Bull Radar

Style Outperformer:

• Large-Cap Growth +.32%

Sector Outperformers:

• 1) Tobacco +.58% 2) Utilities +.43% 3) Foods +.30%

Stocks Rising on Unusual Volume:

• EQIX, LRN, PLL, P and MCP
  

Stocks With Unusual Call Option Activity:

• 1) EQIX 2) NXPI 3) PHM 4) LF 5) CI
  

Stocks With Most Positive News Mentions:

• 1) PGR 2) RTN 3) FWLT 4) ETN 5) EQIX
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume

Thursday Watch

Evening Headlines
Bloomberg:

• U.S. Officials Concerned Over What Follows Arab Spring. The attacks on U.S. diplomatic compounds in Egypt and Libya, where ambassador Chris Stevens and three other Americans died, have fueled growing concerns about what will replace long-standing Arab dictatorships that kept order at the expense of freedom. The Obama administration supported democratic uprisings, abandoning decades of support for Egyptian President Hosni Mubarak in the Arab world’s most populous nation and supporting the rebels who toppled Libyan dictator Muammar Qaddafi. The U.S. helped negotiate the ouster of Yemen’s unpopular pro-American leader, and now is siding with Syrian rebels trying to topple dictator Bashar al-Assad. “The structures of state influence are not what they used to be, so it’s not just American, but all embassies that are at greater risk,” John Nagl, a research fellow at the U.S. Naval Academy in Annapolis, Maryland, said in a phone interview yesterday. The fatal attack on the U.S. consulate in Benghazi and the demonstration at the American Embassy in Cairo, as well as threats of violent protests elsewhere in the region, “raise troubling questions about the whole experience of the Arab awakening and why security has gotten so far out of control,” said Michele Dunne, director of the Middle East program at the Atlantic Council, a Washington policy research institute.
• Ambassador Stevens Dies, Witness Then Casualty in Libya. John Christopher Stevens, the American ambassador to Libya killed trying to evacuate the U.S. consulate in Benghazi during an attack by Islamist protesters, was a firsthand witness to Libya’s painful transition to democracy who became one of its casualties. He was 52. Known to friends, family and colleagues as Chris, the California native was a fluent Arabic-speaking, 21-year veteran of the State Department who had postings in Damascus, Cairo and other Middle Eastern locales before his first stint in Libya from 2007 to 2009. “He found humor in the blackest of moments, always made time for a game of tennis, and enjoyed a gin and tonic at the end of a long day,” said Molly Phee, who joined the foreign service in the same class as Stevens and is deputy chief of mission in Addis Ababa, Ethiopia. His friendship over 20 years “and kindness helped revive me when I felt low,” Phee said in an e-mail.
• German Court’s Backing Bailout Fund to Test EU Resolve on Crisis. German backing for Europe’s bailout fund quickened the bargaining over a bond-buying program for Spain, testing the resolve of government leaders and the European Central Bank to conquer the debt crisis. Spain is pressing for an ECB intervention with no strings attached, while creditors led by German Chancellor Angela Merkel are reluctant to lend more money. Mario Draghi’s central bank is waiting for the two sides to commit before it wades back into the bond market. After yesterday’s “Super Wednesday” in crisis politics marked by relief over the German supreme court’s endorsement of the 500 billion-euro ($645 billion) rescue fund, the question of a credit line or full loan program for Spain is set to dominate a two-day meeting of finance ministers starting tomorrow in Nicosia, Cyprus.
• China’s Stocks Drop to One-Week Low; Industrial Shares Decline. China’s stocks fell to a one-week low after the official Xinhua News Agency said massive stimulus measures would be “detrimental” to sustainable growth, overshadowing the government’s plan to provide aid to exporters. Gansu Qilianshan Cement Group Co. (600720) and machinery maker Sany Heavy Industry Co. slid at least 1.8 percent, leading declines for infrastructure-related stocks. “Reliance on exports and investments probably isn’t a sustainable way of growth,” said Wang Zheng, Shanghai-based chief investment officer at Jingxi Investment Management Co., which manages about $120 million. “Investors are still worried about China’s long-term growth model.” The Shanghai Composite Index (SHCOMP) fell 0.5 percent to 2,116.14 at the 11:30 a.m. local-time break.
• Shadow Bankers Vanishing Leave China Victims Seeing Scams. To live out his retirement years, He Zhongkui was counting on steady income from an investment that promised interest payments five times higher than what he could earn in a Chinese bank. Now He, a 62-year-old former municipal official in Wenzhou who rides a rusty bicycle, is cutting back on food and gasoline, having found himself one of a growing number of victims of China’s nebulous world of shadow banking. A “friend,” who he said had been paying him 2,400 yuan ($379) a month after He gave him one-third of his 600,000-yuan life savings to invest in real estate, suddenly disappeared. So did the payments and principal.
• Alaska Governor Faults U.S. Rules on Petroleum Reserve. Alaska Governor Sean Parnell joined some oil industry officials in criticizing proposed rules issued by the U.S. Interior Department governing drilling in the National Petroleum Reserve-Alaska. Parnell said yesterday the new rules effectively withdraw millions of acres from potential drilling, and said the state would withdraw from an memorandum of understanding concerning the reserve.
• Chicago Teachers Shouldn’t Be Obstacle to School Progress. The stakes in Chicago’s school strike go well beyond the nation’s third-largest public school system. For U.S. education reform, it may be a watershed. For teachers unions, it may be a Waterloo. It was poor timing for Chicago teachers to walk out on 350,000 children Monday, the second week of the school year. (Despite union claims to the contrary, “walk out” is exactly what the teachers did, unilaterally shutting off negotiations with city.)
• Moore Capital Said to Cut Investment Jobs in Team Restructuring. Moore Capital Management LLC, the $15 billion hedge fund run by Louis Moore Bacon, cut 10 to 15 investment jobs as it restructures one of its equity teams, according to three people with knowledge of the matter. The portfolio managers and research analysts were let go on Sept. 11, said one of the people who asked not to be identified because the information is private. Patrick Clifford, a spokesman for New York-based Moore, declined to comment.
• India Potential Dims as Skidding Investment Tests Singh: Economy. India’s growth outlook is waning as the longest fall in capital-goods output since 2009 signals weaker investment, adding pressure on Prime Minister Manmohan Singh to salvage his development agenda. Capital-goods production, a gauge of corporate expenditure on factories and machinery, slid in July for a fifth straight month, the longest stretch since declines over most of 2009, a report showed yesterday. India’s economic growth potential may have fallen to 6 percent to 6.5 percent a year, below the Reserve Bank of India’s 7.5 percent estimate, JPMorgan Chase & Co. said.

