Friday, January 11, 2013

Today's Headlines

Bloomberg: 
  • European Stocks Post Weekly Drop on Valuation, China. European stocks fell in the second week of 2013 amid the highest valuation in 11 quarters for the benchmark Stoxx Europe 600 Index and concern that quickening inflation in China will limit the scope for economic stimulus. 
  • U.K. Economy Shrank 0.3% in Fourth Quarter, Niesr Estimates. Britain’s economy probably shrank in the fourth quarter, tipping it closer to a triple-dip recession, according to an estimate from the National Institute of Economic and Social Research. Gross domestic product fell 0.3 percent in the period after rising 0.1 percent in the three months through November, the London-based institute, whose clients include the Bank of England and the U.K. Treasury, said in a statement today.
  • Fed’s Plosser Says Stimulus May Backfire, Fuel Inflation. Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank’s record stimulus risks a surge in inflation and may impair efforts by households to repair their finances. “Attempts to increase economic ‘stimulus’ may not help speed up the process and may actually prolong it,” Plosser said in the text of a speech today in Somerset, New Jersey.
  • Trade Gap in U.S. Widens. The gap swelled 15.8 percent to $48.7 billion, the largest since April, Commerce Department data showed today in Washington. The shortfall exceeded all projections in a Bloomberg survey of economists.
Wall Street Journal:
  • SAC Is Bracing for Big Exodus of Funds. Hedge-fund group SAC Capital Advisors has told employees and business partners it is bracing for client withdrawals of at least $1 billion this year—nearly 17% of the money it manages for outside investors—amid intense regulatory scrutiny of alleged insider trading, people briefed on the conversations said.
  • Fed’s Plosser: Platinum Coin Not Worth Risk to Credibility. The “mint the coin” gang doesn’t have a friend in Philadelphia Fed chief Charles Plosser. The currency in question is the so called “platinum coin” some say the Treasury could create in a bid to do an end run around hitting the debt ceiling.
CNBC:
  • Why Stock Market Is 'Going to Hit a Brick Wall'. If mom-and-pop investors are always the last ones to the stock party, then it might be time to call a cab. Market behavior in recent weeks suggest that after years of running from equities, the retail crowd is coming back in a big way.
Business Insider:
RTT News:
  • China's 2012 Auto Sales Miss Expectations. China's automobile sales missed official estimate in 2012 due to anti-congestion measures adopted by the government and low imports from Japan on territorial dispute. Auto sales grew 4.3 percent in 2012, which was much below the official estimate of 8 percent growth, data from the China Association of Automobile Manufacturers showed Friday.
NY Post:
  • Atlantic City casinos were bad bet for hedge funders. Turns out, the house doesn’t always win. Hedge-fund high rollers who bet big on a comeback for Atlantic City’s casinos are watching their gambling profits dwindle. The city’s casino industry suffered its sixth straight decline last year, with winnings down 8 percent to $3.05 billion, the New Jersey Division of Gaming Enforcement said in its latest annual report, released yesterday. Even before Sandy laid waste to the city’s famed boardwalk and emptied its casinos, the gaming industry was down 4.8 percent through September, the regulator said. The numbers suggest the odds are increasingly stacked against deep-pocketed backers who play a key role in reviving the city’s fortunes.
  • Bad Insta karma. Nearly 8 million users bail.Facebook’s(FB) Instagram continues to slide after an Internet uproar last month over policy changes to the photo-sharing service, new data show. Instagram has shed nearly half its daily active users — the highest frequency group — since the fiasco over its terms of use, according to AppStats. Its figures show that Instagram’s active daily users dropped to 8.42 million this week, from 16.35 million on Dec. 17, the day the controversial news broke.
Pragmatic Capitalism:
Reuters: 
  • US Fed official warns about slipping into currency wars. A top U.S. Federal Reserve official waded into the sticky debate over global currency wars on Friday, warning that such beggar-thy-neighbor monetary policies would only hurt world trade and the economies that were involved.
MF: 
  • Italy May Need to Pass EU 7b Austerity Measures in Spring. A new austerity package worth as much as EU 7b in the spring is "more than likely," citing government officials. Without the measures, Italy risks not meeting its structural deficit target. Tax revenue is less than expected, Finance undersecretary Gianfranco Polillo said on La7 yesterday.
Xinhua:
  • China sends fighters to counter Japanese aircraft. China's Ministry of National Defense on Friday denounced Japanese military aircraft disrupting the routine patrols of Chinese administrative aircraft. At a press conference, an official with the ministry confirmed that China sent two J-10 fighters to the East China Sea after a Y-8 aircraft was closely followed by two Japanese F-15 fighters as it patrolled the southwest airspace of the East China Sea oil platform on Thursday. The two J-10 fighters were sent to monitor the Japanese fighter jets tailing the Y-8 as well as another Japanese reconnaissance plane spotted in the same airspace, the official said. Furthermore, the official said Japanese military aircraft have been increasingly active in closely scouting Chinese aircraft. The activity zone of Japanese military aircraft has also expanded recently, which is the root cause of security disputes concerning territorial waters and airspace between the two countries. The Chinese military will be on high alert and China will resolutely protect the security of its air defense force and uphold its legitimate rights, the official said.

