(NYPost) Taper talk can’t stop the stock-market bulls

It’s damn the taper, the bulls are out of the gate!
Wall Street’s prognosticators are calling for the Dow Jones industrial average to soar like a rocket well into next year. That’ll take it as high as 20,000, with the broader S&P 500 crossing 2,000 by this year’s end. The Dow closed last week at 16,458.56, and the S&P at 1,838.70.
The Fed’s slow tapering is not holding back this market. The financial fireworks are igniting US stock trading. And that’s despite some recent choppy sessions caused by weak earnings and some dollops of bad economic news.
“The reason we are bullish? I still get the sense the world is underallocated for equities,” Savita Subramanian, head of US equity and quantitative strategy at BofA Merrill Lynch global research, told The Post. “I would argue that we are in the very early innings of a great rotation we have been talking about — out of bonds, into equities.”
BofA Merrill Lynch has a year-end target of 2,000 for the S&P, about a 10 percent-plus price returns. And BofA Merrill Lynch is not alone. Goldman Sachs sees the S&P 500 hitting 2,100 points at the end of next year, saying it should close this year at 1,900. That’s roughly in line with what Stuart Freeman, chief equity strategist at Wells Fargo Advisors, called for late last year.
Morgan Stanley chief US equity strategist Adam Parker has called for the S&P 500 to reach 2,014 — in 2014.
Thomas Lee, chief US equity strategist at JPMorgan, is more outspoken, predicting the S&P 500 will close the year at 2,075, a 12 percent jump from a year earlier.
But equities may also be a roller- coaster ride, some experts warn.
“I think you are going to have a volatile year in the market,” Doreen Mogavero, a veteran New York Stock Exchange floor trader, told The Post. “There’s no question the US has one of the strongest economies on the globe — an attractive place to put your money. From that standpoint, you will probably see the year end higher.”
“We need about a 25 percent upside for a 20,000 Dow,” said David Altschuler, a financial planner in Woodbury, NY. “Many US corporations have already squeezed everything they can out of the efficiency orange. Achieving top-line growth and keeping expenses under control will be essential to a rising stock market.”
A new E*Trade survey of “self-directed” online US retail investors shows 66 percent are “bullish on the market,” while 34 percent are bearish. Sixty-two percent see opportunities to beat the market through individual stocks.
The Fed’s decision to shrink its monthly bond purchases to $75 billion from $85 billion — with the prospect of more reductions — could foreshadow a period of rising interest rates.
But BofA Merrill Lynch’s Subramanian is undeterred.
“Equities actually do pretty well, and leadership shifts from more credit-sensitive areas like consumption plays and financials, to industrials, technology — even energy stocks do well in the early stages of a rising rate cycle,” she said.

>>> Gstaad Hotel Palace not for sale despite regular massive offers

Gstaad Hotel Palace not for sale despite regular massive offers
Hotel Palace, the Gstaad, Switzerland luxury hotel, is not for sale, Der Bund reported. Hotel Palace owner Andrea Scherz told the Swiss daily in a lengthy interview he has received and examined several offers, including an offer three years ago for an amount in the hundreds of millions of Swiss Francs, but together with his family always reaches the conclusion that he does not want to sell.

Scherz said the hotel is his life's work and he would never sell out of respect for his predecessors, as long as the hotel is viable from an economic perspective.

Scherz said his family has invested around CHF 100m in the hotel. Andrea, his brother Thierry and father Ernst own a combined 70% in the hotel with a further 10% being held by a Middle Eastern investor and 20% by the Dassault brothers.


Source Der Bund

FT : Derivative-linked Ucits to stay ‘non-complex’

Derivative-linked Ucits to stay ‘non-complex’

Retail investors will not be required to seek financial advice before buying funds that make use of derivatives, such as absolute return funds, following an agreement in the European Parliament last week.
Some parliamentarians had been pressing for derivative-linked Ucits funds to be classified as “complex” as part of the second Markets in Financial Instruments Directive (Mifid II), the wide-ranging reforms of European securities markets that were finalised on Wednesday.
All Ucits are currently classified as “non-complex” so they can be sold to retail investors on an execution-only basis. A change to reclassify derivative-linked Ucits funds as “complex” would have meant retail investors would have needed to be provided with advice as to their suitability before purchase. However, the parliament effectively rejected this option, which would have had a significant impact on the £36bn UK absolute return fund sector.
“There does not appear to be any change in the premise that all Ucits (other that structured Ucits) will be deemed as non-complex,” said Monica Gogna, a partner at Pinsent Masons, the law firm.
The Mifid II directive also specifies that investment groups must act in the “best interests” of clients at all times, that disclosure of product risk and returns must not be misleading, and that clients must be informed whether any advice being provided is independent or not. It also called for all “toxic” products to be withdrawn without defining what these might be.
The final text is not expected to be circulated before the end of this week at the earliest but some parliamentarians are promising to continue to fight for change.
Sven Giegold, a German Green MEP and member of the committee on economic and monetary affairs, said: “The Mifid II deal is better than the current situation. Europe will have to come back to the issue of Newcits [hedge fund strategies in a mutual-fund wrapper] in future reforms of the Ucits regulatory framework.”

