Trichet's 'Close Call' Decision May Signal How Fast ECB Will Raise Rates. European Central Bank President Jean- Claude Trichet today may indicate just how fast he’s prepared to raise interest rates over the coming months. While policy makers meeting in Helsinki will keep the benchmark rate at 1.25 percent, according to all 48 economists in a Bloomberg News survey, any pledge by Trichet for “strong vigilance” would signal an increase as soon as June.
Oil Falls for Fourth Day on 'Bearish' Stockpiles, U.S. Economic Slowdown. Oil declined for a fourth day in New York, the longest losing streak in almost eight weeks, as rising U.S. supplies and slowing economic growth stoked speculation fuel demand may weaken in the world’s biggest crude consumer. Crude for June delivery lost as much as 63 cents to $108.61 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $108.69 at 9:13 a.m. Sydney time. Stockpiles at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, gained 102,000 barrels, the biggest increase in a month. Demand for gasoline declined 2.2 percent to a four-week low of 8.94 million barrels a day, the Energy Department said.
Silver Has Biggest Three-Day Drop Since 1983. Silver had its biggest three-day drop since March 1983, crude oil tumbled to a two-week low and gold, copper and grains fell after money managers made near-record bets on high commodity prices in April. Silver plummeted 19 percent since April 29 as increases in Comex margin requirements drove investors away, and oil declined after a U.S. report showed supplies surged.
China May Levy Resource Tax of 10% on Oil, Gas, Securities News Says. China’s planned resource tax on the sale of oil and gas may be as high as 10 percent, Shanghai Securities News reported, citing a government document it obtained. The government may levy a tax of 5 percent to 10 percent of sales value, according to an amendment to temporary regulations on the matter, the newspaper reported, without giving details on a timeframe or geographical regions for implementation. China has proposed a nationwide resource tax to raise funds to develop the poorer western regions, which are rich in oil, gas and coal reserves.
Berkshire's(BRK/A) Board Treats Buffett to Whitewash: Jonathan Weil. Berkshire’s audit committee had the opportunity to provide a full accounting of what went wrong. Instead its members lent their names to a whitewash that ignored the most important question: Whether Buffett or anyone else on Berkshire’s board may have violated the company’s ethical standards. Maybe that’s because they didn’t like the answer.
Canadian Solar(CSIQ) Aims to Increase Market Share Amid Supply Glut. Canadian Solar Inc. (CSIQ), the Chinese solar-panel maker that’s expanding factories more than 60 percent this year, aims to increase its market share as global overcapacity among manufacturers squeezes out smaller rivals. Chief Executive Officer Shawn Qu said the Suzhou-based company’s reputation for quality will persuade customers to choose its photovoltaic devices over those of competitors as output potential outstrips demand to 2012, pushing prices down. “During an oversupply situation everybody’s margins get pressure, but it’s actually the tier-one companies that gain market share,” Qu said in a telephone interview.
Hong Kong Home Sales Fall to 2-Year Low on Curbs, Rates. Hong Kong home sales fell to the lowest volume in more than two years in April as government curbs and rising mortgage rates sapped demand after a price surge since 2009. The number of units that changed hands last month declined 37.6 percent from a year earlier to 7,635, according to a statement on the Land Registry website yesterday. That’s the lowest since March 2009, according to data compiled by Bloomberg. The value of transactions slid 26.8 percent from a year earlier to HK$39 billion ($5 billion), the biggest yearly drop since June 2010, according to the release. Housing prices in the city, ranked the world’s most expensive place to buy a home by Savills Plc (SVS), have gained more than 55 percent in the past two years on record-low mortgage rates and an influx of buyers from China.