Wall Street Journal:

• Libya Attack Sparks Crisis. U.S. Sends Marines After Ambassador, Three Other Americans Killed; 'We Couldn't Stop Them'. The killing of the U.S. ambassador to Libya and three other Americans, in one of the most brazen attacks on a U.S. diplomatic compound in a generation, sparked a security crisis in the North African country, elevated tensions across the Middle East and raised concerns about how well the U.S. can protect its diplomats abroad. The U.S. responded to the assault by dispatching two Navy destroyers, dozens of Marines, federal investigators and intelligence assets to Libya to protect Americans and help hunt the suspected religious extremists who carried out the attack late Tuesday. U.S. officials described the attack that killed Ambassador Christopher Stevens as complex and possibly premeditated.
• Full Coverage: Libya Violence.
• European Banks Keep Ties to Iran.
  
• Germany Balks at Bank Union. Germany is reluctant to cede control of its banking sector, which includes many small, public-sector banks with close ties to local governments. The German government wants the new regulator to concentrate only on the region's biggest banks, though it has left open the possibility of eventually expanding its authority. Berlin's position is controversial within Germany's financial community, pitting Deutsche Bank AG and other private-sector banks against the public-sector banks. Currently, all European banks are supervised by their national regulators.
• Cheney: Cairo, Benghazi and Obama Foreign Policy. In too many parts of the world, America is no longer viewed as a reliable ally or an enemy to be feared. It has certainly been a terrible 48 hours. In Libya, violent extremists killed American diplomats. In Cairo, mobs breached the walls of the U.S. Embassy, ripped down the American flag and replaced it with the al Qaeda flag. In response to the attack in Cairo, diplomats there condemned not the attackers but those who "hurt the religious feelings of Muslims." The president appeared in the Rose Garden less than 24 hours later to condemn the Libya assault and failed even to mention the attack in Egypt. The message sent to radicals throughout the region: If you assault an American embassy but don't kill anyone, the U.S. president won't complain. Though the administration's performance in the crisis was appalling, it wasn't surprising—it is the logical outcome of three-and-a-half years of Obama foreign policy.

