Thursday, May 06, 2010

Thursday Watch

Evening Headlines

  • Weber Draws Battle Lines as Pressure Grows on ECB to Save Euro. Bundesbank President Axel Weber fired the first shot in a brewing debate over how far the European Central Bank should go to defend the euro. As the single currency plunged to a 15-month low yesterday, Weber said the threat of contagion from Greece’s fiscal crisis doesn’t merit “using every means,” rebuffing calls for the ECB to consider buying government bonds. The central bank’s Governing Council meets today in Lisbon, the latest capital to be hit by the fiscal meltdown that’s shaking the foundations of Europe’s monetary union. ECB President Jean-Claude Trichet is under pressure to do more to calm markets after the pledge of a 110 billion-euro ($142 billion) bailout for Greece from euro-area countries and the International Monetary Fund failed to assuage investors’ concerns. While Weber’s comments suggest he won’t agree to asset purchases, some economists said that remains an option if the crisis worsens. The ECB could also reverse the withdrawal of emergency lending measures used to fight last year’s recession and dilute collateral rules further. “Europe’s policy makers have been behind the curve and there’s a risk that the ECB doesn’t do anything because they feel it’s too soon to act,” said Ken Wattret, chief euro region economist at BNP Paribas SA in London. “But something desperately needs to be done to inject confidence into markets that are running out of control.”
  • Freddie Mac Seeks $10.6 Billion, Fueling Republicans' Criticism. Freddie Mac, the mortgage company operating under U.S. conservatorship, said it will need $10.6 billion more in Treasury Department aid after reporting a first- quarter loss, spurring Republicans to fault Democrats for excluding the firm from their proposed financial-rules bills. The new request, which came as Freddie Mac announced a $6.7 billion first-quarter loss in a regulatory filing today, adds to the $50.7 billion in taxpayer support the McLean, Virginia-based company has received since November 2008. Freddie Mac and Washington-based Fannie Mae have received a total of $137.5 billion from the Treasury since regulators seized the government-sponsored enterprises in September 2008 after rising delinquencies and foreclosures pushed the companies to the brink of collapse. “We had 137 billion reasons why this government-sanctioned duopoly needed to be terminated,” U.S. Representative Jeb Hensarling, a Texas Republican, said in a telephone interview. “Today we have 10 billion more reasons.” House Republicans led by Hensarling are pushing to eliminate government subsidies for the two companies and repeal their affordable-housing mandates. Republican Senators Richard Shelby of Alabama and John McCain of Arizona are aiming to include a similar provision in financial-rules legislation being debated in the Senate. Treasury Secretary Timothy F. Geithner said the Obama Administration “made a choice” not to seek legislation to address Fannie Mae and Freddie Mac this year. The Congressional Budget Office in January estimated that direct U.S. aid to the government-sponsored entities could total $389 billion by 2019. In addition, the Treasury and the Federal Reserve last year spent $1.4 trillion to buy the companies’ mortgage-backed securities. “I find it mind-blowing that Democrats reject the opportunity to engage in a serious conversation about reforming the entities that are clearly the government’s biggest toxic liabilities,” Garrett said in a written statement.
  • Senate Backs Anti-Bailout Changes to Financial Bill. The U.S. Senate today broke a logjam in the debate over financial-overhaul legislation, approving two amendments that strengthen language aimed at ending taxpayer- funded bailouts. Lawmakers voted 93-5 for an amendment offered by Senators Christopher Dodd, a Connecticut Democrat, and Richard Shelby, an Alabama Republican, to drop a $50 billion industry-supported fund to cover the cost of unwinding a failing firm and ensure that shareholders and unsecured creditors bear losses when the government liquidates a business.
  • Fed's Plosser Says Dodd Bill Would Encourage Bailouts. A bill in the Senate intended to strengthen the financial system would instead encourage excessive risk-taking by limiting the Federal Reserve’s supervisory authority to the largest U.S. lenders, a central bank official said. Charles Plosser, president of the Philadelphia Fed, said a proposal to strip the Fed of authority over all banks except those with assets of at least $50 billion would only encourage investors to view the largest firms as having an implicit government guarantee. “By singling out these firms for special attention by the Fed, the Congress is sending markets the message that they are indeed too big to fail,” Plosser said today in a meeting with lawmakers, according to a release from the Philadelphia Fed.
