relations in New York. The Obama administration has proposed limiting banks’ proprietary trading, while Fed Chairman Ben S. Bernanke is among officials who have called for a law to wind down failing financial firms. Such a move may still confer a “government- sponsored advantage” on the companies, Fisher said. “Given the danger these institutions pose to spreading debilitating viruses throughout the financial world, my preference is for a more prophylactic approach: an international accord to break up these institutions into ones of more manageable size,” said Fisher, 60. “If we have to do this unilaterally, we should.” Fisher didn’t identify firms he would target for breaking up. The largest U.S. bank holding companies include Bank of America Corp.(BAC), Citigroup Inc.(C), Goldman Sachs Group Inc.(GS), JPMorgan Chase & Co.(JPM) and Wells Fargo & Co(WFC). Fisher may find support from central bankers elsewhere. The 10 largest U.S. banks’ share of the industry’s assets has increased to 60 percent in 2009 from 44 percent in 2000 and about 25 percent in 1990, Fisher said. “The existing rules and oversight are not up to the acute regulatory challenge imposed by the biggest banks,” Fisher said. “Because of their deep and wide connections to other banks and financial institutions, a few really big banks can send tidal waves of troubles through the financial system if they falter.”
  • Consumer-Stock Rally May Help S&P 500 Rise: Technical Analysis. The rally in U.S. consumer stocks indicates the Standard & Poor’s 500 Index has the momentum needed to surpass the 15-month high it reached in January, Oppenheimer & Co.’s Carter Worth said. The Consumer Discretionary Select Sector SPDR Fund, an exchange-traded fund tracking 80 stocks such as Nike Inc. and Gap Inc., rose 1.6 percent on March 1 to $31, a level last seen in September 2008. The ratio between the ETF and another that tracks the entire S&P 500 climbed to 0.277, the highest since January 2007. When the ratio rises, it means consumer shares are outperforming. Gains by companies reliant on consumer spending, which accounts for about 70 percent of the U.S. economy, show the market can overcome speculation that the recovery is slowing, Worth said. After the biggest rally since the Great Depression, the S&P 500 lost as much as 8.1 percent during the past six weeks as investors bet that the labor market isn’t improving fast enough and that European budget deficits will slow growth. “Strength will resurrect itself and you will get back” to the January highs in the S&P 500, said Worth, ranked third among analysts who study price charts in Institutional Investor magazine’s 2009 survey.
CNBC:
 NY Times:
  • Commercial Property Deals to Hit 318 Bln Pounds. The volume of global commercial real estate deals is forecast to rebound 30 percent to total $478 billion (318 billion pounds) this year, led by surging investments in China and a revival in the United States, a report said on Wednesday. Property consultants Cushman & Wakefield said investment sales are rising after the steep downturn in 2009, when global volumes fell 23 percent to $365 billion, the lowest since 2003, but are still well below the 2007 peak of more than $1 trillion. The United States is forecast to post the biggest percentage rise in sales in 2010 as it, the world's largest commercial property market, pulls out of recession, boosting volumes in North America by 48 percent to $64 billion, Cushman said. "With many (U.S.) investors sitting on a lot of cash after the recapitalisations, equity raises and inward investment flows of last year, a strong turnaround in activity looks likely ... if the economy stays on track, it wouldn't be surprising to see our forecast beaten," Janice Stanton, Cushman's senior managing director of capital markets in the US, said.
  • Obama Lays Out Volcker Rule Specifics For Congress. U.S. banks would be banned from proprietary trading and other large financial firms would face quantitative limits on such activity, according to draft language on the so-called "Volcker rule" from the Obama administration. The language maintains the toughest components of the proposal first floated in January, despite skepticism from lawmakers and the industry that such restrictions would do little to prevent another financial meltdown like the one that seized markets in 2008. Banks would also be banned from investing in or sponsoring hedge funds and private equity funds, according to a draft version of the legislative language obtained by Reuters. A final version of the language is expected to be sent to lawmakers later on Wednesday.The proposal would prevent a financial firm from acquiring another company if the resulting firm would have more than 10 percent of the liabilities of the financial system.
