BETWEEN THE HEDGES

Friday, March 30, 2012

Friday Watch

Posted by Gary .....at 12:08 AM

Night Trading

Asian equity indices are -.50% to +.50% on average.
Asia Ex-Japan Investment Grade CDS Index 162.0 +7.0 basis points.
Asia Pacific Sovereign CDS Index 133.75 +6.5 basis points.
FTSE-100 futures +.65%.
S&P 500 futures +.24%.
NASDAQ 100 futures +.21%.

Morning Preview Links

Earnings of Note
Company/Estimate

(FINL)/.81

Economic Releases
8:30 am EST

Personal Income for February is estimated to rise +.4% versus a +.3% gain in January.
Personal Spending for February is estimated to rise +.6% versus a +.2% gain in January.
The PCE Core for February is estimated to rise +.1% versus a +.2% gain in January.

9:45 am EST

The Chicago Purchasing Manager Index for March is estimated to fall to 63.0 versus 64.0 in February.

9:55 am EST

Final Univ. of Mich. Consumer Confidence for March is estimated to rise to 74.5 versus a prior estimate of 74.3.

Upcoming Splits

None of note

Other Potential Market Movers

The Eurogroup meeting and NAPM-Milwaukee for March could also impact trading today.

BOTTOM LINE: Asian indices are mostly higher, boosted by industrial and commodity shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.

Thursday, March 29, 2012

Stocks Slightly Lower into Final Hour on Rising Eurozone Debt Angst, Global Growth Fears, Less Financial/Homebuilding Sector Optimism, Profit-Taking

Posted by Gary .....at 4:15 PM

Broad Market Tone:

Advance/Decline Line: Lower
Sector Performance: Most Sectors Declining
Volume: Below Average
Market Leading Stocks: Performing In Line

Equity Investor Angst:

VIX 16.19 +4.65%
ISE Sentiment Index 122.0 +35.56%
Total Put/Call 1.08 +5.88%
NYSE Arms 1.17 -17.39%

Credit Investor Angst:

North American Investment Grade CDS Index 93.22 +2.79%
European Financial Sector CDS Index 217.64 +5.64%
Western Europe Sovereign Debt CDS Index 273.15 +1.88%
Emerging Market CDS Index 247.39 +.45%
2-Year Swap Spread 24.75 +1.25 basis points
TED Spread 41.25 +1.75 basis points
3-Month EUR/USD Cross-Currency Basis Swap -51.0 -1.0 bp

Economic Gauges:

3-Month T-Bill Yield .06% -2 basis points
Yield Curve 182.0 -3 basis points
China Import Iron Ore Spot $147.70/Metric Tonne unch.
Citi US Economic Surprise Index 19.60 -1.9 points
10-Year TIPS Spread 2.31 -2 basis points

Overseas Futures:

Nikkei Futures: Indicating a -39 open in Japan
DAX Futures: Indicating a +32 open in Germany

Portfolio:

Slightly Higher: On gains in my Retail, Biotech, Medical sector longs and index hedges
Disclosed Trades: Added to my (IWM)/(QQQ) hedges and added to my (EEM) short, then covered some of them
Market Exposure: 75% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish, as the S&P 500 reverses morning losses and trades near session highs despite more disappointing US economic data, less financial/homebuilding sector optimism, high energy prices, profit-taking and rising global growth fears. On the positive side, Coal, Oil Tanker, Steel, Hospital, HMO and Education shares are especially strong, rising more than +.75%. Tech shares have held up relatively well throughout the day. Oil is down -2.3%, the UBS-Bloomberg Ag Spot Index is falling -1.14%, Copper is gaining +.53% and Lumber is gaining +1.11%. On the negative side, Bank, Ag, I-Banking, Homebuilding, Insurance and Gaming shares are under pressure, falling more than -1.0%. The Financials have traded poorly throughout the day. Major European Indices are falling around -1.5% today, led down by a -3.3% plunge in Italy. As well, Spanish equities are now down -7.7% ytd, which remains a large red flag for the region, as concerns over Spain’s sovereign debt intensify. The Germany sovereign cds is jumping +7.5% to 76.83 bps, the France sovereign cds is gaining +3.99% to 173.67 bps, the Spain sovereign cds is gaining +3.73% to 438.10 bps, the Italy sovereign cds is gaining +6.5% to 397.0 bps, the Japan sovereign cds is gaining +5.9% to 98.58 bps and the Russia sovereign cds is gaining +4.2% to 188.01 bps. Moreover, the European Investment Grade CDS Index is gaining +4.4% to 126.28 bps. The Philly Fed ADS Real-Time Business Conditions Index continues to trend lower from its late-December peak despite investor perceptions that the US economy is accelerating. Moreover, the Citi US Economic Surprise Index has fallen back to early-Nov. levels. Lumber is -8.0% since its Dec. 29th high despite the better US economic data, dovish Fed commentary, improving sentiment towards homebuilders, equity rally and decline in eurozone debt angst. Moreover, the weekly MBA Home Purchase Applications Index has been around the same level since May 2010. The Baltic Dry Index has plunged around -60.0% from its Oct. 14th high and is now down around -45.0% ytd. China Iron Ore Spot has plunged -18.4% since Sept. 7th of last year. Shanghai Copper Inventories are right near a new record and have risen +741.0% ytd. I still think this is more of a red flag for falling demand rather than the intentional hoarding, which many suggest. Today's late day rally was led by recent poor-performers, such as the Coal stocks, which likely indicates quarter-end short-covering. The macro news continues to worsen, while US stocks continue to mostly ignore it. Investor complacency is fairly elevated once again. I would like to see the market prove itself after quarter-end before becoming more aggressive on the long-side. For the recent equity advance to regain traction, I would still expect to see further European credit gauge improvement, a further subsiding of hard-landing fears in key emerging markets, a rising 10-year yield, better volume, stable-to-lower energy prices and higher-quality stock market leadership. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more tech sector optimism, falling energy prices, a bounce in the euro off the lows and investor performance angst.

Today's Headlines

Posted by Gary .....at 2:58 PM

Bloomberg:

