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Frontrunning: November 5

Tyler Durden's picture




 
  • China premier warns against loose money policies (Reuters)
  • Brussels forecasts tepid Eurozone growth (FT)
  • SAC Case Began With Informant’s Tips on Cohen, Rajaratnam (BBG)
  • Dirty Munich Home’s Nazi Loot Estimated at $1.35 Billion (BBG)
  • Mortar hits Vatican embassy in Damascus, no casualties (Reuters)
  • India Launches Mars Mission (WSJ)
  • Lael Brainard to leave Treasury, heading to Fed (FT)
  • U.S. Takes Aim at 'Forced' Insurance (WSJ)
  • Wife of Jeff Bezos attacks book about Amazon (FT)
  • Fall of Brazil’s Batista embarrasses President Dilma Rousseff (FT)
  • The One Thing People Still Really Like About BlackBerry (BusinessWeek)
  • Twitter IPO More Expensive Than Facebook Without Profits (BBG)
  • Cash floods into property as investors seek alternative or safety (Reuters)
  • Fired Deutsche Bank Rates Traders Said to Return to Work (BBG)
  • Italy eyes 'Google Tax' to help fix public finances (RTRS)

 

Overnight Media Digest

WSJ

* SolarCity said Monday that it intends to privately place $54 million of securities backed by a pool of solar-power systems, leases and electricity contracts.

* Investment in the medical-device and equipment industry is on pace to fall to $2.14 billion this year, down more than 40 percent from 2007 and the sharpest drop among the top five industry recipients of venture funding, according to an analysis of data compiled by PricewaterhouseCoopers and the National Venture Capital Association.

* Twitter Inc, riding a wave of strong demand for initial public offerings, sharply increased the price range of its shares three days before its stock is expected to begin trading. San Francisco-based Twitter increased its proposed share-price range to between $23 and $25 a share, up from between $17 and $20 a share.

* Tencent Holdings Ltd is vying to lead a $200 million fundraising in Snapchat, the latest effort by one of China's Internet giants to gain a foothold in the United States.

* BlackBerry has abandoned a plan to sell itself and instead will sell $1 billion of convertible debt to its major shareholder and other investors, and said it would replace CEO Thorsten Heins.

* Kellogg plans to cut its workforce by 7 percent as part of a four-year cost-cutting campaign, as the cereal maker posted higher earnings on flat sales.

* Allen Edmonds Corp, a maker of high-end men's shoes that generated some takeover interest from Men's Wearhouse Inc , itself a takeover target, has revealed it has agreed to be sold to another buyer.

* U.S. Attorney General Eric Holder said the government is willing to settle its antitrust lawsuit against the merger of AMR and US Airways if the airlines agree to broad concessions.

* Network-gear maker Alcatel-Lucent said Monday that it plans to raise about $2.7 billion to cut its debt and finance its turnaround plan, taking advantage of a rebound in shares to unveil a capital increase.

* TRI Pointe Homes has clinched a $2.7 billion deal to merge with timber conglomerate Weyerhaeuser's home-building division.

 

FT

Twitter Inc IPO-TWTR.N increased its IPO price range by 25 percent after strong investor demand, putting the microblogging network on course to secure a valuation of over $17 billion at its stock market debut later this week.

Johnson & Johnson will pay $2.2 billion in fines to U.S. federal and state authorities for kickbacks to pharmacists and the marketing of pharmaceuticals for diseases beyond their approved uses over more than a decade.

BlackBerry Ltd abandoned its plan to sell itself and removed its chief executive on Monday, sending the share price of the one-time market leader down 16.4 percent to its lowest in a decade.

Britain's Co-operative Group has detailed a rescue plan for its banking arm, under which it will hand control of 70 percent of the unit to a group of bondholders, and warned it would take up to five years to fix the troubled lender.

Budget airline Ryanair Holdings Plc issued its second profit warning in two months on Monday, citing aggressive fare cuts in response to increased competition and weak economic conditions.

Loss-making telecom equipment maker Alcatel-Lucent said on Monday it plans to raise 955 million euros ($1.3 billion) from shareholders and $750 million from a high-yield bond to shore up its balance sheet.

