Fed's Rules Let Brokers Turn Junk Into Cash at Height of Financial Crisis. At the height of the financial crisis, the Federal Reserve allowed the world’s largest banks to turn more than $118 billion in junk bonds, defaulted debt, securities of unknown ratings and stocks into cash. Collateral of those asset types made up 72 percent of the total $164.3 billion in market-rate securities pledged to the Fed on Sept. 29, 2008, two weeks after the bankruptcy of Lehman Brothers Holdings Inc., according to documents released yesterday. The collateral backed $155.7 billion in loans on the largest day of borrowing from the Primary Dealer Credit Facility, which was created in March 2008 to provide loans to brokers as Bear Stearns Cos. collapsed.
Libya-Owned Bank Drew at Least $5 Billion From Fed. Arab Banking Corp., a lender part- owned by the Central Bank of Libya, used a branch in New York to borrow at least $5 billion from the U.S. Federal Reserve as credit markets seized up in 2008 and 2009. The bank, then 29 percent-owned by the Libyan state, drew $1.1 billion from the Fed’s so-called discount window in October 2008, including $450 million during the week when hundreds of financial firms borrowed a record amount of emergency funding from the U.S lending program, according to data released by the Fed today. Arab Banking Corp. also owed about $4 billion to the Fed under other bailout programs in the fall of 2009, data released in December show. Arab Banking Corp. received an exemption that allows the firm to continue operating while prohibiting it from engaging in any transactions with the government of Libya, according to the Treasury Department. “It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” said Senator Bernard Sanders of Vermont, an independent who caucuses with Democrats, in a letter to Fed and U.S. officials. The letter was addressed to Fed Chairman Ben S. Bernanke, Treasury Secretary Timothy F. Geithner and John Walsh, acting comptroller of the currency. The figure refers to the aggregate amount of loans the bank received under U.S. lending programs. Arab Banking Corp. said Dec. 2 that Libya’s stake in the Manama, Bahrain-based company had increased to 59 percent.
Oil Rises to 30-Month High on Concern Libya Conflict to Prolong Supply Cut. Oil rose to the highest in 30 months in New York on concern the conflict in Libya, Africa’s third- largest exporter, will prolong production cuts and spread to Middle East producers. Futures advanced as much as 0.9 percent, extending the biggest quarterly rally since 2009, as troops loyal to Libyan leader Muammar Qaddafi retook control of the oil port of Ras Lanuf and shelled Brega, another energy hub. Libyan oil output fell 72 percent in March to a 49-year low, and OPEC production slid 1.2 percent, a Bloomberg News survey showed.
Corn Extends Advance on Concern Higher U.S. Acreage Won't Boost Stockpiles. Corn futures jumped after surging the most allowed by the exchange yesterday on speculation an expansion in plantings in the U.S., the world’s largest grower and exporter, may not be enough to rebuild global stockpiles. May-delivery corn advanced as much as 5.7 percent to $7.33 a bushel on the Chicago Board of Trade, extending yesterday’s 4.5 percent gain. Futures traded at $7.3125 a bushel at 10:59 a.m. in Singapore, a 6.1 percent advance this week.
SEC Said to Investigate Sokol Over Lubrizol Stock Purchases. David Sokol, the Berkshire Hathaway Inc. (BRK/A) manager who resigned after disclosing that he bought stock in a firm whose takeover he helped negotiate, is being investigated by U.S. regulators, a person with knowledge of the matter said. The Securities and Exchange Commission is probing whether Sokol, 54, bought shares in Lubrizol Corp. (LZ) on inside information that Berkshire was considering buying the company, said the person, who declined to be identified because the investigation is secret. The SEC is seeking records from Sokol’s brokerage and examining trading data from the Financial Industry Regulatory Authority, the person said.
Australia Boom Pays Men Without Degree More Than Bernanke. Travis Marks, a 24-year-old with no college degree, is hitting pay dirt as Australia’s mining bonanza fuels demand for workers. Already making triple the nation’s average salary, he expects to get even richer. “With what’s going on in the industry, there’s lots of big jobs coming up,” said Marks, who earns A$220,000 ($227,150) a year -- more than Federal Reserve Chairman Ben S. Bernanke’s $199,700. His job as a rigger for a company providing construction and maintenance services to the resources industry is “a really good way to get ahead as a young bloke,” he said. Reserve Bank of Australia Governor Glenn Stevens faces a developed-world rarity: wage pressure in an economy near full employment.
