Evening Headlines
Bloomberg:
- Qaddafi Vows New Crackdown as Violence Spreads. Libyan leader Muammar Qaddafi vowed to fight a growing rebellion until his “last drop of blood,” as parts of the capital of Tripoli resembled a war zone and some of his followers and troops defected to the opposition. In Tripoli, bodies were left in the streets after an attack on protesters by pro-Qaddafi gunmen, the opposition National Front for the Salvation of Libya said. In the eastern city of Benghazi, where the protests began, the flag of the constitutional monarchy overthrown by Qaddafi in 1969 flew on streets and over several buildings and there were no security forces in evidence except traffic police, witnesses said. “In my opinion, the regime is over,” former Interior Minister Abdel Fattah Younes, one of those who defected, said on Al Arabiya television. “Most of the towns and tribes have said they back the revolution,” he said, while urging the Libyan army to join the rebellion.
- Oil Rises From Two-Year High as Libya Unrest Stokes Mideast Supply Concern. Oil rose from the highest close in more than two years as Libya’s violent uprising threatened to disrupt exports from Africa’s third-biggest supplier and spread to other crude-producing nations in the Middle East. Futures for April delivery advanced as much as 0.7 percent, gaining for a fifth day, after Libyan leader Muammar Qaddafi vowed to fight a growing rebellion until his “last drop of blood.” “It’s still the risk that this contagion spreads to Saudi Arabia or Iran, and production in those regions are also tied up,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Crude for April delivery gained as much as 66 cents to $96.08 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.86 at 1:31 p.m. Sydney time. Yesterday, it increased $5.71 to $95.42, the highest since October 2008. Futures are up 21 percent from a year ago.
- China's 'Jasmine' Rally Organizer Calls for Weekly Gatherings in Web Post. Chinese demonstrators should gather every Sunday afternoon at 13 spots around the country to push for an independent judiciary and an end to corruption, according to an open letter posted on a U.S.-based website. The call for rallies in Beijing, Shanghai, Guangzhou and other cities posted on Boxun.com follow gatherings across China on Feb. 20 inspired by revolts in the Arab world. The Chinese protests, known as “Jasmine” rallies after the revolution that toppled Tunisia’s leader in January, began after a similar post on Boxun.com, a Chinese-language news website that reports on unrest and is blocked inside of China. “Without pressure from the people, absolutely no authoritarian government would take the initiative to respect the people,” according to the letter from someone claiming to be an organizer of the Feb. 20 events. “What we need to do now is put pressure on the Chinese ruling party. If the party does not conscientiously fight corruption and accept the supervision of the people, then it will please exit the stage of history.” Scores of Chinese police gathered at the protests sites on Feb. 20, which included a Beijing McDonald’s Corp. restaurant, to quell the demonstrations. Hundreds of people were present at the rally, though only a handful actively participated, the Associated Press reported at the time. Cellphone and Internet networks have blocked messages containing the Chinese words “Jasmine Revolution.” “It is the Chinese people’s common aspiration to safeguard social and political stability, promote social harmony, and safeguard people’s livelihood,” Ma told reporters in Beijing yesterday. “No one nor any force can sway our resolve.”
- Copper Drops for a Third Day as Geopolitical Turmoil May Spread. Copper declined from London to New York on concern that escalating geopolitical tensions may derail the global economic recovery. The metal had its biggest drop in almost seven weeks in Shanghai. Three-month copper on the London Metal Exchange fell for a third day, by as much as 0.7 percent, to $9,514 a metric ton, and traded at $9,541.75 at 10:51 a.m. in Singapore. The contract tumbled 2.3 percent yesterday, the most in a month. All six LME metals declined, paced by a 1.1 percent drop in lead. “Metals are being dragged lower by the risk aversion seen in the other financial markets,” said Li Peiying, an analyst at Essence Futures Co. “With the oil price suddenly jumping, the issue of inflation is once again brought to the fore.” “If high oil prices persist, governments around the world may be more friendly towards raising interest rates,” said Zhang Xuechuan, an analyst at Huachuang Securities Co.
- Dubai Can't Kick Its Building Habit as Glut Lowers Prices. Dubai just can’t kick its building habit. Construction sites are buzzing with work across the Persian Gulf sheikdom more than two years after the financial crisis set off a real-estate slump that caused values to fall by more than 60 percent. In the next two years, tens of thousands of new properties will come onto a market where about 40 percent of homes and offices are empty. Developers have chosen to complete projects started before Dubai’s property market collapsed rather than canceling them and facing a legal obligation to return all advance payments to customers.