Bear Radar

Style Underperformer:
  • Mid-Cap Value -.40%
Sector Underperformers:
  • 1) Coal -3.70% 2) Steel -1.95% 3) Banks -1.30%
Stocks Falling on Unusual Volume:
  • TGA, CNSL, TRST, PZE, TIVO, CHU, AVAV, CIEN, CCO, FNSR, KBR, SSRI, SNX, FARO, ARO, SVEP, CBD, RUE, ELN, WPI, WSO, PRGO, INCY, BBL, CNA and BA
Stocks With Unusual Put Option Activity:
  • 1) GT 2) SWY 3) GGC 4) TEX 5) CTSH
Stocks With Most Negative News Mentions:
  • 1) CENX 2) JCP 3) CNA 4) BA 5) DELL
Charts:

Bull Radar

Style Outperformer:
  • Large-Cap Growth -.21%
Sector Outperformers:
  • 1) Airlines +.95% 2) Computer Services +.86% 3) Hospitals +.38%
Stocks Rising on Unusual Volume:
  • INFY, VELT, DK, BBY, SPLK, FIO and CTSH
Stocks With Unusual Call Option Activity:
  • 1) GGC 2) AGN 3) NRG 4) EA 5) MNST
Stocks With Most Positive News Mentions:
  • 1) PM 2) JCI 3) BBY 4) LMT 5) HPQ
Charts:

Friday Watch

Evening Headlines 
Bloomberg: 
  • Bondholders in Crosshairs as Merkel Travels to Cyprus. Bondholders are in the crosshairs as conservative European leaders gather in Cyprus amid talks over a bailout that may be as big as the nation’s entire economy. German Chancellor Angela Merkel said this week Cyprus won’t get “special” treatment as it negotiates the rescue it requested in June. She, Ireland’s Enda Kenny and other leaders of the European People’s Party descend on the city of Limassol to discuss the next European Union budget as they back Nicos Anastasiades, head of the DISY opposition, as successor to Communist President Demetris Christofias in February elections. Aid for the third-smallest euro nation will test policy makers’ commitments to hold the 17-member currency bloc together and avoid more sovereign-debt writedowns after they called Greece’s restructuring a one-off. The workarounds may put most of the burden on bank bondholders and possibly depositors.
  • Cyprus Cut Three Steps to Caa3 by Moody’s on Bank-Bailout Costs. Cyprus’s credit rating was cut three steps to Caa3 by Moody’s Investors Service, citing the government’s projected increased debt load from the need to recapitalize its banking system. Nonperforming loans at the nation’s three largest banks rose to 26 percent in September from 19 percent in March, New York-based Moody’s said today in a statement. Recapitalizing those institutions may cost of about 10 billion euros ($13.3 billion), Moody’s said. “As a result of the increased debt burden, we think there’s a higher likelihood that the Cypriot government may default outright or press for a distressed exchange,” Sarah Carlson, a senior credit officer at Moody’s in London, said in a telephone interview. “It’s important to note that our base-case scenario does not assume that this will happen in 2013.” Cyprus’s debt to gross-domestic-product ratio may rise to 150 percent this year, Moody’s said
  • Berlusconi Denies Responsibility for Italy Crisis in TV Showdown. Former Italian Prime Minister Silvio Berlusconi, the country’s longest-serving elected head of government, refused to accept responsibility for the deepening recession in a televised debate last night with a long-time critic.
  • China’s Inflation Accelerates as Chill Boosts Food Prices. China’s inflation accelerated more than forecast to a seven-month high as the nation’s coldest winter in 28 years pushed up vegetable prices, a pickup that may limit room for easing to support an economic recovery. The consumer price index rose 2.5 percent in December from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.3 percent median estimate in a Bloomberg News survey of 42 economists and a 2 percent gain in November.
  • China Data Suspected Says 75-Year-Old Theory: Cutting Research. A mathematical tool devised by an American physicist in the 1930s underscores doubts about the quality and reliability of Chinese economic data, according to research by Australia & New Zealand Banking Group Ltd. (ANZ) The results are based on “Benford’s Law,” which holds that in any series of numbers, certain patterns will be found only if the statistics are naturally generated. The rule, created by former General Electric Co. (GE) engineer Frank Benford, suggests patterns for the first and second digits in a numeric series and can be used to detect phony data, Li-Gang Liu, ANZ’s chief economist for Greater China, and colleague Louis Lam said in a Jan. 8 report. Benford’s work has already been adapted to show Greece should have been suspected of manipulating its data before the European debt crisis and that now-jailed financier Bernard Madoff was overstating investment returns.
  • China’s Stocks Fall After Inflation Data, Paring Weekly Gains. Chinese stocks fall, paring a sixth week of gains for the benchmark index, as a government report showing inflation accelerating more than forecast overshadowed optimism an economic recovery will bolster earnings. Citic Securities Co., the nation’s biggest-listed brokerage, and Soochow Securities Co. dropped more than 1 percent after the People’s Daily reported that regulators warned the two brokerages for failing to make timely disclosures.
  • Gross Raises Holdings of Treasuries to Highest Level Since July. Bill Gross raised the percentage of Treasuries held in his flagship fund to 26 percent in December, the highest level since July, while warning of the inflationary risks of stimulus programs such as quantitative easing. The world’s biggest manager of bond funds increased the proportion of U.S. government and Treasury debt in Pacific Investment Management Co.’s $285 billion Total Return Fund (PTTRX) from 23 percent of assets in November, according to a report on the company’s website. Mortgages remained his largest holding, though the percentage was reduced from 44 percent to 42 percent, the least since October 2011.
  • AmEx(AXP) Cuts Jobs as Digital Age Transforms Travel Business. American Express Co. will eliminate 5,400 jobs this year, mostly in travel services, as consumers and businesses rely more on digital technology for bookings. The lender posted a 47 percent drop in fourth-quarter profit and recorded after-tax charges totaling $594 million, including costs tied to severance and changes in how the firm estimates future redemptions of credit-card rewards, New York- based AmEx said yesterday in a statement. “Travel has gone through a great deal of change,” Chief Executive Officer Kenneth I. Chenault said in a conference call with analysts. The economics of corporate travel has “changed more dramatically over the years than any part of the business.”
  • Pentagon Authorizes Steps Such as Freezing Civilian Hires. The Pentagon has authorized senior managers to freeze civilian hiring, curtail travel and training, dismiss temporary workers, review contracts and cancel some weapons maintenance because of uncertainty over the budget. “We have no idea what the hell’s going to happen,” Defense Secretary Leon Panetta said today at the Pentagon, in explaining the need to begin cost-cutting measures. “All told, this uncertainty, if left unresolved by the Congress, will seriously harm our military readiness.”
Wall Street Journal: 
