Market Talk

- SEC investigating a few dozen financial firms regarding repo 105s is a welcome move, but it brings into question whether the agency has enough reach to be effective, Yves Smith says.

- Amazon (AMZN) currently controls nearly all of the e-book market. That will change with the iPad, Nook and others taking share, but maybe they can all thrive together, MediaMemo blogger Peter Kafka ponders.

- Current financial reform proposals are “toothless facades of what real regulation should look like,” Barry Ritholtz writes. He offers 10 questions finance reformers need to answer before passing legislation.

- New iPhones potentially on both AT&T (T) and Verizon Wireless may possible be Palm’s worst nightmare, Digital Daily blogger John Paczkowski says.

- This March has been a great month for stocks. And more gains may be on the way. April’s historically one of the best months of the year for the market, with the Dow averaging a 1.9% gain in April over last 50 years, according to Bespoke.

- “Regulation has to be smarter than something as simple as narrow banking,” Paul Krugman says. “Government backing — the 21st-century version of deposit insurance — plus regulation so that the backed institutions don’t abuse the privilege is still the way to go.”

- Non-profits can’t possibly save print journalism, Newsosaur blogger Alan Mutter argues.

- Ireland’s government announced plans to inject billions of euros into the nation’s beleaguered banking system and outlined bigger-than-expected discounts on loans to be transferred by financial institutions to the nation’s “bad bank.”

- Wondering what the next big battle between Wall Street and Washington will be? Capital ratios and liquidity, Andrew Ross Sorkin says.

- This perfectly exemplifies how bad the job market truly has gotten.

Verizon (VZ) shares enjoying a nice run-up this morning on the heals of a WSJ report that a possible new Apple (AAPL) iPhone could be compatible with Verizon Wireless’ network.

A Verizon-powered iPhone would end AT&T’s (T) exclusivity and represent an obvious positive catalyst for Verizon, Jefferies writes. Firm, which has been positive on the stock regardless of the latest iPhone news, says “in a world of handset parity (and the apps that go with those handsets),” customers will focus carrier selection on network quality.

“And we believe Verizon Wireless is currently viewed as the network leader.”

But beyond its expectation for Verizon to carry the iPhone sometime in the second half of 2010, Jefferies thinks increasing traction from Android-based devices “could ultimately level the handset/app playing field,” which is better economically for Verizon than broader iPhone availability.

Lots of unknowns remain. Both the timing and pricing of a Verizon iPhone – as well as how much of a subsidy Verizon would pay Apple – are still unclear.  But there seem to be some obvious winners and losers in the event that the iPhone comes to Verizon.

Continue reading…

- “Here we are, up 70% or so from the lows of over a year ago, and there is no uniformity of thought – which is probably a good thing,” Barry Ritholtz says.

- Treasury’s Geithner insists a resolution authority will help manage a failure of a large cross-border financial institution. “It simply will not,” former IMF chief economist Simon Johnson writes. “Mr. Geithner wanted to sound tough. But is he really coming out to fight? Or did he and his colleagues already throw in the towel?”

- Palm hopes distribution deal with AT&T (T) will boost sagging smartphone sales, but analysts aren’t so sure, John Paczkowski reports.

- “The home buying tax credit expires at the end of April and time is running out,” Miller Tabak’s Peter Boockvar says. “Bottom line, the next big test for this phase of the housing recovery is just ahead.”

- February existing home sales are proof the home buyer tax credit “has run out of gas,” Karl Denninger writes at the Market Ticker.

- Year-over-year decline in housing inventory is getting smaller. “This is something to watch,” Calculated Risk says. “This slow decline in the inventory is especially concerning with 8.6 months of supple in February – well above normal.”

- “Once upon a time, you could set your watch with the Google-Goldman super-tell duopoly,” Todd Harrison says at Minyanville. “As both are pointing due south today, it’s worthy of a mention.” Google (GOOG) drops 1.5% to $549; Goldman Sachs (GS) drops 0.8% at $174.83, but the Dow Jones Industrial Average rises 103 points.

