Bull Radar

Style Outperformer:

• Mid-Cap Growth -.40%

Sector Outperformers:

• 1) HMOs +.78% 2) Tobacco +.39% 3) Gold & Silver +.38%
  

Stocks Rising on Unusual Volume:

• SAI, DSX, MFRM, WAC, AOL, FBR and TPX

Stocks With Unusual Call Option Activity:

• 1) NWS 2) INFA 3) ALXA 4) APOL 5) TIVO
  

Stocks With Most Positive News Mentions:

• 1) FTI 2) SPW 3) PBI 4) BWLD 5) AOL

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Wednesday Watch

Evening Headlines 
Bloomberg: 

• Cyprus Capital Controls First in EU Could Last Years. Cyprus is on the verge of an unprecedented financial experiment: imposing controls on money transfers in an economy that doesn’t have its own currency. Countries from Argentina to Iceland have used similar measures in the past to defend against devaluation. Being part of the euro zone may make it harder for the Mediterranean island to enforce restrictions, as any money that leaves the banking system can be taken out of Cyprus without losing value. That also may make it more difficult to meet the goal set yesterday by Finance Minister Michael Sarris to lift any controls in “a matter of weeks.” 

• Europe’s Deep Freeze Takes the Wind Out of Store Sales. As most Europeans shiver in the grip of the coldest March in living memory, the region’s retailers are feeling every bit as uncomfortable. Spring fashions, potted plants and garden furniture -- which normally contribute to sales at this time of year -- are gathering dust as freezing winter temperatures show no sign of dissipating. Kingfisher Plc, (KGF) the region’s largest home-improvement retailer, has had a slow start this spring, the company said yesterday. Hennes & Mauritz AB, (HMB) Europe’s second-biggest clothing retailer, reported last week that cold weather was among the reasons for a 10 percent drop in first-quarter profit. 

• U.K. Clean Energy Rules to Add 36% to Company Power Bills. U.K. measures to curb carbon emissions may raise power and gas bills for the biggest corporate consumers by as much as 36 percent by 2020, the Department of Energy and Climate Change said.

• Monte Paschi Fails Siena Race as Oldest Bank Loses Trust.

• Deutsche Bank(DB) May Have Rating Cut by S&P as Legal Costs Rise. Deutsche Bank AG (DBK), Germany’s biggest bank, may have its credit rating cut by Standard & Poor’s after the lender reduced its reported profit for 2012 amid rising legal costs. Deutsche Bank’s A+ long-term rating was placed on CreditWatch negative, S&P said today in a statement. The Frankfurt-based firm said last week it had set aside additional money to cover costs linked to U.S. mortgage lawsuits and other regulatory probes, lowering 2012 profit by about 400 million euros ($514 million) to 291 million euros.

• China Shadow Banking Hard to Squelch in City Plagued by Suicides. Zhou Xiang is playing with his mobile phone in a room just big enough for a desk and chairs at the year-old Wenzhou Private Lending Registration Center. Not a single prospective customer has shown up for hours. As a government-sanctioned loan broker seeking to match cash-strapped business owners with private investors, Zhou is one of the few people who can even be found inside the two-story building in a high-end residential district of Wenzhou, a city of 9 million people in China’s southeastern Zhejiang province. Rows of airport-like seats are empty. “Only those who are really out of options would come here for loans,” says Zhou, a manager at Sudaibang, one of five independent brokers operating out of the center. “Most of the time, you would find these firms so weak financially that they can be literally crushed by a straw. The volume of lending is so low that we ourselves won’t be here long without expanding into some other businesses.” One year after China’s leaders picked Wenzhou to start a pilot program designed to curb and regulate the city’s informal shadow-lending networks, it’s clear, based on a recent trip to the country’s epicenter of private lending, that the plan isn’t working.

• Foxconn Plant in Peanut Field Shows Labor Eroding China’s Edge.

• N. Korea Calls Combat Alert as U.S. Spurns ‘Bellicose Rhetoric’. U.S. officials denounced North Korea’s threats after Kim Jong Un’s regime put artillery forces on their highest combat alert and warned again it may attack South Korea and America. “North Korea’s bellicose rhetoric and the threats that they engage in follow a pattern designed to raise tensions and intimidate others,” White House press secretary Jay Carney said yesterday in Washington. It’s the highest-level combat posture North Korea has issued, Defense Ministry spokesman Kim Min Seok said in Seoul. The South Korean military put a border region on its highest alert level early this morning and then retracted the order hours later, Yonhap reported.  