Spain Vows to Resist Strikers’ Demands to Reverse Labor Law. Spain’s government vowed to stick to its labor overhaul, defying union leaders who threatened further unrest after staging the first general strike since Prime Minister Mariano Rajoy took office three months ago. Iberia, the Spanish unit of International Consolidated Airlines Group SA (IAG), canceled 65 percent of its flights, while national power demand was about 17 percent below usual, grid operator Red Electrica Corp. SA data showed. Unions said 77 percent of workers took part, more than during a walkout in 2010, even as the People’s Party government said fewer workers stayed home than last time. Shops, restaurants and banks in central Madrid opened as usual. While Rajoy’s measures have angered unions and undermined support for the party in a regional election on March 25, the government is still struggling to convince investors it can cut debt and reduce a 23 percent jobless rate. Spain’s extra borrowing costs compared with Germany’s increased to the most in more than a month today, surging 67 basis points from the start of March.
Monti's Labor Law Marks Return of Political Risk: Euro Credit. Investors are facing the return of political risk in Italy as Prime Minister Mario Monti’s plan to make it easier to fire workers divides his ruling coalition. Unless Italy is “ready for what we think is a good job, we may not seek to continue,” Monti said on March 26, prompting concern the government won’t last until elections due by May 2013. He made the comments after leaders of the Democratic Party, which has backed his unelected government, said they would seek to reverse the change in Parliament. The rate on Italy’s benchmark 10-year bond has risen 27 basis points to 5.11 percent since March 20 when Monti unveiled his change to the firing rules, prompting Italy’s biggest union to call a general strike. The yield difference with comparable German bunds was at 327 basis points today, up from a seven- month low of 278 the day before the announcement.
Sovereign, Corporate Bond Risk Rises, Credit-Default Swaps Show. The cost of insuring against default on European sovereign and corporate debt rose, according to traders of credit-default swaps. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments increased 1.5 basis points to 269.5, according to BNP Paribas SA at 10:45 a.m. in London. Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings added 9.5 basis points to 602.5. The Markit iTraxx Europe Index of 125 companies with investment-grade ratings was up 2.5 at 123.5 basis points. The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers rose 5.5 basis points to 214.5 and the subordinated gauge was 11.5 higher at 349.5.
Emerging Stocks Tumble to 2-Month Low on Slowdown Concern. Emerging-market stocks fell to a two-month low as U.S. jobless claims exceeded economists’ estimates and Chinese earnings missed forecasts. The MSCI Emerging Markets Index (MXEF) declined 1.4 percent to 1,029.67 by 11:34 a.m. in New York, on course for its weakest close since Jan. 31. Information technology and energy companies led declines.
H&M Profit Misses Estimates as Margin Reaches Eight-Year. Hennes & Mauritz AB (HMB), Europe’s second-largest clothing retailer, reported first-quarter profit that missed estimates as increased textile costs and markdowns led to the weakest profitability in eight years. H&M fell as much as 5.9 percent in Stockholm trading, the most since August. The retailer, which sells jeans for less than 20 euros ($26.70) and underwear designed by soccer player David Beckham, said the gross margin narrowed to 55.8 percent of sales from 57.8 percent a year earlier. That was the lowest since the first quarter of 2004, according to data compiled by Bloomberg. “H&M is having to give up margin to drive sales,” Richard Chamberlain, an analyst at Bank of America, wrote in a report.
Goldman(GS) Should Stop Saying Clients Come First, Levitt Says. Goldman Sachs Group Inc. (GS) should stop promoting itself as “putting customers first” because the slogan ignores conflicts inherent in trading, said Arthur Levitt, the former Securities and Exchange Commission chairman and a senior adviser to the firm. “We probably ought to stop saying that because nobody really puts customers first,” Levitt, 81, said in an interview with Erik Schatzker on Bloomberg Television today. “Business is a tension between sellers and buyers.”
Pension Deficit for 100 U.S. Company Plans Increased 41% in 2011. The pension-funding deficit for 100 of the largest defined-benefit pension plans at U.S. companies, including Boeing Co. (BA) and AT&T Inc.(T), increased 41 percent last year as low interest rates drove up liabilities. The 100 largest plans posted a record shortfall of $326.8 billion for 2011, up from $232.1 billion a year earlier, according to a report by Milliman Inc., a Seattle-based actuarial and consulting company. Pension-related charges to earnings rose to $38.3 billion, also a record, from $30.5 billion in 2010, according to the report, based on figures for the largest U.S. plans that reported 2011 data in 10K filings to the U.S. Securities and Exchange Commission by March 5. Contributions to pensions were $55.1 billion for the 100 companies tracked, according to the report. Costs related to pensions will continue to rise because of low interest rates, which cause estimated pension payouts to increase after they are calculated at net present value.
Best Buy to Cut Costs Close 50 Stores. Best Buy Co. said it plans to close 50 U.S. big box stores and open 100 small mobile locations in the U.S. in fiscal 2013 and cut $800 million in costs by fiscal 2015. The news came Thursday as the biggest U.S. specialty electronics retailer posted a fiscal fourth quarter loss partly due to restructuring charges. Despite the loss, Best Buy's adjusted results for the quarter topped Wall Street's expectations. But the company's full year revenue guidance fell slightly short of analysts' expectations, sending its stock down 6 percent.
Fed Nominees Powell, Stein, Approved by Senate Banking Committee. The Senate Banking Committee approved both of President Barack Obama’s nominees to the Federal Reserve’s Board of Governors, advancing them to the full Senate for a final confirmation vote. The panel voted to approve the nominations of Harvard University professor Jeremy Stein and Jerome Powell, an attorney and private equity investor who was a Treasury undersecretary for President George H.W. Bush.
Jobless Claims More Than Estimates: Economy. Applications for jobless insurance dropped by 5,000 last week to 359,000, the Labor Department said today in Washington. The Labor Department revised the claims data to reflect updates to the seasonal adjustments used to help smooth out week-to-week changes. The result of the adjustment led to higher levels of initial claims over recent weeks, while leaving intact the trend of declining dismissals over the past year. The median forecast in the Bloomberg survey of 46 economists called for 350,000 claims. The Labor Department revised the previous week’s figure to 364,000 from an initially reported 348,000.
Fed's Plosser Says Fed May Need to Raise Rates Before End of 2014. Federal Reserve Bank of Philadelphia Charles Plosser said the Fed may need to raise interest rates before late 2014 and that additional stimulus isn’t needed as the U.S. economy shows signs of strength.

