Global Strategists Give Up on their Bearish Views

The markets and recent data have analysts capitulating…

The Euro turned positive on the clam’s speech…

BRUSSELS (AP) — Greece’s international debt inspectors have discovered that the debt-ridden country still needs an extra euro15 billion ($20 billion) in help — on top of a promised euro130 billion bailout and a euro100 billion debt relief from private investors, a European official said Thursday.

The European Commission, the executive arm of the European Union, has asked the other 16 countries that also use the euro to help foot the bill for the missing euro15 billion, the official said, indicating that a limit has been reached of what can be achieved by Athens implementing further cuts and private investors taking losses on the bonds they hold in the country.

The gap could be filled either though more help from eurozone governments or by eurozone central banks or state-owned banks like France’s Caisse de Depots taking a cut on their Greek bondholdings, the official said. He was speaking on condition of anonymity because of the sensitivity of the matter.

The new push for Greece’s public and government creditors to take a cut on their investments — dubbed the official sector involvement, or OSI — is a new front in the battle to save the country from a potentially devastating default. So far the eurozone and the International Monetary Fund have given billions in bailout loans to the struggling country, but they haven’t been asked to take losses.

The official added that a related deal with private creditors to take losses on their holdings has to be announced before the end of the week, adding that experts from national finance ministries will discuss the tentative deal on Friday.

People familiar with the talks on so-called private sector involvement — or PSI — have said that the deal would see investors take losses of more than 70 percent through a 50 per cent cut in the value of the bonds, a lower interest rate of between 3.5 per cent and 4.5 per cent on the bond and more time to pay back the debt.

WASHINGTON (AP) — Ben Bernanke is urging lawmakers to balance their desire to cut deficits with policies that could help boost the weak economy in the short run.

Bernanke told the House Budget Committee that he recognizes that huge budget deficits represent a serious threat to the economy.

“Even as fiscal policymakers address the urgent issue of fiscal sustainability, they should take care not to unnecessarily impede the current economic recovery,” Bernanke said. “Fortunately, the two goals … are fully compatible.”

The Federal Reserve chairman is testifying a week after the Fed signaled that a full recovery could take at least three more years. As a result, the Fed said it doesn’t plan to raise its benchmark interest rate from a record low before late 2014 at the earliest.

The hearing began on a contentious note. Chairman Paul Ryan, a Republican from Wisconsin, said the Fed’s policies were adding to uncertainty and raising risks of higher inflation down the road.

Ryan was critical of the Fed’s decision last week to announce that it hoped to hold interest rates at record low levels for three more years.

“I think this policy runs the great risk of fueling asset bubbles, destabilizing prices and eventually eroding the value of the dollar,” Ryan told Bernanke. “The prospect of all three is adding to uncertainty and holding our economy back.”

Bernanke is also appearing two days after the Congressional Budget Office estimated that the deficit will top $1 trillion for a fourth straight year and could stay around that level for years.

The two leaders offered contrasting views last summer over how to handle high budget deficits. Bernanke warned Republicans that threatening to block a pending increase in the nation’s borrowing limit could hurt the economy. He said the debt ceiling was the “wrong tool” for trying to push federal spending cuts through Congress.

Ryan countered at the time that using the debt-ceiling vote as leverage to win meaningful deficit reductions was a valid approach.

This time, Bernanke will likely point to some economic improvements. Factories are making more goods. Americans are buying more cars. The unemployment rate is near its lowest level in nearly three years. And employers have produced six straight months of solid hiring.

Still, growth was only modest in the final three months of last year. And consumers will likely slow their spending if hiring and pay increases don’t strengthen.

A key reason the deficit has surged in the past four years is that the government collected less tax revenue. In part, that’s because the economy has yet to regain the millions of jobs lost during the Great Recession.

And the government has had to spend more on emergency unemployment benefits and efforts to boost growth, such as the Social Security tax cut that will expire in February unless Congress extends it.

The Fed has also taken extraordinary measures during and after the recession to try to help the economy recover. In June, it completed its second round of bond buying.

At a news conference after last week’s Fed meeting, Bernanke said a third round of bond buying might be necessary. Some economists think the Fed could announce more bond buying as soon as its next meeting in March.

SAN FRANCISCO (Reuters) – At least a half-dozen major U.S. companies whose computers have been infiltrated by cyber criminals or international spies have not admitted to the incidents despite new guidance from securities regulators urging such disclosures.

