Frontrunning: February 24

Tyler Durden's picture
  • Ukraine Seeks $35 Billion as Yanukovych Warrant Is Issued (BBG)
  • Ukraine's fugitive president wanted for mass murder (Reuters)
  • Polar Vortex to Bring More Snow on Return to U.S. This Week (BBG)
  • China property prices continue to rise (FT)
  • Microsoft Said to Cut Windows Price 70% to Counter Rivals (BBG)
  • Pentagon to propose shrinking Army, scrapping some jets (Reuters)
  • Hedge Funds Turn Bearish on S&P 500 as VIX Advances (BBG)
  • Draghi’s Data Jigsaw Takes Shape as ECB Readies Showdown (BBG)
  • China, eyeing Japan, seeks WW2 focus for Xi during Germany visit (Reuters)
  • U.S. now bugging German ministers in place of Merkel (Reuters)
  • Emerging Stocks Decline With Copper as Natural Gas Surges (BBG)


Overnight Media Digest


* Retail health clinics that are popping up in drugstores and other outlets shouldn't be used for children's primary-care needs, the American Academy of Pediatrics said, arguing that such facilities don't provide the continuity of care that pediatricians do.

* With tax season under way, federal authorities are stepping up efforts to stop what they call a growing problem of fraudulent filings seeking tax refunds based on stolen identities.

* Hedge fund Blue Harbor has taken a 2.5 percent stake in Tribune and is discussing with its management moves to boost the media company's shares.

* CNN says the prime-time talk show "Piers Morgan Live" is coming to an end after just three years in a key primetime slot. The program, hosted by former newspaper editor Piers Morgan, had struggled to gain traction at the 9 p.m. hour, and was routinely beaten in the ratings by cable competitors.

* The activist hedge fund fighting Darden Restaurants Inc over its plan to spin off Red Lobster is trying a new tactic: a shareholder vote that could halt the plan.

* Netflix Inc has agreed to pay Comcast Corp to ensure Netflix movies and TV shows stream smoothly to Comcast customers, a landmark agreement that could set a precedent.

* Boeing Co's machinists at its St. Louis defense plant agreed Sunday to a seven and a half year contract extension that will further move the company's unionized employees away from a defined benefit retirement plan.



German Chancellor Angela Merkel is likely to urge Britain to stay at the heart of the European Union, dismissing eurosceptics, during her one-day visit to the UK.

European telecoms industry body, Etno, has criticised "over-regulation" of the sector, and blasted proposals for neutrality plans - which would bar them from giving importance to guaranteed internet access services - scheduled to be vetoed in the European Parliament this week.

The European Commission is expected to report a formal complaint against Telefonica's takeover bid of 8.6 billion euros for KPN's German mobile division, E-Plus, people familiar with the talks said.

Deutsche Bank has laid out plans to reduce its U.S. balance sheet as the U.S. Federal Reserve adopts new rules to shield the country's taxpayers from costly bailouts.

British specialist credit advisory firm Venn Partners has bought a 500 million euro portfolio of Dutch residential mortgages, marking its entry into the residential mortgage-backed securities platform since the credit crunch.



The following are the top stories on the New York Times business pages. Reuters has not verified these stories and does not vouch for their accuracy.

* The Federal Reserve pumped hundreds of billions of dollars to nations to bolster global banks when dollars were scarce, newly released transcripts of 2008 Fed policy committee meetings reveal.

* An actuarial board is recommending a change in the financial information given out by public pension plans, saying more precise, meaningful information about the health of all public pension funds would give citizens the facts they need to make informed decisions.

* Comcast Corp and Netflix Inc announced an agreement Sunday in which Netflix will pay Comcast for faster and more reliable access to Comcast's subscribers.

* Yahoo Inc is starting to push into two of the hottest areas of Internet advertising: stream ads and so-called native ads, with the aim of making the ads on Yahoo just as compelling and just as integrated with the news and information people seek on the company's websites and mobile applications.

* Overtaken by new technology and shifting consumer habits, telephone movie listing and ticket service Moviefone will be disconnected.

* News organizations are rushing to form alliances with new companies they hope can give them an edge in finding stories and attracting younger viewers.

* Credit Suisse on Friday became the latest big bank to admit wrongdoing to the Securities and Exchange Commission, striking a deal over its failure to comply with a cardinal rule of the financial industry.




* John Tory will end months of speculation on Monday by declaring his candidacy for Toronto mayor, promoting low taxes and a downtown relief subway in a bid to unseat Rob Ford.

* Canada's middle-class is mortgaging its future to stay afloat, making the Canadian dream "a myth more than a reality." That is the blunt assessment of an internal Conservative government report, an unvarnished account of the plight of middle-income families that is in contrast to the rosier economic picture in this month's budget.