  • Greek Violence Threatens to Scare Sway Tourists Key to Economy. The protests and riots in Athens threaten to undermine tourism, one of Greece’s few growth industries and the country’s best hope of easing the pain of its unprecedented austerity program. “People will think twice about going to Greece,” said Ian Gamse, a director at London-based Otus & Co., which advises Marriott International Inc. and Hilton Worldwide. “People who have booked are going to start calling their tour operators. If Greece can’t get the situation under control, it is going to be a big problem.”
  • California Demands More Data on Credit Default Swaps. California’s treasurer today asked six banks that underwrite municipal bonds for his office to say whether they bet against the state with credit default swaps and how much swaps are sold to investors who don’t own the debt. Treasurer Bill Lockyer sent letters to Bank of America Merrill Lynch, Barclays Plc, Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley, as a follow-up to questions he sent them in March. Lockyer said he is concerned that speculative trading of credit default swaps, the buying and selling of the insurance contracts by investors who don’t own the securities, could boost borrowing costs. He said that may occur if the transactions create an unjustifiably negative perception of California’s risk of default.
  • Fraud-Tarred Finance Firms' Trail Mean Blankfein Keeps Job. Goldman Sachs Group Inc.(GS) Chief Executive Officer Lloyd C. Blankfein may take comfort from Wall Street’s legal history: Even after being sued for fraud by regulators and paying multimillion-dollar fines, the biggest financial firms rarely depose their leaders.
  • Rubber Futures in Tokyo Decline as Much as 5.7%.
  • Rio(RTP) Puts Some Projects on Hold Because of Mining Tax. Rio Tinto Group, the world’s third- largest mining company, put some Australian expansion projects on hold to study the effect of the government’s proposed 40 percent “super tax” on mining. “The concern is that people are looking at this now in boom times, not realizing that sooner or later, we’re going to be in tough times and it’s going to be very, very tough for projects,” Sam Walsh, the head of Rio’s iron ore operations, said in comments provided by the company. The proposed tax will slash about 35 percent of the estimated increase in Rio’s valuation from its proposed A$12 billion ($11 billion) iron ore expansion in Australia, according to Citigroup Inc. BHP Billiton Ltd., the world’s biggest mining company, and Alcoa Inc. said this week the planned tax will threaten the nation’s mining investment.
  • New York's King Wants Investigation Into Leaks in Shahzad Case. U.S. Representative Peter King of New York is calling for an investigation into leaks to the news media on the suspect in the failed Times Square bombing attempt that the lawmaker said came from the Obama administration and could have jeopardized the case. News reports based on comments from unnamed officials that law enforcement officials were looking for a suspect who was born in Pakistan and had become a naturalized U.S. citizen may have prompted Faisal Shahzad to attempt to flee and almost make it out of the country, King said. “It’s very likely this person was tipped off,” King, the top Republican on the House Homeland Security Committee, told reporters. “I have never seen so many sensitive leaks on a criminal investigation before the person has been apprehended.” King said he wants Congress or the FBI to look into who was responsible for the leaks.
  • Asia Should Consider Capital Controls to Stem Bubbles, UN Says. Asian nations should increasingly consider capital controls in their “policy toolkit” to manage inflows that are fueling inflation and creating asset bubbles, a United Nations agency said today. “The main short-term threat to growth in Asia and the Pacific is the return of inflationary pressures as recovery gathers steam,” fuelled in part by an influx of money from abroad, the Bangkok-based agency said in a report today.
  • China's Growth Momentum Has Peaked, UBS Economist Wang Says. China’s economic momentum has peaked and interest rates won’t rise until June “at the earliest” after an increase in banks’ reserve requirements and measures to cool the property market, UBS AG said. A construction slowdown and a correction in property prices “seem inevitable” in coming months, Wang Tao, a Beijing-based economist, said in a note dated yesterday.
