- NY Fed releases Maiden Lane data. Late yesterday afternoon, the New York Federal Reserve disclosed nearly all the details related to the Maiden Lane holdings, the three limited liability companies that became storehouses for assets from Bear Stearns and AIG (NYSE:AIG). The disclosure, which came after months of political pressure, shows that the government is stuck holding a portfolio of questionable loans and property that have lost their value and are facing the threat of rising defaults. Though the general size of the portfolio had already been known, the new information shows the range of properties covered in the portfolio.
- GGP files bankruptcy exit plan. General Growth Properties (NYSE:GGP) filed a plan to exit bankruptcy and laid out a two-round bidding process. In the standalone plan, Brookfield Asset Management (NYSE:BAM), Fairholme Capital Management and William Ackman's Pershing Square Capital will invest $6.55B to fund the firm's bankruptcy exit, receiving in return a majority interest and warrants to buy another 120M shares. However, other interested firms, like Simon Property Group (NYSE:SPG), will be able to submit rival bids. GGP wants first-round bids by April 19, a final deal in place by July 2 and a bankruptcy exit by September 30.
- Obama expands offshore drilling. The White House unveiled a "comprehensive strategy for energy security" yesterday that allows offshore oil and natural gas drilling in a huge section of East Coast waters and in other protected areas in Alaska and the Gulf of Mexico. The decision could help U.S. producers hold down the cost of exploration, and could impact the country's domestic and foreign policies as "we are going to need vital energy sources to maintain our economic growth and our security."
- Borders surges on EPS jump. Borders Group (BGP) rocketed nearly 34% in after hours trading after announcing its Q4 earnings per share had risen to $0.91 from $0.48 the year before, and that it had secured new credit facilities of nearly $800M. Though its profit rose, helped in part by an income tax benefit and cost cuts, sales fell 13%. The company plans to put more emphasis on "growing market share by acquiring, engaging and retaining customers through a transformation of the Borders brand."
- EMI breaches debt covenants. Terra Firma's EMI music company breached its debt covenants yesterday after failing to reach a licensing deal with either Universal Music Group (OTC:VIVDY) or Sony Music (NYSE:SNE). Terra Firma will now have to turn to its investors to raise £120M ($183M) by June 12, or face a seizure of EMI by lender Citigroup (NYSE:C).
- Mixed messages on mortgages. In its monthly summary, Fannie Mae (FNM) reported the serious delinquency rate for single-family houses hit a new record of 5.52% in January, a jump from December's 5.38% and nearly double the 2.77% registered in Jan. 2009. However, an industry trade group reported that for the first time in four years, borrowers catching up on overdue mortgages outnumbered new delinquencies. Last month 80,758 privately insured homeowners got back on track vs. 68,675 that fell into default. Yesterday also marked the end of the Federal Reserve's $1.25T program to purchase mortgage-backed securities.
- Report faults China on unfair trade. In its annual report on trade barriers, the U.S. Trade Representative's office accused China of engaging in several dubious measures meant to keep foreign companies from competing fairly in its market. Though China has reduced official trade tariffs and quotas, its "willingness to encourage domestic or 'indigenous' innovation at the cost of foreign innovation and technologies" is troubling. The report sidestepped China's policies on the yuan.
- Credit Suisse may buy hedge fund stake. Credit Suisse (NYSE:CS) may buy a minority stake in hedge-fund giant York Capital, sources said, though talks could still fall apart. Tie-ups between big banks and hedge funds aren't new, but there have been few such deals lately. Perhaps more importantly, the talks suggest that at least some on Wall Street think regardless of whatever financial reform legislation is ultimately passed, large financial firms will be allowed to continue owning hedge-fund stakes.
- Yahoo gets hacked. Several activists and journalists working on issues related to China and Taiwan reported yesterday that their Yahoo (YHOO) email accounts were hacked into, making this the latest of a string of internet incidents involving China. Yahoo "condemns all cyber attacks regardless of origin or purpose," but a spokeswoman declined to discuss the latest breach for privacy reasons.
- Google's China business starts to fall apart. Google's (NASDAQ:GOOG) China business is starting to show signs of strain. Earlier this week, the company accused China of blocking searches on its Hong Kong website, and as of yesterday, searches out of China remained problematic. As a result, advertisers say they are seeing a major drop-off in traffic, and are inclined to respond by switching to other search engines. According to some analysts, the returns in China from Google's search ads have dropped 30-50% as compared to before Chinese search was moved to the Hong Kong site.
- Hartford repays TARP. Hartford Financial Services (NYSE:HIG) said yesterday that it had bought back $3.4B in TARP preferred shares but doesn't plan to repurchase 52M warrants. With the government repaid, the company is "well positioned from both a capital and balance sheet perspective." Shares closed up 1.4% yesterday.
- MSFT, Ford team up on electric cars. Microsoft (NASDAQ:MSFT) will expand its Hohm consumer energy management software to work with Ford's (NYSE:F) electric cars. The partnership will allow drivers to determine the best time to recharge their vehicles at home. As more people use electric cars and want to recharge the batteries after coming home from work, "the demand placed on the energy grid will be momentous. Addressing the challenge of how that demand is managed in a smart and affordable way is absolutely going to be critical."
- IPOs fare favorably. A handful of companies made their market debuts, with most of the initial public offerings showing favorable results. Wireless network provider Meru Networks (NASDAQ:MERU) closed nearly 28% above its IPO price, while financial services software maker SS&C Technologies (NASDAQ:SSNC) opened 6.7% above its IPO price (though it closed up only 0.5%). Primerica (NYSE:PRI), Citigroup's (C) life insurance unit, sold 21.4M shares instead of the 18M expected, and priced at $15 instead of the $12-14 expected. Crude oil and petroleum transporter Scorpio Tankers (NYSE:STNG) performed worse-than-expected, closing 3.4% below its IPO price.
Earnings: Wednesday After Close
- Micron (NASDAQ:MU): Q2 2010 EPS of $0.39 beats by $0.15. Revenue of $1.96B (+97.5%) vs. $1.82B. Revenue from sales of DRAM products rose 24% over Q1. Shares +2.9% AH. (PR, earnings call transcript)
- Mosaic Company (NYSE:MOS): FQ3 EPS of $0.50 misses by $0.12. Revenue of $1.7B (+26%) vs. $1.8B. (PR)
- Research In Motion (RIMM): Q4 EPS of $1.27 misses by $0.01. Revenue of $4.08B (+17.9%) vs. $4.31B. Guides Q1 EPS above consensus, revenue in-line. Shares -4.8% AH. (PR, earnings call transcript)
- RINO International (OTC:RINO): Q4 EPS of $0.53 beats by $0.04. Revenue of $53M (+30%) vs. $60M. Shares -5.4% AH. (PR)
- In Asia, Nikkei +1.4% to 11244.4. Hang Seng +1.4% to 21537. Shanghai +1.2% to 3147. BSE +0.9% to 17693.
- In Europe at midday, London +0.7% to 5721. Paris +1.1% to 4016. Frankfurt +0.8% to 6206.
- Futures: Dow +0.5%. S&P +0.5%. Nasdaq +0.2%. Crude +0.9% to $84.52. Gold +0.2% to $1115.30.
Thursday's Economic Calendar
6:00 Auto sales
6:00 Monster Employment Index
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
5:00 PM Fed's Dudley: 'Economic Outlook for 2010'
- Notable earnings before Thursday's open: KMX
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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