Top U.S. cybersecurity officials believe corporate hacking is widespread, and the Securities and Exchange Commission issued a lengthy “guidance” document on October 13 outlining how and when publicly traded companies should report hacking incidents and cybersecurity risk.

But with one full quarter having elapsed since the SEC request, some major companies that are known to have had significant digital security breaches have said nothing about the incidents in their regulatory filings.

Defense contractor Lockheed Martin Corp, for example, said last May that it had fended off a “significant and tenacious” cyber attack on its networks. But Lockheed’s most recent 10-Q quarterly filing, like its filing for the period that included the attack, does not even list hacking as a generic risk, let alone state that it has been targeted.

A Reuters review of more than 2,000 filings since the SEC guidance found some companies, including Internet infrastructure company VeriSign Inc and credit card and debit card transaction processor VeriFone Systems Inc, revealed significant new information about hacking incidents.

Read the rest here:

The drafters of the Dodd-Frank financial reform law got an important thing right. Despite fierce pushback from the banks – and lackluster support from the White House at critical moments – the legislators communicated a key new intent: megabanks must be able to fail, and the Federal Deposit Insurance Corporation should be in charge of that liquidation process.

The F.D.I.C. was an inspired choice for this role, because it is less captivated by the “magic” of Wall Street and less captured by its money and influence than any other group of officials.

The F.D.I.C. has also long been in the business of shutting down banks while limiting the damage to taxpayers, although it did not previously have complete jurisdiction over the largest banks when they got into trouble. It could only deal with those parts that had federally insured “retail” deposits, and this turns out not to be where the biggest problems have occurred in recent times.

Charged with this mandate involving the too-big-to-fail banks and with the difficult task of potentially shutting one or more of them without disrupting the economy, the F.D.I.C. took the remarkable step of opening up its decision-making process.

By creating a Systemic Resolution Advisory Committee of informed outsiders and by Webcasting the deliberations of that group, the agency has brought perhaps an unprecedented degree of transparency to public policy for banks – a point made forcefully by Dennis Kelleher; his blog at Better Markets is a must-read for anyone who cares about financial regulatory reforms. (Disclosure: I’m a member of the committee, an unpaid position.)

Committee members hold a wide range of views. Some are quite sympathetic to our existing financial structures, some much more skeptical. You can look over the list and make up your own mind as to who is on which side, and you might want to review the recording of the Jan. 25 meeting.

There is no question that the senior leadership of the F.D.I.C. is paying attention to the committee – and at the meetings, key people are put on the spot to discuss all relevant details with well-informed committee members, who can ask a lot of follow-up questions.

It is inconceivable that any other part of our financial regulatory apparatus will ever open itself up in the same way – for example, the Federal Reserve (in both Washington and New York), the Treasury Department and the Federal Stability Oversight Council are likely to be forever opaque. They, too, should open themselves up in public to tough cross-examination by experts, but that goes directly against their aloof and perhaps arrogant culture.

The history of American public administration is littered with examples of policy gone wrong – and actions misdirected – because informed and well-meaning critics were kept at arm’s length. Information is withheld even from other agencies. Powerful special interests work their influence; the rest of society has no effective voice. Even the most energetic Congressional oversight is unlikely to work when expert critics are kept so far from the real policy action.

Within the financial sphere, if the F.D.I.C. really manages to convince the markets that big banks can and will fail – meaning that creditors face the genuine prospect of losses – that changes everything.

+3.5% nearing $27.

NEW YORK (AP) — Dow Chemical Co. is feeling the impact of the slowing European economy, and seeing some weakness in North America as well.

The nation’s largest chemical maker said Thursday that it posted a loss of 2 cents per share in the fourth quarter as a one-time charge resulted in higher taxes at its Brazilian operations.

Excluding charges, Dow earned 25 cents per share. But that was short of analysts’ expectations and shares fell 3 percent in premarket trading.

Price increases helped revenue rise 2 percent to $14.1 billion. But overall volume was down 3 percent, or flat excluding businesses that Dow has sold off. The company said demand slipped as customers in North America, Europe and other regions worked through existing inventory instead of replenishing their stockpiles.

Dow says it saw global economic “deterioration” in the period, with “considerable weakness” in Western Europe. Europe, which is embroiled in a debt crisis, accounts for a quarter of the company’s sales.

