Monday, March 22, 2010

Today's Headlines


  • Greece Leads Rise in Sovereign Debt Risk. Greece led a rise in the cost of credit-default swaps on government bonds amid concern that failure to agree an aid package for the nation at this week’s European Union summit will trigger a sovereign debt crisis. Swaps on Greek bonds climbed 26 basis points to 356, the highest level in more than three weeks, according to CMA DataVision prices. Contracts on Spain jumped 4 to 115, Portugal was up 6.5 at 142, Italy was 5 higher at 109 and Ireland rose 4 to 137. German Chancellor Angela Merkel, who favors an International Monetary Fund led bailout, may be heading for a summit clash with French President Nicolas Sarkozy, who’s pressing for an EU rescue. Greek Prime Minister George Papandreou and European Commission President Jose Barroso said the EU should spell out its aid measures at the March 25-26 meeting in Brussels. “Greece is a concern for the entire marketplace,” said Gary Jenkins, head of credit research at Evolution Securities Ltd. in London. “If Greece were to collapse, what happens to Portugal, what happens to Spain, what happens to the U.K.? There are a lot of heavily indebted countries out there that need to raise a lot of money.” Greek 10-year bonds slid, widening the premium investors demand to hold the debt instead of German bunds to the most in almost a month. The yield spread between Germany and other so- called peripheral European debt including notes from Italy, Ireland, Portugal and Spain widened on concern the region’s fiscal crisis will spread.
  • Citi(C) to Double Team Helping Institutional Hedge Fund Investment. Citigroup Inc., the bank 27 percent owned by the U.S. government, plans to double the size of a team helping pension and government-backed funds manage direct hedge fund investments, said Nick Roe, its global prime finance head.
  • The Baltic Dry Index, a measure of shipping costs for commodities, fell to the lowest in 11 days on rates to ship Australian and Brazilian iron ore to China. The index tracking transport costs on international trade routes retreated 42 points, or 1.2%, to 3,337 points, according to the Baltic Exchange.
  • China's Stocks Will Extend Drop, Dreyfuns' Simon Says. China’s stocks will likely extend declines for the next several months as inflation risks increase before rebounding by the third quarter, said Hugh Simon, co- manager of the $1.1 billion Dreyfus Greater China Fund. “You’ll continue to see some consolidation and then you’ll probably see some higher prices later in the year, probably in the second and third quarter,” Simon said in a Bloomberg Television interview. His fund beat 94 percent of peers last year, according to data compiled by Bloomberg. The Shanghai Composite Index has fallen 6.6 percent this year, the fifth-worst performer globally among 93 benchmark Indexes.
  • U.S. Stocks Outlook Is 'Quite Positive' for Legg Mason's Miller. Legg Mason Inc.’s Bill Miller said he has a “quite positive” outlook for U.S. stocks and favors technology and financial companies because of their valuations. Technology companies are his largest holding because they are “very cheap,” said Miller, chief investment officer of U.S.-based Legg Mason Capital Management, with $16.9 billion in assets. His fund boosted stakes in financial shares in January and February.
  • U.S. Property Index Rises for Third Straight Month. U.S. commercial property values rose for a third month in January as the economy grew, according to Moody’s Investors Service. The Moody’s/REAL Commercial Property Price Index climbed 1 percent from December, Moody’s said today in a report. Values are 40 percent lower than the peak in October 2007. The index fell 24 percent from a year earlier.
  • OSX Plunges as Eike Batista Calls Market 'Difficult'. OSX Brasil SA, billionaire Eike Batista’s oil-services and shipbuilding company, plunged 12 percent in its first day of trading after slashing the size of its initial public offering to lure investors. Batista today called market conditions in Brazil “difficult” and said at the ceremony for OSX’s debut in Sao Paulo that it would have been better to sell the shares in the second half of the year. OSX’s sale was the biggest IPO in Brazil this year even after Batista cut the size by 67 percent last week.
Wall Street Journal:
  • Feinberg to Review Pay at Bailed-Out Firms. The U.S. pay czar plans to review executive compensation at Goldman Sachs Group Inc.(GS), J.P. Morgan Chase & Co.(JPM) and 417 other firms that took government bailout funds, to determine if any bonuses, salary or other compensation paid during a short window should be returned, according to government officials.