  • Wads of Cash Squeeze Bank Margins. Inability to Find Credit-Worthy Borrowers Is Squeezing Lenders’ Margins. U.S. banks are struggling with a problem most people would love to have: too much cash. But the flood of deposits into U.S. financial firms, at a time when many lenders are having difficulty making new loans, spells trouble for the industry as banks prepare to post fourth-quarter numbers. Deposits reached a record $10.6 trillion at the end of 2012, according to Market Rates Insight Inc., a San Anselmo, Calif., firm that tracks deposit data. Meanwhile, the share of each deposit dollar that banks lend out hit a postfinancial-crisis low in the third quarter, according to data tracker SNL Financial of Charlottesville, Va. Extra cash can help cushion banks in an economic downturn, but it also helps to explain why banks’ net interest margin—the sum they collect by pocketing the difference between the interest they pay to depositors and the rate they charge borrowers—has fallen sharply.
  • Rivkin and Casey: The Myth of Government Default. Three false arguments, pushed hard by the Obama administration and accepted on faith by the media and much of the political establishment, must be laid to rest if the American people are to understand the issues at stake in the federal "debt ceiling" debate. The first is that Congress's failure to raise the debt ceiling—the amount of money the federal government is authorized to borrow at any given time—will cause a default on the national debt. The second is that federal entitlement programs are constitutionally protected from spending cuts. The third is that the president can raise the debt ceiling on his own authority.
MarketWatch.com:
  • PC sales fall 6.4% in Q4, worse than expected. Unit sales of PCs slid 6.4% in the fourth quarter compared to the same period last year, according to data released by IDC late Thursday. This was worse than the 4.4% that was predicted earlier by the market research firm -- and notable in that the quarter included the retail launch of the Windows 8 operating system from Microsoft Corp. Calling the PC market "sluggish," IDC said in its report that PC sales "continued to take a back seat to competing devices and sustained economic woes." In terms of global shipments, Hewlett-Packard HPQ retained the number one slot with 16.7% market share for the quarter, followed by Lenovo at 15.7% and Dell DELL at 10.6%. 
  • Videogame retail sales fall 26% in December. Sales of videogame software at U.S. retailers plunged by 26% in the month of December compared to the same period last year, according to data from NPD Group released late Thursday. Hardware sales slid by 22%, despite the presence of the new Wii U console from Nintendo.
CNBC: 
Zero Hedge: 
Business Insider: 
Washington Post: 
  • White House considers funding for police in schools after Newtown. The Obama administration is considering a $50 million plan to fund hundreds of police officers in public schools, a leading Democratic senator said, part of a broad gun violence agenda that is likely to include a ban on high-capacity ammunition clips and universal background checks. The school safety initiative would make federal dollars available to schools that want to hire police officers and install surveillance equipment, although it is not nearly as far-ranging as the National Rifle Association’s proposal for armed guards in every U.S. school. 
  • Jack Lew had major role at Citigroup when it nearly imploded. Treasury secretary nominee Jack Lew has spent most of his career in government, but during the financial crisis, he was embedded inside one of the country’s biggest banks as it nearly imploded. From 2006 to 2008, he worked at Citigroup in two major roles, a notable line in his résumé given that as Treasury secretary, he would be charged with implementing new rules regulating Wall Street.
CNN:
  • Consumer groups criticize new mortgage rules. New rules from the Consumer Financial Protection Bureau aim to make mortgages safer for borrowers, but consumer groups argue that the rules offer more protection for lenders than benefits for borrowers.
  • Middle class tax breaks on the line. Watch out, middle class Americans. President Obama wants to tie spending cuts to tax revenue hikes in the debt ceiling talks, but that could mean trouble for the middle class taxpayers he has pledged to protect. "They'll have to go down to where the real money is, which is the middle class," said Brian Gardner, Washington policy analyst with Keefe, Bruyette & Woods, an investment bank. "Politically, that would be very tough."
Reuters:
  • Michigan governor wants review team to assess Detroit cash flow. Whether or not the state of Michigan takes over Detroit's finances could depend on recent action by the city council to approve contracts tied to city's restructuring and oust the corporation's counsel. 
  • U.S. Fed hawks worry about threat of inflation. Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank's easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year. 
  • U.S. stock mutual funds gain $7.5 bln, most since 2001 -Lipper.
  • U.S. officials to launch review of Boeing's Dreamliner - source. U.S. transportation officials will hold a press conference on Friday to discuss issues related to recent electrical problems on Boeing Co's new 787 Dreamliner, according to a person familiar with the matter. The source, who declined to be identified because the information is not public, declined to provide further details. The U.S. Federal Aviation Administration will announce a review into the jet's power system at the Friday press conference, according to Bloomberg News.
  • Japan November current account swings into hefty deficit. Japan's current account swung to a much bigger than expected deficit in November after the nation's trade gap hit a 10-month high, adding to a string of poor data and firming up the case for more stimulus to help the stuttering economy. The 222.4 billion yen ($2.52 billion) deficit reported by the Finance Ministry on Friday marked the first shortfall in 10 months and far exceeded economists' median forecast of 3.5 billion gap. "The argument that Japan can rely on a current account surplus and savings in the household sector to fund its public debt is starting to weaken."
China Securities Journal:
  • New Rules May Make Mortgages Harder to Get. The government is establishing new rules for mortgages that will make it harder for some borrowers to qualify but that are designed to prevent the kind of risky lending that nearly caused the housing market to collapse during the financial crisis.
Evening Recommendations 
  • None of note
Night Trading
  • Asian equity indices are -.25% to +.50% on average.
  • Asia Ex-Japan Investment Grade CDS Index 103.0 -2.0 basis points.
  • Asia Pacific Sovereign CDS Index 83.0 +2.0 basis points.
  • FTSE-100 futures +.26%.
  • S&P 500 futures unch.
  • NASDAQ 100 futures +.03%.
Morning Preview Links