  • India Stocks Face Greater Inflation Risk Than China, HSBC Says. Rising consumer prices make India’s stock market riskier than China’s, said Garry Evans, HSBC Holdings Plc’s global head of equity strategy. India will increase interest rates by 150 basis points in the next 12 months to contain rising prices fueled by accelerating economic growth, HSBC forecasts. The nation’s consumer prices surged 14.9 percent in February, while China’s gained 2.7 percent, according to data compiled by Bloomberg. “India has a much bigger inflation problem than China does,” Evans said in a May 4 interview in Hong Kong. “The Reserve Bank of India is behind the curve in tackling that.”
Wall Street Journal:
  • Greece Fuels Fears of Contagion in U.S. Investors and policymakers are starting to worry that the economic crisis in Greece could cross the Atlantic and undermine the U.S. economic recovery, in the same way that U.S. housing woes in 2008 battered Europe. Early credit-market indicators of contagion to the U.S. aren't yet flashing red, but investors are keeping a wary eye on them. Europe as whole has powerful ties to the U.S. through trade, investment and finance. U.S. banks hold more than $1 trillion of European debt, according to the Bank for International Settlements. Bruce Kasman, J.P. Morgan's chief economist, estimates that the 16 nations of the euro zone account for about 14% of U.S exports, apart from petroleum products. Those ties can become weaknesses in bad times. One big surprise of the U.S. housing crisis was how many European banks held securities tied to worthless U.S. mortgages and how much they lost. A recession in Europe followed quickly on the heels of one in the U.S. Even before the Greek crisis, the IMF estimated that the euro zone, whose economy contracted by 4.1% in 2009 would grow at just 1% this year. Anything short of that could curb U.S. exports and weaken what is projected to be an already humdrum recovery. Perhaps the biggest wild card is uncertainty itself. The financial panic of 2008 has made investors skittish of a repeat performance. Some may view that Greece's problem with a heavy debt load will be mirrored over the next few years in the U.S., U.K and other wealthy countries. "Investors get less and less tolerant of high levels of public debt," says Marco Annunziata, chief economist at UniCredit Group in London. "It might be that investors are so burned by the experience of the last crisis, that once they see that a problem is big enough they feel they can't confidently predict that it can stay limited," so they pull out of the market, deepening the crisis that they feared. The transfer of any economic trouble to the U.S. from Europe, if it occurs, will register in financial markets before showing up in economic indicators.
  • Along the Coast, Nothing to Do but Wait. Residents in State of Limbo, Speculating Where, When and Whether Slick Will Come Ashore and How Bad Damage Might Be.
  • Inside Job: Infiltrating Jihadis' World. Officer Goes Undercover in Terror Fight. After the failed attempt to bomb Times Square, New York police are dispatching more officers to be seen on the streets, around landmarks and on subways. But there's one tactic they hope won't go noticed at all: getting inside the bands of terrorists-in-the-making. That's why a young Bangladeshi immigrant working undercover found himself among a dozen men at an Islamic bookstore in Brooklyn one day in 2004 to watch videos of U.S. soldiers being slain. "That made these guys pumped up and happy," the officer said. "It's like a party at a club. They were hitting the walls with excitement. One guy even broke a chair." Among the revelers: Shahawar Matin Siraj, who would be sentenced in January 2007 to 30 years in prison for an August 2004 plot to blow up Herald Square. "He loved talking about doing jihad," said the officer. In an interview with The Wall Street Journal, the undercover officer described four years embedded with Brooklyn radicals, a stint which began a few months after the Sept. 11 terror attacks and ended with his testimony at Mr. Siraj's trial in mid-2006.
  • New U.S. Push to Regulate Internet Access. In a move that will stoke a battle over the future of the Internet, the federal government plans to propose regulating broadband lines under decades-old rules designed for traditional phone networks. The decision, by Federal Communications Commission Chairman Julius Genachowski, is likely to trigger a vigorous lobbying battle, arraying big phone and cable companies and their allies on Capitol Hill against Silicon Valley giants and consumer advocates. Breaking a deadlock within his agency, Mr. Genachowski is expected Thursday to outline his plan for regulating broadband lines. He wants to adopt "net neutrality" rules that require Internet providers like Comcast Corp. and AT&T Inc. to treat all traffic equally, and not to slow or block access to websites. The decision has been eagerly awaited since a federal appeals court ruling last month cast doubt on the FCC's authority over broadband lines, throwing into question Mr. Genachowski's proposal to set new rules for how Internet traffic is managed.
