Honeywell

• S&P Raises the Stakes in Deficit Battle (FT)
• France and Switzerland most exposed to Greece's debt crisis, say analysts (Guardian)
• EU Budget Plan Angers Austere States (FT)
• Prospects Of Stepped-Up Yuan Strength Lifts Asia FX (Market News)
• Bernanke Bond Market Signals No Shift With Obama Deficit Cutting (Bloomberg)
• Bernanke to Open Up as Fed Embarks on Era of Glasnost (Hilsenrath)
• Australia Won’t ‘Manipulate’ Currency Now at Record (Bloomberg)
• World Revs Up U.S. Profits (WSJ)
• Balkan Economic Recovery Is at Risk From Greek Woes, Mirow Says (Bloomberg)

• Asian stocks, Copper decline before European debt talks; Treasuries gain.
• EU faces `gridlock' on debt crisis; agrees on a crisis- management mechanism in 2013.
• India’s central bank kept benchmark interest rates unchanged after 6 increases this year.
• Oil falls to near $88 in Asia despite plunge in US crude inventory.
• Qatar makes $65B bet it can remake economy in World Cup preparation.
• US foreclosure filings plunge to two-year low as lenders probe practices.
• AAR Corp beats by $0.07, posts Q2 EPS of $0.42. Revs rose 36.0% to $447M.

The market continued to move sideways today as economic data was less relevant than Bernie Madoff's thoughts on the CAPM and fund managers...

• Asian stocks, Dollar, copper climb as China refrains from increasing rates.
• Australia overhauls banking rules; said it would improve banking competition.
• China pledges to change growth model in 2011, tackle prices, grow quickly.
• Chinese Premier Wen to visit India in bid to build mutual trust amid disputes over territory, trade.
• China risks 'rush' to tighten in 2011 after inflation accelerates past 5%.
• EU leaders set to focus on debt crisis facility as ECB grapples with banks.
• Euro falls to $1.3202 in morning European trading as EU nations to meet amid debt crisis.

Changes in pension accounting rules are going to wreak havoc on corporate profits. Just what we need, more earnings volatility!

• Asian stocks gain as SGX buys ASX; Dollar weakens on G-20 currency pledge.
• Bank of Japan may leave policy unchanged after cutting rates to near zero.
• G-20 vows to avoid weakening currencies as leaders prepare to prod China.
• Japan's September trade surplus widens 54% from year-ago, more than expected.
• One third of Britons see house prices falling: Righmove Plc.
• US Treasury 30-year yield near two-month high on outlook for quicker growth.
• Amazon to begin allowing Kindle users to lend e-books to friends, for 14 days.

• Federal Reserve urged to act on economy (FT)
• Weil: Foreclosure Fiasco’s Trail Leads to Washington (Bloomberg)
• Few Ready For Currency War (JAD)
• ECB's Trichet Rejects Weber's Call to End Bond Purchase Program (Bloomberg)
• Banks Face Mortgage Scrutiny as $49 Billion in Value Vanishes (Bloomberg)
• Homeowners in Limbo - Mortgage Mess Means Delays for Those Facing Foreclosure (WSJ)
• BOE Will Expand Stimulus by 100 Billion Pounds, CEBR Predicts (Bloomberg)
• The Recklessness of Quantitative Easing (Hussman)
• Why a Foreclosure Moratorium Is a Bad Idea (WSJ)
• Fast Yuan Rise Will Be Short-Lived (Reuters)
• Investors Bet Fed Action Will Bring Inflation (FT)
• Hedge Funds Succumbing to Mutual Funds’ Mediocrity (Bloomberg)
• Germany Bows to Call for Political Sway Over Euro Sanctions (Bloomberg)
• Income Inequality: Too Big to Ignore (NYT)
• U.K. Readies Cuts in Defense Outlays (WSJ)

Spreads tightened across Europe and the US today with indices outperforming intrinsics thanks to rumors of JPY intervention and headlines proclaiming European sovereign fears over, the US recovery still in place, a 'coming' M&A boom, and the start of the Fed POMO encouraging risk-taking. The thinness of markets (given the summer slump and general lack of desire) enabled modest re-risking to move markets rapidly at the index levels across sovereigns, financials, and corporates in the US and Europe. The completion of the Irish and Spanish debt issues today seemed in and of itself enough to get everyone going (despite notably higher yields in the former and suspected 'help' from the ECB in both) and despite a major drop in German confidence, bond spreads and CDS compressed relative to Bunds with a feeling of squeeze to the move in SovX today - 9bps tighter vs 6bps intrinsics and leaving the index notably rich to intrinsics overall.