Wall Street Journal:
Signs Point to Pakistan Link. U.S. and European intelligence officials increasingly believe active or retired Pakistani military or intelligence officials provided some measure of aid to al Qaeda leader Osama bin Laden, allowing him to stay hidden in a large compound just a mile from an elite military academy. The suspicions cast light on where the U.S. is expected to focus as it investigates who might have helped bin Laden hide in plain sight in Abbottabad, a town about 40 miles from the capital Islamabad. Two senior U.S. officials and a high-level European military-intelligence official who have direct working knowledge of Pakistan's military intelligence agency, the Inter-Services Intelligence Directorate, say similar elements linked to the ISI have aided other Pakistan-based terror groups, the Haqqani militant network and Lashkar-e-Taiba. "There's no doubt he was protected by some in the ISI," the European official said of bin Laden. The officials say they believe these ISI elements include some current and former intelligence and military operatives with long-standing ties to al Qaeda and other militant groups.
GOP, White House Talk Deal on Debt. GOP leaders and the White House are discussing a deal that would enact strict deficit targets and some spending cuts to win Republican votes for lifting the ceiling on how much the federal government can borrow. The deal would defer contentious decisions about Medicare, Medicaid and taxes until after the 2012 elections. If such an agreement were reached, it would allow both sides to assure financial markets and the public of their commitment to reducing the deficit and then use next year's campaign to lay out their competing visions for the future of major government programs.
Greek Debt Woes Spur Euro-Zone Divide. Divisions in the euro zone are deepening over how to handle Greece's suffocating debt burden, with German officials open to a voluntary restructuring of Greek bonds but a majority of euro-zone policy makers fearful of the consequences. Europe's line has been that Greece will slash its outlays and repay all of its debts. But investors and, in private, some European governments increasingly doubt the country can. In that case, Greece will need more aid and, many believe, will have to restructure its debts. The debate in the euro zone is about whether and how to restructure. German officials believe Greece should be encouraged to sit down with its bondholders this year to discuss extending the maturity dates on its bonds, a step known as a debt rescheduling, said people familiar with the matter. Such a step would reduce Greece's new borrowing needs in coming years, while sparing investors the pain of a "haircut," or reduction in what they are owed. "We are cautiously open to voluntary measures that avoid imposing haircuts," said a senior German official, adding: "But our ideas are not being well received in Europe." Other key players including France, the European Central Bank, and the European Commission are opposed to discussing even a gentle form of Greek debt restructuring, arguing that financial markets would conclude that other crisis-hit countries such as Ireland and Portugal also won't repay their debts.
Avon(AVP) Bribe Probe Widens. Avon Products Inc.'s internal investigation into possible bribery of foreign officials has uncovered more potential wrongdoing, with evidence of improper payments to government officials found in several countries beyond the probe's original focus of China, according to a person familiar with the matter.
Glencore Bosses' Haul: $23 Billion. Glencore International AG, the private Swiss commodities trader, pulled back its veil further Wednesday as it prepares to enter the public markets, giving investors a clearer indication of the company's value—and the $23 billion combined stake that will be owned by its top five executives, including Chief Executive Ivan Glasenberg.
Syria Protests Spread Amid Widespread Detentions. Syria's widespread and deadly crackdown on anti-regime protesters has emboldened a new set of voices, including students in Syria's two largest cities who are protesting the crackdown itself. Scores from Aleppo University were detained by security forces Tuesday and Wednesday after more than 1,000 students marched through streets around the northern city's university. Activists said the protesters were demanding Syria's military lift its ten-day siege on the southern city of Deraa, where Syria's protests started seven weeks ago, that has left its residents cut off from electricity, food and water.
Eric Holder's Bin Laden Moment. The moment has come for Mr. Holder to end his investigation of the CIA's interrogators of terrorist detainees. As the whole of America takes a bin Laden victory lap, let us pause to remember some of this celebrated event's most forgotten men: the Central Intelligence Agency officers who sit under the cloud of a criminal investigation begun in 2009 by Attorney General Eric Holder into their interrogations of captured terrorists. That's right, the Americans whose interrogation of al Qaeda operatives may have put in motion the death of this mass murderer may themselves face prosecution by the country they were trying to protect.