- Citigroup(C) Executive Knew of Madoff Fraud, Trustee Suit Says. Citigroup Inc.’s Citibank ignored warning signs of Bernard L. Madoff’s Ponzi scheme, and a bank executive knew the con man’s stated trading strategy couldn’t generate the reported returns, the trustee liquidating Madoff’s firm said in a lawsuit.
- Euro Gets Cold Shoulder at Ballot Box of Anger: Jens Bastian. The result in Hamburg couldn’t have been more punishing for the Christian Democratic Union and for Chancellor Angela Merkel. The first of seven regional elections in Germany this year left no doubt about where German voters stand on a much larger issue: the euro crisis. The race for mayor of the city-state, the equivalent of the premier in other German states, was won by the candidate from the opposition Social Democratic Party, which achieved something that is rare in Germany: an outright majority that can govern without a coalition partner. The CDU’s share of the vote was halved to 21 percent, while the SPD snared more than 48 percent. The Christian Democrats in Hamburg and Berlin were quick to blame local issues for the astonishing protest vote. But the electoral tsunami had deeper causes. Voters are also taxpayers and cast ballots accordingly. Like any other citizen in the euro area, Germans in Hamburg, Berlin or Stuttgart want to know what lies ahead for their personal finances. While the German economy is the euro area’s main growth engine and unemployment is declining, the electorate is uneasy about the government’s loan guarantees for bailouts in Greece and Ireland. For months, they have been waiting to find out how Merkel intends to solve the euro area’s sovereign-debt crisis. The answer so far has been unconvincing.
- Google's(GOOG) YouTube Says It's in Talks to Stream Live NBA, NHL Hockey Games. Google Inc.’s YouTube said it’s in talks with the National Basketball Association and the National Hockey League to broadcast live games, building on the popularity of cricket’s Indian Premier League last year.
- Goldman's(GS) Blankfein Opposed Raising Salaries Before His Tripled. Lloyd Blankfein, Goldman Sachs Group Inc.’s chairman and chief executive officer, warned against raising base salaries on Wall Street less than eight months before his own more than tripled to $2 million.
- Dictator Loses Grip in Desert. On the ground in the eastern chunk of this oil-rich desert nation, the signs of rebellion are plain to see in the armories of a military base near Baida: Weapons crates lie busted open and empty. Rifles are missing from their racks. Left behind are helmets and gas masks and cleaning kits—things that can't shoot. For four days, rebels newly armed with anti-aircraft guns and Kalashnikovs battled forces loyal to Libyan strongman Col. Moammar Gadhafi and commanded by one of his sons. After days of firefights, feints and an ambush on unarmed local sheiks, the regime forces surrendered their hold on the vital local airport Tuesday morning—placing nearly all of eastern Libya outside Col. Gadhafi's control.
- It's Crunch Time for Organized Labor. Labor unions are facing the most direct challenge to their political and financial clout since Ronald Reagan broke the air-traffic controllers union 30 years ago. Across the industrial Midwest, a union stronghold long vital to Democrats and key to President Barack Obama's re-election prospects, Republicans are trying to roll back the powers of not just public-employee unions but also the bargaining and dues-collecting power of groups that represent auto workers and carpenters.
- Indiana Democrats Stage Boycott. Maneuver Aims to Block Union Bill, as in Wisconsin; Thousands Protest Ohio Bargaining Legislation. Indiana Democratic lawmakers Tuesday boycotted legislative sessions to deny Republicans a quorum needed to pass a bill that would restrict union rights in the state, following the lead of Democrats from Wisconsin who used a similar strategy. House Democratic Leader B. Patrick Bauer said Tuesday night that he and fellow Democratic legislators were in Urbana, Ill., and would stay there as long as it took to reach some kind of compromise on the bill.
- Cuomo Pares Authority of Proposed Financial Regulator. New York Gov. Andrew Cuomo, meeting the financial industry halfway, made amendments to his budget that would scale back the financial-enforcement authority he proposed for a new banking and insurance regulator. Mr. Cuomo, a Democrat, narrowed the definition of financial fraud and financial products that would be used by the state's Department of Financial Regulation.
- Nasdaq(NDQ) Weighs Own NYSE(NYX) Bid. Nasdaq OMX Group Inc. is desperate for a date. A week after a rival, New York Stock Exchange parent NYSE Euronext, announced a $10 billion deal to combine with Germany's exchange operator, Frankfurt's Deutsche Börse, Nasdaq has been scrambling to find a partner to survive in the eat-or-be-eaten exchange landscape. The New York company, under Chief Executive Robert Greifeld, is assessing whether it can compete against Deutsche Börse to buy the NYSE, people familiar with the matter said. If it decides it can't mount a strong rival bid, Nasdaq is looking to buy another exchange or sell itself to avoid marginalization in the wake of the tie-up between the NYSE and its German suitors, these people said.