• Asian shares were down Friday, but many markets were off their lows by closing.
• China’s stocks fell to its worst week in 15 months, on the nation’s policy tightening.
• Crude oil is poised for a third weekly decline on European debt crisis
• FDIC said US banking industry continued to face challenges in Q1 2010.
• Germany's gross domestic product rose 0.2% in the first quarter of the year.
• Japan's central bank keeps rates steady and upgrades its economic outlook.
• US Senate approves Wall Street Financial Overhaul Bill after 59-39 vote.

• Asian stocks fall for fifth day on Europe concern; Commodity shares gain.
• British government plans to partially privatize struggling Royal Mail.
• China officials say won't yield to yuan pressure at U. S. talks.
• China's growth unexpectedly accelerated in the first quarter of 2010: Poll.
• Euro falls to lowest since April 2006 on European debt crisis.
• Fed officials are in no rush to sell mortgage assets, Meeting minutes show.

By Marla Singer and Geoffrey Batt

In September of 2008 the Reserve Primary Fund, loaded with exposure to Lehman Brothers debt, faced massive withdrawals and promptly "broke the buck."  (Slipped below $1.00/share NAV).  The result was a cascade of credit crunches for major corporations dependent on commercial paper for not just their near term financing, but their day to day operations.  Firms like Honeywell, General Electric, 3M, Boeing and WalMart were gripped in what might even be called a destructive co-dependent relationship with the short term cash available in the commercial paper market.  Particularly in an environment of low interest rates, money market funds desperate for yield are ravenous lenders to these large cap firms that divert their cash elsewhere and use the commercial paper market to make up the difference.  The constant "roll risk" means that any seizing up of the commercial paper market could deliver sudden and unexpected defaults by the country's largest and most respected firms.

Spreads rallied today with HY outperforming IG but neither IG nor HY able to get down to Monday's tightest levels as we note 3Y continuing to underperform 5Y (albeit both compressing today) as risk seems to be dragged nearer-term and credit is definitely less Utopian than equities.

This article was inspired by a conversation in January 2010 with fellow directors of the Gold Anti-Trust Action Committee: Chairman Bill Murphy, Secretary/Treasurer Chris Powell, and Directors Adrian Douglas and Ed Steer. In speaking about the growing role of the exchange traded funds in the precious metals market, it was clear that the disclosure that the precious metals ETFs described below were providing to investors was inadequate. However, was there a material omission under securities law? I found the issues complex. Understanding the commodities markets can seem daunting to someone like myself with a securities background. Meanwhile, the securities markets and related legal and regulatory issues can be unfamiliar to those with a background in commodities. I decided to ask my attorney to help me gather the relevant information into one document to make it easier for GATA supporters and other interested parties—whether from the commodities or securities markets—to examine these issues and to better understand and price these securities. - Catherine Austin Fitts, Solari Report

• Asian stocks decline on concern rally may overvalue earnings; Yen weakens.
• Australia gives in-principle approval for Nomura unit to set up 2nd Australian stock exchange.
• Australian retail sales and building approvals unexpectedly tumbled by 1.4% in February.
• Consumer confidence in US improves, Home Prices climb amid job optimism.
• Greece plans to sell a global bond in dollars to help raise 11.6 billion euros.
• Ireland's banks will need $43B in capital after 'appalling' lending.
• Japanese business sentiment approaches pre-crisis levels, Tankan may show.

• Most Asian stocks rose, reversing earlier decline, amid speculation Dubai World will be able to fix its finances.
• German business confidence unexpectedly drops on coldest winter in 14 years.
• Obama unveiled a last-ditch $950B health-care plan.
• Oil falls for first day in six on forecast of gain in US crude supplies.
• Senate moved forward on a $15B job-creation package as 5 Republicans voted for the Democratic bill.
• US Treasury says consumer watchdog benefits banks.
• ABB taps emerging markets, guards cash to escape "thunderstorm".
• Brookfield Asset Mgmt is readying a bid to take a large ownership stake in General Growth.