Morgan Stanley Profit Drops, Beats Estimates as Trading Revenue Jumps (Bloomberg)
Net income fell 45 percent to $968 million, or 50 cents a share, from $1.78 billion, or 99 cents, a year earlier, the bank said today in a statement. Earnings from continuing operations, excluding a 26-cent loss tied to a Japanese joint venture and a 30-cent tax gain, were 46 cents a share. That compared with the 40-cent average estimate of 14 analysts surveyed by Bloomberg.

Ex-Goldman Sachs Banker Starts Hedge Fund Analyzing Japanese Blog Traffic (Bloomberg)
Former Goldman Sachs Group banker Hideki Furusho and a University of Tokyo professor have teamed up to create a hedge fund that invests in Nikkei 225 futures based on a computer model that analyzes Japanese blogs.

At Facebook Townhall, Obama Goes On Offensive (WSJ)
“The Republican budget that was put forward I would say is fairly radical. I wouldn’t call it particularly courageous,” Mr. Obama said. Mr. Obama offered a dire description of the budget drafted by Republican Rep. Paul Ryan of Wisconsin. He said it would reduce taxes for corporations and the wealthy by cutting funds to clean energy programs and transportation. “I guess you could call that bold. I would call it shortsighted,” Mr. Obama said to applause from an audience of mostly young people. “I do think Mr. Ryan is serious,” Mr. Obama added. “He’s a patriot.”

BlackRock First Quarter Profit Gets Boost From Popular ETFs (Reuters)
The New York-based firm earned $819 million, or $2.96 per share, excluding some expenses, compared with $727 million, or $2.40 per share, a year earlier, BlackRock said on Thursday.

Weil: Geithner Downgrades His Own Credibility To Junk (BusinessWeek)
Fox Business reporter Peter Barnes began his televised interview with Treasury Secretary Tim Geithner two days ago with this question: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?” Geithner’s response: “No risk of that.” “No risk?” Barnes asked. “No risk,” Geithner said.

GE Profit, Revenue Beat Street View (Reuters)
The world’s biggest maker of jet engines and electric turbines said earnings attributable to common shareholders came to $3.36 billion, or 31 cents per share, up from $1.87 billion, or 17 cents per share, a year earlier. Revenue rose 6 percent to $38.45 billion.

Bernanke Plans To Make Voice Heard (WSJ)
Next Wednesday, Federal Reserve Chairman Ben Bernanke will do something no Fed chief has done before: Stand before a room full of journalists after officials conclude a policy meeting and answer questions about the central bank’s decisions…”You can argue that the chairman of the Fed is more important than the president of the United States, but very few Americans understand what the Fed does,” says Sen. Bernie Sanders, a Vermont independent who successfully pushed for the Fed to disclose more about its secretive bank lending. Addressing the press, Mr. Sanders says, will be “a step forward.”

Greece Seeks Probe Into Debt Restructuring Rumor (Reuters)
Greek bank stocks fell 4.58 percent on Wednesday and the broader Athens bourse index lost 2.62 percent, underperforming pan-European indices on what traders said where rumors, spread by email, that the country would soon restructure its debt…”The ministry urgently requested the prosecutor’s office to launch a criminal investigation regarding the move in the Athens Stock Exchange and the bond market,” the ministry said in a statement.

Taco Bell Demands Apology After Lawsuit Is Withdrawn (CT)
On Wednesday, the fast-food chain decided to trumpet that good news with full-page ads in 10 major U.S. newspapers, including the Chicago Tribune, Los Angeles Times, New York Times, USA Today and The Wall Street Journal, demanding an apology. The company pegged the ads at a total cost of between $3 million and $4 million. “Would it kill you to say you’re sorry?” the ad exclaimed. “Sure, they could have just asked us if our recipe uses real beef. Even easier, they could have gone to our Web site where the ingredients in every one of our products are listed for everyone to see,” the ad read. “But that’s not what they chose to do.