Wall Street Journal:

Euro-Zone Fix Would Cost EUR5.1 Trillion, Says New Report. Remember euro bonds? The Boston Consulting Group is reviving that highly contentious topic in a sweeping new proposal that, even if it never flies, highlights the giant amounts at stake in Europe's debt crisis. BCG's report estimates the amount of debt to be restructured at an alarmingly large EUR5.1 trillion ($6.8 trillion) -- more than seven times the size of German Chancellor Angela Merkel's latest proposal for an expanded European bailout facility. That is hardly going to go over well with Merkel and leaders of other bailout-weary electorates among the euro zone's creditor nations. But the advisory firm believes the eventual alternative to jointly restructuring the region's excess sovereign and private debt is worse: a chaotic breakup in the euro zone with "devastating consequences."
India Raises Heat on Foreign Companies. If businesses like certainty, then India has been a big turnoff for foreign companies. A series of recent developments have greatly increased the perception that the country has a risky business environment where policies suddenly can turn hostile. Tax proposals in the national budget unveiled in March stunned foreign firms. They could create significant retroactive tax liabilities for international mergers stretching back a half-century and eliminate a tax exemption many investors now have, wreaking havoc on corporate deal making, legal experts say. More than a half-billion dollars in foreign capital has left the Indian stock market in recent days.
BRIC Nations Push for Faster Change at IMF. The Brics group of nations expressed concern Thursday over the West's slow pace at giving developing nations greater control over the International Monetary Fund, and they bashed Western countries' loose monetary policies for causing instability in global financial markets.
Autism Cases Rise in U.S., Report Finds. One in every 88 U.S. children has been diagnosed with an autism-like disorder, a government report says, up sharply since figures were last published in 2009, but the reasons for the increase largely remain a puzzle to public-health officials. The number of kids in the U.S. who have been identified with autism-spectrum disorders, characterized by substantial social impairment and repetitive behaviors, has been on the rise for years. Thursday's numbers, put out by the Centers for Disease Control and Prevention, show a 23% increase over data gathered in 2006 and a 78% increase from 2002.
The ObamaCare Reckoning. After the third and final day of Supreme Court scrutiny of the Affordable Care Act, the bravado of the legal establishment has turned to uncertainty and in some cases outright panic. Everyone who said the decision was an easy fait accompli has been proven wrong by a Court that has treated the constitutional questions that ObamaCare poses with the seriousness they deserve. This reckoning has also been a marvelous public education.

MarketWatch:

Most Tax-Friendly States For Retirees.
Europe ends sharply lower on data; yields jump. Italy’s FTSE MIB index drops more than 3%.

CNBC.com:

Jes Staley, chief executive officer of JPMorgan Chase & Co.'s(JPM) investment bank, told CNBC that equities trading in the first quarter was "still lighter than we'd like to see it." Asked about the trading environment in the quarter, particularly in equities, Staley said it's "down about 20%" from a year ago.
Do We Have a Hot IPO Market or Not? So do we have a hot initial public offering market or not? After yesterday's stunning debut of Annie's Foods and Vocera Communications, everyone was watching to see if today's IPO crop would outperform. So far, the picture is mixed:
Investors Brace for China's First Bond Default. China's fledgling corporate debt market will face a watershed moment next month, when an insolvent manufacturer of chemical fibers may become the first company in the brief history of the country's bond market to default on its obligations.

Business Insider:

Zero Hedge:

Washington Times:

Wolf: Obamacare's Inescapable Death March. The die is cast: Obamacare will not survive. This is not a prediction of how the Supreme Court will rule on President Obama’s health care takeover, mind you. It’s the harsh reality that if Obamacare does not die a judicial or political death - or better yet, both - it will die an economic death, and if it does, it will take America down with it.

CNN:

U.S. Moving Minesweepers to Waters Near Iran. Four Navy minesweepers will be on their way to the Persian Gulf within weeks as part of an effort to boost American military capability in the region amid rising tensions with Iran, a Navy official says. The minesweepers will be loaded onto cargo ships leaving the United States in late April, according to the Navy official. The deployments were publicly confirmed by Adm. Jonathan Greenert, chief of naval operations, earlier this month in testimony before the Senate Armed Services Committee. "We are moving four more mine sweeps to the theater," he said. "That'll make eight. We are moving airborne mine countermeasure helicopters. That'll take us to eight in theater. And ... those, working with the British mine sweeps there, which we exercise with frequently, sets us up a little bit there."