- UK authorities arrested of six men, including an employee of hedge fund Moore Capital and another from Deutsche Bank, in what’s being billed by the government as a major crackdown on insider trading, WSJ reports.

- Solar stocks, which got hit hard during the bear market, have been really struggling during the recovery, Bespoke notes. For solar stocks over the last six months, “it’s not a pretty sight,” firm says. “Is now the time to buy or will solar continue to trade lower?”

- Jeff Saut, Barry Ritholtz, Bob Doll and Mike Santoli all correctly called the bull market, Josh Brown writes at The Reformed Broker.

- Microsoft (MSFT) doesn’t want to talk about the Courier, a rumored response to Apple’s (AAPL) iPad, but it’s willing to concede the blogosphere is a great way to read about it. All Things Digital says MSFT’s JobsBlog tells those looking for a job to check out “online chatter” about, among other things, “the upcoming Courier digital journal.” The JobsBlog links to a post on Engadget that claims exclusive pictures and details.

(UPDATE: Looks like someone at Microsoft’s (MSFT) JobsBlog might be in trouble. MSFT has now deleted a reference to its rumored Courier tablet from a JobsBlog post. “Hilarious,” All Things D’s Peter Kafka tweets. The post is still on JobsBlog but no longer mentions the Courier.)

Palm struggling to find its way.

So much for all the hype surrounding Palm last year.

The smart-phone maker dealt a big blow to investors today, slashing revenue guidance way below analysts’ expectations and acknowledging its devices aren’t selling as well as it expected. Shares plunged.

From WSJ:

Palm rolled out its new Pre and Pixi phones last year in an attempt to regain ground lost to Apple Inc.’s iPhone and Research In Motion Inc.’s BlackBerry. While the phones have won praise from reviewers, sales have stalled amid tough competition, heavy marketing support for more popular phones by the top two U.S. wireless carriers, and a dearth of “apps,” the third-party programs and games that have driven much of the appetite for smart phones.

The company said Thursday wireless carriers are ordering fewer of the phones than expected and are deferring orders they have made to future periods. As a result, Palm said its revenue for the fiscal year ending in May will be “well below” the $1.6 billion to $1.8 billion it had forecast. The company’s shares dropped about 15%.

“Driving broad consumer adoption of Palm products is taking longer than we anticipated,” Chief Executive Jon Rubinstein said in a release.

Palm shares plunged $1.56, or19%, to $6.53, and is now trading at levels last seen in April 2009. The stock had a huge run-up last summer amid potential that the Pre could become an iPhone killer. Looks like those expectations may’ve been a bit premature.

Continue reading…

- Greece has one month to show progress toward its goal of reducing its fiscal deficit by four percentage points in GDP terms. But naked capitalism blogger Yves Smith notes some EU officials, like Luxembourg’s Jean-Claude Juncker who says he’s waiting for Greece to take its commitments seriously, are being overly harsh on Greece.

- Banks did a nice job “helping” Greece. “The European Union is now asking Greece for details of what it did. But it should go further,” Floyd Norris says. “It should seek to find out if the banks that helped Greece lie — and thus knew its numbers were false — made money betting against it. If so, do those banks deserve to keep those profits?”

- Paul Krugman continues to bang the we-need-more-stimulus drum at his Conscience of a Liberal blog. He notes ARRA stimulus “fades out fast starting in fiscal 2011, which starts in October 2010,” while unemployment is still expected to be near current levels. “Fiscal support for the economy will be pulled away with the economy having barely begun to recover,” he says.

- Gawker announces its first-ever acquisition, also ousts its EIC.

- Yahoo (YHOO) just doesn’t carry the same appeal for Carl Icahn anymore. The billionaire activist investor, who at one point held about 75 million Yahoo shares, has slashed his stake down to 12M as of Feb 12.

- Microsoft (MSFT) yesterday revealed AT&T (T) will be its premier wireless partner for its new Windows Phone devices, possibly marking another reason for Apple (AAPL) to drop its AT&T iPhone exclusivity, Dan Frommer writes.

