Yields for Italy, Spain, France, and Germany …
Comments »Ernst and Young Says Pressure to Deliver Growth Has Companies Cooking the Books More Than Usual
“Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young said in a survey Tuesday.
One in five of almost 3,500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said.
In addition 42 percent of board directors and top managers questioned in the fraud survey said they were aware of “some type of irregular financial reporting.”
And despite scandals and regulatory failures in the wake of the credit crunch, almost a quarter of top financial services staff surveyed said they were aware of manipulation, and almost 10 percent of all staff said their companies had understated costs, overstated revenues or used unprincipled sales tactics.
Almost half of the sales staff surveyed across all sectors did not consider anti-corruption policies to be relevant and more than a quarter thought it acceptable to offer personal gifts or services to win or retain business.
In India, over a third felt justified in offering cash—triple of that in western Europe.
“Our survey shows that to find growth and improved performance in this environment, an alarming number appear to be comfortable with or aware of unethical conduct,” said David Stulb, head of E&Y’s fraud investigation and dispute services practice.
In Spain, ranked alongside Russia and just below Nigeria and Slovenia, 61 percent of staff believed companies often exaggerated results, compared with only 7 percent in Finland.
And E&Y said the vast majority of managers from Norway to Nigeria and Russia to Greece were feeling the pressure to deliver a good financial performance over the next 12 months, despite little optimism that business conditions would improve….”
Comments »$MSFT Does a U-Turn on Windows 8
“Microsoft is preparing to reverse course over key elements of its Windows 8 operating system, marking one of the most prominent admissions of failure for a new mass-market consumer product since Coca-Cola‘s New Coke fiasco nearly 30 years ago.
“Key aspects” of how the software is used will be changed when Microsoft releases an updated version of the operating system this year, Tammy Reller, head of marketing and finance for the Windows business, said in an interview with the Financial Times. Referring to difficulties many users have had with mastering the software, she added: “The learning curve is definitely real.”
Analysts warned that changing course would be a significant admission of failure for Steve Ballmer, chief executive, who called the October launch of Windows 8 a “bet-the-company” moment as Microsoft sought to respond to the success of Apple‘s iPad.
(Read More: Microsoft Is ‘Not Dead Yet,’ Say Wall Street Pros)
“It’s a horrible thing for this to happen to your flagship product – he’ll take a hit for that,” said Mark Anderson, an independent tech analyst. “But he’s also responsible for a renaissance inside the company. There’s a level of risk and creativity going on that would never have happened two years ago.”
Richard Doherty, analyst at tech research firm Envisioneering, said: “This is like New Coke, going on for seven months – only Coke listened better.” Coca-Cola dropped its New Coke formula in response to a consumer backlash less than three months after launch.
Windows 8 was an ambitious attempt to update the personal computer for the tablet era by moving to a new touchscreen interface based on colorful tiles, hiding the “desktop” launch screen familiar to white collar workers and consumers around the world….”
Comments »Gold and Silver Can Not Escape the Homo Hammer
Home Prices Continue to Inflate
“Nationwide home
prices including distressed sales were up 10.5% year-over-year in March, according to CoreLogic’s latest home price report. On a monthly basis home prices were up 1.9%.
This was the thirteenth straight monthly rise, and the fastest pace of increase since March 2006. Ex-distressed sales, home prices were up 10.7% year-over-year and 2.4% on the month.
“For the first time since March 2006, both the overall index and the index that excludes distressed sales are above 10 percent year over year,” said Dr. Mark Fleming, chief economist at CoreLogic in a press release. Home prices are being driven by demand from investors and homebuyers even as supply stays tight.
Here are some details from the report…”
Comments »America’s Confidence in the Economy Hits a 5 Year High
“Americans’ confidence in the economy has reached a five-year weekly high, according to Gallup’s weekly tracking index.
This week’s reading matched a five-year high set the week ending Feb. 3. It comes just a week after The Conference Board’s April Consumer Confidence survey showed a huge surge to 68.1 from last month’s upwardly-revised 61.9 reading.