Hong Kong House Prices Likely to Drop 25-30% as Rates Rise, Barclays Says. Hong Kong housing prices are likely to drop by 25-30 percent as mortgage rates climb to 4-4.5 percent by the end of next year, Barclays Capital said. The “debt-fuelled property price rally since mid-2007 is entering its last leg as rising mortgage rates signal a reduction in affordability and purchasing power,” analysts led by Andrew Lawrence wrote in a report dated today. “The end result of the removal of this liquidity is likely to be a property price correction, reflecting our belief that property markets top out soon after liquidity has been most abundant.”
Almost one in five of China's state-run coal-fired power plants faces bankruptcy because rising fuel costs are eroding earnings while electricity prices are frozen, according to China Power International Development Ltd. Eighty-four of the 436 plants owned by the nation's biggest power producers aren't financially viable and more than half made losses in 2010, Shou Rufeng, an investor-relations official at Hong Kong-listed China Power, said by phone today, citing statistics from the country's five largest utilities. China's electricity prices haven't risen since November 2009, while power-station fuel costs surged, as the government controls tariffs to contain inflation. The average benchmark price for coal for immediately delivery at Qinhuangdao, China's largest port for the commodity, rose 25% last year. "The only way to help the nation's coal-fired power plants is to raise electricity prices but the government may become more cautious as inflation is likely heating up, even though there are rumors of a price hike," Zhang Shun, an analyst with Ping An Securities Co., said by phone from Beijing today.
Wall Street Journal:
Ragtag Rebels Struggle in Battle. The rebels battling Libyan leader Moammar Gadhafi are suffering from significant military shortcomings, including a shortage of trained fighters, a limited ability to control their own troops and growing problems for Western warplanes trying to distinguish between Libyan army forces and civilians. The military deficiencies help explain the recent, dramatic swings of fortune for rebels. The problems also are forcing the U.S. to consider new options—including using covert Central Intelligence Agency teams to work directly with anti-Gadhafi forces to improve the accuracy of airstrikes and avoid errant attacks.
Egypt's Top Spy a U.S. Concern. When Egypt's new intelligence chief quietly flew to Syria's capital for a day of meetings last month, his American counterparts took note. What was Murad Muwafi, the new Egyptian spymaster, doing in Damascus? With whom was he meeting? "Honestly, we have our ideas, but we don't know anything for certain," said a senior U.S. defense official, who didn't elaborate on what those ideas might be. "I wouldn't say we're worried—not yet. Concerned is probably a better word."
Investors Move Onward and Upward. Dow Gains 6.4%, Posts Best First Quarter in 12 Years in Tumultuous Period. Overcoming a pair of major shocks in the first quarter, global financial markets recovered amid growing optimism that the recovery from the financial crisis had become self-sustaining.
Report Cites Fannie, Freddie Executive Pay. A federal watchdog criticized federal regulators' oversight of executive pay packages for top officials at Fannie Mae and Freddie Mac in a report published Thursday. The top six executives at the mortgage giants earned $35 million in the last two years, according to the report from the inspector general of the Federal Housing Finance Agency, which regulates the mortgage giants. The firms were taken over by the government in 2008 and have cost taxpayers $134 billion.
Subprime Bonds Are Back. Subprime and other residential mortgage bonds that helped trigger the financial crisis are back in vogue with long-term investors, in the latest sign that American credit markets are healing after the worst downturn in a generation. The prices on a representative slice of the subprime bond market have doubled from 30 cents on the dollar at the low point of the crisis to roughly 60 cents today. Their comeback underscores how investors have regained the courage to take on more risk as the economy recovers, pushing up the prices of a broad swath of riskier assets
Oracle's(ORCL) Hurd Says Directors Will Soon Be Auditing IT Security. Oracle President Mark Hurd was in New York yesterday for the Oracle Chief Security Officer Summit, an all-day conference for Oracle customers and prospects. He said in a short speech that he thinks corporate boards are going to start taking responsibility for IT security as part of their routine corporate governance duties. “There is talk of making risk management a staple of every board… Board members do not like this. IT security is not an event. It is an ongoing risk. And that is one reason that people don’t like dealing with the subject,” he said. All it will take is a “significant attack” on a large company and the pressure will grow for boards to step up, he added.
