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Monthly Archives: June 2011

Japan Higher Despite Greek Tragedy

NIKKEI is higher by 0.5%, despite European failure to agree on a Greek bailout.

Related: S&P futures are down 1.7

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More Than 87% of Chinese Listed Stocks Are Down, Year to Date

This is not including the great many delisted and/or bankrupt names.


Look at some of the stunt man Mike pin action.

No. Ticker YTD Return Industry
1 SCEI -80.18 Chinese Burritos
2 SBAY -78.42 Chinese Burritos
3 HEAT -78.22 Chinese Burritos
4 CHBT -76.46 Chinese Burritos
5 CBEH -74.90 Chinese Burritos
6 GFRE -74.74 Chinese Burritos
7 CSKI -71.59 Chinese Burritos
8 SHZ -71.31 Chinese Burritos
9 CHGS -70.49 Chinese Burritos
10 CVVT -70.23 Chinese Burritos
11 DGW -69.62 Chinese Burritos
12 XNY -68.34 Chinese Burritos
13 CCIH -67.50 Chinese Burritos
14 OINK -66.56 Chinese Burritos
15 NEWN -64.42 Chinese Burritos
16 CNAM -64.18 Chinese Burritos
17 KNDI -63.95 Chinese Burritos
18 CNIT -63.34 Chinese Burritos
19 CNET -62.91 Chinese Burritos
20 KGJI -62.25 Chinese Burritos
21 MCOX -62.08 Chinese Burritos
22 BSPM -61.70 Chinese Burritos
23 GU -60.72 Chinese Burritos
24 FEED -60.54 Chinese Burritos
25 CIIC -60.14 Chinese Burritos
26 SCOK -59.57 Chinese Burritos
27 BORN -58.75 Chinese Burritos
28 DHRM -58.50 Chinese Burritos
29 PUDA -57.89 Chinese Burritos
30 DANG -57.67 Chinese Burritos
31 SEED -57.28 Chinese Burritos
32 SORL -56.86 Chinese Burritos
33 CGA -56.78 Chinese Burritos
34 AOB -55.83 Chinese Burritos
35 HSFT -55.20 Chinese Burritos
36 DEER -54.43 Chinese Burritos
37 CHC -53.99 Chinese Burritos
38 JRJC -53.45 Chinese Burritos
39 MY -53.39 Chinese Burritos
40 CCSC -52.78 Chinese Burritos
41 RCON -52.69 Chinese Burritos
42 SIHI -52.49 Chinese Burritos
43 CMFO -52.22 Chinese Burritos
44 HPJ -51.98 Chinese Burritos
45 HRBN -51.93 Chinese Burritos
46 XING -50.88 Chinese Burritos
47 SPU -50.54 Chinese Burritos
48 CHLN -50.36 Chinese Burritos
49 AMCN -49.78 Chinese Burritos
50 CHOP -49.40 Chinese Burritos

Date provided by The PPT

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Hopes for ‘Greek miracle’ as Merkel changes position

HOPES OF a “Greek miracle” calmed investor nerves yesterday, and lifted the Irish index in line with its Continental counterparts.

Markets opened down, but they steadied after German chancellor Angela Merkel retreated from demands that bondholders should shoulder a substantial part of the cost of a Greek rescue.

Expectations of a “Greek miracle” grew after the chancellor’s meeting with French president Nicolas Sarkozy, and sparked a rally across European markets, a Dublin broker said.

Dr Merkel confirmed she would work with the ECB to resolve the Mediterranean nation’s sovereign-debt crisis. “We would like to have a participation of private creditors on a voluntary basis,” Dr Merkel told reporters in Berlin yesterday. “This should be worked out jointly with the ECB. There shouldn’t be any dispute with the ECB on this.”

Mr Sarkozy said a “breakthrough” had been made on the Greek debt crisis, following his meeting with Dr Merkel.

Read the rest here.

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Flash: Moody’s May Cut Italy’s Credit Rating

Via Moody’s

Frankfurt am Main, June 17, 2011 — Moody’s Investors Service has today placed Italy’s Aa2 local and foreign currency government bond ratings on review for possible downgrade, while affirming its short-term ratings at Prime-1.

