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Frontrunning: May 29

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  • South China Sea tension mounts near Filipino shipwreck (Reuters)
  • OECD cuts economic forecasts as eurozone drags on growth (FT)
  • Switzerland frees banks to settle U.S. tax evasion cases (Reuters)
  • U.S. Says Firm Laundered Billions (WSJ)... no, it's not HSBC, also: Free Corzine!
  • Ardent conservative Bachmann to not seek re-election to Congress (Reuters)
  • Russia faults U.S. over 'odious' Syria rights resolution (Reuters)
  • Medvedev Associate Flees Russia Ahead of Prosecution (BBG)
  • China Credit-Bubble Call Pits Fitch’s Chu Against S&P (BBG)
  • IMF Forecasts Lower China Growth, Warns on Debt (WSJ)
  • Copper Falls on Concern China’s Economy Is Poised to Slow Down (BBG)
  • EU eases hard line on austerity (FT)
  • Apple CEO Says Game Changers in Development to Boost Lineup (BBG)
  • Ferrari Seeks Open Road to U.S. Drivers in EU Trade Talks (BBG)

 

Overnight Media Digest

WSJ

* The battle for control of Dell is about to move into a new, heated phase, when the company and the group trying to buy it will for the first time be able to press their case directly to shareholders.

* A proliferation of counterfeit malaria drugs in Africa threatens to undermine years of progress in tackling the disease.

* Home prices surged during the first quarter at their fastest pace in nearly seven years, the latest sign of a sustained warm-up in an economic recovery that has otherwise been marked by starts and stops.

* Comcast isn't obliged to distribute Tennis Channel as widely as its own niche sports networks, a three-judge panel said.

* Nike is pulling the plug on its Livestrong brand of sneakers and clothing after a nine-year relationship with the foundation started by Lance Armstrong, which helped raise more than $100 million for cancer survivors.

* A former senior partner at KPMG will plead guilty to securities fraud for providing confidential information about some of the firm's clients in exchange for cash and gifts as part of an insider-trading scheme.

* Apple CEO Tim Cook, defending its prowess as a tech trend-set

 

FT

Major brands such as Nissan Motor Co Ltd and Nationwide Building Society have cancelled their marketing campaign on Facebook Inc after their ads were placed automatically next to offensive images.

The European Commission will move the EU's policy focus away from a crisis response based on austerity to structural reforms in its annual economic recommendations for EU members states on Wednesday.

Citigroup Inc has reached a settlement with the Federal Housing Finance Agency that had sued the bank for misleading Fannie Mae and Freddie Mac into buying $3.5 billion of mortgage-backed securities.

The Bribery Act, passed in 2011 with promises from the UK government to crack down on corruption, is set to be reviewed to reduce "red tape" and follows pressure from businesses about the cost of compliance.

The world's largest retailer Wal-Mart Stores Inc said it would pay $82 million to the federal government as it pleaded guilty that it illegally discarded hazardous waste in the United States several years ago.

U.S. authorities charged Costa Rica-based digital currency company Liberty Reserve and seven of its current and former employees, claiming that it was a money transfer hub for criminal gangs trafficking in drugs and child pornography.

 

NYT

* The S&P Case-Shiller home price index rose by 10.9 percent over the last year, a gain that reinforces housing's role in driving the economy.

* The solar industry is anxious about defective panels. When defects are discovered, confidentiality agreements keep the manufacturer's identity secret, making accountability difficult.

* Switzerland's proposed agreement on tax cases with the United States includes a fine of at least $7 billion to $10 billion and the disclosure of the names of banks' American clients.

* With governments unable to revive economies, central bankers are taking increasingly aggressive action.

* Facing pressure from women's groups and its own advertisers, Facebook said it would overhaul its process for monitoring offensive content.

* The money laundering case against Liberty Reserve, a global currency exchange, is believed to be the largest online money laundering prosecution in history, the authorities said.

 

Canada

THE GLOBE AND MAIL

* The Harper government is telling its European allies that arming rebels in Syria is a mistake, warning that the step will lead to "more death and more destruction."