The current confidence score in Gallup‘s confidence reading is -8, which was a surge from -13 the previous week. The index has reached as low as -22 this year.
Monthly economic confidence in April also matched a five-year high, coming in at a marked improvement over March’s reading, which was likely low because of the budget sequester….”
Apparently most of America missed this….
Comments »David Einhorn is Adding to His $APPL Position
“David Einhorn’s Q1 letter to investors is out, and he says that he got a big boost from the weakening yen, reports Bloomberg.
What’s more, he says Apple took a “step forward” and that he’s adding to his bet.
Einhorn’s hedge fund, Greenlight Capital, owned $1.5 million shares of Apple at the end of Q4 2012 and he was very public about desire to get the company to issue preferred stock (you can check out his presentation about it here).
He even sued Apple over the matter but dropped the lawsuit eventually.…”
Comments »Hit the Bricks: Classic NYC Attitude
Hats off to the Italian Eatery, Collegno’s Pizzeria, in Brooklyn!!!
“New York Mayor Michael Bloomberg was denied a second slice of pizza today at an Italian eatery in Brooklyn.
The owners of Collegno’s Pizzeria say they refused to serve him more than one piece to protest Bloomberg’s proposed soda ban, which would limit the portions of soda sold in the city.
Bloomberg was having an informal working lunch with city comptroller John Liu at the time and was enraged by the embarrassing prohibition. The owners would not relent, however, and the pair were forced to decamp to another restaurant to finish their meal.
Witnesses say the situation unfolded when as the two were looking over budget documents, they realized they needed more food than originally ordered.
“Hey, could I get another pepperoni over here?” Bloomberg asked owner Antonio Benito.
“I’m sorry sir,” he replied, “we can’t do that. You’ve reached your personal slice limit.”
Stop and Tisk
Mayor Bloomberg, not accustomed to being challenged, assumed that the owner was joking.
“OK, that’s funny,” he remarked, “because of the soda thing … No come on. I’m not kidding. I haven’t eaten all morning, just send over another pepperoni.”
“I’m sorry sir. We’re serious,” Benito insisted. “We’ve decided that eating more than one piece isn’t healthy for you, and so we’re forbidding you from doing it.”
“Look jackass,” Bloomberg retorted, his anger boiling, “I fucking skipped breakfast this morning just so I could eat four slices of your pizza. Don’t be a schmuck, just get back to the kitchen and bring out some fucking pizza, okay.”
“I’m sorry sir, there’s nothing I can do,” the owner repeated. “Maybe you could go to several restaurants and get one slice at each. At least that way you’re walking. You know, burning calories.”….”
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Gapping Up and Down This Morning
Upgrades and Downgrades This Morning
Upgrades – ANF, ACI, BMRN, CBOE, CHS, EVTC, GPS, MDVN, KORS, PF, RALY, SN, URBN,
Downgrades – AIG, ANR, AEO, COH, INCY, JCP, TMUS, TJX, TIF,
Comments »In Play and On the Wires
Senate Passes $WMT Backed Bill for Taxes on Web Sales
“The U.S. Senate voted to let states collect taxes on out-of-state Internet and catalog sales, sending the proposal to the House, where the issue is dividing Republicans.
The measure, passed yesterday on a 69-27 bipartisan vote, would end the era of tax-free Internet shopping. It is backed by Wal-Mart Stores Inc. (WMT) and other retailers that say it’s unfair that out-of-state sellers don’t have to collect sales taxes on purchases…”
Comments »FL Dirst Bonds are Back in Fuego
“Bonds sold to finance Florida housing developments are being issued at the fastest rate in six years as investors seek extra yield from the municipal debt even as 85 percent of such securities have defaulted since 2008.
Known as dirt bonds, the borrowings are sold by districts set up by builders to finance roads and utility lines on raw land for housing. Jurisdictions in Florida have sold $273 million of the debt this year in 25 issues, on pace for the most since 2007 in terms of dollar amount and number of issues, data compiled by Bloomberg show.