Intuit(INTU), Salesforce.com(CRM) Team Up to Target Small Businesses. The two companies on Friday are set to announce a partnership that marries Intuit’s accounting software for small businesses with Salesforce.com’s sales-automation offerings–all handled over the Web, or in the cloud, as many industry executives put it these days.
Big Banks Back 'Say on Pay'. Goldman Sachs Group Inc.(GS), J.P. Morgan Chase & Co.(JPM), Morgan Stanley(MS) and other financial firms are expected to recommend in coming proxy filings that shareholders get an annual vote on executive-pay practices, according to people familiar with the matter.
We've Become a Nation of Takers, Not Makers by Stephen Moore. More Americans work for the government than in manufacturing, farming, fishing, forestry, mining and utilities combined. If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.
Japan Will Take Control of Nuke Operator TEPCO Via Fund Injection. Japan will take control of Tokyo Electric Company, operator of Fukushima Nuclear Plant, via public fund injection, according to Reuters. Although the government is unlikely to take more than a 50 percent stake, the fund injection will give the government some level of management control, an official told the Mainichi Daily news.
Buffett's Handling of Deputy Baffles Some Experts. Warren E. Buffett is an old-school capitalist with a rock star’s aura, a global celebrity who is revered like a small-town hero. Yet that carefully cultivated image — the envy of nearly every top executive — risks being tarnished by a disclosure that he knew one of his right-hand executives had bought shares in a company before Mr. Buffett’s company announced a deal for it.
Daily Presidential Tracking Poll. The Rasmussen Reports daily Presidential Tracking Poll for Thursday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as president. Forty-two percent (42%) Strongly Disapprove, giving Obama a Presidential Approval Index rating of -18 (see trends).
USA Today:
CEO Pay Soars While Workers' Pay Stalls. At a time most employees can barely remember their last substantial raise, median CEO pay jumped 27% in 2010 as the executives’ compensation started working its way back to prerecession levels, a USA TODAY analysis of data from GovernanceMetrics International found. Workers in private industry, meanwhile, saw their compensation grow just 2.1% in the 12 months ended December 2010, says the Bureau of Labor Statistics.
Reuters:
Dollar Climbs Off Lows After More Hawkish Fed Comments. The dollar drifted off lows versus the euro and particularly against commodity currencies early in Asia on Friday following more hawkish comments from a senior Federal Reserve official. Minneapolis Federal Reserve President Narayana Kocherlakota said rates should rise by up to 75 basis points by year-end if core inflation and economic growth picked up as he expected, the Wall Street Journal reported. The dollar index , which tracks its performance against a basket of major currencies, clawed off the session low of 75.664 to last stand at 76.005, still down 0.15 percent on the day. Against the yen, the dollar extended its climb to 83.22 yen , reaching highs not seen since March 11. Dollar/yen is now back in its trading range roughly between 81-84.5 seen before a massive earthquake hit Japan earlier in the month and caused the yen to rally to a record high on expectations of Japanese repatriation flows. Kocherlakota's comments came hot on the heels of those from Kansas City Fed President Thomas Hoenig and St. Louis Fed President James Bullard, who said the Fed needed to exit its unprecedented monetary stimulus earlier in the week. Those hawkish comments have helped driven U.S. Treasury yields higher this week. The two-year yield hit a six-week high around 0.84 percent on Thursday. Still, traders appeared to be waiting to hear from Fed Chairman Ben Bernanke himself and Fed officials like Janet Yellen to see if the debate within the policy-setting arm of the central bank has changed substantially. "There is a right of reply (from them) and the longer the right of reply isn't taken up, the more important it is. The radio silence is something that should be helping the U.S. dollar," said Robert Rennie, chief currency strategist at Westpac Bank.
European Banks Turned to Fed at Height of Crisis. Banks from Europe drew tens of billions of dollars in emergency loans from the Federal Reserve at the height of the financial crisis in 2008, underscoring the critical role of the U.S. central bank in preventing a meltdown in the world's banking system. Nine of the 12 largest borrowers from the Fed's discount window on the day the Fed lending peaked were foreign-owned firms, documents released on Thursday showed.
