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James Dicks Daily Digest - February 23, 2009

President Obama is bringing together dozens of advisers and adversaries to discuss how to curb a burgeoning federal deficit laden with Social Security, Medicare and Medicaid obligations. Obama's summit at the White House is the first meeting toward a strategy to address the long-term fiscal health of the nation. The gathering also comes as Obama prepares ambitious plans to cut the federal deficit by half within four years.

Federal regulators are pledging to do all they can to support the struggling banking system and will launch a revamped program to infuse fresh capital into financial institutions this week. The White House just last week downplayed persistent speculation that some banks could be effectively nationalized by the federal government.

The National Association for Business Economics believes the U.S. recession is projected to worsen this year and the country stands to lose a sizable chunk of economic activity as consumers retrench in the face of persistent economic troubles. NABE predicts GDP will rebound in 2010, averaging 2.4 percent over the course of the year. The Fed, too, is forecasting that the economy will grow again in 2010-- and will pick up momentum in 2011.

Citigroup Inc. (C) is reportedly negotiating with government officials to have the U.S. boost its stake in the troubled bank to as much as 40 percent. Such a move by Citigroup would result in the bank relinquishing far more control to the feds than executives would like and dilute shareholders' investments.

European Central Bank President Jean-Claude Trichet called for greater supervision of financial markets, including a coordinated international framework for regulating hedge funds and credit rating agencies.

Royal Bank of Scotland (RBS) is to announce a restructuring this week to create a non-core division into which unwanted assets will be placed. The timeline for the whole process, including any possible asset sales, would be from three to five years.

Ford Motor Co. (F) and the United Auto Workers have reached an agreement on modifications to the Voluntary Employee Beneficiary Association, the union’s health care trust for UAW Ford retirees. The union also reached tentative agreement with the company on other modifications to the 2007 UAW-Ford National Agreement.

A Treasury Department official said outside advisers to the U.S. Treasury are lining up contingency financing options for General Motors (GM) and Chrysler as part of a review of restructuring options for the auto makers.

T. Boone Pickens says the government is now behind at least half of the energy-reform plan he advanced last summer to reduce America's dependence on foreign oil. Pickens said he expects the plan to make a huge difference in America's energy dependence within the next three to five years.

Scheduled U.S. Economic Reports (Tuesday)

Case-Schiller Home Prices (Dec), FHFA Home Prices (Dec), Consumer Confidence (Feb)

In Earnings News

Campbell Soup (CPB) earned $233 million or 64 cents per share for the quarter. That's down from $274 million, or 71 cents per share, in the same period a year ago. Profits were hurt by currency exchange rates and pushed down further by higher advertising and promotional spending.

Amerisafe Inc. (AMSF) said its fourth-quarter profit fell 69 percent due to $13.4 million in realized capital losses. Net income for the quarter sunk to $5.7 million, or 28 cents per share. Analysts forecast earnings of 57 cents per share.

Waste Services Inc. (WSII) reported a narrower fourth-quarter loss, beating analyst expectations. The company reported a loss of $10.5 million, or 23 cents per share. Analysts expected fourth-quarter profit of 4 cents per share.

Humana Inc. (HUM) reaffirmed its 2009 profit outlook, but said preliminary 2010 Medicare Advantage payment rates could hurt the health insurer next year. The company still expects profit between $5.90 and $6.10 per share in 2009. Analysts expect profit of $5.93 per share.

Scheduled Earnings Reports (Tuesday)

Target, Office Depot, H.J. Heinz, Dominoes Pizza, Macys, Federal Mogul, Radio Shack, Papa Johns, Cracker Barrel, Fresh Del Monte, Orbiz Worldwide, Taser International, World Wrestling Entertainment

Stocks in the News

General Motors (GM) traded higher after the Obama administration asked for more analysis of the requests from auto makers for $21 billion in additional taxpayer assistance before any more funds were released.

ITT Corp (ITT) will partner with Emirates Advanced Investments to pursue opportunities in defense and security in the United Arab Emirates.

Garmin Ltd (GRMN) said its fourth-quarter profit nearly halved to $157.8 million, or 78 cents a share, from $307 million, or $1.39 a shared.

BankAtlantic Bancorp (BBX) will defer its scheduled interest payments on $294.2 million of junior subordinated debentures outstanding.

Exxon Mobil (XOM) traded higher after Deutsche Bank upgraded the oil company to "buy" from "hold" saying Exxon Mobil has the lowest break-even oil price of its peers.

AT&T (T) said it will spend $1 billion this year to build out its network. The investment will fund network-based services and applications and mobility services.

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