Weekend Headlines
Bloomberg:
- U.S. charges Gunman in Shooting of Giffords, Judge. Jared Lee Loughner was charged with attempting to kill U.S. Representative Gabrielle Giffords and the murder of U.S. District Judge John Roll in a shooting spree at a Tucson, Arizona, shopping mall that claimed six lives and wounded at least 13 others, federal prosecutors said. Loughner, 22, is accused of killing Roll and Gabriel Zimmerman, a member of Giffords’ staff and a federal employee, according to a criminal complaint filed yesterday in Phoenix. He is also charged with attempting to murder Giffords and two other members of her staff who are also federal employees, prosecutors said. “He certainly could face the death penalty,” said Laurie Levenson, a professor at Loyola Law School and a former federal prosecutor.
- Gabrielle Giffords, Former Republican, Became Democrat Who Defies Labels. Arizona U.S. Representative Gabrielle Giffords was one of 19 Democrats to deny their party’s leader, Nancy Pelosi, support as the U.S. House of Representatives chose a new speaker Jan. 5. Giffords, in critical condition after being shot in the head Jan. 8 while meeting with constituents in Tucson, cast her vote for Georgia Representative John Lewis as the new Republican-controlled House picked John Boehner of Ohio to be the new speaker. She was one of two Democrats to vote for Lewis, a veteran of the 1960s civil rights movement. The protest vote against Pelosi, who led House Democrats to defeat in last November’s election, was largely conducted by members of the Blue Dog Coalition, a group of fiscally conservative Democrats that includes Giffords among its members. She voted against legislation in 2009 to bail out auto companies such as General Motors Co.
- Euro Trades Near Three-Month Low as Funding Concern Clouds Debt Auctions. The euro traded near its lowest level in more than three months against the yen on concern European nations will struggle to raise funds, diminishing the allure of assets in the region. Europe’s currency was also close to a three-month low versus the dollar after a slide in Portuguese government bonds last week dimmed the outlook for debt auctions over the next three days in the nation, Spain and Italy. “It looks as though the market is pricing in some further deterioration in the sovereign debt story,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Obviously the Portugal auction on Wednesday will be closely watched. I see euro weakness continuing.”
- Bond Distress at Three-Year Low on U.S. Refinancings. The percentage of corporate bonds considered in distress is the lowest in more than three years as the U.S. economic recovery gives fixed-income investors the confidence to lend to the riskiest borrowers. The number of junk bonds trading at yields at least 10 percentage points more than government debt fell to 215, or 8.6 percent of the total, as of Jan. 7, the least since October 2007, according to Bank of America Merrill Lynch’s Global High- Yield Index.
- Kyl Optimistic Obama, Republicans Can Compromise on Taxes. Republican Senator Jon Kyl said he is optimistic that his party can work with President Barack Obama to find common ground on overhauling the U.S. tax system, including changes to corporate and individual rates. “The White House and I know Senate Republicans, and I think House Republicans, understand that in the longer run, starting maybe a year or two from now, we are going to have to make some changes to get a more pro-growth tax code,” Kyl said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend. Kyl, the party’s chief Senate vote-counter, said the tax code is “too filled with all kinds of subsidies and credits,” and some loopholes could be eliminated. “We could have lower rates, for example, a lower corporate rate that the White House has talked about if we are able to reform our tax code,” he said. Republicans and Democrats also may be able to agree on spending cuts, he said.
- Eclectica's Hendry Turns Greece Profit Into China Failure Bet. Now, Hendry is focusing his rhetoric -- and investing strategy -- on a bigger target: China. He’s betting that growth in the world’s No. 2 economy will collapse because of rampant real-estate speculation, sending shock waves through Asia and beyond. The problem, Hendry says, is that China’s gross domestic product growth isn’t matched by wealth creation at home. In his doom-laden scenario, a plunge in Chinese stock prices and property values will be exacerbated by a softening demand for the country’s exports, triggering an extended period of global deflation and slower growth. Hendry, a combative Scotsman, is betting against China in an unusual way, by snapping up credit-default-swap protection on bonds issued by Japanese industrial companies such as JFE Holdings Inc. and Nippon Steel Corp., which have benefited from China’s construction boom. Hendry is convinced that Japanese banks are selling such protection too cheaply.
- Centaurs Energy Master Hedge Fund Fined for Violating Nymex Trade Limits. Centaurus Energy Master Fund LP, a Houston-based energy hedge fund run by former Enron Corp. trader John Arnold, was fined $15,000 by New York Mercantile Exchange for violating position limits in natural gas. Centaurus exceeded limits for the expiring December 2010 Henry Hub Natural Gas Look-Alike Last Day Financial Future on Nov. 24, Nymex said in a disciplinary action published today. It’s the fund’s third position limit violation in 24 months, Nymex said. The fund had 5,005.5 short contracts, 5.5 over the limit. The infraction resulted in a $15,000 fine and a disgorgement of $4,015 in profits, the exchange said. The Centaurus Energy Master Fund, founded in 2002, had $5 billion under management and more than 70 employees and focuses on electricity and natural gas trading, Arnold told regulators on August 2009.
- Hedge Funds Raise Bullish Gas Bets Most in Year. Hedge funds almost doubled bets on gains in natural gas as futures climbed to the highest level since August on forecasts for colder-than-normal weather. The funds and other large speculators raised their net-long positions, or wagers on rising prices, in four gas contracts by 94 percent in the seven days ended Jan. 4, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the biggest increase in records dating to January 2010.
- Copper Drops for Fifth Day as China Tightening Concerns Dim Demand Outlook. dropped for a fifth day, erasing gains in early Asian trading, on speculation Copper in LondonChina may further tighten monetary policy, dimming the demand outlook in the world’s largest metals user. Three-month copper on the London Metal Exchange fell as much as 0.4 percent to $9,378 a metric ton before trading at $9,410 by 9:49 a.m. Singapore time. “The issue of tightening in China has been brought back to the fore and against this backdrop, investors are unwilling to enter the market at such high levels and consumers are also unwilling to buy at such high prices,” said Yang Zhenqiang, an analyst at First Futures Brokerage Co.
- Freight Rates Tumbling as 35 Miles of Ships Passes Ore Demand. At a time when analysts anticipate record profits for the biggest mining companies and a third year of gains in commodity prices, shipping lines carrying raw materials are set for the lowest freight rates since 2002. Leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, will drop 34 percent to average $22,000 a day this year, according to the median in a Bloomberg survey of eight fund managers and analysts. The last time that happened, China’s economy, the biggest consumer of the minerals used in steel and power, was 75 percent smaller and the benchmark Standard & Poor’s GSCI commodity index 67 percent lower.
- Headless Bodies of 15 Men Found Near Acapulco Mall, Mexican Police Report. Mexican police found 15 decapitated bodies in the city of Acapulco today, the latest incident amid escalating drug-related violence. The bodies of men between the ages of 25 and 30 were found on a sidewalk in front of a shopping mall in the city known for its beach resorts, Guerrero state said in a statement on its website.
- IMF's Lipsky Calls U.S. Government Finances a 'Major' Challenge to Policy. International Monetary Fund First Deputy Managing Director John Lipsky said U.S. government finances will present policy makers with a “major challenge” for years. “The challenges facing U.S. public finances shouldn’t be underestimated,” Lipsky said during a conference panel discussion today on the U.S. role in the world economy. There is a “brief window of opportunity” for fiscal-policy adjustments, and “the U.S. needs to make the most of this window of opportunity.”
- Dubai Home Prices Extended Drop in Fourth Quarter on Supply, Cluttons Says. Home prices in Dubai, the property market that had the biggest reversal because of the financial crisis, fell as much as 5.1 percent in the fourth quarter from the previous three months and more declines are “unavoidable,” Cluttons LLP said. Cluttons, a London-based property broker, said villa prices dropped 5.1 percent, while apartment values declined 2.4 percent in the fourth quarter from the third. The broker expects 35,000 homes to be completed in Dubai over the next two years. Property prices in the emirate slid by almost 60 percent from their peak in mid-2008 after the credit crisis squeezed speculators out of the market and forced banks to lend less, Ahmed Badr, analyst at Credit Suisse Group AG said today. “As supply continues to increase, drops in values will be unavoidable,” Cluttons said. “We are continuing to see the flight to quality in both the sales and rental markets as the more desirable locations become increasingly affordable.”