The main drivers that prompted the rating review are:

(1) Economic growth challenges due to macroeconomic structural weaknesses and a likely rise in interest rates over time;

(2) Implementation risks surrounding the fiscal consolidation plans that are required to reduce Italy’s stock of debt and keep it at affordable levels; and

(3) Risks posed by changing funding conditions for European sovereigns with high levels of debt.

Moody’s review will evaluate the weight of these growing risks in light of the country’s high rating but also relative to some credit-strengthening trends that have been observed in recent years and are expected over the coming years, such as improved fiscal governance, lower budget deficits and a modest economic recovery.


First, the Italian economy faces growth challenges in an environment characterized by long-term structural impediments to growth and potentially rising interest rates. Structural economic weaknesses — mainly low productivity and important labour and product market rigidities — have been a major impediment to growth in the last decade and continue to hinder the economy’s recovery from the severe recession it experienced in 2009. Italy has so far only recovered a fraction of the nearly seven percentage points in GDP that it lost during the global crisis, despite low interest rates, which are likely to rise in the medium term. Growth prospects for the Italian economy in the coming years will be a crucial factor that will determine the government’s revenues and the achievement of fiscal consolidation targets.

Second, there are implementation risks to the fiscal consolidation plans that are required to reduce Italy’s stock of public debt to more affordable levels. Against a backdrop of rising interest rates and weak economic growth, the government may find it difficult to generate the primary surpluses that are needed to place the public debt-to-GDP ratio and the interest burden on a solid downward trend. The adoption of additional conservative fiscal policies may prove more difficult in the near future because the current government’s electoral support is weakening, with the government facing challenges in gaining public approval for its policies. For example, the government’s recent energy and water supply proposals were rejected by popular vote.

Third, the fragile market sentiment that continues to surround European sovereigns with high levels of debt poses additional risks for Italy. The continued stability of market demand for Italy’s debt is uncertain at current yields. Although future policy actions within the euro area could reduce investors’ concerns and stabilize funding costs, the opposite is also possible. In any event, going forward, investors appear likely to differentiate more among euro area sovereign borrowers than they did prior to the financial crisis, to the disadvantage of euro area countries with higher-than-average debt burdens, like Italy.


Moody’s review of Italy’s sovereign rating will focus on the growth prospects for the Italian economy in coming years, and particularly the prospects for a removal of important structural bottlenecks that could hinder a stronger economic recovery in the medium term. The review will also examine the government’s ability to achieve ambitious fiscal consolidation targets and to implement further plans to generate substantial primary surpluses in the medium term. This will include an analysis of the vulnerability of the Italian government debt trajectory to a rise in risk premia, as well as the options for the government to react. The government’s new fiscal plan, which is expected to be announced shortly, will be considered during the review.

In addition, any broader developments across the euro area, in particular with regard to the resolution of the euro area debt crisis and its impact on funding costs, could be important determinants of the outcome of Moody’s rating review.


Moody’s last rating action affecting Italy was implemented on 15 May 2002, when the rating agency upgraded Italy’s Aa3 government bond ratings to Aa2 with a stable outlook. The rating action prior to that was taken on 3 July 1996, when the rating agency upgraded Italy’s A1 government bond ratings to Aa3.

The principal methodology used in this rating was “Sovereign Bond Ratings”, published in September 2008.

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Moody’s: Large quantity of bank debt maturing into uncertain environment

New York, June 16, 2011 — Over the past year, the global banking system has modestly reduced its reliance on wholesale funding and lengthened the maturity of new debt securities, according to Moody’s Investors Service’s latest bank debt maturity profiles report. Nevertheless, the rating agency notes that the favorable market conditions supporting low-cost deposits and low-cost bank debt will not continue indefinitely, leaving the global banking system exposed to refinancing risk at a time when an usually large amount of debt is coming due. Of the $11 trillion of the long-term wholesale debt outstanding from Moody’s-rated banks globally, $3.4 trillion (33%) will mature by the end of 2012, and $4.9 trillion (45%) by the end of 2013.

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Wall Street to slash staff and expense accounts

By Knut Engelmann

NEW YORK (Reuters) – Traditionally fat expense accounts on Wall Street are about to get slashed as major banks set out to cut spending and staffing due to weaker markets and new regulation that will cut in to their profits.

Goldman Sachs plans to cut as much as $1 billion in non-compensation expenses — costs not directly linked to salaries, bonuses and benefits — over the next 12 months, a person familiar with the matter told Reuters on Thursday.