• Rio(RIO) CDS rises most as Rinehart joins iron glut. Rio Tinto Group’s bond risk is rising the most in Australia on concern iron ore prices will decline as supply climbs from new mines including billionaire Gina Rinehart’s Roy Hill project. The cost to insure Rio bonds against non-payment rose 26 basis points this year to 111 yesterday, the biggest jump among contracts in Australia’s benchmark index, CMA prices show. The average for 46 metals and mining companies worldwide fell to 226 basis points from 232. Yields on Rio’s US$1 billion (RM3 billion) of 2022 securities rose to the highest since November relative to similar-dated U.S. Treasuries.

• Corn Supply Slumps Most Since ’75 on Ethanol Profit: Commodities. Corn supplies in the U.S., the biggest grower, are shrinking at the fastest pace in almost four decades as improving demand from ethanol refiners drains reserves already diminished by drought. Stockpiles probably fell 38 percent in three months to 4.995 billion bushels (126.9 million metric tons) by March 1, the biggest drop since 1975, according to the average of 31 analyst estimates compiled by Bloomberg. AgResource Co. in Chicago and Northstar Commodity Investments Inc. in Minneapolis expect prices to jump 13 percent to $8.25 a bushel before supply rebounds with a record harvest in September.

Wall Street Journal: 

• BlackRock(BLK) Cuts Spain, Italy Sovereign-Bond Holdings. BlackRock Inc.,the world's largest money manager, has cut holdings of Italy and Spain government bonds over the past three months. The firm may shed more if the euro-zone's growth outlook deteriorates. "We have been less enthusiastic about euro-zone sovereign debt compared to three to six months ago," said Rick Rieder, chief investment officer of fundamental fixed income and co-head of Americas fixed income at BlackRock. "If growth continues to deteriorate in the euro zone, due in large measure to weak private-sector lending from a deleveraging banking sector, we would further reduce our positions in the euro zone, such as in Italy and Spain." 

• European Regulators to Charge Banks Over Derivatives. European antitrust authorities are moving soon to bring a case against some of the world's largest banks alleging collusion in the $27 trillion dollar market for credit derivatives, people familiar with the investigation said. The probe by the European Commission involves 16 financial groups. It focuses on whether they sought to stifle competition from exchanges in the market for credit-default swaps, which pay out when a country or a company defaults on its debts. If the European regulators press ahead with their administrative case and win, some or all of the banks could face fines.

• Euro's Bears Go Back On Prowl. Investors are turning against the euro—again. Some say the common currency is due for a correction in light of the latest round of flare-ups in the euro zone, including Sunday's last-minute deal to save Cyprus' banking sector and Italy's political stalemate following elections last month. These euro bears predict the currency will head to $1.20 or lower if a fresh crisis causes investors to dump European assets. The European Central Bank also could buy sovereign bonds to calm markets, which would weaken the euro because it would involve printing money.

• Big Players Cash Out of Hong Kong Property. With the government growing confident that it has halted the meteoric rise in property prices, some of this city's biggest real-estate investors are getting out. Several of Hong Kong's wealthiest families are planning initial public offerings of hotels, offices and other real-estate assets in coming months, while others are lowering prices on luxury apartments to entice buyers.

• Sebelius: Some Could See Insurance Premiums Rise. Some people purchasing new insurance policies for themselves this fall could see premiums rise because of requirements in the health-care law, Health and Human Services Secretary Kathleen Sebelius told reporters Tuesday. Ms. Sebelius’s remarks come weeks before insurers are expected to begin releasing rates for plans that start on Jan. 1, 2014, when key provisions of the health law kick in.

Fox News:

• What to Cut: Excess federal property costing taxpayers billions. The federal government owns or leases between 55,000 and 77,000 vacant properties. But it's impossible to tell exactly how many. No precise inventory has been kept. Selling them off, though, could save taxpayers between $3 billion and $8 billion a year, according to various analysts. That's nothing to scoff at as the government grapples with a mounting debt and sequester-tied spending cuts. 