- Duke Energy(DUK) Said to Plan to Name Progress's(PGN) Johnson as Chief After Merger. Duke Energy Corp. is nearing an agreement to buy Progress Energy Inc. and put Progress Chief Executive Officer William Johnson in charge of what will be the largest U.S. utility, said three people with knowledge of the matter.
- China's Reserves Set for $2.8 Trillion Mean Tightening. China’s foreign-exchange reserves probably rose 4 percent to $2.76 trillion in the fourth quarter, adding to pressure on the central bank to drain cash from the economy and allow the yuan to strengthen. “We will probably see a round of pretty intense tightening in the first half,” said Ren Xianfang, an economist in Beijing for Lexington, Massachusetts-based research company IHS Global Insight. “The yuan’s appreciation in 2011, particularly in the first half, should be faster than last year.”
- Some Manure, Please, to 'Grow the Economy:' Commentary by Caroline Baum. “Grow the economy?” The phrase is painful to the ears -- and only one reason it makes me wince. We grow old, we grow up, we grow out of our bad habits (hopefully). But grow the economy?
- Indonesia Stocks Set for Biggest Three-Day Tumble Since 2008 on Inflation. Indonesia’s stocks tumbled, with the benchmark index set for its biggest three-day drop since October 2008, on concern accelerating inflation will curb returns and prompt higher interest rates. PT Bank Central Asia, Indonesia’s largest lender by market value, dropped 6.3 percent and PT Indosat, the nation’s second- largest telephone company, plunged 8.4 percent. The Jakarta Composite index fell 3.6 percent to 3,501.66 as of 11:29 a.m. local time, extending the three-day drop to 7.5 percent. The central bank may increase its benchmark interest rate by a “cumulative” 100 basis points starting in February to curb inflation, Morgan Stanley said in a note dated today. December inflation accelerated to 6.96 percent from a year ago compared with the central bank’s benchmark interest rate of 6.5 percent.
- Suspect Fixated on Giffords. Accused gunman Jared Lee Loughner appeared to have been long obsessed with U.S. Rep. Gabrielle Giffords. A safe at Mr. Loughner's home contained a form letter from Ms. Giffords' office thanking him for attending a 2007 "Congress on your Corner'' event in Tucson. The safe also held an envelope with handwritten notes, including the name of Ms. Giffords, as well as "I planned ahead," "My assassination," and what appeared to be Mr. Loughner's signature, according to an FBI affidavit.
- Giffords Shows Encouraging Responses. Rep. Gabrielle Giffords, shot in the head at point-blank range, showed encouraging responses following emergency brain surgery, doctors said Sunday.
- Big Consultant Payouts Hint Insider Probe Will Broaden. Large sums of money paid to some consultants charged in the government's insider-trading case indicate they may have talked with dozens of hedge funds, suggesting the scope of the investigation could widen significantly, people familiar with the expert-network industry say.
- Market for Vacation Homes Is on the Rise. Sales in many vacation communities across the U.S. soared last year to levels not seen since boom times, driven by deep discounts, cash purchases and buyers' rising stock portfolios.
- Profits Face Headwinds. Companies start reporting final 2010 earnings in earnest this week, but the gains should peak this quarter then level off as high unemployment and new headwinds restrain further business profit gains. Pressures from rising costs and tougher comparisons are draining the momentum from corporate profits. While some businesses should see a modest boost this year from new tax-law depreciation changes, big profit gains are largely behind many industries.
- U.S. Auto Sales to Rise 10%, Chicago Fed Economist Says.
- U.S. Mortgage Rules Delayed in Regulator Spat. The crafting of new standards for mortgage lending has been delayed as top U.S. regulators clash on whether to attach protections for homeowners on the verge of foreclosure. The holdup is an indication that the implementation of the Dodd-Frank financial overhaul could be messy as a diverse set of regulators try to reach consensus on numerous rules.
