$GS’s O’Neill to Retire

“(Reuters) – Jim O’Neill, the chairman of Goldman Sachs Group Inc’s asset management division who coined the popular term “BRIC” to refer to four fast-growing emerging markets, will retire later this year, according to an internal memo sent out on Tuesday.

O’Neill is an economist by training who joined the firm in 1995 as a partner, said the memo, which was signed by Goldman Sachs Chief Executive Lloyd Blankfein.

He is perhaps best known for coming up with the BRIC acronym in 2001, which identified Brazil, Russia, India and China as top emerging markets where investors could put their money for high returns. He proclaimed that those emerging economies, China’s in particular, would help drive markets and world economic growth for the next decade.

O’Neill, once described as the world’s first rock star economist for his talent on predicting movements in the $1 trillion-a-day foreign exchange markets, continues to be bullish on China…”

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“The big rally in European risk assets like stocks took a breather late last week.

Citi strategist Robert Crossley is watching flows in sovereign bond markets, and he warns that problems are surfacing in Europe.

In a note to clients titled “Cracks starting to appear in Europe,” Crossley looks at demand for European sovereign debt – which just turned negative for the first time in three months.

Although the drop in demand has been led by a retreat from safe-haven investments in “core” sovereign debt – like that of Germany – the issue is where the money has been going.

Certain sovereign debt markets in the euro periphery – Spain, for one – have been the big winners. Demand for the periphery remains positive, notes Crossley, but that could change pretty quickly:

Although demand for peripherals has fallen, like the core, it remains positive. It is this cumulative yield-seeking positioning that concerns us in the current environment where the risk-on mood is turning and investors are reassessing the risk-reward of risk positions with the wash-out of carry trades in short-dated EUR swap forwards, a strengthening FX rate, and risks surrounding comments coming from the forthcoming ECB meeting.

Sure enough, there is one market in particular that has Citi particularly wary: Spanish sovereign debt.

As the chart below shows…”

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[youtube://http://www.youtube.com/watch?v=Z_4hikITY7M&list=UU6co8_uGCP_EUQKGZguG63Q&index=1 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=Z_4hikITY7M&list=UU6co8_uGCP_EUQKGZguG63Q&index=1

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[youtube://http://www.youtube.com/watch?v=zFJfSIpIbDg 450 300]

Link for iPhone users: http://www.youtube.com/watch?v=zFJfSIpIbDg

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After yesterday’s losses many thought the markets would continue follow through today. Shorts into yesterday’s bell are getting crushed.

The DOW & the S&P are up nearly 1%, while the NADAQ is up over 1%.

Europe was able to climb out of the red after some decent service data and a stronger Euro…it also helped that yields did not spike for Italy and Spain.

Gold is down .45% while WTI is up 0.63%

Market Update

3 D Heat Map 

[youutbe://http://www.youtube.com/watch?v=wwyXQn9g40I 450 300]

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“The full extent of the CIA‘s extraordinary rendition programme has been laid bare with the publication of a report showing there is evidence that more than a quarter of the world’s governments covertly offered support.

A 213-page report compiled by the Open Society Justice Initiative (OSJI), a New York-based human rights organisation, says that at least 54 countries co-operated with the global kidnap, detention and tortureoperation that was mounted after 9/11, many of them in Europe.

So widespread and extensive was the participation of governments across the world that it is now clear the CIA could not have operated its programme without their support, according to the OSJI.

“There is no doubt that high-ranking Bush administration officials bear responsibility for authorising human rights violations associated with secret detention and extraordinary rendition, and the impunity that they have enjoyed to date remains a matter of significant concern,” the report says.

“But responsibility for these violations does not end with the United States. Secret detention and extraordinary rendition operations, designed to be conducted outside the United States under cover of secrecy, could not have been implemented without the active participation of foreign governments. These governments too must be held accountable.”

The states identified by the OSJI include those such as Pakistan, Afghanistan, Egypt and Jordan where the existence of secret prisons and the use of torture has been well documented for many years. But the OSJI’s rendition list also includes states such as Ireland, Iceland and Cyprus, which are accused of granting covert support for the programme by permitting the use of airspace and airports by aircraft involved in rendition flights.

