North American Investment Grade CDS Index 80.66 -.64%
European Financial Sector CDS Index 137.83 bps +5.60%
Western Europe Sovereign Debt CDS Index 173.67 bps +.96%
Emerging Market CDS Index 220.32 -.41%
2-Year Swap Spread 20.0 unch.
TED Spread 20.0 unch.
Economic Gauges:
3-Month T-Bill Yield .11% unch.
Yield Curve 277.0 -3 bps
China Import Iron Ore Spot $189.50/Metric Tonne +.32%
Citi US Economic Surprise Index +68.40 +1.3 points
10-Year TIPS Spread 2.31% unch.
Overseas Futures:
Nikkei Futures: Indicating +40 open in Japan
DAX Futures: Indicating +19 open in Germany
Portfolio:
Higher: On gains in my Ag, Tech and Biotech long positions
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades at a new multi-year high, despite recent equity gains, ongoing Mideast unrest/uncertainty, emerging markets inflation fears and rising eurozone debt angst. On the positive side, Coal, Oil Tanker, Oil Service, Steel and Construction shares are especially strong, rising more than 1.0%. Small-caps are outperforming. Oil is falling -.5% and continues to trade very poorly. Copper is rising +1.94% and continues to trade very well. Moreover, the UBS-Bloomberg Spot Ag Index is falling -.84%, which is also a positive. The 10-year yield is stable at 3.62%. The Citi US Economic Surprise Index remains at the highest level since Sept. 1, 2009. The Saudi sovereign cds is falling -5.34% to 118.32 bps and the Israeli sovereign cds is declining -2.23% to 144.85 bps. On the negative side, Retail, Wireless, Utility, Insurance, Telecom and Defense shares are under mild pressure, falling more than .5%.The Greece sovereign cds is up +5.29% to 909.65 bps, the Brazil sovereign cds is rising +3.35% to 124.0 bps and the Spain sovereign cds is rising +4.80% to 253.25 bps. The Western Europe Sovereign CDS Index has been trending higher over the past week, which is a big negative. Heavily-shorted (GMCR) is exploding higher on volume. While I am not currently long this stock, it is another situation that should give the bears pause. The major US averages are continuing their slow grind higher, despite potential headwinds, which is a big positive. The import price index, released tomorrow, will likely exceed estimates. I will monitor the 10-year yield's reaction to this data closely. I expect US stocks to trade mixed-to-higher into the close from current levels on earnings optimism, short-covering, technical buying, US fund inflows, buyout speculation and falling energy prices.
Geithner Quietly Tells Obama Debt-to-GDP Cost Poised to Increase to Record. Barack Obama may lose the advantage of low borrowing costs as the U.S. Treasury Department says what it pays to service the national debt is poised to triple amid record budget deficits. Interest expense will rise to 3.1 percent of gross domestic product by 2016, from 1.3 percent in 2010 with the government forecast to run cumulative deficits of more than $4 trillion through the end of 2015, according to page 23 of a 24-page presentationmade to a 13-member committee of bond dealers and investors that meet quarterly with Treasury officials. Net interest expense will triple to an all-time high of $554 billion in 2015 from $185 billion in 2010, according to the Obama administration’s adjusted 2011 budget. “It’s a slow train wreck coming and we all know it’s going to happen,” said Bret Barker, an interest-rate analyst at Los Angeles-based TCW Group Inc., which manages about $115 billion in assets. “It’s just a question of whether we want to deal with it. There are huge structural changes that have to go on with this economy.”The amount of marketable U.S. government debt outstanding has risen to $8.96 trillion from $5.8 trillion at the end of 2008, according to the Treasury Department. Debt-service costs will climb to 82 percent of the $757 billion shortfall projected for 2016 from about 12 percent in last year’s deficit, according to the budget projections. “If government debt and deficits were actually to grow at the pace envisioned, the economic and financial effects would be severe,” Federal Reserve Chairman Ben S. Bernanke told the House Budget Committee Feb. 9. “Sustained high rates of government borrowing would both drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living.”
