Bear Radar

Style Underperformer:

• Small-Cap Value (-1.98%)

Sector Underperformers:

• 1) Banks -3.45% 2) I-Banks -3.38% 3) Alt Energy -2.71%

Stocks Falling on Unusual Volume:

• GNCMA, VOD, JOSB, HRBN, RIMM, TROW, DWA, ASIA, EWBC, FMER, SEE, FR, SCCO, BKD, NRGY, SNCR, MDP, JNPR, DG and LNG
  

Stocks With Unusual Put Option Activity:

• 1) SVU 2) LNKD 3) ACI 4) JNPR 5) ESV
  

Stocks With Most Negative News Mentions:

• 1) KMT 2) TROW 3) HNZ 4) PBH 5) AMSC
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Mid-Cap Growth (-.65%)

Sector Outperformers:

• 1) Education +1.15% 2) Gaming +.31% 3) Semis +.03%

Stocks Rising on Unusual Volume:

• GLNG, VLCCF, MPEL, LVS, KGC, CECO, APOL, EHTH, WSH, CCOI, ESV, SKM, UBS, TLVT, DAKT, ZAGG, FEIC, GLNG, MELI, REDF, VRNT, NANO, FTNT, RRGB, IPGP, TZOO, RVBD, MSTR, PEET, WYNN, SXCI, WHG, LNT, PVH, SM, FST, VMW, SFY and HRC
  

Stocks With Unusual Call Option Activity:

• 1) ESV 2) NLY 3) VMW 4) ITT 5) LRCX
  

Stocks With Most Positive News Mentions:

• 1) CCL 2) NBL 3) M 4) BRCM 5) ESV

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume
  

Wednesday Watch

Evening Headlines

Bloomberg:

• Rehn Sees Greek Solution in Bond Rollovers, Cuts. The European Union’s top economic official said a solution to keeping Greece solvent is combining bold deficit cuts reminiscent of Belgian sacrifices in the 1990s and willingness by lenders to roll over expiring bonds, adapting what was done in Eastern Europe two years ago. “Belgium is a relevant example” in showing Greece what is “feasible and doable” in primary surplus goals, and the “Vienna initiative has mostly given us positive lessons,” Olli Rehn, the EU’s economic and monetary affairs commissioner, said in an interview yesterday at Bloomberg headquarters in New York. “The basic idea would be that banks maintain their exposure on a voluntary basis.”
• Australia GDP Falls Most Since 1991. Australia’s economy shrank in the first quarter by the most in 20 years as floods hurt exports, even as stronger business investment underscored the central bank’s forecast for a rebound in the second half of the year. Gross domestic product fell 1.2 percent from the previous three months, when it rose a revised 0.8 percent, the Bureau of Statistics said in Sydney today. Exports slumped 8.7 percent, subtracting 2.1 percentage points from GDP growth, today’s report showed, while machinery and equipment spending jumped 6 percent, adding 0.4 point.

Wall Street Journal:

• John Edwards Probe Turns on Purpose of Payoff. As we noted last week, former Senator John Edwards faces a possible indictment over the more than $1 million that was allegedly paid to keep quiet an affair that he was having during his 2008 run for president. Over at WSJ’s Washington Wire blog, Evan Perez takes a closer look at the probe, which could yield an indictment as soon as today, according to people familiar with the matter.
• Promising Returns Lure Back U.S. Hotel Buyers. The rebound of U.S. hotels and resorts is drawing in buyers who stepped back from the industry prior to the recession, as the hospitality sector once again promises high returns. Among those now marshalling billions of dollars to acquire hotels is KSL Capital Partners LLC, the former hospitality investing arm of KKR Financial Holdings LLC led by Vail Resorts Inc. veterans. KSL is expected to disclose Wednesday that it has finished raising a $2.1 billion fund targeting distressed resorts.
• NYSE Euronext to Announce 'Cloud' Platform for Traders. NYSE Euronext (NYX) plans to announce on Wednesday a new venture with EMC Corp. (EMC) and VMware Inc. (VMW) that will allow financial institutions direct access to NYSE's services through the fast-growing technology trend known as cloud computing.
• SAC Faces Probe of Biotech Trading. SAC Capital Advisors LP, one of the nation's most successful hedge funds, is a focus of a Securities and Exchange Commission investigation into whether traders used inside information to profit from the $15 billion takeover of biotechnology firm MedImmune Inc. in 2007, people familiar with the matter say.
• As Currency Swings Bash Big Bets, Hedge Funds Play It Safe. May has been a messy month for currency-focused hedge funds. Their new M.O.? Tone down the trading. As of Thursday, hedge funds that bet on currencies and other economic data were down 2.75% on average in May.
• Lehman Presses Big Banks on Derivatives Settlement. Lehman Brothers Holdings Inc. is proposing a wide-ranging settlement of its unresolved derivatives trades with more than a dozen of its largest counterparties—including some of Wall Street's biggest banks—in a move the investment bank says could help speed the resolution of its bankruptcy case.
• Mideast Uses Western Tools to Battle the Skype Rebellion.
• House Soundly Rejects Increase in Debt Ceiling. The House on Tuesday soundly rejected a bill to increase the federal borrowing limit by $2.4 trillion—a symbolic vote that House GOP leaders said demonstrated that Congress will not increase the debt ceiling unless it is linked to a deficit-reduction plan. The vote was 318-97. All Republicans who voted and 82 Democrats opposed the bill. Seven Democrats voted "present.''
• Red Ghost Over China. Maoism makes a comeback as economic and political reform ebb.

CNBC:

• China May Official PMI Hits 9-Month Low on Credit Curbs.

Business Insider:

• OUCH! Only 29% of Microsoft(MSFT) Employees Approve of Steve Ballmer.
• Why May 2011 Was A Huge, Pivotal Month For Hedge Funds.
  
• 11 Things You Should Know About The U.S. Postal Service Before It Goes Bankrupt.
• IT BEGINS: China to Do 2-3 Trillion Yuan Bailout of Indebted Local Governments. Little by little, this notion that China is a rock of financial stability (at least compared to the US) is being chipped away. Reuters (via hedgefundinvest) is reporting that the central government in Beijing is about to shift 2-3 TRILLION yuan ($308-$463 billion) in local debt to the Federal books. Basically, local governments have borrowed like crazy, and there's been a fear of a massive wave of defaults, especially as revenue from real estate dries up. Also there's no local bond market, so these are debts owed to banks, meaning that this bailout of localities is also a bank bailout (surprise!). The expert on this issue is Northwestern poli-sci professor Victor Shih, who points out that China has been able to maintain the illusion of growth without government debt precisely through these local authorities. Others have likened local governments to the infamous SIVs from the US financial crisis -- pockets of leverage hidden from public view. That this is happening now is potentially a big moment. Remember, throughout the US crisis, there were a series of bailouts that, at first blush, would have appeared to put a halt to things. If history is any guide, this kind of big bailout is closer to the beginning of the story.
• This Brand New $105 Million High School in Riverside, California is Too Broke to Hold Any Classes.
  

Zero Hedge:

• Now That The Banker Bailout Plan Is Set, Here Are The Greek Islands About To Hit eBay and Fund Another Record Wall Street Bonus Season.
• Here Is Your Chance to Demand Answers From The Fed's General Counsel, Scott Alvarez.
• CME LOWERS ES, SP, YM Margins, Despite an INCREASE in Realized Vol.
  

Boy Genius Report:

• Apple(AAPL) Could Launch 8-Megapixel iPhone Sans SIM Card in August.

The Blaze:

• Schumer to Jewish Audience: Arabs and Palestinians 'Don't Believe There Should Be An Israel'.