Reports in the business section:

* Maple Leaf Foods Inc Chief Executive Michael McCain is asking for patience. Again. The meat company he runs - and owns one-third of - is nearing the end of a multiyear restructuring in which it is replacing production facilities and opening a new distribution system.

* After struggling through a year that Target Corp executives are probably relieved to put behind them, they now face further uncertainties, since the retailer is currently grappling with skittish consumers who are heading to stores less often.


* Federal Liberals passed a controversial resolution calling for the de-criminalization of medically-assisted suicide during their policy convention on Sunday.

* Finance Minister Jim Flaherty said Canada's economy could post surprising growth this year as optimism remains strong around the U.S. recovery.


* TekSavvy Solutions Inc must hand over the names of hundreds of its customers accused of illegal file sharing, the Federal Court ruled this week, but internet policy experts say the carefully crafted decision actually lowers the odds of "copyright trolls" setting up shop in Canada.

* With the ups and downs of the Keystone XL pipeline becoming a national obsession, many of those keeping score became more pessimistic this week about the United States approving the project because of a lack of progress at the Three Amigos summit in Mexico, in addition to an unfavourable ruling by a lower court in Nebraska.




- Widespread talk that some banks have posed curbs on loans to property developers has caused fresh alarm in the sector that has long been criticised for sky-high housing and land prices.

- A sharp fall in China's short-term money market rates last week, partly propelled by milder-than-expected central bank open market operations, has sparked hopes that the long depressed domestic stock market may continue its recent rebound.


- A commentary said unusual high investment in China's property market over the past decade has caused a saturation in the sector and such investment will for certain cool down along with the slowdown of the country's economy in recent years.

- The China Banking Regulatory Commission has convened a meeting on rapid expansion of the country's money market funds, warning that risk is mounting in such products amid an official clampdown on excessive liquidity in the money markets.


- The southern Chinese city of Guangzhou may take the lead to let the public conduct online search on officials' salaries and other income, a step towards ordering officials to make public their assets, which has been a widespread call from the Chinese public yearning for a clean government.


- China may simplify procedures to let brokerages sell assets-backed securities later this year, allowing them to just register with regulators to float such products, instead of applying for approval currently.


- A number of security measures, including a permanent police presence, will be introduced in major hospitals after a rising spate of vicious attacks against medical workers, Sun Haibo, an official at the Ministry of Public Security, said.


- Factories have been closed and vehicles put off the road as China takes a slew of steps to curb persistent air pollution in major cities including its capital of Beijing.


- China is amending its "Advertisement Law" and may ban any parties to send advertisements to anybody via mobile phone short messengers and emails without the permission of receivers.



The Telegraph


HSBC is expected to unveil its highest profits since the onset of the financial crisis on Monday, fuelled by a surge in mortgage lending as the UK's economic recovery gathers pace.


National Insurance, a 100-year old charge on employers and employees, will be renamed "earnings tax", the Chancellor has signalled.

The Guardian


David Cameron will use his first ever cabinet meeting in Scotland to promise a revolution in North Sea oil and gas extraction worth up to 200 billion pounds over two decades - but that this will only be affordable if the union stays together.


More than 11 million homes lie empty across Europe - enough to house all of the continent's homeless twice over - according to figures collated by the Guardian from across the EU.

The Times


The Governor of the Bank of England warned last night that banks have to stop refusing to follow new international rules on capital and liquidity.


The government is to make fund managers reveal the details of costs and charges for almost all pensions in Britain.

Sky News


HSBC is to hand its chief executive a bonus of 1.8 million pounds as part of a 7 million pound-plus overall pay deal for 2013, Europe's largest bank will disclose on Monday.

Nokia X Android Smartphone Set For Launch

Nokia's first Android smartphone is expected to be launched at the Mobile World Congress in Barcelona on Monday.


Fly On The Wall 7:00 AM Market Snapshot

Domestic economic reports scheduled for today include:
Chicago Fed national activity index for January at 8:30 am ET--consensus -0.2
Dallas Fed manufacturing survey for February at 10:00 am ET--consensus 3.0