  • Senators Push for Fed Disclosure. A pair of U.S. senators said today that they plan to offer an amendment to the financial overhaul legislation that would force the Federal Reserve to disclose which financial institutions received emergency assistance and the terms of the aid. Sens. Byron Dorgan (D., N.D.) and Charles Grassley (R., Iowa) announced their plans in a joint statement. “The Fed refuses to disclose this information to the American people, so we are taking dongressional action to determine how the Fed has used these trillions of dollars,” Dorgan said. The Federal Reserve’s Board of Governors asked a federal appeals court Monday to reconsider a ruling that ordered it to disclose documents related to individual borrowing from its discount window and other “last resort” lending programs.
  • SEC Examines Berkshire's(BRK/A) Disclosure on Burlington. The Securities and Exchange Commission is examining the disclosures Berkshire Hathaway Inc. made about its $26 billion purchase of Burlington Northern Santa Fe Corp. railroad, said people familiar with the matter. For a number of weeks, the SEC has been looking at how Berkshire, helmed by billionaire investor Warren Buffett, informed other Burlington shareholders about its offer to buy the company in late October 2009, these people said.
  • A Fannie Mae Political Reckoning. One sign that the White House financial reform is less potent than its advertising claims is that it doesn't even attempt to reform the two companies at the heart of the housing mania and panic, Fannie Mae and Freddie Mac. So we're glad to see that yesterday GOP Senators John McCain, Richard Shelby and Judd Gregg introduced a Fan and Fred reform amendment that will let Democrats show if they're serious about reducing reckless lending and taxpayer risk.
Fox News:
  • Rumors Not Bad Mortgages Killed Bear Stearns: Former CEO Cayne. Former chief executive Jimmy Cayne told a commission investigating the causes of the recent financial crisis that Bear Stearns in early 2008 “was like a big fat goose” waiting to be attacked by predators who stood to gain at the expense of Bear Stearns’ losses. Rumors circulated every day both in the financial media and across Wall Street trading desks that Bear Stearns was bleeding money as a result of its huge exposure to subprime mortgages, according to Cayne. “There were a lot of rumors of concern,” a stoic Cayne said during questioning by members of the Financial Crisis Inquiry Commission. One of those rumors, according to Cayne, was that hedge funds had banded together to take advantage of Bears’ position in the subprime market. Even a former head of Securities and Exchange Commission suggested such a conspiracy, Cayne recalled. As the rumors grew investors got scared and withdrew their assets from the bank, he said. At the same time, the bank's lenders also grew wary and cut off credit. The combination proved lethal. “The market’s loss of confidence, even though it was unjustified and irrational, became a self-fulfilling prophecy,” Cayne said in his prepared testimony. Cayne was forced out as CEO two months before Bear Stearns collapsed in bankruptcy in March 2008 and was absorbed by JPMorganChase (JPM) in a fire sale orchestrated by the government.
NY Times:
Business Insider:
  • Health Care Law's Massive, Hidden Tax Charge. An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork. Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.
  • Documents Reveal AT&T(A), Verizon(VZ), Others, Thought About Dropping Employer-Sponsored Benefits. The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans -- coverage they know and prize -- will react to the new law's radically different regime of subsidies, penalties, and taxes. Now, we're getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation. Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.
