>>> Congressional Budget Office (CBO) updated budget and economic outlook for 20

Congressional Budget Office (CBO) updated budget and economic outlook for 2016-2026; budget deficit to increase this year and grow over coming 10 years 

In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009, according to the Congressional Budget Offices estimates. If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years, CBO projects. Debt held by the public would also grow significantly from its already high level.

CBO anticipates that the economy will expand solidly this year and next. Increases in demand for goods and services are expected to reduce the quantity of underused labor and capital, or slack, in the economy thereby encouraging greater participation in the labor force by reducing the unemployment rate and pushing up compensation. That reduction in slack will also push up inflation and interest rates. Over the following years, CBO projects, output will grow at a more modest pace, constrained by relatively slow growth in the nations supply of labor. Nevertheless, in those later years, output is anticipated to grow more quickly than it has during the past decade.

The 2016 deficit will be $544B, CBO estimates,$105B more than the deficit recorded last year (see Summary Table 1). At 2.9% of gross domestic product (GDP), the expected shortfall for 2016 will mark the first time that the deficit has risen in relation to the size of the economy since peaking at 9.8% in 2009. About $43B of this years increase in the deficit results from a shift in the timing of some payments that the government would ordinarily have made in fiscal year 2017, but that will instead be made in fiscal year 2016, because October 1, 2016 the first day of fiscal year 2017falls on a weekend. If not for that shift, the projected deficit in 2016 would be $500B, or 2.7% of GDP

The 2016 deficit that CBO currently projects is $130B higher than the one that the agency projected in August 2015. That increase is largely attributable to legislation enacted since August in particular,the retroactive extension of a number of provisions that reduce corporate and individual income taxes. 

The deficit projected by CBO would increase debt held by the public to 76% of GDP by the end of 2016, the agency estimates about 2 percentage points higher than it was last year and higher than it has been since the years immediately following World War II 

>>> Media-Saturn founder wants Metro to co-finance capital injection - RTRS

Media-Saturn founder wants Metro to co-finance capital injection - RTRS


19-JAN-2016 16:51:13

DUESSELDORF, Germany, Jan 19 (Reuters) - The founder of Europe's biggest electronics chain Media-Saturn sees the company in urgent need of a capital increase, and is calling on its majority owner, retailer Metro MEOG.DE, to use some of the proceeds from recent disposals.

Media-Saturn's billionaire founder, Erich Kellerhals, still owns a stake of close to 22 percent and has regularly clashed with Metro over its management of the business, most notably over the group's move into the fast-growing online market.

If Metro is not willing to inject more capital, Kellerhals remains interested in buying its stake, Ralph Becker, head of Kellerhals' investment firm Convergenta, told Reuters.

Metro said if Convergenta made a concrete, firm offer for the rest of Media-Saturn is would look at it. Also, it is not categorically opposed to a capital increase at Media-Saturn but did not believe it is necessary, a spokesman for Metro said.

NYT - Viacom in Cross Hairs of Activist Investor


To Eric Jackson, an activist investor with SpringOwl Asset Management, Viacom appears to be a a textbook-style target.

The entertainment company, which owns Nickelodeon, MTV and Paramount Pictures, has a slumping stock price, a well-compensated management team and board and a decade of missed opportunities online, according to Mr. Jackson.

Viacom sold half its stake in Vice Media — now reportedly valued at more than $4 billion — for just millions in 2007, according to Mr. Jackson. He also took issue with Viacom counting the host of a CBS-produced show as an independent director, even though Viacom shares its chairman with CBS.

In a new, 99-page report, Mr. Jackson outlined a plan — including replacing Viacom’s management and board, instituting a cost-cutting program and recruiting new leaders. He said these changes could increase the stock price by as much as 135 percent.

But unlike Mr. Jackson’s previous campaigns, most notably at Yahoo, Viacom comes with the hurdle of a dual-class share structure. Sumner M. Redstone, Viacom’s 92-year old chairman, holds a majority of the voting power through his holding company, National Amusements, meaning any changes would have to come at the will of the media mogul.

Frustrated shareholders, of whom also include Gamco Investors’ chief executive, Mario Gabelli, have had no recourse other than to complain publicly.

“At the end of the day, they can tell us to pound sand, and we’re kind of stuck,” Mr. Jackson, a managing director at SpringOwl, said in a phone interview. “Viacom made sense to own because even though we’ve got some strong criticisms over the C.E.O., it’s so lowly valued, in our view, there could be a number of things that become catalysts.”

Mr. Jackson owns a relatively small amount of Viacom, well below the threshold of 5 percent required to file with regulators.

Viacom did not receive a copy of the report before it was publicly disclosed. Company representatives declined to comment.

Viacom’s stock price has underperformed peers, currently trading at half the level of its July 2014 peak. The report estimates that replacing Viacom’s chief executive, Philippe P. Dauman, could provide the most upside to the stock. Mr. Dauman, along with the chief operating officer, Thomas E. Dooley, were granted a combined $432 million in cash and stock over the five years through 2014, higher than comparable executives at CBS, Disney, Time Warner and Fox, according to SpringOwl figures.