- Gold has a monster up day, breaks above its 50-day moving average and puts its recent correction behind it, Bespoke notes.

- Insider buying continues to show a bearish tone. “It remains clear that insiders are very hesitant to make long-term investments in their own shares due to continuing negative hiring trends and little to no sign of organic revenue growth,” the Pragmatic Capitalist says.

- Time for a concrete answer on financial reform, but who knows how it’ll all turn out. “Congress will do something. Voters expect it and they’ll deliver,” Mark Thoma says. “The question is whether the changes they make will have any teeth, and whether they’ll be directed at the right problems.”

- Folks may want to take today’s gains with a grain of salt. Volume is still lousy, and traders look at strong volume as a way to gauge the conviction behind a market move, our WSJ bud Matt Phillips writes at MarketBeat.

- Overseas stocks ahead of US on correction course. “But note: Over the last year, foreign stocks have mostly followed the US market trend, not led it,” Tom Petruno says. “At this point, they probably don’t have a message for Wall Street so much as they’re looking for a message from Wall Street.”

- “Millions” of Kindles flying off Amazon’s shelves. TechCrunch’s Michael Arrington pegs it at 3 million.

- Hard to draw conclusions in this complicated market. “The markets right now are especially complicated and appear to be facing fundamental things that it has either never faced or not faced in modern times,” says Roger Nusbaum, portfolio manager at Your Source Financial.

- S&P 500 crashes through support. Traders had been watching 1080-1085 level. So much for the strong opening. “The reversal today was telling,” FusionIQ CEO Barry Ritholtz says.

- It’s getting ugly out there. “This type of action, when the market trades sharply down even though economic reports and earnings reports both beat estimates handily, is not good,” Bespoke says. “There’s simply no way to sugercoat it.”

- Seems like Apple hasn’t lost affinity for AT&T. “Apple has been happy with the company as a carrier partner and is confident of its plans to vastly improve its network,” Digital Daily blogger John Paczkowski says.

- Pressure on the euro accelerates as currency falls below $1.39 for first time in more than six months.

- Might be a little soon to talk about “post-crisis” times, Pimco CEO Mohamed El-Erian says. “Too many markets, too many institutions have assumed this would happen quickly,” he notes.

- AIG releases list Of troubled derivatives contracts. AIG says in SEC filing that it’s releasing documents “due to recent public disclosure of the full contents of Schedule A,” a detailed listing of $62.1 billion in notional value derivative transactions its financial products group wrote.

- This blog needs more Gaga!

Geared up for heavy flow of 4Q earnings reports this morning, including AT&T, P&G, 3M and Ford; Microsoft and Amazon report after the closing bell.

Premarket tone so far is slightly more firm, following some solid gains in Asia overnight and higher European markets. December durable goods, weekly jobless claims due at 8:30am; Kansas City Fed’s January manufacturing index set for 11:00am.

US dollar index edging higher. S&P futures up 5.80, Dow futures up 41; 10-yr lower, yield at 3.66%.

Newswires’ Roger Cheng reports:

For all the talk of the pending split between Apple (AAPL) and AT&T (T), it seems the couple is doing just fine.

Apple earlier this week reiterated its suppport of AT&T’s network upgrade plans, and AT&T is once again the carrier partner for the new iPad. That shoots holes in the theory that Verizon Wireless would carry the device on its network, and possibly puts doubt into those Verizon Wireless iPhone rumors as well.

And while much of the focus for the iPad’s 3G services has been on the $30 unlimited plan, Goldman Sachs’ Jason Armstrong calculates that the capped $15 plan could prove to be “very profitable” for AT&T.

He estimates that the cost of 100 megabytes of data on a fully loaded network is $1. With a 250 megabyte cap, that’s quite a windfall for AT&T. The bigger question is how much the unlimited users will cost the network.

Firm notes the average iPhone consumes 400 megabytes of data per month, while a cellular laptop card uses 2 gigabytes, and the iPad should fall somewhere in between.

AT&T up 1.5% at $25.70; Apple up 1% at $208.37.