ABC News:
  • While Oil Slick Spread, Interior Department Chief of Staff Rafted with Wife on "Work-Focused" Trip in Grand Canyon. Though his agency was charged with coordinating the federal response to the major oil spill in the Gulf of Mexico, Department of the Interior chief of staff Tom Strickland was in the Grand Canyon with his wife last week participating in activities that included white-water rafting, ABC News has learned. Other leaders of the Interior Department were focused on the Gulf, joined by other agencies and literally thousands of other employees. But Strickland’s participation in a trip that administration officials insisted was “work-focused” raised eyebrows among other Obama administration officials and even within even his own department, sources told ABC News. Strickland, who also serves as Assistant Secretary for Fish and Wildlife and Parks, was in the Grand Canyon with his wife Beth for a total of three days, including one day of rafting. Beth Strickland paid her own way, Obama administration officials said. The Stricklands departed for the Grand Canyon three days after the leaks in the Deepwater Horizon pipeline were discovered. Ultimately, after the government realized that the spill was worse than had been previously thought, officials decided that Strickland was needed in the Gulf so Strickland was taken out of the Grand Canyon by a National Park Service helicopter. One government official, asking for anonymity because of the political sensitivities involved, told ABC News that some Interior Department employees thought it was “irresponsible” for Strickland to have gone on the trip, given the crisis in the Gulf, which was fully apparent at the time he departed for the Grand Canyon.
  • Mary Landrieu: 'Not About Protecting BP(BP)' Louisiana Sen. Mary Landrieu suggested Wednesday that her fellow Democratic colleague, New Jersey Sen. Robert Menendez, is trying to put oil companies “out of business” by increasing the amount of money they’d be forced to pay for catastrophic leaks. Landrieu, a long-time ally of the energy industry, said that British Petroleum “is going to pay” for the costs associated with the catastrophic oil spill at one of its leased rigs in the Gulf of Mexico. But she said the method sought by Menendez could have unintended and devastating consequences to smaller operators in the region. “What I don’t want to do is overreact,” Landrieu said, adding that she doesn’t want companies that don’t have the wealth of BP to be on the hook for sky-high cleanup costs. “Lots of them work in the Gulf, which is a big misconception in this country that it’s only Big Oil [there],” Landrieu said. ‘There are thousands of wells drilled by mom-and-pop operators that if Menendez has his way, they’re going to be out of business. And I’m not going to allow that.”
  • Feds Didn't Call All Airlines to Warn of Suspect. Law enforcement officials decided not to call all airlines directly on Monday to tell them an important name had been added to the government's "no-fly" list, even as investigators pursued the man they suspected was the Times Square bomber. Emirates airlines apparently didn't notice the notification from the Transportation Security Administration that there was an addition to the list, and Faisal Shahzad boarded a Mideast-bound jetliner before federal authorities pulled him off and arrested him. On Wednesday, the government issued a new requirement for airlines to check the no-fly list more often, a move aimed at closing that security gap in future cases of terror suspects. But officials could have called all the airlines themselves in such a critical situation — they've done it before. This would have put Shahzad on the radar of the carriers, and it could have prevented him from being able to board the Emirates plane headed for Dubai.The FBI asked the TSA not to make the calls, according to an administration official who spoke on condition of anonymity in order to discuss the ongoing investigation.
  • Merkel Plea to Save Europe as Contagion Hits Iberia. Europe's debt markets are flashing danger signals after spreads on Iberian debt reached the highest level since the launch of the euro and investors rushed for safety into German notes, prompting warnings from German Chancellor Angela Merkel that the European Project itself is at risk.
Mail Online:
  • Greek Economic Crisis Could Spread to the UK. Anyone who believed that the £128billion bail-out of Greece would be enough to end the catastrophic convulsions in euroland will be sadly disappointed. The rioting and tragic deaths on the streets of Athens, as Greece's public sector workers sought to defend their indefensible privileges, was matched by tremors across Europe's financial markets. The speed with which the Greek crisis spread to Portugal and Spain poses serious questions as to whether the decade-old single currency can survive the current crisis and whether Maastricht and Lisbon - the great treaties which seek to bind Europe together - can remain intact. For a British electorate going to the polls today, the crisis shows the terrifying price which the next government will pay if it fails to take a meat axe to the UK's budget deficit - which at a projected 12 per cent of national output this year will be even higher than that of Greece. Even though Britain is not part of the imploding eurozone, the European Commission is making it clear Britain needs to address its budgetary black hole urgently rather than delaying and waiting for recovery. Once financial speculators have the bit between their teeth no economy is safe from the contagion spreading through Europe. Britain with its vast budget deficit and the threat of a stale-mated, hung Parliament could easily become caught up in the growing new threat to global financial stability. British banks alone hold some £40billion of debt in the Club Med nations of Portugal, Italy, Greece and Spain, all of which are teetering on a debt precipice. If any of these economies were to renege on their obligations, the crisis could quickly rebound on the UK with global investors refusing to buy our government bonds known as gilt-edged stock. It will require huge determination by the next government to deal with our deficit
  • VC, PE Firms Lining Up for Mass Exit. Bangalore: Venture capital (VC) fund Sequoia Capital’s exit from Kerala-based non-banking financial company Manappuram General Finance and Leasing Ltd two weeks ago is just the beginning of an avalanche of high-return exits lined up for this year. Nearly half a dozen VC and private equity (PE) firms Mint spoke with are preparing for at least a dozen portfolio exits as they reach the end of their investment horizons, and to cash in on an improving economy. Overall, experts see at least 50 exits over the next six-nine months. India has never seen more than 20 VC exits in a year. But in the first three months of 2010 alone, there have been 10 VC exits against three last year, according to research firm Venture Intelligence.