CNBC:

• Economy 'In a Deep Hole, Crawling Along': Feldstein. The economy is doing “terribly” and may not reach 2 percent growth this year, Martin Feldstein, former Council of Economic Advisors chairman under President Reagan, told CNBC’s "Closing Bell.

Business Insider:

• China's Next Leader Xi Jinping Suffered Heart Attack.
• Why Recent Graduates Are Moving Back Home In Droves.

Zero Hedge:

• Here's Hilsenrath With What To Expect Tomorrow.
• Goldman(GS) On Spain's Tension-Inducing Arrogance.
• US Totalitarianism Loses Major Battle As Judge Permanently Blocks NDAA's Military Detention Provision.
• 72 Seconds Of Sanity On Europe. (video)
  

New York Daily News:

• How to send Egypt a message. The Morsi government is encouraging anti-U.S. unrest; the Obama administration must now send a clear signal back. The image of a black Al Qaeda flag flying above the United States Embassy in Cairo on Sept. 11 shocked Americans. It should have shaken the Egyptian Government as well. Egypt receives $1.5 billion annually from the U.S., and Washington is about to forgive $1 billion in the ailing state’s debt. But Egypt’s government is charting a different course. Rather than denouncing the egregious violation of U.S. sovereignty, Egypt’s ruling party, the Muslim Brotherhood, is doubling down. This Friday, the Brotherhood is slated to hold a mass demonstration just two blocks from U.S. compound in Cairo. In Egypt and the U.S., the attack is widely being attributed to an obscure anti-Islamic movie. But in fact, Al Gamaa Al Islamiyya, a U.S.-designated terrorist organization, announced weeks ago that it would protest in front of the U.S. Embassy on 9/11 to demand the release of Sheikh Omar Abdel Rahman, the blind cleric mastermind of the first World Trade Center Bombing in 1993.

Read more here: http://blogs.sacbee.com/capitolalertlatest/2012/08/fiscal-analyst-hundreds-of-millions-at-risk-from-facebook-slide.html#storylink=cpy

Forbes:

• The Price Of Oil Is The New Economic Spoiler. The charts below — provided by Ruchir Sharma, Morgan Stanley Head of Emerging Markets and Global Macro — prove without a doubt that rising oil prices due to QE1 and QE2 act like rising interest rates– and stall the economy into recession.

CNN:

• QE3 won't create jobs. "The Fed continues to want the economy to grow faster and specifically, to grow more jobs, but the ability of QE to do that is extraordinarily limited," she said. "We know that QE reduced interest rates, but we also know that has not led to more construction, more mortgages, more business investment, or more lending," Mann said. "Since it hasn't done any of that, it probably hasn't created jobs either." Meanwhile, banks are sitting on $1.5 trillion in excess reserves and haven't been eager to lend that money out. In fact, low interest rates make it harder for them to turn a profit on new loans.

Rasmussen Reports:

• Daily Presidential Tracking Poll.The Rasmussen Reports daily Presidential Tracking Poll for Wednesday shows President Obama attracting support from 46% of voters nationwide, while Mitt Romney earns 45% of the vote. Four percent (4%) prefer some other candidate, and five percent (5%) are undecided.

Reuters:

• China says tensions with Japan likely to hurt trade. Rising tension between China and Japan over disputed islands is likely to harm their trade ties, a senior Chinese commerce official said on Thursday. Asia's two largest economies both claim islands in the East China Sea and tensions have flared since Tuesday when Tokyo announced it would purchase disputed islands from a private Japanese owner, an act that Beijing has called a violation of its sovereignty. Chinese Vice Minister of Commerce Jiang Zengwei added to the volley of warnings from Beijing. "With Japan's so-called purchase of the islands, it will be hard to avoid negative consequences for Sino-Japanese economic and trade ties," Jiang told a news briefing. China is Japan's largest trading partner.