Reuters:

Goldman(GS) Commodities Crown Slips As Traders Exit.
US Gold and Copper Slide as Dollar Strengthens.
Oil Slips Under $123/bbl. U.S. unemployment claims fell to a four-year low but still failed to meet heightened market expectations, leaving investors to wonder whether the economy can sustain a rally. Brent crude futures fell $1.30 to $122.86 a barrel at 1601 GMT, extending losses after falling 1.09 percent the previous session. U.S. crude futures also fell, down $2 to $103.41 a barrel, having dropped by 1.79 percent on Wednesday. Signs of slowing economic growth also emerged from China, where the Shanghai exchange closed at a two-and-a-half month low on weaker-than-expected corporate results.
Pentagon Sees Mass Layoffs If Budget Cuts Prevail. The Pentagon said on Thursday it would expect hundreds of thousands of layoffs across the defense industry if lawmakers did not take action to avert an additional $500 billion in defense budget cuts that could take effect in January 2013.

Telegraph:

Debt Crisis: Live. Investors remain jittery after the OECD warns the eurozone is holding back a shaky G7 recovery while a general strike in Spain and a fall in unemployment in Germany highlights the two-speed nature of the eurozone economy.
UK is Back in Recession, Says OECD. Britain has plunged back into a recession, as the economy continued to shrink in the first three months of the year, according to a leading global authority.

Het Financieele Dagblad:

Portugal May Need More European Aid, ECB's Knot Tells Dagblad. Portugal's adjustment program has been affected by the prolonged discussion on private sector involvement in the Greek rescue package, ECB Governor Klaas Knot said in an interview.

Ansa:

Italy's economic recession will last the entire year, Development Minister Corrado Passera told a parliamentary committee.

Shanghai Daily:

Sales of New Homes Fall for Third Straight Quarter. Between January 1 and Wednesday, a total of 1.18 million square meters of new apartments, excluding government-funded affordable units, were sold, down 11 percent from the previous three months, Century 21 China Real Estate said in a report released yesterday. "Compared with the same period in 2011 and 2010, this quarter's apartment transaction would also be the lowest as buying momentum didn't pick up until this month," said Huang Hetao, a research manager at Century 21. "The real estate developers also seemed not keen to release their projects over the past three months amid sluggish sentiment."

Bear Radar

Posted by Gary .....at 1:24 PM

Style Underperformer:

Small-Cap Value -1.10%

Sector Underperformers:

1) Homebuilders -3.0% 2) I-Banking -2.21% 3) Banks -1.67%

Stocks Falling on Unusual Volume:

BBY, SABA, FMCN, PATK, MAPP, GSVC, WPRT, WFM, UBNT, ANGI, VRA, ARUN, MPEL, AFFY, NTES, JCOM, STO, AIZ, LNCR, GMCR, PEET, HELE, DXPE, PVR, EWH, WWW, GME, UNG, MOS, BIG, TXI and AH

Stocks With Unusual Put Option Activity:

1) PHM 2) XHB 3) OIH 4) BBY 5) F

Stocks With Most Negative News Mentions:

1) WFM 2) AXP 3) NTES 4) JPM 5) UPS

Charts:

Bull Radar

Posted by Gary .....at 11:12 AM

Style Outperformer:

Large-Cap Growth -.48%

Sector Outperformers:

1) HMOs +.88% 2) Computer Services +.15% 3) Software -.12%

Stocks Rising on Unusual Volume:

MOV, AET, CI, YPF, ILMN, RHT, PSS, MCP, CVH and FUL

Stocks With Unusual Call Option Activity:

1) WLP 2) AET 3) RHT 4) BBY 5) TEX

Stocks With Most Positive News Mentions:

1) EBAY 2) SSI 3) DTV 4) T 5) DHI

Charts:

Thursday Watch

Posted by Gary .....at 12:24 AM

Evening Headlines
Bloomberg:

Spanish General Strike Looms as Rajoy Corned by Deficit Crisis. Spanish Prime Minister Mariano Rajoy will today face down the first general strike against his three-month old government as pressure from investors and European peers trumps demands from unions. The People’s Party government “will not cede” as the economic situation is at the “limit,” Budget Minister Cristobal Montoro said yesterday. Spain’s two biggest unions are predicting broad support for the strike against changes to labor laws and austerity, even as a poll by El Pais showed just 30 percent of workers would join the walkout. While Rajoy’s measures have angered unions and undermined support for the party in a regional election on March 25, the government is still struggling to convince investors its policies are enough to restore the public finances and reduce a 23 percent jobless rate. Spanish 10-year borrowing costs have surged almost 50 basis points since the start of March. “He has no choice,” said Antonio Barroso, a political analyst at Eurasia Group in London and a former government pollster. “If he gives in the markets will punish Spain. Rajoy has his back against the wall.” Unions have organized a demonstration in central Madrid at 6:30 p.m. In the El Pais poll, published on March 25, 51 percent of those surveyed said the strike was justified. Comisiones Obreras and Union General de Trabajadores have agreed with the government to run 35 percent of rush-hour suburban train services and 20 percent of high-speed trains today.
Espirito Santo Among Five Portugal Lenders Downgraded by Moody’s. Banco Espirito Santo SA (BES) was among five banks in Portugal to have credit ratings cut by Moody’s Investors Service, which cited asset risks and a “poor economic outlook” in a nation whose own grade was reduced last month. Espirito Santo, Portugal’s largest publicly traded bank by market value, had its debt rating lowered one level to Ba3, Moody’s said yesterday in a statement. It took the same action for Caixa Geral de Depositos SA and Banco BPI SA. (BPI) Banco Internacional do Funchal was downgraded to B1 from Ba3.
China's Stocks Poised to Extend Drop on Profit, Says Julius Baer. Chinese stocks are poised to extend their slump as the slowing economy hurts earnings, according to Bank Julius Baer & Co., which has about $286 billion in client assets worldwide. Chinese equities will probably retreat unless there is “significant” easing of monetary policy, Alan Lam, a Hong Kong-based analyst at Julius Baer, said by phone yesterday. His comments came after the Shanghai Composite Index (SHCOMP) fell 2.7 percent, the most in four months, as Societe Generale SA said Chinese corporate profits won’t grow at all this year. “In the coming three months, the rally has ended,” Lam said. “The economic slowdown will continue for a while and there are overexpectations on policy. It’s a fact that the economic slowdown in China is negative on profitability.” The Shanghai Composite has slumped 7.2 percent from this year’s high on March 2 on concern the world’s second-biggest economy is stalling as government property curbs and tight monetary policies reduce profits. The Hang Seng China Enterprises Index (HSCEI) of Hong Kong-listed Chinese stocks has tumbled 9.5 percent this month, the second-biggest slump among 93 primary indexes tracked by Bloomberg.
Californians Love Taxes, Not Government Reform. A funny thing happened after California officials announced the shutdown of 70 state parks in the face of an estimated $33 million in budget cutbacks: Private companies, wealthy donors, nonprofit organizations and local governments came up with ways to keep many parks open. Eleven parks have already been dropped from the closing list, and the parks agency is holding workshops to teach community groups how to run a state park. Unfortunately, such creative solutions -- where government officials privatize services or find other ways to stretch the taxpayer’s dollar -- appear less likely as Californians express support for tax increases.
4 Numbers Add Up To An American Debt Disaster. 1) 2.2 percent is the average interest rate on the U.S. Treasury’s marketable and non-marketable debt (February data). 2) 62.8 months is the average maturity of the Treasury’s marketable debt (fourth quarter 2011). 3) $454 billion is the interest expense on publicly held debt in fiscal 2011, which ended Sept. 30. 4) $5.9 trillion is the amount of debt coming due in the next five years.
BofA(BAC) Says Monynihan Received $7 Million in Compensation Package. Bank of America Corp., the second- biggest U.S. lender, said Chief Executive Officer Brian T. Moynihan's 2011 compensation package was $7 million for 2011, a 30 percent cut, as the company's stock slumped. The CEO's salary was unchanged at $950,000, with the rest of his package consisting of $1.82 million in "cash-settled restricted stock units" and $4.24 million of restricted stock units tied to performance, according to a regulatory filing yesterday. A separate calculation conforming to U.S. Securities and Exchange Commission standards showed Moynihan's compensation quadrupled to $8.09 million. Moynihan, 52, spent his second year as CEO selling more than $33 billion in assets and targeting $8 billion of cost savings as revenue stagnated. Profit rebounded to $1.4 billion in 2011 from a $2.2 billion loss a year earlier, and capital levels rose in the fourth quarter. The stock plunged 58 percent last year, the worst in the Dow Jones Industrial Average.
MF Global Treasurer Provides No Answers on Missing Funds. A U.S. House investigations subcommittee ended a third hearing into the collapse of MF Global Holdings Ltd. with the same problem they had four months ago: No answers from the woman said to have the most information about what happened to $1.6 billion in missing client money. Edith O’Brien, assistant treasurer at the firm’s brokerage, invoked her constitutional right against self-incrimination yesterday at a congressional hearing, disappointing lawmakers seeking answers to questions about frantic money transfers during the company’s final days in October.

