Under The Radar News - Thursday

by: SA Eli Hoffmann
  • Dollar bears to spark rally. Jim Rogers says Wall Street is too bearish on the U.S. dollar, leading it to a nice rally. Another factor: "America is also a huge producer of agriculture and if I'm right about agriculture prices, which I think will go up a lot, that's going to help America compared to those countries which don't have agriculture." Rogers said last month he hoped a dollar bounce would last a year, so that he can sell off all his U.S. currency. He thinks commodity producers like Australia, Canada and New Zealand will do well in the longer-term. The dollar is losing its status as the world's reserve currency, he says, to the euro, yen and sterling.
  • Trade the marathon, not the sprint. Bespoke notes that while the short-term action of the dollar has been bullish, its longer-term picture remains bleak.
  • Bear market bounce - Soros. George Soros says the acute phase of the credit market implosion is behind us, but its effects on the real economy are likely to be increasingly felt due to a time lag. Just as housing prices overshot to the upside, they will overshoot to the downside, he says. Soros called the current strength in U.S. equity markets a "bear market rally."
  • TV Guide back on block. Just days after being acquired by Macrovision (MVSND), TV Guide is once again up for sale. Macrovision's main interest is in Gemstar's electronic assets, patents for on-screen cable program guides and on-demand services; the print version of TV Guide, which has suffered years of anemic sales, it can do without. Macrovision also wants to sell TV Guides cable channels (TV Guide channel and TVG).
  • Investment banking's one-horse wonders. A massive decline in M&A action is taking its toll on boutique investment banks that specialize as advisors. "Financial advisory revenues declined faster than we expected and restructuring fees haven't picked up as quickly as we anticipated," S&P analyst Matthew Albrecht says. Of six publicly traded M&A advisory firms, KBW (NYSE:KBW) may be the best off due on the strength of its recapitalization business, as companies look to raise capital through debt offerings. The others: Evercore Partners (NYSE:EVR), Cowen (NASDAQ:COWN), Greenhill (NYSE:GHL), Thomas Weisel (TWPG), Lazard (NYSE:LAZ).
  • Zune block. After announcing it would start selling video programming for the Zune, Microsoft (NASDAQ:MSFT) says it may update the device's software to block unauthorized copies of copyrighted material. NBC (NYSE:GE) exec. J. B. Perrette says the copyright filter is one of the reasons the company is moving from iTunes (NASDAQ:AAPL) to Microsoft. "In the short term, this will not win us a lot of friends," Perrette says. "In the long term, the consumer wants there to be quality premium-produced content, and in order for that to continue to be a viable business, there needs to be significant protection around it." Perhaps, but is the widely ignored Zune the right platform to promote that agenda?
  • Just one more year. Merrill Lynch (MER) CEO John Thain expects auction-rate securities held by Merrill clients to be fully refinanced by their issuers within one year, giving investors access to their frozen cash. Good to know, but keep in mind buyers were told they could sell the bonds at auctions that took place every few weeks. 23% have been refinanced so far. Thain said once again Merrill needs no more capital.
  • WellCare a takeover target? Shares of WellCare Health Plans (NYSE:WCG) shot up yesterday on rumors of a possible acquisition. Shares are down more than 60% from year-ago. UnitedHealth Group (NYSE:UNH) is seen as the potential buyer.
  • A patent filing reveals Apple (AAPL) is developing a 3D remote control system for Apple TV that would mimic the functionality of Nintendo's (OTCPK:NTDOY) Wii controller.
  • Comcast sacked us: NFL. Former NFL commissioner Paul Tagliabue alleges Comcast (NASDAQ:CMCSA) removed the NFL Network from its expanded basic level to its digital sports tier in retaliation for the league's not selling several regular-season games to the Versus channel. The NFL says that the tier shift devalued the NFL Network and reduced its appeal to advertisers.
  • Comcast may make uber-downloaders pay. Comcast (CMCSA) is considering limiting subscribers to 250 GB per month. Mind you, that's enough to handle about 300 standard-definition movies.
  • Forced resignations at NY Times. The New York Times Company (NYSE:NYT) is being forced to lay off employees after not enough bowed out voluntarily. 100 newsroom jobs are being cut.
  • AIG's long-term is cloudy at best. Aside from the fact that AIG (NYSE:AIG) is unlikely to report a blowout quarter today, its next several years don't look particularly rosy. A potential ratings downgrade could make it more expensive for its aircraft-leasing unit to buy planes. Also, AIG insures corporate directors and officers, who may come under legal scrutiny from subprime market turmoil. And insurance prices are falling.
  • Something brewing at Bud. Despite denials from Anheuser-Busch (NYSE:BUD) CEO August Busch IV, there is speculation a takeover is brewing. Demand for BUD call options has surged, particularly in June call options, indicating some money is betting on a move within the next couple months.
  • General Dynamics gets big UK contract. The UK Ministry of Defense awarded the first big contract on England's most important military program to General Dynamics (NYSE:GD). It has been hired to design a new generation of armored vehicles. The program will see Britain spend up to £16B over the next few years. Shares: +1.5%.
  • Oil firms to pay for cleanup. Several large oil companies, including BP (NYSE:BP), ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX) are paying nearly $423M to settle a lawsuit over alleged water contamination from methyl tertiary butyl ether, a gasoline additive. The oil giants also agreed to pay 70% of future cleanup costs for the next 30 years. Exxon (NYSE:XOM) and several other named defendants did not agree to the deal.
  • Gone but not forgotten. GLG (GLG) stands to lose a potential $4.3B of its $24.6B under management due to the departure of manager Greg Coffey.