Case Shiller Home Price Index Declines For Third Month A Row: Longest Negative Stretch Since March 2012

Another month, another sequential drop in the Case Shiller NSA index – the one the index creators themselves say should be used, not the Seasonally Adjusted data used by most commentators eager to find the best data. At a sequential decline of -0.08% in January, this was the third drop in a row – the longest consecutive period of sequential declines since March 2012  – and post a year over year increase of 13.24%, down from 13.38% in December, and the lowest since September 2013. Clearly, the pricing gains across the country are slowing.

 

Amusingly, not even the Seasonally Adjusted data showed the complete “weather-free” data many were hoping for, because while sequentially the 20 City Composite Index beat on a squential basis at 0.85%, above expectations of 0.6%, the Year over Year increase of 13.24% missed expectations of 13.42% and was down from 13.38% last month.


    



via Zero Hedge http://ift.tt/1iYse7W Tyler Durden

Shikha Dalmia on GM’s Get-Out-of-Jail Card on the Cobalt Crashes

GM

The GM bailout is the gift that keeps on giving to the auto
giant. It has already cost Americans more than $10 billion. Even
worse, it might have cost them their legal rights too.

That’s because GM obtained a liability shield that takes it off
the hook for any pre-structuring incidents involving its defective
cars. This means that victims of the 1.6 million Cobalt and other
vehicles that GM was forced to recently recall because of a faulty
ignition switch might have a very hard time obtaining just
compensation, explains Reason Foundation Senior Analyst Shikha
Dalmia.

View this article.

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A.M. Links: Obama to Recommend NSA Reforms, Ukrainian Defense Minister Dismissed, NASA Wants Vote on Space Suit

  • my votePresident
    Obama is expected to introduce legislation
    to reform the National Security Agency (NSA), including ending some
    bulk data collections.
  • Ukraine’s defense minister has been dismissed
    a day after ordering Ukrainian troops out of Crimea.
  • Following the missing flight, Chinese tourists are looking

    away
    from Malaysia as a destination.
  • A bomb went off, and the Taliban engaged in a
    firefight
    , near the home of one of Afghanistan’s presidential
    candidates.
  • The eyewear maker Luxottica Group, which owns the brands
    Ray-Ban and Oakley, will be redesigning
    Google Glass.
  • The National Aeronautics and Space Administration (NASA) wants
    the public to
    vote
    on its final spacesuit design.

Follow Reason and Reason 24/7 on
Twitter, and like us on Facebook. You
can also get the top stories mailed to
you
sign
up here
.

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Cato Panel on Federalizing America’s Immigration System Featuring Reason’s Shikha Dalmia

The immigration reform debate is increasingly polarized and has
policymakers looking for new and innovative reform options. One
such option is state- or regionally managed guest-worker visa
programs, in addition to federal visas. Under such a system,
individual states could manage and experiment with different
guest-worker visa systems designed to suit their particular
economic circumstances.

Canada and Australia have regional visa programs that have
worked well, aided economic growth, and slowed population decline.
Their approaches could be adapted to the United States.

Reason Foundation Shikha Dalmia wrote about Canada’s program

here
.

She’ll join the panel featuring Brandon Fuller, Deputy Director
and Research Scholar, NYU Stern Urbanization Project; Reihan Salam,
columnist and National Review Institute policy fellow; and
moderated by Alex Nowrasteh, Immigration Policy Analyst, Cato
Institute to discuss the potential economic, political, and legal
issues that come with regionally managed visas.

Come one, come all at the Cato building at 1000 Massachusetts
Avenue at noon. Please register
here
. Or, if you can’t come, watch it live at www.cato.org/live

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The 8:30 AM Gold Dump, Carry Pump Is Right On Time

This morning’s pre-open is dominated by deja vu all over again. Just as we saw yesterday, right on cue at 830ET, gold (and silver) are unceremoniously dumped and USDJPY is pumped so as to ensure stocks look shiny for the US open (and Biotech can be dumped to the next greater fool). Oil is not moving, 30Y bonds are weaker, and the USD is flat… all makes perfect sense if you don’t think about it.

SSDD…

 

SSDD.. again…

 

Perhaps it was all about running Copper up to $300?