Saudi Arabia may need the oil price to rise to more than $100 a barrel by 2015 to be able to fulfill its plans to increase public spending, citing new estimates by the Institute of International Finance. The break-even oil price for the Saudi Arabian government to balance its budget was $68 a barrel last year, $88 this year, and will increase to $110 in 2015, the IIF said.
ShanghaiDaily.com:
Panic Buying in China as Price Woes Hit Home. That old bugaboo "inflationary expectations" has infected shoppers in Shanghai, who are rushing to buy up goods in anticipation that prices will be higher tomorrow than today. The wave of what some are calling "panic buying" has hit supermarkets, shops and even online shopping websites across the city, media reports said on Monday. That followed reports that some goods - including instant noodles, soap and shampoo - will become considerably more expensive from April. Disconcerting news for Chinese consumers already haunted by the specter of months of unbridled inflation. The Consumer Price Index, which measures broad price fluctuations, seems to be invading the public psyche. Even unsophisticated old peddlers on the street now know the phrase CPI. Li Maoyu, an analyst at the Changjiang Securities Co, said the vast majority of consumers in China remain price-conscious. For daily necessities, price changes rattle the nerves. "Inflationary expectations have hardly eased despite the government's intensive efforts to rein in price advances," Li said. Worse, some economists are predicting that inflation may have accelerated to 5 percent in March. The National Development and Reform Commission, China's top economic planning agency, said last week that consumer prices in the first quarter may have risen about 4.9 percent. The agency predicts that the inflation barometer may rise between 4.8 percent and 5 percent in the first half. One problem with higher interest rates is that they risk an even heavier flow of speculative funds into the country as investors chase yields. So-called "hot money" threatens to roil already troubled equity and housing markets, while heaping more pressure on China to accelerate reform of its exchange-rate system. Consumers watching prices go up week by week often don't understand the economics behind the increases or the government's remedial measures. They just see their wallets shrinking fast.
Financial News:
China's c0ommercial city banks should cut "impractical" scale and profit growth targets in a timely manner because the country has lowered its gross-domestic-product growth target, China Banking Regulatory Commission Assistant Chairman Yan Qingmin wrote in a commentary. The city banks should prevent risks from property loans and lendings to local government financing vehicles, Yan wrote.
China Securities Journal:
China may raise interest rates to achieve positive real rates this year, citing Chinese central bank adviser Xia Bin.
Chinese central bank governor Zhou Xiaochuan said the nation is "not in a hurry" for the yuan to join the International Monetary Fund's Special Drawing Rights basket.
Caixin:
All Aboard China's Fast Trains to Trouble. Now that high-speed trains are crisscrossing the country, enormous costs and other shortcomings have been exposed. More track for high-speed railways was laid in China over the past decade than all new rail installed in western countries combined over the past half-century. Opponents of the ongoing project, however, say high-speed trains serve only the rich. They call the build-up wrong for China's strategic positioning, citing serious market, debt and financial risks. They also point to technical dangers and safety issues that run against the grain of China's push for "scientific development."
Evening Recommendations Citigroup:
Reiterated Buy on (MHS), added to Top Picks Live list, raised target to $77.
Night Trading
Asian equity indices are +.25% to +1.25% on average.
Asia Ex-Japan Investment Grade CDS Index 108.0 +1.5 basis points.
The Change in Non-farm Payrolls for March is estimated at 190K versus 192K in February.
The Unemployment Rate for March is estimated at 8.9% versus 8.9% in February.
Average Hourly Earnings for March are estimated to rise +.2% versus unch. in February.
10:00 am EST
ISM Manufacturing for March is estimated to fall to 61.0 versus a reading of 61.4 in February.
ISM Prices Paid for March is estimated to rise to 82.9 versus 82.0 in February.
Afternoon
Total Vehicle Sales for March are estimated to fall to 13.25M versus 13.38M in February.
Upcoming Splits
(SF) 3-for-2
Other Potential Market Movers
The Fed's Plosser speaking and the Fed's Dudley speaking could also impact trading today.
BOTTOM LINE: Asian indices are higher, boosted by commodity and technology 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 day.
North American Investment Grade CDS Index 95.50 -.44%
European Financial Sector CDS Index 96.08 -2.18%
Western Europe Sovereign Debt CDS Index 169.25 bps +.99%
Emerging Market CDS Index 205.23 -.61%
2-Year Swap Spread 17.0 unch.
