Opening Bell: 01.31.01
Lonely Analyst Warns Of 2015 Crisis Amid Upbeat Davos (Bloomberg)
“The fundamentals haven’t been addressed at all,” Barrie Wilkinson, a London-based partner at consulting firm Oliver Wyman, said in an interview at the Hotel Morosani Schweizerhof. “The things that caused the previous crisis -- loose monetary policy and trade imbalances -- they’re actually bigger now than they were then.”
Opposition Ramps Up Pressure On Mubarak (WSJ)
A coalition of opposition groups called for a million people to take to Cairo's streets Tuesday to ratchet up pressure on President Hosni Mubarak to leave...In the most significant change, the interior minister—who heads internal security forces—was replaced. A retired police general, Mahmoud Wagdi, was named to replace Habib el-Adly, who is widely despised by protesters for brutality shown by security forces.
Moody's Cuts Egypt's Rating, Warns On Spending (Reuters)
"There is a strong possibility that fiscal policy will be loosened as part of the government's efforts to contain discontent," Moody's said in a statement. "A background of rising inflationary pressures further complicates fiscal policy by threatening to increase the high level of budgetary expenditure on wages and subsidies."
Nouriel Roubini: Egypt's Protests Negative For Growth (CNBC)
"There's already political contagion from Tunisia to Egypt… geopolitical risk is on the rise," Roubini told CNBC in an interview. "It has a negative effect on growth or rising inflation. All this is not good." But he added that the situation wasn't as serious yet as to lead to another recession. "Even if in the past recessions have been associated with oil price shocks caused by geopolitical risk… we're not yet there but rising oil prices, risk aversion, these are all negative for the markets," Roubini said.
Business Operations Halt In Egypt (WSJ)
Dutch brewer Heineken NV, chemicals company Akzo Nobel NV, consumer-products giant Unilever NV, Japanese auto company Nissan Motor Co. and General Motors Co. of the U.S. were among the companies suspending production.
Egypt Spurs Jump In Developing Money-Market Rates (Bloomberg)
The last time short-term borrowing costs in developing nations rose this fast was the second half of 2008, when the global financial crisis and record commodity prices pushed the world economy into a recession.
A Fund Manager Ensnared (WSJ)
The hedge-fund manager—Samir Barai, the 39-year-old founder of New York-based Barai Capital Management—didn't return calls for comment. Prosecutors haven't disclosed any charges of wrongdoing against Mr. Barai in the still-unfolding investigation. FBI agents raided his fund in November, the people familiar with the matter say, but the fund's identity hasn't before been made public. Mr. Barai made his name at Citigroup in a high-profile hedge-fund position and he used that affiliation to help market his own fund, according to people familiar with the firm. His role in the investigation involves conversations and trading that took place after Mr. Barai left Citigroup in 2007, and there is no indication the bank is implicated in the probe.
Climber falls 300m down a mountain – and survives (Guardian)
In seconds Adam Potter fell 300m (about 1,000 ft) down the side of Sgurr Choinnich Mor, gathering pace as he fell. He tumbled down a rough scree slope – fortunately cushioned by deep snow - and bounced over three cliffs, each perhaps a hundred feet high, scattering his kit behind him. His body twisted, heels over head. Miraculously, Potter survived. He came to rest 800m above sea level with a skinned and bloodied face, whiplash, back injuries and wrenched shoulders, when his downwards momentum was finally arrested by a boulder. He thinks the rock briefly knocked him out.
Growth Stocks May Fizzle As Rebound In Market Favors Value (Bloomberg)
Growth stocks in the U.S. have “dominated value for well over the last year, hardly a surprise given investors’ preference for emerging markets to domestic exposure,” Graham Bishop and Ian Richards, equity strategists at Royal Bank of Scotland Group Plc in London, wrote in a Jan. 12 report. “But as domestic concerns subside and valuations become stretched, we expect investors to switch into the ‘value’ catch-up candidates and out of the recent ‘growth’ winners.”
United, Delta Profit at Risk From `Silent Killer' in Fuel Hedges (Bloomberg)
U.S. airlines including United Continental Holdings Inc. and Delta Air Lines Inc. may see 2011 profits eroded as an indicator of jet-fuel costs surges to a two-year high. Most carriers try to smooth fuel-price swings with advance purchase contracts linked to the cost of crude or heating oil, a proxy for jet fuel. Those with hedges tied to crude futures have been less protected against rising costs, with the difference versus heating oil jumping more than 50 percent this month. “This is out of control,” said David Cush, chief executive officer of Virgin America Inc., the low-fare carrier partly owned by U.K. billionaire Richard Branson. “This is a kind of silent killer. It has a huge impact on airlines.”
Americans Pick Up Spending (WSJ)
Consumer spending grew by 0.7% in December, the Commerce Department reported Monday. Americans' incomes rose by 0.4% for a second month in a row.
Bankers Expect 13 Percent Bonus Deferral (Reuters)
Investment bankers working in Britain expect, on average, 13 percent of their bonuses will be deferred, according to a survey published on Monday by financial services recruitment firm Astbury Marsden. The survey's findings showed most bankers were fighting recommendations made by European Union regulators for at least 40-60 percent of top bankers' bonuses to be deferred over 3-5 years. "Below vice-president level, most staff are not ready for the idea that they have to accept another year of deferred bonuses," Astbury chief operating officer Mark Cameron said.
