Soros Mistrusts EU Aid as Irish Default Risk Soars. Ireland’s bailout money starts to arrive next week, with investors expressing skepticism about the country’s ability to repay its debts by driving the cost of insuring against default to a record. The government was forced in November to accept 85 billion euros ($113 billion) to bolster its finances and inject 10 billion euros into Irish banks, with another 25 billion euros in reserve. Assessing the aid plan, billionaire George Soros wrote in the Financial Times last month that the country will have to renegotiate the accord. Finance Minister Brian Lenihan said a default would “destroy” the country. “If the government doesn’t have to put more than the 10 billion-euro initial capital injection into the banks, the package is doable,” said Brian Devine, an economist at NCB Stockbrokers in Dublin. “But there’s a higher probability a government would have to renegotiate on sovereign debt if the bank costs move beyond that.”
Goldman Sachs(GS) May Sell, Hedge Facebook Stake Without Warning to Investors. Goldman Sachs Group Inc. clients considering whether to buy shares in closely held Facebook Inc. should take heed: Wall Street’s most profitable securities firm could unload its own holdings without letting them know. In the last sentence of a one-page investment profile sent to private wealth clients, the firm explains: “GS Group may at any time further reduce its exposure to its investment in Facebook (through hedging arrangements, sales or otherwise), without notice to the fund or investors in the fund.” The offering document, obtained by Bloomberg News, shows that $75 million of the $450 million investment in Facebook by Goldman Sachs is coming from Goldman Sachs Investment Partners, a hedge fund that handles client money. The firm’s own $375 million investment will probably be cut to $300 million because Goldman Sachs expects to sell $75 million to third parties or to the fund it created so clients could buy a stake in Facebook. “There may be conflicts of interest relating to the underlying investments of the fund and Goldman Sachs,” according to the Facebook offering document’s disclosures section. Material in the documents “is not guaranteed as to accuracy or completeness.”
China Rare Earths Leave Toxic Trail to Toyota, Vestas. Rare earth metals are key to global efforts to switch to cleaner energy -- from batteries in hybrid cars to magnets in wind turbines. Mining and processing the metals causes environmental damage that China, the biggest producer, is no longer willing to bear. China’s rare earth industry each year produces more than five times the amount of waste gas, including deadly fluorine and sulfur dioxide, than the total flared annually by all miners and oil refiners in the U.S. Alongside that 13 billion cubic meters of gas is 25 million tons of wastewater laced with cancer-causing heavy metals such as cadmium, Xu Xu, chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, said at a Beijing conference on Dec. 28. “China supplied the world with very cheap and good-quality rare earths for more than a decade at the cost of depleting its resources and damaging its environment,” Wang Caifeng, who heads the government-affiliated China Association for Rare Earths, said at the conference. “The world should thank China.” With China now shutting down unregulated rare earth mines and slashing exports, users from Toyota Motor Corp. to Vestas Wind Systems A/S, the world’s biggest maker of wind turbines, are concerned that supplies may be constrained.
LNG Demand Increase in Asia Signals Price Rebound in 2011: Energy Markets. Liquefied natural gas demand in Asia is poised to rise for a second year in 2011, signaling a rebound in spot prices for the fuel after a 32 percent drop in November. The region’s imports may increase by 5 percent this year, after jumping almost 12 percent in 2010 and falling 2.9 percent the previous year, according to Sook Ching Wong and Alexis Aik of FACTS Global Energy, a Singapore-based energy consultant.
China is home to almost half of all skyscrapers being erected around the world, underscoring concerns that excessive investment will lead to a sharp economic slowdown, according to Barclays Plc. Investment in real estate development in China reached $649 billion in the first 11 months of last year, more than triple the amount of the same period in 2005. China accounts for 44% of the 50 skyscrapers scheduled for completion worldwide in the next six years, Barclays analysts led by Andrew Lawrence said in a report this week. "For investors, this concentration of skyscraper building should raise concerns," the analysts wrote. "History implies that this is a sign of economic over-expansion and a misallocation of capital, which will result in an economic correction within the next five years." Over the last 140 years, completion of the tallest buildings has coincided with periods of economic turmoil such as the Great Depression, the Asian financial contagion and the global credit crisis, Barclays said.
Malawi to Get $350.7 Million Electricity Grant. Secretary of State Hillary Clinton and a public-private board of directors, including Treasury Secretary Timothy Geithner and venture capitalist Alan Patricof, today approved a $350.7 million grant for Malawi to boost economic growth by improving its electric power system. The board of the Millennium Challenge Corp., an agency created by President George W. Bush to promote growth and reward democratic governance in poor countries, said the grant will help the southern African nation improve its electric supply by renovating power stations and improving distribution networks.