NY Post:
  • Vornado in Mall Mixture. Commercial real-estate giant Vornado Realty TrustVNO) may bid for part or all of bankrupt mall operator General Growth Properties, adding another big name to the mix of property landlords interested in buying the fallen owner of the South Street Seaport, The Post has learned. Vornado's apparent interest turns up the heat on an auction that was already sizzling after Canada's Brookfield Asset Management last week tossed its hat into the ring. Last month Simon Property Group, the largest mall developer in the US, made an unsolicited $10 billion bid for General Growth, the nation's No. 2 mall operator, which has repeatedly rejected the offer. General Growth has since proposed splitting itself up -- with Brookfield's help -- in an attempt to fend off Simon's advances.
The Business Insider:
 Washington Post:
  • Obama Administration Plans to Close International Labor Comparisons Office. Like a scorekeeper for the world, a tiny unit within the Bureau of Labor Statistics tracks globalization's winners and losers, and the results are not always pretty for the United States. Manufacturing jobs here, for example, have fallen faster since 1979 than in Canada, Germany or Japan. Compensation for those jobs dropped here in 2008 but jumped in South Korea and Australia. Soon, however, Americans may be spared the demoralization in these numbers: The White House wants to shutter the unit that produces them. President Obama's budget would eliminate the International Labor Comparisons office and transfer its 16 economists to expand the bureau's work tracking inflation and occupational trends.
Financial News:
  • Biggest US Hedge Funds Get Bigger. A handful of hedge funds managing more than $5bn (€3.7bn) of assets nearly doubled in size last year, suggesting that the big are getting bigger as investors seek the security of brand-name firms, a survey of the largest US hedge funds has found. The biannual survey, published by Institutional Investor and HedgeFund Intelligence’s Absolute Return + Alpha magazine, also found that JPMorgan’s(JPM) hedge fund business reclaimed its top spot, surpassing Ray Dalio’s Bridgewater Associates. The bulk of JP Morgan's growth came from from its JP Morgan Asset Management division, which doubled its assets to $32.5bn from its January 2009 total of $15.6bn. JP Morgan's hedge fund business also comprises the $17.9bn Highbridge Capital. Other notable firms to have greatly grown their assets last year include BlackRock(BLK), whose purchase of BGI resulted in an instant 235.6% increase at the firm. It now oversees $16.1bn of assets. Credit Suisse(CS) Hedging-Griffo assets also went up 72.2% to $7.8bn. The survey, which covered 213 firms – each managing over $1bn, also found that the biggest US hedge fund firms still manage 29% less than they did at their all-time high in 2008, despite a modest 4.2% gain from the $1.134 trillion they managed at the start of 2009. Assets peaked in July 2008, when the 268 largest firms managed $1.675 trillion. Bridgewater fell to second place with $43.6bn, a 17.84% increase from July 2009, when it managed $37bn. Paulson & Co. remained in third pace, with assets increasing 10.35% to $32bn, from the $29bn it managed in January following strong returns in 2009. Soros Fund Management grew by 28.57% to $27bn in 2009 pushing out D.E. Shaw Group from fourth place. DE Shaw dropped to fifth and was the biggest loser in the top 10, shedding 17.48% of its assets in 2009 to start 2010 with $23.60bn.
Crain's NY Business:
  • Murdoch Talks Up Local WSJ Edition. Rupert Murdoch made official on Tuesday what has been widely reported for the past few months: The Wall Street Journal will be launching a New York section in April. Speaking at a midtown gathering of the Real Estate Board of New York, the News Corp. chairman lauded the real estate industry—a likely source of advertising revenue for the section—and lobbed a grenade at the Journal's rival, The New York Times. “We believe that in its pursuit of journalism prizes and a national reputation, a certain other New York daily has essentially stopped covering the city the way it once did,” he said in prepared remarks. “In so doing, they have mistakenly overlooked the most fascinating city in the world—and left the interests and concerns of people like you far behind them. I promise you this: The Wall Street Journal will not make that mistake.”
The First Post:
Rasmussen:
  • Daily Presidential Tracking Poll. Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 26% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty percent (40%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -14 (see trends).