 

It didn’t end so well yesterday…

 

Charts: Bloomberg


    



via Zero Hedge http://ift.tt/1iYlaIL Tyler Durden

Albert Edwards Destroys The “Solid Earnings Growth” Myth

Not a day passes without some pundit opining on financial comedy TV how it is not the Fed but impressive corporate profit growth that is keeping the markets afloat. We can’t help but laugh every single time. Why? Because with every reiteration, these pundits confirm they are clueless about just how it is that “profits” are created in the US – one way is from actual operations, another –  from accounting gimmicks, especially when one includes the epic black boxes of bottom-line fudgery that are financials (and their tens of billions in quarterly loan loss reserve release “profits”). It is the latter (i.e., unbridled accountant imagination) that is the reason for profits “growing” at an impressive rate. As for actual earnings, when stripped away of all tangential one-time, non-recurring boosts, things are far, far worse. In fact, true earning growth matches the already abysmal growth pace of both revenues and cash flows.

But don’t take our word for it: here is SocGen’s Albert Edwards with the explanation.

US profits have begun to decline on a MSCI trailing basis – one of the key measures we monitor. We have long believed that the profits cycle is probably the most important leading indicator for the economic cycle as profits drive the highly volatile business investment component of GDP. The consensus believes that the US has just begun a long economic recovery, whereas we believe it is already quite advanced and vulnerable to events in Asia. Falling US MSCI profits are an extremely important straw in the wind that investors will ignore at their peril.

So what does the difference between reported and actual earnings look like? It looks like this:

My colleague Andrew Lapthorne published an update on the US profits situation in the wake of the Q4 reporting season. He writes “?At first look, growth in US net income last year looks remarkably good. With nearly all S&P 500 names having reported year-end figures, net income grew 14% last year, or 12.8% on an ex-financial basis. This is fairly impressive growth given  the lacklustre economic backdrop. So should we be celebrating? Well we?re not so sure, as the source of this growth is not a robust improvement in operating cash flow, but is to be found in the large goodwill write-downs of 2012?.”

 

Andrew then shows that the vast majority of this 14% growth in profits was driven by company-specific write-downs made back in 2012 ? with Hewlett Packard, AT&T and Verizon Communications leading the way.

And in chart format:

So what should one do if one wishes to get a sense of “clean” net income growth? Reading the following is a good start:

Most of the market tends to focus on profits on a pro-forma basis. We have never been big fans of this. These are the earnings numbers companies like to publish that steer attention away from the ?bad stuff?. My former colleague James Montier used to be highly scathing, describing them as “undefined, unregulated and untrue”. But because of their ready availability most in the market tend to quote pro-forma earnings numbers from the likes of Bloomberg and I/B/E/S and many base their equity valuations on this dodgy earnings metric. Yet even on this artificially inflated measure, trailing EPS grew only a paltry 5½% yoy in 2013, and 3% on a non-financial basis.

 

 

Andrew states that ?when looking at profit growth, a better profit series comes from MSCI. This definition of earnings is not as harsh as the S&P earnings definition incorporated into the likes of Robert Shiller?s cyclically adjusted PE (CAPE), but neither is it as overly generous as the pro-forma numbers supplied by I/B/E/S. To give you an example of the difference, during the 2009 profit slump S&P core earnings fell peak-to-trough by 92%, MSCI defined earnings fell by 55%, and I/B/E/S pro-forma earnings fell by 36%.

 

As we show above, not only are MSCI reported profits no longer growing, but the gap in thegrowth rate between these numbers and the pro-forma numbers is widening, with the proforma number considerably more ?optimistic?. ?This is a phenomenon that often precedes a more significant profit slump. It is also an indication that the quality of earnings is deteriorating.”

What does all of the above mean? Simple: management teams realize that while the numbers presented for public consumption as pure BS, the true, unreported picture is far worse. And it is the “truth” that determines s management team capital allocation decisions, especially when it comes to deciding between buybacks, or a quick shareholder friendly sugar rush, and CapEx or business fixed investing, which is merely a confirmation that the corporate results are indeed accurate and the company itself foresees growth in the future. It is the latter which is the case, and is why CapEx has not only refused to rise – the biggest missing piece supporting a broad economic recovery and is why sellside strategists always “forecast” a surge in CapEx spending just around the corner – but why as income statement numbers continue to be fudged, CapEx will remain barely above the flatline, and as the economy slows further, is sure to contract, being the final missing link sending the economy into all out recession.