Mr. Jackson declined to specify who would be a fit replacement for Mr. Dauman, but suggested that someone would need to have a better understanding of digital strategies. Viacom, under Mr. Dauman’s leadership, had sold the half of Vice Media it owned for $3 million in 2007, the report showed. He also suggested that the management team consider partnerships for Paramount Pictures with Alibaba or Amazon, as well as a merger with AMC.

Mr. Jackson also notes how Mr. Redstone, facing a legal battle from a former companion questioning his mental capacity, has skipped earnings calls and shareholder meetings.

Mr. Jackson criticizes the makeup of Viacom’s board, saying that only 27 percent could truly be classified as independent. Viacom counts Deborah Norville, host of the CBS-produced program “Inside Edition,” as an independent director, even though Mr. Redstone also owns a controlling stake in CBS.

Mr. Jackson says he has had little luck reaching executives at Viacom.

“We have reached out to the company to try and communicate these ideas, and it hasn’t been a great experience getting a hold of them so far,” Mr. Jackson said.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: UN +4.5%, MS +3%, DAL +2.2%, BAC +2%, SN +1.1%, CMA +1.1%,UNH +0.8%, FHN +0.8%, MTB +0.5%

M&A news: BITI +80.8% to be acquired by Acorda (ACOR) for $25.60 per ADS), RSE +26% (Brookfield Asset Management (BAM) proposes to acquire Rouse for $17.00/share in cash), SUNE +5.8% (acquires 33% stake in remaining 231 megawatt portion of Dominion's (D) 567 megawatt solar portfolio for $117 mln and sells said stake to Terra Nova for same price), ERIC +4.4% (Ericsson to acquire FYI TV), SHPG +3.1% (Barron's profiles positive view on Shire (SHPG) based on Baxalta (BXLT) M&A deal), TCK +1.6% (Teck Resources: Sandstorm Gold (SAND) has agreed to acquire 56 royalties from co for $22 mln), MSFT +1.4% (will be acquiring MinecraftEdu)

Select China related names showing strength: JKS +9.5%, MOMO +5.5%, CSIQ +5.2%, JMEI +4.8%, SPWR+4.7%, QUNR +3.4%, JASO +3.4%, JD +3.3%, BABA +2.5%

Select metals/mining stocks trading higher: MT +9.7%, CLF +7.1%, AU +4.9%, FCX +4.8%, BBL +3.1%, BHP+3%, AA +1.7%, VALE +0.8%

Other news: CRDC +40% (Receives FDA clearance for expanded indications of Surgical Stapling Device), CANF +18.1% (announced that the USPTO has issued a Notice of Allowance for a patent titled, "A3 Adenosine Receptor Allosteric Modulators"), BSI +10.8% (Court grants temporary stay of legal proceedings against Mega Retail; also confirms it has received an number of offers to purchase the Company's holdings in Blue Square Real Estate), ZPIN +8.8% (received going private proposal valued at $17.50 per ADS and $8.75 per ordinary share), ATV +7% (cont strength), SNY +5.6% (strong EU mkts overnight), PUK +5.1% (still checking), TTM +5.1% (appoints new CEO), NRZ +5% (announces $200 mln share repurchase program), WMB +4.4% (Board is unanimously committed to completing the transaction with Energy Transfer Equity (ETE)), DDD +4.1% (still checking), INCY +2.9% (Incyte and Lilly (LLY) announce Submission of New Drug Application to FDA for Oral Once-Daily Baricitinib), BBRY +2.5% (reports co was awarded a $20 million multiple-year delivery order), CARA +2.1% (may be related to BITI merger), RIO +2.4% (reports Q4 production results),YHOO +2.1% (in symp with BABA), NVS +2% (received two new FDA approvals for Cosentyx to treat patients with ankylosing spondylitis and psoriatic arthritis in the US), GPRO +1.9% (strength in broader mkt this am), NFLX +1.9% (positive WSJD story), FB +1.8% (WhatsApp to pull its yearly subscription fee, test other monetization), BIIB +1.7% (reports EU approval for BENEPALI ), NGG +1.1% (Canadian funds are considering taking stake in NGG, according to Telegraph), SN +1.1% (reports average production of average production of 58,115 boe/day during the 4Q15; lowers 2016 Capital Budget guidance)

Analyst comments: EXEL +5.9% (upgraded to Outperform from Mkt Perform at Leerink Partners), SHOP +5.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley ), SHAK +4.8% (upgraded to Outperform from Market Perform at William Blair), P +4.8% (upgraded to Neutral at BTIG Research), KITE +4.4% (upgraded to Outperform from Mkt Perform at FBR Capital; tgt $75), SWIR +4.4% (upgraded to Outperform from Market Perform at Northland Capital),SWKS +3% (upgraded to Buy at Needham), AZN +1.9% (upgraded to Equal Weight, ResMed (RMD) downgraded to Underweight at Barclays)