Reuters:

• Iraqis Charged in U.S. With Trying to Help al Qaeda. Two Iraqi men were arrested and charged in Kentucky with trying to help al Qaeda militants in their home country and one of the suspects was also charged for attacks on U.S. troops there, the Justice Department said on Tuesday. Waad Ramadan Alwan, 30, was accused of taking part in roadside bomb attacks on U.S. troops between 2003 and 2006, linked in one such instance by fingerprints obtained by U.S. forces from a device that did not detonate. He and a second Iraqi, Mohanad Shareef Hammadi, also were charged in a 23-count indictment for allegedly trying to provide support and weapons to an al Qaeda affiliate in Iraq, in a sting operation subsequently run by U.S. authorities.
• US Arms Makers Said Bleeding Secrets to Cyber Foes. Top Pentagon contractors have been bleeding secrets for years as a result of penetrations of their computer networks, current and former U.S. national security officials say. The U.S. Defense Department, which runs its own worldwide eavesdropping, spying and code-cracking systems, says more than 100 foreign intelligence organizations have been trying to break into U.S. networks. Some of the perpetrators "already have the capacity to disrupt" U.S. information infrastructure, Deputy Defense Secretary William Lynn, who is leading remedial efforts, wrote last fall in the journal Foreign Affairs.
• Phillips-Van Heusen Q1 Beats; Raises FY View. Phillips-Van Heusen Corp raised its full-year outlook and posted first-quarter earnings that beat market expectations as revenue more than doubled on strong sales in its Tommy Hilfiger and Calvin Klein businesses. The apparel maker's shares rose 2 percent in extended trade to $67.42, having closed at $65.97 on Tuesday on the New York Stock Exchange. "As we look forward to the balance of 2011, we believe that the momentum of the Calvin Klein and Tommy Hilfiger brands around the world will continue to drive our revenue and profitability growth," Chief Executive Emanuel Chirico said in a statement.
• Big Investors Urge Hedge Funds to Open Up. Pension funds and endowments are sending hedge fund managers a friendly message -- let us sit in the front seat with you, please. As hedge funds take on a growing role in institutional investment portfolios, large investors, including the California Public Employees Retirement Scheme (Calpers) and the British Airways Pension Investment Management, have written a guide to help managers better understand exactly what they want. "If it is our capital, we should have more of a voice in how it is managed and to be able to take control of our assets when we deem it necessary," said Kurt Silberstein, a senior portfolio manager at Calpers.

Kathimerini:

• A New Greek Deal With Troika Imminent. The government and visiting officials of the European Commission, European Central Bank and the International Monetary Fund - collectively known as the troika - have made significant progress in ongoing talks and are expected to finalize the details of the government’s midterm fiscal plan and privatization program by Wednesday night or Thursday morning.

Xinhua:

• China will suspend approval for new projects in cities and provinces where heavy-metal pollution cases are reported, citing Environmental Protection Minister Zhou Shengxian.

Shanghai Securities News:

• China may increase the yuan's trading band, interest rates and banks' reserve requirement ratio in June to curb inflation, citing market participants.

South China Morning Post:

• Communist Propaganda Pushes Out Hollywood. Hollywood blockbusters including Transformers 3 and Cars 2 have been pushed back on mainland cinema schedules to make way for the Communist Party's latest propaganda film. The Founding of a Party, set to premiere across the mainland on June 15, marks the 90th anniversary of the Communist Party on July 1.

China News Service:

• China's industrial output growth may slow this year because of power shortages, rising costs and growing inventories, citing a Ministry of Industry and Information Technology report. Overall borrowing costs have increased at least 13% for small companies and inventories of vehicles, steel and textiles rose more than 20% in the first four months from a year earlier due to inflation and slowing demand.

China Securities Journal:

• China's central bank may raise interest rates this month to combat inflation, citing analysts. Consumer prices probably rose 5.3% to 5.5% in May on port and seafood costs, citing a China Intl. Capital Corp. report. High home prices and drought may delay slower inflation, it said, citing Li Huiyong, an analyst at Shenyin Wanguo Securities Co.

