Frontrunning: December 17

  • New Calls for Gun Limits (WSJ)
  • Funerals begin for Newtown victims as schools confront tragedy (Reuters)
  • Introducing The Stock Trader of the Future (WSJ)
  • Feds knocking on 72 Cummings Ave door any minute now? SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (BBG)
  • China Signals Tolerance of Slower Growth After Meeting (BBG)
  • Huge mandate for Japan's LDP may be less than meets the eye (Reuters)
  • UBS Said to Face $1.6 Billion Libor Penalty This Week (BBG) - shareholders pay, and nobody goest to jail
  • Treasury Plan Would Cut Rates on Some Mortgages in Bonds (BBG)
  • Egypt opposition calls for protests against basic law (Reuters)
  • Euro Crisis Will Linger, Merkel Tells Summit (WSJ)
  • Economic slowdown throughout euro zone a worry for ECB: Liikanen (Reuters)
  • Emerging Europe: Goal challenged (FT)
  • London Property ‘Less Frothy’ as Asking Prices Fall (BBG)
  • LOL regulations: US banks call for easing of Basel III (FT)


Overnight Media Digest


* A fresh proposal from House Speaker John Boehner to raise tax rates on millionaires marked a breakthrough in stalled budget negotiations with President Barack Obama, suggesting a potential framework for avoiding year-end spending cuts and tax increases known as the fiscal cliff.

* American International Group Inc began selling its remaining stake in its pan-Asian life insurer, in a deal that could raise as much as $6.5 billion for the U.S. insurer.

* Swiss bank UBS AG is set to agree as soon as this week to pay roughly $1.5 billion to settle allegations of wrongdoing related to benchmarks such as the London interbank offered rate, or Libor.

* Google Inc is close to emerging largely unscathed from a two-year federal probe of its Web-search business, people familiar with the matter said, a result likely to disappoint rivals that were hoping the Internet giant would become mired in antitrust litigation.

* Two companies competing to acquire Knight Capital Group Inc discussed over the weekend whether to increase their bids, but they seemed to hold back ahead of the brokerage firm's board meeting set for Monday morning, according to people involved in the talks.

* Akamai Technologies Inc, a central player in delivering content over the Internet, plans to announce Monday that it has tapped mathematician co-founder Tom Leighton as its new chief executive.




U.S. banks are making a last-minute push to ease new global liquidity requirements, arguing that they would need to come up with an additional $800 billion.


The British treasury stands to raise as much as 1 billion pounds ($1.61 billion) by selling Ministry of Defence airwaves currently reserved for military purposes.


Japan's Liberal Democratic party has crushed the ruling Democrats in an election landslide.


The number of investment banks working on individual initial public share offerings has reached a record high as bankers scramble for work amid a dearth of global deal activity.


Insurers are conducting a war of words with regulators trying to prevent a repeat of AIG's collapse, as the industry makes a last-ditch effort to avoid capital surcharges.


BP is seeking to change the terms of its contract with the Iraq government for the super giant Rumaila oilfield.


Europe will have to "work very hard" to maintain the most generous welfare system in the world and remain globally competitive, said Angela Merkel, the German chancellor.


UK banks are facing the backstop threat of a break-up if they fail to comply with the proposed ringfencing of their retail operations.


An improved and more balanced housing market will emerge in 2013, despite sellers slashing asking prices this month in the biggest fall seen for more than a decade.



* Economists see a number of sources of underlying strength, but some envision slower growth in 2013 even if Washington avoids a stalemate in the fiscal talks.

* The insurance giant American International Group said it had launched a process to sell off its entire stake in the Asian insurer A.I.A. Group, ending an association that dates back more than 90 years.

* Federal regulators said that Aletheia Research and Management steered profits to some clients, and to the firm's co-founder, Peter J Eichler Jr., at the expense of others.

* In the talks between the Federal Trade Commission and Google Inc to negotiate the terms for ending the agency's antitrust investigation, things seem to be going Google's way, two people who have been briefed on the discussions said Sunday.

* Chobani, the yogurt company that grew from nothing five years ago to a roughly $1 billion powerhouse today, on Monday will formally open one of the world's largest yogurt-processing plants in Twin Falls, Idaho.