CNBC:
Facebook, Google(GOOG) Mull Skype Deal. Facebook and Google are separately considering a tie-up with Skype after the web video conferencing service delayed its initial public offering, two sources with direct knowledge of the discussions told Reuters.
Billionaire Carlos Slim Just Jumped On The SELL SILVER Bandwagon. After a 20% decline -- during which there have been sales by Eric Sprott, George Soros and others -- news comes from CNBC that Mexican Billionaire Carlos Slim is now "actively selling" silver futures.
Shep Smith Doesn't Believe Anything The White House Is Telling Us About Osama Bin Laden. If the White House wants to get a good sense of the skepticism they have created with their shifting story lines and refusal to release pictures of Osama Bin Laden dead they need look no further than Shep. Widely considered the most objective anchor on Fox (and one might argue just on cable in general) Shep went on a tear on his Studio B show about the White House's handling of the Bin Laden storyline. Here's the thing, if this was any other anchor on TV Shep's suspicions might be chalked up to typical cable jabber. But as a general rule Shep does not suffer conspiracies, or conspiracy theorists (or angry emailers, or people looking to push their agenda) on his show. So to see him show such a total, and vehement lack of confidence in the White House is notable. It's also a problem for the White House, because it likely speaks to a larger skepticism in the nation, and the last thing the administration needs now is to be forced into producing the death certificate, so to speak, in the same way Obama released his birth certificate.
Markets Losing Faith in Portugal. One day after agreeing to a $115.5 billion rescue package, Portugal was forced to offer higher interest rates on its debt, spurring fears that, as in Greece and Ireland after their aid deals, financing costs in the country will continue to escalate. While all three countries will benefit in the short term from the loans coming from the European Union and the International Monetary Fund, their ability to continue to raise affordable short-term funds from international investors is considered crucial. Interest costs have soared for Greece and Ireland as many investors expect the tough austerity measures included in their rescue packages will actually deepen the countries’ economic slumps and make it even harder for them to balance their budgets and repay their debts. Portugal’s ability to secure more relaxed deficit targets from the I.M.F. — 5.9 percent of gross domestic product this year as opposed to an earlier promise from Lisbon of 4.6 percent, and 4.5 percent in 2012 compared with an earlier pledge of 3 percent — suggests that concerns are building in Washington and Brussels that too much austerity could have a detrimental effect.
Politico:
Kay Granger Questions Hillary Clinton on Pakistan Aid. The Republican in charge of doling out foreign aid wrote to Secretary of State Hillary Clinton expressing “grave concern” over cash payments to Pakistan and asked they stop. Rep. Kay Granger of Texas, who chairs a subcommittee of the Appropriations Committee responsible for foreign aid, is singling out $190 million in “assistance for flood victims through the Pakistan Citizens’ Damages Compensation Fund (CDCF).
Reuters:
California Unions, Governor Split on Budget Tactic. California's powerful public-sector unions back Governor Jerry Brown's call to extend tax hikes to close the state's $15 billion budget gap, but they are breaking with his plan to put the issue in front of voters. The unions prefer lawmakers extend tax increases expiring this summer because that would eliminate the risk of a defeat at the ballot box which could also jeopardize the pension benefits of their members. The unions' position could open a rift between Brown and fellow Democrats who control the legislature and who are close allies of public-sector unions. The difference between the governor and one of his key support groups compounds the mess in California's budget politics.
U.S. Plans to Blow Third Hole In Missouri Levee. The government plans to blow up a third section of a Mississippi River levee on Wednesday night to allow flood water back into the river, as river levels upstream continue to drop.
Siemens' Brazil Chief Warns on Strong Real - FT. Brazil needs to impose stricter capital controls to avoid the risk of "deindustrialisation," the chief executive of Siemens (SIEGn.DE) was quoted as saying on Thursday. In an interview with the Financial Times, Adilson Antonio Primo said Brazil's strong currency was crushing Siemens' export business in the country. "We need wider measures, harsher measures," Primo told the newspaper, adding that the government should introduce a quarantine on foreign investment.