• GOP leaders voice 'grave misgivings' to Obama over key terror trial in civilian court. The Republican chairmen of four congressional committees, with oversight for intelligence, the armed services, the judiciary and foreign affairs, have told President Obama they have "grave misgivings" about his administration's decision to send Usama bin Laden's brother-in-law to a federal court for criminal prosecution. The lawmakers voiced their concerns to Obama in a letter obtained by Fox News.

CNBC: 

• Fed Study Says China's Growth Could Slow Sharply by 2030. Economic growth in China faces mounting headwinds and could fade dramatically in the years ahead due to declining productivity and an aging population, according to a U.S. Federal Reserve study. Trend growth could slow gradually to around 6.5 percent by 2030, or it could break much more sharply to a pace under 1 percent if forces undermining economic activity combine in a "worst-case scenario," according to the study, which was published online on Monday.

• Cyprus Readies Capital Controls to Avert Bank Run. Cyprus is expected to complete capital control measures on Wednesday to prevent a run on the banks by depositors anxious about their savings after the country agreed a painful rescue package with international lenders. With banks due to reopen on Thursday, Finance Minister Michael Sarris said he expected the control measures to be ready by noon (1000 GMT) on Wednesday: "I think they will be within the realms of reason," he said, without going into details.

Zero Hedge:

• Student Loan Defaults Soar By 36% Compared To Year Ago. 

• Dijsselbloem: "Levy On Wealth Is Defendable In Principle".

• Another Dow All-Time High But Bonds/Credit/Banks Ain't Buying It. (graphs)

• Santelli Stunned: It's Better To Be On Disability Than Work Minimum Wage. (video)

• For High Yield Bonds, Is "Frothy" The New "Irrational Exuberance". (graph)

Business Insider: 

• Instead Of Doing His Job, Jeroen Dijsselbloem Has Given Us A Glimpse Of The Euro 'End Game'.

• The US Army Is Planning For A Failed Nuclear State In North Korea.

• These Are The Victoria's Secret Items For Teens That Parents Are Furious About.

• SHILLER: 'We're Living In A Totally Artificial Real Estate Economy'.

• Europe Is Politically Bankrupt.

• Nike's(NKE) New Tiger Woods Ad Has A Brazen Message For His Critics.

• It Looks Like Jim Chanos Is Nailing Another Short — And People Are Starting To Notice.

• These Stunning Examples Of Government Waste Cost Taxpayers $16 Billion.

USA Today: 

• Study: Health overhaul to raise claims cost 32%. Medical claims costs — the biggest driver of health insurance premiums — will jump an average 32% for Americans' individual policies under the Affordable Care Act health care law, according to a study out Tuesday by the nation's leading group of financial risk analysts.

Reuters: 

• UK banks braced for details of capital shortfall. Britain's banks discover on Wednesday how much extra capital they need to keep regulators happy when the outcome of an inquiry into their financial health is revealed. The Bank of England will release the capital requirements on Wednesday morning.

The Economist:

• The Debt Run. INFLATE, stagnate, default. That has been the choice facing highly indebted economies ever since the crisis broke in 2007-2008. It would be nice if growth could lift us out of this mess, but that looks unlikely; see how sluggish growth has become (the 2000 decade ended in 2009, before the Greek crisis hit, so this is not just an issue of austerity). Why is this? There has been too much focus on government debt; the problem is total debt in an economy, including the financial sector, corporates and consumers. Government debt usually rises sharply when another sector is badly hit; Cypriot government debt, for example, was only 61% of GDP in 2010. Think of debt as a claim on wealth. If a bank extends you a loan, you now have wealth in the form of money that you can spend on goods and services or use to buy an asset, such as a house; the bank also has an asset in the form of its loan, which it records on its balance sheet. Debt can thus increase rapidly relative to GDP and can help increase output, as the debtors spend their wealth. All is well as long as the creditor is confident that the debtor can repay the debt. We are nearly six years into this crisis and we have made precious little progress in running down debts and thus are vulnerable to further crises; Cyprus is just the latest example. Nor have we decided whether default or inflation is the preferred option. Either way, savers should beware.

Financial Times: 

• Global pool of triple A status shrinks 60%. The expulsion of the US, the UK and France from the “nine-As” club has led to the contraction in the stock of ­government bonds deemed the safest by Fitch, Moody’s and Standard & Poor’s, from almost $11tn at the start of 2007 to just $4tn now, according to Financial Times analysis.