TED Spread 22.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .09% unch.
Yield Curve 267.0 +2 bps
China Import Iron Ore Spot $172.40/Metric Tonne +1.11%
Citi US Economic Surprise Index +42.90 -1.5 points
10-Year TIPS Spread 2.49% +4 bps
Overseas Futures:
Nikkei Futures: Indicating -20 open in Japan
DAX Futures: Indicating +41 open in Germany
Portfolio:
Slightly Higher: On gains in my Biotech and Medical longs
Disclosed Trades: None
Market Exposure: 100% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 consolidates recent gains, despite rising Mideast unrest, rising energy prices, emerging market inflation fears, eurozone debt angst and Japan concerns. On the positive side, Road & Rail, REIT, Biotech, Networking, Paper, Ag and Defense shares are especially strong, rising .75%+. The Transportation Index is making a new multi-year high today. (IYR) has traded well throughout the day again. Small-caps are also outperforming again. Lumber is rising +1.34% and Copper is gaining +.47%. The Saudi sovereign cds is falling -2.24% to 119.55 bps and the US sovereign cds is declining -1.49% to 42.19 bps. The 10-year yield is stable, rising +2 bps to 3.45%. On the negative side, Airline and Semi shares are under mild pressure, falling more than .75%. (XLF) has undperformed throughout the day. Oil is rising +2.35% and the UBS-Bloomberg Spot Ag Index is gaining +2.17%. The US price for a gallon of gas is up +.02 today to $3.61/gallon. It is up .49/gallon in 44 days. The Spain sovereign cds is jumping +6.79% to 233.50 bps, the Japan sovereign cds is rising +2.62% to 99.63 bps and the Ireland sovereign cds is climbing +2.86% to 640.17 bps. Despite Goldman Sachs moving Chinese stocks to Overweight last night, the Shanghai Composite fell for the third day in a row, declining -.94%, and finished near session lows. Gains in european equities and tomorrow's jobs report could spur further stock gains tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more economic optimism, window-dressing and buyout speculation.
U.S. Jobless Claims Fall, Consumer Confidence Improves. Fewer Americans filed claims for jobless benefits last week and consumer confidence stabilized, a sign the world’s largest economy is weathering the jump in commodity prices heading into the second quarter. The number of applications for unemployment insurance payments fell by 6,000 to 388,000 in the week ended March 26, a one-month low, Labor Department figures showed today in Washington. The Bloomberg Consumer Comfort Index rose to minus 46.9 last week from a seven-month low of minus 48.9. Business activity expanded in March at close to the fastest pace in two decades, a report from members of a Chicago purchasing managers group also showed, indicating strengthening sales in the U.S. and overseas are helping manufacturers like United Technologies Corp. (UTX)The group’s employment measure climbed to the highest level since 1983, and its index of order backlogs increased to a 37- year high. A report tomorrow is projected to show the February pickup in payrolls was sustained this month.
Sentiment Near August Low Means Stock Gains: Technical Analysis. The rebound in the Standard & Poor’s 500 Index isn’t over because when pessimism about the market was this high in August, equities rose in five of the next six months, said Bay Crest Partners LLC. The benchmark index for U.S. equities slipped as low as 1,249.05 on March 16 amid concern rising energy costs will hurt global economic growth and Japan’s 9.0-magnitude earthquake may tip the world’s third-biggest economy into recession. The next day, the weekly survey from the American Association of Individual Investors showed the ratio of bulls to bears fell to 0.71, the lowest since Aug. 26, Bloomberg data shows. Christian Bendixen, director of technical research at Bay Crest, said the increase in pessimism may reverse and help the S&P 500 climb to 1,425, or 7.3 percent above yesterday’s close of 1,328.26. The bearish sentiment on Aug. 26 coincided with a bottom for the S&P 500. The benchmark rose in five out of the following six months, rallying 28 percent to a 32-month high on Feb. 18. Since its 2011 low on March 16, the S&P 500 has climbed 6.3 percent.