 

NYT

* While the hedge fund SAC Capital has put the government's criminal case behind it, Steven Cohen remains the focus of a criminal investigation and a SEC administrative complaint.

* Federal officials said Johnson & Johnson promoted the anti-psychotic drug as a way to treat dementia patients for many ailments, when it was only approved for schizophrenia.

* Twitter has raised the price range for its initial public offering to $23 to $25, signaling the company's bullish outlook ahead of its trading debut on Thursday.

* Netflix said on Monday that starting early next year it will be the exclusive streaming distributor for "The Square," an Arabic documentary about the Egyptian protest centered in Tahrir Square, which is considered a leading contender for an Oscar nomination.

* A tentative takeover bid for BlackBerry Ltd from its largest shareholder collapsed on Monday, clouding the immediate future of the company. Fairfax Financial Holdings of Toronto, the insurance and investment company, had made a conditional, non-binding offer to buy the 90 percent of BlackBerry shares it does not own for $9 each, valuing the company at about $4.7 billion.

* Tom Wheeler was sworn in on Monday as chairman of the Federal Communications Commission and promptly named to his senior staff Gigi Sohn, one of the agency's most outspoken critics but a supporter of the new leader.

* A measure that would outlaw workplace discrimination against gay men, lesbians and transgender people overcame a significant obstacle in the Senate as seven Republicans voted to begin debate on the bill.

* The Carlyle Group has hired Kewsong Lee away from his post as managing director at Warburg Pincus, an unusually high-level transition within private equity's executive ranks.

* Tri Pointe Homes, the West Coast builder controlled by Barry Sternlicht's Starwood Capital, is merging with the home-building subsidiary of Weyerhaeuser, a large owner of timberlands.

* Two activist hedge funds, the Clinton Group and Cannell Capital, have joined forces to mount a proxy battle for control of the Internet and television shopping network ValueVision Media.

 

Canada

THE GLOBE AND MAIL

* A meeting between British Columbia Premier Christy Clark and her Alberta counterpart Alison Redford scheduled for Tuesday has been canceled as talks between the two provinces on pipeline development in British Columbia have reached a tense stalemate.

* The number of Canadians using food banks fell 4.5 percent this year from 2012, reflecting improvement in some regions, particularly the Prairies.

Reports in the business section:

* Beijing-based computer manufacturer Lenovo Group Ltd actively considered a bid for BlackBerry Ltd, but the Canadian government told the smartphone company it would not accept a Chinese takeover because of national security concerns, according to sources familiar with the situation.

* Canadian manufacturers and steel producers are urging Ottawa to channel tens of billions of dollars in planned federal spending their way over the next decade.

NATIONAL POST

* Liberal leader Justin Trudeau is walking an intentionally fine line following two high-profile expressions of support in recent weeks for the oilsands and the controversial Keystone XL pipeline.

* Transport Canada has told its minister, Lisa Raitt, that it is gathering evidence that could lead to federal prosecution against Montreal, Maine and Atlantic Railway Inc, the company involved in the Lac-Megantic disaster, for allegedly failing to comply with safety regulations.

FINANCIAL POST

* Bankers still have a lot of work to do to sell all of Barrick Gold Corp's $3 billion equity offering, but sources maintained on Monday that there is no talk of re-pricing the deal.

* The Ontario government is considering the introduction of new tax incentives in hopes of boosting the level of investment in research and development within the province.

 

China

CHINA SECURITIES JOURNAL

- China may allow private banks to be launched early next year under a pilot scheme, the newspaper reported without citing sources.

- Egg futures will be listed on Nov. 8 on the Dalian Commodity Exchange, according to a notice published by the exchange on Monday.

- China's National Energy Administration said in a notice it plans to increase the country's photovoltaic capacity by 20 percent to 12GW in 2014, under certain circumstances.

SECURITIES TIMES

- China should expand the testing areas for property tax as soon as possible, said Ren Xingzhou, leader of the economics institute in the State Council's Development Research Center, a government think tank.

PEOPLE'S DAILY

- China is experiencing severe overcapacity in crude steel, electrolytic aluminium, cement and flat glass, which will lead to vicious competition and a waste of resources, said a commentary in the paper that acts as the government's mouthpiece.

CHINA DAILY

- China will increase efforts to tackle the overcapacity problem in the cement, electrolytic aluminium, sheet glass, shipping and steel industries, the newspaper said in an editorial. Shang Fulin, chairman of the China Banking Regulatory Commission, called for green loans to curb overcapacity, it added.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

BlackBerry (BBRY) upgraded to Hold from Sell at Deutsche Bank
BlackBerry (BBRY) upgraded to Hold from Sell at Societe Generale
Energen (EGN) upgraded to Buy from Neutral at ISI Group
GT Advanced (GTAT) upgraded to Buy from Neutral at BofA/Merrill
GT Advanced (GTAT) upgraded to Overweight from Neutral at Piper Jaffray
HSBC (HBC) upgraded to Buy from Neutral at Mizuho
Holly Energy (HEP) upgraded to Neutral from Sell at Goldman
MGIC Investment (MTG) upgraded to Outperform from Market Perform at Keefe Bruyette
Safe Bulkers (SB) upgraded to Buy from Neutral at Citigroup
SunEdison (SUNE) upgraded to Overweight from Neutral at Piper Jaffray
TTM Technologies (TTMI) upgraded to Overweight from Neutral at JPMorgan

Downgrades

BlackBerry (BBRY) downgraded to Underperformer from Sector Performer at CIBC
ExlService (EXLS) downgraded to Market Perform from Outperform at Wells Fargo
ExlService (EXLS) downgraded to Perform from Outperform at Oppenheimer
Halcon Resources (HK) downgraded to Market Perform from Outperform at Wells Fargo
Kellogg (K) downgraded to Hold from Buy at Deutsche Bank
LINN Energy (LINE) downgraded to Neutral from Buy at Goldman
LinnCo (LNCO) downgraded to Neutral from Buy at Goldman
Ocwen Financial (OCN) downgraded to Market Perform from Outperform at Keefe Bruyette
Pearson (PSO) downgraded to Neutral from Buy at Goldman
RBS (RBS) downgraded to Underperform from Neutral at Exane BNP Paribas
Rovi (ROVI) downgraded to Sell from Neutral at Goldman
Siemens (SI) downgraded to Neutral from Buy at UBS
St. Jude Medical (STJ) downgraded to Market Perform from Outperform at Bernstein

Initiations

AmBev (ABV) initiated with an Overweight at Barclays
Antero Resources (AR) initiated with a Buy at Citigroup
BancorpSouth (BXS) initiated with an Overweight at Evercore
Cinemark (CNK) initiated with an Outperform at FBR Capital
Duke Energy (DUK) initiated with a Buy at CRT Capital
FactSet (FDS) initiated with an Equal Weight at Barclays
Forum Energy (FET) initiated with an Overweight at Morgan Stanley
Gannett (GCI) initiated with an Outperform at FBR Capital
HSN, Inc. (HSNI) initiated with a Market Perform at FBR Capital
Lamar Advertising (LAMR) initiated with an Outperform at FBR Capital
Liberty Interactive (LINTA) initiated with an Outperform at FBR Capital
Liberty Ventures (LVNTA) initiated with an Outperform at FBR Capital
New York Times (NYT) initiated with a Market Perform at FBR Capital
News Corp. (NWSA) initiated with a Market Perform at FBR Capital
QTS Realty Trust (QTS) initiated with a Hold at Deutsche Bank
Regal Entertainment (RGC) initiated with a Market Perform at FBR Capital
SCANA (SCG) initiated with a Fair Value at CRT Capital
Southern Company (SO) initiated with a Fair Value at CRT Capital
Spectral Diagnostics (SDI) initiated with an Outperform at Wedbush
Stonegate Mortgage (SGM) initiated with an Outperform at Keefe Bruyette
Superior Energy (SPN) initiated with a Buy at Deutsche Bank
TECO Energy (TE) initiated with a Fair Value at CRT Capital
Thomson Reuters (TRI) coverage assumed with an Equal Weight at Barclays
Twitter (TWTR) initiated with a Buy at CRT Capital
Valassis (VCI) initiated with a Market Perform at FBR Capital
Wisconsin Energy (WEC) initiated with a Buy at CRT Capital

HOT STOCKS

Endo Health (ENDP) to acquire Paladin Labs for $1.6B in stock, cash
Ford (F) to launch 17 vehicles to accelerate growth in Middle East, Africa
AIG (AIG) may file lawsuit against Morgan Stanley (MS) over mortgage securities
Monsanto (MON) announced $1B debt issuance
Becton Dickinson (BDX) announced plan to repurchase about $450M of stock in FY14

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
R.R. Donnelley (RRD), Vitamin Shoppe (VSI), Becton Dickinson (BDX), Ashland (ASH), Regis (RGS), Hertz (HTZ), Consolidated Edison (ED), Tidewater (TDW), EarthLink (ELNK), Plains All American (PAA), XPO Logistics (XPO), Dun & Bradstreet (DNB), Marathon Oil (MRO), U.S. Auto Parts (PRTS), LeapFrog (LF), Hill International (HIL), Newfield Exploration (NFX)

Companies that missed consensus earnings expectations include:
NYSE Euronext (NYX), McDermott (MDR), Owens & Minor (OMI), Atlas Pipeline Partners (APL), Jamba (JMBA), Skilled Healthcare (SKH), Luminex (LMNX), Halcon Resources (HK), Tutor Perini (TPC), Polypore (PPO), BroadSoft (BSFT)

Companies that matched consensus earnings expectations include:
PAA Natural Gas Storage (PNG), Acura Pharma (ACUR), Tenet Healthcare (THC), Synchronoss (SNCR), Chemtura  (CHMT), Pioneer Southwest (PSE), Nautilus (NLS)

NEWSPAPERS/WEBSITES

  • The Federal Housing Finance Agency is moving ahead with a ban on fees for "force-placed" insurance policies, expensive coverage that is thrust upon borrowers whose regular homeowners' policy has lapsed, despite industry objections that such a move encroaches on state regulators (FNMA, FMCC, AIZ), the Wall Street Journal reports
  • Attorney General Eric Holder said the government is willing to settle its antitrust lawsuit against the merger of AMR Corp. (AAMRQ) and US Airways (LCC) if the airlines agree to broad concessions that would preserve competition, the Wall Street Journal reports
  • Apple (AAPL) will open a manufacturing facility in Mesa, AZ in partnership with mineral crystal specialist GT Advanced technologies (GTAT) to make sapphire materials for Apple's popular electronic devices, Reuters reports
  • Lael Brainard, the Treasury Department’s top international official, is likely to be nominated to the Federal Reserve Board, sources say, Bloomberg reports
  • Cooper Tire & Rubber’s (CTB) dispute with India’s Apollo Tyres over a $2.5B buyout goes before a judge in a non-jury trial set to begin today in Delaware Chancery Court with no compromise in sight, Bloomberg reports

SYNDICATE

Boise Cascade (BCC) files to sell 8M shares of common stock for holder
CST Brands (CST) files to sell 13.1M shares of common stock for Valero Energy
Carrizo Oil & Gas (CRZO) files to sell 3.75M shares of common stock
Constellium (CSTM) files to sell 17.5M shares of common stock
Enterprise Products (EPD) files to sell 7.5M units for limited partners
Extra Space Storage (EXR) files to sell 4.5M shares of common stock
Integra LifeSciences (IART) files to sell 3.5M shares of common stock
InterMune (ITMN) files to sell 6.5M shares of common stock
PS Business Parks (PSB) files to sell 1.3M shares of common stock
Tableau Software (DATA) files to sell 6.5M shares of common stock for holders
Vantiv (VNTV) files to sell 15M shares of common stock for holder

 

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Tue, 11/05/2013 - 08:43 | 4122231 kaiserhoff
kaiserhoff's picture

India should make some attempt to feed its children, and let Mars take care of itself.

 

India is a nation where all life is sacred, except human life.

                                                     Eric Weiner

Tue, 11/05/2013 - 09:03 | 4122269 J Pancreas
J Pancreas's picture

India should colonize and terraform Mars to relax the burden of resources in that part of the globe. As a matter of fact, I would donate to such a cause. China too for that matter.

 

#Apu Nahasapeemapetilon

Tue, 11/05/2013 - 09:09 | 4122286 SWRichmond
SWRichmond's picture

Representatives of Jewish families, from whom hundreds of thousands of works were stolen, called on the authorities to publish a list as soon as possible to help them identify missing art.