New Swiss Tax Rules Signal Big Changes for Private Banks (NYT)
Switzerland aims to sign new treaties by the summer with Germany and Britain under which their citizens would pay taxes on more of their undeclared assets in Swiss banks. France and Italy are expected to follow suit.

Business Group Vows Support for U.S. Lawmakers to Cut Deficits (Bloomberg)
“The business community strongly supports a comprehensive deficit-reduction plan and will support members of Congress who help get it enacted,” according to a statement from the Committee for Economic Development released today in Washington. “Serious deficit reduction cannot be painless, and no one should expect or demand that the spending and revenue provisions they care most about will not be touched.”

Regulators Serve Up Alphabet Soup (WSJ)
Banks that decide they don’t want to belong to this exclusive, heavily regulated club should beware the “Hotel California.” This provision of Dodd-Frank, named in homage to the Eagles lyric that “you can check out any time you like but you can never leave,” ensures a taxpayer-aided bank can’t “de-SIFI” simply by shrinking its assets. Jargon purists, who prefer acronyms to Eagles songs, can find particularly rich pickings in the dozens of new rules affecting swaps, futures and options. A round-table event held by regulators last fall invited the public—”seating on a first-come, first-served basis”—to discuss DCOs, DCMs, SDs, MSPs, SEFs and SB SEFs. Such acronyms “remain strictly for the Dodd-Frank cognoscenti,” says Margaret Tahyar, a partner at law firm Davis Polk. Some of these terms will remain obscure. But some will enter the corporate lexicon, perhaps graduating to be the SECs and FDICs of their day.

Article courtesy of Dealbreaker

As had been speculated in recent weeks, Italy’s discussion of subsidies for its solar-power industry is tilting toward a diminution of how much the country will spend based on a target spending rate, reports Reuters’s Stephen Jewkes in Milan.

The latest version of the country’s decree on subsidies puts a target on installed capacity of solar of 23 gigawatts through 2016, but that is apparently tied to an estimated annual cost of €6 billion to €7 billion in subisides, writes Jewkes. Jewkes notes discussions today should lead to a presentation by the Industry and Environment ministries of Italy at meeting tomorrow.

In a note this morning, Jefferies & Co. analyst Jesse Pichel reiterates a view that the present discussion are leading to what’s been referred to by analysts as a “corridor” of solar capacity in Italy of 2 gigawatts to 3 gigawatts annually. Pichel emphasizes that the ministries’ proposals are “regulations, not a law,” and as such don’t require a vote of parliament.

Pichel sees the main impact of the solar tariff, or subsidy, reduction coming in 2012:

In the second half of 2011, [subsidies] may be capped to 1500 megawatts to avoid excessive FITs [feed-in tariffs], [and] when combined with the first half [of 2011] should allow 2.5 gigawatts for 2011. In terms of FIT, we expect a modest decline in the second half, with most of the decline in 2012. We believe the mechanism for rationalizing the overly generous FIT in 2011 is the main hold up to the regulation. Also, whether the large systems will be subject to bidding, rather than a FIT is a main question for 2012.

Pichel reiterated Buy recommendations on Yingli Green Energy (YGE), Trina Solar (TSL), and JA Solar (JASO). There will likely be greater volatility in shares of SunPower (SPWRA) and Power-One (PWER), he thinks, given that the two, “are most levered to the Italian regulation,” and especially any constraints on ground-based installations, he writes.

Solar shares today are down in an overall down market for the Nasdaq: Shares of YGE are down 10 cents, or 0.9%, at $11.48; Trina shares are down 70 cents, or 2.5%, at $27.01; and JA Solar shares are down 10 cents, or 1.6%, at $6.08. SunPower is down 37 cents, or 2.4%, at $14.97. Power-One is off 11 cents, or 1.5%, at $7.31.

