General Motors

GE’s announcement that its getting out of the finance business should be a reminder of how crony capitalism is corrupting and debilitating the American economy. The ostensible reason the company is unceremoniously dumping its 25-year long build-up of the GE Capital mega-bank is that it doesn’t want to be regulated by Washington as a systematically important financial institution under Dodd-Frank. Oh, and that its core industrial businesses have better prospects. We will see soon enough about its oilfield equipment and wind turbine business, or indeed all of its capital goods oriented businesses in a radically deflationary world drowning in excess capacity. But at least you can say good riddance to GE Capital because it was based on a phony business model that was actually a menace to free market capitalism. Its deplorable raid on the public purse during the Lehman crisis had already demonstrated that in spades.

• Greece pleads cash running out, told to hasten reforms (Reuters)
• ECB Cash Said Likely to Fall Short of Greek Request This Week (BBG)
• Chinese Stock Buying Frenzy Sweeps Into Hong  (WSJ)
• Shell’s $70 Billion BG Deal Meets Shareholder Skepticism (BBG)
• Yemen's Houthis seize provincial capital despite Saudi-led raids (Reuters)
• Iran Nuclear Deal Gives Syria’s Bashar al-Assad Reason to Worry (WSJ)
• Slow apps, low battery life limit appeal of Apple Watch (Reuters)
• Gilead’s $1,000 Pill Is Hard for States to Swallow (WSJ)
• The Oil Industry's $26 Billion Life Raft (BBG)

• Israel, U.S. Lawmakers Press Case Against Iran Nuclear Deal  (WSJ)
• Rand Paul tries to broaden libertarian appeal (Reuters)
• Fewer Oil Trains Ply America’s Rails (WSJ)
• Chicago voters go to polls in first ever mayoral runoff (Reuters)
• FedEx to buy TNT to expand Europe deliveries (Reuters)
• Mohamed El-Erian Has Most of His Money in Cash (BBG)
• In Surprise Move, Australia Holds Rates (WSJ)
• Oil falls as Iran, China discuss more supply (Reuters)

• Oil holds around $55 as Iran nuclear talks drag on (Reuters)
• Bob Diamond’s African Banking Venture Runs Into Problems (WSJ)
• Iran Nuclear Talks Resume With Lavrov Saying Deal at Hand (BBG)
• Wal-Mart Ratchets Up Pressure on Suppliers to Cut Prices (WSJ)
• Renegades of Junk: The Rise and Fall of the Drexel Empire (BBG)
• Explosion at Yemen factory kills at least 25: residents, medics (Reuters)
• Macerich Rejects Simon Property’s $16.8 Billion Takeover Bid (WSJ)
• Reckoning Arrives for Cash-Strapped Oil Firms Amid Bank Squeeze (BBG)

• Setbacks and progress as Iran, six powers meet to end nuclear impasse (Reuters)
• Russia’s Foreign Minister Sergei Lavrov to Leave Iran Nuclear Talks (WSJ)
• Obama Ramps Up Lobbying on Iran as Deadline Looms (WSJ)
• Greek yields edge up as lenders scrutinise reform pledge (Reuters)
• Oil prices drop on possible Iran deal, dollar (Reuters)
• Yemen’s Houthis Battle for Aden as Saudi Strikes Hit Rebels (BBG)
• Iran nuclear deal to see $20 oil if Tehran floods crude market (Telegraph)
• China’s Zhou Says PBOC Has Room to Act on Growth Slowdown (BBG)

Unless We Learn Our History, We're Doomed to Repeat It

• Google's new CFO to make $70 million (WSJ)
• Senate passes Republican budget with deep safety net cuts (Reuters)
• With Yemen strikes, Saudis show growing independence from U.S. (Reuters)
• Banks Slash Dividends as Loans Sour From Beijing To Pearl River (BBG)
• North American Railroads Caught by Speed of Crude-Oil Collapse (BBG)
• Japan’s Zero Inflation a Setback for Abenomics (WSJ)
• Cooperman Says U.S. Seeks Information About Omega Trades (BBG)

• Fed May Not Hit Neutral Until 10th Anniversary of Lehman Collapse (BBG)... make that never
• Global stocks and bonds roar Fed approval, dollar fights back (Reuters)
• EU to tell Greece time, patience running out (Reuters)
• U.S. likely to delay planned closure of two Afghanistan bases (Reuters)
• Norway Signals Reduction After Unexpectedly Holding Rate (BBG)
• Oil Falls to $55 as Kuwait Comments Refocus on Oversupply (Reuters)
• Tsipras Heads to Summit as Merkel Tries to Defuse Greek Crisis (BBG)
• Yahoo Pulls the Plug on China Operations (WSJ)

GM did $20.4 billion worth of buybacks from 1986 through 2002. If it had saved that money and earned a modest 2.5% on it, the company would have had $35 billion on hand when the financial crisis and Great Recession hit and probably would not have had to file for bankruptcy protection. As Bob Lutz, the veteran auto executive, said recently, stock buybacks are “always a harbinger of the next downturn…in almost all cases, you regret it later”... Taxpayers and workers brought GM out of bankruptcy, yet it is the hedge funds that will reap the biggest rewards. Taxpayers and workers should demand that open-market repurchases by all companies be banned. Stock buybacks manipulate the stock market and leave most Americans worse off. In this case, it is clear that what is good for the hedge funds is bad for the United States.

• Dollar at 12-year peak versus euro, emerging markets spooked (Reuters)
• CIA sought to hack Apple iPhones from earliest days (Reuters)
• Draghi Urged Greece to Allow Troika Back Before It’s Late (BBG)
• Brent crude dips below $58 on strong dollar and supply (Reuters)
• Credit Suisse replaces CEO Dougan with Prudential's Thiam (Reuters)
• More "distressed" energy M&A: Verisk buys Wood Mackenzie for £1.85bn (FT)
• Prepare for a surge in defaults: Investors Are Buying Stocks and Bonds From Energy Producers Amid Oil Price Drop (WSJ)
• Private equity executive ordered to pay £72m to ex-wife (FT)
• Democratic donors unfazed by Hillary Clinton's use of private email (Reuters)
• Expensive Hepatitis C Medications Drive Prescription-Drug Spending (WSJ)
• 'ISIS Hackers' Almost Certainly Not ISIS Hackers (NBC)

Doubting if the growth ahead of GM is now over, and the great post-bankruptcy "success story" is rapidly fading as the company has been pushed to resort to the kind of financial engineering which has pushed the S&P higher for all of 2014, and follows a record month of stock buyback announcements? Then doubt no more: moments ago GM announced it is authorizing an immediate $5 billion stock buyback, and plans to return all cash above a $20 billion floor to shareholders.

• ECB Starts Buying German, Italian Government Bonds Under QE Plan (BBG)
• Creditors Reject Greece's Reform Proposals (BBG)
• Is Apple Watch the Timex digital watch of the Internet era? (Reuters)
• Tesla shedding jobs in China as sales target missed (Reuters)
• Malaysia Airlines says expired battery on MH370 did not hinder search (Reuters)
• Gunmen kill more than 12 Islamic State militants in eastern Syria (Reuters)
• GM Plans Share Buyback, Averting Proxy Fight (WSJ)
• Wisconsin capital marked by third day of protests after police shooting (Reuters)

Exactly 15 years ago today, who said it?

"You want winners? [This] is what my fund is buying today to try to make money tomorrow and the next day and the next? You want my top 10 stocks for who is going to make it in the New World? You know what? I am going to give them to you. Right here. Right now. OK. Here goes. Write them down..."

Fifteen months later, Money magazine reported that [his] list had cratered 82%... Accountability ruins the game.

• Tsipras Tamed as Economists Declare Greece Loses Austerity Fight (BBG)
• Greece readies reform plans to first sign of leftist unrest (Reuters)
• Yellen Faces Congress Amid Direst Threat to Fed Since Dodd-Frank (BBG)
• The war must go on: Kiev says cannot withdraw heavy weapons as attacks persist (Reuters)
• Ukraine fears spread of war after blast in eastern city (Reuters)
• Denmark Dismisses Report It Could Consider Capital Controls (BBG)
• Deadline Nears on Homeland Security Funding Impasse (WSJ)
• Gross Fund Hurt by Oil’s Plunge Amid Bets on Energy Bonds (BBG)

• Greece Should Not Give In to Germany’s Bullying (FP)
• Greece Can Pay Its Debts in Full, but It Won’t (WSJ)
• Early Friday humor: Euro Region Economy Strengthens Amid Wrangling on Greece  (BBG)
• Euro zone may need extra summit to clinch Greek deal (Reuters)
• Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth (WSJ)
• Yellen Confronts Economists’ Ignorance (BBG) - where does one even start with this one
• ECB Plans to Push Greek Banks to Shed State Debt If Talks Fail (BBG)