- Big Law's $1,000-Plus an Hour Club. Leading attorneys in the U.S. are asking as much as $1,250 an hour, significantly more than in previous years, taking advantage of big clients' willingness to pay top dollar for certain types of services.
- IEA May Tap Oil Stockpiles. The International Energy Agency, or IEA, will this week discuss at a governing board meeting whether to tap strategic stockpiles of crude oil against a backdrop of continued political turmoil across the Middle East, the agency's head said Tuesday. The IEA's members are so far undecided on whether and when they will need to tap emergency stocks in light of potential production outages in Libya, said Nobuo Tanaka in an interview.
- Emanuel Wins Big in Chicago.
- Private-Share Trade Is Probed. SEC Searches for Conflicts of Interest in Market for Pieces of Firms Like Facebook.
- Cisco's(CSCO) Clients Weigh Options. Some Customers Switch Amid Company's Price, Technology Contest With Rivals.
- ObamaCare Is Already Damaging Health Care. Many of its changes don't kick in until 2014. But the law is forcing dramatic consolidation and reducing choice in the industry. The Republicans who now control the House of Representatives hope to repeal or defund ObamaCare, but the law has already yielded profound, destructive changes that will not be undone by repeal or defunding alone. Active steps and new laws will be needed to repair the damage.
- Hewlett-Packard(HPQ) Shares Take a Hit as Sales Miss Targets. Hewlett-Packard reported revenue that was lower than expected and trimmed its full-year outlook on Tuesday, and the company's shares dropped sharply in extended trading Tuesday. The world's largest technology maker reported sales of $32.3 billion in its fiscal first quarter, a 4 percent increase from $31.177 billion last year but short of the $32.96 billion that analysts expected, according to consensus estimates from Thomson Reuters. HP Chief Executive Leo Apotheker pointed to weak demand among consumers for the sales shortfall. Shares of HP plunged more than 10 percent in late trading.
- Will Raymond Davis Be Murdered?Raymond Davis, the former Special Forces operator and CIA contractor who stands accused of murdering two men in Lahore, Pakistan, is the tipping point of US-Pakistani relations. If he is murdered in his jail cell, as many expect he will be, the Obama Administration will be forced to respond. You don't leave your warriors on the field of battle. You don't let "allies" kill your people. It offends every fiber of Jacksonian America.
- Richard Koo: QE Is Undermining U.S. Economic Policy. Richard Koo, likely the foremost expert in quantitative easing brings us a global perspective on the Fed’s QE2 policy and he believes it is having a strictly negative impact on the USA’s ability to manage its economy. In his latest economic note Koo writes that QE is undermining the USA’s attempts to generate stability:
- Which US Banks Are Managing Billions For The $32 Billion Libyan Sovereign Wealth Fund?
- Korean Bank Run Spreading: Eighth Bank Closes Following "Massive Withdrawals".
New York Times:
Forbes:
LA Times:
- Mexico's Calderon Not So Happy With U.S. Drug War Cooperation. In unusually candid comments, Mexican President Felipe Calderon has criticized U.S. agencies for failing to do their part in the fight against powerful drug cartels.
- Gaddafi's Next Move: Sabotage Oil and Sow Chaos? There's been virtually no reliable information coming out of Tripoli, but a source close to the Gaddafi regime I did manage to get hold of told me the already terrible situation in Libya will get much worse. Among other things, Gaddafi has ordered security services to start sabotaging oil facilities. They will start by blowing up several oil pipelines, cutting off flow to Mediterranean ports. The sabotage, according to the insider, is meant to serve as a message to Libya's rebellious tribes: It's either me or chaos.
- Wisconsin Unions Calling for a General Strike if Walker Plan Passes. In an attempt to follow their European counterparts, public-sector unions in Wisconsin are endorsing a call for a general strike if Governor Scott Walker’s plan passes and is signed into law.
- Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Tuesday shows that 21% 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 -20 (see trends).
- Best Buy(BBY), Home Depot(HD) Find China Market a Tough Sell. Two U.S. retail giants, and one supersized marketplace, have not added up to business success in China. Electronics retailer Best Buy (BBY) began closing its branded stores around the country Tuesday, one month after home-improvement chain Home Depot (HD) shut down its last Beijing outlet.
Reuters:
- Libyan Security Minister Defects - Al Jazeera. Libya's Interior Minister Abdel Fattah Younes al Abidi has announced his defection and support for the "February 17 revolution", news channel Al Jazeera reported on Tuesday.
