7/9T8:26 Co. in the News

Fannie, Freddie 'insolvent' after losses, Poole says - Bloomberg.com
Bloomberg.com reports borrowing at Fannie Mae (FNM) has never been so expensive and it may not get better any time soon. Fannie Mae paid a record yield relative to Treasuries on the sale of $3 bln in two-year notes yesterday amid concern the biggest provider of financing for U.S. home loans won't have enough capital to weather the worst housing slump since the Great Depression. The co's credit-default swaps show traders are treating the AAA rated debt as if it were five steps lower. Fannie Mae shares tumbled 13% yesterday in New York to the lowest level in almost 14 years. Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac (FRE), former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 bln more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules. The fair value of Fannie Mae's assets fell 66% to $12.2 bln, data provided by the Washington-based company show, and may be negative next quarter, Poole said.

Stanford initiates Priceline.com (PCLN 109.13) with a Buy and sets a $140 tgt, as they believe the co stands positioned to sustain powerful growth because consumers are shifting to the Internet and its bargain prices to make travel plans while international diversification should insulate Priceline from the moderating economy with its European operations driving industry-leading booking growth...


JWN Nordstrom reports Jun same store sale; sees Q2 EPS at low end or slightly below previous guidance (31.24 )
Co reports Jun same store sales -18.6% vs -19.0% Briefing.com consensus. Co sees Q2 EPS at the low end or slightly below previous guidance of $0.65-0.70 vs $0.67 consensus, due to lower gross profit margins. Co's June sales results were negatively impacted by the shift of the Half-Yearly Sale for Women and Kids into May.


ICE IntercontinentalExchange plunges 13% this morning; co will testify before U.S. House of Representatives Agriculture and Appropriations Committees today and tomorrow (83.30 -12.09)
ICE is showing notable weakness this morning, trading -11% while the other exchanges are only slightly lower (CME -0.2%, NYX +0.3%, NDAQ -2.7%). This weakness comes ahead of the co's testimony before U.S. House of Representatives Agriculture and Appropriations Committees. The co issued summary statements this morning regarding its testimony, saying "ICE's OTC markets have no bearing on the price of crude oil and do not set the price for major benchmark products. Trading volumes in ICE's OTC markets is almost solely related to contracts for natural gas and power. ICE's OTC market has a 0% market share of trading in U.S. crude oil, heating oil, jet fuel and gasoline contracts... The 2008 Farm Bill -- passed by Congress with bipartisan support and signed into law -- unequivocally closes the "Enron Loophole" by extending CFTC regulation to all energy contracts deemed to be a price-discovery contract, rather than just traditional energy futures contracts... ICE Futures Europe is fully regulated by the UK Financial Services Authority and since 2006 the exchange has been providing information regarding trading in its WTI futures contract to the U.S. Commodity Futures Trading Commission to provide additional transparency into the WTI market. Trading in ICE's WTI futures contract comprises only 15% of the open positions in the global WTI market compared to 85% on the New York Mercantile Exchange (NMX)... Pursuant to amended CFTC and FSA agreements in May and June of 2008, the ICE WTI contract is subject to the same U.S. regulatory provisions as the NYMEX WTI contract, including position reporting and position accountability and limits. The expanded agreement between these regulatory agencies provides for futures-style regulation of U.S.-based futures contracts... In June, the Director of Enforcement of the CFTC publicly stated that the Division of Enforcement has seen no evidence of manipulative activity in ICE's markets. Finally, margin requirements at ICE Futures Europe today are three times the level of margin requirements in May 2007"... We'd note that CME's CEO Donohue discussed the credit derivatives markets and central-party clearing solutions with with U.S. Senators yesterday.

LEH Lehman Brothers spokesman declined to comment, citing policy against commenting on rumors and speculation - Reuters

LEH Lehman Brothers credit -default swaps rises 36 basis points to 320 bps- Bloomberg