South China Morning Post:

• Guangzhou to Levy 20% Tax on 2nd-Hand Home Sales. City plans to impose 5 measures to control housing prices with "perseverance", citing Deputy Mayor Chen Rugui. A 20% capital-gains tax on homes "will have a tremendous impact" on speculative buying, Chen said. 

• China's southern city of Guangzhou plans to limit home price increases under the level of this year's local GDP and income growth, citing Deputy Mayor Chen Rugui.

Evening Recommendations 
RBC:

• Rated (WDC) Outperform, target $55.

Night Trading

• Asian equity indices are +.25% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 118.50 -1.5 basis points.

• Asia Pacific Sovereign CDS Index 94.25 +3.0 basis points.

• FTSE-100 futures +.13%.

• S&P 500 futures +.01%.

• NASDAQ 100 futures +.06%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (LNN)/1.29

• (PAYX)/.39

• (PRGS)/.25

• (PVH)/1.50

• (SCS)/.19

• (RHT)/.30

• (TXI)/-.41

• (FUL)/.50 

Economic Releases
10:00 am EST

• Pending Home Sales for February are estimated to fall -.3% versus a +4.5% gain in January.

10:30 am EST

•  Bloomberg consensus estimates call for a weekly crude oil inventory build of +1,325,000 barrels versus a -1,314,000 barrel decline the prior week. Gasoline supplies are estimated to fall by -1,000,0000 barrels versus a -1,476,000 barrel decline the prior week. Distillate supplies are estimated to fall by -850,000 barrels versus a -672,000 barrel decline the prior week. Finally, Refinery Utilization is expected to rise by +.45% versus a +2.5% gain the prior week.

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kocherlakota speaking, Fed's Rosengren speaking, Fed's Evans speaking, Fed's Pianalto speaking, Eurozone Industrial Production data, France/UK GDP reports, Italy 10Y Bond auction, Eurozone Trade Data/Consumer Confidence, 5Y T-Note auction, weekly MBA mortgage applications report and the (Z) analyst day could also impact trading today.

BOTTOM LINE: Asian indices are higher, boosted by commodity and industrial shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 50% net long heading into the day.

Stocks Higher into Final Hour on Less Eurozone Debt Angst, Short-Covering, Energy/Healthcare Sector Strength

Broad Market Tone:

• Advance/Decline Line: About Even
  

• Sector Performance: Mixed
  

• Volume: Light

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• VIX 12.89 -6.19%

• ISE Sentiment Index 105.0 +3.96%

• Total Put/Call .77 -13.48%

• NYSE Arms .92 -36.94%

Credit Investor Angst:

• North American Investment Grade CDS Index 90.56 -.57%

• European Financial Sector CDS Index 189.98 +.59%

• Western Europe Sovereign Debt CDS Index 100.50 -.17%

• Emerging Market CDS Index 258.78 +1.04%

• 2-Year Swap Spread 18.25 +.5 bp

• TED Spread 21.75 -.5 bp

• 3-Month EUR/USD Cross-Currency Basis Swap -20.0 +.75 bp

Economic Gauges:

• 3-Month T-Bill Yield .07% +1 bp

• Yield Curve 166.0 -1 bp

• China Import Iron Ore Spot $137.10/Metric Tonne +.81%

• Citi US Economic Surprise Index 25.10 -5.1 points

• 10-Year TIPS Spread 2.54 unch.

Overseas Futures:

• Nikkei Futures: Indicating +39 open in Japan

• DAX Futures: Indicating +14 open in Germany

Portfolio: 

• Slightly Higher: On gains in my tech, biotech and medical sector longs
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% Net Long

Today's Headlines

Bloomberg:  

• Slovenia’s New Cabinet Under Pressure to Avoid Cyprus Fate. Slovenia’s six-day-old government is being urged to prevent the nation becoming the euro region’s next bailout battleground. Prime Minister Alenka Bratusek’s Cabinet must quickly carry out a plan to revamp the country’s ailing lenders, the central bank said yesterday. The former Yugoslav nation needs about 3 billion euros ($3.9 billion) of funding this year, while banks need 1 billion euros of fresh capital, the International Monetary Fund said last week. Slovenian banks such as Nova Ljubljanska Banka d.d. are struggling with surging bad loans that equal a fifth of economic output, fueling investor concern that it may be next to seek aid. 