Whole Foods(WFMI) Ups 2011 View On Profit Beat. Whole Foods Market Inc reported a quarterly profit that topped Wall Street's view and raised its full-year profit forecast, sending its shares up 5.4 percent.
JDS Uniphase(JDSU) Sees Q4 Growth Driven by High Bandwidth Demand. JDS Uniphase Corp sees strong demand for its laser and fiber optic products as soaring demand for bandwidth and an explosion in volume of data traffic through mobile phones and the internet, drives sales. Shares of the company rose 10 percent in after-market trade, after the company reported market beating first quarter results and forecast fourth-quarter adjusted revenue of $455-$475 million.
BMC Software(BMC) Q4 Beats Wall Street, Sees Strong FY12. Business software maker BMC Software Inc reported fourth-quarter results above Wall Street expectations and said it expected a strong fiscal 2012 boosted by solid bookings at its segment that focuses on servers and networks. "We are seeing a surge in demand because companies are looking to develop and manage flexible IT infrastructure, whether its cloud, or SaaS (software-as-a-service) or virtualization," CEO Bob Beauchamp told Reuters. Shares of the Houston, Texas-based company were up 5.3 percent at $51.65 in trading after the bell.
Financial Times:
High Petrol Prices Fuel Jump in US Online Shopping. Online shopping grew by its fastest rate in nearly four years in the US last month as rising fuel prices prompted Americans to cut trips to malls and buy on the internet instead, according to MasterCard Advisors. US consumers spent $13.8bn online last month, a 19.2 per cent jump from April last year, according to the SpendingPulse survey, which is based on spending on MasterCard credit cards and estimates of other forms of payment.
China Business News:
The southwestern Chinese province of Chongqing raised taxi fares by 50% to 1.8 yuan a kilometer from today, citing Yuan Lu, head of the local price bureau.
Evening Recommendations Citigroup:
Reiterated Buy on (AGN), raised estimates, boosted target to $94.
Reiterated Buy on (CSX), target $85.
Night Trading
Asian equity indices are -1.0% to +.25% on average.
Asia Ex-Japan Investment Grade CDS Index 106.50 +.5 basis point.
Asia Pacific Sovereign CDS Index 114.0 +2.0 basis points.
Preliminary 1Q Non-farm Productivity is estimated to rise +1.1% versus a +2.6% increase in 4Q.
Preliminary 1Q Unit Labor Costs are estimated to rise +.8% versus a -.6% decline in 4Q.
Initial Jobless Claims for last week are estimated to fall to 410K versus 429K the prior week.
Continuing Claims are estimated to rise to 3649K versus 3641K prior.
Upcoming Splits
None of note
Other Potential Market Movers
The Fed's Kocherlakota speaking, ECB Rate Announcement, BoE Rate Announcement, ICSC Chain Store Sales for April, weekly Bloomberg Consumer Comfort Index, RBC Consumer Outlook Index for May, weekly EIA natural gas inventory report, (JBL) analyst meeting, UBS Industrials Conference and the RBC Capital Markets Financial Institutions Conference could also impact trading today.
BOTTOM LINE: Asian indices are mostly lower, weighed down by commodity and real estate shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed. The Portfolio is 75% net long heading into the day.
North American Investment Grade CDS Index 89.93 +1.31%
European Financial Sector CDS Index 84.75 -.94%
Western Europe Sovereign Debt CDS Index 185.91 -1.31%
Emerging Market CDS Index 201.95 +.68%
2-Year Swap Spread 17.0 -1 bp
TED Spread 26.0 +1 bp
Economic Gauges:
3-Month T-Bill Yield .02% unch.
Yield Curve 263.0 -2 bps
China Import Iron Ore Spot $183.30/Metric Tonne +.38%
Citi US Economic Surprise Index -20.3 -13.6 points
10-Year TIPS Spread 2.55% unch.
