Tag: finance

Three years after being accused of sexual assault, removed from an airplane in NYC, and later having the charges dismissed on an alleged out of court settlement, former IMF chief, Dominique Strauss-Kahn (DSK) is planning to leverage his status – as an expert on global finance – as well as his thick rolodex to raise a $2bn hedge fund in Asia. As WSJ reports, the fund, which is awaiting regulatory approval, will “invest based on Dominique’s analyses,” and like most global macro funds will “aim for steady capital returns” with “no leverage.” Ironically, given his new role as hedge fund marketer, DSK faces another case in France on charges of “aggravated pimping.”

 

Via WSJ,

A new hedge fund is planning to leverage the status of former International Monetary Fund chief Dominique Strauss-Kahn as an expert on global finances, as well as his thick rolodex, to raise $2 billion, notably in Asia.

 

The fund, which is awaiting regulatory approval from Luxembourg authorities…

 

“We will invest based on Dominique’s analyses,” Mr. Leyne said in a telephone interview from Shanghai, where he and Mr. Strauss-Kahn are meeting with potential clients.

 

The research team of the fund will be headed by Mr. Strauss Kahn’s daughter Vanessa, who holds a Ph.D. in economics from New York University…

 

The fund, like most global macro funds, will aim for “steady capital returns” with “no leverage.” It will invest in a range of asset classes, including bonds, equities and foreign exchange, LSK chief executive officer Mohamad Zeidan said.

Trust your money with this guy – but not your daughter… “Naked Call Capital”

…

 

The former IMF chief, who was long seen as a presidential hopeful in France, stepped down from the IMF in May 2011 after a New York hotel maid accused him of sexual assault. Mr. Strauss-Kahn denied the accusations and the case was later dismissed by New York prosecutors.

 

The former IMF chief and the maid later settled a civil lawsuit out of court for an undisclosed amount.

 

One other case awaits him in France. Last year, French magistrates sent Mr. Strauss-Kahn to trial on a charge of aggravated pimping as part of an investigation into an alleged prostitution ring. Mr. Strauss-Kahn has said he rejected the aggravated pimping charges, and denied any wrongdoing.

“aggravated pimping” or “hedge fund marketing”?

Interesting that they claim “no leverage” will be used as we assumed the use of “naked calls” was a major part of DSK’s life.

via Zero Hedge http://ift.tt/1d7ImEc Tyler Durden

Strongly supported by a surge in AUDJPY, the S&P 500 futures rallied into the US open on this quad witching day and the cash index surged higher once the market opened – breaking to new all-time record highs at 1883.97. VIX was clubbed back below 14% to provide some further support. Nothing else is moving in this ‘jerky’ manner… gold is leaking higher, Treasuries holding flat (at high yields of week), and the USD is flat… which makes one wonder how long this spike wil hold…

 

AUDJPY in charge of stocks…

 

Which provided just the ammo to open the cash index to new record highs…

 

but bonds remain dead…

 

As VIX was slammed bacxk under 14%

 

Charts: Bloomberg

via Zero Hedge http://ift.tt/1gP4r9Z Tyler Durden

If it was the intent of the West to bring Russia and China together – one a natural resource (if “somewhat” corrupt) superpower and the other a fixed capital / labor output (if “somewhat” capital misallocating and credit bubbleicious) powerhouse – in the process marginalizing the dollar and encouraging Ruble and Renminbi bilateral trade, then things are surely “going according to plan.”

For now there have been no major developments as a result of the shift in the geopolitical axis that has seen global US influence, away from the Group of 7 (most insolvent nations) of course, decline precipitously in the aftermath of the bungled Syrian intervention attempt and the bloodless Russian annexation of Crimea, but that will soon change. Because while the west is focused on day to day developments in Ukraine, and how to halt Russian expansion through appeasement (hardly a winning tactic as events in the 1930s demonstrated), Russia is once again thinking 3 steps ahead… and quite a few steps east.

While Europe is furiously scrambling to find alternative sources of energy should Gazprom pull the plug on natgas exports to Germany and Europe (the imminent surge in Ukraine gas prices by 40% is probably the best indication of what the outcome would be), Russia is preparing the announcement of the “Holy Grail” energy deal with none other than China, a move which would send geopolitical shockwaves around the world and bind the two nations in a commodity-backed axis. One which, as some especially on these pages, have suggested would lay the groundwork for a new joint, commodity-backed reserve currency that bypasses the dollar, something which Russia implied moments ago when its finance minister Siluanov said that Russia may regain from foreign borrowing this year. Translated: bypass western purchases of Russian debt, funded by Chinese purchases of US Treasurys, and go straight to the source.

Here is what will likely happen next, as explained by Reuters:

Igor Sechin gathered media in Tokyo the next day to warn Western governments that more sanctions over Moscow’s seizure of the Black Sea peninsula from Ukraine would be counter-productive.

 

The underlying message from the head of Russia’s biggest oil company, Rosneft, was clear: If Europe and the United States isolate Russia, Moscow will look East for new business, energy deals, military contracts and political alliances. 

 

The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West.

More details on the revelation of said “Holy Grail”:

State-owned Russian gas firm Gazprom hopes to pump 38 billion cubic meters (bcm) of natural gas per year to China from 2018 via the first pipeline between the world’s largest producer of conventional gas to the largest consumer.

 

“May is in our plans,” a Gazprom spokesman said, when asked about the timing of an agreement. A company source said: “It would be logical to expect the deal during Putin’s visit to China.”

Summarizing what should be and is painfully obvious to all, but apparently to the White House, which keeps prodding at Russia, is the following:

“The worse Russia’s relations are with the West, the closer Russia will want to be to China. If China supports you, no one can say you’re isolated,” said Vasily Kashin, a China expert at the Analysis of Strategies and Technologies (CAST) think thank.

Bingo. And now add bilateral trade denominated in either Rubles or Renminbi (or gold), add Iran, Iraq, India, and soon the Saudis (China’s largest foreign source of crude, whose crown prince also happened to meet president Xi Jinping last week to expand trade further) and wave goodbye to the petrodollar.

As reported previoisly, China has already implicitly backed Putin without risking it relations with the West. “Last Saturday China abstained in a U.N. Security Council vote on a draft resolution declaring invalid the referendum in which Crimea went on to back union with Russia. Although China is nervous about referendums in restive regions of other countries which might serve as a precedent for Tibet and Taiwan, it has refused to criticize Moscow. The support of Beijing is vital for Putin. Not only is China a fellow permanent member of the U.N. Security Council with whom Russia thinks alike, it is also the world’s second biggest economy and it opposes the spread of Western-style democracy.”

This culminated yesterday, when as we reported last night, Putin thanked China for its “understanding over Ukraine.” China hasn’t exactly kept its feelings about closer relations with Russia under wraps either:

Chinese President Xi Jinping showed how much he values ties with Moscow, and Putin in particular, by making Russia his first foreign visit as China’s leader last year and attending the opening of the Winter Olympics in Sochi last month.

 

Many Western leaders did not go to the Games after criticism of Russia’s record on human rights. By contrast, when Putin and Xi discussed Ukraine by telephone on March 4, the Kremlin said their positions were “close”.

The punchline: “A strong alliance would suit both countries as a counterbalance to the United States.” An alliance that would merely be an extension of current trends in close bilateral relations, including not only infrastructure investment but also military supplies:

However, China overtook Germany as Russia’s biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan.

 

If Russia is isolated by a new round of Western sanctions – those so far affect only a few officials’ assets abroad and have not been aimed at companies – Russia and China could also step up cooperation in areas apart from energy. CAST’s Kashin said the prospects of Russia delivering Sukhoi SU-35 fighter jets to China, which has been under discussion since 2010, would grow.

 

China is very interested in investing in infrastructure, energy and commodities in Russia, and a decline in business with the West could force Moscow to drop some of its reservations about Chinese investment in strategic industries. “With Western sanctions, the atmosphere could change quickly in favor of China,” said Brian Zimbler Managing Partner of Morgan Lewis international law firm’s Moscow office. 

 

Russia-China trade turnover grew by 8.2 percent in 2013 to $8.1 billion but Russia was still only China’s seventh largest export partner in 2013, and was not in the top 10 countries for imported goods. The EU is Russia’s biggest trade partner, accounting for almost half of all its trade turnover.

And as if pushing Russia into the warm embrace of the world’s most populous nation was not enough, there is also the second most populated country in the world, India.

Putin did take time, however, to thank one other country apart from China for its understanding over Ukraine and Crimea – saying India had shown “restraint and objectivity”.

 

He also called Indian Prime Minister Manmohan Singh to discuss the crisis on Tuesday, suggesting there is room for Russia’s ties with traditionally non-aligned India to flourish.

 

Although India has become the largest export market for U.S. arms, Russia remains a key defense supplier and relations are friendly, even if lacking a strong business and trade dimension, due to a strategic partnership dating to the Soviet era.

 

Putin’s moves to assert Russian control over Crimea were seen very favorably in the Indian establishment, N. Ram, publisher of The Hindu newspaper, told Reuters. “Russia has legitimate interests,” he added.

To summarize: while the biggest geopolitical tectonic shift since the cold war accelerates with the inevitable firming of the “Asian axis”, the west monetizes its debt, revels in the paper wealth created from an all time high manipulated stock market while at the same time trying to explain why 6.5% unemployment is really indicative of a weak economy, blames the weather for every disappointing economic data point, and every single person is transfixed with finding a missing airplane.

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

Over the past few years we have grown used to the odd dissent among Fed members as hawks complain at the uber-easy policies and the costs outweighing the benefits but it’s different this time. Among the most dovish of Fed heads, Narayana Kocherlakota, dissented, warning that the new “guidance” of the Fed (rather than lowering existing and entirely discredited ‘thresholds’) will hurt Fed credibility, foster undertainty, and lower growth. Perhaps, then, this is moment when the doves cry and in fact the Fed is becoming more hawkish than that investing public really believes is possible.

Statement on Dissenting Vote at March 19, 2014, Meeting of the Federal Open Market Committee
Narayana Kocherlakota – President

I view the March 19 Federal Open Market Committee (FOMC) statement as an unusually significant one. In that statement, the FOMC adopted new forward guidance about the evolution of its target for the federal funds rate. I see that new guidance as being intended to describe the Committee’s decisions for some time to come.

I dissented from the new guidance for two reasons.

• The first reason is that the new guidance weakens the credibility of the Committee’s commitment to target 2 percent inflation.
• The second reason is that the new guidance fosters policy uncertainty and thereby suppresses economic activity.

In what follows, I’ll elaborate on these reasons, discuss an alternative form of forward guidance, and conclude by strongly endorsing one aspect of the FOMC’s new forward guidance.

In terms of credibility: the Personal Consumption Expenditure (PCE) inflation rate has drifted downward over the past few years and is currently near 1 percent. The FOMC’s new forward guidance does not communicate purposeful steps being taken to facilitate a more rapid increase of inflation back to the 2 percent target.The absence of this kind of communication weakens the credibility of the Committee’s inflation target, by suggesting that the Committee views persistently sub-2-percent inflation as an acceptable outcome.

In terms of uncertainty: Currently, most labor market metrics imply that the economy is still well short of maximum employment. In its forward guidance, the Committee provides little information about its desired rate of progress toward maximum employment. Indeed, the guidance provides little quantitative information about what would characterize maximum employment. These omissions create uncertainty about the extent to which the Committee is willing to use monetary stimulus to foster faster growth, and this uncertainty is a drag on economic activity.

How could the FOMC have done better? I believe that, over the past 15 months, the Committee’s forward guidance about the fed funds rate has been highly effective at shaping market expectations. That guidance has relied on an unemployment rate threshold of 6.5 percent and an inflation outlook guardrail of 2.5 percent. Given the effectiveness of this quantitative approach, I would have favored adopting a similar approach going forward.

For example, the Committee could have adopted language of the following form: “the Committee anticipates keeping the fed funds rate in its current range at least until the unemployment rate has fallen below 5.5 percent, as long as the one-to-two-year-ahead outlook for PCE inflation remains below 2 1/4 percent, longer-term inflation expectations remain well-anchored, and possible risks to financial stability remain well-contained.” This alternative guidance communicates the Committee’s willingness to use monetary policy tools to push inflation back up to 2 percent. It reduces macroeconomic uncertainty by being clearer about the kinds of labor market and inflation conditions that are likely to be associated with an increase in the fed funds rate. Finally, it deals with the unlikely possibility of risks to financial stability through an explicit escape clause.

There is one key aspect of the Committee’s new forward guidance that I strongly endorse. The guidance provides information about the Committee’s intentions for the behavior of the fed funds rate once employment and inflation are near mandate-consistent levels. Those intentions are appropriate, and communicating them should help stimulate economic activity by reducing uncertainty about the likely path of the fed funds rate once the Committee’s goals are reached.

 

++++++++++++++++

So, to be clear, Kocherlakota wants to preserve Fed credibility by expansing precisely the actions (and thresholds) that destroyed the credibility of the Fed in the first place, thus confirming forward guidance was a farce at best and a cover-up at worst.

 

Perhaps the market had it right out of the gate – when the Fed doves are crying then it suggests the Fed’s policy is not as uber-dovsh as it has been (and thus more hawkish)…

via Zero Hedge http://ift.tt/1h1e3uz Tyler Durden

Earlier in the week the hypocrisy of the big tech firms was exposed when the NSA’s senior lawyers “busted” their lies by explaining they knew full-well that they were engaged in the surveillance-state. Today comes yet more ‘elite’ hypocrisy as AP reports, Microsoft, which has skewered rival Google for going through customer emails to deliver ads, acknowledged Thursday it had searched emails in a blogger’s Hotmail account to track down who was leaking company secrets. Scroogled, indeed.

 

We do spy and search your data – but only if we really need it… (via AP)

the software company “took extraordinary actions in this case.”

 

In the future, he said, Microsoft would consult an outside attorney who is a former judge to determine if a court order would have allowed such a search.

 

The case involves former employee Alex Kibkalo, a Russian native who worked for Microsoft as a software architect in Lebanon.

 

…

 

Besides the email search, Microsoft also combed through instant messages the two exchanged that September. Microsoft also examined files in Kibkalo’s cloud storage account, which until last month was called SkyDrive. Kibkalo is accused of using SkyDrive to share files with the blogger.

 

…

 

“Courts do not issue orders authorizing someone to search themselves,” he said. “Even when we have probable cause, it’s not feasible to ask a court to order us to search ourselves.”

 

…

Microsoft also has a long-running negative ad campaign called “Scroogled,” in which it slams Google for scanning “every word in every email” to sell ads, saying that “Google crosses the line.”

via Zero Hedge http://ift.tt/1jgu1DT Tyler Durden

Rumors of a new “preferred shares” program which could implicitly mean easier access to desperately needed liquidity for Chinese banks and real estate developers prompted what one analyst called “a short-covering-led recovery after shares had fallen a lot.” The banks of the Shanghai Stock Exchanged rallied notably as chatter was they would be be first to be blessed with the ability to issue new stock and this boosting their capital. The 2.7% rally in the composite was the best day in 4 months (even as China CDS surged by their most in 9 months) but, as one trader noted, “we may see one or two more days of upside but China’s fundamentals are still weak. We weren’t falling for nothing.”

 

 

Via Bloomberg,

China’s stocks rallied, sending the benchmark index to its biggest gain in four months, amid speculation the government is loosening funding restrictions for property developers and banks to support economic growth.

 

…

 

The Shanghai Composite Index (SHCOMP) climbed 2.7 percent to 2,047.62 at the close, the biggest gain since Nov. 18, after reaching record-low valuations yesterday. Policy makers are trying to bolster real estate and financial companies as the economy slows and bad debts increase. Allowing lenders to sell preferred shares would give them a new way to meet long-term fundraising requirements.

 

“Investors hear talk that banks may be the first to be included in the preferred-shares program,” said Xu Shengjun, analyst at Jianghai Securities in Shanghai. “Investors are hoping this will bring a lot of benefits to the companies, including boosting their capital.”

 

…

 

Companies in the Shanghai Stock Exchange 50 A-Share Index, which includes at least 10 banks, can issue preferred shares, according to a statement posted on the official microblog of the CSRC. They can use the funds to pay for acquisitions and buy back stock, the CSRC said.

 

Selling the securities would enable banks to have a supply of capital without adding pressure on common stock investors, according to Masterlink Securities Corp. Lenders are facing increasing competition for deposits after the central bank engineered a cash crunch last year to curb off-balance sheet financing that evolved to circumvent official credit curbs.

 

…

 

Today’s stocks surge may be temporary, said Alex Wong, a Hong Kong-based director at Ample Capital Ltd.

 

“This is a short covering-led recovery after shares fell a lot,” said Wong. “We may see one or two more days of upside but China’s fundamentals are still weak. We weren’t falling for nothing.”

Just as that trader noted, this is far from over – as the smattering of headlines from last night suggest:

*CHINA YUAN WEAKENS 0.06% TO 6.2315 VS U.S. DOLLAR

 

ICBC, CCB STOP SELLING TRUST PRODUCTS: SECURITIES DAILY

 

China CDS surged 10.5bps (the most in 9 months) and are back over 100bps (5 times that of the USA and double the risk of Japan).

 

China corporate bonds are at one-month lows.

 

China warns of risk in insurance industry due to heavy exposure to corporate credit (especially local government debt). Rather stunningly, new debt investment plans by insurance companies last year totaled 287.76b yuan, equal to the sum total amount of the previous seven yrs combined.

 

More stories of Hong Kong property sellers slashing prices is also raising tensions with at least 10 housing estates seeing sellers cutting prices yesterday. New homes are being discounted at 11.75% discount (and as we noted yesterday, existing homes at over 20%). Barclays warns this is only the start, noting it expects home price to fall by at least 30% by end-2015 from Oct. 2013 level. Current home-price-to-income multiple (13.3x vs historical avg 8.7x) is “very far away” from where end-users can support market

 

*CHINA TO ‘DRASTICALLY’ CURB NUMBER OF NEW SHIPYARDS: DAILY – China must restrain blind investment in shipbuilding industry. Li said small and medium-sized shipyards with few orders will gradually withdraw from the market in next 5 yrs: Daily

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

Sanctions against billionaires – that’s one (very much meaningless) thing. But halting sales of Russian vodka, now that could really cripple someone, just not clear who. And in an attempt to answer that question, the premier of Canada’s Saskatchewan province, Brad Wall, says he is considering banning Russian booze in government-run liquor stores because of Russia’s actions in Ukraine. Wall says it’s a small measure, but sends a strong statement.

Yes, well, rhetoric is one thing. The realization that trade is bilateral (as both the EU and USA have realized in recent days), something completely different. Which is why despite the posturing, don’t hold your breath. As Globanews reports, “Wall says trade issues have to be considered because Saskatchewan manufacturers sell shortline rail equipment into Russia…. the premier cautions that international trade can be complicated, so the province wants to work with the federal government to find out what trade sanctions are in the works.” Here’s the answer: none.

Still, this is a good marketing campaign for domestic booze makers nonetheless.

The Saskatchewan Liquor and Gaming Authority carries Russian Standard Vodka.

Why Saskatchewan? “Political violence in Ukraine hits home for many people in Saskatchewan where about 13 per cent of the population has Ukrainian roots.”

Finally, there would be nothing quite like sending the price of Russian booze soaring, leading to bumper profits for producers and bootleggers, if indeed someone were to arbtirarily halt such a “liquid” trade channel. Which is why it will never happen. Just like nobody will ever say no to that other “liquid” Russian exports, no matter tha posturing – crude oil.

via Zero Hedge http://ift.tt/1r4Tgyc Tyler Durden

• Australia says nothing spotted in search for plane (AP)
• Putin looks to Asia as West threatens to isolate Russia (Reuters)
• China Billionaire Builds Metals With Dreyfus, Glencore Hires (BBG)
• China Beige Book Says Economy Slowing (BBG)
• Caterpillar Said to Be Focus of Senate Overseas Tax Probe (BBG)
• US Cancels Summit With Divided Group of Gulf Nations (WSJ)
• Cyprus defense minister suffers aneurysm (AP)
• Abe to zero in on economy as tax hike looms (Nikkei)
• Europe strikes deal to complete banking union (Reuters)
• Barclays Said to Miss Alibaba Fees by Defying SoftBank’s Son (BBG)
• Tiffany posts 4Q loss due to large charge (AP)
• Gunmen ram explosives-laden tanker into Iraq police HQ, killing many (Reuters)

 

Overnight Media Digest

WSJ

* U.S. President Barack Obama ordered a second round of financial sanctions on Russian officials and a St. Petersburg bank over Crimea, and the European Union added names to its sanctions list. Moscow responded with penalties against nine U.S. officials. (http://ift.tt/1hMXG6s)

* The Federal Reserve’s annual test of big banks’ financial health showed the largest U.S. firms are strong enough to withstand a severe economic downturn, a sign that many will get the green light soon to reward investors by raising dividends and buying back shares. The Fed said 29 of the 30 largest institutions have enough capital to continue lending even when faced with a hypothetical jolt to the U.S. economy lasting into 2015, including a severe drop in housing prices and a spike in unemployment. (http://ift.tt/1oEpA96)

* Symantec Corp, the computer-security company synonymous with “antivirus,” fired Chief Executive Steve Bennett amid sagging revenue and slumping shares, the second time it has dumped a CEO in less than two years. (http://ift.tt/1jbdWU8)

* Airbnb Inc, which once sold novelty cereal boxes to stay afloat before emerging as a threat to the hotel industry, is close to becoming one of the world’s most valuable startups. The online service that lets people rent their homes to travelers is in advanced talks to raise capital that would value it at about $10 billion. (http://ift.tt/1oEpxtU)

* Major bitcoin exchange Mt. Gox said it found nearly a quarter of the bitcoins it previously said were lost, raising questions about how much of the missing total could eventually be recovered. (http://ift.tt/1jbdW6L)

* The White House is testing smartphones from Samsung Electronics and LG Electronics Inc for internal use, threatening one of the last and most high-profile strongholds of BlackBerry Ltd. (http://ift.tt/1oEpA98)

* Exxon Mobil Corp has agreed to disclose how the regulation of carbon emissions could affect the value of its oil and gas holdings, a sign that America’s biggest energy company is stepping up efforts to address shareholders’ environmental concerns. (http://ift.tt/1jbdWUg)

* Hewlett-Packard Co shareholders have forgiven three company directors they heavily criticized for presiding during some of the firm’s most troubled periods. The company’s longest-serving directors Marc Andreessen, Raymond Lane and Rajiv Gupta, were re-elected by shareholders at HP’s annual meeting on Wednesday, the results weren’t released. (http://ift.tt/1oEpA9d)

 

FT

Airbnb is in talks with private equity firms including TPG Capital Management LP to raise funds that would price the online home-rental marketplace at about $10 billion.

Netflix Inc has accused big internet providers, including Comcast Corp, of using their “market position” to impose tolls for access to their networks, hindering the online video operator’s ability to provide a quality service.

Turkey blocked access to Twitter on Thursday, after Prime Minister Tayyip Erdogan vowed to eradicate the social media site for national security reasons as he battles a damaging corruption scandal.

Chinese e-commerce giant Alibaba Group <IPO-ALIB.N> has invested $215 million in mobile messaging app-maker Tango, valuing it at $1 billion.

Chemicals producer Ineos has accused Asia’s biggest refiner Sinopec Corp of breaching its intellectual property rights over the manufacture of a key industrial compound.

 

NYT

* U.S. President Barack Obama expanded sanctions against Russia on Thursday, blacklisting a bank and several wealthy businessmen with close ties to President Vladimir Putin, as the United States struggled to forestall further Russian incursions into Ukraine. (http://ift.tt/1jbdWUl)

* Technology companies have spent months denying they know anything about broad government spying on people who use their Internet services. But a legal case filed this week against a former Microsoft Corp employee shows the power these companies themselves have to snoop on their customers whenever they want to. (http://ift.tt/1oEpApx)

* Nearly all of the United States’ largest banks have adequate capital to withstand a severe economic downturn and market turmoil, the Federal Reserve has found in its latest annual stress test of the country’s financial system. (http://ift.tt/1jbdW6P)

* Airbnb, the company that was created nearly six years ago as a way to help people find spare rooms and couches to sleep on, is in advanced talks to raise more than $400 million in capital, a round of financing that would value it at more than $10 billion. (http://ift.tt/1oEpxu4)

* Credit Suisse has hired a new head of its power and renewables investment banking group from RBC Capital Markets, the firm announced in an internal memo on Thursday. (http://ift.tt/1jbdWn5)

 

Canada

THE GLOBE AND MAIL

* Canada is looking seriously at levying punitive sanctions against firms in Russian business sectors over Moscow’s seizure of Crimea, an increase in pressure under consideration as Prime Minister Stephen Harper heads to Ukraine to show solidarity with the beleaguered country. (http://ift.tt/1oEpxu6)

* On Friday, the Canadian Supreme Court will rule on whether Prime Minister Stephen Harper’s latest appointee to that court, Justice Marc Nadon of Quebec, has the legal qualifications for the job. (http://ift.tt/1jbdWn9)

Reports in the business section:

* U.S. retailer Nordstrom Inc will delay bringing its low-cost Rack stores to Canada, as it looks to contain expenses and avoid a repeat of Target Corp’s fumbled debut. (http://ift.tt/1oEpxKk)

NATIONAL POST

* Canada’s Conservative government wants to hear from the public about how to rewrite the prostitution laws that were struck down by the Supreme Court late last year. A month-long, online consultation period on the Justice Canada website began Monday and runs to March 17. (http://ift.tt/1jbdXaE)

FINANCIAL POST

* Valero Energy Corp, owner of Canada’s second-largest oil refinery, is working to source the Lévis, Quebec facility’s entire crude oil supply from North America by the end of 2014. The shift would mark a break from the refinery’s near-complete dependence on so-called Atlantic basin crude from Algeria and other overseas nations for the past several decades. (http://ift.tt/1oEpxKm)

* Merchant Law Group LLP, a Canadian class-action law firm, is going after General Motors Co for the automaker’s handling of defective ignition switches in 1.6 million small cars worldwide, including about 235,000 cars sold in this country. (http://ift.tt/1jbdXaG)

 

China

SHANGHAI SECURITIES NEWS

– China Hi-Tech Group Corp will repurchase all H shares of its listed subsidiary Jingwei Textile Machinery Co Ltd with a premium of 30 percent, the company said in a statement.

SECURITIES TIMES

– Hot rolled coils futures starts trading at Shanghai Futures Exchange on Friday with the benchmark price being 3316 yuan per tonne, according to a statement on its website.

NATIONAL BUSINESS NEWS

– China’s urbanization rate is expected to reach 60 percent by 2020, demanding investment of more than 42,00 billion yuan, the vice minister of the Ministry of Finance said. The investment will mainly come from private investors, he added.

21ST CENTURY BUSINESS HERALD

– China’s central bank said in a closed-door meeting that it would not change its supportive stance toward online financing industry, sources told the paper. This comes after it suspended the QR code payment service last week.

CHINA DAILY

– China should maintain diversity in its urbanization process and not harm the cultural and historical heritage preserved in its numerous villages and small towns, an editorial said.

PEOPLE’S DAILY

– The key of the success of China’s ongoing political and economic reform is the enforcement of the pronounced reform policies, the paper which acts as the party’s mouthpiece said in an editorial.

Britain

The Telegraph

BG GROUP PUTS 1,100 UK JOBS AT RISK

Up to 1,100 jobs are at risk at BG Group’s head office in Reading, England after the energy company started a redundancy programme. (http://ift.tt/1j9YgAA)

LIDL CHAIRMAN IN SHOCK EXIT OVER STRATEGY DIFFERENCES

The chairman of budget food retailer Lidl has abruptly resigned due to “unbridgeable” future strategy differences.(http://ift.tt/1j9Yfwu)

The Guardian

BP DRAWN INTO ROW OVER RUSSIA’S ANNEXATION OF CRIMEA

BP has been sucked into the row over Russia’s annexation of Crimea with calls for the delisting from the London Stock Exchange of Rosneft, the Moscow-based oil company in which the British group has a 20 percent holding. (http://ift.tt/1gZ57pr)

NEXT’S PROFITS SET TO OVERTAKE MARKS & SPENCER AFTER 12 PCT ANNUAL RISE

The decline of Marks & Spencer was again brutally underlined on Thursday when Next reported soaring profits that are almost certain to have beaten its venerable high street rival for the first time. (http://ift.tt/1gZ57px)

The Times

MULBERRY CHIEF EXECUTIVE QUITS IN WAKE OF PROFIT WARNING

Designs on pushing Mulberry Group upmarket have received a setback with the resignation of its chief executive only two years after he was appointed. (http://ift.tt/1j9YgQY)

POOR CUSTOMER SERVICE HITS RYANAIR CREDIT RATING

Ryanair’s reputation for abysmal customer service has resulted in a maiden credit rating for the budget airline of three notches above junk. (http://ift.tt/1j9YfMX)

INTU TAPS MARKET TO RAISE MONEY FOR MALLS

Intu Properties has defended its decision to buy three shopping centres from the Westfield Group for 868 million pounds ($1.43 billion) and fund the purchase through a deeply discounted 500 million pound rights issue. (http://ift.tt/1j9YgR4)

The Independent

BLOW FOR SCOTTISH NATIONALISTS AS BAE SAYS SPLIT WOULD DESTROY JOBS

The defence giant BAE Systems has finally warned that Scottish independence could threaten thousands of jobs north of the border, after months of refusing to comment on September’s vote. (http://ift.tt/1j9YgR8)

FAMILY WINS RIGHT TO SUE RBS OVER THEIR LOST FIRM

A family have won a landmark case giving them the green light to sue Royal Bank of Scotland Group for millions over the alleged mis-selling of interest rate swaps that ultimately left them with crippling borrowing costs on a 55 million pound loan. (http://ift.tt/1j9YgRc)

TRADER FINED AND BANNED FOR TRYING TO RIG UK BOND MARKET

A top trader was fined nearly 700,000 pounds and banned for life for manipulating the price of government bonds in an attempt to profit from the taxpayer-backed money printing programme known as QE. (http://ift.tt/1gZ57G7)

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

No domestic economic reports of note are scheduled today.

ANALYST RESEARCH

Upgrades

City National (CYN) upgraded to Outperform from Market Perform at Wells Fargo
Ensco (ESV) upgraded to Buy from Neutral at Guggenheim
Exelon (EXC) upgraded to Outperform from Neutral at Credit Suisse
JDSU (JDSU) upgraded to Buy from Neutral at MKM Partners
Posco (PKX) upgraded to Buy from Neutral at Citigroup
Progressive (PGR) upgraded to Outperform from Market Perform at William Blair
United Technologies (UTX) upgraded to Buy from Neutral at Goldman

Downgrades

Boeing (BA) downgraded to Neutral from Buy at Goldman
Community Health (CYH) downgraded to Fair Value from Buy at CRT Capital
ConAgra (CAG) downgraded to Neutral from Buy at Goldman
Equity One (EQY) downgraded to Hold from Buy at MLV & Co.
Lennar (LEN) downgraded to Neutral from Positive at Susquehanna
Symantec (SYMC) downgraded to Hold from Buy at Jefferies
Symantec (SYMC) downgraded to Market Perform from Outperform at Cowen
Symantec (SYMC) downgraded to Neutral from Buy at UBS
Symantec (SYMC) downgraded to Neutral from Outperform at RW Baird
Symantec (SYMC) downgraded to Sell from Buy at MKM Partners
Walgreens (WAG) downgraded to Sell from Hold at Cantor

Initiations

Apple (AAPL) initiated with an Outperform at Macquarie
Cardiovascular Systems (CSII) initiated with a Strong Buy at Needham
DexCom (DXCM) initiated with a Neutral at Sterne Agee
Erickson Air-Crane (EAC) initiated with a Hold at Canaccord
Insulet (PODD) initiated with a Buy at Sterne Agee
Keryx (KERX) initiated with a Buy at Mizuho
New York Mortgage (NYMT) initiated with a Buy at UBS
Primo Water (PRMW) initiated with a Buy at B. Riley
Spectranetics (SPNC) initiated with a Buy at Needham
Tandem Diabetes (TNDM) initiated with a Neutral at Sterne Agee
Volcano (VOLC) initiated with a Hold at Needham

COMPANY NEWS

The Federal Reserve released stress test results, said banks ‘collectively better positioned’
Netflix (NFLX) CEO said net neutrality ‘must be defended and strengthened’
Nike (NKE) warned that the impact from foreign currencies will impact its Q4 and FY15 results
Golden Gate Capital reported a 9.5% stake in Ann Inc (ANN), and said it intends to, “leverage [its] significant retail expertise and public and private equity experience to assist in creating value for the company’s shareholders
Aveo Pharmaceuticals (AVEO) said it regained worldwide rights to to AV-203, a clinical-stage inhibitory antibody candidate, from Biogen (BIIB)
Symantec (SYMC) terminated the employment of its CEO, Steve Bennett, and named Michael Brown as interim CEO

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Silver Wheaton (SLW), Rally Software (RALY), Nike (NKE), Envivio (ENVI), New York & Co. (NWY), TIBCO (TIBX)

Companies that missed consensus earnings expectations include:
Aeterna Zentaris (AEZS), Shoe Carnival (SCVL), AAR Corp. (AIR)

NEWSPAPERS/WEBSITES

General Motors (GM) CEO to testify before congressional comittee on April 1, WSJ says
Microsoft (MSFT) admits reading Hotmail inbox of blogger, AP reports
Sprint (S) to close three call centers, 55 stores, Re/code reports
Defense companies (LMT, UTX, RTN, GD) find new focus in working against hackers, WSJ reports
Caterpillar (CAT) at center of Senate overseas tax investigation, Bloomberg says
Deutsche Bank (DB) fails to end four U.S. lawsuits over soured mortgages, Reuters reports
Twitter (TWTR) banned in Turkey, VentureBeat says
Judge urges deeper Toyota (TM) probe to include employees, WSJ reports

SYNDICATE

A10 Networks (ATEN) 12.5M share IPO priced at $15.00
Amber Road (AMBR) 7.4M share IPO priced at $13.00
Borderfree (BRDR) 5M share IPO priced at $16.00
China Mobile Games (CMGE) 3.442M share Secondary priced at $24.00
EnLink Midstream Partners (ENLK) files to sell 17.99M common units for holders
Foundation Medicine (FMI) files to sell $150M of common stock
KB Home (KBH) 6.94M share Secondary priced at $18.00
PBF Energy (PBF) files to sell 15M shares of Class A common stock for holders
Sangamo (SGMO) 4.44M share Secondary priced at $22.50
Seacoast Banking (SBCF) files $150M mixed securities shelf
Sonus Networks (SONS) files to sell 43.125M shares for holders
TPG Specialty Lending (TSLX) 7M share IPO priced at $16.00
Tableau (DATA) 4M share Secondary priced at $89.25
TherapeuticsMD (TXMD) 9M share Secondary priced at $7.10
Versartis (VSAR) 6M share IPO priced at $21.00
Wix.com (WIX) files to sell $86.25M of ordinary shares

via Zero Hedge http://ift.tt/1fM1jHf Tyler Durden

Moments ago the “absorption” of Crimea into the Russian Federation was completed after Putin signed the final previously passed by parliament. And with that, in less than a month, the Crimean “question” has been answered. The only question is whether Putin will stop here or will the ease with which he just expanded the Russian political map leave him hungry for more.

In other news, as part of the Western escalations against Russia, Bank Rossiya, the one bank exclusively identified in the sanctions list, announced that Visa and MasterCard have stopped, without notification, providing services for payment transactions for clients. Another bank that saw the drop of merchant credit card services was SMP bank, co-owned by brothers Boris and Arkady Rotenberg, who were also on the latest U.S. sanctions list.

SMP bank said in a statement that it considered the credit card giants’ move unlawful, because the U.S. sanctions targeted shareholders and not the bank itself, Reuters reported Friday.

Earlier in the day, Bank Rossiya said it was working in a “stable regime” and was taking all the necessary legal measures to defend its rights and its clients’ rights and legal interests.

“In connection with the information about U.S. sanctions being imposed on Rossiya we can report that the bank is working in a stable regime. The bank is meeting and will, without a doubt, fully meet all its obligations to its clients and partners,” the bank said in a statement.

“The management of Rossiya understands the difficulties of clients in the current situation and will do all it can to solve them,” the bank said in a statement.

These moves in turn promptly led to Putin announcing that he wants to open an account with the Bank Rossiya. From Moscow Times:

“I don’t have an account there, but I will certainly open one there on Monday,” Putin said Friday, while speaking at a Security Council meeting, Interfax reported.

Putin later asked for his salary to be transferred to Bank Rossiya and ordered Russia’s Central Bank to take the sanction-hit lender’s clients under protection and provide all possible assistance to them, The Associated Press reported.

U.S. President Barack Obama on Thursday announced that Washington was levying a new round of sanctions affecting 20 Russian officials and businessmen, but also Bank Rossiya, which is chaired and part owned by businessman Yuri Kovalchuk, who is one of the 20.

Why was the bank singled out?

The United States Treasury Department stated that Bank Rossiya is used by senior Russian officials and that its shareholders include members of Putin’s inner circle.

via Zero Hedge http://ift.tt/1iJXHe3 Tyler Durden