The securities are benefitting from home prices in Florida that rose at the end of 2012 to a 21-month high, data from the Federal Housing Finance Agency show. At the same time, investors are hunting for speculative-grade munis, which have earned 3.1 percent this year, compared with 1.5 percent for the broader local market, Barclays Plc data show.
The jump in issuance shows “that many of those housing markets have stabilized,” said Peter Hayes, head of munis at New York-based BlackRock Inc. He oversees $114 billion of local debt, including land-development obligations.
“That helps dirt bonds, along with the fact that they offer more income and more yield than some other sectors,” he said.
Bubble Burst….”
Comments »IMF’s Lagarde Pushes Further for a Banking Union
“AMSTERDAM (Reuters) – For European banking union to succeed, all EU member countries need to be in agreement, Christine Lagarde, managing director of the International Monetary Fund, said on Tuesday.
“You need to have all the players at the table,” Lagarde, managing director of the IMF, told students at the University of Amsterdam when asked about Germany’s concerns.
The banking union is one of the key projects to improve the economy of the 17 countries sharing the euro….”
Comments »The Cloud is in Full Force as $BMC Accepts Off to go Private
“BMC Software Inc. (BMC) agreed to be taken private in a $6.9 billion deal by Bain Capital LLC and Golden Gate Capital after struggling to compete with newcomers better equipped to handle the shift toward cloud computing.
The buyout group, which includes Singapore’s GIC Special Investments Pte Ltd. and Insight Venture Partners, is taking control of BMC in the third-largest private-equity deal of 2013. The investors said yesterday that they will pay $46.25 a share in cash, a 13 percent premium to the closing price on March 4, before Bloomberg reported that BMC had drawn renewed takeover interest after failing to find an acquirer last year.
BMC, a Houston-based provider of software that keeps corporate computer networks running smoothly, gets about 40 percent of its sales from the lucrative business of managing powerfulmainframe computers from International Business Machines Corp. Yet it has had a harder time keeping up with rivals in the market for server software, which is expanding as companies rely more on programs delivered over the Web, fueling demand for data centers and the technology that runs them.
“They’ve been outpositioned by some of the growth companies out there,” said Joel Fishbein, an analyst at Lazard Capital Markets. “The world’s changed from a technology perspective very dramatically, and they haven’t been able to keep up.”
The emergence of software delivered as a service via the so-called cloud has helped newer competitors such as ServiceNow Inc. and Splunk Inc. grab market share. BMC is also contending with traditional rivals CA, Hewlett-Packard Co. and IBM. About a quarter of new ServiceNow customers are replacing BMC products, ServiceNow Chief Executive Officer Frank Slootman said in a recent interview….”
Comments »Black Gold Trades Flat to Down On Expectations of Climbing Inventory
“West Texas Intermediate crude fell for the first time in four days before government data that may show U.S. stockpiles rose from an 82-year high. Saudi Arabia increased production to the most in five months.
Futures slid as much as 0.9 percent in New York after the biggest three-day gain since the first week of August. U.S. crude supplies probably climbed by 2 million barrels last week, according to a Bloomberg News survey before the Energy Information Administration report tomorrow. Saudi Arabia raised output to 9.32 million barrels a day in April, a person with knowledge of the country’s production said. China’s external trade probably slowed last month, a separate survey showed.
“We are probably going to be presented with another weekly inventory rise from the U.S. tomorrow, and that obviously does bring the focus that the market is still well supplied,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said in a telephone interview. “Whether we are ready to see a return toward the $110 level, which is the average for the last few years, it’s probably too early to say.”
WTI for June delivery declined as much as 90 cents to $95.26 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.66 at 10:38 a.m. London time. The volume of contracts traded was little changed from the 100-day average. Futures climbed 55 cents to $96.16 yesterday, the highest close since April 2, capping a three-day gain of 5.6 percent.
