Today's Headlines

Bloomberg:

• Abe’s Yen Exporting Deflation Risks Davos Tension: Currencies. Shinzo Abe’s debased yen is leaving other nations to pay the price for faster Japanese inflation. As Japan’s prime minister addresses the global financial elite today in Davos, Switzerland, the yen is within 3 percent of a five-year low against both the euro and dollar, with analysts forecasting further declines. “When your currency falls heavily like the yen did, you create inflation for yourself but disinflation for others,” David Bloom, the global head of currency strategy at HSBC Holdings Plc in London, said in a Jan. 20 phone interview. “If we get to the point where inflation falls and growth looks like it’s going to be incredibly weak again, then the background for a currency war is growing.”

• Merkel Aide Says Obama Spying Curbs Fall Short as Damage Sticks. An ally of German Chancellor Angela Merkel said President Barack Obama’s pledge to limit global surveillance by spy agencies isn’t persuasive, leaving U.S.- European relations at the lowest ebb since the Iraq war. Leverage to pressObama for further changes includes a pact that gives U.S. anti-terrorism investigators access to bank transaction data, which the European Union should suspend, Philipp Missfelder, the foreign-policy spokesman for Merkel’s Christian Democratic Union in parliament, said in an interview. 

• European Stocks Are Little Changed. European stocks were little changed, with the Stoxx Europe 600 Index at a six-year high, as a rally in ASML Holding NV offset a decline in ABB Ltd. ASML jumped the most in a year after saying it plans to increase its 2013 dividend. Rautaruukki Oyj soared 33 percent after SSAB AB offered to buy the Finnish steelmaker. ABB Ltd. retreated 3.6 percent after saying charges from project delays and operational issues will hurt profit. The Stoxx 600 added 0.1 percent to 336.06 at the close of trading. 

• WTI Crude Rises a Third Day on Distillate Supply Forecast. WTI for March delivery increased $1.83, or 1.9 percent, to $96.80 a barrel at 1:38 p.m. on the New York Mercantile Exchange. Futures touched $96.89, the highest intraday price since Jan. 2. Volume of all contracts was 14 percent above the 100-day average.

• Singer Says Derivatives He ‘Loves Trading’ Hurt Society. Billionaire hedge-fund manager Paul Singer said derivatives have been a “net negative” for society and that the touted hedging benefits have been overstated by financial companies. “I love trading them,” Singer, whose Elliott Management Corp. manages $23.9 billion, said during a panel discussion at the World Economic Forum in Davos, Switzerland, today. “On balance, there’s been a net negative to society from this particular type of invention.” While banks say that derivatives allow companies in industries from energy to agriculture to hedge their risks, the resulting increase in leverage and complexity to balance sheets hasn’t been worth it, said Singer, 69. He also said that the banking industry remains too dangerous to global stability five years after the financial crisis. 

• Resolved: Obamacare Is Now Beyond Rescue.

• Why Bill Fleckenstein Is (Almost) Ready to Short Stocks.

• U.S. East Shovels Record Snow as Temperatures Plunge.

Wall Street Journal: 

• Clashes in Ukraine Turn Deadly. Medic Says Two Protesters Shot and Killed Amid Clashes With Police. Two protesters died from gunshot wounds amid clashes with police, a medic said Wednesday, raising the stakes in two-month antigovernment protests that exploded into violence in recent days. One dead protester suffered four gunshot wounds, and the second was shot in the heart, said the medic, Oleh Musiy. The names of the victims weren't released immediately.

• Copper Eases After Mixed China Data. Copper futures eased a bit on Wednesday in thin trade as investors weighed mixed Chinese economic data and a coming holiday that may limit trading activity in the top consumer. The most actively traded copper contract, for March delivery, recently traded down 1.6 cents, or 0.5%, at $3.335 a pound on the Comex division of the New York Mercantile Exchange.

Fox News: 

• Taking a hit: Anti-drug groups rebuke Obama over marijuana remarks. President Obama is taking a hit from anti-drug groups for downplaying the effects of marijuana use, as some point out his recent comments appear to clash with statements by his own health and law enforcement agencies. The president, in a recent interview with The New Yorker, likened pot to cigarettes and alcohol.

MarketWatch:

• Coach(COH) shares slump after worst same-store sales in at least 13 years.