Oil Advances, Heads for Third Quarterly Increase, on Libyan Supply Concern. Oil rose the most in two weeks in New York and was poised for its third quarterly gain amid concern that the Libyan conflict will prolong production cuts. Prices advanced as much as 2.4 percent after troops loyal to Libyan leader Muammar Qaddafi retook control of the oil port of Ras Lanuf and were shelling Brega, another energy hub to the east. Futures traded as high as $106.77 a barrel, poised to test a 30-month high of $106.95 reached in intraday trading March 7. “Events in the Middle East, particularly the fighting that continues to be going on in Libya, are providing support for the market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We’re ranging just below our two-and-a-half-year highs, and the market seems to be searching for a catalyst to continue the rally.” Crude for May delivery climbed $2.09, or 2 percent, to $106.36 a barrel at 12:29 p.m. on the New York Mercantile Exchange. Futures have increased 16 percent from January through March, the strongest first-quarter gain since 2005. Brent oil for May settlement on the London-based ICE Futures Europe exchange rose $2.14, or 1.9 percent, to $117.27 a barrel. Prices are up 24 percent this quarter.
Corn, Soybeans Surge as Supplies Ebb, Heightening Food-Inflation Concerns. Corn rose the most allowed by the Chicago Board of Trade as concerns mounted that food-price inflation will accelerate after the latest U.S. government forecasts on supplies and acreage. Soybeans and wheat also jumped. U.S. corn stockpiles at the beginning of March dropped to 6.52 billion bushels, the lowest for the date since 2007, the Department of Agriculture said today. Last month, the prices of corn, soybean, wheat and rice climbed to the highest since 2008, when surging food costs spurred riots from Haiti to Egypt. Today, cattle rose to a record for a second straight day, and cotton jumped. “What’s unique about 2011, unlike 2008, is that corn and soybeans are equally tight, cotton is tight and wheat isn’t comfortable either,” said Hussein Allidina, the head of commodity research at Morgan Stanley in New York. “The takeaway is that prices are not high enough to ration demand.”
Facebook is Tool for Trial Lawyers Scouring Juror Profiles to Unearth Bias. Facebook, Twitter Inc. and other services have become a major resource for both prosecutors and defense attorneys, letting them glean more insight than they can get from jury questionnaires, said Joseph Rice, chief executive officer of Jury Research Institute in Alamo, California. “Social media has given us an incredible tool, because it’s something jurors voluntarily engage in, and they post information about their activities or affiliations or hobbies,” Rice said. That reveals “their life experience or attitude that may have an impact on how they view the facts of the case.”
Portugal Misses 2010 Deficit Target, Raising Chances of European Bailout. Portugal reported a budget deficit of 8.6 percent of gross domestic product last year, missing a government target of 7.3 percent and causing a jump in borrowing costs that increases the risk of a bailout. The revisions won’t affect the government’s goal for a 4.6 percent shortfall in 2011, the national statistics agency said today in an e-mailed statement. The agency also revised the 2009 budget gap to 10 percent from 9.3 percent, after European Union accounting changes prompted Portugal to add more than 2 billion euros ($2.8 billion) to the 2010 deficit. The yields on the country’s two, five and 10-year bonds rose to euro-era records.
Fed Releases Discount-Window Loan Records Under Order. The Federal Reservereleased thousands of pages of secret loan documents under court order, almost three years after Bloomberg LP first requested details of the central bank’s unprecedented support to banks during the financial crisis. The records reveal for the first time the names of financial institutions that borrowed directly from the central bank through the so-called discount window. The Fed provided the documents after the U.S. Supreme Court this month rejected a banking industry group’s attempt to shield them from public view. “This is an enormous breakthrough in the public interest,” said Walker Todd, a former Cleveland Fed attorney who has written research on the Fed lending facility.
U.S. Government Pensions Gain 5.5% as Stock Market Rises. U.S. state and local government pension-fund assets rose in value by 5.5 percent in the last three months of 2010 as stock market gains helped recoup losses incurred since the financial crisis. The assets of the hundred largest government employee retirement systems grew by $138 billion to $2.64 trillion by the end of 2010 from three months earlier, the U.S. Census Bureau reported today.