Politico:
  • Harkin: Reconciliation Is a Go. Sen. Tom Harkin told POLITICO that Senate Democratic leaders have decided to go the reconciliation route. The House, he said, will first pass the Senate bill after Senate leaders demonstrate to House leaders that they have the votes to pass reconciliation in the Senate. Harkin made the comments after a meeting in Senate Majority Leader Harry Reid's office including Harkin and Sens. Baucus, Dodd, Durbin, Schumer and Murray. When asked whether the leaders had made the decision, Durbin said: "We are moving ahead with a version of the health care reform bill that we believe has a good chance of passing both the House and the Senate." He then put the onus on House Speaker Nancy Pelosi to signal whether she can provide enough votes to pass the Senate bill, followed by a package of fixes through reconciliation. Reconciliation "has always been an option. But she has to make her own decision on what it takes to enact this in the House," he added.
  • Charles Rangel Gives Up Gavel. Neither power nor popularity could save Charles Rangel from himself. The affable, quotable and often jovial New York Democrat stepped down from his chairmanship of the Ways and Means Committee Wednesday because his fellow Democrats feared that ethics investigations into Rangel’s personal finances, travel, living arrangements and use of his office posed a grave threat to their chances in November’s elections. Rangel says he's stepping aside only temporarily, but he officially resigned the post in a letter submitted to the House Wednesday morning. Technically, he could be restored by a future House vote, but that's a political long shot given that he was forced aside by ethics troubles.
Real Clear Politics:
  • Dem Only Health Bill Push Would be Reckless. You there! Congressman! Come out from behind that tree! The speaker of the House has wonderful plans for you, involving the very sharp sword she says you're going to fall on for the greater glory of... whatever. Wondrous to behold are the leadership instincts of a Democratic establishment conflicted when it comes to Obamacare. Not that Nancy Pelosi has doubts. As she told Elizabeth Vargas on ABC's "This Week": "Why are we here? We're not here just to self-perpetuate our service in Congress. We're here to do the job for the American people" -- the speaker's assumption being that the American people desperately crave the Democratic health care scheme and won't mind sacrificing an indeterminate number of Democratic congressmen to get it. The Great Health Care Cram-Down requires more, nonetheless. "The public be damned," as Commodore Vanderbilt once exclaimed in a moment of exasperation with the yokels. The Real Clear Politics poll average on health care, Democratic style shows 51.3 percent of Americans against it, with 40.3 percent in favor. A Quinnipiac poll says a mere 35 percent endorse the plan. As for the credentials of the reformers themselves, here's more fun. Real Clear Politics averages out Congress' job approval at 18.8 percent, versus 75.6 percent with thumbs pointed resolutely downward. Now there's a mandate for you -- a mandate to sneak off in the night and wait until it all blows over.Which, alas, it won't because the Democrats have decided to do this deed no matter what. If doing it costs various congressmen their seats, well, that's life.
Reuters:
  • U.S. May Use Citi Exit Strategy at AIG. As American International Group Inc prepares to shed two big units, it looks set to follow the same path as Citigroup Inc out from under the U.S. government's wing. The government is likely to follow an exit strategy similar to what it has used so far with Citigroup to untangle itself from AIG, a source familiar with the matter said. The two companies are expected to fetch about $50 billion overall, which could allow AIG to pay down almost all of its Federal Reserve Bank of New York credit facility. But that would still leave the government holding roughly $47 billion in equity investments, including the amount drawn under a $30 billion equity line, and a nearly 80 percent stake in AIG, to which it has committed up to $182.3 billion in taxpayer funds. AIG has struck a deal to sell its Asian unit, American International Assurance (AIA), for about $35.5 billion, and the company is talks to sell foreign life insurance unit American Life Insurance Co (Alico).
Handelsblatt:
  • Euro-Area Countries Want ECB to Rate Them. Euro-area countries want the European Central Bank to create a new sovereign rating system to break the dominance of global rating companies, citing finance ministers. The ECB is concerned that Moody's Investors Service currently wields too much power over Greece's standing in global markets, citing central bank officials. Moody's currently rates Greek debt A2, two steps higher than Standard & Poor's and Fitch. If Moody's cuts its rating to the same level as the others, Greek bonds would be ineligible as collateral at the ECB when the central bank returns to pre-crisis rules at the end of the year. The idea of creating a euro-region sovereign rating system is gaining support within the ECB. It is unclear when this initiative will be realized. The ECB is aware that an immediate introduction would create doubts about the independence of the central bank and it needs to be careful in light of the Greek fiscal crisis.
MIIT:
  • China's 100 major retailers saw their combined sales fall 7.11% for the first month of this year, according to statistics posted on the Web site of the Ministry of Industry and Information Technology.
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