Perhaps this could take place after representatives of Palestinian familes, from whom hundreds of thousands of homes and lives were stolen, had their property and lives restored by the Israeli government which stole them.

Tue, 11/05/2013 - 09:16 | 4122313 J Pancreas
J Pancreas's picture

Did you forget your morning Ritalin? Why'd you reply to me with that?

Tue, 11/05/2013 - 09:27 | 4122353 dognamedabu
dognamedabu's picture

Vancouver, right? Im on the Island. I like the colonise mars idea. Its honest.. Out there for sure but doable. I'd donate to the cause. 

Tue, 11/05/2013 - 09:36 | 4122384 dognamedabu
dognamedabu's picture

Glad you got goy your push in there.. Yeah this world not nice. Not at all. And the news tells us somethings that man gots to give you all who know shivers down the spine. Its a messed up thing. What a person to do? From my POV its all gotta reach a head soon. IDK Im just boy from west coast Canada saying hey world watch out! 

Tue, 11/05/2013 - 13:47 | 4123304 Kirk2NCC1701
Kirk2NCC1701's picture

It's normal for agencies of all governments to avoid publishing info or providing little if any info on "Ongoing Investigations".  This will simply take time.

Here are my observations, after having read several articles on this issue:

1. The reason this went unnoticed for so long, was that the guy is (or claimed to be) Jewish himself, and the American occupation forces then left him alone.

2.  As someone who is or claimed to be Jewish, he gradually sold off the collection to Jewish art dealers in Bern, Switzerland.  Clearly they were not prepared to 'rat' him out.  If he "pulled a Madoff" (Jewish guy stealing from fellow Jews), this explains why it went unnoticed.  The irony is that it was not a Jewish org that broke the case open, but Swiss and German (not Jewish) Customers & Border Patrol people got suspicious of him doing money laundering and tax evasion.  Well, depending on German tax law, he quite possibly avoided paying taxes of various kinds.

3. If his father bought it (no matter the price), it's his.  If it was abandoned, it's his.  If it was stolen it should be returned, but after the descendants of the original owners jump over some legitimate hurdles:

   a. Verified proof of original ownership and proof of descendancy.

   b. Payment of Storage Fees (for the last 70 yrs) plus Administrative fees associated with this case.  Since the descendants are not taxpaying Germans, this is fair and rational, and NO different than having to pay a host of Gov fees & licenses for other things (passports, fishing+hunting licenses, building permits, DL, etc, etc).  Private storage of "Assets" costs money.  Especially for "valuable assets" that must be maintained at optimal conditions.

4. If the guy and his father had kept meticulous records, they should've sold off the 'confiscated' works first and kept those that were bought or abandoned.  If had common sense, and realized that nothing lasts forever.

5. There is probably an added legal wrinkle in that his father had a legal contract with the German Gov of record, and he did not 'confiscate' them himself.  Technically they are thus still property of the present German Gov, and they are free to dispose of them as they wish -- notwithstanding the avalanche of political pressure that will mount on them.

6. As to the "estimated value": This amount is based on the assumption of being sold of individually or in small batches over a long period of time, to maintain (supply-demand) "price stability".  If they (the confiscated portion) were all dumped on the market at the same time, the price per unit would fall dramatically.  If, as a mental exercise, we assume that 500 of the 1500 were either bought or found abandoned, then 1000 of the 1500 were actually confiscated, and are thus available for 'sale' if their chain of ownership cannot be proven.  Dumping those 1000 pieces at several actions would fetch a far, far lower price than the $1.35 Billion 'estimated'.

Certainly an interesting and entertaining article.

p.s. If a person knew of this, imagine the fantastic wealth (over $1 Billion) you would have had as a heist, if you'd robbed his place.  They'd make a movie out of it:  The German Job.

Tue, 11/05/2013 - 17:26 | 4124194 thisandthat
thisandthat's picture

If they're stolen/"confiscated", I doubt they can claim "storage/administrative" fees - more like to opposite (i.e.: pay compensations)...

Tue, 11/05/2013 - 14:11 | 4123414 Kirk2NCC1701
Kirk2NCC1701's picture

Am not surprised that countries who can ill afford a space program, have one nonetheless.  Eg., India, Israel, etc.