* A new nonprofit called the Freedom of the Press Foundation aims to insulate the fund-raising efforts of organizations like WikiLeaks from political and business pressures.




* Jim Flaherty predicts there will be no national consensus - and therefore no deal - to expand the Canada Pension Plan (CPP), a position that clearly irritated his Ontario counterpart as federal, provincial and territorial finance ministers gathered for a Sunday night dinner in Ottawa. "I think what will happen at our meeting is we'll have a discussion on the CPP issue and it will not be resolved because there's not a consensus," Flaherty said.

Reports in the business section:

* In stark contrast to the previous regime, the new Parti Québécois government is pulling out all the stops to entice companies into locating their cloud computing and data operations in Quebec.

* First Quantum Minerals Ltd has made a hostile, C$5.1 billion ($5.17 billion) takeover offer for Inmet Mining Corp, taking the bid directly to shareholders after two earlier offers were snubbed by the owner of one of the world's largest undeveloped copper assets.


* The Canadian Army is trying to hold on to its intelligence-gathering capability and its ability to disrupt spying in the face of budget strain, according to internal National Defence documents.

* A group that lost its federal charitable status over alleged ties to Hamas is no longer sponsoring an Islamic conference in Toronto at which liberal leadership hopeful Justin Trudeau is expected to speak.


* The U.S. Federal Reserve released a proposal Friday that would make foreign banks with a significant presence in the United States, including some of Canada's biggest financial institutions, subject to the same capital cushion requirements as domestic banks.




-- China's state-owned companies saw their gross profit fall 7 percent to 1.9 trillion yuan during the January-November period from a year earlier.

-- Hong Kong Exchanges and Clearing Limited hopes to launch more Chinese currency yuan-related investment products including Shanghai main stock index futures and options to meet rising demand, an exchange official said on Saturday.


-- Shanghai's car license plate auction hit a record-high average bid in December of 69,346 yuan, underscoring the city's strong demand for cars.


-- The Shanghai Stock Exchange released new policies on delisting procedures that will take effect in 2013, aimed at simplifying and standardizing processes to protect investors, the exchange said in a statement.


-- China will have to beef up growth in the agriculture industry and improve farmers' revenue even though its main agriculture products supply and demand are basically balanced, the paper said in a commentary on the country's annual policy-setting conference over weekend.


Fly on the Wall 7:00 AM Market Snapshot



Brown & Brown (BRO) upgraded to Sector Perform from Underperform at RBC Capital
Delta Air Lines (DAL) upgraded to Buy from Hold at Dahlman Rose
Diodes (DIOD) upgraded to Buy from Underperform at Sterne Agee
Informatica (INFA) upgraded to Overweight from Neutral at Piper Jaffray
Insulet (PODD) upgraded to Overweight from Neutral at Piper Jaffray
JetBlue (JBLU) upgraded to Hold from Sell at Dahlman Rose
ON Semiconductor (ONNN) upgraded to Buy from Neutral at Sterne Agee
RenaissanceRe (RNR) upgraded to Outperform from Sector Perform at RBC Capital
SAP (SAP) upgraded to Market Perform from Underperform at JMP Securities
Simon Property (SPG) upgraded to Buy from Neutral at Citigroup
Tanger Factory (SKT) upgraded to Buy from Neutral at Citigroup
Teleflex (TFX) upgraded to Buy from Outperform at CLSA
Tenet Healthcare (THC) upgraded to Buy from Hold at Deutsche Bank
Travelers (TRV) upgraded to Top Pick from Outperform at RBC Capital
United Continental (UAL) upgraded to Buy from Hold at Dahlman Rose
USG (USG) upgraded to Top Pick from Outperform at RBC Capital


Apple (AAPL) downgraded to Neutral from Buy at Citigroup
Baker Hughes (BHI) downgraded to Equal Weight from Overweight at Morgan Stanley
Finish Line (FINL) downgraded to Hold from Buy at Canaccord
Regency Centers (REG) downgraded to Neutral from Buy at Citigroup
SandRidge Energy (SD) downgraded to Sell from Hold at Canaccord
Texas Instruments (TXN) downgraded to Underperform from Neutral at Sterne Agee
Usana (USNA) downgraded to Hold from Buy at Canaccord
W. R. Berkley (WRB) downgraded to Sector Perform from Outperform at RBC Capital