Wall Street Journal:

Health Case Ripples Outword. After three days of historic Supreme Court debate, the political world and health-care companies confronted the prospect of President Barack Obama's health law being wiped away, a decision that would upend years of planning by businesses and roil the November elections.
Iran Oil Slows as Price Concerns Rise. Iran's oil exports appear to have dropped this month as buyers prepare for tough new sanctions, market observers say, and shipments are likely to shrink further if President Barack Obama determines by Friday, as expected, that markets can adjust to fewer barrels of Iranian oil.
For Portugal, Moment of Truth Nears. Politicians in Lisbon and policy makers in Brussels insist that Portugal isn't like Greece. This spring, the country will have to prove it. The European Central Bank's injection of money into the Continent's banking system has, for now, pulled Italy and Spain away from the edge of the sovereign-debt crisis. But that medicine hasn't soothed Portugal. Though its government-bond yields have improved this week, they remain at elevated levels that suggest distress.
AIG's Death-Bet Team Departs. A team who helped run American International Group Inc.'s $18 billion portfolio of "life-settlement" investments has left the company to launch a firm that advises investors on the controversial holdings. The departures signal that AIG, one of the largest financial conglomerates to fall victim to the financial crisis, remains committed to retreating from ancillary businesses to focus on its core property-casualty and life operations.
Facebook(FB) Targeting May IPO. Facebook Inc. is preparing its initial public offering for May, according to people familiar with the matter, in what is shaping up to be the largest-ever U.S. Internet offering. The Menlo Park, Calif., social network halted trading of its shares on the secondary market this week, as it sets about nailing down its shareholder count, according to a person familiar with the matter.
Survey Finds Americans Staying Put. A scant 10% of Americans plan to move to a new residence this year, while 70% plan some sort of home improvement, showing that consumers continue staying put as they wait for the housing crisis to finish playing out. Of those looking to move, some 44% expect to buy, while 42% are looking to rent, according to the latest American Express Spending & Saving Tracker survey released Wednesday. (The questions related to moving are new this year, so no previous comparison is available.) Not surprisingly, the survey found a lack of confidence in the housing market is hampering buying and selling activity. More than half of those surveyed are “not very/not at all confident” that they would get their asking price. Most respondents are also willing to make concessions to help sell their home — including paying for buyer’s closing costs (15%), offering to make requested repairs (29%), offering to include appliances (41%) and offering to include furniture (12%).
Chaos Over a Plunging Note. Regulators are examining volatile trading in a complex exchange-traded note that caused it to lose 60% of its value in the past week. The Securities and Exchange Commission is looking into the VelocityShares 2x Long VIX Short Term Exchange note(TVIX), managed by Credit Suisse Group AG, which had about $700 million in assets before the decline, according to people familiar with the matter. The SEC review is preliminary, the people said.
We're Not France, Yet. Maybe the United States dodged a bullet this week. Make that a deep-penetration bunker buster into the original idea of America. On Tuesday, the justices of the Supreme Court sounded, on balance, to be disposed against affirming the Obama health-care law's mandate.

Fox News:

Lenders Opening Up To Borrowers With Shaky Credit. The amount of new credit extended last year to U.S. consumers grew more than 10% to $782 billion, spurred in part by more loans to "subprime" borrowers, according to new data from credit bureau Equifax. The total includes credit cards, auto loans, personal loans, home-equity lines of credit and student loans but excludes mortgages. Growth in subprime-loan originations was especially prevalent in the credit-card and auto-loan markets, a stark contrast from the recession, during which banks cut off lending to all but the most credit-worthy borrowers.
Rubio endorses Romney, saying he's 'earned' it. (video) Sen. Marco Rubio, R-Fla., endorsed Mitt Romney for president Wednesday night on Fox News' "Hannity," saying Romney offers "a very clear alternative" to President Obama's vision for the future of the country. Rubio, a young, first-termer who has been discussed as a possible vice presidential candidate, criticized talk of a fight for the Republican nomination on the convention floor, a possibility that is keeping alive the campaigns of Rick Santorum and Newt Gingrich.

Dow Jones:

S&P Says Greece May Need Another Restructuring. Greece will likely have to restructure its new bonds at some point in the future, said the head of sovereign ratings for Europe, Middle East and Africa at Standard & Poor's Corp. Earlier this month Greece pushed through the largest sovereign-debt restructuring in history in order to avoid defaulting on its bonds. Speaking on a panel at the London School of Economics, S&P head Moritz Kraemer said the CCC rating on Greece's new bonds is "extremely low," factoring in the large risk of another sovereign debt restructuring.

MarketWatch:

The False Promise Of China Bank Profits. There is no longer any doubt over the profiteering model’s risks.

Business Insider:

Zero Hedge:

CNBC:

Plunge in Natural Gas Prices Is Reshaping Energy Industry. Natural gas prices are falling near levels last seen in the 1990s, which could help spur the US to develop more uses for the fuel, including transportation.

IBD:

VeriFone(PAY) To Make Hay On Pay As EMV Chip Cards Arrive.

Forbes:

China Luxury Warning? Ports Design Suspends Trade, Warns Of Results Delay. Fashion retailer Ports Design yesterday suspended trading in its shares at the Hong Kong Stock Exchange and warned of a possible delay in posting its annual results that would put the fashion retailer in non-compliance with listing rules.

Time:

Inside the Supreme Court: Why Obamacare Supporters Are Getting So Nervous.

The Detroit News:

Patterson Fears Detroit Is Headed For Bankruptcy, Unrest. Oakland County Executive L. Brooks Patterson said Wednesday he is concerned that harsh comments against a possible consent agreement to solve Detroit's financial crisis could foster economic chaos and even civil unrest. In an interview, Patterson expanded on remarks he made before a Chamber of Commerce breakfast Wednesday morning at Oakland University. During the event, he described Detroit as a "tinderbox" and criticized a minister's comments made at a Detroit town hall meeting. The outspoken Patterson also predicted Detroit couldn't survive without an emergency manager "yet continues to borrow money in an effort to get out of debt." "Detroit is in a desperate economic struggle and appears headed towards the cliff we call bankruptcy," said Patterson. "An emergency manager may be the only way out of it. We have seen that in Flint, Pontiac, other cities, struggling with money problems. In Pontiac, we went from hundreds of employees and eliminated police and fire departments, much of city hall, and will probably be down to about 20 before it is all done."

Reuters:

Mosaic(MOS) Profit Misses Street On Potash(POT) Sales Drop. Mosaic Co posted a stark drop in quarterly profit as farmers bought less potash fertilizer and costs jumped in the phosphate fertilizer segment. High prices for potash kept many customers from buying ahead of the spring planting season, which begins shortly in North America. Chief Executive Jim Prokopanko blamed global economic concerns during the company's December to February fiscal quarter for the weak results, but said sales are already on the rebound.
Red Hat(RHT) Profit Beats, To Buy Back Stock. Red Hat Inc's quarterly profit beat analysts' expectation for the fifth straight quarter on the back of higher subscription revenue, and the business software maker said it would buy back $300 million of its shares. The stock of the world's largest distributor of the Linux operating system rose more than 8 percent after the bell.

Telegraph:

Obama's Disturbing Missile Defense Comments.

Sueddeutsche Zeitung:

Greece still needs to implement several measures which may be "painful" for its population to restore the country's fiscal health and remain in the euro, citing the European Commission's Matthias Mors. European Union member states will probably insist on Greece not becoming accustomed to being a recipient of aid, the newspaper cited the member of the so-called troika of the commission, IMF and ECB as saying.

Fuji TV:

North Korea fired two missiles toward the Yellow Sea around 4pm local time yesterday, citing a Japanese govt official.

Xinhua:

China's "major" steelmakers incurred combined losses of 2.8b yuan in Jan.-Feb., citing the China Iron and Steel Association.

Shanghai Securities News:

The National Energy Administration told local governments not to "arrange" new wind power projects in areas where more than 20% of wind farm output is lost because of limited grid capacity, citing a notice.

Evening Recommendations
ThinkEquity:

Rated (GOOG) Buy, target $714.
Rated (AMZN) Buy, target $230.
Rated (EBAY) Buy, target $43.
Rated (Z) Buy, target $40.