Frontrunning: December 30
- Americans on Wrong Side of Income Gap Run Out of Means to Cope (BBG)
- Michael Schumacher battles for life after ski fall (Reuters)
- Professors for hire: Academics Who Defend Wall St. Reap Reward (NYT)
- Chinese police kill eight in Xinjiang 'terrorist attack' (Reuters)
- How to Prevent a War Between China and Japan (BBG)
- Unemployment Benefits Lapse Severs Lifeline for Longtime Jobless (BBG)
- Japan's homeless recruited for murky Fukushima clean-up (Reuters)
- China Local-Government Debt Surges to $3 Trillion (WSJ)
- How unexpected: Britons less inclined to pay down mortgage debt (Reuters)
- Paschi Volatile as Owner Wins $4.1 Billion Sale Delay (BBG)
- Schauble: "Low interest rates cannot continue for ever" (Reuters)
- China Says Abe Closed Door to Meetings After Visiting Shrine (BBG)
- Home Prices Back at Peaks in Some Areas (WSJ)
- Turkey Is Biggest Loser in Stocks as Erdogan Crisis Persists (BBG)
Overnight Media Digest
* Saudi Arabia pledged $3 billion to bolster Lebanon's armed forces, in a challenge to the Iranian-allied Hezbollah militia's decades-long status as Lebanon's main power broker and security force.
* The housing recovery remains uneven as cities that were spared in bust soar, but many others struggle.
* Sales of long-term "junk" bonds are lagging and prices are down, the latest sign that investors are flocking to shorter-term securities that are less vulnerable to rising interest rates.
* Blackstone Group is spending $200 million for preferred stock of struggling footwear company Crocs.
* Amazon.com isn't that forthcoming with details about its Prime program, but that doesn't diminish its importance.
* The Securities and Exchange Commission is pushing life insurers to disclose the potential cost if they are forced to halt use of controversial "captive" entities, according to regulatory filings and people familiar with the matter.
* Acer Inc said Monday that three senior executives had recently left the company and some of them won't be replaced as the embattled personal-computer maker tries to keep costs low.
* As Chesapeake Energy Corp burned through cash in recent years, it raised billions of dollars by selling pieces of its empire: oil and gas properties, pipelines, even royalties from wells yet to be drilled.
* Technology giants Google Inc and Apple Inc are about to expand their battle for digital supremacy to a new front: the automobile.
Next week at the Consumer Electronics Show in Las Vegas, Google and German auto maker Audi AG plan to announce that they are working together to develop in-car entertainment and information systems that are based on Google's Android software, people familiar with the matter said.
Financial regulators in the UK have warned that consumers are increasingly being targeted by "dubious" firms offering investment opportunities in graphene, the carbon-based wonder material with a vast range of potential applications.
Activist hedge funds are fighting for the right to pay bonuses to directors that they place on corporate boards.This comes as 33 US companies have amended their bylaws to disqualify any directors that receive payment from outsiders, in the hope of deterring attacks by activist investors such as Carl Icahn, Bill Ackman and Daniel Loeb.
David Cameron has quietly dropped his support for a new generation of "garden cities" in a move that raises questions over the government's commitment to tackling Britain's escalating housing shortage.
Europe is ripe for a surge of leveraged buyout restructurings as banks sell their worst-performing loans to "distress investors" eager to take over the borrowers.
The gold mining sector is braced for asset writedowns and a fall in the amount of reserves in the ground after the precipitous drop in the price of the metal this year
* Emails and other confidential documents show that JPMorgan Chase and Co escalated what it called its "Sons and Daughters" hiring program, adding the children of China's ruling elite, and tracking how those hires translated into business deals with the Chinese government.
* Democrats are hoping that a push to raise the federal minimum wage and a campaign to place state-level wage proposals on the ballot will help their chances in hotly contested congressional races.
* Media conglomerate Time Warner Inc hopes to spin off its Time Inc unit into a separate public company within the next six months.
* The United States, the country that invented the Internet, is falling dangerously behind in offering high-speed, affordable broadband service to businesses and consumers, according to technology experts and an array of recent studies.
* Twitter Inc is trading at a much higher valuation than proven Internet powerhouses like Facebook Inc and Google Inc. The company, which has released no major news or financial information since its initial public offering, has not stopped investors' exuberance about its potential to eventually bring in billions of dollars from advertising, coupled with Wall Street's penchant for hopping onto any fast train, from propelling the shares to nosebleed levels.
THE GLOBE AND MAIL
* Toronto Hydro Chief Executive Anthony Haines said on Sunday that he expected power would be fully restored in the city on Monday.
* Hundreds of people filed into a Montreal funeral home on Sunday to pay their respects to reputed Mafia boss Vito Rizzuto. Rizzuto, the head of a criminal organization with reach across Canada and beyond, died of natural causes in a Montreal hospital last Monday at age 67.
Reports in the business section:
* Big companies such as Royal Bank of Canada and Manulife Financial Corp are getting serious about cutting real estate costs by giving employees less room. That could have a profound impact on the market as developers plan millions of square feet of new space.
* Kinross Gold Corp will complete a critical study on its Tasiast gold mine in the first quarter of the new year, a step that will determine whether the company will expand its troubled mine in the Mauritanian desert.
* The Mutual Fund Dealers Association of Canada, the watchdog for Canada's mutual fund dealers, is searching for ways to be less burdensome on its members as increased regulation and changing investor demands reshape a maturing business.
* Aimia Inc is poised to enter a new era in 2014 with Toronto-Dominion Bank as its new partner and long-standing ally CIBC both offering credit cards linked to Aimia's Aeroplan rewards. However, current customers of CIBC Aerogold Visa cards won't initially see any change and the companies are saying it won't be until mid-2014 until the transition is completed.
* The federal government is working on a new way to warn Canadians about the need to protect themselves from the dangers of frigid weather. When the new system is introduced, perhaps as early as in 2014, Canadians will no longer see separate wind chill warnings in Environment Canada forecasts or on its website.
* A top United Nations official is praising Prime Minister Stephen Harper government's foreign policy initiative to end forced marriage of young girls, even if Canada won't fund projects that would allow victims access to an abortion. The Conservative government's practice of not allowing aid dollars to go towards organizations that offer abortions to victimized girls or war-rape victims has sparked heated criticism in some quarters.
* Tech startups are increasingly inflating job titles to attract much-needed workers, says AdZuna, a young British company that surveys classified ads in the UK, Canada, South Africa, Germany and Brazil.
* Consensus is forming that 2014 will be the economic turning point for the United States and that is traditionally good news for Canada. However, Canada has some headwinds that, until addressed, will likely decouple Canada's growth from its neighbor's in the short and medium term
CHINA SECURITIES JOURNAL
- A front-page editorial emphasizes the importance of the State Council's recent policy guidelines on protecting small- and medium-sized investors, saying that increased protections are crucial to the healthy development of China's capital markets.
- China Postal Express & Logistics Co., Ltd withdrew its application for an initial public offering, becoming the latest of 292 companies that have withdrawn applications for IPOs on the Shanghai and Shenzhen stock exchanges.
SHANGHAI SECURITIES NEWS
- A front-page editorial praises the State Council's policy document on protecting small and medium-sized investors as a historical milestone, particularly the focus on increasing the influence of capital market investors relative to companies raising capital in the market.
- China can play a bigger role in the Arctic, but China is still "far from becoming a power player in the Arctic", said the head of the polar strategic research division under the Polar Research Institute of China.
- President Xi Jinping joined diners for dumplings recently, showing his closeness to the people, said a commentary in the paper that acts as the party's mouthpiece. Such a man-of-the-people work ethic will lead to the satisfaction of the masses and assist in achieving the "China Dreams", the paper said.
GOVERNMENT COULD SELLOFF REMAINING LLOYDS STAKE IN 2014
The Government could complete the privatisation of Lloyds Banking Group in 2014 with the sale of the state's remaining 33 percent holding in the lender, according to sources close to the process.
BURBERRY AND SAINSBURY'S SEENS AS POSSIBLE TAKEOVER TARGETS
Top British companies such as Burberry, J Sainsbury and Chemring have been tipped as takeover targets next year by investment bank UBS
CABLE QUIZES HUNT OVER NHS RISK FROM PRIVATISED PLASMA FIRM
The business secretary, Vince Cable, has asked his cabinet colleague Jeremy Hunt at the Department of Health for assurances that the recent privatisation of the state-owned blood plasma company will not leave the NHS short of life-saving products.