Artisan Partners (APAM) upgraded to Buy from Neutral at Citigroup
BankUnited (BKU) upgraded to Outperform from Neutral at Credit Suisse
CIBC (CM) upgraded to Buy from Neutral at Citigroup
Canadian Pacific (CP) upgraded to Buy from Hold at BB&T
Comcast (CMCSA) upgraded to Outperform from Sector Perform at Pacific Crest
Consolidated Edison (ED) upgraded to Hold from Underperform at Jefferies
Expeditors (EXPD) upgraded to Outperform from Sector Perform at RBC Capital
Genpact (G) upgraded to Outperform from Market Perform at BMO Capital
Gerdau SA (GGB) upgraded to Buy from Neutral at BofA/Merrill
Invesco Mortgage (IVR) upgraded to Buy from Hold at Wunderlich
Kindred Healthcare (KND) upgraded to Market Perform from Underperform at Wells Fargo
Marriott (MAR) upgraded to Outperform from Market Perform at Raymond James
Molson Coors (TAP) upgraded to Hold from Sell at Societe Generale
Nordstrom (JWN) upgraded to Neutral from Underweight at Atlantic Equities
Pilgrim's Pride (PPC) upgraded to Buy from Hold at BB&T
Plexus (PLXS) upgraded to Market Perform from Underperform at Raymond James
Select Medical (SEM) upgraded to Market Perform from Underperform at Wells Fargo
Semtech (SMTC) upgraded to Neutral from Sell at B. Riley
Two Harbors (TWO) upgraded to Buy from Hold at Wunderlich
UTi Worldwide (UTIW) upgraded to Outperform from Sector Perform at RBC Capital
Verizon (VZ) upgraded to Buy from Neutral at BofA/Merrill


3D Systems (DDD) downgraded to Underperform from Buy at BofA/Merrill
Builders FirstSource (BLDR) downgraded to In-Line from Outperform at Imperial Capital
Commercial Metals (CMC) downgraded to Hold from Buy at KeyBanc
Container Store (TCS) downgraded to Hold from Buy at Stifel
Container Store (TCS) downgraded to Underperform from Neutral at BofA/Merrill
Extra Space Storage (EXR) downgraded to Neutral from Buy at ISI Group
Forest Labs (FRX) downgraded to Neutral from Outperform at Credit Suisse
Halliburton (HAL) downgraded to Market Perform from Outperform at Wells Fargo
Hibbett Sports (HIBB) downgraded to Sell from Hold at Stifel
Tim Participacoes (TSU) downgraded to Neutral from Buy at Citigroup
Toronto-Dominion (TD) downgraded to Neutral from Buy at Citigroup
U.S. Steel (X) downgraded to Hold from Buy at KeyBanc


Canadian Solar (CSIQ) initiated with an Overweight at JPMorgan
Celladon (CLDN) initiated with an Overweight at Barclays
H&R Block (HRB) initiated with an Outperform at Credit Suisse
Lifetime Brands (LCUT) initiated with a Buy at Canaccord
Paragon Shipping (PRGN) initiated with a Buy at Jefferies
Zillow (Z) initiated with an Equal Weight at Morgan Stanley


Netflix (NFLX), Comcast (CMCSA) announced multi-year interconnection agreement
Chesapeake (CHK) to pursue strategic alternatives for Oilfield Services division
Microsoft (MSFT) added new Windows Phone hardware partners, including Lenovo (LNVGY), Foxconn and LG
Mueller Industries (MLI) hikes dividend 20%, announced 2-for-1 stock split
WellCare (WCG) CFO Tom Tran to step down
MasterCard (MA) to acquire C-SAM, terms not disclosed
Ericsson (ERIC), Facebook (FB) announced joint innovation lab for initiative
Ericsson (ERIC), Telefonica (TEF) partner to virtualize networks


Companies that beat consensus earnings expectations last night and today include:
Autohome (ATHM)

Companies that missed consensus earnings expectations include:
TGC Industries (TGE)


Ford (F) to dump Microsoft (MSFT) for BlackBerry (BBRY) in next-generation Sync, Bloomberg reports
HSBC (HBC) not planning to spin off U.K. retail bank, Reuters reports
Pfizer (PFE) to resume shipping thyroid drug Levoxyl, WSJ reports
Deutsche Bank (DB) outlines plans to meet new Fed rules, including reduction in assets held in U.S. unit by up to 25%, FT reports 
Nokia (NOK) looks to expand Juniper (JNPR) sales partnership, smaller deals, Bloomberg reports
Las Vegas Sands (LVS)' Adelson: 'I'd spend $10B in Japan,' WSJ reports
Nokia (NOK) aims for emerging markets with Android smartphones, AP reports
UBS (UBS) wants immunity from U.S., EU in fx investigations, Bloomberg reports
GE (GE) to increase energy research $10B by 2020, Reuters reports
Apple (AAPL), Samsung (SSNLF) fail to reach settlement in patent dispute, WSJ reports
Sina (SINA) preparing to float Weibo in the U.S., FT reports