Overseas Futures:
Nikkei Futures: Indicating -164 open in Japan
DAX Futures: Indicating +33 open in Germany
Portfolio:
Slightly Higher: On gains in my Tech/Retail sector longs, ETF hedges and emerging market shorts
Disclosed Trades: Added to my (IWM)/(QQQ) hedges and then covered some of them
Market Exposure: 75% Net Long
BOTTOM LINE: Today's overall market action is mildly bearish as the S&P 500 trades well off session lows despite sharp losses overseas, emerging market inflation fears, global growth concerns and commodity sector weakness. On the positive side, Internet, Computer, Semi, Drug and Restaurant shares are higher on the day. The UBS-Bloomberg Ag Spot Index is falling -1.56%, gold is down -1.48% and oil is dropping -1.88%. Silver is down about -20% in 5 days. The 10-year yield is falling -3 bps to 3.22%. The Portugal sovereign cds is falling -4.54% to 621.70 bps, the Greece sovereign cds is declining -4.07% to 1,285.02 bps and the Ireland sovereign cds is down -3.29% to 640.55 bps. On the negative side, Coal, Alt Energy, Energy, Ag, Steel, Paper, Networking, Construction and Road & Rail shares are under significant pressure, falling more than -1.75%. Small-caps and cyclicals are underperforming again. Commodity-related equities have traded very heavy throughout the day again despite a stable euro. The US price for a gallon of gas is rising .01/gallon today to $3.98/gallon. It is up .86/gallon in 78 days. Lumber is falling another -2.11% and has plunged around -27.0% in just over 2 months. Copper is dropping -2.81%. The US dollar continues to trade very poorly. The Japan sovereign cds is rising +2.76% to 80.84 bps and the US Muni CDS Index is gaining +2.79% to 125.91 bps. The sectors that are the most sensitive to global growth are getting hit the hardest again. I continue to believe the global economy is slowing more than economists expect on soaring food/energy prices, US housing, European austerity, central bank tightening in emerging markets and the Japan nuclear crisis. Some market leading stocks are trading very well in the face of recent weakness, which is a large positive. I expect US stocks to trade mixed-to-lower into the close from current levels on profit taking, more shorting, technical selling, global growth concerns, Mideast unrest and emerging markets inflation fears.
Services Expand at Slowest Pace in Eight Months. Service industries in the U.S. expanded in April at the slowest pace in eight months as companies cut back in response to higher energy costs. The Institute for Supply Management’s index of non- manufacturing companies declined to 52.8 last month, lower than the median forecast of economists surveyed by Bloomberg News, from 57.3 in March. The ISM’s measure of new orders at service providers decreased to 52.7, the lowest since December 2009, from 64.1 in March. The 11.4-point drop was the biggest since record-keeping began in 1997. A gauge of business activity, which reflects sentiment among purchasers, also declined. The group’s employment gauge dropped to 51.9 from 53.7 a month earlier. Fueled by spreading unrest in the Middle East, the average price of a gallon of regular gasoline at the pump advanced to $3.98 on May 3, the highest since July 2008, according to data from AAA, the nation’s biggest motoring group. Forced to spend more for food and fuel, household purchases have cooled. Consumer spending adjusted for inflation rose at a 2.7 percent annual pace in the first quarter, down from 4 percent in the last three months of 2010, the Commerce Department said last week.
ADP Estimates U.S. Companies Added 179,000 Jobs in April. Companies in the U.S. added workers in April, signaling the labor market is strengthening, data from a private report based on payrolls showed today. Employment increased by 179,000 in April from a revised 207,000 the prior month, according to figures from ADP Employer Services. The median estimate in the Bloomberg News survey called for a 198,000 advance this month.
U.S. May Pursue More Lenders After Suing Deutsche Bank(DB) on Faulty Mortgages. The U.S. Department of Justice may pursue claims against other lenders after suing Deutsche Bank AG for more than $1 billion, alleging the firm lied while arranging federal insurance on faulty mortgages. The Housing and Urban Development Department is examining loans insured through the Federal Housing Administration and may refer additional cases to the Justice Department, HUD’s general counsel, Helen Kanovsky, said yesterday in an interview. “We go where the evidence takes us, and if it takes us to the larger players on Wall Street, so be it,” Kanovsky said. “We could see another potential big negative for the industry out of this,” said Paul Miller, a former examiner for the Federal Reserve Bank of Philadelphia and an analyst with FBR Capital Markets in Arlington, Virginia. “It’s going to be a continued earnings drag on the industry.”
