Under The Radar News - Monday

Economic activity hits 5-year low; points to recession. The Chicago Fed's index of U.S. economic activity fell February to -1.04 from -0.68 in January, its lowest level in nearly five years. All four categories -- employment, consumption, housing and production -- contributed negatively. The Chicago Fed says the numbers indicate "an increasing likelihood that a recession has begun."

How low can we go? Economists and investors are groping for historical perspective with which to assess the million (trillion?) dollar question: How bad will it get? No one can say for sure, but if the 1970s' slump gives sort of template, things could still get worse. Back then, the S&P 500 fell 36%; today it's down just 15% from record highs.

Look for Wells Fargo to go shopping. Wells Fargo (WFC) is looking to take advantage of a current downturn by picking up struggling banks on the cheap, and may go fishing for bigger game than it has in the past. Wells, which many think is in relatively good shape, is being recruited by federal regulators to take over banks in trouble. National City (NCC) is one name floating around.

Forbes wants Google's take. Forbes is set to become the latest media outlet to build its own ad network in an effort to stem the flow of ad dollars to Google (GOOG), Yahoo (YHOO), Microsoft (MSFT), Time Warner (TWX) and other internet ad vendors. It joins Viacom (VIA), CBS (CBS) and other who have rolled out home-brewed ad networks in recent months.

Clinton wants Greenspan to fix housing market. Former Fed Chairman Alan Greenspan and others should decide if the U.S. government needs to buy, restructure and resell failed mortgages in order to buffer an ailing U.S. economy. -- Democratic presidential candidate Hillary Clinton.

Jaguar, Land Rover sale to close this week. Ford (F) will complete its sale of its Land Rover and Jaguar businesses to Tata Motors (TTM) "within a few days." Initial estimates were for a price of $1.3-1.5B, but the recent success of Land Rover new model launches may have pushed the number closer to $2B. There are rumors Citigroup (C) and JPMorgan (JPM) are providing financing with a one-year $3B bridging loan.

Verizon sets stage for assault on cable cos. Verizon's (VZ) fiber-optic service (FiOS) is making a big push into Manhattan by connecting to an 11,000-unit apartment complex already serviced by rival cable companies Time Warner Cable (TWC) and RCN (RCNI). Verizon, which announced the deal today, says seven buildings are already connected. Previously, FiOS has focused mainly on single family homes. Verizon still needs to get permission to provide cable TV in the city.

More Goldman layoffs. Goldman Sachs (GS) is planning to cut almost 15% of its workforce in support units and capital markets. The cuts are on top of about 4,000 previously-disclosed cuts, and will occur by the end of March.

Lehman, Deutsche Bank look to India. Deutsche Bank (DB) and Lehman (LEH) will invest a combined $500M to take a minority stake in an SPV formed by Unitech, India's second-biggest real estate developer.

MySpace close to music JV. MySpace's (NWS) rumored streaming music and download service is on the verge of signing deals with Warner Music (WMG) and Sony BMG (SNE). The labels will receive minority equity stakes in MySpace in exchange for digital rights to their music.

Rio on defense. Rio Tinto (RTP) has hired Morgan Stanley (MS) to help it sell its $5B packaging business that it acquired when it bought Alcan last year, a move it hopes will enable it to defend itself against a hostile bid from BHP Billiton (BHP).

UBS may make funding move. UBS (UBS) will announce a rights issue of up to $5.7B within weeks, although some think it may wait until after its Q1 results in May.

Apple pushes Safari. Open-source browser Mozilla's CEO John Lily went ballistic after Apple (AAPL) offered iTunes users the option to download the latest version of its browser - Safari 3.1 for Windows and Mac. Many wonder: Is it a crime to market your own product?

Comments

[PCScipio]

Thanks, Mr. Hoffmann; I always appreciate your insight.

[SA Editor Eli Hoffmann]

Thanks for your encouragement!