Article courtesy of Tech Trader Daily

Interesting piece this morning by Bloomberg’s Allessandra Migliaccio and Flavia Rotondi about the Italian town of Montalto di Castro, situated on Italy’s west coast, about 70 miles from Rome. The town’s mayor is pushing hard for solar energy and against nukes.

The town’s nuclear reactor by the sea has been inoperative since a 20-year ban went into effect, and Mayor Salvatore Carai is organizing protests and staging Europe’s largest “photovoltaic park,” Migliaccio and Rotondi write, in order to draw attention to the promise of solar and the dangers of nukes.

The article quotes an anti-nuclear organizer who fears Montalto is “at the top of the list” to get a new reactor if the country moves ahead with a plan to end the moratorium on nuke construction, and there are risks people would abandon the area out of fear of leaks, the organizer says.

On the other hand, a farmer from the town recalls the boom-town days when the plant was built, and casts doubt on the electrical generation capability of solar.

Article courtesy of Tech Trader Daily

Sayeth the ratings agency:

Standard & Poor’s Ratings Services said today that it affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the U.S. Standard & Poor’s also said that it revised its outlook on the long-term rating of the U.S. sovereign to negative from stable. Our ratings on the U.S. rest on its high-income, highly diversified, and flexible economy. It is backed by a strong track record of prudent and credible monetary policy, evidenced to us by its ability to support growth while containing inflationary pressures. The ratings also reflect our view of the unique advantages stemming from the dollar’s preeminent place among world currencies.

“Although we believe these strengths currently outweigh what we consider to be the U.S.’s meaningful economic and fiscal risks and large external debtor position, we now believe that they might not fully offset the credit risks over the next two years at the ‘AAA’ level,” said Standard & Poor’s credit analyst Nikola G. Swann. “More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” Mr. Swann added.

In 2003-2008, the U.S.’s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most ‘AAA’ rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover.

On April 13, President Barack Obama laid out his Administration’s medium-term fiscal consolidation plan, aimed at reducing the cumulative unified federal deficit by US$4 trillion in 12 years or less. A key component of the Administration’s strategy is to work with Congressional leaders over the next two months to develop a commonly agreed upon program to reach this target. The President’s proposals envision reducing the deficit via both spending cuts and revenue increases.

Key members in the U.S. House of Representatives have also advocated fiscal tightening of a similar magnitude, US$4.4 trillion, during the coming 10 years, but via different methods. House Budget Committee Chairman Paul Ryan’s plan seeks to balance the federal budget by 2040, in part by cutting non-defense spending. The plan also includes significantly reducing the scope of Medicare and Medicaid, while bringing top individual and corporate tax rates lower than those under the 2001 and 2003 tax cuts.

We view President Obama’s and Congressman Ryan’s proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible.

Standard & Poor’s takes no position on the mix of spending and revenue measures the Congress and the Administration might conclude are appropriate.

But for any plan to be credible, we believe that it would need to secure support from a cross-section of leaders in both political parties. If U.S. policymakers do agree on a fiscal consolidation strategy, we believe the experience of other countries highlights that implementation could take time. It could also generate significant political controversy, not just within Congress or between Congress and the Administration, but throughout the country. We therefore think that, assuming an agreement between Congress and the President, there is a reasonable chance that it would still take a number of years before the government reaches a fiscal position that stabilizes its debt burden. In addition, even if such measures are eventually put in place, the initiating policymakers or subsequently elected ones could decide to at least partially reverse fiscal consolidation.