BATTLE FOR FUTURE OF SKIES: BOEING DREAMLINER V AIRBUS A380
Despite a troubled birth a year ago, Boeing's flagship plane has overtaken the larger A380 in terms of orders.
COAL PLANTS WILL STAY SHUT DESPITE THREAT OF BLACKOUTS
The Government has ruled out challenging European environmental legislation that has forced the closure of many of Britain's biggest coal plants and left the country at risk of blackouts within two years.
WE DON'T WANT YOUR HELP, AGENCIES TELL BIG TOBACCO
Tobacco companies should no longer be allowed to fund raids on premises suspected of selling illegal cigarettes, or sponsor the training of sniffer dogs, under new guidelines to be issued next year.
INSURANCE BROKERS MAKE CLAIM FOR UNFAIR TREATMENT BY FCA
Britain's top regulator has been accused of backtracking on a promise to introduce "proportionate" red-tape on insurance brokers after launching 10 industry reviews in nine months.
CBI BOSS CALLS ON FIRMS TO PAY STAFF MORE THAN MINIMUM WAGE
The head of the CBI will today call for companies to start paying their staff more, saying the large number of people working for the minimum wage is a "serious challenge" that business and the Government must address.
Fly On The Wall 7:00 AM Market Snapshot
Disney (DIS) upgraded to Buy from Neutral at Guggenheim
Myriad Genetics (MYGN) downgraded to Underperform at JMP Securities
POZEN (POZN) downgraded to Neutral from Strong Buy at Ascendiant
Entergy (ETR) coverage resumed with a Neutral at Goldman
Ocera Therapeutics (OCRX) initiated with a Buy at Stifel
StoneCastle (BANX) initiated with a Market Perform at JMP Securities
Westmoreland Coal (WLB) initiated with a Buy at Brean Capital
Crocs (CROX) entered financial partnership with Blackstone (BX), raised buyback plan to $350M, CEO to retire in April
Abbott (ABT) to pay $5.475M to settle DOJ claims
Genzyme (SNY) received Complete Response Letter from FDA on Lemtrada application
- Investors are homing in on shares seen as bargains, a shift that bulls say could keep this year's epic stock rally going in 2014. The "inexpensive" category includes those with relatively low valuations based on earnings forecasts and increasing estimated profits (DAL, BIIB, AAPL), the Wall Street Journal reports
- BMW and Toyota (TM) agreed to develop a joint platform for sports cars, and with two different vehicles, Reuters reports
- For investors in internet stocks, this year’s gains haven't been anxiety-free, thanks to uncomfortable memories of the 1999 Internet bubble and subsequent bust. Market strategists and tech experts say the comparison is overblown, Reuters reports
- U.S. regulators’ Dodd-Frank rules properly balance Wall Street’s pursuit of profits with the public’s need for a stable financial system, said Commodity Futures Trading Commission Chairman Gary Gensler, following the American Bankers Association’s court challenge of the Volcker Rule, Bloomberg reports
- Five years after the equity bull market began, U.S. investors returned to stocks in 2013, just in time for the best relative returns versus bonds on record. S&P’s 500 Index rose 29%, beating government debt by 32 percentage points, the widest spread since at least 1978, Bloomberg reports
Coca-Cola (KO) could rise 20% or more in 2014
Air France-KLM (AFLYY) shares could rise 25%
Loral Space & Communications (LORL), Wendy's (WEN), Carmike Cinemas (CKEC), Crocs (CROX), Orient Express Hotels (OEH), Outerwall (OUTR) mentioned positively as small caps
Staple stocks such as Wal-Mart (WMT), Procter & Gamble (PG), Coca-Cola (KO) a good defensive bet against risk of market downswing
Cisco Systems (CSCO), EMC (EMC), NetApp (NTAP), F5 Networks (FFIV), VMware (VMW) underperformed in 2013, likely to "continue to suffer" in 2014
Giant Interactive (GA), China Finance Online (JRJC), Noah Holdings (NOAH) are “stealth” China real estate plays
Cobalt (CIE) files automatic mixed securities shelf
Peregrine (PPHM) files to sell $100M of common, preferred stock