Trader's Digest

Diffusion

5/8/2010
[Euro fund vs. volcanic ash]
http://www.bloomberg.com/apps/ne ... uNVxfKbAw&pos=1
European Union finance ministers meet today to hammer out the details of an emergency fund to prevent a sovereign debt crisis from shattering confidence in the 11- year-old euro.

Jolted into action by last week’s slide in the currency to the lowest in 14 months and soaring bond yields in Portugal and Spain, leaders of the 16 euro nations agreed to the financial backstop at a May 7 summit. They assigned finance chiefs to get it ready before Asian markets open later today European time.

“We will defend the euro, whatever it takes,” European Commission President Jose Barroso told reporters in the early hours yesterday after the leaders met in Brussels.

http://www.bloomberg.com/apps/ne ... TwIwqjl2Y&pos=9

A cloud of volcanic ash from Iceland is spreading from the North Atlantic across northern Portugal and Spain, closing airports across the region, according to the regional flight controller.

The ash, from eruptions of the Eyjafjallajökull volcano in Iceland, has spread south from the North Atlantic and is also covering parts of southern France, according to charts provided by Eurocontrol, which coordinates air traffic across Europe.

“During the day, the area affected by volcanic ash is expected to extend from Iceland, south to Portugal and possibly as far east as Barcelona and Marseille,” Eurocontrol said in an e-mailed statement.

[European banks are more important than Greece]
http://online.barrons.com/article/SB127327033278388499.html (May require subscription)

What's increasingly clear, however, that the 110 billion EU/IMF package is aimed not so much at assisting the debtor, the Greek government, as at its creditors, the European banks. The latter made the same "lazy assumptions" that deluded investors into thinking Fannie Mae and Freddie Mac were true triple-A credits, observes F. Mark Turner, manager of the Pentagram hedge funds in Boston. The symmetry extends to taxpayers' money for bailout of feckless borrowers ending up in their lenders' pockets.

In all, last week felt like a reprise of periods in 2007 and early 2008. Just as it was argued then that subprime mortgages were a small part of the market and a purely U.S. domestic problem, it's asserted that Greece concerns only Europe and is a tiny part of the EU economy at that. But by destabilizing the banking system, Greece threatens the global economy, just as the seemingly "contained" subprime market did.

Diffusion

5/7/2010
[Consumer credit rebounds, but revolving credit kept sliding]
http://money.cnn.com/2010/05/07/ ... er_credit/index.htm

Consumer credit rebounded in March, blowing past economists' expectations, according to a government report released Friday.

The total amount of credit outstanding rose by $2 billion in March to $2.451 trillion, growing at an annual rate of 1% according to the Federal Reserve. Economists had predicted that total borrowing would slide by $3.9 billion during the month, according to a consensus estimate from Briefing.com.

"This was the second increase since January 2009, and it looks like consumer credit is beginning to stabilize," said economist Sean Maher of Moody's Economy.com. "That will help sustain the recovery of consumer spending, but whether it's desirable in the long-term for consumers to borrow more during times of high unemployment and sluggish income growth is debatable."

Revolving credit, which includes credit card debt, continued to slide for the 18th straight month, falling by 4.5% to $852.6 billion. But the decline was much narrower than previous months, Maher said.

[American made ... Chinese owned]
http://money.cnn.com/2010/05/06/ ... l.fortune/index.htm

Companies from China are spending billions to build factories in the U.S. -- and creating thousands of new jobs for American workers.

Diffusion

4/27/2010
[Debt woes spread in Europe]
http://www.bloomberg.com/?b=0&Intro=intro3

Greece’s credit rating was cut three steps to junk by Standard and Poor’s, the first time that’s happened to a euro member since the currency started, as contagion from the nation’s debt crisis spread through the bloc.

Greece was lowered to BB+ from BBB+ by S&P, which also warned that bondholders could recover as little as 30 percent of their initial investment if the country restructures its debt. The Greek move came minutes after the rating company reduced Portugal by two steps to A- from A+. The euro weakened, stocks plunged and the extra yield that investors demand to hold Greek and Portuguese bonds over German bunds surged.

The turmoil comes as European Union policy makers struggle to agree on measures to ease the panic over swelling budget deficits. Leaders of the 16 euro nations may hold a summit after the Greek government’s decision last week to tap a 45 billion- euro ($60 billion) emergency-aid package failed to reassure investors, a European diplomat said.     “The markets are demanding their pound of flesh and want everything to be signed, sealed and delivered as of yesterday,” said David Owen, chief European financial economist at Jefferies International Ltd. in London.