Financial Times:

• Bundled US car loan deals enjoy comeback. Mr Longaker, general sales manager at the dealership, says cheap financing is luring drivers to trade in their models more regularly, and even buyers with poor credit histories finally have access to loans again. “There’s no shortage of people who have suffered heartbreak over money over the last few years,” he says. “Until four or five months ago, they had no chance of financing. Now they do. And as for the best borrowers, they can now get rates as low as 2 per cent.

Telegraph:

• The euro’s demise may be the final chapter of the ERM debacle. The drama of 1992 showed why Germany cannot lead Europe out of a monetary crisis. Germany cannot be relied on to sacrifice its own national interest to that of the broader whole. Quite right too, you might reasonably argue, but the fact is that even the relatively loose arrangement of a fixed exchange rate regime, let alone the full monty of monetary union, cannot survive unless mutual obligations are recognised. Europe’s problem with the single currency is but a reflection of a much deeper and older fault line at the heart of this troubled continent: Germany is both too big and economically dominant to be easily contained, but too small, tainted by history and politically alien, to be trusted with the controls. Perceived national interest prevents Germany from offering the benighted periphery a plausible way out of depression, even though it must if the euro is to survive. Yesterday, the German Constitutional Court seemed to give a qualified thumbs up to Europe’s bail-out arrangements, so perhaps there is hope for the euro yet. However, any reading of the detail powerfully suggests otherwise. In fact, this is as close to a thumbs down as you can get without the German court immediately calling time on the whole endeavour. The flexibility needed in German policy to save monetary union is denied by the small print of the ruling. What began with the debacle of the ERM is heading for eventual nemesis in the crisis of the euro.

China Daily:

• China Should Act to Stop Inflation Return, BOC Chair Says. China should take measures to prevent the economic conditions of 2010 when inflation reached 6.5%, Bank of China Ltd. Chairman Xiao Gang wrote in a commentary. There is doubt as to how long the low consumer price level will last, Xiao wrote.

China Securities Journal:

• PPI y/y growth may stabilize and rebound in 4Q, according to a reporter named Cao Shuishui.

National Business Daily:

• Some Chinese travel agencies have stopped offering trips to Japan as the Diaoyu Islands dispute continues.

Economic Information Daily:

• A Chinese sovereign debt crisis is "extremely unlikely" as the nation has sufficient assets to cover its debt, citing Li Yang, vice president of the Chinese Academy of Social Sciences and former People's Bank of China adviser. China's sovereign balance sheet faces risks of asset- liability mismatches and contingent liabilities, Li said. China should reduce government-directed economic activities and reduce contingent liabilities, he said.

Evening Recommendations
Jefferies:

• Rated (RHT) Buy, target $67.

Night Trading

• Asian equity indices are -.50% to +.50% on average.
• Asia Ex-Japan Investment Grade CDS Index 123.50 -7.0 basis points.
• Asia Pacific Sovereign CDS Index 102.75 -4.25 basis points.
  
• FTSE-100 futures -.01%.
  
• S&P 500 futures -.10%.
  
• NASDAQ 100 futures -.10%.

Morning Preview Links

Earnings of Note
Company/Estimate

• (PIR)/.19
• (ALOG)/.84

Economic Releases
8:30 am EST

• The Producer Price Index for August is estimated to rise +1.2% versus a +.3% gain in July.
• The PPI Ex Food & Energy for August is estimated to rise +.2% versus a +.4% gain in July.
• Initial Jobless Claims are estimated to rise to 370K versus 365K the prior week.
• Continuing Claims are estimated to fall to 3318K versus 3322K prior.
  

12:30 am EST

• The FOMC is expected to leave the benchmark fed funds rate at .25%.

2:00 pm EST

• The Monthly Budget Deficit for August is estimated to widen to -$170.0B versus -$134.1B in July.
  

Upcoming Splits

• None of note
  

Other Potential Market Movers

• The Fed's Bernanke speaking, Italian bond auction, G-20 Meeting, 30Y T-Bond auction, Moody's decision on Spain, RBC Consumer Outlook Index for September, weekly EIA natural gas inventory report, weekly Bloomberg Consumer Comfort Index, Morgan Stanley Industrials/Autos Conference, (COO) analyst meeting, (WDC) analyst day and the (COV) investor meeting could also impact trading today.
  