  • Germany Ponders Bank Levy. German Chancellor Angela Merkel's cabinet could approve a bank levy to cover the cost of future financial bailouts as early as next week, a government spokesman said Monday. Government spokesman Ulrich Wilhelm said the levy is part of a "strategy to minimize the systemic risks posed by big banks" and oblige them to "bear the costs of coping with the crisis."
  • First Solar(FSLR) Flies Too Close to the Sun. First Solar's reign as the sun king could be coming to an end. The Tempe, Ariz., company has long stood out from its peers in the solar-panel manufacturing sector. Not only is First Solar's balance sheet sturdier than rivals', but its panels are cheaper, resulting in enviable profit margins and revenue growth. Trouble is, the picture darkens over the next few years. Solar power relies almost completely on subsidies, and those are being slashed in Germany, where First Solar made 65% of its sales last year.
NY Times:
Business Insider:
Crain's Chicago Business:
  • Local Office Values to Keep Falling: Survey. Chicago-area office buildings will continue to lose value over the next year, according to a new survey, though landlords in seven other metro areas will fare worse. Investors forecast that office valuations here will decline 5.9% over the next 12 months, according to the first-quarter Korpacz Real Estate Investor Survey conducted by PricewaterhouseCoopers LLP. Of the 18 markets the survey tracks, the worst are expected to be Dallas and Charlotte, N.C., with valuations falling by more than 11% over the next year. Denver, Washington, D.C., and Los Angeles are forecast to be the strongest, with values falling less than 2%. “The winds of change have yet to fully blow through the Chicago office market as property owners continue to contend with downsizing companies and rising levels of sublease space,” the report says.
  • Mike Doyle Facilitated Critical Bart Stupak Talks. The fate of health care reform may have turned on a single relationship. When they needed to find a way to unlock the votes of a group of anti-abortion lawmakers led by Michigan Rep. Bart Stupak, Democratic leaders turned to Stupak’s roommate, Pennsylvania Rep. Mike Doyle, to facilitate the critical talks.
  • Darrell Issa Probes Joe Sestak Job Offer Allegation. The top Republican on the House Oversight committee is demanding answers from the White House about whether it offered Rep. Joe Sestak (D-Pa.) a job to drop out of his state’s Senate primary. This time Rep. Darrell Issa’s (R-Calif.) target is White House Press Secretary Robert Gibbs. Issa, for the past few weeks, has been seeking information about whether the Obama administration broke the law in offering Sestak an appointed position to drop out of his battle to unseat Sen. Arlen Specter (D-Pa.) in a primary. Earlier this month Issa sent White House general counsel Robert Bauer demanding answers about any conversations. The White House did not respond.
Rasmussen Reports:
  • 43% Say Cost of Prescription Drugs Will Go Up If Health Plan Becomes Law. Forty-three percent (43%) of Americans expect the cost of prescription drugs to go up if the health care plan proposed by President Obama and congressional Democrats becomes law. A new Rasmussen Reports national telephone survey finds that only 23% think the cost of prescription drugs will go down if the plan becomes law.
USA Today:
  • 'It Must be Repealed' by Jim DeMint. This monstrosity ignores people’s will and violates the Constitution. There’s no fixing the government health care takeover Democrats forced through on Sunday. It must be repealed. After telling Americans in 2008 that they would lower spending, taxes and insurance premiums, Democrats passed a bill that breaks every promise. Using secret deals, kickbacks and carve-outs, Democratic leaders jammed through legislation to control more than one-sixth of the nation’s economy. The plan will explode the national debt, raise $569.2 billion in new taxes, force taxpayers to fund abortions, and impose unconstitutional mandates on every American. All of this was done in the face of overwhelming public outrage and bipartisan opposition in Congress. This process has been an insult to our democracy and threatens our nation’s prosperity and freedom.
The Globe And Mail:
  • Canadians' Internet Use Exceeds TV Time. The average Canadian now spends more time on the Internet than watching television, according to a new survey from Ipsos Reid, a shift in digital habits that reflects the increasing prevalence of computers in our lives.

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