Dire warning from Sino-Forest...The Saga Continues

The chase by Marty Cej:

Sino-Forest, the Hong Kong-based and Toronto-listed forestry company that saw more than $6 billion in value evaporate last year amid fraud allegations, said late last night that its historic financial statements and audit reports should not be relied upon. The admission appeared in an announcement that the company is "optimistic" that it will reach a waiver agreement with some of its bondholders. While shares of Sino-Forest remain halted with a nominal value of a penny a share, the stock of Greenheart Group, a Hong-Kong listed timber merchant, rallied 50 percent overnight to close at 90 Hong Kong cents. Sino-Forest remains one of the most compelling stories in Canadian financial market history for several reasons, many of which will be explored Friday morning with short-seller Carson Block, whose allegations in June toppled Canada's biggest forestry company. Sino-Forest continues to struggle to explain and refute Block's allegations or address issues raised by the company's auditor and the OSC. Beginning at 8:30 am Eastern, Block will take us through the research that led him to accuse Sino-Forest of fraud and to tell us whether it can happen again.
Among the most widely-read stories on BNN's website this morning was the warning from Canadian bank CEOs that Canada's housing market is showing signs of peaking. We made it our top story yesterday afternoon and will continue to pursue it today with Bank of Montreal CEO Bill Downe, who joins us for half an hour starting at 1:00 pm Eastern. It's a story that affects every Canadian and all of our viewers.
Auto parts maker Magna said that 2012 revenue will rise to a range of $27.8-billion to $29.3-billion, just shy of the average expectation for sales of $29.6-billion. It's hard to say whether this announcement will be taken by the market as a warning since sales will be higher than 2011 and the new forecast is higher than its own previous forecast if still below the market' expectations. The fact is the company continues to put more of its stuff into each car, sales are rising and the operating margin is widening. There is a lot to examine in the company's announcement this morning. Thankfully, Frances Horodelski is a CFA and can spit out ratios like a Nascar fan spittin' out tobaccy juice. Yeehaw, I say. Yeehaw.
After Steve Ballmer's rousing speech to kick off the Consumer Electronics Show in Las Vegas and intimidating poor Ryan Seacrest on stage, Microsoft now says that industry-wide sales of PCs will probably fall short of analysts forecasts in the fourth quarter due to supply issues stemming from floods in Thailand. Watch shares of the PC makers, the chipmakers and Microsoft. Ford Motor Co. said yesterday as well that its profit was hurt by the Thailand floods. Are there any more warnings to come from companies with significant production in this key country?
The Federal Statistics Office in Weisbaden, Germany, said today the German economy shrank "roughly" 0.25 percent in the fourth-quarter, leading some economists to conclude that Europe's largest economy has already slipped into recession. While most economists and investors agree that broader Europe is already in a recession, perhaps even a severe one, word that Germany may be in the same boat has sent European stocks, North American index futures and copper prices lower. While the Federal Statistics Office in Weisbaden says its estimate is "unofficial," I dare you to call up the Federal Statistics Office in Weisbaden and challenge their figure. I dare you.
Keep an eye on oil today as Germany pushes for a European embargo on importing Iranian oil. Iran also said today that one of its nuclear scientists was killed by a magnet bomb fixed to his car by a motorcyclist who sped past. Iran has blamed Israel for the assassination, which adds to a number of killings of Iranian nuclear scientists in recent years.
Mitt Romney solidified his status as the frontrunner for the Republican presidential nomination by taking the New Hampshire primary last night. Libertarian Ron (The Fed Oughta Be Dead) Paul surged to a second-place finish, which surprised no one since New Hampshire's official slogan is "Live Free or Die" and its unofficial slogans include "New Hampshire: Go Away and Leave Us Alone" and "New Hampshire: Don't Take it For Granite."