“We will turn over every rock,” the source said.

The bank, which currently employs some 35,400 staff around the world, will also review staffing levels, and job cuts are “certain” to come over the next months, the source added, though the bank has not set a specific target.

Goldman Sachs declined to comment.

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IMF cuts U.S. growth forecast, warns of crisis

SAO PAULO (Reuters) – The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are “playing with fire” unless they take immediate steps to reduce their budget deficits.

The IMF, in its regular assessment of global economic prospects, said that bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies.

The global lender forecast that U.S. gross domestic product would grow an anemic 2.5 percent this year and 2.7 percent in 2012. In its forecast just two months ago, it had expected 2.8 percent and 2.9 percent growth, respectively.

The outlook elsewhere was mixed. The IMF said it was slightly more optimistic about the euro area’s growth prospects this year, but a lack of political leadership in dealing with that crisis and the budget showdown in the United States could create major financial volatility in coming months.

“You cannot afford to have a world economy where these important decisions are postponed because you’re really playing with fire,” said Jose Vinals, director of the IMF’s monetary and capital markets department.

“We have now entered very clearly into a new phase of the (global) crisis, which is, I would say, the political phase of the crisis,” he said in an interview in Sao Paulo, where the forecast was published.

In the United States, the political problems include a fight over raising the debt ceiling. Fears that the world’s biggest economy could default, even briefly, have rattled markets, with Fitch Ratings saying even a “technical” default would jeopardize the country’s AAA rating.

Meanwhile, Greece has edged closer to default as euro zone officials disagree on a possible second aid package for the indebted country. With strikes and protests around the country, political turmoil has added to uncertainty, stoking fears that the government will not be able to tighten its belt enough to reduce crippling deficits.

“If you make a list of the countries in the world that have the biggest homework in restoring their public finances to a reasonable situation in terms of debt levels, you find four countries: Greece, Ireland, Japan and the United States,” Vinals said.

Read the rest here.

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Upgrades and Downgrades This Morning


POT – Potash upgraded to Buy from Hold at TD Newcrest

MWW – Monster Worldwide upgraded to Buy from Neutral at UBS

AOS – A.O. Smith upgraded to Buy at KeyBanc

EXXI – Energy XXI initiated with Outperform at Credit Suisse

SUG – Southern Union downgraded to Hold from Buy at Jefferies

CACI  – CACI Intl upgraded to Buy from Neutral at SunTrust

CIEN – Ciena upgraded to Neutral at UBS

BR – Broadridge Financial upgraded to Overweight at JPMorgan

NPBC – National Penn upgraded to Strong Buy from Outperform at Raymond James


RIMM – Research In Motion downgraded to Equal Weight at Evercore Partners

SPLS – Staples downgraded to Neutral from Buy at Nomura

MDU – MDU Resources initiated with a Hold at Williams Capital

COF – Capital One upgraded to Buy from Neutral at SunTrust

BKH – Black Hills Corp initiated with a Hold at Williams Capital

AVA – Avista initiated with a Buy at Williams Capital

HRS – Harris initiated with Neutral at Goldman

DSX – Diana Shipping downgraded to Underperform at Credit Suisse

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Gapping Up and Down This Morning

Gapping Up

AAPL +0.9%, POT +2%, SAP +2%, CTIC +4.7%, AVL +2%, BJ +4.5%, BP +0.8%, MS +1.5%, ING+4.6%, STD +4.1%, TOT +2%, VVUS +5.9%, YOKU +2.8%, DB +3.3%, E +2.6%, TOT +2%, RDS.A +1.2%, DRYS +4.4%, CIEN+1.3%, ING +3.5%, ALE +3.8%, SPRD +4.7%, BBL +2.4%, ERIK +1.9%, RIO +2.1%, CLF +1.8%, FCX +1.7%, BHP +1.5%, COF +1.5%, BAH +3.1%, NOK +2.4%, AVL+2%, MT +1.5%, NBG +7.4%, BBVA +3.8%,

Gapping Down

RIMM -16.5%,MIND -5.6%, STLD -3.3%, MFLX -2.0%, LPS -10.1%, JRJC -6.1%, MMSI -5.9%, ASMI -1.5%, SA-1.1%, HBC -1.1%,

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