China's Stocks Fall Most in Two Months on 'Critical' Inflation. China’s stocks fell the most in two months after the government said taming inflation is “critical,” signaling to investors that more policy tightening measures may be ahead even as economic growth slows. China Shenhua Energy Co., the nation’s biggest coal company, and Yanzhou Coal Mining Co. plunged more than 5 percent after Goldman Sachs Group Inc. said the government may cap thermal coal prices to help power producers. Jiangxi Copper Co. and PetroChina Co. led a drop for commodity producers as metal and oil prices extended declines. China Citic Bank Corp. fell the most in six months after the China Securities Journal said the central bank will raise lenders’ reserve requirements this month. “Curbing inflation is the top priority for the government,” said Wu Kan, a fund manager at Dazhong Insurance Co., which oversees $285 million. “China’s economic growth has shown signs of a slowdown but that won’t change the government’s intention to cool inflation with more monetary measures.” The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, slid 66.2 points, or 2.3 percent, to 2,866.02 at the 3 p.m. close, the most since Feb. 22. “A moderate growth slowdown in 2011 could be taken as a signal of a hard landing going forward,” Bank of America- Merrill Lynch economists led by Ting Lu said in a report today. Growth indicators such as industrial production and fixed- asset investment will likely moderate in April from March, they said. “Stabilizing prices and managing inflation expectations are critical,” the People’s Bank of China said in a first- quarter monetary policy report published yesterday. Bank reserve requirements have no “absolute ceiling,” the report said, restating Governor Zhou Xiaochuan’s comment on April 16.
Qaddafi's Forces Bombard Rebel Cities as Allies Prepare for Rome Meeting. Libyan forces loyal to Muammar Qaddafi bombarded rebel-held cities in the west of the country as ministers from 22 nations prepared to meet in Rome to discuss ways to end the fighting. “The nature of the conflict has changed significantly in a month, but what has not changed and will not change is the resolve of NATO and our partners,” NATO Secretary-General Anders Fogh Rasmussen told reporters today in Brussels. “It is hard to imagine that the attacks against civilians in Libya will cease as long as Qaddafi remains in power.”
Russia's Micex Falls More Than 10% From High; Enters Correction. Russia’s Micex Index fell more than 10 percent from this year’s peak, the world’s first major benchmark stock gauge to enter a correction in six weeks. The Micex sank 2 percent to 1,657.54 by the 6:45 p.m. close in Moscow, its lowest level since Dec. 10. The 30-stock gauge has retreated from an April 6 high of 1,859.99 as commodities slipped and concern deepened that tighter monetary policy will curb economic growth.
Crude Oil Falls in New York After U.S. Supplies Climb to a Six-Month High. Crude oil dropped to a two-week low as a U.S. government report showed supplies surged, and on signals that U.S. economic growth is slowing. Oil fell as much as 2 percent after the Energy Department said stockpiles rose 3.42 million barrels to 366.5 million last week, the highest level since October.“The inventory numbers were much more bearish than expected,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “We were already poised for a move lower when the inventory data and the negative economic numbers came out. This is looking like a perfect time to take risk off the table.” Crude oil for June delivery fell $2.07, or 1.9 percent, to $108.98 a barrel at 11:21 a.m. on the New York Mercantile Exchange.
Applied Materials(AMAT) Agrees to Buy Varian(VSEA) for $4.9 Billion. Applied Materials Inc. (AMAT), the world’s largest producer of chipmaking equipment, agreed to buy Varian Semiconductor Equipment Associates Inc. (VSEA) for $4.9 billion in cash to add technology for chips used in mobile devices. The company will pay $63 a share, 55 percent more than yesterday’s closing price, Santa Clara, California-based Applied Materials said in a statement today.