Earnings of Note

Company/Estimate
  • (WFC)/.89
Economic Releases
8:30 am EST
  • The Import Price Index for December is estimated to rise +.1% versus a -.9% decline in November.
  • The Trade Deficit for November is estimated at -$41.3B versus -$42.2B in October.
 2:00 pm EST
  •  The Monthly Budget Deficit for December is estimated at -$1.0B versus -$86.0B in November.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Plosser speaking, USDA crop report,  UK GDP report, (BBY) sales results and the Goldman Sachs Energy Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by financial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing modestly lower. The Portfolio is 50% net long heading into the day.

Thursday, January 10, 2013

Stocks Rising into Final Hour on Less Eurozone Debt Angst, Diminishing Global Growth Fears, Short-Covering, Financial/Tech Sector Strength

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 13.56 -1.81%
  • ISE Sentiment Index 140.0 +45.8%
  • Total Put/Call .77 -9.41%
  • NYSE Arms .58 -64.84%
Credit Investor Angst:
  • North American Investment Grade CDS Index 86.63 +.03%
  • European Financial Sector CDS Index 127.40 +2.57%
  • Western Europe Sovereign Debt CDS Index 99.83 -1.96%
  • Emerging Market CDS Index 213.69 +2.76%
  • 2-Year Swap Spread 14.0 +.5 bp
  • TED Spread 24.50 -.5 bp
  • 3-Month EUR/USD Cross-Currency Basis Swap -16.50 +3.5 bps
Economic Gauges:
  • 3-Month T-Bill Yield .06% unch.
  • Yield Curve 165.0 +4 bps
  • China Import Iron Ore Spot $158.50/Metric Tonne -.19%
  • Citi US Economic Surprise Index 28.70 -1.3 points
  • 10-Year TIPS Spread 2.53 +1 bp
Overseas Futures:
  • Nikkei Futures: Indicating +118 open in Japan
  • DAX Futures: Indicating +30 open in Germany
Portfolio:
  • Higher: On gains in my medical/biotech/tech/retail sector longs
  • Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back
  • Market Exposure: 50% Net Long