In our baseline macroeconomic scenario of near 3% annual real growth, we expect the general government deficit to decline gradually but remain slightly higher than 6% of GDP in 2013. As a result, net general government debt would reach 84% of GDP by 2013. In our macroeconomic forecast’s optimistic scenario (assuming near 4% annual real growth), the fiscal deficit would fall to 4.6% of GDP by 2013, but the U.S.’s net general government debt would still rise to almost 80% of GDP by 2013. In our pessimistic scenario (a mild, one-year double-dip recession in 2012), the deficit would be 9.1%, while net debt would surpass 90% by 2013. Even in our optimistic scenario, we believe the U.S.’s fiscal profile would be less robust than those of other ‘AAA’ rated sovereigns by 2013. (For all of the assumptions underpinning our three forecast scenarios, see “U.S. Risks To The Forecast: Oil We Have to Fear Is…,” March 15, 2011, RatingsDirect.

“Our negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years,” Mr. Swann said. “The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012.”

Some compromise that achieves agreement on a comprehensive budgetary consolidation program–containing deficit-reduction measures in amounts near those recently proposed, and combined with meaningful steps toward implementation by 2013–is our baseline assumption and could lead us to revise the outlook back to stable. Alternatively, the lack of such an agreement or a significant further fiscal deterioration for any reason could lead us to lower the rating.

[via MarketWatch]

Article courtesy of Dealbreaker

Citi Profit Falls 32 Percent (Reuters, Citi)
Citigroup’s first-quarter profit fell 32 percent as the bank lost less money on bad loans but struggled to grow its business. The bank said this morning it earned $3.0 billion, or 10 cents per share. That compared with $4.4 billion, or 15 cents per share, a year earlier.

Geithner Says GOP Prepared To Lift Debt Limit (WSJ)
In interviews aired on the Sunday talk shows, Mr. Geithner said House Speaker John Boehner and other senior Republicans told President Barack Obama in discussions last week that they were aware of the risk of a credit default and were open to lifting the limit even in the absence of a comprehensive deal to slash the country’s debt load.

Greenspan Says US Should Let Bush-Era Tax Cuts Expire (Bloomberg)
We should “allow the Bush tax cuts to expire,” Greenspan said on NBC’s “Meet the Press” today, calling the economic crisis “imminent and dire.” We should “put the rates back to where they were during the Clinton administration,” he said.

Hedge Funds Bounce Back (WSJ)
Total hedge-fund assets are approaching $2 trillion and are soon expected to surpass their peak in early 2008, according to industry analysts. Even start-ups and smaller funds, which were shunned by many investors in the wake of the crisis, are benefiting.

Emerging Nations Reject Capital Plan (WSJ)
The IMF’s plan would have encouraged nations to treat capital controls as a last resort, after they had first tried use other tools, such as policies on interest rates, currency values and government budgets. But ministers of developing economies resisted vehemently, viewing the proposal as an effort by advanced economies to hamstring their policies. Brazil, Turkey, South Korea and several other developing countries have adopted capital controls over the past year to limit surging inflows. “We oppose any guidelines, frameworks or ‘codes of conduct’ that attempt to constrain, directly or indirectly, policy responses of countries facing surges in volatile capital inflows,” Brazil’s finance minister, Guido Mantega, told the IMF’s steering-committee meeting.

Robot Does Hazardous Duty At Nuclear Plant (WSJ)
The plant’s operator, Tokyo Electric Power Co., said Sunday that the PackBot, a small robot that scoots around on tank-like treads, would monitor radiation and oxygen levels to find out whether conditions were safe enough to allow human workers to go in to try to bring the nuclear crisis at the plant under control.

FDIC Eyes Tougher Rules For Big Banks (FT)
Sheila Bair warned that regulators now had the authority to demand that US banks break themselves into smaller parts — and it “could and should be used.”

Is Sitting Lethal? (NYT)
Over a lifetime, the unhealthful effects of sitting add up. Alpa Patel, an epidemiologist at the American Cancer Society, tracked the health of 123,000 Americans between 1992 and 2006. The men in the study who spent six hours or more per day of their leisure time sitting had an overall death rate that was about 20 percent higher than the men who sat for three hours or less. The death rate for women who sat for more than six hours a day was about 40 percent higher. Patel estimates that on average, people who sit too much shave a few years off of their lives…Sitting, it would seem, is an independent pathology. Being sedentary for nine hours a day at the office is bad for your health whether you go home and watch television afterward or hit the gym. It is bad whether you are morbidly obese or marathon-runner thin. “Excessive sitting,” Dr. Levine says, “is a lethal activity.”