Evening Recommendations
RBC Capital:

• Rated (C) Outperform, target $52.

Barclays Capital:

• Rated (NFLX) Overweight, target $315.
• Rated (GOOG) Overweight, target $675.
  

Night Trading

• Asian equity indices are -.25% to +1.0% on average.
• Asia Ex-Japan Investment Grade CDS Index 107.0 -3.0 basis points.
  
• Asia Pacific Sovereign CDS Index 113.50 -1.75 basis points.
  
• S&P 500 futures +.25%.
  
• NASDAQ 100 futures +.33%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (ESL)/1.09
• (CPRT)/.70
• (DG)/.50

Economic Releases
8:15 am EST

• The ADP Employment Change for May is estimated at 175K versus 179K in April.
  

10:00 am EST

• Construction Spending for April is estimated to rise +.3% versus a gain of +1.4% in March.
• ISM Manufacturing for May is estimated to fall to 57.1 versus 60.4 in April.
• ISM Prices Paid for May is estimated to fall to 81.8 versus 85.5 in April.
  

Afternoon

• Total Vehicle Sales for May are estimated to fall to 12.4M versus 13.14M in April.

Upcoming Splits

• (FFIN) 3-for-2
• (CHD) 2-for-1
• (FTNT) 2-for-1
  

Other Potential Market Movers

• The Fed's Pianalto speaking, Challenger Job Cuts report for May, weekly MBA mortgage applications report, 1-Year T-Bill Aucition, weekly retail sales reports, Sanford C. Bernstein Strategic Decisions Conference, Cowen Tech/Media/Telecom Conference, Citi Power/Gas/Coal/Alt Energy Conference, KeyBanc Industrial/Automotive/Transport Conference, Lazard Alt Energy Summit, DA Davidson Tech Forum, BofA Merrill Tech Conference and the (ALL) analyst day could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and technology shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing modestly higher. The Portfolio is 100% net long heading into the day.

Stocks Surging into Final Hour on Euro Bounce, Asian Equity Strength, Short-Covering, Technical Buying

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 16.02 +.25%
  
• ISE Sentiment Index 80.0 -21.57%
  
• Total Put/Call .78 +9.86%
  
• NYSE Arms 1.13 +36.78%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 89.88 -1.01%
  
• European Financial Sector CDS Index 113.30 -2.87%
  
• Western Europe Sovereign Debt CDS Index 194.87 -1.87%
  
• Emerging Market CDS Index 213.05 -2.42%
  
• 2-Year Swap Spread 19.0 +1 bp
  
• TED Spread 21.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .05% unch.
  
• Yield Curve 258.0 -1 bp
  
• China Import Iron Ore Spot $169.80/Metric Tonne -.67%
  
• Citi US Economic Surprise Index -71.40 -11.6 points
  
• 10-Year TIPS Spread 2.24% -3 bps
  

Overseas Futures:

• Nikkei Futures: Indicating -8 open in Japan
• DAX Futures: Indicating +6 open in Germany

Portfolio:

• Higher: On gains in my Tech, Medical, Retail and Biotech sector longs
  
• Disclosed Trades: Covered all of my (IWM)/(QQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 100% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades back above its 50-day moving average despite eurozone debt angst, rising energy prices, global growth concerns and emerging market inflation fears. On the positive side, Alt Energy, Paper, REIT, Homebuilding, Drug, Disk Drive, Semi, Ag and Oil Tanker shares are especially strong, rising more than +1.0%. Small-cap shares are outperforming again. (IYR) is relatively strong. Lumber is rising +3.06% and the UBS-Bloomberg Ag Spot Index is falling -.32%. On the negative side, Wireless and Restaurant shares are down on the day. Oil is surging +2.0% and copper is falling -.2%. The US price for a gallon of gas is -.03/gallon today to $3.78/gallon. It is up .64/gallon in less than 4 months. The 10-year yield is still falling too much too quickly, declining another -3 bps to 3.04%. The Japan sovereign cds is climbing +1.12% to 86.35 bps and key eurozone cds are not falling back much, notwithstanding the jump in the euro currency, equity gains and rising optimism for another Greek bailout. The Citi Latin America Economic Surprise Index fell -7.4 points today to -22.20, which is the lowest reading since mid-February. The major US averages remain very resilient in the face of mounting headwinds. Equity investors continue to cheer any signs of a pushing out of the dealing with the eurozone debt situation. I continue to believe that it is highly unlikely the eurozone will exist in its current form a few years from now. Asian equities traded very well overnight and could help boost US stocks further in the near-term. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, bargain-hunting, technical buying, end-of-month window dressing, a bounce in the euro and lower food prices.

Today's Headlines

Bloomberg:

• Consumer Confidence Slumps to 6-Month Low. Consumer sentiment unexpectedly decreased in May to the lowest level in six months as Americans grew concerned over the outlook for jobs and the economy, while a measure of home prices dropped to a nine-year low. The Conference Board’s confidence index dropped to 60.8 from a revised 66 reading in April, figures from the New York- based private research group showed today. Home prices decreased 5.1 percent in the first quarter from the same time in 2010, according to data from S&P/Case-Shiller. A separate report today showed manufacturing cooled. Consumer finances have been squeezed by rising costs of food and fuel and erosion in home equity, causing spending to slow. The group’s measure of present conditions decreased to 39.3 from 40.2 a month earlier. The gauge of expectations for the next six months slumped to 75.2, the lowest since October, from 83.2. The share of respondents expecting more jobs over the next six months dropped, as did the proportion projecting their incomes will rise.
  
• Chicago Purchasing Mangers Index Falls to 56.6 in Sign Expansion Slowing. Business activity in the U.S. cooled more than forecast in May, a sign manufacturing may be leveling off after leading the recovery in the world’s largest economy. The Institute for Supply Management-Chicago Inc. said today its business barometer fell to 56.6 this month, the lowest since November 2009, from 67.6 in April. The measure’s 11-point drop this month was the biggest since October 2008.
• IMF Must Reflect the End of U.S.-Led Order, Sachs Writes in FT. The next head of the International Monetary Fund must be capable of helping to create a new global framework, for the existing U.S.-led order has had its day, Jeffrey Sachs, who heads the Earth Institute at Columbia University, wrote in the Financial Times. The answer is a system based on several regional currencies: the dollar, the euro, the yuan and, perhaps, the Brazilian real and the Indian rupee; that means regional groups such as the eurozone, the Arab world and the main economies of southeast Asia must assume responsibility for monetary policy, financial regulation, tax coordination and enforcement and fiscal policy harmonization, he said.
• Crude Oil Futures Rise as Greece Aid Package Bolsters Euro Versus Dollar. Oil climbed, trimming the biggest monthly drop in a year, on signals the European Union will approve aid for Greece, bolstering the euro against the dollar. Crude rose as much as 2.8 percent after Luxembourg Prime Minister Jean-Claude Juncker said leaders will decide on a new aid package by the end of June. The comments sent the euro to a three-week high versus the dollar, increasing the appeal of commodities.
• Buyout Firms Morphing Into Asset Managers. After making their founders billionaires, buyout specialists such as Carlyle Group and KKR & Co. are turning into asset managers that run hedge funds and strip malls as fresh capital and takeover targets become scarce.
• China Raises Power Prices for Business, Farmers as Summer Shortage Looms. China raised electricity prices for businesses and farmers for the first time in more than a year, threatening to exacerbate inflation as the nation aims to curb power shortages that may be the worst on record. The increase in electricity costs may complicate China’s fight against inflation, which is above the government’s target. The world’s biggest energy consumer may boost residential rates in the second half, according to Citigroup Inc. Higher prices may spur generation as pressure eases on profit margins squeezed by rising coal costs. An electricity shortfall this summer may be as much as 40 gigawatts, surpassing the 2004 record, State Grid Corp. of China said.
• Ex-Egypt Bank Head Arrested on Sex Charges. The former chairman of Egypt’s Bank of Alexandria was charged with sexually abusing a maid at the Pierre Hotel in New York, police said. Mahmoud Abdel Salam Omar, 74, chairman of El-Mex Salines Co., was arrested yesterday after a 44 year-old female maid alleged he attacked her May 29, according to a police department spokesman.
• Apple's(AAPL) Jobs to Unveil iCloud, New Software. Apple Inc. (AAPL) Chief Executive Officer Steve Jobs will address an annual conference on June 6 to unveil a service that lets users store content online and tout a new version of the software that runs the iPad and iPhone. Jobs, in the midst of his third medical leave since 2004 as he battles a rare form of cancer, will deliver a keynote address at Apple’s Worldwide Developers Conference, the Cupertino, California-based company said in a statement. It will be Jobs’ second appearance this year, after the iPad debut in March. Apple follows rivals Google Inc. (GOOG) and Amazon.com Inc. (AMZN) in creating services to make it easier for customers to store and access music and other content via the Internet.