[First year-over-year increase of housing price]
http://money.cnn.com/2010/04/27/ ... prices_up/index.htm

February home prices posted their first year-over-year increase since December 2006, according to a report out today.

Home prices inched up 0.6% compared to February 2009 according to the S&P/Case-Shiller 20-city index, with nine of the 20 cities showing gains.

[Small business borrowing is coming back]
http://money.cnn.com/2010/04/27/ ... t_lending/index.htm

On Tuesday's conference call, Thain said that small business lending demand is on the rise, with applications up 70%. Credit conditions are also improving: "Delinquencies, quarter-over-quarter, improved. Charge-offs were significantly lower," he said.

Diffusion

4/26/2010
[Merkel asked for "sustainable plan" to cut Greek budget before releasing fund]
http://www.bloomberg.com/apps/ne ... wbCNVdaGo&pos=2

German Chancellor Angela Merkel said she won’t release funds for a Greek rescue until the country shows it’s got a “sustainable” plan to cut its budget deficit and a final decision may be in a “few days.”

Greek bonds plunged today as Germany delays approval of a $60 billion rescue plan that would be co-financed by the euro region and the International Monetary Fund. The extra yield that investors demand to hold Greek 10-year debt over German bunds rose 65 basis points to 625 basis points.

Merkel, speaking to reporters in Berlin, said there would be no decision on aid for Greece until the International Monetary Fund works out a plan of cuts with Greek government. She said Germany would assist Greece only after it agrees to take “tough” measures for the next several years.

[Shelby says Republicans will block rules bill in vote]
http://www.bloomberg.com/apps/ne ... NmWkmikfc&pos=9

Senator Richard Shelby, a lead negotiator on a financial-rules bill, said Republicans will block Democrats’ efforts to begin debate on the measure in a test vote today, saying the move would give them more leverage.

“I believe that 41 Republicans are right now going to stand together,” Shelby, the top Republican on the Senate Banking Committee, said in a speech at an Independent Community Bankers of America conference in Washington.

Democrats, who control the Senate with a 59-41 majority, need 60 votes to open debate in the procedural ballot set for 5 p.m. in Washington. Shelby said he will continue talks with Senate Banking Committee Chairman Christopher Dodd, the Connecticut Democrat who wrote the bill, to come up with a bipartisan compromise.

[Investors show no confidence of the Greece bailout]
http://money.cnn.com/2010/04/26/ ... al/Greece/index.htm

A key measure of Greek debt -- the spread between the Greek 10-year note and Germany's 10-year bund -- widened by a record of more than 6 percentage points early Monday.

The widening spread is worrisome as investors look to Germany's bunds as a benchmark measure for other European bonds.

"Investors remain nervous that if this funding isn't forthcoming, Greece won't be able to meet its funding needs in time and will be forced into some kind of restructuring," said Stamenkovic.

Diffusion

4/23/2010
[New home inventory falls to 6.7-month of sales]
http://www.bloomberg.com/apps/ne ... ydj3c3Kfw&pos=1

The median price of a new home in the U.S. increased 4.3 percent in March from a year earlier to $214,000.

The jump in sales brought the number of new houses on the market down to 228,000, the fewest since March 1971. The supply of homes at the current sales rate dropped to 6.7 months’ worth, the lowest level since December 2006, from 8.6 months in February.

Diffusion

4/22/2010 Midnight
[Goldman at cross-hair again]
http://www.bloomberg.com/apps/ne ... 1CMoHnSGE&pos=7

A Goldman Sachs Group Inc. director tipped off a hedge fund billionaire about a $5 billion investment in the bank by Warren Buffett’s Berkshire Hathaway Inc. before it became public knowledge, the Wall Street Journal reported, citing a person familiar with the matter.

Goldman Sachs director Rajat Gupta told Galleon Group founder Raj Rajaratnam about the Berkshire investment, the newspaper quoted the source as saying. Federal investigators wrote to Gupta to say they had intercepted phone calls between Gupta and Rajaratnam, the report quoted the source as saying.

http://www.bloomberg.com/apps/ne ... s5FgBoCVg&pos=2

Goldman Sachs Group Inc. may be better off cutting its losses instead of fighting what it terms “unfounded” fraud claims, say professors of securities law who have examined the U.S. Securities and Exchange Commission’s lawsuit against the bank.

