Eight Things You MUST Read; The Eurozone sov debt situation.., Washington, Earnings

· Washington - increasingly becoming the single focus for investors…the Obama speech yesterday was significant only in that it highlighted the massive gulf btw Ryan/GOP and Obama on budget…..the risk is that both sides hold the debt ceiling hostage while they fight over long-term spending. Note that May 16 is when the Treasury first starts touching the ceiling and Jul 8 is the absolute last date…..also note that Congress is on RECESS Apr 18-May 1 (so they don't have a ton of time to negotiate). But - sentiment on this issue is now VERY negative…keep in mind that while the F11 budget talks were a negative (right down to the wire) recall that the Nov tax deal was a positive surprise (showing that Washington can wind up pleasing the markets, esp when expectations are as low as they are now).

· The Eurozone sov debt situation, which had been a non-event for weeks, is suddenly an issue again. A German official for the first time in public acknowledged that a Greek restructuring is possible. It's not clear what this means (i.e. lower rates, longer duration, or outright haircuts) and keep in mind that Greek debt is already pricing in a restructuring, but the fact such an idea is gaining traction w/EU officials is spooking people (i.e. does this mean the option is on the table for other larger countries? What about CDS payouts?). Away from Greece, people are increasingly worried on Finland ahead of their elections this weekend (Reuters said there was a 50% chance that Finland winds up killing the Portugal bailout).

· Apr '10 looking similar to Apr '11? Remember around Apr '10 the Eurozone debt crisis first started to crop up (Greece) and we had the SEC suit against GS. This Apr we have again Greece (restructuring?) and GS/Senate (Levine's remarks on Wed and the new Senate report on the financial crisis).

· Earnings – there still have been too few reports for people to draw a firm conclusion on the earnings season. One trend we have seen so far is that "good" earnings are being met w/sellers (i.e. banks yesterday and FCS/semis today). Tonight we get GOOG and Fri morning we get BAC.

· Financials - banks are getting hit again. People aren't thrilled w/the kick-off to earnings yesterday (still a lot of headaches in the mortgage business w/MSR write-downs, new foreclosure standards, etc; meanwhile, the focus is on top line/NIM and not on credit so much any more – w/the lack of loan growth indications, people are selling off the space). Also - the Senate report is raising worries again in terms of gov't legal actions (esp for GS). On earnings, we get BAC tomorrow morning. The Goldman research report is getting attention today (they d/g'd financials) but keep in mind this was from their equity strategist (not their bank analyst).

· Tech - more neg. PC data points last night (bad Gartner/IDC #s). Also FCS, which had nice headline #s, actually coming for sale (on the call they said not sure what impact will be from Japan which is causing people to question their guidance).

· Eco #s US - jobless claims came in worse than expected, but there were some distortions overall not a huge deal today (see our takeaways http://bit.ly/gzHAFD).

· Eco #s China - Money supply + bank lending both pretty strong for China in Mar, raising worries that maybe officials aren't as close to the end of their tightening cycle as people were hoping. The spec is the PBOC could move on bank RRRs again as early as Fri (this was mentioned on Reuters). Tonight we get a bunch of China #s (GDP, CPI, etc).