Volumes rose in the Latin American and Asia-Pacific region.

The q ratio measures value in the market place….

We could be in for a pop…

Source

Allstate Corp. (ALL) : The largest publicly traded U.S. auto and home insurer said fourth-quarter profit more than doubled on lower costs tied to catastrophes.

Electronic Arts Inc. (EA) (EA US): The second-largest U.S. video-game publisher reported a 70 percent increase in third- quarter profit.

Equity Residential (EQR) : The largest publicly traded U.S. apartment landlord said fourth-quarter funds from operations climbed as the nation’s rents increased amid a 10- year low in vacancies.

Green Mountain Coffee Roasters Inc. (GMCR) : The maker of Keurig brand single-cup pods and brewers reported first-quarter profit that exceeded analysts’ estimates as sales of K-Cups surged.

Las Vegas Sands Corp. (LVS) : The U.S. casino company said fourth-quarter profit rose 17 percent on growth in Singapore and China. The company also declared its first common stock dividend.

Qualcomm Inc. (QCOM) : The world’s biggest maker of mobile-phone chips raised its sales and profit expectations for this quarter and the year as the it benefits from growing demand for smartphones.

SandRidge Energy Inc. (SD) : The energy company agreed to buy Dynamic Offshore Resources LLC for $1.28 billion in cash and stock. The purchase will be made using $680 million in cash and about 74 million shares of SandRidge.

Shutterfly Inc. (SFLY) : The Internet-based photo storage and printing company said it sees a loss of as much as 43 cents a share in the first quarter, missing the average analyst estimate of a loss of 30 cents.

Source

AK Steel Holding Corp. (NYSE: AKS) Cut to Underperform at BofA/ML.
Altera Corporation (NASDAQ: ALTR) Cut to Underperform as Bear of the Day at Zacks.
Broadcom Corporation (NASDAQ: BRCM) Started as Buy at Canaccord Genuity.
Calpine Corporation (NYSE: CPN) Started as Overweight at JPMorgan.
CenturyLink, Inc. (NYSE: CTL) Cut to Neutral at Goldman Sachs.
Dell Inc. (NASDAQ: DELL) Raised to Overweight at JPMorgan.
Edwards Lifesciences Corporation (NYSE: EW) Cut to Neutral at Credit Suisse.
JDS Uniphase (NASDAQ: JDSU) Cut to Neutral at UBS.
Marvell Technology Group Ltd. (NASDAQ: MRVL) Started as Buy at Canaccord Genuity.
Nomura Holdings Inc. (NYSE: NMR) Raised to Outperform at Credit Suisse.
Steel Dynamics, Inc. (NASDAQ: STLD) Cut to Neutral at BofA/ML.
W.W. Grainger, Inc. (NYSE: GWW) Maintained Outperform as Bull of the Day at Zacks.

Gapping up

GMCR +21.6%, RLD +12.9%, OTEX +8.5%, ZNGA +6.9%, SNN +5.2%, NAVB +5%, QCOM +4.8%, ALL +4.4%, NVO +4%, OCLR +3.8%, CGEN +3.8%, FNSR +3.7%,

CACI +3.5%, ABTL +3.4%, EXXI +3.2%, ABCO +3.1%, JDSU +2.8%, RENN +2.6%, CNQR +2.2%, USLM +1.7%, CLB +1.1%, GMCR +21.6%, RLD +12.9%, OTEX +8.5%,

CMI +4.5%, SNN +4.5%, ALL +4.4%, GPS +4.4%, NVO +4%, CACI +3.5%, ABTL +3.4%, BZH +2.5%, CX +2.3%, CNQR +2.2%, TGT +2.1%, USLM +1.7%,

Gapping down

SFLY -8.4%, SD -8%, NG -7.6%, SNE -5.7%, AZN -4.5%, UN -3.8%, LVS -3%, ENTR -2.5%, EA -2.4%, RDS.A -2.2%, TFSL -2.1%, CMG -1.7%, TSCO -1.4%, DB -1%,

DOW -3.7%, BSX -3.1%, PCX -2.8%, DB -2.6%, ENTR -2.5%,

In Play

On the Wires 

Report

Futures pare losses

Non farm productivity up 0.7%

Thias is the seventh consecutive beat for the company…

Dow took some charges that helped them to miss estimates

Revenues rose 14%

Preliminary comments on the Q