Ferrari Should Be Valued at $7.3 Billion in IPO, Marchionne Says (Bloomberg)
Fiat SpA Chief Executive Officer Sergio Marchionne said he’s told bankers pushing him to pursue an initial public offering of Ferrari that the division may be worth more than 5 billion euros ($7.3 billion).

Greece Denies Restructuring Plan As Traders Raise Bet Default (Bloomberg)
“Restructuring is not an issue we’re discussing,” Greek Finance Minister George Papaconstantinou said in an April 16 interview in Washington. “The pain and the cost” of doing so would be greater than repaying lenders, he told reporters the same day.

Greek Default Would Mean Pain All-Around (WSJ)
Economists at the Brussels think tank Bruegel calculate that roughly 20% of Greece’s debt at the end of 2010 was held by domestic banks. They are in difficult straits, and forcing losses on them may simply require the country’s rescuers to come up with more money to help.

Rep. Jesse Jackson Jr. Blames iPad For American Unemployment (HP)
On Friday, Congressman Jesse Jackson Jr. addressed the United States’s current unemployment crisis and claimed the iPad was “probably responsible for eliminating thousands of American jobs.” Jackson, himself an iPad owner, expanded on his statement by pointing to the recent bankruptcy of Borders Books. “Why do you need to go to Borders anymore? Why do you need to go to Barnes and Noble? Just buy an iPad and download your book, download your newspaper, download your magazine,” the Congressman said.

Article courtesy of Dealbreaker

Senator Levin: Goldman Sachs Misled Congress After Duping Clients (Bloomberg)
Goldman Sachs misled clients and Congress about the firm’s bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said. Senator Carl Levin, releasing the findings of a two-year inquiry yesterday, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value….Much of the blame for the 2008 market collapse belongs to banks that earned billions of dollars in profits creating and selling financial products that imploded along with the housing market, according to the report. The Levin-Coburn panel levied its harshest criticism at investment banks, in particular accusing Goldman Sachs and Deutsche Bank AG of peddling collateralized debt obligations backed by risky loans that the banks’ own traders believed were likely to lose value.

Senate Report Lays Bare Mortgage Mess (WSJ)
“I think I found white elephant, flying pig and unicorn all at once.” –Goldman Sachs email describing an Australian client that invested in a souring mortgage structure 4/26/2007

Moody’s, S&P Caved to Goldman, UBS Mortgage Pressure, Levin Says (Bloomberg)
“Investment bankers who complained about rating methodologies, criteria, or decisions were often able to obtain exceptions or other favorable treatment,” according to the Levin report. The decisions appeared to be “concessions made to prevent the loss of business.”

US Probes Libor Dealings (WSJ)
For the past year, law-enforcement officials have been investigating whether the U.S. and European banks understated their own borrowing costs, which are used to calculate the London interbank offered rate, or Libor. The investigators are now looking into whether the banks effectively formed a global cartel and coordinated how to report borrowing costs between 2006 and 2008.

Geithner: We Must Raise Taxes (PBS)
Appearing on the PBS NewsHour Wednesday evening, U.S. Treasury Secretary Timothy Geithner said there is “no plausible way” to cut the deficit without raising taxes. “Unless you’re going to cut deeply into commitments we have made to seniors and to the disabled and to the poor, or ask the country to go borrow the money, you can’t solve this,” he said.