The European Union's decision to end an embargo on sending arms to Syria has underlined that the Western world is divided over how to deal with the country's violence. Canadian Foreign Minister John Baird insisted the differences won't strain ties with some of Canada's closest NATO allies, even as the United States expressed support for the EU's position.

* Toronto Mayor Rob Ford is not answering questions about why two members of his staff talked to police about a video he has insisted does not exist. Ford, at City Hall on Tuesday for a day-long meeting of his executive, tried to turn the page on allegations he was caught on camera smoking crack cocaine, but failed to deflect a constant barrage of questions about how much he and his staff knew about the alleged video.

Reports in the business section:

* Oxford Properties Group's latest foray into London, a joint venture with an ancient royal real estate concern, underscores how Canadian pension funds are gobbling up prime properties across the globe. Oxford, the real estate arm of the Ontario Municipal Employees Retirement System, announced on Tuesday it had struck a 50-50 partnership with Crown Estate, which traces its roots back almost 1,000 years and owns some of London's most expensive real estate.

NATIONAL POST

* Driven in part by the arrival of thousands of French-eschewing immigrants, Canadian rates of French-English bilingualism have dropped for the first time since the election of prime minister Pierre Trudeau, according to a Statistics Canada report released on Tuesday. Rather than illustrating any nationwide reticence to learn multiple tongues, however, the numbers may simply point to French losing ground to other languages such as Cantonese, Punjabi and even Cree and Inuktitut.

* Senate officials confirmed they have found a troubling pattern of Senator Mike Duffy improperly claiming living expenses, including several days in 2011 when he was campaigning across the country for the Conservatives.

FINANCIAL POST

* As the cost of wringing oil from Alberta's bitumen deposits continues to edge up, companies are assessing whether to spend billions on new mining projects or pour money into steam-driven extraction.

* As of Tuesday, Mobilicity had secured both creditor and court approval of its plan to sell its business to Telus Corp , kicking the deal squarely into Industry Canada's court and adding to its already large file on the C$19 billion ($18.29 billion) wireless industry.

 

China

CHINA SECURITIES JOURNAL

--The National Reform and Development Commission (NDRC) is considering policies to support the development of e-commerce in the area of trusted trading, mobile payment, trade flows and logistics, said Gu Dawei, the vice minister of the High-Technology Department of NDRC.

--The expansion of China's property tax pilot programme will focus on taxing new construction and extra space in units where the area per resident is above average, insiders told the newspaper.

SHANGHAI SECURITIES NEWS

--The first seven companies listed on China's national over-the-counter market on Tuesday.

21 CENTURY BUSINESS HERALD

--Initial public offerings in China may resume in the middle of August, some insiders told the newspaper.

SHANGHAI DAILY

--China aims to introduce after-hours trading in Shanghai's futures market within two months and reintroduce government bond futures within the year, an official said.

 

Corporate Finance

* Morgan Stanley's real estate unit, Morgan Stanley Real Estate Funds, is looking to raise between $1 billion and $3 billion for a global property fund, the Wall Street Journal reported, citing people familiar with the discussions.

* Malaysian tycoon Vincent Tan is looking to sell up to 49 per cent of his 7-Eleven convenience store franchise in a deal that could value the company at $800 million, the Business Times reported.

* American Tower Corp is close to buying an Indian telecom tower company owned by a group of international investors for $572 million, the Economic Times reported.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Analog Devices (ADI) upgraded to Buy from Neutral at Citigroup
athenahealth (ATHN) upgraded to Strong Buy from Outperform at Raymond James
Denbury Resources (DNR) upgraded to Outperform from Neutral at Credit Suisse
EnerNOC (ENOC) upgraded to Strong Buy from Outperform at Raymond James
Linear Technology (LLTC) upgraded to Neutral from Sell at Citigroup
Microchip (MCHP) upgraded to Buy from Neutral at Citigroup
Sonus Networks (SONS) upgraded to Buy from Hold at Jefferies