FT : Hedge fund pair bet on British bank Aldermore

Hedge fund pair bet on British bank Aldermore

Two leading hedge funds have invested in Aldermore, a small bank that launched in the UK in 2009, in the latest sign of growing investor appetite for British lenders.
Toscafund and Lansdowne Partners have injected £40m of fresh capital into the bank, helping to fuel its growth in retail and small business lending ahead of a potential stock market listing later this year.

Aldermore said the deal would “establish a wider dialogue with UK institutional investors as the bank continues to review its capital markets strategy which may, among other strategies, include an initial public offering.”
As one of the biggest investors in Lloyds Banking Group, Lansdowne has been bullish on the prospects for UK banking. Meanwhile, Toscafund is chaired by Sir George Mathewson, former chief executive of Royal Bank of Scotland.
The outlook for UK retail banking has improved dramatically in the past year, as UK banks have slashed costs and benefited from wider margins on loans. The improving prospects have attracted strong investor interest in the sector. Last year’s sale of £3.2bn government-owned shares in Lloyds was oversubscribed and investors are now turning their attention to a string of other retail banking stocks that are expected to list on the stock market over the next couple of years.
TSB – 630 branches that have been spun out of Lloyds – is expected to float in the summer, while Metro Bank and Virgin Money are also eyeing listings. RBS is planning to float its Williams & Glyn's business, while Santander UK, the division of the Spanish bank, is considering pushing ahead with its long-sought after London listing later this year.
Metro Bank, which opened in central London in 2010, on Sunday completed a £387.5m fundraising to accelerate the opening of more branches.
New banking entrants are benefiting from a drive by politicians and competition bodies to weaken the dominance of the big four banks.
Ed Miliband, Labour leader, last week said that if he won the 2015 election he would force the big lenders to divest hundreds of branches to create two new competitors.
Aldermore launched in the UK in 2009 as an SME focused lender. It branched into residential mortgages a year later and has since lent more than £3bn to small business and homeowners.
Initially backed by AnaCap, the private equity group, it has also attracted investment from Morgan Stanley Alternative Investment Partners and Goldman Sachs Asset Management. In the first half of 2009 it made a profit of £9.2m.
Phillip Monks, the bank’s chief executive said the latest fundraising would “provide us with the opportunity to do even more to champion Britain’s small businesses, the lifeblood of our economy.”

FT : Al-Qaeda: On the march

Al-Qaeda: On the march

The worst job in the world, western spymasters used to joke, was being number three in al-Qaeda.
At its peak, the US drone programme – with Hellfire missiles picking off al-Qaeda leaders seemingly at will in the remote mountains of Yemen and the tribal borderlands of Pakistan – meant becoming number three was as good as being dead.