Dean Foods (DF) initiated with an Overweight at Morgan Stanley
Esterline (ESL) initiated with a Neutral at Goldman
Magnum Hunter (MHR) initiated with a Buy at UBS
Molycorp (MCP) initiated with a Neutral at Goldman
Post Holdings (POST) initiated with a Buy at Goldman
YY Inc. (YY) initiated with a Neutral at Piper Jaffray
Yelp (YELP) initiated with an Equal Weight at Morgan Stanley


United Airlines (UAL) pilots ratified new joint labor agreement
KPN (KKPNY) acquired Dutch spectrum, will not pay final dividend in 2012
American Realty (ARCP) to acquire American Realty Capital Trust III
Banco Santander (SAN) proposed to merge with Banesto unit
Teavana (TEA) reached settlement with shareholders over Starbucks (SBUX) deal
ITC judge ruled Intel (INTC) did not infringe patents of X2Y Attenuators
AIG (AIG) announced proposed sale of ordinary shares of AIA Group Limited
Liberty Global (LBTYA) announced $1B stock repurchase program for 2013
BP (BP) selling non-operated interested in Sean to SSE plc for $288M in cash
Calumet Specialty Products (CLMT) acquired refinery assets from NuStar Energy (NS) for $115M
Honeywell (HON) confident new automotive refrigerant is safe for use
GlaxoSmithKline (GSK) received FDA approval for raxibacumab anti-toxin
FDA approved Novartis' (NVS) Signifor drug for Cushing’s disease
Lexicon Pharma (LXRX) drug candidate for IBS receives FDA fast track status
Bio-Rad (BIO) signed definitive agreement to acquire AbD Serotec
Headwaters (HW) agreed to acquire assets of Kleer Lumber


Companies that missed consensus earnings expectations include:
Cubic (CUB)


Private-equity firms are using almost as much debt to fund acquisitions as they did before the financial crisis. While the increase in borrowed money heralds the possibility of strong returns for buyout groups, the surge also brings back memories of the last credit binge around six years ago, the Wall Street Journal reports
China's huge holdings of U.S. Treasury debt is quietly receding as today’s Treasury International Capital System data for October may show that Japan, once the largest foreign holder of U.S. debt, retaking the top spot. China's Treasury holdings have fallen from 8.4% in mid-2011 to 7.3% recently, the Wall Street Journal reports
Mitsubishi Heavy Industries CEO Hideaki Omiya said Japan should restart atomic plants shut after the world's worst nuclear crisis in 25 years. "Japan must grow economically and energy policy plays a large role in that," he said, Reuters reports
The French government is concerned about Alcatel-Lucent's (ALU) plan to use patents as collateral for a $2.1B loan because the intellectual property could fall into the hands of foreign banks, according to Les Echos newspaper, Reuters reports
Telecom Italia (TI) hired Morgan Stanley (MS) for advice on spinning off its fixed-line network as the company seeks to raise capital, sources say, Bloomberg reports
Hedge funds cut bullish commodity bets by the most in a month as the Fed warned the U.S. budget impasse may damage the economy, increasing concern about demand just as prices head for the first loss since 2008, Bloomberg reports


The market could rise 10% in 2013 despite fear of 'Fiscal Cliff'
Johnson & Johnson (JNJ) underappreciated, stock could be ready to rise
Positive trends changing perception of South Korean companies (EWY, SSNLF)
Tronox (TROX) shares could double if titanium-dioxide demand rises
Aruba Networks, Ruckus Wireless (ARUN, RKUS) could benefit from LTE build
Look past traditional 'comfort stocks' to mitigate risk (NDAQ, AFL, WU, LH)
2013 could be very good for tech yields, LTE


Hudson Technologies (HDSN) files to sell 600,000 shares of common stock for holders
Sonic Foundry (SOFO) files to sell 900,000 shares of common stock
Universal Insurance (UVE) files to sell 7M shares of common stock for holders


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