The most profitable firm in Wall Street history will probably lose what is typically the first hurdle in court, a motion to throw out the April 16 suit because it lacks legal merit, the professors said in interviews this week. After that, Goldman Sachs’s risks will mount and its negotiating position will weaken, they said.

“There’s a very low probability that Goldman could get the case dismissed,” said Thomas Hazen of the University of North Carolina at Chapel Hill, whose books include a two-volume treatise on broker-dealer law. “Every pretrial motion the SEC wins, Goldman gets one step closer to losing.”

[Brace the impact of financial reform]
http://www.bloomberg.com/apps/ne ... HXnpFssvg&pos=9

Senate Democrats and Republicans say a deal on legislation to rewrite the rules of U.S. finance may be within reach. If they succeed, they’ll be only halfway home.

Senate and House negotiators would then have to resolve differences between their versions of the overhaul on issues ranging from the power of the Federal Reserve to a new consumer protection agency to derivatives regulation.

Diffusion

4/22/2010
[Flipped between PE's rather than IPO]
http://www.bloomberg.com/apps/ne ... dhgHalpko&pos=4

TPG Capital Inc.’s $1.3 billion purchase of American Tire Distributors Holdings Inc. shows private-equity firms’ most willing buyers may be each other.

The takeover by David Bonderman’s TPG marks the second time since 1999 that the company has changed buyout owners. American Tire’s backers, a group of financial sponsors led by Investcorp SA, decided to forgo a planned public offering for as much as $230 million in favor of the private sale.

Buyout firms are seeking ways to unload assets fast to return money to the pensions, endowments and wealthy individuals that invest in their funds, and who have seen payouts dwindle to the lowest since 2000, according to researcher Preqin Ltd. Deals in which both the seller and the buyer are private-equity investors have jumped to levels last seen in 2006, in the midst of the leveraged buyout boom.

“You have to question whether managers are using these sales as a source of broader liquidity with little regard for whether it’s truly the best time to exit,” said William Atwood, who helps oversee about $10 billion as executive director of the Illinois State Board of Investment in Chicago.

[Greece dragged Germany down]
http://online.barrons.com/article/SB127193332870480995.html (May require subscription)

Who bails out the governments that have bailed out the feckless?

But, Wednesday, the auction of 3 billion (just over $4 billion) of 30-year German government bonds, or bunds, attracted only 2.752 billion in bids and wound up selling 2.458 billion at a yield of 3.83%.

[Cracks on Obama's Cabinet]
http://www.bloomberg.com/apps/ne ... xFJh8Qljw&pos=9

White House Budget Director Peter Orszag was poised to become the first member of Barack Obama’s Cabinet to leave, as early as this summer. Then came an appeal from the president insisting that he reconsider.

Orszag will make his decision soon, according to a person familiar with the matter, Bloomberg BusinessWeek will report in its April 26 issue. The 41-year-old budget director had been signaling to White House officials that he didn’t plan to remain for the next budget cycle, the person said.

[Home buyers returns to luxury market]
http://www.bloomberg.com/apps/ne ... JHQv3a31g&pos=5

Home sales in the Hamptons, the New York beach towns swarmed by Wall Street and Hollywood vacationers each summer, more than doubled in the first quarter as buyers seized luxury properties.

Transactions climbed to 396 in the towns on Long Island’s East End, the biggest annual jump in seven years of record keeping. A shift toward larger, more expensive homes pushed the median price up 35 percent to $908,500, New York-based appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today.

“You had a lot more high-end properties in the mix and that skewed the indicators,” Jonathan Miller, president of Miller Samuel, said in an interview. “I’d still characterize the housing prices in general as stable.”

Diffusion

4/21/2010
[The first mortgage backed security sell in 2 years]
http://www.bloomberg.com/apps/ne ... PPCmQ7ecA&pos=6

Citigroup Inc. is attempting to sell $222.4 million of securities backed by new mortgages, the first transaction of its type in more than two years, people familiar with the offering said.

Redwood Trust Inc., the Mill Valley, California-based real estate investment trust that specializes in jumbo-mortgage assets, is being called the securitization’s sponsor, which may mean it will buy more-junior classes, said the people, who declined to be identified because the sale is private. Citigroup, which made the 255 loans in the past 11 months, is underwriting the potential sale with JPMorgan Chase & Co. as co- manager, the people said.