Kinder Morgan (KMP, KMR, KMI, EPB) could lose appeal
AIG (AIG), Halliburton  (HAL), Ingersoll-Rand (IR), Discover (DFS) could double dividends
Kaiser Aluminum (KALU) could return about 20% in next 18 months
Ralph Lauren (RL) at good entry point for long-term investors
BHP Billiton (BHP), Rio Tinto (RIO) have room to run higher
Svenska Cellulosa AB (SVCBY) could jump 20% in a year
SanDisk (SNDK) still looks cheap
Compass Minerals (CMP) could reach $100
Facebook's (FB) acquisition of WhatsApp could be age-driven


Atlas Pipeline Partners (APL) files to sell $250M of common units
IMAX (IMAX) files to sell 2.73M shares of common stock for holders
Quintiles (Q) files to sell 15M shares of common stock for holders
Rubicon Minerals (RBY) files to sell 37.15M shares of common stock

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Sufiy's picture

Lithium Catalyst: This Week Is Tesla Lithium Battery Gigafactory Week. 


"The production volume is expected to be at least 30 gigawatt-hours-worth per year. That's more storage than all the lithium battery factories in the world combined produce now."

Sudden Debt's picture

I'm shorting that!

But what I don't understand about that Tesla factory is why they build a lithium factory which is so poluting and already outdated!

The IBM copper batteries are WAY more cheaper and hold 4 times more electricity!

Second, there's the salt and silver natrium batteries that are also WAY more effective.


I don't think they'll allow such a factory in America. There's a reason why they make those batteries in China. Because the Chinese don't care what happens to their environnement.

And the Chinese pollution comes from their coal factories, not their cars.

And the giga factory will not be able to cut costs for Tesla to ever build a 35K car.

It might even raise the costs as there's a lithium shortage like mentioned in your article that could tripple the price of the batteries.


America should use it's gas reserves for it's cars. I don't think you want to cruise the west in a Tesla that has a range of 200 miles.

greatbeard's picture

>> Because the Chinese don't care what happens to their environnement.

So, are the Chinese Republicans or are Republicans Chinese?

SAT 800's picture

Silver is over $22 this morning; which is very odd.

disabledvet's picture

huge deal...the cost of the battery pack coming out of that thing is expected to halve as well.

simply put they have superior energy density to gasoline.

apparently their drive system is by far the most efficient ever made as well...which will have a major impact on the drive systems for vehicles that use an internal combustion engine to create electricity.

oh, and...don't be surprised if Putin gets overthrown as the corruption of this Olympics starts to get exposed.

Headbanger's picture

That's great news for sex toy lovers who want to keep the buzz going longer and harder!

And BTW... A rubber band has higher energy density than gasoline.  So does a flywheel.

And for that matter, why not just build nucular cars like Ford wanted to do in the 50's??

Sudden Debt's picture


SAT 800's picture

Dont' confuse them with facts; they just woke up this morning and decided they were engineers; but they can't do arithmetic.

tip e. canoe's picture

hahaha, funny shit, nice find SD

did you see his other video recently uploaded?    

not many views, but sublimely beautiful.

Charley Junior

nmewn's picture

Popcorn anyone? ;-)

"The Daily Telegraph's front page story on Friday – "The worst flood damage could have been prevented" – didn't tell the half of it, writes Christopher Booker in this week's column.

Nor did the front page "exclusive" in the Daily Mail, asking: "Could Met Office have been more wrong?", a story reported on the Booker column last week, of how the Met Office forecast in November that the three months between December and February would most likely be drier than usual – and since repeated in other newspapers.

Writes Booker, devastating evidence has now come to light not just that the floods covering 65 square miles of the Somerset Levels could have been prevented; they were deliberately engineered by the Labour Government in 2009, knowingly regardless of the property and human rights of the thousands of people whose homes and livelihoods would be affected.

Furthermore that wildly misleading Met Office forecast in November led the Environment Agency to take a step which has made the flooding infinitely more disastrous than it need have been, turning what could have been a minor, short-lived inconvenience into a major disaster for the people of Somerset.

For reasons of space, Booker starts the story in 2005 with Labour's "floods minister", Elliot Morley, later to be jailed for fraudulently claiming £30,000 on his MP's expenses. But in fact the linear sequence starts in 1992 with the EU's Habitats Directive 92/43/EEC and then the Water Framework Directive (WFD) 2000/60/EC.

The combined effects of these directives were profound. In the first instance, the Habitats Directive put wildlife conservation on the EU policy map and, through, the Natura 2000 programme, requiring progressive improvements in the conditions of designated conservation areas. Then, following a Commission Communication on 29 May 1995 (COM(95) 189 final) on the "wise use and conservation of wetlands", the WFD put wetlands "restoration" (i.e., flooding) very much on the policy map."

Moar eco-central planning at its very

DR's picture

"Ukraine Seeks $35 Billion as Yanukovych Warrant Is Issued"

The EU can't afford to take on another failed state-default is imminent.