Buffett Misses Chance to Show Moral Courage: Alice Schroeder. What were they thinking? How could Warren Buffett excuse David Sokol’s trading in stock while Sokol was pitching the company toLubrizol Corp. (LZ)Berkshire Hathaway Inc. (BRK/A) as an acquisition candidate? Buffett and Sokol both say that nothing “unlawful” was going on (Sokol even went so far as to tell CNBC he did nothing inappropriate). Their explanation is that, because a deal with Lubrizol hadn’t actually been struck and wasn’t likely when Sokol bought his shares, it was all right for Sokol to profit from his knowledge of a possible deal. On Wall Street, we call this kind of trading front-running, and everybody knows that it is wrong.
Wall Street Journal:
Saudi's New Super Light Crude Blend to Hit Market in April - Source. The newly produced blend of super light crude by Saudi Arabia won't become available until early April, despite speculation that the oil has already been purchased in the Mediterranean, someone familiar with the matter told Dow Jones Newswires on Thursday.
Handicapping the Economic Recovery by Alan S. Blinder. Japan, Europe, oil and the deficit all pose problems. But chances are growth will continue.
Few Banks Seek Funds for Small Businesses. The Obama administration announced with much fanfare last fall that it would set aside $30 billion for a program to revive small-business lending. But only 7% of banks have participated in it. About 526 community banks have requested $7.6 billion in funds from the program, which is available to the nation's nearly 7,700 lenders that have less than $10 billion in assets. That is far short of the amount allocated by the Treasury Department. The program, the centerpiece of September's Small Business Jobs Act, included enticements such as low interest rates to encourage banks to get money into the hands of small-business owners. But relatively few community banks, which had until March 31 to apply for the program, signed up. Earlier this week, the Treasury Department extended Thursday's deadline to May 16. The extra time mightn't be enough to win the banks over. Many say they have plenty of capital but little demand from small businesses. Banks have also long complained that increased scrutiny from regulators has made it difficult to underwrite risky small-business loans. A government program, especially one with strings attached, isn't the solution, they say.
Irish Banks Need $33.9 Billion. Four of Ireland's most important banks could need up to a total of €24 billion ($33.9 billion) in new capital to stay viable, the Irish Central Bank said Thursday.
Al Qaeda in the Arabian Peninsula (AQAP) has declared Yemen's Abyan province an "Islamic Emirate" and banned women from going outside, according to Eurasia Review and accounts from Yemeni journalists.
Apple(AAPL) and Partners to Meet iPad 2 Demand Amid Earthquake Effects. A series of new reports indicate that Apple and its suppliers are working hard to ensure a steady flow of iPad 2 units to the market amid strong demand and continuing effects from the Japanese earthquake earlier this month. According to DigiTimes, Apple has agreed to absorb additional part costs brought about by the earthquake in exchange for assurances that suppliers will continue providing "smooth shipments" of the needed components.
Kansas City Star:
Kansas City Fed Regional Manufacturing Activity Increases, Employment Inches Higher, Survey Says. Manufacturing activity in the Federal Reserve's Tenth District "accelerated rapidly" in March, hitting a record high for the second straight month, according to a survey released this morning. The survey, which covers a seven-state area including Kansas and western Missouri, also noted that the manufacturing employment index edged higher this month from February to a new record. The report from the Federal Reserve Bank of Kansas City saw growth in most year-over-year factory indexes, such as order backlog and shipments.
The Daily Beast:
Al Qaeda's Libya Pilgrimage. As debate rages in Washington over whether to arm anti-Gaddafi rebels, an exclusive report by The Daily Beast indicates al Qaeda forces are gearing up to join the rebels and seize power in Libya.
Gaddafi Will Stay in Libya 'Until the End' - Spokesman. Libyan leader Muammar Gaddafi and his sons are in the country and are determined to stay "until the end", a government spokesman said on Thursday. Asked if the Libyan leader and his sons were still in the country, government spokesman Mussa Ibrahim said: "Rest assured, we are all here. We will remain here until the end. This is our country. We are strong on every front."
Libya's Gaddafi Not Close to Breaking Point - US.Libyan leader Muammar Gaddafi is not close to a military breaking point even though coalition strikes have seriously degraded his fighting power, the top U.S. military officer told Congress on Thursday.
Wal-Mart(WMT) CEO Bill Simon Expects Inflation. U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday.
Japanese Prime Minister Naoto Kan said Tokyo Electric Power Co.'s Fukushima Dai-Ichi nuclear plant must be decommissioned, citing Kazuo Shii, head of the nation's Communist Party.