CBOE Will Create Volatility Indexes for Companies Including Apple(AAPL), Google(GOOG). The gauges will measure expected stock-price swings for the companies starting Jan. 7, according to a statement today from CBOE Holdings Inc. Values also will be published for International Business Machines Corp., Goldman Sachs Group Inc. and Amazon.com Inc., with possible expansion later, CBOE said.
Microsoft(MSFT) Says Next Windows to Run on ARM Chips as Company Targets Tablets. Microsoft Corp. said the next version of its Windows personal-computer operating system will run on ARM Holdings Plc’s(ARMH) chip technology for the first time, making a deeper push into the market for tablet computers. Windows will work with ARM-based chips made by Nvidia Corp., Qualcomm Inc. and Texas Instruments Inc., Redmond, Washington-based Microsoft said today at the Consumer Electronics Show in Las Vegas.
Sengoku Says Japan's Finances Near 'Edge of a Cliff'. Japan’s top government spokesman said the country’s fiscal situation is “approaching the edge of a cliff,” underscoring Prime Minister Naoto Kan’s call for a national debate on raising the 5 percent sales tax.
India Aims to Fight Inflation as It Withdraws Stimulus Further, Basu Says. India’s government will further withdraw stimulus measures and reduce the budget deficit as it strives to tame inflation in an economy set to return to 9 percent growth, according to top economic adviser Kaushik Basu. “We want to roll back the stimulus” and take steps to reduce inflation, Basu, 58, said in an interview in New Delhi yesterday. “So you will see steps being taken this year, next year and may be the year after.”
Wall Street Journal:
Momentum Builds for Corporate-Tax Overhaul. The White House and congressional Republicans are moving from different directions toward a consensus that the U.S. corporate tax code needs a fundamental overhaul, a goal high on corporate leaders' agenda. Specific proposals for retooling the complex corporate-tax system aren't on the table and the debate over the issue is sure to be lengthy and difficult. But President Barack Obama and Republican congressional leaders are separately sounding the same broad theme that corporate tax rates should be lower. "Tax reform could be a significant boost to our competitiveness," Rep. Eric Cantor (R., Va.), the new House majority leader, said this week. "I'm hopeful and expect the president to put some action behind his statements."
Goldman(GS) Flooded With Facebook Orders. Inundated with demand, Goldman Sachs Group Inc. plans to stop taking orders for shares of Facebook Inc. on Thursday, and has told some would-be investors to expect just a small fraction of the shares they requested, according to people familiar with the situation. The interest, amounting to several billion dollars in an equity offering likely to be no more than $1.5 billion, is a sign of investor fascination with the closely held social-networking company despite a dearth of available information about its operations and financial condition. Goldman has provided some potential investors with little more than a snapshot of Facebook's online traffic, advertisements and other basic measurements, with no disclosure of the Palo Alto, Calif., company's bottom line, people familiar with the matter said.
Head of EMS Fired Over Storm Response. FDNY Commissioner Sal Cassano fired the head of Emergency Medical Services following the city's poor response to the post-Christmas Day storm, an administration official confirmed late Wednesday. Mr. Cassano relieved John Peruggia, FDNY's chief of EMS command, of his duties and plans to replace him with Abdo Nahmod, the official said. Mr. Peruggia is the first person to lose his job following widespread criticism of the city's sluggish and inadequate response to the blizzard. Last week, Mayor Michael Bloomberg voiced enormous dismay with the performance of the 911 system during the storm.
BofA(BAC) to Test New Account Structure, Fees. Bank of America Corp. told employees Wednesday how it intends to restructure the way it charges customers, though the company avoided any detailed discussion of new consumer banking fees. But according to a person familiar with the plan, the bank will soon begin testing fees of roughly $6 a month on its most basic account. Customers will have no options to waive that monthly fee.
U.S. Boosts Afghan Surge. Pentagon Plans to Send 1,400 Extra Marines to Supplement Spring Campaign.
Chips Makers Target Everything But Kitchen Sink. Chip makers, already competing to get their products into computers and cellphones, are preparing for a wider battle as more devices connect to the Internet.
Health Spending Eats Up Record Chunk of GDP. Health spending rose to a record 17.6% of the U.S. economy in 2009, as the overall economy shrank and higher federal Medicaid spending helped to push up health costs.
ObamaCare Rewards Friends, Punishes Enemies. The administration waives allies through the health law's onerous restrictions. In September, HHS Secretary Kathleen Sebelius began granting waivers to companies that provided workers "mini-med" coverage—low-cost plans with low annual limits on what the insurance will pay out. This followed announcements by some employers that they would have to drop these plans because they did not meet the new health law's requirement that 85% of premium income be spent on medical expenses. By early December, HHS had granted 222 such waivers to provide mini-med policies for companies including AMF Bowling and Universal Forest Product, as well as 43 union organizations. According to the department's website, the waivers cover 1,507,418 employees, of which more than a third (525,898) are union members. Yet unionized workers make up only 7% of the private work force. Whatever is going on here, a disproportionately high number of waivers are being granted to administration allies.
John Taylor: The Euro Could Fall Below Dollar Parity in 2011. John Taylor, chief executive officer of FX Concepts LLC, the world’s largest currency hedge fund explains why he is very bearish on the Euro and believes it will decline below parity with the dollar. Taylor says the market is still overly optimistic on the Euro crisis and believes we’re still likely to see defaults and defections from the Euro:
IRS Tax Liens Jump by 60%, but How Effective Are They? IRS liens filed against taxpayers jumped 60% since the start of the national recession, according to a new federal report that urges the tax agency to moderate the collection policy and study its effectiveness.
Reuters:
Volcker to Step Down From White House Panel. Former Federal Reserve Chairman Paul Volcker plans to leave his role as head of a panel of experts advising President Barack Obama on the economy, sources familiar with the decision said on Wednesday. The decision to leave the board was Volcker's.
Osborne Says Europe Needs Tough Bank Stress Tests. Europe needs to "put its house in order" in 2011 by restoring confidence in the euro and sorting out its fragile banking system that is holding back growth and recovery, Chancellor George Osborne said. Writing in an opinion piece published in the Financial Times' Thursday edition, Osborne said Europe needed to agree a "comprehensive package" early this year to allay market concern about sovereign debt. "The sense of crisis may have eased, but wide spreads and high market interest rates still stalk several European economies," he wrote. "The euro zone must follow the logic of the single currency and stand more convincingly behind the euro." Europe needs to "put its house in order" in 2011 by restoring confidence in the euro and sorting out its fragile banking system that is holding back growth and recovery, Chancellor George Osborne said. Osborne also warned Brussels about "badly thought through regulation" that might harm Britain's competitiveness as a global financial centre. Britain, the bloc's biggest financial hub, has clashed for months with Brussels over EU plans to crack down on hedge funds, saying they could deprive investors of choice. "No one should doubt that Britain is determined to remain a global financial centre serving Europe and the world," he wrote.
LinkedIn Plans to go Public in 2011: Sources. LinkedIn, the social networking site for professionals, plans to go public in 2011 and has selected its financial underwriters, three sources familiar with the process told Reuters.
Telegraph:
EU Plans for Bondholder Haircuts Unsettles Debt Markets. The European Commission will on Thursday press ahead with plans to spread the burden of EU bank failures to senior bondholders, marking the start of harsher times for Europe’s creditors.
SkyNews:
Stock Markets 'Could Soar by 20% in 2011'. Speaking on Jeff Randall Live, Jim O'Neill, chairman of Goldman Sachs Asset Management, gave his prediction for share prices in 2011 by saying: "Another 15-20% rally in major stock markets." "I think it might be more led by the developed markets with the momentum we've got around the world economy, particularly with the US, I think valuations are pretty cheap." Mr O'Neill also said he did not agree with warnings that China's rapidly expanding economy is in imminent danger of imploding and believes America's struggling economy will bounce back in the coming months. "I think the risk of a double-dip recession is receding dramatically. I think one of the big surprises for this year is the US. It looks to me as though it's on its way back and it's going to surprise people."
Shanghai Securities News:
China won't set a "clear" target for bank lending this year and will instead use economic growth and inflation as references for controlling loans, citing a person.
People's Daily:
China should start a trial for property taxes as soon as possible, citing Qin Hong, deputy research head of the Ministry of Housing and Urban-Rural Development. Cities facing pressure from increasing property prices should continue limits on home purchases this year, citing Qin. The country must also stick to different money policies for first-time, second-time and third-time home buyers to curb speculation, citing Qin.
The Financial Express:
Shale Gas in India is 300 Times KG D-6. The future of India’s energy sector does not look that bleak after all. Schlumberger, a global leader in oilfield services, has pegged the reserves of gas in shale deposits across the country at 300 times higher than Reliance’s Krishna Godavari (D6) basin, by far the largest gas field in the country.
Evening Recommendations Citigroup:
Reiterated Buy on (WCC), raised estimates, boosted target to $61.
Downgraded (CMA) to Sell, target $40.
Reiterated Buy on (MOS), boosted target to $92.
Night Trading
Asian equity indices are -.50% to +1.0% on average.
Asia Ex-Japan Investment Grade CDS Index 102.0 +3.5 basis points.
Asia Pacific Sovereign CDS Index 101.50 +2.0 basis points.
Initial Jobless Claims for last week are estimated to rise to 408K versus 388K the prior week.
Continuing Claims are estimated to fall to 4080K versus 4128K prior.
ICSC Chain Store Sales for December are estimated to rise +4.0% versus a +5.8% gain in November.
Upcoming Splits
None of note
Other Potential Market Movers
The weekly EIA natural gas inventory report, Goldman Sachs Healthcare Conference, CES and the JPMorgan Tech Forum could also impact trading today.
BOTTOM LINE: Asian indices are mostly higher, boosted by financial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.
North American Investment Grade CDS Index 83.23 +.69%
European Financial Sector CDS Index 161.02 bps +9.55%
Western Europe Sovereign Debt CDS Index 201.17 bps -.29%
Emerging Market CDS Index 195.48 +.72%
2-Year Swap Spread 21.0 +1 bp
TED Spread 17.0 -1 bp
Economic Gauges:
3-Month T-Bill Yield .13% unch.
Yield Curve 276.0 +3 bps
China Import Iron Ore Spot $171.0/Metric Tonne unch.
Citi US Economic Surprise Index +18.90 +4.0 points
10-Year TIPS Spread 2.41% +6 bps
Overseas Futures:
Nikkei Futures: Indicating +165 open in Japan
DAX Futures: Indicating +25 open in Germany
Portfolio:
Higher: On gains in my Medical, Tech, Ag and Biotech long positions
Disclosed Trades: Added to (GOOG) long, took profits in another long
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is very bullish as the S&P 500 trades higher despite some equity weakness overseas, surging long-term rates, recent stock gains and rising euro sovereign debt concerns. On the positive side, Coal, Oil Service, Internet, Disk Drive, Networking, Wireless, Bank, Hospital, Homebuilding, Gaming, Education and Airline shares are especially strong, rising more than 1.5%. (XLF) is strongly outperforming again. Small-caps and cyclicals are also relatively strong. The Eurozone Investment Grade CDS Index is dropping -3.05% to 85.1 bps, which is the lowest since Nov. 23 and a big positive. The euro currency continues to trade poorly and gold is falling another -.28%. Copper is gaining +.79% and lumber is jumping +3.1%. On the negative side, Semi and Utility shares are under mild pressure. The Greece sovereign cds is climbing +3.03% to 1,062.54 bps, the Hungary sovereign cds is gaining +2.46% to 380.17 bps and the China sovereign cds is rising +2.45% to 67.45 bps. The Euro Financial Sector CDS Index remains near its highest level since mid-June and the Western Europe Sovereign CDS Index is still near a record high. The 10-year yield is surging +14 bps to 3.47%, but is still within its recent range. The broad market continues to trade very well as it grinds higher and the bears remain unable to gain any traction on potential negative catalysts. One of my longs, (MOS), reported excellent earnings after the close yesterday and is rising +2.95%, which puts it back near its 52-week high. I still see further meaningful upside in the shares from current levels over the short/intermediate-term. I expect US stocks to trade mixed-to-higher into the close from current levels on equity fund inflows, short-covering, technical buying, less financial sector pessimism, more economic optimism and buyout speculation.
U.S. Companies Added 297,000 Jobs in December, ADP Says. Companies in the U.S. boosted payrolls in December by the most since records began in 2001, showing a stronger labor-market recovery at the end of last year, data from a private report showed today. Employment increased by 297,000, exceeding the highest projection in a Bloomberg News survey, after a revised 92,000 rise in November, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 100,000 gain last month. Faster job growth will fuel the income gains necessary to further spur consumer spending, which accounts for about 70 percent of the economy. “The headwinds for the recovery are fading,” said Jim O’Sullivan, global chief economist at MF Global Ltd. in New York. “Companies have been pretty cautious and they’ve accumulated a lot of spending power, and we’ve seen that in purchases of equipment and software. Now they need more workers to man the equipment.” “There is certainly a strong signal in the ADP data,” Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said in a conference call with reporters. “It has accelerated in each of the last three months and the gains that we reported this morning were widespread.” Today’s ADP report showed an increase of 27,000 workers in goods-producing industries, which includes manufacturers and construction companies. It was the biggest gain since February 2006 and the second straight rise. Service providers added 270,000 workers, the 11th straight gain and the most since record-keeping began. Employment in construction was little changed, the first time without a decline since June 2007, while factories added 23,000 jobs, ADP said. Companies employing more than 499 workers expanded their workforces by 36,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 144,000 jobs and small companies increased payrolls by 117,000, ADP said. Employers in the U.S. announced plans in December to cut 32,004 jobs, the fewest since June 2000, according to Challenger, Gray & Christmas Inc. The Chicago-based outplacement company said firings were down 29 percent from December 2009.
U.S. Services Expand at Fastest Pace Since 2006. Service industries expanded in December at the fastest pace since May 2006, showing the U.S. economic recovery is picking up and broadening beyond manufacturing. The Institute for Supply Management’s non-factory index, which covers about 90 percent of the economy, rose to 57.1, exceeding the median forecast of economists surveyed by Bloomberg News, from 55 in November. “We’re coming into 2011 with some good momentum,” said Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, who projected the ISM index would climb to 57. “We’re going to be entering a better business climate.” The ISM non-manufacturing measures of new orders and business activity increased to the highest levels since August 2005. The group’s employment gauge fell to a three-month low, damping some of the optimism raised by the ADP report.
Portugal Pays More to Borrow in First Test of Investor Demand: Euro Credit. Portugal sold six-month bills today, the first of Europe’s high-deficit nations to test investor demand in 2011 after the threat of default forced Greece and Ireland to seek bailouts last year. The government debt agency, known as IGCP, auctioned 500 million euros ($665 million) of bills repayable in July. The yield jumped to 3.686 percent from 2.045 percent at a sale of similar maturity securities in September, with investors bidding for 2.6 times the amount offered. A year ago, the country paid just 0.592 percent to borrow for six months. “We have a long year ahead, and one auction is not going to answer any questions,” said Padhraic Garvey, a strategist at ING Groep NV in Amsterdam.
PBOC Extending Biggest Cash Crunch Since Lehman: China Credit. Borrowing costs for China’s banks will rise to the highest in more than two years in the first quarter as policy makers curb supplies of cash to fight inflation, according to a survey of bond analysts. The seven-day repurchase rate, which measures interbank funding availability, may average 2.9 percent in the first quarter, compared with 2.75 percent in the previous three months, according to the median estimate in a Bloomberg survey of eight analysts. Both levels were the highest since the third quarter of 2008, when Lehman Brothers Holdings Inc.’s bankruptcy caused global credit markets to seize up. Central bank Governor Zhou Xiaochuan’s tolerance of the funding shortage shows his determination to curb the fastest inflation in two years in a country where 150 million people live on less than $1 a day. The seven-day repo rate has doubled in the past year to 3.26 percent, as the one-week U.S. dollar Libor remained little changed at around 0.25 percent.
At Least 40% of LME Copper Shorts in March Held by One Company, Data Show. One unidentified company held a short position in copper for March delivery on the London Metal Exchange that equaled at least 40 percent of the contract’s open interest, according to bourse data. The short position, which could be a bet on price declines or a hedge against a long position elsewhere, was dated Dec. 30, according to the exchange. Open interest for March amounts to 42,856 lots (1.1 million metric tons), the most in any copper futures contract. As of the same date, one unnamed firm held 50 percent to 79 percent of LME copper stockpiles, bourse data show.
World Food Prices Jump to Record on Sugar, Oilseeds. World food prices rose to a record in December on higher sugar, grain and oilseed costs, the United Nations said, exceeding levels reached in 2008 that sparked deadly riots from Haiti to Egypt. An index of 55 food commodities tracked by the Food and Agriculture Organization gained for a sixth month to 214.7 points, above the previous all-time high of 213.5 in June 2008, the Rome-based UN agency said in a monthly report. The gauges for sugar and meat prices advanced to records.
Crude Oil Rises as U.S. Service Industries Expand, Companies Add Employees. Crude oil rose after reports showed that U.S. service industries expanded and companies added workers in December, signaling that fuel demand may increase in the world’s biggest oil-consuming country. Futures climbed as much as 0.8 percent after the Institute for Supply Management’s non-factory index, which covers about 90 percent of the economy, rose to 57.1.
Birinyi's Projected 322% S&P 500 Advance Beats '90s Tech Rally. Laszlo Birinyi says the U.S. stocks rally that began in March 2009 may produce bigger gains than the technology boom of the 1990s, if history is a guide. Birinyi, who was one of the first money managers to advise buying American equities as they bottomed almost 22 months ago, said yesterday that the Standard & Poor’s 500 Index may increase to 2,854 on Sept. 4, 2013, based on the average size of advances. That requires a 322 percent surge from the low of 676.53 in March 2009, beating the 302 percent rally during the bull market of October 1990 to July 1998.
Qualcomm(QCOM) Agrees to Buy Atheros(ATHR) for About $3.2 Billion. Qualcomm Inc., the world’s largest maker of mobile-phone chips, agreed to buy Atheros Communications Inc. for about $3.2 billion in cash, broadening its lineup of Wi-Fi networking technology. Atheros investors will get $45 a share, Qualcomm said today in a statement. That’s 22 percent more than Santa Clara, California-based Atheros’s closing price on Jan. 3, before reports about the purchase emerged.
Fear 'Mindless' U.S. Deficit Spending, Pimco's Gross Says. Pacific Investment Management Co.’s Bill Gross said investors should favor emerging market corporate and sovereign debt as “mindless” U.S. deficit spending may result in higher inflation, a weaker dollar and the eventual loss of America’s AAA credit rating. “The problem is that politicians and citizens alike have no clear vision of the costs of a seemingly perpetual trillion dollar annual deficit,” Gross wrote in a note on Pimco’s website today. “As long as the stock market pulsates upward and job growth continues, there is an abiding conviction that all is well and that ‘old normal’ norms have returned. Not likely. There will be pain aplenty.” The U.S. deficit was $150.4 billion in November, exceeding the median estimate of economists surveyed by Bloomberg News, compared with $120.3 billion in November 2009, according to a Treasury Department budget statement released last month. “All investors should fear the consequences of mindless U.S. deficit spending.” wrote Gross, a founder and co-chief investment officer at Pimco. Like a female mantis who eats the head of her mate while reproducing, policy makers are “munching on the theoretical heads of future generations, while paying no mind to the wretches that will eventually be called upon to pay the bills,” he wrote. Stimulus measures that have been designed to maintain current consumption instead of working to make America a more competitive nation in the long run will be a drag on real income growth as reflationary policies set in, Gross wrote.
Sears(SHLD), Urban Outfitters(URBN) Said to Weigh J. Crew Bids. Sears Holdings Corp. and Urban Outfitters Inc. are weighing rival bids for clothing retailer J. Crew Group Inc. in a potential challenge to TPG Capital and Leonard Green & Partners LP’s $3 billion buyout, said three people with knowledge of the matter. Sears and Urban Outfitters are studying J. Crew’s books, said the people, who asked not to be identified because the matter is private. Neither company has indicated whether it will actually counter TPG and Leonard Green’s $43.50-per-share offer, the people said. At least two other private-equity firms are also receiving confidential data on the New York-based retailer, said the people. J. Crew’s go-shop period, in which a public company solicits competing offers, expires Jan. 15 so any bid must be made before then. TPG and Leonard Green’s Nov. 23 offer for the company was 29 percent higher than J. Crew’s average closing share price in the month prior to the announcement.
Ford(F) Rises to Top of Consumer Reports Survey, Tying Toyota. Ford Motor Co. matched Toyota Motor Corp. as the most favorably viewed auto brand by U.S. consumers in a survey released today by Consumer Reports magazine. Ford has climbed 35 percentage points in the last two years, while Toyota has fallen 46 points, leaving the automakers “in a statistical dead heat” with scores of 144 and 147 respectively, the Yonkers, New York-based consumer magazine said. Ford excelled in “factors that consumers say matter most: safety, quality and value,” the magazine said in a statement.
Wall Street Journal:
As Speaker, Boehner Vows to Make 'Tough Decisions'. Ohio Republican John Boehner was elected speaker of the U.S. House of Representatives Wednesday, completing a decade-long comeback after being cast from leadership when House Republicans suffered election losses in the late-1990s.
Obama to Address Chamber on Feb. 7. In the latest example of the White House’s renewed outreach to U.S. business, President Barack Obama will address the U.S. Chamber of Commerce Feb. 7 on jobs and the economy, an administraion official said.
Starwood(HOT) Again Circles Condo Carcasses. Barry Sternlicht's Starwood Capital Group is moving to expand its investments in distressed condominiums, leveraging the experience it has gained in the 15 months since it led a group that bought the assets of the failed Corus Bank. The same group of investors that bought the $4.5 billion Corus portfolio from the Federal Deposit Insurance Corp. is now bidding on other distressed residential assets at a time when condo markets are showing signs of stabilizing in some parts of the country.
Google(GOOG) Was the Busiest Startup Acquirer of 2010. Google Inc. missed out on prized daily discounter Groupon in 2010, but it still acquired far more start-ups owned by venture capital firms than any other company last year. In fact, it’s the first time that Google has topped the annual list of most venture-backed acquisitions, according to research firm Dow Jones VentureSource.
Google(GOOG) Wins One Against Microsoft(MSFT). Google Inc. has won a key ruling in its lawsuit against the U.S. Interior Department, two months after the Web giant accused the agency of improperly favoring rival Microsoft Corp. in a contract bid to provide a new email system. Susan Braden, a federal judge in Washington, on Monday issued a preliminary injunction that prevents the Interior Department from deciding to use Microsoft's email and collaboration tools for its 88,000 employees as part of the federal government's move to Web-based software, sometimes known as cloud computing.
IMF Considers Expanded Overseer Role of Global Capital Flows. The International Monetary Fund is considering expanding its role as the overseer of global capital accounts and controls, people familiar with the plan said Wednesday. The IMF is expected to publish as soon as Wednesday a preliminary executive board review examining how the fund could be more involved in supervising capital flows between countries.
CNBC:
US Small Business CEOs in More of a Hiring Mood. U.S. small business owners are finally in a better hiring mood as they grow more confident about both the economy and their own business prospects, a survey released Wednesday showed. For the first time in three years, a majority of chief executive officers polled by small business group Vistage said they planned to add employees in 2011. The quarterly poll of 1,729 CEOs was conducted between Dec. 14 and Dec. 24. In the previous installment of the poll, conducted in September, just 46 percent of CEOs said they planned to add jobs in the next 12 months. In the December poll, 58 percent thought economic conditions had improved from a year earlier, and roughly the same percentage thought things would get better still over the next 12 months. That was a significant improvement over September's survey, which found just 40 percent thought economic conditions would improve in the coming year.
Seeing Firm Growth, Fed's Hoenig Saw 'Duty' to Dissent. The Federal Reserve's most vocal internal critic Wednesday pushed back against the U.S. central bank's effort to control a sometimes-dissonant message, saying it is the duty of those who disagree to vote their conviction. Thomas Hoenig, president of the Kansas City Fed and a known inflation hawk, said the U.S. economy is recovering remarkably well given the depth of the economic downturn, and repeated his view that the Fed's loose monetary policy risks sparking bubbles or inflation in the future. The bank's lone dissenter, who has repeatedly and openly opposed the Fed's policy of ultra-low interest rates, not only stuck to his views but also took a jab at those at the Fed who are concerned about the divergence of view on policy.
AT&T(T) Lays Out Plan for 4G Network, Devices.AT&T laid out an aggressive plan to roll out its next-generation wireless network in 2011, including a slate of devices that will include tablets and the market’s first dual-core smartphone.
Hands On With A Fake Chinese iPhone (photos). From far away, it looks pretty real -- never mind that Apple hasn't actually started selling the white iPhone 4 yet, because of some manufacturing problems. But after holding it for five seconds, and trying to use the software, you get a real sense of appreciation for the real thing. This "SciPhone" is not only a fake, but a crappy fake.
Simons' Medallion Up More Than 30% in 2010. Jim Simons’ Medallion Fund finished 2010 strongly, posting a better than 30 percent return, according to investors. This, of course, is net of a 5 percent management fee and 44 percent performance fee. The performance, however, still put it below its net return range of between 40.5 percent and 84.1 percent in each of the prior four years. Remember, for years Medallion has only been open to partners, employees and friends. Simons’ two newer public funds also posted strong performance. Renaissance Institutional Futures fund (RIFF) — introduced in October 2007 — finished up 22.7 percent after climbing just 3.8 percent last year and losing 12 percent in 2008. The Renaissance Institutional Equities fund (RIEF) fell by more than 1 percent in December 2010, and finished the year up 16.5 percent.
Seeking Alpha:
Crispin Odey Remains Optimistic on Stock Markets: Latest Commentary and Outlook. Crispin Odey, founder of hedge fund firm Odey Asset Management, is out with his latest market commentary and outlook. Back in September, he noted that equities were attractively priced but unloved. Since then, equities have rallied furiously. So, what's his latest take? See below for his outlook penned on the 30th of November:
In House, New Republican Majority Plans to Act Fast to Undo Obama's Agenda. Almost as soon as they take control of the House at noon Wednesday, Republicans will embark on a 20-day plan aimed at undoing major aspects of President Obama's agenda as they seek to take advantage of the weeks before the Senate's return and the president's State of the Union address.
Apple(AAPL) is Granted its First Liquidmetal Patent. Apple has been granted its first patent related to Liquidmetal, a space-age metal alloy. But the patent isn’t for a new iPad enclosure or iPhone antenna, as experts have predicted. Instead Apple’s Liquidmetal patent is for an internal component of a fuel cell. Apple’s new patent describes “amorphous alloy” collector plates for fuel cells, an electrochemical battery that uses hydrogen to generate electricity. Although the patent doesn’t reference the Liquidmetal trademark, the material is an amorphous alloy or “metallic glass.”
BP(BP) Shuts Down Part of Alaska Oil Field in Wake of Court Ruling. BP shut down a small portion of the Prudhoe Bay oil field last week after a judge ruled that federal regulators failed for years to get approval from the Inupiat Eskimo family that owns the land. The shutdown affects less than 1 percent of production from the nation's largest oil field, but so far it's the most visible consequence of a significant legal victory for the Native family, which has battled lawyers for the federal Bureau of Indian Affairs and BP in federal court over the oil production from its land. Federal claims court Judge Nancy Firestone ruled this fall that the Oenga family is owed millions in unpaid rent because the BIA improperly allowed BP to tap three offshore oil deposits from the family's allotment on the northern edge of the vast Prudhoe oil field.
Rasmussen Reports:
Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows that 25% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-one percent (41%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -16 (see trends).
The HD Room:
Netflix(NFLX) Button Coming to Remote Controls. Several hardware manufacturers will begin building in a red Netflix button on their remote controls. The button will allow viewers to access Netflix's online movie rental service and rental queue with a single button click. Blu-ray Disc players, Internet-connected televisions and other related media hardware devices such as set-top boxes will include the Netflix button. Sony, Sharp and Toshiba have unveiled plans to include the button on their Internet-connected televisions in 2011, while Roku, Boxee and Iomega are adding it to their set-top box remotes. Other hardware manufacturers that will add the Netflix buttons to remotes include Panasonic, Memorex, Dynex (Best Buy's brand) and Haier. The first remotes with the Netflix buttons are due in stores this spring.
Politico:
John Boehner Elected Speaker of the House. Capping a two-decade House career, Rep. John Boehner was elected at the 61st speaker of the House, becoming the first Ohio Republican to hold the post in nearly 80 years. The vote was 241-173, with Boehner handily beating Rep. Nancy Pelosi (D-Calif.), who had served as speaker for the last four years. As he walked up the center aisle of the House chamber to receive the gavel from Pelosi, Boehner — well known for being emotional — teared up and wiped his eyes.
Rockefeller Takes Aim at EPA. Firing the first salvo in what is expected to be a top energy issue in the new Congress, Sen. John Rockefeller said Wednesday that he’s raring to go in his controversial bid to handcuff the Environmental Protection Agency’s climate regulations for two years. The West Virginia Democrat told POLITICO that he’ll soon introduce the same piece of legislation he tried unsuccessfully to get a vote on throughout 2010.
Reuters:
EU Targets Senior Creditors at Ailing Banks. All bondholders should be forced to take losses in an ailing bank under draft European Union proposals which aim to avoid taxpayers again having to fund bailouts in the next crisis. The EU's executive Commission is due to publish the consultation paper as soon as this week to shape its crisis management legislative proposals later in the year. The paper obtained by Reuters said writing down a bank's stock and subordinated debt may not be enough at times and that national resolution authorities will need "additional writeoff" powers. The EU executive proposes a tiered model beginning with writedowns of equity and subordinated debt, with senior debt next in line.
Glu Mobile(GLUU) to Develop Games for Tablets With Nvidia(NVDA) Chips. Mobile game developer Glu Mobile Inc (GLUU) said it would partner with graphics chip giant Nvidia Corp (NVDA) to develop games for tablets that run Google's (GOOG) Android, sending its shares up as much as 18 percent. Glu is working with Nvidia to develop games that will use the advanced capabilities of Tegra processors, it said in a statement. Tegra chips help speed up Internet browsing and accelerates graphics on mobile devices. Nvidia has a partnership with Google and expects tablet-like devices that use Tegra chips and run on the Android operating system to be released early next year.
Telegraph:
Brazil Pledges to Stop US 'Melting the Dollar'.Brazil has sounded a new note of warning in the international "currency war" by pledging not to allow the United States to "melt the dollar".
Les Echos:
France is seeking to cut spending by a further 30 billion euros in 2012 to reduce the country's budget deficit to 4.6%, citing Budget Minister Francois Baroin.
Liberation:
The euro currency could disappear unless additional steps are taken to ensure its long-term stability, Nobel economics laureate Joseph Stiglitz said. Stability funds established by euro-region governments provide only "temporary relief for small countries," Stiglitz said. The fiscal situation of larger countries, including Spain and Italy, remains "precarious," he said, adding that further weakening will intensify pressure on the common currency. Without "appropriate policies and balanced institutions," such as a solidarity fund for long-term stability, the euro may not survive, Stiglitz said.
Macau Daily Times:
Sands China Appeals to Court on Plots 7 and 8. Local gaming operator Sands China has already submitted an appeal to the courts over the Government’s decision to reject its application for Cotai plots 7 and 8.
Vatan:
Gap Inc.(GPS), Nike(NKE) and Adidas AG are giving more orders to Turkish firms and reducing production in China. The extra orders mean Turkish textile companies may export $8.8 billion of products this year compared with $6.6 billion in 2010, said Ismail Gulle, head of Instanbul-based textile association Itkib. China has become more expensive because of an increase in input prices, Gulle said.