Raj Keeps Chin Up (NYP)
One reason Rajaratnam has to smile might be the ebullient praise he received yesterday from prominent educator and social activist Geoffrey Canada. Canada, who was called as a character witness, called Rajaratnam a “dear friend” with “a genuine concern for children.”
“Raj and I hit it off right away,” said Canada, the CEO of charitable group the Harlem Children’s Zone. Canada said he approached Rajaratnam earlier this decade to donate to the group and found him eager to help “level the playing field for kids.” “I never had to convince Raj” to be a donor, Canada said when asked to respond to the prosecution’s allegations that Rajaratnam committed his alleged crimes out of greed. “He’s a very generous person,” he added.

Deutsche Bank Sold Mortgage-Linked ‘Pigs’ as Market Buckled, Lawmakers Say (Bloomberg)
“Keep your fingers crossed but I think we will price this just before the market falls off a cliff,” Michael Lamont, the group’s co-head, said in a Feb. 8, 2007, e-mail about Deutsche Bank’s Gemstone CDO VII Ltd., according to a report released yesterday by the Permanent Subcommittee on Investigations. The Frankfurt-based firm sold $700 million of the instruments, which lost most of their value within 17 months.

IMF: Banks Face $3.6 Trillion ‘Wall’ of Maturing Debt (Reuters)
Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.

Obama Challenges Republicans With Deadline For Deficit Deal (Bloomberg)
The timeline Obama proposed for coming up with an agreement — beginning talks in early May and completing them by late June — sets up a negotiation over the nation’s long-term fiscal challenges in parallel with a congressional debate over raising the $14.29 trillion legal debt limit.

Glenore Aims For $8.8 Billion In IPO (WSJ)
The company said it plans to list a 15% to 20% stake, through an offer to raise around $6.8 billion to $8.8 billion in new capital and up to $2.2 billion in existing shares. At the upper level, that would make it London’s largest-ever initial public offering, topping Rosneft’s $10.6 billion offer in July 2006.

London Retains Lure For Hedge Funds As Banks Demure (Reuters)
Throgmorton’s Rubio points to the “Harvey Nicks effect” — referring to upmarket London department store Harvey Nichols, a magnet for big spenders — and said he had seen one manager relocate to Barcelona, only to move back to London.

Article courtesy of Dealbreaker

Think you’re the only one who likes to drizzle the sugary goodness on your breakfast food? Think again!

In a nondescript warehouse on the outskirts of town, some 40 kilometres southwest of Quebec City, there is a stash of maple syrup. A 6.3-million-kilogram stash of maple syrup, to be exact. About 60 kilometres further south, another 1.4-million-kilogram cache is squirrelled away in Plessisville, a town proclaimed as the World Maple Capital in 1976. Together, these stockpiles are officially called the International Strategic Reserve, which works like a Fort Knox for Canada’s most-cherished breakfast condiment – a massive arsenal of sweet, liquid gold ready to be deployed to feed a rise in global demand while maintaining price stability.

It’s the Federation of Quebec Maple Syrup Producers’ way of preparing for what it expects to be a banner year for exports to Asia due to surging demand from countries like Japan, China and South Korea…though Japan is facing a painful recovery from the tsunami and earthquakes that shook the country last month, the country’s demand for Canadian maple syrup is unlikely to take a hit, said Derek Burleton, deputy chief economist at Toronto-Dominion Bank.

“People need to eat, right? It’s that standard cliché. So we wouldn’t expect a major impact on the maple syrup industry as a result of the Japanese crisis,” Mr. Burleton said.

[Globe And Mail]

Article courtesy of Dealbreaker

Do not be fooled by Lenny Dykstra, who will surely be using the campaign as a part of a scam to force people into giving over their pin numbers.

As part of the new campaign, Bank of America will bring some of the most exciting and celebrated players in the game today into select banking centers across the country, where they will surprise customers with free game tickets, autographed items and other baseball-themed giveaways during the opening weeks of the season. One star player from each of the following MLB clubs will make unannounced visits to banking centers in these U.S. cities on these dates:

New York Yankees – April 11
Boston Red Sox – April 14
Chicago Cubs – April 21
San Francisco Giants – April 21
Los Angeles Dodgers – April 28

Additionally, Bank of America will provide free vouchers to be used towards either ballpark concessions or game tickets to customers attending the home openers for five teams: the Boston Red Sox, Chicago Cubs, Los Angeles Dodgers, New York Yankees and San Francisco Giants.