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial 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.

Stocks Slightly Higher into Final Hour on Less Eurozone Debt Angst, Global Central Bank Action/Stimulus Hopes, Short-Covering, Performance Angst

Broad Market Tone:

• Advance/Decline Line: Slightly Lower
  
• Sector Performance: Mixed
  
• Volume: Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 16.30 -.67%
  
• ISE Sentiment Index 117.0 -3.31%
  
• Total Put/Call .68 -12.82%
  
• NYSE Arms .91 +38.12%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 91.22 bps -2.50%
  
• European Financial Sector CDS Index 198.39 bps -4.85%
  
• Western Europe Sovereign Debt CDS Index 182.32 -3.96%
  
• Emerging Market CDS Index 208.78 -1.53%
  
• 2-Year Swap Spread 15.5 +.5 basis point
  
• TED Spread 29.75 -.5 basis point
  
• 3-Month EUR/USD Cross-Currency Basis Swap -21.75 +.25 basis point
  

Economic Gauges:

• 3-Month T-Bill Yield .10% unch.
  
• Yield Curve 151.0 +7 basis points
  
• China Import Iron Ore Spot $98.10/Metric Tonne -2.1%
  
• Citi US Economic Surprise Index 26.30 +1.2 points
  
• 10-Year TIPS Spread 2.39 unch.
  

Overseas Futures:

• Nikkei Futures: Indicating -12 open in Japan
• DAX Futures: Indicating -17 open in Germany
  

Portfolio:

• Slightly Higher: On gains in my Tech/Retail/Medical sector longs
  
• Disclosed Trades: None
  
• Market Exposure: 50% Net Long

Today's Headlines

Bloomberg:

• Germany Can Ratify ESM Fund With Conditions, Court Rules. Germany’s top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro ($645 billion) bailout facility. The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany’s 190 billion-euro contribution can’t be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats that it won’t be forced to assume higher liabilities without its consent. “We are an important step closer to our goal of stabilizing the euro,” German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling today. “It has always been the goal of this government” to establish a “clear limit and to include parliament in all important decisions.” The legal challenge to the ESM and a fiscal pact, designed to impose budget discipline on European Union members, delayed efforts by Merkel and other euro-area policy makers to stem the region’s debt crisis. In the neighboring Netherlands, Prime Minister Mark Rutte, a Merkel ally, is seeking re-election today.
• Schaeuble Says Court Ruling Means ECB Can't Use Money Press: ZDF. German Finance Minister Wolfgang Schaeuble said the decision by Germany's Constitutional Court rules out that the ECB "makes government funding through the money press," citing Schaeuble. Germany may take legal action if the ECB doesn't follow the German court's decision, Schaeuble said.
  