Per Edwards:

If MSCI profits are starting to fall then it?s more than just equity strategists who should be getting worried, for the growth in profits is closely associated with the business investment cycle

His conclusion:

So where does this leave us? This cycle is already long in the tooth at 56 months and the resultant slowing productivity growth is beginning to impact profits adversely. While profits growth is so anaemic, any adverse shock such as an Asian currency devaluation that we have discussed previously (including both Japan and China), will be enough to deepen that profits recession and send US investment expenditure into decline. While most equity investors appear to believe that the US economy has reached escape velocity, a recession carries a far higher risk than the market supposes.

Q.E.D(ead?)


    



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Lisa Snell on How Public Schools Underperform Private Schools When Teaching Science

Dinosaur and cavemanIn a sensational story in Politico,
Stephanie Simon argues that “taxpayers in 14 states will bankroll
nearly $1 billion this year in tuition for private schools,
including hundreds of religious schools that teach Earth is less
than 10,000 years old, Adam and Eve strolled the garden with
dinosaurs, and much of modern biology, geology and cosmology is a
web of lies.” Leave aside the larger argument that, in the United
States, school choice supports a market of ideas, and the virtue of
free thought, speech, and religion is a desirable value that should
extend to parents and their children. The sad fact, writes Reason
Foundation Director of Education Policy Lisa Snell, is that the
public schools have spent more than $600 billion a year with little
to show in terms of science education for public school
students.

View this article.

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Iraq Buys Massive 36 Tonnes Of Gold In March

From GoldCore

Iraq Buys Massive 36 Tonnes Of Gold In March

 

Gold rallied from the lowest price in more than four weeks on safe haven demand after the G7 nations threatened more sanctions against Russia after the annexation of Crimea.

Meeting for the first time since last week’s annexation of Crimea by Russia, G7 leaders said they won’t attend a G8 meeting that had been set for Sochi, on Russia’s Black Sea coast, and will instead hold their own summit in June in Brussels. The G7 said in a statement that they remain ready to “intensify actions”, including coordinated sectoral sanctions.

Trading volumes on the COMEX in New York today are 49% higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.

Palladium fell 1% to $786.20 an ounce. The precious metal rose above $800/oz yesterday, the highest  since August 2011, on concern that supplies from top producer Russia will be disrupted.

The Central Bank of Iraq said it bought 36 tons of gold this month to help stabilise the Iraqi dinar against foreign currencies, according to a statement from the bank that was emailed this morning.

It is very large in tonnage terms and Iraq’s purchases this month alone surpasses the entire demand of many large industrial nations in all of 2013. It surpasses the entire demand of large countries such as France, Taiwan, South Korea, Malaysia, Singapore, Italy, Japan, the UK, Brazil and Mexico. Indeed, it is just below the entire gold demand of voracious Hong Kong for all of 2013 according to GFMS data (see chart).

 
Demand By Country (GFMS via Thomson Reuters)

Iraq had 27 tonnes of gold reserves at the end of 2013 according to the IMF data and thus Iraq has more than doubled their reserves with their allocations to gold this month. Gold remains less than 5% of their overall foreign exchange reserves showing that there is the possibility of further diversification into gold in the coming months. 

The governor of the Iraqi Central Bank, Abdel Basset Turki, told a news conference that, “the bank bought 36 tonnes of gold to boost reserves and this move is to strengthen the financial capacity of the country and increase the elements of security and insurance reserves of the Central Bank of Iraq.”

He said, “the purchase quantity comes with the aim of achieving the highest stages of the financial soundness for Iraq”. He pointed out that the measure comes within the purview of the central bank in the use of the fiscal policy tools  of Iraq.

“The Bank has purchased large quantities of gold bullion with a very high purity and in accordance with the approved international standards,” according to the Iraqi central bank.

He added that “the central bank seeks through the purchase of large quantities of gold to stabilize the Iraqi dinar against foreign currencies.”

Iraq quadrupled its gold holdings to 31.07 tonnes over the course of three months between August and October 2012, data from the International Monetary Fund shows. The IMF’s monthly statistics report showed the country’s holdings increased to some 23.9 tonnes in August 2012 to 29.7 tonnes.

That was followed by a 2.3-tonne rise in September to 32.09 tonnes and then a cut of 1.02 tonnes in October 2012 to 31.07 tonnes. 

It is Iraq’s first major move to bolster its gold reserves in months.

The central bank of Iraq’s doubling of its gold reserves this month is important as there are many oil rich nations in the world with sizeable foreign exchange reserves, primarily in dollars, and only a small allocation to gold by these central banks alone could lead to higher gold prices.

36 tonnes is a lot of physical gold, however in terms of dollars it is worth just $1.522 billion which is a tiny fraction of the $80 billion of foreign exchange reserves that Iraq holds.

Energy rich Russia alone has foreign exchange reserves of some $440 billion. Should they decide to allocate a sizeable portion of their reserves to gold, it would rapidly result in materially higher prices.

Signs that the global economy is slowing down and the most serious confrontation between Moscow and the U.S. and its allies since the end of the Cold War is likely to lead to central banks continuing their foreign exchange diversification.

Central banks and the smart money will continue to dollar cost average and accumulate bullion on dips.


    



via Zero Hedge http://ift.tt/1glOYP9 Tyler Durden

Frontrunning: March 25

  • Putin Threatened With More Sanctions as Russia Out of G-8 (BBG)
  • China Faces ‘Mini Crisis’ on Debt Defaults, Ex-PBOC Adviser Says (BBG)
  • Don’t laugh too hard: Obama to propose ending NSA bulk collection of phone records (Reuters)
  • Japan GPIF asset review not aimed at supporting domestic stocks (Reuters)
  • Chinese families clash with police, slam Malaysia over lost plane (Reuters)
  • Russian Capital Flight Surges in First Quarter, Fueled by Ukraine Crisis (WSJ)
  • SEC Is Probing Dealings by Banks and Companies in Loan Securities (WSJ)
  • Democrats ditch Nate Silver after data whiz predicts dismal midterm outcome (DN)
  • China’s Urbanization Loses Momentum as Growth Slows (BBG)
  • German Confidence Falls for First Time in Five Months (BBG)
  • Loneliness of Kiev Bond Trader Shows Market Was Wiped Out (BBG)
  • Japan Firms Continue to Hoard Cash (WSJ)
  • China Internet Funds Called Vampires Draw Calls for Rules  (BBG)
  • UK satellite operator used 19th century physics to trace missing plane (Reuters)
  • Grand Central: A Stein on the Fed’s Easy Policy Path  (WSJ)

 

Overnight Media Digest

WSJ

* The heads of state of the world’s largest advanced economies moved Monday to isolate Russia, severing a key link between Moscow and the Western world after nearly two decades. The leaders of the Group of Seven, or G-7, nations effectively disbanded the larger G-8 by excluding Russia until it changes course in Ukraine. (http://ift.tt/1fWuAPB)

* Seventeen days after a Malaysian jetliner disappeared, authorities for the first time said they believed they knew what happened to the plane and the 239 people aboard: It crashed in the southern Indian Ocean, one of the world’s most remote and turbulent seas. (http://ift.tt/1eHTiXE)

* The Securities and Exchange Commission is investigating whether a Wall Street boom in complicated bond deals is creating new avenues for fraud, according to people close to the probes. (http://ift.tt/1eHTgiw)

* Bernard L. Madoff has maintained for years that his decades long Ponzi scheme was a one-man show. On Monday, a jury concluded instead that it was a team effort. Jurors found five former employees of Madoff guilty of aiding and hiding the fraud in a trial that painted the money manager’s Manhattan offices as a hive of illegal activity, where employees cooked up lies and manufactured fake documents to keep afloat a scam that ultimately cost investors $17 billion. (http://ift.tt/1eHTgiD)

* Box Inc on Monday revealed plans to raise up to $250 million in an initial public offering as the unprofitable startup tries to ward off intensifying competition in the online storage market. (http://ift.tt/1eHTiXI)

* Walt Disney Co on Monday named ABC News President Ben Sherwood as the next head of its television-entertainment networks, marking a rapid climb for a news producer who just four years ago was out of the media business entirely. (http://ift.tt/1eHTiXK)

* General Motors Co engineering managers knew about ignition-switch problems on the 2005 Cobalt that could disable power steering, power brakes and air bags, but launched the car because they believed the vehicles could be safely coasted off the road after a stall, according to court documents. (http://ift.tt/1eHTiXM)

 

FT

Russia’s government is braced for capital outflows to jump to $70 billion in the first three months of the year as investors seek to soften the blow from international sanctions after President Vladimir Putin’s Ukrainian land grab.

Five of investment manager Bernard Madoff’s former aides have been found guilty of helping him carry out and cover up multibillion-dollar investment fraud for years.

The European Commission shelved plans to relax cross-border rules that could leave schemes with a multibillion pound funding gap, dashing the Scottish government’s hopes that EU pension reforms would smooth a transition to independence, sources said.

Data storage company Box said it hoped to raise about $250 million in an initial public offering after posting a wider net loss than last year despite doubling its revenue.

Rating agency Moody’s cautioned that changes to the rules on buying an annuity in Britain had “credit negative implications” for the country’s life insurers, dealing them a further blow following George Osborne’s pensions overhaul

 

NYT

* The Obama administration is preparing to unveil a legislative proposal to end the National Security Agency’s once-secret bulk phone records program – a systematic collection of data about Americans’ calling habits. If approved by Congress, phone companies would not be required to retain bulk data for any longer than they normally would. The N.S.A. could obtain specific records only with permission from a judge, using a new kind of court order.(http://ift.tt/NMWzu3)

* At a meeting on May 15, 2009, engineers at General Motors Co learned that data in the black boxes of Chevrolet Cobalts confirmed a potentially fatal defect that existed in hundreds of thousands of cars. But in the months and years that followed, as a trove of internal documents and studies mounted, GM told the families of accident victims and other customers that it did not have enough evidence of any defect in their cars, interviews, letters and legal documents show. (http://ift.tt/1nW727g)

* A federal jury on Monday found five associates of the convicted swindler Bernard Madoff guilty of 31 counts of aiding one of the largest Ponzi schemes in history. (http://ift.tt/NMWzub)

* The Walt Disney Co acted quickly to put a new top executive in place at its ABC Television Group, naming Ben Sherwood on Monday to succeed Anne Sweeney, who announced her resignation two weeks ago. (http://ift.tt/NMWzud)

* Herbalife Ltd said on Monday it agreed to give its biggest shareholder Carl Icahn three additional seats on the board. Icahn, one of the company’s most outspoken supporters, who already had a 16.8 percent stake in the company and two board seats, requested the additional representation last week. (http://ift.tt/NMWzuh)

* Online storage service company Box Inc expects to raise about $250 million in its initial public offering. Box was valued at $2 billion in a recent round of private funding, but would most likely be worth several times that after the IPO. Many more cloud businesses, for both business and consumers, are expected to follow this year. (http://ift.tt/NMWCpQ)

* Google Inc on Monday announced a partnership with the Luxottica Group, the largest eyeglass company in the world, to design, manufacture and distribute frames for Google Glass, the Internet-connected eyewear.(http://ift.tt/1nW6Zsi)

 

Canada

THE GLOBE AND MAIL

* Ontario’s Liberal government is planning a budget crafted to be hard for the New Democratic Party to defeat, including left-friendly measures such as better welfare benefits. Despite Premier Kathleen Wynne’s bullish posturing in recent weeks, government sources say the Liberals are wary of a spring vote – particularly after two by-election losses last month – and will design a budget New Democrats can support in order to prevent one. (http://ift.tt/1fdSyqc)

* The Alberta Progressive Conservative party leadership vote to replace Alison Redford will take place on Sept. 6, with a potential run off vote scheduled for Sept. 20. The PC party, which has formed the government in Alberta continuously for more than four decades, made the announcement about the leadership contest after a long board meeting on Monday. (http://ift.tt/1gltxOa)

Reports in the business section:

* Canadian companies operating in Russia are pleading with Ottawa to ensure they aren’t hurt by sanctions as the federal government puts global security ahead of commercial interests in the region. On Monday Prime Minister Stephen Harper said commercial interests are now secondary in the consideration of responses to the Russian moves. (http://ift.tt/1gltuSu)

NATIONAL POST

* Prime Minister Stephen Harper and his fellow G7 leaders have indefinitely suspended Russia from the Group of Eight until President Vladimir Putin “changes course.” The G7 “condemned” Russia’s annexation of Crimea in a brief document called “The Hague Statement” that was more strongly worded than had been expected. It described the referendum held in Crimea eight days ago that resulted in a 96.7 percent support for union with Russia as “illegal.” (http://ift.tt/1fdSw1B)

* Prime Minister Stephen Harper has endorsed controversial Calgary Conservative MP Rob Anders, who faces a serious challenge from a well-known former Alberta provincial minister as he seeks his party’s nomination for the 2015 election. (http://ift.tt/1fdSwhS)

FINANCIAL POST

* British Columbia’s Liberal government has followed through with its promise to table back-to-work legislation for unionized truckers on strike at Port Metro Vancouver, with heavy penalties for not complying. The legislation includes penalties of up to $400 per day for workers and $10,000 per day for the union or employer for contravening the legislation. (http://ift.tt/1fdSyGv)

* The clock is still ticking on BlackBerry Ltd’s attempted turnaround, but it is clear Chief Executive John Chen has managed to buy some time for the embattled technology company. Chen has moved quickly to jumpstart BlackBerry’s transition from primarily a seller of smartphones to a specialized provider of enterprise grade software and services. (http://ift.tt/1glty4D)

 

China

SOUTH CHINA MORNING POST

— Occupy Central activists may block roads in Hong Kong’s financial district this summer if authorities make decisions that rule out any hope for “genuine” universal suffrage. Campaign organiser Chan Kin-man said supporters became impatient since protests against a cross-strait trade pact began in Taiwan. (http://ift.tt/1gU9MIB)

— Bets on yuan appreciation have long been deemed the key reason for accumulation of yuan deposits in offshore banking systems, but Hong Kong regulators say growth in yuan deposits in the city had instead been driven by the interest rate difference between yuan and Hong Kong dollar. (http://ift.tt/1gU9MID)

— Sinopharm, China’s largest drug distributor, plans to boost retail sales to more than 10 billion yuan ($1.62 billion) in 2016, said president Li Zhiming. Last year, the state-owned firm’s drug retail sales rose 17.5 percent to 4.83 billion yuan. (http://ift.tt/1gU9Ms8)

THE STANDARD

— The Housing Authority will put up 85 Home Ownership Scheme flats in Tai O on Lantau Island for sale in June, all costing below HK$1 million ($128,900) each. The prices are based on a 30 percent discount to market value and reflect the remote location of the flats. (http://ift.tt/1gwgcDJ)

— Chongqing Bank plans to boost micro loans to comprise 40 percent of its total business by 2015 from 33 percent now. (http://ift.tt/1gwgfz7)

HONG KONG ECONOMIC JOURNAL

— Tongda Group Holdings Ltd is seen to sell 420 million new shares at up to HK$1.19 apiece in a share placement, raising up to HK$500 million ($64.45 million), according to a term sheet.

HONG KONG ECONOMIC TIMES

— Yanzhou Coal Mining Co Ltd had trimmed its work force by 5,400 in 2013 in a move to reduce cost and the firm is set to cut up to another 5,000 this year, according to senior management.

 

Britain

The Telegraph

RBS ‘IN TALKS’ TO SELL CITIZENS TO JAPANESE BANK

One of Japan’s largest banks has approached Royal Bank of Scotland to buy its U.S. retail business ahead of its stock market flotation this year. (http://ift.tt/1h3IhAU)

ENERGY COMPETITION PROBE ‘WILL INCREASE RISK OF BLACKOUTS’

The risk of blackouts will be increased by a two-year probe into the energy market that will deter companies from building new power plants, a leading analyst has warned. (http://ift.tt/1h3Iggc)

MONITISE TO RAISE 110 MLN STG IN SHARE PLACING

Monitise, the online payments provider, announced plans to raise more than 110 million pounds ($181.4 million) on London’s junior AIM market to fund a shift to subscription-based services that is expected to slow its growth. (http://ift.tt/1h3IhAW)

GATWICK MISSES OUT ON DIRECT ROUTE TO JAKARTA

An Indonesian airline which was due to launch a direct service from Gatwick to Jakarta in May will now operate the service via Amsterdam to pick up passengers, it has emerged. (http://ift.tt/1h3Iggh)

The Guardian

LLOYDS’ TOP MANAGEMENT BONUSES POTENTIALLY WORTH MORE THAN 27 MLN STG

Bailed out Lloyds Banking Group has handed its top management team – including Chief Executive Antonio Horta-Osorio – bonuses potentially worth more than 27 million pounds. (http://ift.tt/1h3Iggn)

ASDA TO AXE AROUND 200 JOBS

Asda is to cut around 200 jobs as it forges a new five-year plan to tackle increasing competition from rival supermarkets and discounters. (http://ift.tt/1h3Iggp)

The Times

CO-OP’S STAKE IN BANK SLIPS AFTER 400 MILLION POUND CALL

The Co-operative Group’s grip on its troubled banking division appeared to weaken further last night after a stack of mis-selling costs forced the lender into a surprise 400 million pound emergency cash call. (http://ift.tt/1h3IhRm)

SCOTLAND ‘WOULD FACE HIGHER TAXES OR IMMIGRATION TO FUND PENSIONS’

An independent Scotland would have to raise taxes or attract hundreds of thousands of immigrants to pay the state pension currently offered within the UK, a new study has found. (http://ift.tt/1h3Iggr)

PHONES4U TRIES TO GATECRASH CARPHONE MERGER WITH DIXONS

Merger talks between Dixons Retail and Carphone Warehouse have hit a potential hurdle after the owners of Phones4u approached the retailer about an alternative deal. (http://ift.tt/1h3IhRx)

LLOYDS ACCUSED OF USING LOOPHOLE TO CUT PPI BILL

A fresh payment protection insurance scandal is set to engulf Lloyds Banking Group amid accusations that it used a loophole to cut compensation awards to customers. (http://ift.tt/1ivKJQy)

ALL THAT GLISTERS COULD NOW TURN TO DUST FOR ALBEMARLE

Troubled pawnbroker Albemarle & Bond, which has been seeking a buyer for the business for months while its lenders kept the company afloat, is set to collapse after its banks called time on the turnaround of the business. (http://ift.tt/1ivKK6M)

The Independent

FURY AS FCA IS ACCUSED OF WIMPING OUT OF TOUGH NEW REGULATIONS ON PAYDAY LOANS

Members of Parliament and consumer groups have criticised the London’s financial watchdog, the Financial Conduct Authority, for lacking teeth ahead of its taking over responsibility for payday lenders next month. (http://ift.tt/1ivKK6O)

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
S&P Case-Shiller 20-city home price index for January at 9:00–consensus up 0.6% for month
Consumer confidence for March at 10:00–consensus 78.4
New home sales for February at 10:00–consensus down 4.9% to 445K rate

ANALYST RESEARCH

Upgrades

Domtar (UFS) upgraded to Buy from Neutral at Goldman
Eni SpA (E) upgraded to Outperform from Market Perform at Raymond James
Exa Corp. (EXA) upgraded to Outperform from Neutral at RW Baird
Farmers Capital upgraded to Outperform from Market Perform at Keefe Bruyette
PACCAR (PCAR) upgraded to Buy from Neutral at Goldman
Palo Alto (PANW) upgraded to Outperform from Market Perform at FBR Capital
Rackspace (RAX) upgraded to Overweight from Equal Weight at Morgan Stanley
ReneSola (SOL) upgraded to Buy from Neutral at Roth Capital
Sinopharm Group (SHTDF) upgraded to Outperform from Neutral at Credit Suisse

Downgrades

Alpha Natural (ANR) downgraded to Hold from Buy at Jefferies
Arch Coal (ACI) downgraded to Hold from Buy at Jefferies
BioMarin (BMRN) downgraded to Neutral from Buy at Goldman
CST Brands (CST) downgraded to Neutral from Overweight at JPMorgan
KBR (KBR) downgraded to Neutral from Buy at Goldman
MSCI (MSCI) downgraded to Neutral from Buy at UBS
Navistar (NAV) downgraded to Neutral from Buy at UBS
PulteGroup (PHM) downgraded to Underweight from Equalweight at Barclays
Timken (TKR) downgraded to Hold from Buy at KeyBanc

Initiations

Alliance Fiber Optic (AFOP) initiated with a Buy at Needham
Convergys (CVG) initiated with a Buy at SunTrust
Fifth Street Senior (FSFR) initiated with a Buy at UBS
FireEye (FEYE) initiated with an In-Line at Imperial Capital
NPS Pharmaceuticals (NPSP) initiated with a Buy at Goldman
Sapient (SAPE) initiated with a Buy at SunTrust
Spirit Airlines (SAVE) initiated with a Buy at SunTrust
Varonis (VRNS) initiated with a Buy at Jefferies
Varonis (VRNS) initiated with a Buy at Needham
Varonis (VRNS) initiated with an Equalweight at Barclays
Varonis (VRNS) initiated with an Outperform at RBC Capital

COMPANY NEWS

Disney (DIS) announced a deal to acquire Maker Studios for $500M. The deal also includes up to an additional $450M in performance-based payouts for Maker
Online file sharing and content management service Box (BOX) filed with the SEC for an IPO
RealD (RLD) announced an agreement with Wanda Cinema to install 780 additional 3D screens in China
Sonic (SONC) said it expects FY14 SSS to grow by low-single digits and earnings for the year to grow 14%-15%
Orthofix (OFIX) implemented an internal audit program and announced the filing of restated financial results
Safeway (SWY) declared special stock dividend to spin-off Blackhawk (HAWK)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
McCormick (MKC), HD Supply (HDS), Sonic (SONC)

Companies that matched consensus earnings expectations include:
CTI Industries (CTIB), Exa Corp. (EXA)

NEWSPAPERS/WEBSITES

SEC launching investigation into complex bond deals (BCS, C, DB, GS, MS, UBS, RBS), WSJ reports
Yahoo (YHOO) shareholders eyeing a big Alibaba payday, FT reports
Luxottica (LUX), Google (GOOG) collaborating on new versions of Google Glass, WSJ says
HP (HPQ) may not release news on first 3D printer until October, GigaOM says
Sanofi (SNY) joins bidders for Merck’s (MRK) consumer health unit, Bloomberg reports 
U.K. PS4 (SNE) sales up 106% since launch of ‘InFamous’ game, MCV says
RBS (RBS), Sumitomo (SMFG) hold talks on RBS Citizens, WSJ says
Mitsubishi UFJ Financial Group (MTU) has considered bid for RBS’s (RBS) Citizens, Reuters reports
General Motors (GM) engineers knew about ignition problems, WSJ reports

SYNDICATE

Actinium Pharmaceuticals (ATNM) files $200M mixed securities shelf
Arlington Asset Investment (AI) files to sell 2.75M common shares
Box, Inc. (BOX) files registration with SEC for IPO
CommScope (COMM) files to sell 17.5M shares of common stock for holders
Crestwood Midstream (CMLP) files to sell $300M in common units
CyrusOne (CONE) files $600M mixed securities shelf
CyrusOne (CONE) files to sell 44.48M shares of common stock for holders
Farmland Partners (FPI) files 4.67M share IPO
MoneyGram (MGI) files to sell 8M shares of common stock
MoneyGram (MGI) files to sell 8M shares of common stock for holders
PRO-DEX (PDEX) announces commencement of rights offering
PennyMac (PFSI) files to sell 5.55M shares of common stock for holder
SciQuest (SQI) files to sell 3M shares of common stock
Veeva (VEEV) files to sell 12M shares of common stock in an amended S-1 filing
Western Asset Mortgage (WMC) files $400M mixed securities shelf


    



via Zero Hedge http://ift.tt/1jBct5o Tyler Durden

Reason Debate: Should Vaccines Be Mandatory?

SyringeFew issues divide libertarians so emphatically as
government-mandated vaccinations against communicable diseases,
as Reason discovered after including anti-vaccine
activist Jenny McCarthy in our “45 Enemies of Freedom” list
(August/September 2013). That selection brought forth a deluge of
mail, such as this succinct riposte from reader Christopher Kent:
“Freedom doesn’t get much more personal than the right of
individuals to choose what is put into their bodies, and to accept
or reject medical procedures.” But what happens when one person’s
individual choice leads to the otherwise preventable infection of
another person who chooses differently?

So what is the proper role for government, and the citizenry, in
the vaccination of children? The lines are hard to draw; all the
more reason to have a Reason debate. To that end, Ronald
Bailey, Jeffrey Singer, and Sandy Reider take the scalpel to each
others’ arguments, in the hope of bringing more practical and
philosophical clarity to a divisive topic.

View this article.

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