Today's Headlines

Bloomberg: 
  • Euro Climbs as ECB Sees Recovery. The euro gained the most in five months versus the dollar as European Central Bank President Mario Draghi said the economy should gradually recover and the decision to refrain from cutting interest rates was unanimous. The 17-nation currency climbed to the strongest since July 2011 against the yen after Spain sold more than the maximum target at its first debt auction of the year, adding to signs the region’s financial crisis is easing.
  • Consumer Comfort Drops as Americans Brace for Payroll Tax Boost. Consumer confidence in the U.S. slumped last week to the lowest level in a month as Americans prepared to lose a portion of their pay to taxes. The Bloomberg Consumer Comfort Index fell to minus 34.4 in the seven days ended Jan. 6 from minus 31.8 the prior period, the biggest one-week drop since August. All three components of the measure declined. Paychecks will shrink after Congress agreed last week to let the payroll tax that funds Social Security benefits revert to 6.2 percent from 4.2 percent. With spending power diminished, Americans will have to rely on increases in salaries to counter some of the lost income just as the economy is struggling to strengthen.
  • Brazil Consumer Prices Rise More Than Forecast in December. Brazil’s consumer prices in December rose more than economists forecast, as government efforts to revive economic growth spark price increases. Prices as measured by the IPCA index rose 0.79 percent in December, the national statistics agency said today in Rio de Janeiro. The median estimate from 34 analysts surveyed by Bloomberg was for a 0.74 percent increase. Annual inflation quickened to 5.84 percent from 5.53 percent in November, compared with a forecast of 5.79 percent from 30 economists surveyed.
  • Gold Climbs to One-Week High as Draghi Sees Weakness. Gold rose to a one-week high after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth. “The economic weakness in the euro area is expected to extend into 2013,” Draghi said at a press conference in Frankfurt today.
  • Oil Rises to Three-Month High as China Exports Accelerate. Oil rose to the highest level in three months as exports from China accelerated in December and European Central Bank President Mario Draghi said “a gradual recovery should start” in the region this year. Crude oil for February delivery gained 86 cents, or 0.9 percent, to $93.96 a barrel at 11:17 a.m. on the New York Mercantile Exchange after climbing to $94.70, the highest intraday level since Sept. 19. Trading volume was 84 percent more than the 100-day average.
  • Bats CEO Says Software Problems a Symptom of Too-Complex Market. The software problem that caused Bats Global Markets Inc. to allow trades in violation of rules is a symptom of overly complex market regulations that should be simplified, Chief Executive Officer Joseph Ratterman said. Bats discovered the problem on Jan. 4 through routine inspections conducted by its operations department looking for anomolies in transactions and how the exchange handles orders, Ratterman said in a telephone interview.
  • Tiffany(TIF) Sees Profit at Low End of Forecast on Weak Sales. Tiffany & Co. (TIF), the world’s second- largest luxury jewelry retailer, said full-year earnings will be at the low end of its forecast after holiday sales growth slowed in the Americas and Asia. The shares fell. Sales in November and December rose 4 percent to $992 million worldwide, the New York-based company said today in a statement. That was slower than the 7 percent gain Tiffany recorded in the same period a year earlier.
  • EU Sees Google(GOOG) Diverting Web Traffic From Rivals, FT Says. European Union antitrust regulators believe Google Inc.'s search engine diverts Web traffic from competitors, the Financial Times reported today, citing an interview with EU Competition Commissioner Joaquin Almunia. Almunia told the newspaper he is convinced that Google diverts traffic and may be abusing its dominant position in the search market.
  • Cantor May Face Another Ratings Cut as Fitch Cites Slump. Cantor Fitzgerald LP, the brokerage whose credit rating was cut twice last year, faces another potential downgrade amid a slump in trading, Fitch Ratings said.
  • Fed’s Bullard Sees Difficulty Tying QE to Economic Levels. Federal Reserve Bank of St. Louis President James Bullard said it may be difficult to tie the central bank’s $85 billion monthly bond purchases to numerical levels of unemployment and inflation. After settling a debate over how long to hold interest rates near zero, Fed officials are debating when to halt their purchases of Treasuries and mortgage-backed securities. At its December meeting, the Federal Open Market Committee agreed to hold the target interest rate near zero so long as unemployment remains above 6.5 percent and inflation stays below 2.5 percent.
Wall Street Journal: 
  • Bombings in Pakistan Kill Over 100. A series of bombings in different parts of Pakistan killed 103 people Thursday, including 69 who died in a sectarian attack on a bustling billiard hall in the southwest city of Quetta, officials said.
CNBC:
  • Farr: Crying Wolf May Make Markets Complacent. Aggressive monetary and fiscal policies have forced so much money into the economy; it has become impossible to determine how much of our modest economic growth is organic and how much may be the result of the trillions of dollars of government injections.
Business Insider:
c/net:
  • Apple's(AAPL) Cook talks 'cooperation' with iPhone-less China Mobile. Apple CEO Tim Cook is in China talking with the country's largest carrier. A China Mobile spokesman told Reuters today that Cook visited the carrier's headquarters this morning to meet with Chairman Xi Guohua and discuss "matters of cooperation." The person would not divulge the nature of those discussions and what the companies might cooperate on.
WallSt.CheatSheet:
  • Optimism rebounded strongly, as pessimism dropped in the latest AAII Sentiment Survey. Bullish sentiment, expectations that stock prices will rise over the next six months, jumped 7.7 percentage points to 46.4%. This matches the short-term high set on December 20, 2012. Bullish sentiment is also above its historical average of 39% for the sixth time in seven weeks. Bearish sentiment, expectations that stock prices will fall over the next six months, fell 9.3 percentage points to 26.9%. Though the magnitude of the increase is steep, it only puts pessimism at a three-week low. Bearish sentiment is also below its historical average of 30.5% for the fourth time in five weeks.
Reuters: 
  • US Fed policy might trigger bubbles, inflation -George. The Federal Reserve might be contributing to the next asset price bubble through its aggressive purchase of bonds to spur U.S. growth, while its near-zero interest rates could trigger future inflation, a senior Fed official said on Thursday. Kansas City Federal Reserve President Esther George, in remarks that will clearly stamp her as a hawk on the U.S. central bank's policy-setting committee, went out of her way to make clear she is not comfortable with recent Fed action. "A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the FOMC's 2 percent inflation goal in the future," she said.
  • German parliament group warns Britain against "blackmail" on EU. The head of the German parliament's influential European Union Affairs Committee warned Britain on Thursday against trying to "blackmail" other countries in its push to fashion a new relationship with Europe.
Telegraph:
China National Radio:
  • Chinese cities including Wuhan, Xi'an and Hefei will introduce a property leasing tax.