Under The Radar News - Monday

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by: SA Eli Hoffmann

Subprime down under? Analysts say Japan may be sitting on a mountain of sub-prime debt that they have yet to admit. Seen by some as the 'next shoe to drop,' estimates are Japan may be sitting on close to $300 billion in mortgage-related debt, trumping the $130 billion or so admitted by U.S. firms. A possible harbinger of things to come, the iTraxx index, which measures the default risk of 50 Japanese companies, jumped to 77.5 Thursday, its biggest-ever one day move.

CDO sales grind to a halt. The market for collateralized debt obligations has slowed to a virtual halt. In January, just $1.3 billion in CDOs were sold, vs. $22B in January 2007.

IT spending to sink; implications for global economy. Global IT spending is expected to grow just 6% to $1,695B in 2008, just half of the sector's 12% growth last year. The Forrester Research forecast has far-reaching implications: "Historically, there has always been a very strong correlation between the economy and technology spending," the report's author said.

Microsoft exec: more money's not a problem. "If Yahoo (NASDAQ:YHOO) comes back and says this isn't enough money, would you borrow money or partner to make it happen?" Advertising Age asked Microsoft (NASDAQ:MSFT) senior VP-strategic partnerships Yusuf Mehdi. "Without a question," he said. "We are very committed to this combination. ... We have a whole set of plans and preparations ready to go to make it work. And we'd like to do that in a cooperative way with Yahoo."

Microsoft's Yahoo bid thwarted private-equity suitors. Sources say Yahoo (YHOO) was about to sell itself to an East Coast private-equity firm for $25-25/share, with some Yahoo properties being spun-off to shareholders, when Microsoft (MSFT) stepped up to the plate with its $31/share offer.

Apple Boy? Apple (NASDAQ:AAPL) recently filed to protect its trademark in hand-held video games and standalone video consoles, among others. Some view this as a clue Apple may see portable video games in its future.

Another iPhone price drop coming. Sources say Apple (AAPL) will again drop prices on the iPhone and iPod Touch within the next two months -- by as much as $100.

RIM mulls overseas hub. Research in Motion (RIMM) is considering manufacturing BlackBerry phones in India or China to serve the growing Asia-Pacific region.

BP buries drilling woes. BP (NYSE:BP) warned its employees to refrain from creating electronic documents about unpublicized problems with the company's Thunder Horse floating oil production project.

BofA, UBS, JPMorgan could face fraud charges. Bank of America (NYSE:BAC) received a so-called Wells notice from the SEC, notifying it the SEC plans to charge it with securities fraud charges in connection with a 14-month investigation into bid-rigging of guaranteed investment contracts and interest-rate swaps. Sources say UBS (NYSE:UBS) also received a notice, and that JPMorgan (NYSE:JPM) expects to.

Getty fails to attract solid bids. Sources say that after putting itself up for sale last month, Getty Images (GYI) has not received any bids significantly above its current market value of $1.6B.

Salesforce.com jumps on buyout rumor. Sources say Salesforce.com (NYSE:CRM) approached Oracle (NYSE:ORCL) with a potential offer to sell itself for $75/share -- close to a 50% premium over CRM's Friday close of $50.87. Shares are up sharply.

Whirlpool earnings got Brazilian spin. Citigroup analyst Jeffrey Sprague notes that $0.63 of Whirlpool's (NYSE:WHR) Q4 EPS of $2.38 was due to Brazilian tax credits.

Egg on Citi's face? After cancelling over 160,000 credit cards, Citigroup's (NYSE:C) Egg internet bank is being probed by British authorities who suspect the bank may be revoking the cards of upstanding clients in order to issue cards to high-risk customers that boost profits.

Google mulling CNet stake? Google (NASDAQ:GOOG) may be considering a stake in CNet Networks (NASDAQ:CNET). The move would likely give Google some control over CNet's ad inventory.