Wall Street Journal:

• Economists Downgrade Prospects for Growth. The world's largest economy may be facing a growth problem. After a disappointing first quarter, economists largely predicted the U.S. recovery would ramp back up as short-term disruptions such as higher gas prices, bad weather and supply problems in Japan subsided. But there's little indication that's happening. Manufacturing is cooling, the housing market is struggling and consumers are keeping a close eye on spending, meaning the U.S. economy might be on a slower path to full health than expected.
• Obama Taps Businessman Bryson for Commerce Post. President Barack Obama on Tuesday nominated John Bryson, the former chairman of a California power company and a prominent environmental advocate, to be his next commerce secretary. Mr. Bryson retired in 2008 from Edison International, a publicly traded power company and the parent of Southern California Edison and Edison Mission Group, after 18 years there. He now serves as one of 20 senior advisers to the private-equity firm Kohlberg Kravis Roberts & Co.

CNBC.com:

• The Stupidity of Hope: Greece is Still Going to Default.

Business Insider:

• What I Learned From One Week Spent In Chengdu, China.
• Strauss-Kahn Hires ALL-MALE Cleaning Crew for his Tribeca Townhouse.
• Karzai Threatens War Against NATO.
• Europe's Cucumber Crisis Kills 14 People - Everyone Blames Spain. Most of Europe is moving to block Spanish cucumber exports after a deadly outbreak of E. coli. two weeks ago killed at least 14 people in Germany, according to Bloomberg. 329 people in Germany are reported to have a severe form of the infection, that includes bloody diarrhea and stomach cramps. Sweden had reported 30 cases; Denmark, 11; Austria 2; and Britain 3 so far, according to The New York Times.

Zero Hedge:

• Food Stamp Usage Hits Fresh Record. (graph)
• Oil Is Now Leaking In Sea Near Fukushima.
  

New York Times:

• As China's Workers Get a Raise, Companies Fret. Wages are surging this year in China and in its main low-wage Asian rivals, benefiting workers across the region. But the increases confront trading companies and Western retailers with surging costs, and are making higher price tags likely for American and European consumers.

Washington Post:

• Credit Unions Increasingly Offer High-Rate Payday Loans. To millions of member-customers, credit unions are the financial equivalent of a trusted uncle, dispensing prudent loans for cars, homes, and education without the profit motive of traditional banks. But encouraged by federal regulators, an increasing number of credit unions are competing directly with traditional payday lenders, selling small, short-term loans at prices far higher than they are permitted to charge for any other product.