Deutsche Bank(DB) Sued by Los Angeles Over Foreclosed Properties, Evictions. Deutsche Bank AG (DBK) was sued by the City of Los Angeles for allegedly failing to maintain foreclosed properties and illegally evicting low-income tenants. The lawsuit comes a day after the U.S. Department of Justice sued the German bank for more than $1 billion, claiming it lied while arranging federal insurance on faulty mortgages. Deutsche Bank’s MortgageIT unit falsely certified that it was examining default risks while qualifying loans for Federal Housing Administration insurance, according to the government.
Goldman Sachs(GS) May Make 'Near-Term' Management Changes, UBS Says. Goldman Sachs Group Inc. (GS), accused of misleading clients by a U.S. Senate inquiry, is likely to make management changes in the “near-term,” said William Tanona, an analyst at UBS AG. “Any turnover will concern investors despite the firm’s deep bench,” Tanona, who worked at Goldman Sachs from 2005 to 2008, wrote today in a note to investors. “GS’s management team is very strong; however, missteps on the public relations front have further tarnished the firm’s reputation.” Managers will remain under strain after lawmakers sent findings to the Justice Department and Securities and Exchange Commission, he said.
ConAgra(CAG) Sweetens Ralcorp(RAH) Offer to $4.9 Billion to Spur Talks. ConAgra Foods Inc. (CAG) offered to buy Ralcorp Holdings Inc. (RAH) for about $4.9 billion, sweetening its bid to lure the largest U.S. store-brand foods maker into takeover negotiations. The unsolicited cash offer is $86 a share, 32 percent more than Ralcorp’s closing price before the initial bid, ConAgra said today.
Wall Street Journal:
U.S., Allies Discuss $4.5 Billion Fund to Help Libyan Rebels. The U.S. and its allies are discussing the creation of a fund to finance the operations of Libyan forces opposing the regime of Col. Moammar Gadhafi, according to people familiar with the matter. The potential €3 billion ($4.5 billion) fund, which will be on the agenda when Secretary of State Hillary Clinton and other top diplomats meet in Rome on Thursday—would be guaranteed by assets of the Gadhafi regime that were frozen in the wake of the dictator's violent crackdown on protesters this year, these people said.
Connecticut Senate Approves Democratic Budget Deal. The state Senate bucked a national trend of forgoing tax increases early Tuesday and instead passed a two-year, $40.1 billion budget that attempts to tackle the state's deficit with a combination of cuts, labor savings and wide-ranging tax hikes. Republican lawmakers warned the opposite will happen. They said the cornucopia of increased taxes -- about $1.4 billion in the first year and $1.2 billion in the second year -- on everything from personal and corporate income to diesel fuel, yoga studios, alcohol and pedicures hurts specific industries and everyday taxpayers still struggling from the recession. "Hold on to your hat. We're going to tax you from head to toe and everything in between," warned Sen. Andrew Roraback, R-Goshen, the ranking Republican senator on the tax committee. "It's the middle class that is taking it the hardest with the budget."
CNBC.com:
Treasury Suggests $2 Trillion U.S. Debt Cap Raise: Sources.The Treasury has told lawmakers a roughly $2 trillion rise in the legal limit on federal debt would be needed to ensure the government can keep borrowing through the 2012 presidential election, sources with knowledge of the discussions said. Obama administration officials have repeatedly said that it is up to Congress to decide by how much the $14.3 trillion debt limit should be raised. But when lawmakers asked how much of an increase would be needed to meet the government's obligations into early 2013, Treasury officials floated the $2 trillion working figure, Senate and administration sources told Reuters.
Business Insider:
Hedge Funds Go Long Asian Currencies At Record Levels. As of last Thursday, according to a senior Deutsche Bank currency strategist, "long positions in some of the Asian currencies had been close to a record high."