• French Consumer Sentiment Drops on Stalled Economy, Unemployment. French consumer confidence dropped in March as a stalled economy and rising unemployment discouraged spending. A household sentiment index dropped to 84 this month from 86 in February, national statistics office Insee said today in an e-mailed statement. Economists expected a reading of 86, according to the median of 16 forecasts gathered by Bloomberg. 

• Sarris Muffles Calls for Cyprus’s Exit From Euro Area. Finance Minister Michael Sarris sought to muffle calls for Cyprus to weigh a precedent-setting exit from the euro to ease the economic pain inflicted by the country’s 10 billion-euro ($13 billion) bailout. The option of eventually pulling out of the currency was floated yesterday by a Nobel prize winner now advising the government, Christopher Pissarides, and Nicholas Papadopoulos, head of the parliament’s finance committee.

• Li Ka-shing Backs Hong Kong Property Curbs as Transactions Fall. Li Ka-shing, Asia’s richest man, backed recent measures by the Hong Kong government to curb an “unhealthy” surge in property prices that’s turned the city into the world’s most expensive housing market. “If prices goes up every day, and a lot of people can’t afford to buy, this would be unhealthy,” Li said after his flagship developer Cheung Kong Holdings Ltd. (1) reported lower property sales yesterday. “The Hong Kong government has said it wants a stable market.”

• Dallas Fed Favoring Reduced Asset Purchases on U.S. Recovery. Dallas Fed President Richard Fisher said he’d like the U.S. to reduce its mortgage-backed security purchases program amid signs that the economy will probably grow at about 3 percent by the end of the year. “I’m personally in favor of tapering back our mortgage- backed security purchases,” Fisher told reporters today at a conference in Abu Dhabi.

• Home Prices in 20 U.S. Cities Climb by Most Since June 2006. The S&P/Case-Shiller index of property values in 20 cities climbed 8.1 percent in January from the same month in 2012 after rising 6.8 percent in the year ended in December, the group said today in New York. The increase exceeded the 7.9 percent median forecast by economists in a Bloomberg survey. 

• Grain-Shipping Rates End Longest Rally Since ’03 as Demand Slows. Rates for Panamax ships carrying grains ended their longest rally in a decade amid speculation demand temporarily declined before holidays starting at the end of this week. Earnings for the vessels, which also carry coal, slid 0.5 percent to $9,632 a day, according to the Baltic Exchange in London today. Rates rallied every day from Feb. 6 to yesterday, the longest advance since 2003. The Baltic Dry Index, a wider measure of commodity-shipping prices, also fell, as did three of the four vessel types in the gauge. 

• WTI Crude Advances to Five-Week High. WTI for May delivery climbed $1.08, or 1.1 percent, to $95.89 a barrel at 2:02 p.m. on the New York Mercantile Exchange after rising to $96.08, the highest intraday level since Feb. 20. Prices are up 4.4 percent in 2013. The volume of all futures traded was 7.4 percent above the 100-day average for the time of day.

• Facebook’s(FB) Zuckerberg Said to Explore Forming Political Group. Facebook Inc. Chief Executive Officer Mark Zuckerberg is exploring the formation of a political advocacy group that would focus on topics such as immigration, the economy, education and scientific research funding, according to a person familiar with the matter. Zuckerberg is considering establishing the group with others in the technology community, according to the person, who asked not to be identified because the plans haven’t been made public.

• Audit Faults Stimulus-Backed $1.5 Billion U.S. Clean-Coal Effort. Poor management has hampered a U.S. program to develop technology to capture carbon-dioxide emissions, the Energy Department inspector general said in a report that raises new questions about a clean-energy initiative backed by the 2009 economic stimulus. In total, the Energy Department received $1.5 billion in the American Recovery and Reinvestment Act to invest in technology that responds to climate-change risks.

Wall Street Journal:

• North Korea Is Running Out of Threats. When North Korea tosses out another threat of violence against one of its neighbors or the U.S., it’s become routine to describe it as an escalation of Pyongyang’s rhetoric. That description captures the fact that North Korea makes a lot of threats without following through. But is there a point where it’s not even appropriate to call new threats an escalation?