Downgrades

Comerica (CMA) downgraded to Hold from Buy at Wunderlich
Home Bancshares (HOMB) downgraded to Hold from Buy at Wunderlich
Javelin Mortgage (JMI) downgraded to Neutral from Buy at Citigroup
Maxim Integrated (MXIM) downgraded to Neutral from Buy at Citigroup
Pinnacle Financial (PNFP) downgraded to Hold from Buy at Wunderlich
Western Asset Mortgage (WMC) downgraded to Neutral from Buy at Citigroup

Initiations

Alkermes (ALKS) initiated with an Outperform at Leerink
Intelsat (I) initiated with an Outperform at RBC Capital
Nuverra Environmental (NES) initiated with a Buy at Needham
SeaWorld (SEAS) initiated with a Neutral at Citigroup
SeaWorld (SEAS) initiated with a Neutral at Goldman
SeaWorld (SEAS) initiated with a Neutral at JPMorgan
Snyder's-Lance (LNCE) initiated with a Neutral at SunTrust

HOT STOCKS

Smithfield Foods (SFD) near $4.5B-$5B sale to Shuanghui Group, WSJ reports
Tanger Factory Outlet Centers (SKT) CEO Steven Tanger told CNBC that consumers appear to feel more secure on economy
Williams (WMB), Boardwalk Pipeline  (BWP) formed JV to continue development process for Bluegrass Pipeline
PC shipments worldwide expected to fall 7.8% in 2013 according to IDC (MSFT, DELL, HPQ, AAPL, LNVGY)
SAP (SAP) to enter strategic cooperation with China on intelligent transportation systems
Amgen (AMGN), Astellas announced Japan alliance
Astronics (ATRO) acquired PECO for $136M

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
The Fresh Market (TFM), Guidewire Software (GWRE)

Companies that missed consensus earnings expectations include:
Perfect World (PWRD), Navarre (NAVR), EnerSys (ENS)

Companies that matched consensus earnings expectations include:
United Natural Foods (UNFI), Wet Seal (WTSL)

NEWSPAPERS/WEBSITES

  • The battle for control of Dell (DELL) will soon move into a new, heated phase, when the company and the group trying to buy it will for the first time be able to press their case directly to shareholders, the Wall Street Journal reports
  • Apple (AAPL) CEO Tim Cook, defending the company's prowess as a tech trend-setter, hinted that wearable devices may play a role in future product plans, the Wall Street Journal reports
  • Sprint Nextel (S) and Japan's SoftBank (SFTBF) reached agreement with U.S. authorities on the national security aspects of the Japanese firm's pending $20.1B deal to win control of the U.S. wireless carrier, sources say, Reuters reports
  • More than 100 members of Congress asked U.S. regulators to allow American Airlines (AAMRQ) and US Airways Group (LCC) to keep all their airport slots at Reagan National Airport outside Washington, DC. if the companies' planned merger is approved, Reuters reports
  • Morgan Stanley (MS) is trying to raise $1B to $3B for a new global real estate fund amid appetite for higher-yielding investments, sources say, Bloomberg reports
  • An increase in goods entering California is signaling optimism about the resilience of U.S. consumer spending and the trucking industry (SWFT, KNX, WERN) this year, Bloomberg reports

SYNDICATE

Associated Estates (AEC) offers 6.5M common shares on forward basis
Inland Real Estate (IRC) files to 9M shares of common stock
Plains All American (PAA) files $750M equity distribution agreement

 

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Wed, 05/29/2013 - 07:44 | 3606759 kralizec
kralizec's picture

Looks like another boring day in latter day America...

And now for something totally different...

Wed, 05/29/2013 - 07:54 | 3606778 blindman
blindman's picture

goon squad below !
World Bank Whistleblower Attacked By DOJ
http://www.youtube.com/watch?v=tKxyYZeaNxY&feature=youtu.be
.
the "owners" squad control everything, even that which
they don't own !

Wed, 05/29/2013 - 08:04 | 3606803 blindman
blindman's picture

28 May 2013
Coming Collateral Crisis: Re-Hypothecation To the Point of Exhaustion or Destruction

If you think that the global banking system has somehow been 'cleaned up' and made more stable since the financial collapse precipitated by the mispricing of Collateralized Debt Obligations and the fraud of the housing bubble you may be mistaken.
.
http://jessescrossroadscafe.blogspot.com/2013/05/coming-collateral-crisi...