Canada not only permitted the use of its airspace but provided information that led to one of its own nationals being taken to Syriawhere he was held for a year and tortured, the report says.

Iran and Syria are identified by the OSJI as having participated in the rendition programme. Syria is said to have been one of the “most common destinations for rendered suspects”, while Iran is said to have participated in the CIA’s programme by handing over 15 individuals to Kabul shortly after the US invasion of Afghanistan, in the full knowledge that they would fall under US control….”

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“A confidential Justice Department memo concludes that the U.S. government can order the killing of American citizens if they are believed to be “senior operational leaders” of al-Qaida or “an associated force” — even if there is no intelligence indicating they are engaged in an active plot to attack the U.S.

The 16-page memo, a copy of which was obtained by NBC News, provides new details about the legal reasoning behind one of the Obama administration’s most secretive and controversial polices: its dramatically increased use of drone strikes against al-Qaida suspects abroad, including those aimed at American citizens, such as the  September 2011 strike in Yemen that killed alleged al-Qaida operatives Anwar al-Awlaki and Samir Khan. Both were U.S. citizens who had never been indicted by the U.S. government nor charged with any crimes.

The secrecy surrounding such strikes is fast emerging as a central issue in this week’s hearing of White House counterterrorism adviser John Brennan, a key architect of the drone campaign, to be CIA director.  Brennan was the first administration official to publicly acknowledge drone strikes in a speech last year, calling them “consistent with the inherent right of self-defense.” In a separate talk at the Northwestern University Law School in March, Attorney General Eric Holder specifically endorsed the constitutionality of targeted killings of Americans, saying they could be justified if government officials determine the target poses  “an imminent threat of violent attack.” …”

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“Insurance companies are charging many safe drivers more than those who have had an accident, according to research by the Consumer Federation of America. CFA Director of Insurance Bob Hunter tells MarketWatch Radio’s Adrienne Mitchell they are using factors that have nothing to do with driving to determine customers’ rates…”

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“When they file their returns this year, some Americans will get a medical bill with their tax bill.

Starting next January, the Affordable Care Act mandates that every American have health coverage, and those who remain uninsured will pay a penalty. The extent to which one is eligible for federal subsidies to buy insurance, and the penalties for failing to comply with the mandate, will both be determined using one number: the adjusted income reported to the Internal Revenue Service this year. “So much of the Affordable Care Act is being implemented through the tax code,” says Kathy Pickering, executive director of the Tax Institute at H&R Block. And for many taxpayers, “their tax situation will factor into health-care decisions as well,” she says….”

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Source 

“FORTUNE — “The big question we get from investors is whether the greatest turnaround and growth story of the past decade is over?”

So begins a note to clients issued Tuesday morning by Sterne Agee’s Shaw Wu. His short answer is “no.”  His slightly longer answer is that Apple (AAPL) needs to think different to regain its “mojo.”

How exactly does it do that? Wu offers a four-step program:

1. Make a bigger iPhone. “In many markets, the 4.8- inch (Samsung Galaxy S III) to 5.55-inch (Galaxy Note II) form factors are the new high-end of the market where the iPhone 5 is viewed as mid-range but with a high-end price.”
2. Reclaim the high end. “We believe AAPL is leaving money on the table by not participating in larger touchscreen form factors. But more importantly, we believe AAPL needs to reclaim high-end leadership as that is what its brand is about.”
3. Address the mid-range better. “The iPhone 4 and 4S are highly desired by many but not as widely available as they could be… We believe this isn’t because of components but because iPhone 4 and 4S manufacturing capacity had been scaled back in favor of iPhone 5.”
4. Let the margins fall. “Investors have shown a willingness to accept lower margins for sustainable top-line growth. We have seen this with Amazon (AMZN) and Google (GOOG).”

Wu rates Apple as a “buy” with a $715 price target. Apple closed Monday at $442.32, down $11.30 (2.49%) for the day. The stock could use some mojo.”

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“Media billionaire John Malone is eyeing a potential bid for the second-biggest U.K. pay TV operator Virgin Media, a deal that would set him up to challenge market leader Rupert Murdoch.