That's like dad insisting on the need for a Ferrari, while the family lives in a shack.  But, hey, banksters love Debt, just like ploticians love to make campaign promises on what they'll do for the voters with their money:

"Hey, vote for me, because I'll create more Gov-funded jobs than my opponent.  Jobs that are based on your taxes and growing national Debt that's making banksters richer and you poorer."  [big campaign smile].

/ No doubt the US should offer Foreign Aid to these countries, given the dire situation of the people in these countries.  Never mind that they also take away US jobs. / sarc

Tue, 11/05/2013 - 17:31 | 4124226 thisandthat
thisandthat's picture

Frankly, the 73 mil said to have cost them, is peanuts for many/most countries, let alone of such size (not that it's going to directly contribute anything to its economy).

Tue, 11/05/2013 - 08:42 | 4122232 dognamedabu
dognamedabu's picture

China premier warns against loose money policies 

 

Like back of the line for you. How many have warned? Like now (un)elected China guy is sounding the alarm? 

Tue, 11/05/2013 - 08:43 | 4122237 dognamedabu
dognamedabu's picture

Ahhh I hate headline! Just reminds me how stupid world is. 

Tue, 11/05/2013 - 08:53 | 4122254 slotmouth
slotmouth's picture

Does anyone think it is funny that Solarcity is packaging and selling Collarateralized lease obligations?  They are basically saying that their business model doesn't work so they are going to package and sell their assets to unwitting investors.  I suppose that is the same strategy that they have been pursuing with their endless secondaries.

Tue, 11/05/2013 - 09:14 | 4122303 Dr. Bonzo
Dr. Bonzo's picture

China premier warns against loose money policies (that he happily contineus to pursue with the rest of the world)


*cough*

Tue, 11/05/2013 - 09:17 | 4122316 Diplodicus Rex
Diplodicus Rex's picture

"Dirty Munich Home’s Nazi Loot Estimated at $1.35 Billion"

Pfft, that's nothing. I heard they found the original Emperor's New Clothes hanging up in his wardrobe. They're absolutely priceless.

Tue, 11/05/2013 - 09:39 | 4122401 dognamedabu
dognamedabu's picture

Hurry up! Fail Already!! I'm not the only one.. Fuck system fail!!! Fail!! Fuck!~!

Tue, 11/05/2013 - 09:45 | 4122418 dognamedabu
dognamedabu's picture

Ahh I'm a goof. But really.. Can't take this tension any longer! Fuck if this shit going down.. I want to be there fistcuffs up.. 

Tue, 11/05/2013 - 10:15 | 4122513 Disenchanted
Disenchanted's picture

FYI..."Electric Grid Failure Drill Scheduled for 13 -14 November 2013"

 

 

Huge Electric Grid Failure Drill Scheduled for 13 -14 November 2013

 

October 29, 2013 by legitgov

ShareThis

Heads up! From the 'people' who brought you 9/11, Aurora, Sandy Hook, and miscellaneous minor false flags: Huge Electric Grid Failure Drill Scheduled for 13 -14 November 2013 --NERC will host GridEx 2013 on 13-14 November 2013 --North American wide distributed-play exercise --Executive 'policy trigger' table top exercise on 14 November 29 Oct 2013 Drill Will Simulate a Knockout Blow of Power Grid 17 Aug 2013 (The New York Times) ...Thousands of utility workers, business executives, National Guard officers, F.B.I. antiterrorism experts and officials from government agencies in the United States, Canada and Mexico are preparing for an emergency drill in November that will simulate physical attacks and cyberattacks that could take down large sections of the power grid. They will practice for a crisis unlike anything the real grid has ever seen, and more than 150 companies and organizations have signed up to participate. "This is different from a hurricane that hits X, Y and Z counties in the Southeast and they have a loss of power for three or four days," said the official in charge of the drill, Brian M. Harrell of the North American Electric Reliability Corporation, known as NERC. "We really want to go beyond that." See also: GridEx II - GridSecCon Update -- Grid Security Exercise - Grid Security Conference 2013, published by NERC.

Tue, 11/05/2013 - 12:17 | 4122969 monad
monad's picture

Those martians have a higher GDP. Work faster, fat stupid cattle!

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