Republicans Dismiss Obama Budget as 'Path to Bankruptcy'. President Barack Obama’s $3.7 trillion budget sets off a clash with congressional Republicans who seek deeper spending cuts. Obama’s first budget request since Republicans took House control was met immediately today with demands for a far bolder reshaping of government. House Speaker John Boehner, an Ohio Republican, said the president’s plan “will destroy jobs by spending too much, taxing too much and borrowing too much.” He promised a rival plan for 2012 within weeks. Republicans said the president ignored the need to address the growth of entitlement programs, such as Social Security and Medicare, that make up most government spending. “The president’s budget accelerates our country down the path to bankruptcy,” House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, said in a statement. He said the plan “puts the government on track to nearly double in size since the day he took office -- a direct result of his party’s reckless spending spree.” The current fiscal year’s deficit is forecast to reach a record $1.6 trillion -- 10.9 percent of gross domestic product. “I still don’t see a sense of urgency from the president about the massive federal debt,” Senator Lamar Alexander of Tennessee, the third-ranking Republican, said in a statement. He said Obama’s blueprint calls for too much government borrowing. Republican Senator John Cornyn of Texas called the budget proposal “timid.”
Gross Cuts Government Holdings to Lowest Since 2009. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., reduced its holdings of government related debt to the lowest level since January 2009 while saying low yields cheat investors. Gross cut the proportion of U.S. government and related securities in Pimco’s $239 billion Total Return Fund to 12 percent of assets in January from 22 percent in December, according to the Newport Beach, California-based company’s website. He increased the percentage of cash equivalent holdings to 5 percent, the highest since April. Policy makers are robbing savers by driving down realinterest rates as they keep borrowing costs at record lows in a “devil’s bargain,” Gross said in his monthly investment commentary on Feb. 2. Because of so-called easy monetary policies in developed countries, combined with larger debt loads and increasing inflation expectations, investors in developed market sovereign debt are taking a “haircut,” he said.
'Swipe' Fee Cap May Force Fees, Job Cuts, Bankers Say. U.S. community banks may eliminate free products, fire workers and shelve expansion plans if the Federal Reserve imposes proposed debit-card “swipe” fee caps, according to a survey conducted by a trade group. The caps, required by the Dodd-Frank Act, are “deeply flawed,” and an exemption for firms with less than $10 billion in assets won’t shield smaller banks from its negative effects, Independent Community Bankers of America President Camden Fine said in a statement. To back up its case, the group plans to release results of a survey today highlighting steps it says bankers would have to take in response to the new rule. Of the bankers surveyed, 93 percent said they would be required to charge customers for services that are currently free. Another 50 percent said they would charge customers a fee each time they use a debit card.
Copper Rises to Record in London After China's Imports Increase. Copper rose to a record in London after imports increased in China, the world’s largest metal consumer. On the Comex in New York, copper futures for March delivery rose 8.95 cents, or 2 percent, to $4.6255 a pound.
Wall Street Journal:
Consumer and Business Spending to Spur Expanding U.S. Economy. A newly resilient economy is poised to expand this year at its fastest pace since 2003, thanks in part to brisk spending by consumers and businesses. In a new Wall Street Journal survey, many economists ratcheted up their growth forecasts because of recent reports suggesting a greater willingness to spend. "We're in a lot different place from last year," said Goldman Sachs's Jan Hatzius, who last year was one of the most bearish economists on Wall Street, but now is among the most optimistic on growth. The 51 economists polled—not all of whom answer every question in the survey—expect gross domestic product will be 3.5% higher in the fourth quarter of 2011 than a year earlier, up from the 3.3% increase they projected in last month's survey. That would be the largest increase since 2003. They look for GDP to expand at a 3.6% annual rate in the current quarter, accelerating from the 3.2% rate recorded in the final months of 2010.
Bahraini Police Break Up Protests. Bahraini riot police fired tear gas and rubber bullets to disperse protesters Monday, according to eyewitnesses, while thousands of Yemenis returned to the streets for a third day of demonstrations, with regime supporters and protesters facing off violently with each other in the capital, San'a.