MarketWatch:

• EU to extend CDS probe to ISDA trade group. The European Union Tuesday widened the scope of its ongoing probe into credit default swaps, or CDS, to include the International Swaps and Derivatives Association (ISDA), an organization of financial institutions that deals in over-the-counter trading of derivatives. The European Commission said it had found "preliminary indications" that ISDA may have been part of a coordinated effort of investment banks to delay or prevent exchanges from entering the credit derivatives business. "Such behavior, if established, would stifle competition in the internal market in breach of EU antitrust rules," the Commission said in a statement.

Fox News:

• N. Korea puts artillery forces at top combat posture in latest threat on S. Korea, US. North Korea's military warned Tuesday that its artillery and rocket forces are at their highest-level combat posture in the latest in a string of bellicose threats aimed at South Korea and the United States. Seoul's Defense Ministry said it hasn't seen any suspicious North Korean military activity and that officials were analyzing the North's warning. Analysts say a direct North Korean attack is extremely unlikely, especially during joint U.S.-South Korean military drills that end April 30, though there's some worry about a provocation after the training wraps up. North Korea's field artillery forces — including strategic rocket and long-range artillery units that are "assigned to strike bases of the U.S. imperialist aggressor troops in the U.S. mainland and on Hawaii and Guam and other operational zones in the Pacific as well as all the enemy targets in South Korea and its vicinity" — will be placed on "the highest alert from this moment," the statement said. Kim will eventually be compelled to do "something provocative to prove the threats weren't empty," Lee said.

• California county administrator to get $423,644 a year -- after retirement. When local California official Susan Muranishi retires from her job in a couple of years, she’s going to be walking away with a fat paycheck -- $423,664 a year – for the rest of her life. Muranishi, an Alameda County administrator, makes $301,000 in annual base pay. But in addition to that, the San Francisco Chronicle reports she'll also receive:  

CNBC: 

• Has Wealth Inequality in US Sparked Fed's Interest? Recently, the Federal Reserve has also taken a greater interest in the topic. And some analysts are asking whether financial inequality in the U.S. might soon become part of the Fed's decision-making process. 

• Cyprus Jitters: How It Could Still Go Wrong. "France is teetering between a core and a troubled peripheral country; if it slips into the latter category, then the troubled euro zone countries will outweigh the core and the euro will be doomed," he said. Bill Blain, senior fixed income broker at Mint Partners, feared the current state of Europe's banks after recent revelations saying that Monday's comments from Dijsselbloem probably creates the worst capital funding environment since 2008. "Let's just assume Europe's banks go back to square one," he said in a research note.

Zero Hedge:

• Capital Spending Renaissance Deferred Once More As Nondefense Cap Orders Ex-Aircraft Tumble In February. (graph)

• What Dijsselbloem Really Said: Full "On The Record" Transcript.

• March Consumer Confidence Plunges As New Home Sales, Richmond Fed Miss. (graph)

• Here We Go Again: EU Lawmaker To Push For Bail-In Resolution Law For Deposits Over €100K. (graph) 

• European Bank Bonds Plunge To 5-Month Lows. (graph)

• The Great British Cash EUxodus Begins.

• Cypriot Youth Rise Up In Pictures: "They Just Got Rid Of All Our Dreams"

Business Insider:

• And Now Borrowing Costs Are Jumping In Slovenia...(graph)

• Warren Buffett Is About To Own A Whole Lot Of Goldman Sachs(GS).

• Citi(C): 'The End Is Nigh' For Oil.

• 10 Warning Signs Of Another Spring Stock Market Slide.

• It's Not Just Russia, All The BRICs Have A Dangerous Tax Haven Problem.

• Eurozone Economy Now Expected To Sink Even Deeper Into Recession.

• NOMURA: Europe Needs To Do 3 Things To Fix The Crisis, And Right Now It's Doing None Of Them.

HedgeCo.Net:

• Study: The Impact Of The Obamacare Tax On Hedge Funds. The NII tax clearly is imposed on the carried interest (i.e.incentive allocation) of a hedge fund manager. The Obamacare legislation had hedge fund managers specifically in mind when it included income from “trading in financial instruments” in the types of income expressly subject to the NII tax. There do not appear to be significant planning opportunities for hedge fund managers to avoid the NII tax on their incentive allocations, except to the extent they have side pockets containing real estate or private equity assets of the types noted below.