Miles Franklin
If I May...
By Bill Holter
May 28, 2013
"..OK, so these guys got arrested and had in their possession $500 million fraudulent “collateral.” Is this ALL of the fraudulent collateral? Did they have more Do others possess or have pledged fraudulent collateral? How much? Where and to whom has it been pledged? How many times over has it been pledged? …And then out of nowhere, Europe decides to rein in the Shadow Banking System that is purported to be $80 TRILLION (with a capital “T”)! Do you see any connection here? I’ll make it easy for you, “collateral” is the common denominator.

I also want to mention that “collateral” is what makes the financial world turn. Everything runs on “credit,” if you have “collateral” then you can obtain credit. The problem now, that is being exposed, is that no one knows anymore if collateral is real or even “who’s” collateral it is anymore since it has been lent out so many times. Now, to add even more fuel to the fire, it turns out that some of the so called “collateral” is not and was not even real to begin with! Funds in the trillions of dollars have been lent and now it seems as if the collateral backing many loans may not be real. …And Europe is now considering pulling the plug on shadow banking? How many “assets” will banks and brokers have to sell to keep their capital ratios adequate? Do they even have enough real assets to sell to cover the collateral that turns out to be fake or has been lent out 10 times over (not to mention 100 times over). I might also ask the question, “What happens to the markets?” What will happen to the stock markets, bond markets, and real estate markets, ALL MARKETS if banks are forced into liquidation to cover for fraudulent or many times pledged collateral...

My point is this, the tide is going out and it looks like EVERYONE is naked and no one has drawers on. Margin debt for stocks are at an all-time high, shorts by hedge funds in gold are at an all-time high, printing by central banks are at an all-time high, yields on sovereign bonds (even the deadbeats like Spain and Italy) were recently compressed to all-time lows and are now rising…and the real economies across the globe are beginning to contract again. The “inflection point” has apparently arrived and fraud everywhere you look is being uncovered. In a system that runs on debt, “collateral” is the foundation. What are the ramifications when “collateral” is questioned and turns out to be nothing more than a piece of paper with no value whatsoever? Everything that has derived value from this initial capital …is worth nothing...

Read the entire article here."

Wed, 05/29/2013 - 08:12 | 3606829 Monedas
Monedas's picture

Maybe just another normal day like yesterday .... gold down $5 .... palladium up .... $30 .... WTF ?

Wed, 05/29/2013 - 08:30 | 3606900 blindman
blindman's picture

Monday May 27, 2013
Boston-Benghazi-911 Dots Connected
by Tom Heneghan, International Intelligence Expert
.
http://www.tomheneghanbriefings.com/
.
“UNITED STATES of America – It can now be reported that the Department of Homeland Security (DHS) ordered drill (that included 35 armed Navy Seals with detonators) that was taking place at the finish line of the recent Boston Marathon was pre-approved by the Office of Naval Intelligence (ONI) and its counter-surveillance unit.
?This is the same Pentagon unit that scheduled Red-Blue U.S.-Canadian war games on the day of 09-11-2001.
?This is the same day of the Nazi Paperclip attack on the United States reference New York City and the Pentagon in Washington, D.C.
” …..

?This was, of course, George W. BushFRAUD’s Reichstag fire.

Read more at http://www.maxkeiser.com/2013/05/luke-henry-kissinger-confronted-while-r...

Wed, 05/29/2013 - 10:03 | 3607215 Son of Loki
Son of Loki's picture
Proportion of employers looking to shed staff hits three-year high(News from AU)

 

 

AMP chief economist Shane Oliver said today that despite an unemployment rate of 5.5 per cent, when you count the people working only 1 hour a week or more who are looking for more work, the unemployment rate is actually 7-8 per cent.

 

The comments follow a business survey released today which found the proportion of Australian employers intending to lay off either permanent or temporary staff members is at its highest level in three years....


Read more: http://www.news.com.au/business/proportion-of-employers-looking-to-shed-staff-hits-three-year-high/story-e6frfm1i-1226652634419#ixzz2UgqNSOkx
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