Under The Radar News - Wednesday

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 |  Includes: AMBC, C, HPQ, KSS, MBI, MER, UBS, VLKAY
by: SA Eli Hoffmann

It's a start. Consumer comfort improved for the first time in six weeks, according to a Washington Post/ABC survey. U.S. consumer comfort improved by 3 points to -34, following a three-week slump at its lowest level in 14 years. Despite the increase, each of the index's three categories -- personal finance, state of the economy, and buying climate -- remain 'pessimistic.' 22% of those surveyed view the economy positively.

U.S. lost 77K, no 23K jobs. TrimTabs Investment Research estimates the U.S. lost 77,000 in February. Meanwhile ADP says the private sector lost 23,000 jobs, and sees "deceleration of employment growth across businesses of all sizes" -- even mid-size companies which lost 4,000 jobs in the first decline since June 2003. Economists expect a 35k gain in nonfarm payrolls due out Friday.

Wanted: Bond auctioneer. Despite approaching 70%, auction-rate bond failures show no signs of easing. Yields averaged 6.52%, up from 3.63% a month ago. 521 auctions failed yesterday. "It's still a liquidity issue, not a credit issue," one bond trader said. Perhaps -- but for how long?

Merrill: We're quite alright. Merrill Lynch (MER) CEO John Thain says his firm doesn't need any more money, thank you very much. "We will not have to go back to the market to raise capital," Thain told Bernstein analyst Brad Hintz. Thain's comments come after the head of a large Dubai investment firm said Tuesday that Merrill rival Citigroup (NYSE:C) still needs more cash from Middle East SWFs, despite having already taken on $20B. Merrill has taken $6.6B from investors, much of that from Middle East and Asia SWFs. Merrill is working to sell off illiquid assets and some noncore businesses. When trading in CDOs resumes, Merrill will "sell these positions as soon as possible despite the potential value there may be in the long run," he said.

Ambac tells the tale. "All you really need to know about this market is that if it can swing a hundred points on the whim of the latest Ambac (ABK) or MBIA (NYSE:MBI) rumor: 1) Either these companies, which nobody cared about a year ago, became way too influential for their own good or 2) they're an excuse for people to buy or 3) this is a market with absolutely no conviction or 4) all of the above." -- Herb Greenberg.

Worse than the dot.com crash? As of January, 2007, nearly 1,400 mutual funds were earning 15% or more. This January, just 270 funds hit that number -- an 80% decline. From December 2000 to December 2001 -- the bursting of the tech bubble -- the 12-month drop was only 57%.

Kohl's to market Avril Lavigne line. Kohl's (NYSE:KSS) is partnering with rock singer Avril Lavigne to launch a new youth apparel and jewelry line. Called Abbey Dawn, clothing prices will range from $24 to $48, and will feature new fashions every 60 days.

Mobile broadband catching on. Apparently people are getting the hang of surfing the net with cell phones and PDAs: Mobile devices accessing the internet via wireless broadband soared 154% y/y in Q4. People using mobile broadband for work (59%) outnumbered casual use (41%). Still, mobile broadband is used by less than 1% of the total U.S. internet user base.

No pain for luxury cars. "There have never been so many rich people on the planet and so many countries with rapidly developing economies," Bentley (OTCPK:VLKAY) CEO Franz-Josef Paefgen says. "You won't get me saying it's the end of the luxury car business." 45% of Bentleys are exported to the U.S., but sales in China are growing at 100%/year.

UBS dumps $20B of Alt-A debt? Rumors of a $20B sale of Alt-A mortgages by UBS AG (NYSE:UBS) to Pimco saw UBS shares up 1.6%. The debt was reportedly sold at $0.70 on the dollar. If so, the loss was massive, because UBS valued the debt at $0.96 on the dollar just three weeks ago.

Radio ads sink. On-air radio ads fell back to 2003 levels in 2007, down 2.6% from a year ago. Radio companies are undercutting each other in big markets, and people are spending less time listening to the radio and more time surfing the internet and using mobile phones.

HP to revamp famed Labs. Hewlett-Packard (NYSE:HPQ) is planning a major overhaul to its research arm, HP Labs. Details of the revamp, its biggest in more than a decade, are expected tomorrow. Based on previous interviews, it's assumed HP will identify big themes, and throw a lot of resources at them. H-P will likely continue to focus on nanotechnology, reducing power and increasing automation in computer data centers, and advances in digital printing.