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“In the last two weeks we have pointed out that not only are equity futures traders the most net long in six years but NYSE Margin Debt is also near four year highs. Add to this the fact that VIX futures are the most net short they have ever been – crushed by an all too visible hand – and it appears that equity market participants were critically unafraid of the fiscal cliff uncertainty. What is even more concerning, at least for those who care to be modestly contrarian that is, is that the market appears to be running out of greater fools in every asset class as JPMorgan’s speculative position indicator – which combines net positioning across 8 ‘risky’ and 7’safe’ assets – is at its most risk-on since just before the crash began in Q3 2007. So, for all those taking heads who expect a flood of new money, who still believe there is money on the sidelines that wants to be put to work, the fact is in the last decade we have been more speculatively positioned long only once – and that marked the top in stocks (and risk-assets everywhere)….”

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“Gasoline prices, which hit a 2012 low of $3.22 a gallon Dec. 19, are up 8 cents in the past two weeks and will likely continue climbing through April. Experts say the 2013 national average will likely top out at about $3.95 a gallon.

That early winter break you’ve been getting at the gasoline pump? It’s beginning to show signs of cracking.

Gasoline prices remain below $3 a gallon in at least 50% or more outlets in 14 states. But the national average has crept up three cents to $3.30 a gallon the past week and 8 cents since hitting a 2012 low of $3.22 in mid-December.

It’s likely to get worse in the coming weeks. Crude oil prices are up about $10 a gallon the past month, with benchmark West Texas Intermediate crude closing at $93.09 a barrel Friday, finishing the week up 2.5%.,,,”

“Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies….”

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“Walt Disney, which reported record earnings in November, started an internal cost cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters.

Disney, whose empire spans TV, film, merchandise and theme parks, is exploring cutbacks in jobs no longer needed because of improvements in technology, one of the people said.

It is also looking at redundant operations that could be eliminated after a string of major acquisitions over the past few years, said the person, who did not want to be identified because Disney has not disclosed the internal review.

Executives warned in November that the rising cost of sports rights and moribund home video sales will dampen growth….”

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Some charts suggest a possible correction for equities…

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NEW YORK (Reuters) – Brokerages saw top advisers depart in droves last year and shift $132.5 billion in client assets with them, a Reuters tally shows, creating headaches for some Wall Street banks at a time when wealth management is becoming an increasingly important part of business.

Unprecedented signing bonuses, cultural changes linked to acquisitions, a push to cross-sell company products, and a growing charm of joining regional outfits contributed to many of these exits which are likely to continue this year, recruiters and brokers said.

All told, at least 880 veteran brokers and their teams changed firms in 2012, according to the data, which tracks the moves of top individual advisers and teams that manage $100 million or more inclient assets. That included the departure of at least 16 $1 billion-plus advisers or teams, a numberwealth management recruiters say they usually see over several years, not in 12 months.

Morgan Stanley Wealth Management – the brokerage majority owned by Morgan Stanley and partially owned by Citigroup – felt the brunt of defections in 2012, with the departure of at least 243 veteran advisers who managed more than $39.2 billion. Bank of America Corp’s Merrill lost at least 184 advisers who managed more than $28.5 billion.

The two largest U.S. brokerages by headcount each lost at least six teams that managed $1 billion or more in client assets apiece – easily the size of an entire office branch….”

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“TOKYO (Reuters) – Japan’s new government will set up schemes worth nearly $5 billion to boost businesses, including helping them buy foreign companies, according to a draft economic stimulus package seen by Reuters on Monday that could be approved this month.

Prime Minister Shinzo Abe has made reviving the economy his top priority after his Liberal Democratic Party (LDP) won elections last month, combining aggressive monetary easing with fiscal spending to encourage investment and spur growth.

His spending promises have raised concerns that Japan’s public debt burden, already the worst among major economies, could deteriorate further. Some economists say structural reforms might have a bigger impact after years of stop-start growth.

The Development Bank of Japan (DBJ), a state-backed lender, will administer a 150 billion yen ($1.7 billion) lending scheme to encourage firms to develop new technologies and collaborate on new business lines, the draft showed.

The stimulus package would also establish a 200 billion yen fund with the Japan Bank for International Cooperation (JBIC), another state-sponsored lender, to encourage foreign mergers and takeovers.

It also includes 83 billion yen in loan guarantees and low-interest-rate loans for small firms, the draft showed.

A LDP sub-committee approved the draft on Monday, and it could be approved by the Cabinet as soon as this week.

MORE DEBT…”

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“Bank of America Corp., the second- biggest U.S. lender by assets, agreed to pay Fannie Mae$3.6 billion to resolve home-loan repurchase claims.

The lender will also pay $6.75 billion to repurchase residential mortgages sold to Fannie Mae,Charlotte, North Carolina-based Bank of America said today in a statement. The deal will “substantially resolve outstanding claims for compensatory fees” between the two companies, according to the statement.

Fannie Mae, Freddie Mac and other buyers of mortgages have demanded compensation for loans created by Countrywide Financial Corp., which Bank of America acquired in 2008, claiming the loans were based on flawed data about the properties and borrowers. Losses from Countrywide, the largest U.S. mortgage lender as recently as 2007 before billions of dollars in soured loans prompted its sale to Bank of America, have continued to plague the lender, leading to more than $40 billion in costs.

“These agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time,” Bank of America Chief Executive Officer Brian Moynihan, 53, said in the statement….”

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“Oil declined for a third day in London amid speculation that talks between Sudan and South Sudan may lead to the resumption of crude exports.

Brent futures fell as much as 0.5 percent, while the U.S. benchmark West Texas Intermediate lost as much as 0.7 percent. Sudanese President Umar al-Bashir and South Sudan’s Salva Kiir will meet in the Ethiopian capital Addis Ababa on Jan. 13, having agreed last week to set up a demilitarized zone along their border “without further delay.” Morgan Stanley said that Brent will come under pressure as demand eases after winter in the Northern Hemisphere and supplies in Angola, Nigeria and South Sudan are restored.

“The improved supply-demand balance should put marginal downward pressure on Brent prices over the next few months,” Hussein Allidina, head of commodities research at Morgan Stanley inNew York, said in a report. “We assume production will return from South Sudan through 2013.”

Brent for February settlement slipped 50 cents to $110.81 a barrel on the London-based ICE Futures Europe exchange at 12:43 p.m. local time. The European benchmark contract was at a premium of $18.22 to WTI, in line with the closing level on Jan. 4, the narrowest in more than three months.

Crude for February delivery declined as much as 64 cents to $92.45 a barrel in electronic trading on the New York Mercantile Exchange. The contract advanced to $93.09 on Jan. 4, the highest settlement since Jan. 2….”

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“Speculators increased their bullish commodity wagers for the first time since November as signs of accelerating growth in China and the U.S. drove prices higher for a fourth consecutive week.

Hedge funds and other money managers raised their net-long positions across 18 U.S. futures and options by 2.4 percent to 691,832 contracts in the week ended Dec. 31, the first gain since Nov. 27, U.S. Commodity Futures Trading Commission data show. Cotton holdings climbed to the highest since September 2011, and those for sugar reached a nine-week high. Gold wagers rose for the first time in three weeks.

The Standard & Poor’s GSCI gauge of 24 raw materials rebounded 3.8 percent since reaching a three-month low on Nov. 5. China’s manufacturing unexpectedly expanded at the fastest pace in 19 months in December, a private survey showed Dec. 31. The U.S. added more jobs than forecast last month, capping a third year of rising payrolls, the government said Jan. 4.

“In 2012, we had a lot of liquidating by hedge funds, but there’s an incentive to reverse that because of growth in emerging markets and especially China,” said Rob Haworth, a senior investment strategist at U.S. Bank Wealth Management inSeattle, which oversees about $111 billion of assets. “It’s going to be a good year for commodities.”

Commodities Rally “

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“The euro declined toward a three-week low against the dollar amid speculation the European Central Bank will signal it is open to cutting its benchmark rate when policy makers meet this week.

Europe’s shared currency declined versus 13 of its 16 major counterparts after a report showed producer-price inflation in the euro-area slowed more in November than economists forecast. The yen strengthened from near the weakest level since July 2010 against the dollar even amid media reports that the government will announce additional stimulus measures.

“The ECB meeting will be the focus this week,” said Jane Foley, a senior currency strategist at Rabobank International inLondon. “If there is more speculation about the ECB cuttinginterest rates that could undermine the euro against the dollar.”

The euro dropped 0.2 percent to $1.3041 at 11:01 a.m. London time after falling to $1.2998 on Jan. 4, the lowest level since Dec. 12. The single currency fell 0.5 percent to 114.63 yen.Japan’s currency strengthened 0.3 percent to 87.90 per dollar after depreciating to 88.41 on Jan. 4, the weakest since July 15, 2010.

ECB President Mario Draghi’s Governing Council, which cut economic and inflation projections last month, will keep its benchmark refinancing rate at a record low of 0.75 percent on Jan. 10, according to a Bloomberg News survey of 55 economists. Five predict the central bank will reduce the benchmark rate to 0.5 percent….”

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“Global central bank chiefs gave lenders four more years to meet international liquidity requirements and watered down the measures in a bid to stave off another credit crunch.

Banks won the delay to fully meet the so-called liquidity coverage ratio, or LCR, following a deal struck by regulatory chiefs meeting yesterday in Basel, Switzerland. They’ll be able to pick from a longer list of approved assets including equities and securitized mortgage debt as they seek to build up buffers of liquidity for use in a financial crisis.

“This was a compromise between competing views from around the world,” Bank of England Governor Mervyn King said at a briefing following yesterday’s meeting. King chairs the Group of Governors and Heads of Supervision, or GHOS, which decides on global bank rules. “For the first time in regulatory history we have a truly global minimum standard for bank liquidity.”

Banks and top officials such as European Central Bank President Mario Draghi pushed for changes to the LCR, arguing that it would choke interbank lending and make it harder for authorities to implement monetary policies. Lenders have warned that the measure might force them to cut back loans to businesses and households.

“The new liquidity standard will in no way hinder the ability of the global banking system to finance a global recovery,” King said. “It’s a realistic approach. It certainly did not emanate from an attempt to weaken the standard.”

Shares Rise…”

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“Australia’s dollar rose against most of its 10 developed-market peers on speculation Japan will increase spending to bolster its economy, supporting demand for assets linked to global growth.

The so-called Aussie advanced versus the New Zealand dollar before data this week forecast to show improvement in retail sales and building approvals in Australia. New Zealand’s currency, known as the kiwi, weakened against the majority of its peers as Asian stocks halted an advance from last week.

“Considering the relatively deep economic ties, an accelerated rebound in Japan’s economy will be positive” for the Australian currency, said Kengo Suzuki, a strategist in Tokyo at Mizuho Securities Co., a unit of Japan’s third-largest bank by market value. Suzuki said he is “bullish” on the Australian dollar.

The Australian dollar traded at $1.0469 as of 4:23 p.m. in Sydney after rising 0.1 percent on Jan. 4 to $1.0480. The Aussie advanced 0.2 percent to NZ$1.2627. The kiwi fell 0.3 percent to 82.90 U.S. cents…”

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“Stocks in Europe fell from a 22- month high and the yen rebounded from a 2 1/2-year low against the dollar. Banks rose as regulators watered down liquidity rules while Italian bonds retreated.

The Stoxx Europe 600 Index (SXXP) slipped 0.2 percent at 7:20 a.m. in New York after closing at its highest level since February 2011 last week. BNP Paribas SA and Barclays Plc led banks higher. Standard & Poor’s 500 Index futures fell less than 0.1 percent. The yen advanced against all major peers, adding 0.3 percent versus the dollar. Italian and Spanish bonds declined. Copper slid 0.6 percent and oil lost 0.5 percent.

Central bankers meeting yesterday in Basel, Switzerland, allowed lenders to use a wider range of assets to meet the so- called liquidity coverage ratio amid warnings the proposal would strangle lending and stifle the economic recovery. Alcoa Inc. (AA) will unofficially kick off the U.S. earnings reporting season after the market closes tomorrow. European Central Bank President Mario Draghi’s Governing Council will meet Jan. 10 to focus on nursing the euro region back to economic health.

“Markets that had enjoyed a nice rally recently are giving back part of their gains,” said Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd., which oversees $5.5 billion. “Earnings season in some countries kicks off soon, which will be keenly watched by investors at least until early February.”

Banks Climb”

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World Markets

Currencies

Commodities

USD Libor

Euribor

Yields for Italy, Spain, France,  and Germany …

$UA Downgraded to Equal-weight at Morgan Stanley

— Benzinga.com (@Benzinga) January 7, 2013

$AMZN Upgraded to Overweight at Morgan Stanley, $325 PT

— Benzinga.com (@Benzinga) January 7, 2013