[BusinessWire]

Article courtesy of Dealbreaker

American Depository Shares of China Unicom (CHU) are down 30 cents, or 1.8%, at $16.46 after the company this morning reported 2010 annual revenue of 171.3 billion Renminbi, surpassing the the 167 billion average estimate, but said profit fell 55%, year over year, on costs for network upgrades.

Ticonderoga Securities analyst Brian White this afternoon picked through the details of the report, concerned less with China Unicom itself, and for what it says about some tech suppliers he follows.

In particular, he discussed the implications for Cogo Group (COGO), which supplies “modules,” incorporating multiple chips and other parts, used by cell phone makers, and modules that go into the networks themselves, in gear from Chinese equipment makers such as Huawei and ZTE.

The good news is that capital expenditures at China Unicom are going to rise 5% this year after a 38% decline in 2010, observes White, with the bulk of the outlay in 3G wireless networks to the “HSPA+” standard, and transport networks.

That level of spending signals an ambition on the part of China Unicom, and competitors China Telecom (CHL) and China Mobile (CHA), the largest, that may end up making China’s mobile Internet “one of the ‘wonders of the world,” writes White. “We believe the country will have the largest 3G subscriber base in the world by 2012 before shifting to a 4G TD-LTE network.” (I would note that CHU is the sole carrier in China at the moment of Apple’s (AAPL) iPhone.)

Cogo “appears well positioned to benefit,” he writes. Cogo gets 25% of sales from mobile phones, and the 3G handset ramp in China should help that. Also, Cogo is working with “nearly 50 tablet customers,” and got 24% of its Q4 revenue from sales into telecom equipment makers.

White thinks Cogo can shoot up from an expected $451 million in revenue this year to perhaps $1 billion “over the next few years.”

Cogo shares today are down 17 cents, or 2%, at $7.63.

Article courtesy of Tech Trader Daily

Citi Plans Reverse Stock Split (WSJ)
The bank announced a 1-for-10 reverse stock split of its common shares effective after markets close on May 6. Separately, the banking giant said it plans to reinstate a quarterly dividend of a penny a share in the second quarter.

Buffett Won’t Sell Japan Shares As Earthquake Becomes ‘Opportunity’ (Bloomberg)
“If I owned Japanese stocks, I would certainly not be selling them because of the events of the past 10 days or so,” said Buffett, speaking to reporters in the South Korean city of Daegu, where he arrived yesterday to attend a ceremony for a new factory being built by TaeguTec Ltd. “Something out of the blue like this, an extraordinary event, really creates a buying opportunity.”

Buffett: Berkshire Seeks More Deals (WSJ)
“We’re looking at a number of big businesses in Korea, the U.S., the U.K. We hope to find good companies wherever they may be. Basically, it’s the bigger, the better,” he said at a press conference in South Korea.

Kan Sees ‘Light at the End of the Tunnel’ as Atomic Crisis Eases (Bloomberg)
In a flurry of announcements today, Kan said progress was being made in restoring power to reactors No. 1 and No. 2, while Tokyo Electric Power Co. said it had connected No. 3 and No 4. Minutes later, state broadcaster NHK said engineers were evacuated as gray smoke was seen billowing from reactor 3. “While we haven’t reached the point where we can say we’ve gotten out of this crisis situation, it can be said that we can see the light at the end of the tunnel,” Prime Minister Naoto Kan said at the beginning of a meeting of his crisis response team at the prime minister’s office in Tokyo.