Reuters: 

• Berlusconi ally says parties still far apart after Italy vote. A senior official in Silvio Berlusconi's centre-right party said on Tuesday there were still wide differences with the centre-left which must be overcome this week or Italy will have to go back to the polls after last month's deadlocked election. "What I can tell you is that our positions are still very distant from each other, and if they remain distant in the next 48 hours we will affirm that the only way is to go back to vote," People of Freedom (PDL) party secretary Angelino Alfano told reporters after talks with centre-left leader Pier Luigi Bersani.

• Chill in car sales spreads to northern Europe. Snow is piled high on the cars in a deserted dealership in Berlin, and it is not just the stubborn wintry weather that is gnawing at salesman Mustafa Kosak, shivering at his desk in a portable office. "Sales were drastically down in January, February; sometimes we are happy just to cover our overheads," said Kosak, 38, wrapped up in a big overcoat. The chill in cars sales has spread from southern Europe, where the worst of the euro zone debt crisis is crippling economies, to the north, including the region's biggest car market, Germany. New car sales have dropped 10 percent in 2013 so far this year in Germany, nearly 30 percent in the Netherlands and 14.8 percent in Sweden.

• FOREX-Euro flat but vulnerable as Cyprus concerns continue. The euro steadied versus the dollar on Tuesday, holding above a four-month low hit the previous day, but remaining vulnerable to fears Cyprus's banking problems may make investors shun euro zone assets or withdraw money from banks in countries like Spain and Italy.

Telegraph:

• Mr Yen cautions on Japan's 'unsafe' debt trajectory. Japan's public debt has reached worrying levels and could lead to a bond buyers' strike unless the government brings the budget deficit under control, the country's top currency official has warned. "A debt ratio of 245pc of GDP is not really safe, and it is not happening because we are investing," said Takehiko Nakao, Japan's 'Mr Yen' or vice finance minister in charge of the exchange rate. Mr Nakao said the scope for further fiscal stimulus is running out and the country must restore public finances to a sustainable path by the middle of the decade. "We can't continue to expect people to lend money to us," he told The Daily Telegraph.

The West Australian:

• Bank of Spain sees economy shrinking further this year. Spain's economy will sink deeper into recession this year, the Bank of Spain said on Tuesday, sending a stark message to the government as it prepares to revise its own growth forecast. In its annual update of economic forecasts, the central bank said it saw Spain's economy shrinking by 1.5 percent in 2013 following a 1.4 percent contraction last year as austerity continues to exacerbate the effects of a burst property bubble. The central bank's new estimate is well below the official forecast for a 0.5 percent contraction in GDP, although the government is widely expected to revise the 2013 figure downwards in April.

Bear Radar

Style Underperformer:

• Small-Cap Growth +.01%

Sector Underperformers:

• 1) Education -2.14% 2) Gold & Silver -1.31% 3) Retail -.81%
  

Stocks Falling on Unusual Volume:

• HA, BBVA, IRE, M, BAC, TI, CLMT, WIN, PWE, GMAN, PLCE, HCS, AMTG, AI, IEP, SPLK, TRLA, MFRM, ASH, CNW, AGU, TSRO, APOL, SLCA, AEO, BFAM, SFLY, CMCO, EVR, TECH, PNR, CRI, ROK and BPI

Stocks With Unusual Put Option Activity:

• 1) TWC 2) SVU 3) BIIB 4) JNK 5) GT
  

Stocks With Most Negative News Mentions:

• 1) SWN 2) COG 3) MDT 4) DELL 5) RCL
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Large-Cap Growth +.39%

Sector Outperformers:

• 1) Gaming +1.14% 2) Computer Hardware +1.11% 3) Disk Drives +.91%
  

Stocks Rising on Unusual Volume:

• HK, SONC, BSFT, STX, AMBA and WDC

Stocks With Unusual Call Option Activity:

• 1) HK 2) MDCO 3) LGF 4) CHS 5) HUN
  

Stocks With Most Positive News Mentions:

• 1) GILD 2) T 3) BSFT 4) EMR 5) BTU

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume