Frontrunning: December 13

  • Bernanke Wields New Tools to Reduce Unemployment Rate (BBG)
  • Home Seizures Rise as Banks Adjust to Foreclosure Flow (BBG)
  • EU Backs Release Of Greek Aid (WSJ)
  • Democrats Confident They Have 'Cliff' Leverage (WSJ)
  • Americans Back Obama Tax-Rate Increase Tied to Entitlement Cuts (BBG)
  • Goldman flexes tentacles: Treasury open to Carney radicalism (FT)
  • Launch Fuels Asia Security Concerns (WSJ)
  • BOJ’s Unlimited Loan Program Seen Open to Use by Hedge Funds (BBG) - there are Japanese hedge funds?
  • Abe Set to Face Manufacturing Gloom as Japan Contracts (BBG)
  • US and UN condemn N Korea rocket launch (Guardian)
  • Eurozone agrees common bank supervisor (FT)
  • Berlusconi Adds to Italy Turmoil by Signaling He’d Step Aside (BBG)
  • SNB Maintains Ceiling as European Woes Weigh on Franc (BBG)

Overnight Media Digest


* Barclays Plc plans to eliminate as many as 2,000 jobs in its investment bank as part of a broad restructuring of the company, according to people familiar with the bank's plans, becoming the latest entry in a global banking cost-cutting spree.

* Nearly three months after the Google Maps mobile app was kicked off the iPhone in favor of Apple Inc's own mapping software, Google Inc released a downloadable version of the app, spelling relief for many Apple users who had complained about the switch.

* European Union finance ministers reached a landmark deal early Thursday that would bring many of the continent's banks under a single supervisor, in what governments hope will be a major step toward resolving their three-year-old debt crisis.

* Warren Buffett's Berkshire Hathaway Inc repurchased $1.2 billion in stock from an unnamed shareholder, an unusual deal for a company that typically eschews buybacks.

* Knight Capital Group Inc expects to make a decision on its future ownership by early next week, according to people familiar with the matter.

* The Federal Reserve, clarifying its intentions for an economy hobbled by uncertainties, for the first time spelled out the unemployment level it would like to see before it raises short-term interest rates.

* Apple Inc is working with component suppliers in Asia to test several television set designs, suggesting the U.S. company is moving closer to expanding its offerings for the living room.

* Caterpillar Inc figures it could save its shareholders about $30 million in federal taxes by moving up next year's first-quarter dividend payment.

* 3M Co forecast growth in earnings per share of 6 percent to 10 percent in 2013, slightly slower than analysts had expected, and said it would increase capital investments and spending on research.

* New York hedge-fund Tiger Asia Management pleaded guilty to a criminal fraud charge Wednesday and agreed to pay $44 million to settle civil allegations by U.S. securities regulators that it engaged in insider trading of Chinese bank stocks.

* More than 100 countries recognized Syria's main opposition group as the legitimate representative of the Syrian people, cementing broad political recognition for a body that gained the backing of the United States a day earlier.

* The United States is set to yield some ground to foreign regulators who have complained that efforts to rein in complex derivatives at the center of the financial crisis have gone too far.




The U.S. Federal Reserve will keep interest rates at close to zero until unemployment falls below 6.5 percent in a historic change to monetary policy.


Barclays has appointed Hector Sants, former boss of British regulator the FSA, to oversee its compliance and relationship with governments and regulators.


Bank of Canada Governor Mark Carney has offered a glimpse of the policy ideas he might bring to the Bank of England when he takes over as governor next year.


Rebekah Brooks received a compensation package worth 10.9 million pounds ($17.57 million) after she resigned as chief executive of News International.


Bumi is backing the Bakries over financier Nat Rothschild as it seeks to end a year-long shareholder war over corporate governance.


U.S. manufacturing is poised to reap the benefits of cheaper energy, says Lakshmi Mittal, the chairman and chief executive of ArcelorMittal.


BP is back in the running for Abu Dhabi's onshore oil concession after its unexpected earlier omission from a bidding round.


EE, Britain's largest phone operator, will double the number of cities that can access its 4G network as it accelerates plans ahead of the state auction of frequencies.


Wm Morrison, the supermarket group, is poised to name Trevor Strain as its new finance director.


Downing Street was in a battle with The Daily Telegraph on Wednesday after claims it had warned the newspaper not to run a critical story about the culture secretary Maria Miller.



* The Federal Reserve made it plain on Wednesday that job creation had become its primary focus, announcing that it planned to continue suppressing interest rates so long as the unemployment rate remained above 6.5 percent.

* The release of a new Google Inc Maps app for the iPhone may help Apple Inc customers find their way, but it will not relieve Apple of the pressure to improve its own service.

* John McAfee, the antivirus software pioneer, arrived in the United States on Wednesday night after being deported from Guatemala, where he had sought to evade police questioning in the killing of a man in neighboring Belize.

* SolarCity, which installs solar panels for homeowners, has priced its initial public offering at $8 a share, well below its earlier estimates, a person briefed on the matter said on Wednesday.

* A new and extensive analysis of 2.4 million loans insured by the Federal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation's most vulnerable borrowers.

* Canada said Wednesday that it would reconsider plans to buy 65 F-35 fighter jets after an independent audit found that the sophisticated stealth planes would cost substantially more than the government had promised.

* Politicians remain locked in a rancorous debate over impending tax increases and spending cuts, and it remains unclear if a deal will be reached by the end of the year. But investors are already betting that lawmakers will do enough to avoid heading over the so-called fiscal cliff.

* With some board members still skeptical about authorizing smartphone apps to hail yellow cabs, the New York City Taxi and Limousine Commission's chairman said Wednesday that the panel was instead likely to consider a pilot program to allow the products for a trial period.

* House Republicans warned the Federal Communications Commission on Wednesday against "giving away" scarce airwaves that they said could produce up to $19 billion in proceeds if they were instead auctioned to telecommunications companies for use in mobile broadband networks.




* The Harper government on Wednesday officially announced it was backing off a sole source plan to buy 65 F-35 Lightning jets as a replacement for Canada's aging CF-18 Hornets - but the federal government is still resisting calls to hold an open competition to pick Canada's next jet purchase. ()

Reports in the business section:

* HD Mining International, building a large coal mine in northern British Columbia using Chinese workers, will take four years before it hires even a single Canadian miner, and another decade beyond that before the work force is fully local, court documents show.

* Former key executives of Sino-Forest Corp that allegedly engaged in fraud or the violation of securities laws, could face as much C$84 million ($85.27 million) in potential penalties, the Ontario Securities Commission has told the company.

* Close to two thirds of Canadians polled in a new study fear the Canadian economy will suffer if the "fiscal cliff" problem in the U.S. is not resolved.


* Ontario's cash strapped government plans to write off at least C$1.4 billion ($1.42 billion) in unpaid taxes because it failed to act promptly and lacked the manpower to collect them, auditor general Jim McCarter found in his annual report.


* Real estate investment trusts, along with renewed interest from pension funds and foreign buyers, will boost the investment market which saw C$25.8 billion ($26.19 billion) in property change hands in 2012, a new report said.




-- Kweichow Moutai Co Ltd, China's top premium white liquor maker, said its sales value hit 30 billion yuan ($4.80 billion) in the first 10 months of this year.

-- China Vanke Co Ltd , the country's largest real estate developer by turnover, will join forces with four other real estate companies to buy business park land worth 5.4 billion yuan.


-- China's Ministry of Railways said railway investment in fixed assets was 81.8 billion yuan in November, up 30.6 percent from a year earlier, while investment in capital construction hit 70.1 billion yuan, up 141.2 percent year-on-year.


-- Sales of residential apartments in Beijing grew over 50 percent from January to November, a sign that the market is warming despite government controls, a joint survey by the Beijing Bureau of Statistics and the National Bureau of Statistics showed.


-- Preventing the security situation on the Korean peninsula from deteriorating requires tackling the root of the problem on the peninsula, and solving it in a comprehensive and systematic manner, an editorial said.


Fly On The Wall 7:00 AM Market Snapshot



Avago (AVGO) upgraded to Buy from Neutral at Goldman
BreitBurn Energy (BBEP) upgraded to Neutral from Underperform at Credit Suisse
Charles River Labs (CRL) upgraded to Outperform from Market Perform at Wells Fargo
Dresser-Rand (DRC) upgraded to Positive from Neutral at Susquehanna
First Merchants (FRME) upgraded to Outperform from Market Perform at Keefe Bruyette
GulfMark Offshore (GLF) upgraded to Outperform from Market Perform at Wells Fargo
HSBC (HBC) upgraded to Buy from Hold at Deutsche Bank
M&T Bank (MTB) upgraded to Outperform from Market Perform at Keefe Bruyette
Microchip (MCHP) upgraded to Neutral from Sell at Goldman
RF Micro Devices (RFMD) upgraded to Overweight from Equal Weight at Barclays
Tesoro (TSO) upgraded to Outperform from Neutral at Credit Suisse
Vera Bradley (VRA) upgraded to Buy from Hold at Jefferies


Analog Devices (ADI) downgraded to Neutral from Buy at Citigroup
Comerica (CMA) downgraded to Underperform from Market Perform at Keefe Bruyette
Cree (CREE) downgraded to Neutral from Buy at B. Riley
Huntington Bancshares (HBAN) downgraded to Underperform at Keefe Bruyette
International Rectifier (IRF) downgraded to Sell from Neutral at Goldman
Linear Technology (LLTC) downgraded to Sell from Neutral at Citigroup
Nabors Industries (NBR) downgraded to Underperform from Hold at Jefferies
United Therapeutics (UTHR) downgraded to Sell from Neutral at Goldman
Veeco (VECO) downgraded to Neutral from Buy at B. Riley