But al-Qaeda has proved to have a Hydra-like quality. Far from withering, it has proliferated. The group and its affiliates have never controlled more land, had as many recruits in their ranks or been as well financially resourced as now.
In recent months, al-Qaeda franchises have scored successes or near-victories in an arc stretching from the Sahel in east Africa through to the Levant via the Horn of Africa, Yemen and Iraq.
In 2012, al-Qaeda forces came within hours of seizing control of Bamako, the capital of Mali. In 2013, its militants radicalised the conflict in Syria. This year has begun with fighters storming the city of Fallujah in Iraq, just 70km from Baghdad. They still control it.
Last Wednesday, the US House Intelligence committee opened an inquiry to investigate the resurgence of the group. Mike Rogers, the Republican congressman who chairs the committee, called the demise of al-Qaeda a “false narrative” and warned against complacency in Washington. He cautioned: “The defeat of an ideology requires more than just drone strikes.”
Three fundamental questions are of concern to the west in its handling of the group’s rebound. How resilient is the resurgence, how centralised is its structure and how much of a threat does it still pose internationally?
The hope among its opponents is that al-Qaeda’s renaissance belies a still dangerous but fatally weakened foe. Many see the group as a disparate set of franchises that have fed off disenchantment caused by the Arab Spring, but which ultimately are either locally focused and pragmatic. Or they believe it will burn itself out through its own brutality, alienating local Muslim populations by persecuting them as much as waging jihad against the west and its regional allies.
They point to the situation in Syria, where jihadis fighting for the Islamic State of Iraq and al-Sham are committing atrocities against civilians, turning other Islamist groups against them.
But Isis’s brutality – and the “seeds of its own destruction” narrative of al-Qaeda that is perpetuated by such actions in the west – is far from the complete picture.
Al-Qaeda is certainly disparate and no longer controlled to the same degree by a central authority. But it has proved very adaptable, and very aware of the mistakes it made in the past.
Afghanistan and Pakistan
In Afghanistan, the rout of al-Qaeda has been extensive. Intelligence analysts put the number of al-Qaeda operatives functioning in the country as low as 200, although many fear a rebound if aid to the fragile Afghan government dries up.
For now, al-Qaeda’s core presence in the area – and the world – remains in Pakistan, where Ayman al-Zawahiri, the successor to Osama bin Laden, is based.
Its links in Pakistan run deep. It is telling that it took the US a decade to find the whereabouts of bin Laden, who turned out to be living in a compound in urban Abbottabad. While al-Qaeda is known to have a significant presence in the Federally Administered Tribal Areas of the country, many analysts believe its core leadership operates comfortably – or could even be based in – its most populated, metropolitan areas.
The US drone campaign explains why. “You can’t just go and bomb an urban area,” says Shashank Joshi, research fellow at the Royal United Services Institute, a UK think-tank. “Al-Qaeda has adapted to our counterterrorism measures and it has become more resilient. [While] its leadership has been shattered at various points, it is clearly not any longer an organisation dependent on a small coterie of individuals for its survival.”
Syria and Iraq
It is now difficult to imagine that before the 2003 US invasion of Iraq, al-Qaeda and affiliated groups had almost no presence in the Levant. The ill-fated US occupation created both a lawless environment for radical jihadi governments to take root and fomented an ideologically potent cause for them to pursue.
Al-Qaeda’s early success in Iraq under Jordanian Abu Musab al-Zarqawi was unwound from 2006, thanks to the US-funded sahwa (awakening) of local Sunni tribes in Iraq’s Anbar province, who revolted against al-Qaeda’s excesses. It has since been resurgent. In Syria, the relentless and brutal assault on mostly peaceful Sunni protesters by Bashar al-Assad, the country’s Alawite president, has provided al-Qaeda with an expansive presence in the region. In Iraq, political mismanagement on the part of President Nouri al-Maliki and the spillover from Syria have contributed to the group’s renewed presence in Anbar province.
Both Jahbat Al-Nusra, led by Abu Mohammed al-Joulani, and the Islamic State of Iraq and al-Sham, led by Abu Bakr al-Baghdadi, claim affiliation to al-Qaeda in the region.
But in Syria, it is Al-Nusra – Syrian- led and more tolerant – that has the support of Mr Zawahiri, and not the more brutal Iraqi-dominated Isis, which has already alienated swaths of the indigenous Syrian population with its ruthlessness.
Yemen
The remote mountains of southern Yemen gave birth to al-Qaeda and to this day remain one of the group’s most cohesive strongholds in the world. The group has found solace among the mountains and fiercely independent tribes of the south, tapping into the deep pool of resentment born of grinding poverty, anti-northern sentiment and, more recently, US drone strikes that have all too often hit innocent targets.
The Yemeni and Saudi branches of the group merged in 2009 to form al-Qaeda in the Arabian Peninsula, led by Nasir al-Wuhaishi, Osama bin Laden’s former secretary and one of Mr Zawahiri’s closest allies. AQAP is considered by western intelligence agencies the most dangerous branch of al-Qaeda, and it has proved resilient: a government campaign in 2012 to expel the group from Abyan and Sabwah provinces is still continuing.
AQAP has more recently adapted its method of exporting jihad by using other militant groups around the world as proxies.
“This may be the kind of relationship that we increasingly see between AQAP and other groups with the promotion of Mr Wuhaishi – loose operational guidance with seed funding and, where possible, the provision of fighters to participate in high-profile plots, especially in the fluid security environments of north Africa,” says John Nugent, terrorism analyst at Control Risks, a security consultancy.
Horn of Africa
In the Horn, al-Qaeda’s current largest affiliate is al-Shabaab (the Boys), the former youth movement of the Islamic Courts Union (ICU), the radical Islamist group that once controlled most of Somalia.
While it has been forced to cede huge swaths of territory in the past 18 months, it remains a well-resourced organisation, and embedded throughout Somalia.

The UN estimated it earned $50m a year when it controlled the port of Kismayo. It has also exploited the illegal ivory trade, killing hundreds of elephants in the region, according to environmental campaigners.
As al-Shabaab has been pushed back, it has sought to export violence to the home soil of those fighting it, such as Kenya. The group orchestrated the deadly Westgate shopping mall attack in Nairobi last September, in which 224 people died.
The ICU itself had strong ties with al-Qaeda core, with many of its founding leaders trained in Afghanistan, but al-Shabaab has often chosen to follow its own path.
In 2010 Mr Zawahiri sought to replace al-Shabaab’s leader, Ahmed Godane, but his ruling
was ignored. Mr Godane swore allegiance to Mr Zawahiri again in 2012.
The Sahel and Maghreb
More than a year after staging a spectacular attack on a remote Algerian oil and gas facility, and 18 months after nearly seizing control of Mali, al-Qaeda of the Islamic Maghreb appears on the defensive. French troops have pushed back AQIM, led by Abu Musab Abdel Wadoud, a veteran of Algeria’s 1990s civil war. Algeria’s security forces have cornered extremist groups.
But from Mauritania to Libya, the longstanding ethnic and political grievances still fester. The abuses of the civil war that fed Algerian Islamist anger have never been resolved. The official neglect that led ethnic Tuaregs to seek an autonomous Saharan homeland has worsened.
“No one should underestimate the narrow margin that existed between AQ and their goal of seeking to take over the organs of a whole state and create a safe haven,” says Stephen O’Brien, the UK prime minister’s special envoy to the Sahel, referring to AQIM’s near takeover of Bamako, Mali’s capital, in 2012.
“What is clear is that the franchise’s approach has become much more about winning over the hearts and minds of populations by the provision of basic services.”
Different approach
Last month al-Qaeda broke new ground: it apologised. “We acknowledge our mistake and guilt,” Qassim al-Rimi, a commander of AQAP in Yemen, said in a video, referring to an attack on December 5 on the Yemeni Defence Ministry that killed 52 people – many in the attached hospital next door.
Behind the statement was recognition of the need to keep local populations onside, and the difficulties of doing so for such a violent, strict Islamist organisation.
The tension recurs frequently but al-Qaeda has shown that it has the will to resolve it.
If al-Qaeda’s threat to the west is perceived to have diminished, it is perhaps precisely because the group has learnt from the sahwa in Iraq and has been at pains to refocus on its core project: the establishment of al-Qaeda controlled “emirates” and, eventually, a larger caliphate. To do so, the group clearly recognises that it needs genuine and lasting popular support. It is why Mr Zawahiri supports al-Nusra in Iraq and fell out with Mr Godane in Somalia.
After French troops pushed AQIM out of Timbuktu in Mali last year, journalists stumbled across a rare document: letters from AQIM’s leader, Abu Musab Abdel Wadoud, to his commanders.
“The current baby is in its first days, crawling on its knees, and has not yet stood on its two legs,” Wadoud wrote. “If we really want it to stand on its own two feet in this world full of enemies waiting to pounce, we must ease its burden, take it by the hand, help it and support it . . . until it stands.”

(ZH) What Do "Insiders" Know That You Don't?

What Do "Insiders" Know That You Don't? {http://bit.ly/1fNtgof}
Tyler Durden's pictureSubmitted by Tyler Durden on 01/19/2014 12:28 -0500

With your local friendly asset-gatherer constantly promoting the cheapness of stocks of the TINA (there is no alternative) to BTFATH, TV talking-heads jabbering over 'stock-pickers' markets (infuriating Cliff Asness), and CEOs trotted out day after day to espouse how bright the future looks (even if outlooks in the immediate future are down-down-down-graded); it is hardly surprising that sentiment among the sheeple is so extremely bullish. So, when we saw the chart below... we could only ask - what do the insiders know that the average-joe-investor doesn't?

Of course, we are sure someone will try and explain away this avalanche of insider-selling with "tax-related" factors or "taking-profits" but none of that negates the less-than-optimistic tone that it implies about what the short- or medium-term expectations are from management of the firms that comprise the US equity market...

FT : David Cameron faces EU isolation on anti-immigration stance

David Cameron faces EU isolation on anti-immigration stance

EU ministers say they will resist David Cameron's efforts to restrict free movement in the bloc
David Cameron risks “damaging Europe” with his anti-immigration stance, according to some of Britain’s key allies, leaving the prime minister looking increasingly isolated in his attempts to restrict free movement in the EU.
Ministers and officials from several big EU powers told the Financial Times that they would resist Mr Cameron’s attempts to restrict the ability of citizens from new member states to travel freely across the union.
Germany looks poised to become the most powerful opponent of Mr Cameron’s plans. Frank-Walter Steinmeier, the new German foreign minister, has even accused the UK prime minister of posing a threat to German interests with his push to reform the principle of free movement.

Mr Steinmeier said: “Germany has benefited tremendously from this and surely more than others. Now many young people from southern Europe are coming to us, to learn and study. That benefits us and also helps the states from which they come. Whoever questions that damages Europe and damages Germany.”
Free movement was an undeniable part of European integration that could not be changed or renegotiated, he said.
The German position will be a severe blow to Number 10, which has listed Berlin as a fellow advocate of migration reform, due to its support for a limited clampdown on the benefits regime for EU migrants. Mr Cameron is fighting for concessions on free movement to fend off rebellions in the Conservative party over Europe.
Dozens of Tory MPs have called for a national veto over EU laws, which the government has ruled out as unworkable. David Davis, the former Tory leadership challenger, this weekend urged the prime minister to be more explicit over which powers he wants to repatriate from Brussels.
Mr Steinmeier’s opposition is echoed across Europe. In an interview with the FT, Paschal Donohoe, the Irish minister for Europe, said: “The ability of people to move freely around the union is an absolute cornerstone of the European Union. It represents an integral part of the deal overall that keeps the union together. [We have] freedom of people, freedom of services and freedom to move money around.”
He added: “Many of the issues I believe can be dealt with through the implementation of the domestic competencies that have already been enacted through the Lisbon treaty.”
Dutch officials say concerns about immigration can be solved by introducing tougher EU-wide penalties on those who abuse free movement rules rather than scrapping the whole thing together. The French support this approach.
The resistance from some of Britain’s closest allies is a major problem for Mr Cameron’s efforts to reform freedom of movement. In an article for the FT last year the UK prime minister suggested that Europe should “require a new country to reach a certain income or economic output per head before full free movement was allowed”.
The proposals form part of his push to renegotiate the terms of Britain’s membership of the EU before a promised referendum in 2017.
With European elections due in May, polls suggest that his Conservative party could be beaten into third place by Labour and the UK Independence Party, with immigration beginning to top the list of voters’ concerns.
Ukip emerged as the most popular of all UK parties in a ComRes poll published on Sunday, with 27 per cent of voters saying they “liked” it the best.
Separate research by Lord Ashcroft, former Conservative party treasurer and pollster, found that 37 per cent of 2010 Tory voters would not support the party in an election tomorrow. Half of those said they would shift their support to Ukip.
Without back-up from his European allies, Mr Cameron knows his attempts to gain the initiative on such a sensitive political issue are likely to come to little.
Germany and France have supported the UK’s attempts in Brussels to tackle benefit fraud committed by EU migrants, as all three have experienced a high influx of immigration from poorer member states, which put their welfare systems under stress.
But no European country has backed the UK’s stance on curbing free movement in the EU. Even the Netherlands, which has often been seen as the UK’s closest ally in Brussels, opposes Mr Cameron.
One diplomat from one of the bloc’s richest countries summed up the feeling among most in Brussels.
“Weakening of European freedoms is out of question” the diplomat said. “One can only warn against sacrificing the great European achievements on the altar of political populism. Where there is abuse, let us fight this effectively with existing means.”
Downing Street said: “Free movement is a central principle of the EU but it cannot be a completely unqualified one. The government is working with Germany, Austria, the Netherlands and others so that it is not the same as the freedom to claim benefits.”

>>> Morrison Supermarkets plc Sandell Asset Management acquire stake in the comp

Morrison Supermarkets plc Sandell Asset Management acquire stake in the company - UK press
- Though not formally disclosed, Sandell's stake is said to be under 3%.
- Morrisons is currently under pressure from Elliott Management to spin-out the majority of property assets into another company; unlike competitors Tesco and Sainsbury, Morrisons owns 90% of its stores. 
- Morrisons is set to provide an update for shareholders in March.

>>> China Commerce Ministry (MOFCOM): $1.1T spending bill passed by US Congress

China Commerce Ministry (MOFCOM): $1.1T spending bill passed by US Congress last week clashes with fair trade - financial press
- Report noting the bill contains clauses that limit technological purchases from China. - Says: "China is resolutely opposed (to legislation)... We have noted that U.S. business groups have already made noises opposing the bill. The U.S. side should correct its mistaken ways, and create good conditions for the healthy development of Sino-U.S. trade and business cooperation."