Fed Searches For Next Step After QE2 (WSJ)
Federal Reserve officials on Wednesday are expected to signal that in June they plan to end their controversial strategy of buying $600 billion in U.S. Treasury bonds to spur the economy. That would mark a milestone in the historic efforts by the central bank to stimulate economic growth. While analysts and investors debate whether the end to the bond-buying effort will have a significant impact on financial markets, the Fed is contemplating when and how to begin draining the credit it pumped into the economy during and after the global financial crisis. That tightening of credit still looks at least several months off, if not longer, and could take a while to unfold.
Bill Gross Battles Bond Dealers on Outlook as Treasuries Gain (Bloomberg)
“I could join the dealers and say the 10-year’s not going to go to 4 percent, so what am I left with?” Gross said in a telephone interview April 20. “I’m left with an under-yielding, less-than-inflation security. I have better choices. As a firm we’re not going to put up with it.”
US Housing Showing Some Signs Of Life (Reuters)
Four years after U.S. housing prices began to nose-dive, eventually triggering a global financial crisis, signs of life are appearing at the top and the bottom ends of the market. By contrast, a sustained recovery remains far off for the vast middle ground of the U.S. housing sector. Affluent Americans are feeling more secure as the impact of the recession fades and the stock market racks up big gains. “People who have decent income are saying, maybe I can trade up, buy a better property,” said Bill Hardin, director of the real estate program at Florida International University. “Some people are even saying, I’m willing to take a loss on the property I’m selling now to get something I couldn’t buy during the housing peak.”
NYSE Sees Higher Savings In Deutsche Boerse Deal (Reuters)
NYSE Euronext sees cost savings in its $9.8 billion deal with Deutsche Boerse at closer to 400 million euros ($583 million), up by about a third from its initial estimate, according to a Big Board spokesman on Sunday.
Big Oil’s Profits Set To Impress (WSJ)
If oil prices continue to climb, they could at least rival 2008. That year, U.S. producers reported astronomic profits as crude hit $147 a barrel for a time. Exxon that year earned $45.2 billion, more than any other U.S. publicly traded company in history.
Glencore Traders Urged Russia To Ban Grain Exports (FT)
As it bet on rising prices, senior traders at the Swiss-based company publicly urged Russia to impose a grain export ban. Moscow acted a few days later, triggering a grain rally. Glencore is the largest trader in Russian wheat, followed by US-based rivals Cargill and Bunge. The issue is sensitive because politicians such as Nicolas Sarkozy, French president have often blamed speculators for rising food prices. The G20 group of leading economies will hold a special meeting in June to discuss grain markets. Glencore revealed the proprietary trades to UBS, one of the banks underwriting its flotation, in a rare disclosure for a company that guards its market insights closely.
Plane Hauling Cocaine Crashes In Lake (SFNM)
A small planed loaded with bundles of cocaine and likely battling stormy weather crashed into Lake Heron in Rio Arriba County on Sunday morning, apparently killing all on board, according to the New Mexico State Police. Access to that section of the 4-mile-long lake, near Tierra Amarilla, was closed after bundles of what turned out to be cocaine began floating to the surface, Garcia said. “Several packages began surfacing,” he said.
Barrick to Buy Equinox for $7.68 Billion (Bloomberg)
Barrick bid C$8.15 per Equinox share, the Toronto-based mining company said today in a statement. A previous offer from China’s Minmetals was for C$7 a share. Perth-based Equinox has agreed to the Barrick offer and will drop its bid for Lundin Mining Corp., a Canadian copper and zinc producer.
Warren Buffett, Delegator In Chief (NYT)
ARS: Mr. Buffett’s investing antennas may be genius, but some of his critics have suggested that his trust-based management style may have left him too farsighted to quickly spot operational problems. As reported by Carol Loomis of Fortune magazine, when Mr. Buffett was first told in 1991 about indications of a possible scandal at Salomon Brothers that later nearly took down the company (Berkshire was its largest shareholder), he initially did not detect any reason to be particularly alarmed, “so he went back to dinner.” Only after speaking several days later about the matter with his partner, Mr. Munger, “did Buffett get a sense of real trouble.”
Swiss SVP against capital rules, wants banks split (Reuters)
The popular right-wing Swiss People’s Party (SVP) is against government plans proposed this week to tighten regulation of the country’s biggest banks, saying it wants them split up to cut risk to the Swiss economy. Christoph Blocher, former justice minister and SVP mastermind, said his party would oppose legislation the government handed to parliament on Wednesday to force the big banks to meet tough new capital standards.
Tepco Pumps Tainted Water From Reactor Trenches, Adds Backup Power Cables (Bloomberg)
“While not stable yet, things are generally moving in the right direction,” Penn Bowers, a Tokyo-based analyst for CLSA Asia-Pacific Markets, said by telephone today. “I’m not sure we’re going to see any major corner being turned at this point. There’s going to be a slow grind, probably for months.”
Boeing Factory Probed In Rupture Of Southwest Jet (WSJ)
It is too early to draw definitive conclusions, the officials said, and further testing and data analysis could bring other issues to the forefront. But the federal probe increasingly is focused on some type of assembly-line lapse—a rare occurrence in modern aircraft production— that would explain an incident that stunned the airline industry and worried travelers.
China Must Watch for Rising U.S. Treasury Yields: PBOC Researcher (Reuters)
Zhang Jianhua, a head of research at the People’s Bank of China, said worries that the heavily indebted U.S. government may not repay its debt could drive Treasury yields higher and cause U.S. debt prices to fluctuate.
A Fairytale View Of Britain (LATimes)
“The British public is simply not that excited about the royal wedding. According to the Economist, only a third of the population is definitely going to watch the nuptials on TV, while close to half are actively uninterested. My own secret source on the English streets (OK, it’s my mum, who lives in a small town called Tring) reports that ‘people seem much less bothered’ about Will and Kate than about Charles and Di in 1981.”
Jury Deliberations Set to Begin in Rajaratnam Case (FBN)
Jury deliberations are expected to begin Monday in the closely-watched insider trading trial of ex-Galleon hedge fund founder Raj Rajaratnam. Rajaratnam is charged with 14 counts of conspiracy and securities fraud. The government claims he made $63.8 million illicitly between 2003 and March 2009. He was arrested at his Manhattan apartment and charged in October 2009. He maintains he did nothing wrong…The jury’s patience with the nearly two-month trial has shown some signs of fatigue. On Thursday, two jurors groaned when the prosecution continued its rebuttal past 5 p.m. Another rolled her eyes and put on her coat.
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