• Kennedy says Obama’s wrong about pot, and more must-reads. Former Rep. Patrick Kennedy says President Barack Obama is wrong about the dangers of marijuana, “because the new marijuana is not the old marijuana.” Kennedy, a former eight-term Rhode Island Democrat, made the remarks in a televised interview in response to Obama’s statement that pot isn’t worse than alcohol. Kennedy said if Obama were to talk to his National Institutes of Health director in charge of drug abuse, she would tell him today’s modern, genetically modified marijuana is much stronger than what he acknowledged smoking as a young person.

CNBC:

• Aetna could be forced out of Obamacare: CEO.

ZeroHedge: 

• BOJ Approaches Limit Of Its Existing Bond Buys, As Doubts Spread It Will Boost QE.

• Thai CDS Rise To One Year Highs After Pro-Government Faction Leader Shot. (graph)

• Dead Mall Syndrome: The Self-Reinforcing Death Spiral of Retail.

• Verizon(VZ) Details How It Spied On Its Customers In 2013.

Business Insider:

• Someone Just Said Something About The Japan-China Conflict That Scared The Crap Out Of Everyone.

• Fox Finally Reveals All Of The Things Ex-CNBC Anchor Maria Bartiromo Will Be Doing.

• CARL ICAHN: I Want Apple(AAPL) To Buy Back More Stock, But I'm Better Off If They Do Nothing.

• S&P Says That Tim Geithner Called To Threaten Them After They Downgraded The US In 2011.

• It's Been A Year Since Jeff Zucker Took Over At CNN — And Ratings Have Plunged To 20-Year Lows.

Reuters: 

• Norfolk Southern(NSC) profit rises sharply on strong shipment volumes. Norfolk Southern Corp on Wednesday reported a 24 percent increase in fourth-quarter earnings, beating Wall Street's expectations, as strong chemicals, construction materials and auto shipments more than offset a dip in coal volumes. 

• United Technologies(UTX) profit tops estimates; revenues miss. United Technologies Corp, the world's largest maker of elevators and air conditioners, reported a rise in fourth-quarter profit that topped estimates, helped by a delay in shipping a helicopter order.

Financial Times:

• Davos leaders: Shinzo Abe on WW1 parallels, economics and women at work. Here at Davos, I’ve just had the opportunity to moderate a discussion between the Japanese prime minister, Shinzo Abe, and a group of international journalists. I asked Mr Abe whether a war between China and Japan was “conceivable”. Interestingly, he did not take the chance to say that any such conflict was out of the question. In fact, Mr Abe explicitly compared the tensions between China and Japan now to the rivalry between Britain and Germany in the years before the first world war, remarking that it was a “similar situation”.

Telegraph:

• Trying to deleverage China without blowing up the system. China is walking a tightrope without a net. There is an acute cash crunch. Credit at a viable cost is being fiercely rationed. Foreign buyers with money in hand can – and are – buying up nearly completed buildings from distressed developers for a song. The shadow banking system has risen to 30pc of all lending from 20pc in barely more than a year. The growth generated by each extra yuan of credit has fallen by three quarters from 1.0 to 0.25 in five years, evidence of credit exhaustion.

• Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber. Ex-Bundesbank head Alex Weber expects fresh market attacks on eurozone this year and economist Kenneth Rogoff says the euro was a "giant historic mistake".

Echoing fears that European policymakers remain in a state of cognitive dissonance – recognizing the need for root-and-branch overhaul of peripheral banks, but backtracking on joint liability plans – Christopher Flowers, the legendary FIG investor who now runs the £2.3 billion ($3.5 billion) private equity group JC Flowers, sounded the alarm over the negative sovereign-bank feedback loop. In a shot across the bows of market bulls, who cite the return of capital flows to weaker eurozone states, Flowers issued a stark warning: "There is a scenario where we have a Lehman-type event: we wake up some Thursday and a big country is in trouble. "And the ECB will have to decide to support banks x, y, z. And then the ECB will, in fact, decide to own bank x, y, z.


While we want you to share, we ask you use the functions on-site rather than copy/paste. See T's & C's for details. http://www.euromoney.com/Article/3211790/CurrentIssue/88924/Restructuring-Flowers-slams-Europe-over-inaction.html?copyrightInfo=true

Nikkei:

• Sharp to End U.S. Solar Panel Production by April. Decision prompted by lower cost competition. To cut about 300 jobs at Tennessee plant.

Yomiuri:

• Japan Creates Web Site Devoted to Disputed Islands. Govt will this week launch site justifying its ownership of disputed islands that have been source of disagreement with South Korea and China. Site will explain basis of Japan's ownership of islets as dictated by international law, also to cite efforts govt agencies have taken to protecting territories.