AXIS Capital (AXS) initiated with a Buy at Goldman
AdCare (ADK) initiated with an Outperform at Imperial Capital
Aircastle (AYR) initiated with a Buy at Deutsche Bank
Albermarle (ALB) initiated with an Outperform at RW Baird
Arch Capital (ACGL) initiated with a Neutral at Goldman
Brinker (EAT) initiated with a Buy at Citigroup
Buffalo Wild Wings (BWLD) initiated with a Neutral at Citigroup
Burger King (BKW) initiated with a Buy at Citigroup
MDC Partners (MDCA) initiated with a Buy at Capstone
Molycorp (MCP) initiated with a Neutral at RW Baird
Quanex (NX) initiated with an In-Line at Imperial Capital
Synta Pharmaceuticals (SNTA) initiated with a Buy at Brean Capital
W.R. Grace (GRA) initiated with an Outperform at RW Baird


Sprint (S) proposed to acquire Clearwire (CLWR) shares not owned for $2.90 per share
Graincorp rejected Archer Daniels (ADM) A$12.20 per share offer, saying it ‘materially undervalues’ company
GE Capital's (GE) acquisition approved for about $6.5B in MetLife (MET) bank deposits
Eastman Chemical (EMN) expects to significantly repay its $1.2B Solutia loan by end of 2013
Nissan (NSANY) announced U.S. battery plant in Tennessee for electric Nissan Leaf vehicles
Hexcel (HXL) expects adjusted EPS to average growth in "teens" through 2017
Official Payments (OPAY) sees FY13 adjusted EBITDA $7.2M, 50% higher than FY12
Boston Beer (SAM) raised FY12 EPS view
Juniper (JNPR) to acquire Contrail Networks for $176M in cash and stock
XL Group (XL) estimated $350M loss related to Sandy
Platinum Underwriters (PTP) sees $30M negative impact from Sandy
W.P. Carey (WPC) announced $55M warehouse, land purchase in Japan
Nordion (NDZ) to  postpone Q412 results, cites credit facility amendment
Burger King (BKW), Alsea sign new JV to expand brand presence in Mexico
BioScrip (BIOS) agreed to acquire HomeChoice Partners (DVA)


Companies that beat consensus earnings expectations last night and today include:
Pier 1 Imports (PIR), Restoration Hardware (RH)

Companies that matched consensus earnings expectations include:
Avanir Pharmaceuticals (AVNR)


Americans now solidly back compromise to solve the biggest budget challenges facing the country, according to a Wall Street Journal/NBC News poll. About two-thirds of Americans of all political stripes would like Congress to strike a deal to reduce the federal budget deficit, even if means cutting Social Security and Medicare and boosting some tax rates, the Wall Street Journal reports
EU finance ministers reached a deal early today that would bring many of the continent's banks under a single supervisor, in what governments hope will be a major step toward resolving their three-year-old debt crisis, the Wall Street Journal reports
The Fed announced a new round of monetary stimulus and took the unprecedented step on of indicating interest rates would remain near zero until unemployment falls to at least 6.5%, Reuters reports
American Airlines (AAMRQ) creditors want a potential merger with US Airways Group (LCC) to be an all-stock deal rather than one that pays some claims in cash, sources say, in a move that underscores confidence in a merged airline, Reuters reports
The Bank of Japan plans to avoid restricting where money ultimately flows from its program of unlimited lending to banks, which means funds could go to companies including hedge funds, sources say, Bloomberg reports
U.S. home seizures climbed 5.4% in November, the first annual gain in two years, as lenders seek to manage the flow of distressed properties without disrupting the housing recovery, according to RealtyTrac, Bloomberg reports


Access Midstream Partners (ACMP) 16M share Secondary priced at $32.15
BGC Partners (BGCP) files to sell 20M shares of class A common stock
Connecticut Water Service (CTWS) 1.475M share Secondary priced at $29.25
Graphic Packaging (GPK) Holding Company 18.5M share Secondary priced at $6.10
Harbinger Group (HRG) files to sell common stock for holders
Infinity Pharmaceuticals (INFI) files to sell common stock
MSA to sell 3M shares of Simon Property (SPG) in connection with will and trust
PBF Energy (PBF) 20M share IPO priced at $26.00
Regal-Beloit (RBC) files to sell 2.75M shares of common stock
Sarepta (SRPT) announces proposed common stock offering
SolarCity (SCTY) 11.5M share IPO priced at $8.00
Synta Pharmaceuticals (SNTA) files to sell common stock in a direct offering
The Tile Shop (TTS) 4.5M share Secondary priced at $15.00
Williams (WMB) 46.5M share Secondary priced at $31.00