Virgin Media (VMED), which has a market value of over $10 billion and debt of $9 billion, confirmed it has been approached by Malone’s Liberty Global (LBTYA, Fortune 500)about a possible transaction. Liberty Global declined to comment. Liberty’s interest in buying Virgin was first reported by the Financial Times…”

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Holder says despite internal analysis of deterioration in the quality in RMBS, S&P decided to ignore and hide deterioration by issuing top ratings.

The securities in question not only deteriorated, but failed.

developing…..

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“This will be another year of buoyant earnings, sending the Standard & Poor’s 500 Index up to 1,600 by year-end, according to Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America.

That would represent a 7 percent gain from Monday’s close of 1,495.71, and a 12 percent increase for the year.

“The big surprise for the U.S. equity market is that we might not see a pullback this year, despite what many in the markets are expecting,” Subramanian tells CNBC, noting that the market can avoid its typical 5 percent correction.

Of the 264 S&P 500 companies that had reported earnings as of Monday’s close, about 73 percent beat analysts’ profit forecasts, and 66 percent beat analyst’s sales projections, according to Bloomberg data….”

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“The Federal Reserve’s massive easing program is going to end in financial disaster, says Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland and former chief economist at the U.S. International Trade Commission.

The Fed has become “an enabler of presidential and congressional inaction [on entitlements, etc.] by keeping interest rates artificially low for five years and now by printing money to buy U.S. bonds and mortgage backed securities at a $1 trillion annual pace,” he writes on his blog.

“Record low interest rates are propping up weak consumer demand but sowing the seeds of another financial crisis.”

Urban real estate is rising to unsustainable levels, as are junk bonds, Morici says. The Fed’s low interest rates have helped push student debt over $1 trillion, with one in six loans in default. The easing also has allowed many states to avoid pension reform, he adds.

“Inevitably, all that money will push up inflation, and then the Fed will be compelled to stop buying bonds and let interest rates rise to levels the federal and state governments can’t bear easily,” Morici writes.

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Would be a small deal if it occurs, but another addition to AOL’s new push in re-creating itself….

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“The company formerly known as RIM is holding its first developer event in Europe since launching its new BlackBerry 10 platform last Wednesday. Speaking at the BlackBerry Jam event in Amsterdam, UK MD Stephen Bates said the launch of the first BB10 device —the full touch Z10 — has exceeded expectations, with some U.K. retailers selling out a few days after launch. Bates did not, however, put any concrete figures on early sales. The U.K. was the first market to get the Z10 but the device will launch in Canadian today, and additional European markets this week, including France, Germany, Switzerland, Spain and the Netherlands.

“The response we’ve seen exceeded all of our launch partners’ expectations. Customers are choosing to buy the BlackBerry Z10 in large numbers,” said Bates. “In fact some of our partners have told us that they sold out over the weekend in some of their key retail locations.

“The partners’ call centres are also flooded with calls, as people phone to ask for more information about the device, and also where and how to buy it.”

Yesterday, AllthingsD reported on channel checks conducted by Jefferies & Co. –  quoting Jefferies analyst Peter Misek reporting lines outside a number of U.K. retailers selling the device, and describing sell-outs of the white Z10 as widespread.

Asked about early Z10 sales, U.K. carrier EE also declined to share specific figures but told TechCrunch: “We’re really happy with the interest so far.”

Historically, the U.K. has been a strong market for BlackBerry — especially with the youth sector. Orange commissioned research last November suggested close to half of U.K. teens still owned a BlackBerry. But of course the company needs to win over more than just the youth market with BB10 if it is to turn the platform into a sustainable mobile ecosystem and keep developers working for it generating the apps that are, in turn, needed to attract and grow the user-base….”

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“Amazon has just announced a new virtual currency for Kindle Fire owners to use on in-app purchases, app purchases, etc. in the Amazon Appstore.

The service will launch in May, at which point Amazon will be giving away tens of millions of dollars worth of Amazon coins to customers. Users then have the choice of paying for apps or in-app purchases with their credit cards or with Amazon coins.