The sale shows how much credit markets have revived as a result of government initiatives, including the Federal Reserve holding short-term interest rates near zero. Issuance of home- loan bonds without government-backed guarantees peaked at almost $1.2 trillion in both 2005 and 2006 before freezing as the worst U.S. housing slump since the Great Depression sparked record plunges in their prices that weakened investors and curbed lending, according to the newsletter Inside MBS & ABS.

Diffusion

4/20/2010
[American express eats Visa's market share]
http://www.bloomberg.com/apps/ne ... 44vNEkykA&pos=5

Last month, Macy’s Inc. said American Express Co., based in New York, would replace Visa as the processor for Macy’s and Bloomingdale’s credit cards.

[Republicans seek compromise on financial reform]
http://www.bloomberg.com/apps/ne ... cIW6mC3pQ&pos=8

The financial overhaul legislation, which has drawn the opposition of all 41 Republican senators, may still attract bipartisan support, said Senator Judd Gregg, a New Hampshire Republican and member of the Banking Committee.

“I hope we’ll do a negotiated compromise because there’s not really a big partisan divide here,” Gregg told Bloomberg Radio’s “Bloomberg Surveillance” today. “It’s just a question of getting it right.”

Gregg said he’s working with Senator Jack Reed, a Rhode Island Democrat, on a proposal to regulate the derivatives industry. He said lawmakers need to be guard against placing too many restrictions on derivatives and other parts of the financial industry.

The Senate must be careful that “we don’t overreact in a way that forces assets off shore,” Gregg said.

[Chain reaction continues]
http://money.cnn.com/2010/04/20/ ... ldman_aig/index.htm

AIG is now thinking about going after Goldman if it can prove the Wall Street giant lied about the underlying value and risk of the assets it asked AIG to insure, according to news reports.

If Goldman withheld information about some of those CDOs from AIG, by not telling the insurer that the CDO's fund manager was betting its value would fall, for example, AIG may have a point.

When asked if it's possible to see AIG as the victim, Mike Perlis, partner at Stroock & Stroock & Lavan and former assistant director at the SEC, said, "Of course it's possible."

"Insurers who wrote policies based on false information will seek to void coverage if possible," Perlis added.

Diffusion

4/18/2010 Midnight
[Chain reaction of GS fraud]
http://www.bloomberg.com/apps/ne ... mRVxms8jg&pos=2

Goldman Sachs Group Inc. faces a regulatory probe in Britain and scrutiny from the German government after the U.S. Securities and Exchange Commission sued the firm for fraud tied to collateralized debt obligations.

Prime Minister Gordon Brown called yesterday for the Financial Services Authority to start an inquiry, saying he was “shocked” at the “moral bankruptcy” indicated in the suit. Germany’s financial regulator, Bafin, asked the SEC for details on the suit, a spokesman for Chancellor Angela Merkel said.

Politicians that were forced to bail out their banks during the financial crisis are turning on Goldman, which critics say helped caused the turmoil and profited from it. The European Union is also probing Goldman’s role in arranging swaps for Greece that may have masked the country’s budget deficit.

[Aussie, a leading commodity currency, is said to be fully priced]
http://www.bloomberg.com/apps/ne ... TwwZ_2lB0&pos=4

The Australian dollar’s push to parity with the U.S. dollar is in jeopardy as central bankers signal they may slow the pace of interest-rate increases and China moves closer to revaluing the yuan.

The currency is “fully priced,” said Scott Ainsbury, a New York-based money manager who helps invest about $9 billion at FX Concepts Inc., the world’s biggest foreign-exchange hedge fund. “It’s probably time to lighten up,” he said. The Aussie may weaken about 3 percent before rising by year-end.

[Potential bond downgrade]
http://www.bloomberg.com/apps/ne ... VvGhrIN6o&pos=6

Pharmaceutical company bonds, the most expensive in the U.S. corporate credit market, face rating cuts after a buyout spree to replace expiring patents more than doubled their debt to $270 billion from 2006.

The companies are using debt to finance mergers and acquisitions to help offset losses when patents expire on $136 billion worth of medicines through 2014, according to research firm IMS Health Inc. Their bonds yield 71 basis points more than similar-maturity Treasuries, the narrowest gap of any sector tracked by Bank of America Merrill Lynch indexes and less than the 125 basis points for all U.S. company debt ranked A to AAA.