Obama Budget Includes Derivatives Fees for CFTC. The Obama administration's fiscal-2012 budget proposes new derivatives fees for entities regulated by the Commodity Futures Trading Commission, a way to boost the regulator's funding as it gears up to police the $583 trillion over-the-counter derivatives market. The Obama budget includes about $117 million in proposed CFTC fees. The agency would see its funding jump to $308 million in fiscal year 2012, up from roughly $168 million in 2010.
European, North African Debt Markets Pressured by Higher Risk. The cost of insuring debt rose for European and Middle Eastern countries Monday as sovereign default worries in Greece and Ireland coincided with spreading political unrest in North Africa and the Persian Gulf.
Obama's Approval Rating Slips Further in Michigan, Survey Says. Michiganders are optimistic about the next year financially, despite 43% who say their personal finances are worse than a year ago, according to a survey last fall released today by Michigan State University. And Michigan’s opinion of President Barack Obama continues to plummet; only 33% rate his job performance fair or excellent, his lowest level yet in the state.
Benzinga:
Charlie Gasparino: CME(CME) Could Go Hostile for NYSE Euronext(NYX). Charlie Gasparino is reporting that a potential love triangle could be happening between the CME Group (NASDAQ: CME), NYSE Euronext (NYSE: NYX) and Deutsche Borse could be happening. The CME could pursue a hostile bid for the NYSE, and the company refuses to deny the speculation. Gasparino is reporting that the CME has the money to bid for NYSE Euronext, and there are a bevy of other options that the CME has for the plans of the NYSE.
Reuters:
China Gets First Official Hedge Fund.China's hedge fund industry took a small but significant step on Monday as Guotai Junan Securities Co readies a $45 million (28 million pound) hedge fund, the first such product approved by securities regulators. The move, if successful, could spur other brokerages, fund managers and even trust firms to follow suit, sowing the seeds for China's own George Soros or James Simons.
EchoStar(SATS) to Buy Hughes Communications(HUGH) for $1.33 Billion. EchoStar Corp agreed to buy Hughes Communications Inc for about $1.33 billion as the digital set-top box maker looks to beef up its satellite television and broadband services. Hughes is one of the world's largest providers of broadband satellite services and the deal could give EchoStar the width to expand its customer base and its array of services, including mobile television and Internet Protocol TV.
BofA Merrill Lynch Raises S&P 500 EPS Outlook. Bofa Merrill Lynch Global Research has raised 2011 and 2012 S&P 500 .SPX earnings-per-share (EPS) estimates, citing a pickup in growth and strong fourth-quarter reporting. The estimates on the S&P 500 for 2011 was raised to $95 from $93 and to $102 from $99 for 2012. The new 2011 target is a 12 percent EPS growth from 2010, BofA said in a research note. "We expect sales growth of 7.5 percent and 7 percent for 2011 and 2012 driven by strong business capex, exports and foreign sales on healthy global GDP growth and acquisition." But BofA retained its target on the S&P 500 at 1,400 for 2011.
Drugmakers Could Take Hit Under Obama Budget. Big pharmaceutical companies could face increased competition from generic drugmakers under two proposals put forth by the Obama administration on Monday. President Barack Obama, as part of his 2012 budget proposal, called for cutting the number of years drugmakers could exclusively market brandname biologic drugs to 7 years from 12.
Greece will probably have to restructure its debt as interest payments rise, Lars Feld, who is joining Germany's council of economic advisers, was quoted as saying.
Caijing:
Beijing vehicle sales may fall by 60 billion yuan this year after the city issued measures to limit the number of automobiles, citing local government estimates.
Egypt Army Suspends Constitution, Meets Protester Demand. Egypt’s ruling army council said it aims to hand power to a democratically elected government within six months, after almost three weeks of popular unrest ended 30 years of autocratic rule by President Hosni Mubarak. The Supreme Council of the Armed Forces yesterday dissolved parliament, suspended the constitution and said it would rule until general elections take place. The council also formed a committee to introduce constitutional changes, according to a statement read on state television yesterday. Protesters want the amendments to make it easier to run for president, set term limits on the presidency and cancel the constitutional authority for anti-terrorism measures such as arbitrary arrest, searches and military tribunals.