Developers who already have their app in the Appstore don’t need to do anything to leverage the Amazon Coin system, but if new developers would like to get in on the virtual currency they must have their app approved by the Appstore by April 25.

The idea is to take advantage of what Amazon calls already-high conversion rates from Kindle Fire users on the Amazon platform and give users a new way to spend money. Amazon has been giving developers more options to generate revenue in the Appstore, most recently with the introduction of in-app purchases….”

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“Technorati has released a new Digital Influence Report, and the big theme (probably not surprising coming from a blog and social media ad network) is that most online marketing dollars aren’t being directed to the “blogs and influencers” where they could have the greatest effect. At the same, social ad spending is expected to increase significantly this year.

The company previously released annual State of the Blogosphere reports, but starting this year it’s expanding the report’s scope to include social media — hence the change in name. The company says that it surveyed 1,200 consumers, 150 brand marketers, and 6,000 influencers. (I sent Technorati CEO Shani Higgins an email asking how those influencers were identified, and she said that surveys were sent out to the company’s index of 2.5 million influencers, Technorati waited for 6,000 completed responses, and then it checked them to “make sure we get top influencers participating and a wide sample set.”)

Among the marketers, Technorati says 60 percent predicted that social ad spending will increase this year, and that the average predicted increase was 40 percent. However, the vast majority of their online spending still goes to display, search, and video advertising, with social only accounting for 10 percent of the total. And within social itself, most of the spending goes (in descending order) to Facebook, YouTube, and Twitter, with only 11 percent going to the “blogs and influencers” category that Technorati focuses on.

The report argues that this isn’t the best way for brands to spend their money….”

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“Back in December, as always happens every year for the past 3, a margin call driven liquidation wave pushed the price of the gold to multi-month lows, providing merely yet another lowball buying opportunity (for which let’s all thank John Paulson, again). One buyer who certainly would love to thank whichever marginal seller was liquidating their gold, is none other than China, which as was reported a few hours ago, imported an all time record 114.4 tons of gold in the month of December, or more than all the gold held by the Greek central bank (assuming it hasn’t been confiscated by ze Germans or the ECB, or deposited in G-Pap or Venizelos’ private HSBC safe in Geneva yet: a very aggressive assumption).

This means that for all of 2012, total China imports of gold have hit a staggering 834.5 tons, double the 431 tons in 2011, and that the PBOC’s determination, whose official holdings are still a laughable 1054 tons, when in reality they are likely 3-4 times greater, to convert to a commodity-backed currency the day it decides to become the world’s reserves currency, as we predicted back in 2011, is as steadfast as ever.Recall from the December 2009 edition of China Youth Daily, which we reported previously that State Council advisor Ji was saying “that a team of experts from Beijing and Shanghai have set up a “task force” last year to consider growing China’s gold reserves.,,,,”

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“Walgreen Co. WAG +3.58% posted its first monthly same-store sales gain in a year in January, aided by an active flu season and firmer prescription orders stemming from the resolution of a contract dispute with a major pharmacy-benefits manager.

The 3.7% increase in same-store sales in January came above the projected 1.5% increase, according to analysts surveyed by Thomson Reuters.

Results last year were hurt by a rate contract dispute with pharmacy-benefits manager Express Scripts Holding Co. ESRX +1.64% that led millions of customers to transfer their prescriptions to rival pharmacies. But since Walgreen and Express Scripts entered a new multiyear agreement that began in September, millions have returned to the fold.

The loss of the Express Scripts customers, as well as higher demand for lower-priced generic drugs, hurt Walgreen’s same-store sales throughout 2012. In 2012, January’s same-store sales dropped 4.6%.

Walgreen has also successfully courted some customers it had lost in the dispute and hopes to win back more, gains executives expect will be reflected in many of 2013’s monthly sales reports. In January, pharmacy sales grew 8.7% and same-store pharmacy sales increased 6.2%, compared with an expected 2.4% jump. Prescriptions filled at comparable stores soared 14%.

Overall, total sales in January grew 6.3% to $6.15 billion from a year ago. Front-end sales were up 1.3%, while same-store front-end sales slid 0.4%, compared with expectations of a 0.5% drop….”

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