Diffusion

4/16/2010
[Builders return to Florida]
http://money.cnn.com/2010/04/16/ ... _building/index.htm

Florida's homebuilders are daring to put their hard hats back on.

Though the state is still digging out from the overbuilding excesses of the housing boom, home builders are ramping up their operations for the first time in four years. They are buying land, hiring workers and actually selling homes.

Most of the action is happening near larger cities, where the jobs are found. Thanks to these pockets of strength, building permits for single-family homes are up 60% in the first two months of 2010 compared to the same period a year earlier, according to federal statistics.

But the homes coming on the market are quite different than those that rose during the boom. They are smaller, plainer and, most importantly, cheaper.

Diffusion

4/15/2010 Midnight
[Junk bond market overheats]
http://www.bloomberg.com/apps/ne ... l9rXreXYk&pos=4

Blackstone Group LP and other private-equity firms are accelerating sales of junk bonds and leveraged loans to pay themselves dividends in a sign the market for the riskiest debt may be overheating.

“You start to be concerned that you’re increasing leverage, which was one of the things that created these problems in 2008,” said Quinn, who helps oversee $45 billion for the fund manager in Fort Worth, Texas. “I understand why private-equity firms do it, but I would be concerned.”

Diffusion

4/14/2010 Midnight
[Less default, less delinquency]
http://www.bloomberg.com/apps/ne ... ljkCr_BFQ&pos=7

RealtyTrac reported 304,799 default notices in the quarter, down 1 percent from a year earlier. The number peaked at more than 342,000 in the third quarter of 2009.

http://www.upi.com/Business_News ... UPI-66921271257962/

Fewer U.S. homeowners were delinquent on mortgage loans in the first quarter than in the fourth quarter of 2009, two economic research groups said.

In the first quarter, 6.57 percent of homeowners were 30 days or more behind on their payments, Moody's Economy.com and Equifax said.

In the previous quarter, 6.6 percent of homeowners were at least a month behind on their mortgages, USA Today reported Wednesday.

While only a small improvement, "It portends a peaking of the foreclosure crisis," said Moody's Economy.com chief economist Mark Zandi.

The delinquency rates improved among those 30-, 90- and 120-days late in the first quarter. The rates have not turned lower since early 2006, the newspaper said.

Diffusion

4/14/2010
[“Fundamental real improvement” in consumer mortgage and credit-card delinquencies]
http://www.bloomberg.com/apps/ne ... r_ExEq6.4&pos=2

Chief Financial Officer Mike Cavanagh said on the call that there is “fundamental real improvement” in consumer mortgage and credit-card delinquencies. That didn’t translate into lower credit costs for the quarter, though he said it “augurs well for future quarters if those trends sustain themselves.”

The company decreased its provisions against future credit losses in both divisions while setting aside $2.3 billion in reserves for lawsuits stemming from its purchase of Washington Mutual Inc. Credit-card services lost $303 million, compared with a net loss of $306 million in the prior three months and $547 million a year earlier.

[Tame inflation]
http://www.bloomberg.com/apps/ne ... xgpdQqthM&pos=3

The cost of living in the U.S. rose in March, while prices excluding food and energy were unexpectedly unchanged, indicating tame inflation is accompanying the economic recovery.

The 0.1 percent gain in the consumer price index was in line with expectations and followed no change in February, the Labor Department reported today in Washington. Excluding food and fuel, the so-called core rate held steady after rising 0.1 percent in February, reflecting cheaper rents and clothing.

“There is a near-term risk of flipping to deflation given our view that developed economies have not fully healed and consumers are not yet ready to stand on their own two feet,” Worah, a managing director based at Pimco’s Newport Beach, California, headquarters, wrote in a report on Pimco’s Web site. “Any meaningful inflation should still be a couple of years away.”

[The bright side of Obamacare]
http://money.cnn.com/2010/04/14/ ... ealthcare/index.htm

Under the proposal announced Wednesday, the insurer will cover 16-week programs at the YMCA that discuss changes in eating, exercise and other lifestyle habits.

As part of the program, UnitedHealth will also pay incentives to Walgreens' pharmacists to to teach people how to better manage the disease.

Insurers such as UnitedHealth may start rolling out more such preventative care programs as the government's health care overhaul forces insurers to cover patients regardless of medical condition.