(Photo courtesy of Apple.com)

- Populist outrage has turned Ben Bernanke’s confirmation as Fed chairman into anything but a slam dunk, Tom Petruno writes at LA Times’ Money & Co blog, as everything changed after Scott Brown’s Senate victory. “Suddenly, populism is raging — and Bernanke is a convenient target for Democrats, Republicans and Independents alike,” he says.

- Lots of speculation on when Apple (AAPL) will end its iPhone exclusivity deal with AT&T (T). But Apple was pretty vocal in its defense of the carrier on yesterday’s conference call, Digital Daily blogger John Paczkowski says.

- Stop blaming Glass-Steagall’s repeal for the crisis. “I am all for better regulation of the financial services sector, but many of the ideas floating around do not really address the core issues the industry faces,” says Chad Brand, founder and president of Peridot Capital.

- Similar to the strong earnings beat rate this quarter, the percentage of companies boosting guidance as opposed to cutting their long-term views is also strong, Bespoke reports. But the question remains: is good news already baked into stock prices?

- Expect strong spring buying season for the housing market followed by a weaker middle and end of 2010 as “weak seasonal trends and the lack of government stimulus are likely to show housing’s true colors,” the Pragmatic Capitalist says.

- Don’t expect a Facebook IPO in 2010, according to two major investors in the social networking site. PaidContent has the details.

- Put FusionIQ CEO Barry Ritholtz on the growing list of folks who think Tim Geithner’s days as Treasury Secretary may be numbered. NPR also publishes a column saying Geithner must go. But Mark Thoma would still be surprised if the administration actually removed Turbo Tim.

- Control of Stuyvesant taking center stage, WSJ reports. Creditors and potential buyers are scrambling for control after Tishman relinquished control to creditors.

- For all the recent volatility, the S&P 500 still hasn’t closed below 1091. The index has found support their four times since November. S&P 500 closed down 5 at 1092.

- Blogosphere’s buzzing about “Fear the Boom and Bust: a Hayek vs. Keynes Rap Anthem.” (Hat Tip Abnormal Returns)

- Obama unveiling the “Volcker Rule” last week was encouraging, but there are still reasons to be skeptical, Simon Johnson says. “There are very real indications that the conversation is either superficial (on the economic side of the White House) or entirely a marketing ploy (on the political side),” he says.

- A tablet may not be Apple’s (AAPL) only major announcement at Wednesday’s event. Reports are circulating that Apple could announce the end of its AT&T (T) iPhone exclusivity deal later this week.

- Speaking of Apple, the buzz surrounding Wednesday’s event and expected unveiling of the tablet is reaching epic proportions. WSJ’s Digits blog looks at some of the bizarre tablet rumors. NYT’s David Carr is amazed at how Apple can drum up so much buzz without saying anything. And David Pogue says “The only thing we know for sure about the Apple tablet is that we don’t know anything for sure.”

- Are stocks ignoring earnings? Or has the market already priced in a strong earnings season? Bespoke weighs in.

- Disappointing existing home sales data this morning, but new home sales is what really matters for the economy, Calculated Risk says.

- Journalists, economists, bloggers and others weigh in on the troubles facing Ben Bernanke’s confirmation as Fed chairman. WSJ’s Real Time Economics has the details.

- Insider buying falls to a new low for week ending Jan. 20, while insider selling remains high. Not surprising corporate insiders are expressing little faith in their own shares. “As of now, signs of a sustained rebound in earnings and revenues remain mixed,” the Pragmatic Capitalist blog says.

- Sun Micro (JAVA) CEO Jonathan Schwartz is set to resign, leaving JAVA in hands of new owner Oracle (ORCL), Digital Daily blogger John Paczkowski reports, citing sources close to Sun.

- Tishman gives up Stuyvesant Project to its creditors in the collapse of one of the most high-profile deals of the real-estate boom, WSJ reports.

- StockTwits acquires the financial news aggregator Abnormal Returns, which is great all-around for the econoblogosphere and one-man blogs in particular, Felix Salmon says.