Swiss Re Estimates Japan Claims At $1.2 Billion (WSJ)
Swiss Re Monday said it expects claims costs of $1.2 billion from the earthquake and tsunami in Japan, but cautioned that its estimate is subject to a higher than usual degree of uncertainty and may need to be adjusted as the extent of the insured losses becomes clearer.

Hedge Funds Slash Bullish Commodity Bets Most In 8 Months (Bloomberg)
“The situation in Japan prompted a lot of investors to take profits after a fairly good run in commodities,” said Brian Hicks, who helps manage $3 billion at U.S. Global Investors in San Antonio. “This is a short-term headwind for further upside in commodities. We’re still going to see industrialization and urbanization in emerging markets.”

The Beefy Crunch Burrito Incident (SA)
The price of the Beefy Crunch Burrito had gone up from 99 cents to $1.49 and the man at the Rigsby Road Taco Bell drive-thru had just ordered seven. The fast food customer was so disgruntled by the price hike he shot an air gun at the manager, displayed a semiautomatic assault rifle and pistol while in the restaurant’s parking lot, fled as police were called, exchanged gunfire with three officers who pulled him over, then barricaded himself in his hotel room — all over $3.50 plus additional tax.

Bankers See More Deals To Follow AT&T’s Big Bid (WSJ)
Fears of global financial turmoil were put aside Sunday when AT&T Inc., the nation’s second-largest wireless network operator, announced a $39 billion proposal to acquire the fourth-largest player T-Mobile USA Inc. If naturally optimistic bankers are to be believed, that trend is set to continue this year, with companies searching for growth through deals after the recession and the mergers-and-acquisitions market on its way to a healthy recovery.

Hedge Fund CAI Cuts Entire Exposure To Japan (Reuters)
Eddie Tam, whose CAI Global Fund returned 48 percent last year to become one of the top-10 multi-strategy hedge funds in the world, said he about 15 percent of his portfolio was parked in Japan before the country was hit by the massive earthquake.

Morgan Stanley Targets Mid-Market Private Equity To Boost Fees (Bloomberg)
The bank has advised on seven closed or pending deals this year from firms that manage funds of less than $5 billion, said Joe Purcell, managing director of the middle-market advisory group created last year. “It’s often considered lower profile than covering the largest sponsors, but middle-market private equity can be very profitable for us,” Purcell said in an interview this month.

Western Strike Hits Gaddafi Compound, Tripoli Says (Reuters)
Western forces launched a second wave of air strikes on Libya overnight and officials in Tripoli said a missile intended to kill Muammar Gaddafi had destroyed a building in his fortified compound. “It was a barbaric bombing,” said government spokesman Mussa Ibrahim, showing pieces of shrapnel that he said came from the missile. “This contradicts American and Western (statements) … that it is not their target to attack this place.”

The World’s Most Valuable Brands (CNBC)
Google became the world’s most valuable brand this year, while Coca Cola dropped out of the top ten global brands for the first time, according to the 2011 Brand Finance ranking of the most valuable 500 brands across the globe.

Mets Owners Fire Back At Madoff Trustee (WSJ)
Team owners Fred Wilpon and Saul Katz and their associates issued a 107-page response to the $1 billion lawsuit filed by trustee Irving Picard. They said that, among other distortions, Mr. Picard had falsely accused them of dismissing warnings they had allegedly received about Mr. Madoff from employees at a hedge fund they helped start, Sterling Stamos Capital Management. David Sheehan, a lawyer for Mr. Picard, said “the Katz Wilpon defendants are wrong on the facts and the law.”

How Dumb Are We? (Newsweek)
When Newsweek recently asked 1,000 U.S. citizens to take America’s official citizenship test, 29 percent couldn’t name the vice president. Seventy-three percent couldn’t correctly say why we fought the Cold War. Forty-four percent were unable to define the Bill of Rights. And 6 percent couldn’t even circle Independence Day on a calendar.

Article courtesy of Dealbreaker