[PIMCO's push into equity will focus on globally oriented fund]
http://www.bloomberg.com/apps/ne ... blOCTgqhA&pos=7

Pacific Investment Management Co., manager of the world’s biggest bond fund, will limit its push into equities to globally focused stock funds, said Neel Kashkari, the firm’s head of new investment initiatives.

“You will see us offer a handful of strategies that are globally oriented that can benefit from Pimco’s insights” on currencies and economies, Kashkari said in a telephone interview. “We’re not going to launch a large-cap U.S. fund.”

Diffusion

4/13/2010
[Greece sell 26 week debt at yield 4.55, attracting bids for 7.67 times]
http://www.bloomberg.com/apps/ne ... IPjIPaBkM&pos=1

Greece’s auction of Treasury bills drew stronger demand than at a previous sale as yields more than doubled in the first offering of debt since the nation won a pledge of aid from the European Union.

The government sold 780 million euros ($1.06 billion) of 26-week bills at a yield of 4.55 percent, attracting bids for 7.67 times the securities offered, the nation’s Public Debt Management Agency said today in Athens. Greece also offered 780 million euros of 52-week securities at a yield of 4.85 percent, with a bid-to-cover ratio of 6.54 times. In January, the 52-week bills were sold to yield 2.2 percent.

“The result confirms that the package which was put in place on Sunday has enabled Greece to fund itself in the near- term,” said David Owen, chief European financial economist at Jefferies International Ltd. in London. “But the longer-term fundamental issues in terms of where we go from here haven’t changed. Greece has to put its finances in order against the backdrop of an economy that currently is shrinking.”

[Rising trade deficit is evidence of a rebound in economic growth]
http://www.bloomberg.com/apps/ne ... HGhukvySo&pos=2

he trade deficit in the U.S. widened in February more than anticipated as imports climbed, adding to evidence of a rebound in economic growth.

The gap increased 7.4 percent to $39.7 billion from a revised $37 billion the prior month, the Commerce Department said today in Washington. Imports climbed 1.7 percent as Americans bought more computers and televisions made abroad, while exports rose to the highest level since October 2008.

The need to replenish depleted inventories and gains in consumer spending mean purchases of goods and services from overseas will keep growing in coming months. Exports will probably also advance as global growth accelerates, giving companies from Caterpillar Inc. to Dow Chemical Co. a boost.

“We’re at a stage in the business cycle where both imports and exports should be rising,” said Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, who forecast a $39.8 billion deficit. “It tells us that we’re growing moderately. This is not a typical recovery because you have consumer and housing headwinds, but so far it is sustainable and I think it will continue to be so.”

[Inflation? Maybe not]
http://online.barrons.com/articl ... html?mod=BOL_hps_dc (May require subscription)

"But fiscal deficits that are designed to cushion the blow from a credit contradiction, especially among households, generate far different results. With credit contracting, rents deflation, the broad money-supply measures now declining and unit labor costs dropping at a record rate, it hardly seems plausible that inflation is a risk any time on the near- or intermediate-term horizon," he concludes.

[Recovery is not in small businesses]
Same URL

"Large corporations have a relatively easy time borrowing in the capital markets and reasonable spread and relatively low interest rates. For these firms, slow spending and hiring are due to a lack of confidence rather than a lack of funding. However, household and small business remain credit constrained. A full recovery is only likely as both banks and their customers work their way through the inventory of bad loans."

The divide between the big haves and the little have-nots is visible in the massive gap between the Institute for Supply Management's manufacturing purchasing managers' index and the National Federation of Independent Business' optimism index. That difference can been traced to the tightness of small-business credit, according to Ian Shepherdson, chief U.S. economist for High Frequency Economics.

[Fear the craziness over junk bond]
http://money.cnn.com/2010/04/13/markets/thebuzz/index.htm

Despite continued concerns about how much of a financial drain they'll be on the federal government, shares of the nationalized mortgage buyers Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) are both up about 15% in the past week.

They're not the only case of junk stocks from the financial scrap heap making a comeback. Cue the theme music from "Sanford and Son."

Diffusion

4/13/2010 Midnight
[Unified fiscal policy for EU, and it leads to strong Euro]
http://www.bloomberg.com/apps/ne ... iu3mIa2lE&pos=4

European leaders’ pledge to help Greece with an unprecedented aid package may be a stepping stone on the way to a more unified fiscal policy, said economists at Barclays Capital and Commerzbank AG.

“It’s a defining moment,” Julian Callow, chief European economist at Barclays in London, said in an interview with Bloomberg Television. “We have countries coming together able to help and give assistance to one of their number in the euro area.”