• Merkel’s Court Win on Euro Rescue Resonates Across Debt Divide. Chancellor Angela Merkel’s court victory on policy for saving the euro was hailed by southern Europe as well as her northern allies as German bailout critics failed to stop the joint currency’s permanent rescue fund. With an extension of Greece’s bailout still undecided and Spain holding out on seeking a sovereign rescue, today’s German constitutional court verdict avoids worsening the debt crisis as it approaches its third anniversary. It also hands Merkel ammunition against domestic opponents who see German taxpayers’ money at risk in the name of a united Europe.
• France Said to Press Spain to Seek EU Aid Over German Concerns. France is pressing Spain to snub German concerns and request help from the European Union to contain the euro-area financial crisis, according to three people familiar with negotiations. French officials want Spain to ask the EU’s bailout fund for help to consolidate gains in southern European bonds since European Central Bank President Mario Draghi said the ECB will back up the rescue package by buying unlimited amounts of debt in the secondary market, said the people, who asked not to be named because the lobbying effort is private. Spanish Prime Minister Mariano Rajoy, who has been calling for the ECB to buy government bonds since taking office in December, has spent six weeks hesitating since Draghi said Aug. 2 that any aid would have conditions attached. Rajoy today said he may not need a second bailout because the ECB’s pledge already cut borrowing costs. German policy makers say they would force Spain to accept conditions in exchange for support. “I don’t know if it’s necessary for Spain to ask for it, let’s see how the risk premium evolves in the coming period,” Rajoy told lawmakers today in Parliament in Madrid. He will take the decision to protect “Spaniards’ interests” after assessing the conditions, he said.
• Big Stimulus Would Harm China Long-Term Growth: Xinhua. Massive stimulus measures would be "detrimental" to China's sustainable economic growth, the official Xinhua News Agency wrote in a commentary. While growth in the world's second-biggest economy has slowed for six-straight quarters, such fiscal spending is unlikely. Authorities are aware of the limitations of a possible stimulus plan, writer Liu Jie said. The 4 trillion yuan stimulus in 2008 led to large local-government debts and bad loan risks.
• India Industrial Output Misses Estimates as Economy Falters. Indian industrial production rose less than economists estimated in July, adding to signs that Asia’s third-largest economy is faltering. Production at factories, utilities and mines climbed 0.1 percent from a year earlier, after a 1.8 percent slide in June, the Central Statistical Office said in a statement in New Delhi today. The median of 33 estimates in a Bloomberg News survey was for a 0.5 percent gain.
• Apple Unveils IPhone 5 to Extend Lead in Smartphone Market. Apple Inc. (AAPL) unveiled a new version of the iPhone that boasts a bigger screen, faster chip and access to speedier wireless networks, an overhaul aimed at widening its lead over Samsung Electronics Co. (005930) and Google Inc. (GOOG) in the $219.1 billion smartphone market.
• Burberry’s Stagnating Sales Indicate End to Luxury Boom.

Wall Street Journal:

• U.S. Ambassador to Libya Is Killed. The U.S. ambassador to Libya, Christopher Stevens, and three other American diplomats were killed when suspected Libyan religious extremists stormed the U.S. Consulate in Benghazi late Tuesday, sparking a security crisis across the North African country and raising tensions across the Middle East. Libyan officials spent the night in a manhunt trying to find those responsible for the killings, which occurred when an angry armed mob attacked the diplomatic complex in an apparent protest against an anti-Islamic video created and produced by an American-Israeli real-estate developer.
• Romney Slams Obama Over Embassy Attacks. Mitt Romney on Wednesday renewed his criticism of President Barack Obama over the administration's handling of attacks on U.S. diplomatic missions in Libya and Egypt, saying its early response to the incidents amounted to an apology for American values.
• Protesters Gather Outside U.S. Embassy in Tunisia. An Associated Press photographer present Wednesday witnessed demonstrators burning and trampling a number of American flags. Protesters were kept back from the embassy by reinforced security.
• Libya Violence: Full Coverage.
• Economists Skeptical on More Fed Easing.
  
• Gramm and Taylor: The Hidden Costs of Monetary Easing. Inflation is not the only danger posed by the central bank's ballooning balance sheet. Since mid-September of 2008, the Federal Reserve balance sheet has grown to $2,814 billion from $924 billion as it purchased massive amounts of U.S. Treasurys and mortgage backed securities. To finance those purchases the Fed increased currency and bank reserves (base money).
  

CNBC.com:

• Dodd-Frank Won't Prevent Another Financial Crisis: Pros. A range of regulatory failures caused the financial crisis in 2008 and the Dodd-Frank Act will not prevent a future financial crisis, two bank executives told CNBC's "Squawk Box" on Wednesday.
• Chicago Teachers Strike May Drag On, Talks Stall. With more than 350,000 children from kindergarten to high school age out of school, the patience of parents and labor negotiators began to fray as hopes of a quick resolution to the biggest U.S. labor strike in a year were dashed.

Business Insider:

• The US Believes The Attack That Killed Ambassador In Libya Was Planned.
• This Is What America's Consulate In Libya Looked Like After The Deadly Attacks.
• 8 Must-See Charts On The Euro Crisis From Jeff Gundlach.
• 3 Reasons The Fed Should Not Do QE3.
• CHINA CRASH 2012: Here's How It's Finally Happening This Time.
• Meet The Ivy League-Educated, Wisecracking Woman Leading The Chicago Teachers Strike.