Shanghai Daily:
  • Shanghai new home prices in April rose 16% from a month earlier to a record average $3,358 per square meter, citing a property data service. Sales increased 28% for the month to 1.02 million square meters as supply jumped 76% to 1.23 million square meters, citing Shanghai Uwin Real Estate Information Service.
China Securities Journal:
  • China's Shenzhen city will limit home purchases by foreigners and citizens of Hong Kong, Macau and Taiwan to one residence, citing people familiar with the matter.
  • China will limit the transfer of down payments to developers for unfinished apartments. Down payments and money from mortgages for unfinished apartments will be placed in a special account overseen by the government. Regulators will give developers access to the accounts based on the progress of construction.
Dong-A Ilbo:
  • South Korea has collected metal fragments of a torpedo from the area near the wreckage of a sunken naval ship, citing an official on the investigation team. The team has also detected traces of gunpowder.
Evening Recommendations
  • Reiterated Buy on (NWSA), added to Top Picks Live list, target $18.
  • Reiterated Buy on (EXPD), boosted estimates, target $48.
Sterne Agee:
  • Rated (SNDK) Buy, target $50.
  • Rated (MU) Buy, target $13.
  • Rated (GLW) Buy, target $24.
Night Trading
  • Asian indices are -2.25% to -1.0% on average.
  • Asia Ex-Japan Investment Grade CDS Index 122.0 +11.0 basis points.
  • S&P 500 futures +.02%.
  • NASDAQ 100 futures -.01%.
Morning Preview Links

Earnings of Note
  • (H)/-.05
  • (HEW)/.68
  • (ATK)/2.28
  • (DPS)/.38
  • (LIZ)/-.49
  • (SLE)/.21
  • (DNR)/.07
  • (SMG)/1.45
  • (MGM)/-.26
  • (PPL)/.89
  • (CI)/.88
  • (KFT)/.45
  • (CPKI)/.10
  • (CVC).31
  • (DTV)/.45
  • (LVS)/.02
  • (ED)/.81
  • (EP)/.26
  • (LEA)/.89
  • (DNDN)/-.43
Economic Releases
8:30 am EST
  • Preliminary 1Q Non-farm Productivity is estimated to rise +2.6% versus a +6.9% increase in 4Q.
  • Preliminary 1Q Unit Labor Costs are estimated to fall -.7% versus a -5.9% decline in 4Q.
  • Initial Jobless Claims for last week are estimated to fall to 440K versus 448K the prior week.
  • Continuing Claims are estimated to fall to 4610K versus 4645K prior.
Upcoming Splits
  • None of note
Other Potential Market Movers
  • The Fed's Evans speaking, Fed's Bernanke speaking, Fed's Parkinson speaking, Fed's Bullard speaking, ICSC monthly chain store sales, (GENZ) analyst day, (SNX) analyst meeting, (RAX) analyst day, (KND) investor day, (WST) analyst day, (PMCS) stockholders meeting, could also impact trading today.
BOTTOM LINE: Asian indices are sharply lower, weighed down by technology and real estate 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.

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