- Rare-Earth Ripple Effect Hits Gasoline Producers. The skyrocketing cost of rare-earth metals from China is pushing up the cost of gasoline production in the U.S., the latest sign of the wide-reaching impact of Beijing's decision to restrict exports of the minerals. Prices for some of the chemicals refiners use to process gasoline have risen exponentially after China, which controls about 95% of the world's rare-earth supply, said it would reduce exports of the metals by 35% in 2011. The increase could raise gasoline-production costs by about a penny a gallon and potentially lead some refiners to cut back on fuel production to protect their profits.
- BP(BP) to Cut Alaskan Oil Production. Alyeska, the company that operates the Trans Alaska Pipeline, has told operators on the North Slope to reduce crude production by 95% after an oil leak was discovered at one of their pump stations. The order is a big blow for BP PLC, the largest oil producer in Alaska. The centerpiece of its operations there is Prudhoe Bay, the largest producing oilfield in the U.S. The North Slope currently produces about 630,000 barrels of oil per day - about 9% of total U.S. output. BP accounts for nearly two thirds of that.
- Verizon(VZ) Could Bring Apple(AAPL) Millions of iPhone Users. Apple Inc. watchers are already doing rough calculations and think Verizon Wireless could generate sales of millions of iPhones this year. Sales estimates vary, but many analysts agree Apple will likely sell 9 million to 12 million iPhones on Verizon's network this year, a huge boost in the iconic phone's most important market. To put that into perspective, AT&T Inc. sold 11.1 million iPhones in the first nine months of 2010. Piper Jaffray & Co. estimates a full-year total of 14.5 million iPhones for AT&T, accounting for 12% of Apple's overall revenue and 30% of its iPhone sales. In its fiscal year, ended September, Apple reported revenue of $20.34 billion. Verizon, the country's largest wireless carrier, will have the phone available in stores around the end of the month, a person familiar with the matter says. Piper Jaffray analyst Gene Munster said Wall Street is expecting sales of the new Verizon iPhone to boost Apple's overall sales by 5%, though he believes it could have as much as twice that effect if Verizon lures enough new customers to the phone -- as opposed to those it steals from AT&T. "There's so much pent up demand," said Mr. Munster, who himself has set a conservative sales estimate of 9 million iPhones via Verizon in the current year. Some see an even bigger impact. Brian Marshall, an analyst at Gleacher & Co., said he believes the iPhone could capture 5% of Verizon's customers in its first quarter on sale, a faster rate than when it launched through AT&T in June 2007. "There's probably around 17 million subscribers on AT&T that use the iPhone cumulatively -- I think over time Verizon could be even bigger than that," said Mr. Marshall, who has set a 2011 sales estimate of 12 million units.
- Expect Even More Fees From Banks This Year. Banks, in an attempt to wring more revenue out of customer accounts, are conjuring up new ways to raise fees on basic products like debit cards, cash machines and checking accounts. As regulation curtailing the financial institutions from levying certain charges on consumers has mounted over the past year, banks have had to dream up new fees to replace those now trimmed by laws. Banks are considering additional fees on credit cards and checking accounts. But they also are looking at new ways to make money on cash machines and especially debit cards as regulators pinch the cards' conventional revenue streams. Banks are thinking about imposing annual fees of $25 or $30 on debit cards, according to people familiar with bank strategies. Some also are considering limiting the number of debit-card transactions that a customer can make each month, these people say. Another idea circulating in the industry: limiting the size of a purchase that a customer could make with a debit card.
- Verizon Wireless(VZ) is Confident It's Got Muscle for iPhone. Verizon Wireless has been beefing up its network and believes it will have no problem handling iPhone-type loads, a claim that could be put to the test this year if the carrier signs up millions of subscribers using the Apple Inc. device. Verizon Wireless, the country's largest wireless carrier, is confident enough in its network that it will offer unlimited data-use plans when it starts selling the iPhone around the end of this month, a person familiar with the matter said. Such plans would provide a key means of distinguishing its service from rival AT&T Inc., which limits how much Internet data such as videos and photos its customers may use each month.
- More Bank Reforms Needed, Economists Say. Global financial reforms that have drawn howls from bankers aren't nearly enough to avert another disaster, said academic economists gathered here for the annual meeting of the American Economic Association.
- Don't Bet the House on Private Jets. Downturns in the business-jet market are nasty and brutish, but usually short. The latest one was nastier and more brutish than most: Jet deliveries dropped 42% between 2008's peak and 2010, according to Cowen & Co.
- VW Makes New Push in the U.S. For nearly half a decade, Volkswagen AG has been laying the groundwork for a gambit to reconquer the U.S. Now comes the most ambitious part: the debut of a midsize sedan that could add more upheaval to the auto market's most contested segment. To be unveiled Monday at the North American International Auto Show in Detroit, the revamped Passat, made bigger and less expensive to appeal to American consumers, will be the first car to be built by the German auto maker in the U.S. since the 1980s.
- DuPont(DD) to Buy Denmark's Danisco. DuPont Co. is nearing a deal to buy Danish food ingredients giant Danisco AS for more than $5 billion, according to people familiar with the matter. Wilmington, DE-based DuPont's purchase of Danisco is to be announced as early as Monday unless it falls apart at the last minute, the people said.
- Fed Chief Gets a Likely Backer. Narayana Kocherlakota gets his first crack at voting at Federal Reserve policy meetings later this month, and the wonky former academic said he is likely to support the Fed's controversial $600 billion bond-buying program. "The bar for dissent from the committee is going to be pretty high for me," Mr. Kocherlakota, 47 years old, said in an extensive interview last week, his first with the national media.
- Apollo, Entrepreneur Consider Sara Lee Buyout. Private-equity firm Apollo Global Management LLC and investor C. Dean Metropoulos have formed a group of investors to explore a purchase of Sara Lee Corp.(SLE), people familiar with the matter said. Apollo and Mr. Metropoulos, a Connecticut entrepreneur who acquired Pabst Brewing Co. last year, are leading a consortium that includes Bain Capital LLC and TPG Capital LP, the people said.
- Hiring Prospects Improve for M.B.A. Grads in 2011. More companies are planning to hire business school graduates in 2011 but most aren't planning to offer higher salaries, according to a survey conducted by the Graduate Management Admission Council, which administers the GMAT business-school exam. Sixty-four percent of executives, managers and recruiters polled plan to hire new M.B.A. grads in 2011, up from 60% who said they did so in 2010. Yet 69% said they expected salaries offered to M.B.A. grads would remain flat with those in 2010. Only 26% expected an increase, while 4% forecast a decrease.
- The Arizona Tragedy and the Politics of Blood Libel. Those who purport to care about the tenor of political discourse don't help civil debate when they seize on any pretext to call their political opponents accomplices to murder.
- Bennenbroek Leads Most-Accurate Strategists Favoring Dollar. The world’s most accurate foreign- exchange forecasters say the dollar will be the best currency to own this year as the Federal Reserve’s bond purchases bolster the U.S. economy instead of debasing America’s legal tender. Wells Fargo & Co., Bank of Tokyo-Mitsubishi UFJ Ltd. and SJS Markets Ltd., the top analysts in the six quarters ended Dec. 31, according to data compiled by Bloomberg News, say the dollar will strengthen against the euro, yen and pound. Nick Bennenbroek, the head strategist at Wells Fargo in New York and the most accurate of the group, predicts about a 5 percent gain against the euro over the year and 11 percent versus the yen.
- What MA Foreclosure Court Ruling Really Means.
- Obama Shift to Center Takes Business-Friendly Tone. President Barack Obama's midterm shift to the center is gaining momentum as he tries to strike a more business-friendly, deficit-conscious tone and steal some of the Republicans' thunder to boost his 2012 re-election chances.
- Chipmakers Are Spending Again - And Buying Its Ion Implanters. Varian Semiconductor Equipment (VSEA) headed into the new year all charged up.
- U.S. Subpoenas Twitter Over WikiLeaks Supporters. Prosecutors investigating the disclosure of thousands of classified government documents by the anti-secrecy group have gone to court to demand the account activity of several people linked to the organization, including its founder, , according to the group and a copy of a subpoena made public late Friday.
- Facing Scrutiny, Banks Slow Pace of Foreclosures. An array of federal and state investigations into the way banks foreclose on delinquent homeowners has contributed to a sharp slowdown in foreclosures across the country, especially in hard-hit cities like this one. An array of federal and state investigations into the way banks foreclose on delinquent homeowners has contributed to a sharp slowdown in foreclosures across the country, especially in hard-hit cities like this one.
- Is Law School a Losing Game? If there is ever a class in how to remain calm while trapped beneath $250,000 in loans, Michael Wallerstein ought to teach it.
- Facebook Wins Relatively Few Friends in Japan. . Who?
- Pentagon Must 'Buy American,' Barring Chinese Solar Panels. The military appropriations law signed by on Friday contains a little-noticed “Buy American” provision for the Defense Department purchases of solar panels — a provision that is likely to dismay Chinese officials as President prepares to visit the United States next week.
- Guess How Much Larry Summers Will Get Paid To Go To Bermuda And Pal Around With Hedge Fund Managers. Larry Summers isn't wasting any time. Not even a year after announcing his resignation from the position of Obama's Chief Economic advisor (partly because of his close ties with Wall Street), the former Harvard president will be the keynote speaker at May's 17th annual Alpha Hedge Bermuda Global Hedge Fund Summit. It should be more than a fun vacation. Summers gets paid well to speak to Wall Streeters. From Vanity Fair:
- The Amazing Collapse of the Working Teen. (graph) Despite the anemic pace of job creation, December saw a sizable decrease in the headline unemployment rate thanks to a decline in the workforce. A lot of that discussion focused on folks going into early retirement or giving up the search for jobs, but there's another factor, which is the disappearance of teens in the workforce.
- Democratic Strategist Eagerly Pushes Obama to Exploit The Arizona Tragedy. From what we know about Jared Lee Loughner, there's nothing to suggest his politics could be characterized as "Tea Party" or even conservative. Mainly he fits the category known as "whack job," but that won't stop Democrats from figuring out ways to exploit this. POLITICO: One veteran Democratic operative, who blames overheated rhetoric for the shooting, said President Barack Obama should carefully but forcefully do what his predecessor did. “They need to deftly pin this on the tea partiers,” said the Democrat. “Just like the Clinton White House deftly pinned the Oklahoma City bombing on the militia and anti-government people.” From a timing standpoint, the OKC bombing is a good analogy, having come right after Clinton's disastrous midterms, but we're not buying it here, since it's going to be a huge stretch to connect this clearly disturbed fellow to the GOP, especially when one of his own friends described him as more "left".
- On The Four Year Anniversary Of The Paulson - ACA Meeting That Conceived Abacus. Four years ago to the day from Saturday, a team of "experts" from ACA Management took the elevators to the 29th floor of 590 Madison, the then address of Paulson & Co., and sat down to discuss the structuring of a CDO.
- Weekly Recap, And Upcoming Calendar - All Eyes On Europe.
- California Gov. Jerry Brown Wants to Tame Budget With Tax Extensions, Deep Cuts. Jerry Brown's plan, to be revealed Monday, will have something for just about everyone to hate. But it is in giving Californians a dose of painful truth that he hopes to succeed.
- CDS: Hedge or Hog? Are credit default swaps (CDS) legitimate hedging tools or just another way to bet the ponies?
- Europe is Sick. Europe’s debt crisis remains among the most important factors in the global capital markets. By some market-based measures, like interest rate spreads and credit default swap prices, the crisis is more acute now than it was before an assistance package was belatedly cobbled together for Greece, or before the establishment of the temporary European Financial Stability Facility (EFSF) more than half a year ago, or when the ECB began covered and sovereign bond purchases, and since the end of 2010 saw the assistance package for Ireland. The premium, for example, that Greece is forced to by over Germany reached a new record in the first week of 2011, but it is Portugal that is in the cross-hairs.
- Gates Says China Moving Fast On New Weapons. U.S. Defense Secretary Robert Gates, who says China's rapidly developing defense capabilities are worrisome to the United States, arrived Sunday in Beijing for talks about military issues with Chinese leaders. China has made strides in building a new stealth fighter jet, and the United States is also concerned about a new ballistic missile that could theoretically explode a U.S. aircraft carrier nearly 2,000 miles out to sea. China also has apparently beaten U.S. estimates to develop that weapon. Military analysts say China also has been working on destroying satellites in orbit. This capability would enable it to shoot down satellites used by the U.S. military in the event of war. "They clearly have potential to put some of our capabilities at risk," Gates told reporters traveling with him to Asia. "We have to pay attention to them. We have to respond appropriately with our own programs."
- U.S. to Offer More Support to Pakistan. The Obama administration has decided to offer Pakistan more military, intelligence and economic support, and to intensify U.S. efforts to forge a regional peace, despite ongoing frustration that Pakistani officials are not doing enough to combat terrorist groups in the country's tribal areas, officials said.
- Left, Right Struggle to Define Jared Lee Loughner. Liberals and conservatives have rushed to frame Jared Lee Loughner’s motives – in hopes of gaining the upper hand in the debate over the Arizona rampage early, and for months to come. But despite the attempts on both sides, the picture that crystallized this weekend of Loughner was not of someone who identified neatly with politics on the left or the right. In fact, about the only thing that could be said for certain about Loughner – based on his online persona and accounts by former acquaintances — was that he is virulently anti-government and anti-establishment, with a disintegrating state of mind. That didn’t stop both sides from trying to align Loughner with the other – liberals saying he was conservative, conservatives saying he was liberal. In truth, liberals probably had the easier case to make, at first blush – particularly at a time when anti-government sentiments are most closely identified with the tea party movement. Democrats took to the airwaves, blogs and Twitter to link Loughner to the rhetoric of some on the right, including Sarah Palin – even though Loughner himself made no explicit references to Palin or the tea party movement. But conservatives launched an effort to push back hard Sunday, and they, too, had clues to work with in Loughner’s online history. The unintelligible nature of Loughner’s rants – and the lack of any direct evidence that he was influenced by the tea party – bolstered arguments among conservatives, who said Loughner was simply a mentally disturbed individual. Conservatives pointed to several bits of evidence that Loughner may have, in fact, been sympathetic to left-wing politics – with several noting that he listed as among his favorite books Karl Marx’s “Communist Manifesto,” the very antithesis of conservative doctrine.
El Mundo:
- A group of European Finance Ministers suggested that Spain ask for a so-called Flexible Credit Line from the IMF. The Spanish government has ruled out asked for the IMF credit line.
- Rising commodity prices and the secure supply of raw materials are the biggest challenges for German exporters.
- Beatrice Weder di Mauro, a member of the German government's panel of economic advisers, said mechanisms should be set up to manage the insolvency of euro-area states to stabilize the monetary union in the long run. The private sector must also be included in debt restructurings "in the long term," Weder di Mauro said.
- The CD&V, Belgium's Flemish Christian Democratic party, rejected a proposal from Didier Reynders, the country's finance minister, for a short-term government to address the country's budget deficit. The party wants negotiations to continue on forming a government that is "endowed with full responsibilities," Belga said.
- Germany and France will pressure Portugal to seek aid from the European bailout fund soon to prevent contagion to other countries such as Spain and Belgium. "Experts" in the French and German governments believe the southern European country won't be able to raise money on capital markets for much longer, Spiegel said in a preview of a report to be published in its next addition.
- Shanghai may impose a property tax on newly-built homes this quarter, citing a government official.
- China property prices are likely to trend downwards this year, citing a report by the State Information Center. The nation is read for the imposition of a property tax which should be implemented as soon as possible.
- The Chinese municipality of Chongqing may impose a 1% tax on luxury property.
- China's central bank should consider a series of interest rate increases of 50 basis points if the country's consumer prices remain high in the first half of this year, Liu Yuhui, a researcher with the Chinese Academy of Social Science, wrote.
Barron's:
- Made positive comments on (UNP).
- Made negative comments on (SLXP).
- Reiterated Buy on (AAPL), target $390.
- Asian indices are -2.0% to unch. on average.
- Asia Ex-Japan Investment Grade CDS Index 111.0 +3.0 basis points.
- Asia Pacific Sovereign CDS Index 110.25 +5.75 basis points.
- S&P 500 futures -.04%.
- NASDAQ 100 futures +.07%.
Earnings of Note
Company/Estimate
- (SMSC)/.42
- (AA)/.19
- (APOL)/1.35
- (AYI)/.57
- None of note
- None of note
- The Fed's Lockhart speaking, Cowen Consumer Conference, JPMorgan Healthcare Conference and the BofA Merrill Gaming Conference could also impact trading today.