Hedge Funds Increase Bullish Wheat Bets to Highest Since 2007. Hedge funds increased their bullish bets on wheat to the highest in more than three years amid shrinking global supplies and mounting concern that food inflation will accelerate. In the week ended Feb. 8 on the Chicago Board of Trade, the funds and money managers increased net-long positions, or wagers on rising prices, by 19 percent to 51,787 contracts, the highest since August 2007, government data showed on Feb. 11. On Feb. 9, wheat prices reached a 29-month peak of $8.9325 a bushel. “The sensitivity of the world’s populace to food inflation, the cost of a loaf of bread, is a concern and may actually be one of the catalysts for the groundswell of support for changing existing regimes around the world,” John Thorpe, a senior broker at Cannon Trading Co. in Beverly Hills, California, said in a telephone interview on Feb. 11. “Just from a macroeconomic view, that’s probably why hedge funds may be jumping on here.”
Queensland Floods Spur U.S. Coal Exports to Highest in 15 Years. The biggest floods in Queensland, Australia, in half a century are turning into a windfall for U.S. coal mining companies anticipating record profits and the highest exports in 15 years. Shipments from the U.S. are poised to rise 8.8 percent this year to about 86.5 million tons, the most since 1996, the Energy Department in Washington said Feb. 8. Demand for American coal is increasing after floods devastated an area of Australia twice the size of Texas.
Japan's GDP Contracts, Surpassed by China in 2010. Japan’s gross domestic product fell less than estimated in the fourth quarter in a pullback that may prove temporary as overseas demand revives production after the nation fell behind China as the world’s second-largest economy. The annualized 1.1 percent drop in GDP in the three months through December was driven by a slowing in exports and fading of government stimulus programs, Cabinet Office figures showed today in Tokyo. The median forecast of 26 economists surveyed by Bloomberg News was for a 2 percent drop.
Pakistan's Government Will Help Court Execute Arrest Warrant for Musharraf. Pakistan’s government will assist courts seeking to implement an arrest warrant for former military leader General Pervez Musharraf, the Information and Broadcasting Minister Firdous Ashiq Awan said. Any court directions will be followed and all possible cooperation will be provided, the state-run Associated Press of Pakistan cited the minister as saying yesterday in the capital, Islamabad. The government will contact Interpol, the international police organization, requesting Musharraf be detained if a court order is issued, according to a report from the Associated Press.
Emergency Medical(EMS) Said to Be Near $3.1 Billion Sale. Emergency Medical Services Corp. is near an agreement to be acquired by private-equity firm Clayton Dubilier & Rice LLC in a leveraged buyout valued at about $3.1 billion, three people familiar with the matter said.
Laffer Curve Pays Billions If Obama Just Asks: Kevin Hassett. The U.S. is about to have the highest corporate tax rate in the developed world because our competitors have noticed that revenue goes up as rates go down. Multinational corporations today nimbly move their profits to the friendliest environment, rewarding tax havens like never before. It looks as if President Barack Obama and congressional Democrats are going to miss out on the single biggest policy opportunity for the U.S. this year because of their ideological resistance to the idea that lower rates can increase revenue, also known as the Laffer curve.
China Profits From Solar-Power Strategy as Europeans Backpedal. Europe, which attracted more than $65 billion in solar plant investment in 2010, is providing lessons for China. Germany, the largest panel market, together with Spain and France carried out four unscheduled subsidy cuts in 2010, trying to slow a torrent of projects by developers and speculators.
Wall Street Journal:
Mideast Unrest Spreads. Protests Target Iran, Bahrain, Libya; Egypt Dissolves Parliament, Sets Elections. As Egypt's new military leadership suspended the constitution, dissolved parliament and promised fresh elections, demands for similar political reform swept across the Arab world—from Libya to Iran—following the resignation of President Hosni Mubarak. Egypt's dramatic moves incorporate many demands issued during the mass demonstrations by doing away with the institutional framework that buttressed Mr. Mubarak's three-decade rule. But the military's new road map for governing Egypt in the short term came down by fiat, without input from the political opposition, raising questions about how deeply the military understands the democratic process and the demands of modern politics.