- China Cracks Down on Lawyers and Activists. Chinese authorities have launched a far-reaching crackdown on lawyers and activists following an online call for a “Jasmine revolution” in the country, in an indication of their concern that the democracy movements sweeping the Middle East could prompt a response in China. China Human Rights Defenders, a rights group, said more than 100 people had had their freedoms restricted since last Friday’s online appeal. The heavy-handed approach is the latest sign that the security forces have gained wide-ranging powers in running the country.
- All Eyes on Bahrain as Gulf Tremors Frighten Oil Markets. Oil analysts are paying very close attention to fast-moving events in Bahrain, fearing that clashes between the island’s Sunni elite and an aggrieved Shi’ite majority could embroil the two Gulf giants of Iran and Saudi Arabia.
- Gaddafis' Hidden Billions: Dubai Banks, Plush London Pads and Italian Water. Libya's oil wealth has been siphoned out of the country by a powerful elite – including Gaddafi and his nine children. The Gaddafi family could have billions of dollars of funds hidden in secret bank accounts in Dubai, south-east Asia and the Persian Gulf, much of it likely to have come from Libya's vast oil revenues, according to analysis by leading Middle East experts. Professor Tim Niblock, a specialist in Middle Eastern politics at the University of Exeter, has identified a gap of several billion dollars a year between the amount Libya makes from its oil reserves and government spending – a shortfall he expects has contributed greatly to the wealth of Muammar Gaddafi and his nine children.
- Germany's banking supervisors are weighing tougher requirements for banks' risk models, which may result in lenders needing more equity capital. Regulators may force banks to subtract hidden liabilities from their equity capital in their models.
- China's central bank told financial leasing companies to control lending growth and will impose "differentiated" reserve requirement ratios on those with excessive loans, citing company officials. The central bank has placed financial leasing in its "society-wide financing" liquidity measure that includes off-balance sheet loans and corporate bond sales.
- Chinese Public Security Minister Meng Jianzhu agreed with North Korean officials on cooperation to stamp out any movement in North Korea sparked by pro-democracy revolts in the Middle East. The agreement was made when Meng visited Pyongyang between Feb. 13 and 15, citing a diplomat.
- The China Iron and Steel Association says steel production in the northern and northeastern parts of the country shouldn't expand capacity over the next five year because of overcapacity and oversupply, citing Chairman Deng Qilin.
- China should improve its capacity to "correctly" deal with internal conflicts, the Chinese Academy of Social Sciences said in a commentary today. Mass events are increasing because of internal pressures, the commentary said.
- China is facing more imported inflation pressure this year because of rising global commodity prices and material costs, citing Yao Jingyuan, chief economist at the nation's National Bureau of Statistics.
- None of note
- Asian equity indices are -.75% to +.25% on average.
- Asia Ex-Japan Investment Grade CDS Index 113.50 +2.0 basis points.
- Asia Pacific Sovereign CDS Index 123.0 +5.0 basis points.
- S&P 500 futures +.33%.
- NASDAQ 100 futures +.20%.
Earnings of Note
Company/Estimate
- (DNR)/.20
- (LAMR)/-.07
- (CHS)/.13
- (TOL)/-.08
- (PWR)/.24
- (SKYW)/.34
- (TFM)/.30
- (DTV)/.63
- (ZLC)/1.27
- (AMT)/.22
- (LOW)/.18
- (FDML)/.28
- (SKS)/.08
- (ETN)/.44
- (TJX)/1.02
- (WBMD)/.42
- (LTD)/1.25
- (ONXX)/-.04
- (EQY)/.26
- (XCO)/.15
- (FLS)/1.96
- (JACK)/.44
- (IPI)/.20
- (VNO)/1.53
- (DLTR)/1.27
- (FLR)/.75
- (PCLN)/3.09
- (FSS)/.08
10:00 am EST
- Existing Home Sales for January are estimated to fall to 5.22M versus 5.28M in December.
- (POT) 3-for-1
- (UGP) 4-for-1
- The Fed's Hoenig speaking, Fed's Plosser speaking, $35 Billion 5-Year Treasury Notes Auction, weekly MBA mortgage applications report, Jefferies Clean Tech Conference, CSFB Paper/Packaging Conference, Lazard Capital Med Tech Event, Goldman Sachs Macro Conference, Robert W. Baird Business Solutions Conference, CIBC Retail/Consumer Conference, (DOX) analyst day, (SMG) analyst meeting, (TXRH) analyst day, (BLDP) investor day and the (WLP) investor conference could also impact trading today.