By Yigal Grayeff and the Market Currents team
ECB suspends Greek debt as collateral following S&P downgrade. The ECB has temporarily suspended Greek debt for use as collateral following S&P yesterday cutting the country's credit rating to Selective Default from CC. S&P made its move after Athens launched a bond swap to lower its debt burden and inserted retroactive collective action clauses (CAC) into its loans. "The effect of a CAC is to bind all bondholders of a particular series to amended bond payment terms...and (it) materially changes the original terms of the affected debt," S&P said.
MS may have to find another $6.5B in collateral. Morgan Stanley (MS) will have to post another $6.52B in collateral to counterparties and clearinghouses if Moody's follows through on a warning it may cut the bank's long-term debt rating by up to three notches.
Struggling Panasonic replaces president. Panasonic (PC) has named company veteran Kazuhiro Tsuga to replace Fumio Ohtsubo as President, with the latter to become Chairman. Tsuga, who is the head of Panasonic's loss-making TV arm, takes over as the conglomerate heads for a record ¥780B ($9.7B) annual loss and amid a huge restructuring.
AIG could escape taxes for a decade. AIG (AIG) may not pay taxes for as long as a decade because of the way the Treasury unilaterally bent the tax code during AIG's bailout, rails Andrew Ross Sorkin. This rule-twisting could deprive the government of tens of billions of dollars while boosting bonuses for AIG employees.
Dell distances itself from PCs with enterprise revamp. Dell (DELL) has unveiled a major revamp of its enterprise hardware line, including new server flash memory products, a data warehousing appliance for SMBs, and a new architecture for virtualizing networking resources - the latter is aimed squarely at Cisco (CSCO) and its UCS servers. Executives used the launch to once more proclaim that Dell is no longer a PC company. Given how the PC business is flatlining, it's hard to blame them.
Visa, Vodafone look to conquer worldwide wallets. Visa (V) and Vodafone (VOD) have forged a "worldwide partnership" on a mobile wallet service that will be available across all 30 countries that Vodafone operates in, starting with the U.K., Germany, the Netherlands, Spain and Turkey.
GM could buy 7% in Peugeot. Peugeot may this week announce plans to sell a 7% stake to GM (GM), sources say, as part of an alliance that could include developing engines and building vehicles together in the region. Speculation last week prompted Sanford Bernstein's Max Warburton to say that any tie-up wouldn't make sense. "PSA and Opel can’t restructure independently. We see no reason why putting PSA and Opel together would speed up the process of plant closures, as both have excess capacity."
Forest reports positive results in schizophrenia drug tests. Forest Laboratories (FRX) has disclosed positive top-line results in two Phase III trials of its Cariprazine schizophrenia drug. Data shows that patients that received the treatment experienced significant improvement compared with those that were given a placebo.
Santander looks to Poland to help offset Spanish slump. Banco Santander (STD) has agreed to buy Poland's Kredyt Bank from Belgium's KBC Groep (KBCSF.PK) in a move that will allow Santander to deepen its presence in one of Europe's fastest-growing economies as profits slump in Spain. Santander will then merge Kredyt with its own Polish division, creating a bank valued at around €5B ($6.7B).
Yahoo warns Facebook over patents. Yahoo (YHOO) looks to join the IP wars by threatening to sue Facebook unless it pays licensing fees on the Web portal's patents, with Reuters reporting that these include those for the technical mechanisms in Facebook's ads, privacy controls, news feed and messaging service.
U.K. authorities block Barclays tax shenanigans. Barclays (BCS) is reportedly the unnamed bank that U.K. regulators are blocking from implementing two "highly abusive" tax schemes that would have cost the tax authority £500M. Barclays has faced questions for years as to whether it actively attempts to take advantage of differences in countries’ tax legislation.
KKR bosses earned $94M each last year. KKR (KKR) chiefs Henry Kravis and George Roberts each took home around $94M from the P-E firm last year. Kravis and Roberts, who together own 25% of the firm, made $64.2M just off the cash dividend KKR pays and around $30M on profit sharing.
Confidence rising in Europe. Despite the agonizing over debt and a likely recession, eurozone economic sentiment increased to 94.4 in February from 93.4 previously and against expectations for 94. The rise was led by Poland, France, the Netherlands and Italy. Meanwhile, German consumer confidence is heading for a 12-month high in March, market-research company GfK has forecast, with its consumer-sentiment index set to inch up to 6 points from 5.9 in February.
Banks outline plans to correct foreclosure deficiencies. The Fed yesterday released the documents submitted by banks outlining their plans to fix foreclosure problems. This first data dump (with more likely to follow) includes papers from BofA (BAC), Citigroup (C), JPMorgan (JPM) and Wells Fargo (WFC), among others.
In Asia, Japan +0.9% to 9723. Hong Kong +1.6% to 21569. China +0.2% to 2452. India +1.6% to 17731.
In Europe, at midday, London +0.2%. Paris +0.4%. Frankfurt +0.4%.
Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +0.2% to $108.36. Gold +0.2% to $1778.20.
Tuesday's economic calendar:
7:45 ICSC Retail Store Sales
8:30 Durable Goods
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
10:00 Hearing: 'State of the Housing Market' (Duke)
7:15 PM Fed's Pianalto: 'Prospects for the Nation and the Region'
Earnings Results: Companies that beat EPS expectations last night and today include American Water Works (AWK), Career Education (CECO), Human Genome Sciences (HGSI), Priceline.com (PCLN), Universal Health Services (UHS), AutoZone (AZO), Tech Data (TECD).
Those in line include KAR Auction Services (KAR).
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