Trouble in Acapulco's Paradise. A string of gruesome drug-war murders has made tourists think twice about visiting the fabled beach town. Acapulco was once the playground for Hollywood's jet set. Nowadays, the resort has become a battleground for Mexican drug cartels.Last year, more than 400 people died as rival drug gangs fought for control of the port city of more than one million. On a recent blood-soaked weekend, more than 30 bodies were found dumped in parts of the city, many missing their heads.
Pro-Democracy Activists turn Attention to Gadhafi. In the wake of the resignation of Egypt's Hosni Mubarak, online activists are threatening to test one of the Arab world's most repressive regimes: Col. Moammar Gadhafi's Libya. Expatriate activists and an amorphous group of bloggers and social-network users—it isn't clear how many of them are in Libya—are calling for protests across the oil-rich North African nation on Thursday.
Public-Worker Unions Steel for Budget Fights. Public-sector unions have begun using their clout against efforts to roll back government workers' wages and benefits, cut jobs and curtail contract bargaining rights as political leaders from both parties look for ways to cut spending.
GOP to Block Renewal of Build America Bonds Program. Key Republicans signaled they would block renewal of the Build America Bonds program as the Obama administration prepared to reinstate the bonds in the 2012 budget plan due Monday. Build America Bonds were originally introduced as part of the $787 stimulus program in 2009 but expired at the end of last year. They allowed states and localities to sell taxable bonds and receive a federal subsidy payment from the Internal Revenue Service equal to 35% of the interest costs on their bonds. But Sen. Orrin Hatch (R., Utah), the ranking Republican on the Senate Finance Committee, said late Friday that BABs were "simply a disguised state bailout." "These bonds rightly expired at the end of 2010 and it is my hope the Obama administration does not try to resurrect such a nonsensical provision in their upcoming budget," he said. The Obama administration will propose reintroducing BABs, according to three people outside the administration who were briefed on the matter.
Zynga's Talks With Investors Value Gaming Concern at Over $7 Billion. Social-gaming company Zynga Inc. is holding discussions with potential investors about raising around $250 million in new funding in a deal that could value the three-year-old start-up at between $7 billion and $9 billion, according to people familiar with the matter.
For Big Board Chief, It's Hero or Goat. When Duncan Niederauer took over as chief executive of the New York Stock Exchange's parent company, NYSE Euronext(NYX), he claimed he wasn't a big deals guy. Three years later, Mr. Niederauer is closing in on what is likely to be the NYSE's largest, most controversial, and probably last, transaction.
Bloomberg Businessweek:
China Plans Panel to Scrutinize Foreigners' Local Acquisitions. China plans to create a ministerial panel to review takeovers of local companies by foreign investors. The panel will be led by the National Development and Reform Commission and the Ministry of Commerce and will be overseen by the State Council, according to a statement published today on the council’s website. Coming under scrutiny will be acquisitions involving military industrial companies and others relating to national defense, the statement said. It also will look at takeovers involving producers of agricultural goods, energy and natural resources, as well as companies in some parts of the infrastructure and transportation-services industries.
The Queen of All Media Needs a Cash Infusion. Discovery Communications(DISCA) is pumping another $50 million into a joint venture for Oprah's new cable channel, bringing its total investment to $239 million, less than two months after OWN launched to much fanfare. Nearly three years in the making, OWN: The Oprah Network debuted on Jan. 1, taking over the slot occupied by the Discovery Health Channel. After a big debut that averaged 583,000 viewers in primetime the first week, OWN has seen its ratings fall below those of the channel it replaced.