Market Struggle…”
Comments »The Euro Jumps as German Factory Orders Strengthen
“The euro strengthened against the dollar and yen after German factory orders unexpectedly increased in March, suggesting the region’s largest economy is starting to grow again.
The 17-nation currency rose against all except one of its 16 major peers as the German data damped speculation the European Central Bank will ease monetary policy further after President Mario Draghi said last week the ECB had an open mind about a negative deposit rate.Australia’s dollar fell to a two- month low against the greenback after the central bank cut interest rates to a record low. Sweden’s krona strengthened as industrial production (SWIPNSYY) exceeded economists’ forecasts.
“The German data was far better than expected,” said Jane Foley, senior foreign-exchange strategist at Rabobank International in London. “Today’s data suggests that we are another step away from them cutting the discount rate to negative territory.”
The euro gained 0.4 percent to $1.3123 as of 7:29 a.m. New York time after climbing to $1.3243 on May 1, the highest since Feb. 25. The single currency advanced 0.3 percent to 130.21 yen after dropping as much as 0.5 percent. The yen was little changed at 99.22 per dollar.
The euro is likely to trade between $1.30 and $1.32 until “data gives us strong direction one way or another,” Rabobank’s Foley said.
German factory orders, adjusted for seasonal swings and inflation, increased 2.2 percent from February, the Economy Ministry in Berlin said. The median estimate in a Bloomberg News survey of economists was for a 0.5 percent decline.
ECB ‘Ready’….”
Comments »$HBC Profits Nearly Double as Writedowns Decline
“HSBC Holdings Plc (HSBA), Europe’s largest bank, posted a bigger-than-estimated increase in first-quarter profit after provisions for bad loans shrank, stirring speculation the lender may step up its cost-reduction targets.
Pretax profit increased to $8.43 billion from $4.32 billion in the year-earlier period, the London-based bank said in a statement today. That beat the $8.04 billion average estimate of nine analysts surveyed by Bloomberg (HSBA). Bad loan charges declined 51 percent to $1.17 billion, HSBC said.
Stuart Gulliver has eliminated $4 billion of costs since becoming chief executive officer in 2011, beating his initial target. He’s announced 46,000 job cuts and sold or closed 52 businesses to revive earnings. That’s prompted speculation among analysts he may set a tougher expense-reduction goal when when he updates investors on the bank’s strategy on May 15.
“The true underlying revenue picture is flat, so it makes sense that they would look to the cost side again,” said Simon Willis, an analyst at Daniel Stewart Securities Plc (DAN) whose hold rating on the bank is under review….”
Comments »Inflation Ticks Higher in Russia
“Russian inflation accelerated in April after slowing a month earlier, strengthening arguments to delay easing monetary policy.
Consumer prices rose 7.2 percent from a year earlier after a 7 percent advance in March, the Federal Statistics Service in Moscow said by e-mail today. That matches the median estimate of 24 economists in a Bloomberg survey. Prices increased 0.5 percent in the month, also in line with economist forecasts.
Policy makers led by outgoing central bank Chairman Sergey Ignatiev are waiting to see a sustained slowdown in inflation before cutting their main interest rates. Restraining inflation remains a priority and the government won’t compromise efforts to subdue price growth with economic stimulus, First Deputy Prime Minister Igor Shuvalov said April 18 in Moscow. The economy grew 2.1 percent in the last three months of 2012 from a year earlier, the slowest rate since a 2009 contraction….”
Comments »Portugal Readies Itself to Sell Bonds for the First Time Since the 2011 Bailout
“Portugal is selling 10-year (GSPT10YR) bonds for the first time in more than two years as it seeks to regain full access to debt markets following its 2011 bailout.
The new securities due in February 2024 may yield 400 basis points more than the mid-swap rate, according to a person familiar with the matter who asked not to be identified because they’re not authorized to speak about it. Investors have so far indicated interest in excess of 4 billion euros ($5.23 billion), though the offer size of 3 billion euros will not be increased, the person said….”
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