Zero Hedge:

• America Under Attack: Pictures Of Assault On US Consulate In Libya.
• Cui Bono Fed: Who Benefits from the Federal Reserve?
• Farage's Berating Rebuttal Of Barosso's 'State-Of-The-Union' Banalities.

CNN:

• Chovanec on China's Mounting Bad Debts. (video) Above is a must watch video interview on CNN with Patrick Chovanec, an associate professor at Tsinghua University in Beijing, talking about the mounting bad debt problems in China, and the likelihood of the Chinese economy experiencing a debt crisis, similar to that transpiring in Europe, or a replay of Japan’s ‘lost decade’.

engadget:

• Live Blog: Apple(AAPL) Event.
  

Reuters:

• Fitch cuts highway bond programs on dim view of U.S. policy.
• Swiss fume at U.S. "hypocrisy" over whistleblower's $104M payout. Many Swiss are fuming after a whistleblower, who helped prosecute Swiss bank UBS for helping rich Americans avoid taxes, was paid a record $104 million by U.S. authorities after being jailed for his own part in the affair. "It's the height of hypocrisy if the U.S. is one day sentencing the guy to 40 months in prison and the next give him the highest reward," Pirmin Bischof of the centre-right Christian Democrats and a member of parliament's upper house told Reuters.

AP:

• US poverty rate unchanged; record numbers persist. The ranks of America’s poor remained stuck at record levels, although dwindling unemployment benefits and modest job gains helped stave off what experts had predicted would be the fourth rise in a row in the poverty rate. Also, the median, or midpoint, household income was $50,054, 1.5 percent lower than 2010 and a second straight decline. The overall poverty rate stood at 15 percent, statistically unchanged from the 15.1 percent in the previous year.

Telegraph:

• German Constitutional Court tightens the noose yet further.

Nikkei:

• Bank of Japan Concerned About Slowing Exports to China. Slowing exports to China are raising concern. The BoJ may further cut its view of exports after last month saying a pickup has moderated.
  

ShanghaiDaily.com:

• Closer look at home-buying curbs. THE Shanghai Municipal Housing Authority will this month start to scrutinize that home-purchase restrictions are enforced in the city as it seeks to ensure the rapid rise in home prices has been curbed. The authority will selectively check property projects that are currently for sale in the city. Properties that are over-priced, or registering abnormal sales volume, or involving a large proportion of non-local buyers will be targeted in the monitoring. The scrutiny will last until the end of this year, the authority said.
• Suppliers may cut prices to get orders. SUPPLIERS in China may be forced to cut prices of their products if they hope to secure new orders in the current global economic downturn, participants at the 11th International Sourcing Fair warned.

Bear Radar

Style Underperformer:

• Large-Cap Growth +.12%

Sector Underperformers:

• 1) HMOs -.81% 2) Coal -.55% 3) Disk Drives -.24%

Stocks Falling on Unusual Volume:

• CIG, ELP, MNST, MO, LO, BAC, TOO, VNR, GCOM, TMH, SN, SBS, MLU, LQDT, CPL, CLF, BSAC, FINL, SYNA, MET, APL, GFI, EXC, TEN, CNS, DLTR and POT
  

Stocks With Unusual Put Option Activity:

• 1) EWG 2) EWJ 3) ACI 4) KEY 5) SAN
  

Stocks With Most Negative News Mentions:

• 1) ADP 2) SYNA 3) XRTX 4) TMH 5) EIX
  

Charts:

• ETFs Falling on Unusual Volume
• Stocks Falling on Unusual Volume
  

Bull Radar

Style Outperformer:

• Large-Cap Value +.25%

Sector Outperformers:

• 1) Homebuilders +1.8% 2) Networking +1.23% 3) Airlines +1.23%

Stocks Rising on Unusual Volume:

• FB, PNRA, CS, PHM, TTM, AEO, FRAN and SWHC
  

Stocks With Unusual Call Option Activity:

• 1) IAU 2) MCO 3) KR 4) FST 5) MET
  

Stocks With Most Positive News Mentions:

• 1) MO 2) AEO 3) KSS 4) EXPE 5) PSMT
  

Charts:

• ETFs Rising on Unusual Volume
• Stocks Rising on Unusual Volume