A Terrorist Involved In The London Subway Bombing Is Back On The Street After Helping The FBI. An American jihadist who set up terrorist training camps in Pakistan has been freed after less than five years in jail, according to a Guardian investigation. Mohammed Junaid Babar was sentenced last December to "time served" due to "exceptional co-operation" with the FBI. This means he was released after four and a half years in jail. Babar is also rumored to have been working with the US government as an informant before his arrest. Needless to say, the British are furious that a man who trained the perpetrators of the London Subway Bombing has been freed. Americans won't like to hear it either.
What Part of Bernanke's Secret FCIC Interview Constitutes a Disclosure of National Secrets? Now that the FCIC has declassified all of its interviews with the people responsible, or profiting, for the housing crisis (among which are those of John Paulson, Hank Paulson, Lloyd Blankfein, Dick Fuld, Jonathan Egol (the man who helped Fab Tourre construct Abacus), Alan Greenspan and of course Agent Orange himself - Angelo Mozilo), there is one interview strangely withheld. That of the man largely at the heart of everything - Ben Bernanke.
Paulson Denies Culpability in Crisis, Yet Even Bear Turned Down His Deals. This serves to illustrate that many conventional analyses even now tend to miss the dramatic deterioration in underwriting standards. The use of low and no doc loans rose rapidly from 2004 onward, and these pools were particularly favored by the subprime shorts. Moreover, we now know how some aspects of the underwriting were abused, for instance, by the use of inflated appraisals, so analyzing historical data will not provide a full measure of the fall in underwriting standards. Yet digging into the comfortable narrative of the subprime shorts as heros, or at least harmless, would reveal yet another viper’s nest of bad practices and abuses. The officialdom seems determined to push onward with its “look forward, not back” stance, which means the perps will be able to engage in similar types of looting when the opportunity next presents itself.
Forbes:
Tablets Get High Definition "Telepresence' Mobile Chat. Mobile video chat is one of those ideas that is attractive in theory but little-used in the real world due to poor experience, device limitations and data consumption. A new service aims to spur adoption by increasing videoconferencing quality on tablets and smartphones and opening up the range of applicable devices while keeping bandwidth usage low.
AppleInsider:
Apple's(AAPL) iPad "running far ahead" in Enterprise Adoption. Apple has taken a significant lead in the corporate world with the success of its iPad tablet, said one analyst, while predicting the company will sell 33.7 million iPads this year. Barclays analyst analyst Ben Reitzes said Friday that when it comes to the corporate world, the iPad is "running far ahead of its tablet competition and its their game to lose," Barrons reports. Reitzes' report stems from a conference call with a research Forrester Research analyst. According to Reitzes, Apple hasn't established an enterprise salesforce, but the iPad maker is "listening to enterprise customers." The report noted that Forrester's research indicates that corporate users are "buying devices and bringing them into work" in increasing numbers. Apple is the "winner in the consumerization of IT," said Reitzes. Reitzes sees Apple ending the calendar year with sales of 33.7 million iPads, a more than 70 percent share of the 47 million tablets he predicts will sell in 2011. He has an Overweight rating on Apple stock, with a $450 price target.
Ugandan opponents to President Yoweri Museveni are threatening protests similar to those in Egypt if elections scheduled for next week are manipulated. Opposition candidate Kizza Besigye said the vote will be flawed because the electoral commission favors Museveni.
Reuters:
Armed Yemeni Government Supporters Break Up Protest. Pro-government demonstrators armed with knives and batons broke up a protest on Saturday by around 2,000 Yemenis inspired by the overthrow of Egypt's president.
DB NYSE Group May Be Name for Giant Exchange - Sources. Deutsche Boerse and NYSE Euronext plan to call a combined company DB NYSE Group and will likely sidestep thorny issues of technology in a bid to strike a merger deal by Tuesday, two people close to the negotiations said. The Frankfurt- and the New York-based exchange operators are edging toward an outline deal to be agreed on Tuesday or Wednesday of next week, one source said on Saturday. The two Europe-based sources said the sides have still not finalized a merger document that can be presented to Deutsche Boerse's board of directors, confirming earlier reports.
G20 Sees 2 Steps to Tackling Global Imbalances - EU. Finance ministers from the world's 20 biggest developed and developing economies (G20) are likely to agree next week on a two-stage approach to tackling global economic imbalances, a European Union document showed. Such imbalances, reflected in the current account balance, private and public savings, debt and capital flows, can trigger or augment crises, destabilising the world economy. G20 leaders agreed in November to find a way to tackle them. The first step would be to identify the imbalances using an agreed set of economic indicators and benchmark values. The second step would be to analyse the causes of the imbalances and possibly make policy recommendations on how to deal with them.
Abbas' Cabinet to Resign on Monday - Sources. The Palestinian cabinet will tender resignations Monday after which Prime Minister Salam Fayyad will select new ministers at the request of President Mahmoud Abbas, political sources said. The shake-up, disclosed to Reuters Sunday, was long demanded by Fayyad and some in Abbas's Fatah faction. It follows the fall of Egyptian President Hosni Mubarak to a popular revolt that has set off reform calls throughout the Arab world.
Weber Says European Opposition Reason He Bowed Out. Bundesbank president Axel Weber confirmed on Saturday he would not be a candidate to head the European Central Bank, blaming resistance in some European countries to his hardline monetarist stance. In an interview with Der Spiegel magazine released on Saturday, Weber said he feared the credibility of the office would have suffered if as ECB president he held a minority view on key questions, pointing to his "clear position" in the last year on important decisions.
Financial Times:
US Woos Sovereign Funds in AIG(AIG) Sale. The US government and AIG want to entice sovereign wealth funds to buy a large portion of the authorities’ sale of up to $20bn-worth of shares in the insurer, according to people close to the situation.
Time to Tax Short Selling. The European Union should adopt the draft regulation on disclosure and curbs on short sales and credit default swaps, and then tax short selling. This would reverse the dangerous usurpation of financial markets by hedge funds. Consultants Oliver Wyman noted last May that market observers were unaware short sales now account for 20-30 per cent of equity trading. Such a figure is consistent with McKinsey’s estimate in its 2007 paper, The New Power Brokers, of hedge funds accounting for 30-60 per cent of trading on London and New York exchanges.
Telegraph:
Egypt: Hosni Mubarak Used Last 18 Days in Power to Secure His Fortune. Hosni Mubarak used the 18 days it took for protesters to topple him to shift his vast wealth into untraceable accounts overseas, Western intelligence sources have said. The former Egyptian president is accused of amassing a fortune of more than £3 billion - although some suggest it could be as much as £40 billion - during his 30 years in power. It is claimed his wealth was tied up in foreign banks, investments, bullion and properties in London, New York, Paris and Beverly Hills. In the knowledge his downfall was imminent, Mr Mubarak is understood to have attempted to place his assets out of reach of potential investigators.
Sunday Express:
Barclays Plc(BCS), Britain's third-largest bank, is poised to double its annual divident to more than $912 million.
Wei Wen Po:
China should use "quantitative tightening" to counter the effects of the U.S.'s second round of quantitative easing, citing Li Yang, a researcher at the Chinese Academy of Social Sciences. China should "actively participate" in the building of a new global financial order, Li said.
Weekend Recommendations Barron's:
Made positive comments on (DVN).
Citigroup:
Reiterated Buy on (HOLX), target $24.
Night Trading
Asian indices are +.75% to +1.50% on average.
Asia Ex-Japan Investment Grade CDS Index 107.50 -1.5 basis points.
Asia Pacific Sovereign CDS Index 121.0 -.75 basis point.
The Fed's Dudley speaking, $32 Billion 3-Month and $30 Billion 6-Month Treasury Bills Auctions, BIO Investor Conference and the Mobile World Congress could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by technology and real estate shares in the region. I expect US stocks to open mixed and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the week.
BOTTOM LINE: I expect US stocks to finish the week mixed as mostly positive earnings reports, technical buying and short-covering offset eurozone debt angst, Mideast unrest, emerging market inflation worries and US housing concerns. My intermediate-term trading indicators are giving mostly bullish signals and the Portfolio is 100% net long heading into the week.