“Only recently, it would have been unthinkable for one country to bail out another,” said Christoph Weil, a senior economist at Commerzbank AG in Frankfurt. “Markets forced leaders to unite and come up with a solution.”

Diffusion

4/12/2010
[Inventory rebuilding continues]
http://www.bloomberg.com/apps/ne ... pGJoGciA0&pos=6

Companies from Tiffany & Co. to Home Depot Inc. are restocking shelves in a move that will boost economic growth and may keep the recovery on track through 2010.

Tiffany, based in New York, is planning for a “high single-digit percentage increase” in inventories this year as the world’s second-largest luxury jeweler retailer opens new stores, Chief Financial Officer James Fernandez told analysts March 22. Home Depot, the largest U.S. home-improvement retailer, “will be building inventory” this year in support of stronger sales, Carol Tome, chief financial officer of the Atlanta-based company, said on a Feb. 23 analysts call.

“We’re moving into the restocking phase,” said David Hensley, director of global economic coordination for JPMorgan Chase & Co. in New York. “We’ll see successive additions to growth in the first quarter, second quarter and third quarter.”

[Slower U.S. debt increase]
http://money.cnn.com/2010/04/12/ ... t_deficit/index.htm

The U.S. government is racking up debt at a slower pace than last year, according to Treasury Department figures released Monday.

In the first six months of the fiscal year, the U.S. government fell $717 billion further into the red, the Treasury Department reported Monday, including a $65.4 billion deficit in March. That means the deficit for fiscal 2010, which started in October, is down 8% from $781.4 billion in the same period last year.

[Chasing bond is following the herd]
http://money.cnn.com/2010/04/11/ ... s.fortune/index.htm

Mutual fund companies, just like individual investors, are prone to following the herd. So it's not surprising that, since bond funds attracted nearly $400 billion in 2009--versus a net $9 billion outflow of capital in stock funds--new bond funds are springing up to absorb the surging demand. So far this year, 16 fixed-income funds have launched, according to investment research firm Morningstar, compared to 14 new stock products.

Despite posting better numbers this year, the Treasury Department is still forecasting that the deficit will hit $1.56 trillion this year, up from the record $1.4 trillion losses posted last year.

[Shrink of the maturity wall]
http://www.bloomberg.com/apps/ne ... msp6MswZc&pos=3

Record high-yield, high-risk U.S. corporate bond sales and a rally in the leveraged loan market are chipping away at the so-called maturity wall that’s threatened to cause a surge in defaults.

Cablevision Systems Corp., the New York-area cable-TV provider, sold $1.25 billion of bonds today to refinance notes and has extended loans. Borrowers, which have $1.2 trillion of high-yield bonds and leveraged loans maturing through 2015, have reduced the amount due in the next four years by $196 billion since the start of last year, according to JPMorgan Chase & Co.

Maturing debt has been chiseled down by a record $161.6 billion of junk bond offerings in 2009 and $77.7 billion this year, according to data compiled by Bloomberg. Leveraged loan prices surged to the highest in almost two years and default rates have plunged amid an opening in the corporate bond market.

sooners

回复 25# Diffusion


   

wyjhyd

Diffusion

4/10/2010
[Apple enters mobile Ads market]
http://online.barrons.com/articl ... html?mod=BOL_hps_dc (May require subscription)

The third important addition is what Apple calls iAds, which allow for the inclusion of advertising inside Apps. Apple says developers will keep 60% of the revenue from any advertising they sell, with Apple taking the rest. Jobs said this will let developers who are offering free or low-cost applications make a living. Google (GOOG) has been the dominant player in mobile advertising to date; so much so, that the Federal Trade Commission reportedly plans to attempt to prevent its pending $750 million acquisition of AdMob, a mobile ad network. (Jobs noted Apple wanted to buy the company, but Google made a higher offer.) Jobs said that the opportunity here is huge: The average iPhone owner uses apps about 30 minutes a day. If you show one ad every three minutes -- in the demo, they appeared at the bottom of the screen, like mini-banner ads -- that's one billion potential ad impressions every day.

[Apple still refuses to support Adobe Flash]
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Some Apple customers could be disappointed. First, iPad users could be unhappy that they have to wait until September for an upgrade. Second, the multitasking will work on iPhone 3GS units, but not on older models. Third, the company still refuses to support Adobe Flash, which powers most videos on the Web.