China Establishes New Internet Regulator. A powerful arm of China’s government said Wednesday that it had created a new central agency to regulate every corner of the nation’s vast Internet community, a move that appeared to complement a continuing crackdown on political dissidents and other social critics.
LA Times:
Boeing's(BA) Robotic Jet Phantom Ray Takes Maiden Test Flight. A sleek, delta-winged robotic jet took to the skies for the first time above the Mojave Desert at Edwards Air Force Base. Boeing Co.'s experimental drone, dubbed Phantom Ray, flew to 7,500 feet and reached speeds of 205 mph in its first flight. Unlike existing combat drones that are controlled remotely by a human pilot, the Phantom Ray could carry out a mission controlled almost entirely by a computer. A human pilot sitting miles away designs a flight path and sends it on its way, and a computer program guides it to the target and back.
Arizona Public Safety May Invest In Goldman Sachs(GS), Gracie Hedge Fund. The Arizona Public Safety Personnel Retirement System is set to consider investing more than $200 million in four hedge funds. The $6.1 billion public pension plan's board of trustees will consider a possible $60 million investment with Goldman Sachs Asset Management and $50 million with New York-based Gracie Capital, HFMWeek reports.
The Atlantic:
Egypt's Muslim Brotherhood Sticks With Bin Laden. Most of yesterday's headlines proclaiming the death of Osama bin Laden used epithets like "terror mastermind" or "bastard" to refer to the internationally feared mass murderer. (That latter headline is from the New York Post.) But in its first public statement on the killing of bin Laden, Egypt's Muslim Brotherhood used the honorific term "sheikh" to refer to the al-Qaeda leader. It also accused Western governments of linking Islam and terrorism, and defended "resistance" against the U.S. presence in Iraq and Afghanistan as "legitimate." The Muslim Brotherhood's response to bin Laden's death may finally end the mythology -- espoused frequently in the U.S. -- that the organization is moderate or, at the very least, could moderate once in power.
Seeking Alpha:
China Collapse Means Iron Ore Collapse. Can't read between the lines? Maybe you're missing the advanced warnings from the CEOs of these resource dependent companies? Allow me to throw in a quote: "These record-high levels are probably not sustainable," says Jan du Plessis, CEO of Rio Tinto (RIO), talking about base metals prices. While remaining confident of continuing strong demand from China and India, du Plessis, is prepping his firm's balance sheet for falls in copper and iron ore. It's my understanding that more than half of the iron ore in China goes into Real Estate. It ends up building negative return on investment style ghost towns. That said, right now everyone is pretending that this type of activity is adding long term economic value.
Reuters:
Syria Charges Hundreds With "maligning the state"."Mass arrests are continuing across Syria in another violation of human rights and international conventions," said Rami Abdelrahman of the Syrian Observatory for Human Rights. Hundreds of Syrians have been charged with "maligning the prestige of the state," a Syrian rights group said, in President Bashar al-Assad's drive to crush pro-democracy protests against his 11-year autocratic rule. The charge, which carries a three-year prison sentence, was lodged Tuesday against hundreds of people detained this week before the Muslim day of prayer Friday, when the largest demonstrations calling for Assad's overthrow are typically seen. The campaign intensified after a tank-backed army unit, led by Assad's brother Maher, last week shelled and machinegunned into submission the old quarter of Deraa, cradle of the six-week-old uprising.
Agrium(AGU) Shares Fall 5% on Weaker Forecast. Farm-products retailer and potash miner Agrium Inc offered a weaker than expected financial forecast on Wednesday, and its shares fell 5 percent despite strong first-quarter profit.
Financial Times:
Corn Crop Delays Hit Hedge Funds. For the past few months hedge funds and other speculators have been buying Chicago’s July corn contract, which represents the old-crop, and simultaneously selling the December contract, which represents the new crop due to be harvested later this year. The wager was that old crop supplies were tight – and prices need to increase to ration domestic demand and exports – while new crop supplies were set to ease on the back of a near record planting and expectations of a big rebound in output.