CBS News:

• Muslim Girl in Beauty Contest Stoned to Death. A teenage Muslim girl was stoned to death by suspects claiming the 19-year-old has violated Sharia law by taking part in a beauty contest, a British newspaper reports. The body of Katya Koren was found in a forest near a village in the Crimea region of Ukraine. Will Stewart of the Daily Mail writes that Koren's remains were found a week after her disappearance. She appeared to have suffered head injuries and been strangled. Police are investigating claims that three Muslim youths killed her, saying her death was justified under Islamic law. The Daily Mail reports one 16-year-old suspect under arrest told police Koren had "violated the laws of Sharia." According to an official report on a Crimean government website, the 16-year-old classmate confessed to her murder, and gave as his reason, "I just wanted to kill her."

Rasmussen Reports:

• 68% Say Bank Bailout Money Went To Those Who Caused Meltdown. The latest Rasmussen Reports national telephone survey of Likely Voters finds that 61% think it was a bad idea for the government to provide bailout funding for banks and other financial institutions. Twenty-four percent (24%) say the bailouts were a good idea.

Reuters:

• Exclusive: EU Energy Plan Threatens Carbon Billions. The Europe Union's carbon market could be flooded with excess pollution permits over the next decade, cutting prices in half and depriving governments of billions in budgeted revenues, EU sources say. "There's a real concern of negative impacts on prices if the issue is not properly addressed," one EU source said on condition of anonymity. "Some of the studies imply that carbon prices will collapse."
• German FDP Expert Calls for Greek Eurozone Exit - Report. A leading finance expert of the junior coalition partner in Germany's parliament called on Tuesday for debt-laden Greece to exit the euro zone. "As long as Greece hasn't privatised a single cent worth of assets, increasing the aid would be absolutely the wrong signal," Free Democrat parliamentarian Frank Schaeffler told business daily Handelsblatt. "At the same time governments must help with an orderly euro zone exit," added Schaeffler, one of the loudest dissenting voices against Greek aid in the FDP. Athens should restructure its debt and private creditors should participate in the restructuring, he said.
• Ally Financial Bests on Risky Subprime Car Loans. Ally Financial Inc, the United States' largest maker of car loans, hopes that people have forgotten the time when "subprime" became a synonym for "disaster." Ally, once known as GMAC Financial Services, is getting ready to go public this year, and is making the case that subprime loans for used car buyers are not about to produce the same results that they did in the housing market a few years ago -- a near-collapse of the financial system.

Helsingin Sanomat:

• Greece's access to funding on the international markets next year "looks difficult," Finance Minister George Papaconstantinou said. He declined to comment on a new bailout package for Greece, saying no decisions have been made and it's too early to comment on the matter. "Any new aid will be decided on at a later stage," Papaconstantinou said. "A lot depends on whether we can tap international markets for funding already next year. At the moment that looks difficult."

Die Zeit:

• Northern European Union countries led by Germany still want private creditors to Greece to contribute to bailouts of the over-indebted country. The countries are especially pushing for a lengthening of maturities of outstanding Greek government bonds.

O Globo:

• Brazil Finance Minister Guido Mantega conditioned his support for Christine Lagarde's candidacy to head the IMF on Brazil being granted a "strategic position" on the IMF's board.

Bear Radar

Style Underperformer:

• Mid-Cap Growth (+.48%)

Sector Underperformers:

• 1) Gold & Silver -.44% 2) Education -.23% 3) Wireless -.22%

Stocks Falling on Unusual Volume:

• AIG, AVGO, DWA, MAKO, PDCO, BRCM, WMK, SKM, IBA, TRS and RLD
  

Stocks With Unusual Put Option Activity:

• 1) NOK 2) CIEN 3) NKE 4) MRO 5) DHI
  

Stocks With Most Negative News Mentions:

• 1) WEC 2) HOMB 3) KEY 4) SMG 5) LMT
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume