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Frontrunning: August 18

Tyler Durden's picture




 
  • Yellen Dashboard Warning Light Glows as Millions Work Part Time (BBG)
  • More US drones boosting global GDP: Unidentified war planes, explosions heard in Libyan capital (Reuters)
  • London Home Asking Prices Plunge Most in More Than Six Years (BBG)
  • No Fed fireworks, but plenty of clues, expected at Jackson Hole (Reuters)
  • Kurdish, Iraqi forces in control of Mosul dam (Reuters)
  • China Pushes Cleanup of Banks (WSJ)
  • Russia Widens Ruble Trading Band in Move Away From Managed Rate (BBG)
  • Dollar General Makes $9.7 Billion Family Dollar Counterbid (BBG)
  • Carney - Rate Hike before Pay Recovers (Times)
  • Autopsy finds unarmed teen killed by police was shot six times (NYT)
  • Bull Market Waning as Barclays Sees 1% Gain for S&P 500 (BBG)
  • Credit Suisse Caught Up in Espírito Santo Mess (WSJ)
  • White House meets with big biz on immigration (Politico)
  • Don’t Hike Alone Is Jackson Hole Bear Warning for Central Banks (BBG)
  • WikiLeaks' Julian Assange hopes to exit London embassy if UK lets him  (Reuters)
  • Big Investors Snap Up Junk Bonds (WSJ)
  • Ex-SAC Executive Kumin's Hedge-Fund Firm Gets Leucadia Investment (WSJ)

 

 

Overnight Media Digest

WSJ

* U.S. jets, drones and bombers pounded Sunni insurgent positions on Sunday to ease the siege of the strategically vital Mosul Dam, as Washington and its Kurdish allies turned up pressure on the radical group Islamic State. (on.wsj.com/1BrVg8W)

* A march protesting the shooting death of an unarmed 18-year-old black man by a white officer here erupted in chaos Sunday night when police forced back demonstrators in a cloud of smoke. The retreat by marchers set off widespread vandalism and shots were fired, but it wasn't known by whom. Several storefront windows were shattered along West Florissant Avenue, a main thoroughfare in Ferguson. (on.wsj.com/1tdPwLp)

* China denied on Monday that a spate of recent antitrust probes into foreign companies could be responsible for falling levels of investment in the country, after data showed that foreign direct investment in China fell 17 percent in July compared with a year earlier. (on.wsj.com/1uL9EYg)

* Sonic Automotive Inc will open a chain of preowned-vehicle stores hoping to move on the turf of used-car retailer CarMax Inc. Sonic on Monday will announce the creation of EchoPark stores, with the first dealership opening in Denver, a few miles from a CarMax store. (on.wsj.com/VycKzu)

* Across the United States, small-business lending has been stuck in a slow, grinding recovery behind most other types of business and consumer loans. At the end of the first quarter, banks held $585 billion in loans to small businesses, up 1 percent from last September but still 18 percent less than the peak of $711 billion in 2008, according to the Federal Deposit Insurance Corp. (on.wsj.com/1o3T7pP)

* Many economists fear the U.S. Federal Reserve will wait too long before raising interest rates, but officials believe markets and economic indicators are not signaling an economy near overheating. (on.wsj.com/1oIeiDV)

* Institutions are taking advantage of a recent slide in high-yield bonds' price triggered by small investors' selling-figuring the bonds are still a good bet as the economy expands. (on.wsj.com/1kN0g2Q)

* Former SAC Capital Advisors LP executive Solomon Kumin has secured a $400 million investment from Leucadia National Corp for his startup hedge-fund firm, according to people familiar with the recent developments. (on.wsj.com/1mab1Yy)

* Credit Suisse Group AG helped sell billions of dollars of securities that ultimately played a role in toppling Portugal's second-largest bank. The Swiss bank was responsible for putting together securities that were issued by offshore investment vehicles and then sold to retail customers of Portugal's Banco Espirito Santo SA. (on.wsj.com/1rhvsKC)

* As the Federal Communications Commission reviews Comcast Corp's proposed acquisition of Time Warner Cable Inc one issue it has to decide is whether to allow Comcast to continue TWC's long-standing arrangement to handle programming and technology acquisitions for the sixth-biggest cable operator, Bright House Networks. (on.wsj.com/1uL8n3i)

* PricewaterhouseCoopers will pay $25 million and be banned for two years from some consulting work to settle New York state regulators' allegations that the accounting firm mishandled its work for Bank of Tokyo-Mitsubishi UFJ. The New York State Department of Financial Services alleges that PwC watered down an anti-money-laundering report it did for the Japanese bank that was submitted to regulators. (on.wsj.com/1mZTaUf)

* The Justice Department on Friday filed additional charges against FedEx Corp, accusing it of conspiracy to launder money, in connection with its prescription-drug case against the package-delivery concern. (on.wsj.com/1vZrico)

 

FT

Some Wall Street banks are drawing up preliminary plans that include moving some of their London-based operations to Ireland to deal with the possible scenario of Britain leaving the European Union.

Bank of England Governor Mark Carney said he will not necessarily wait for real wages to turn positive before raising interest rates.

European banks are expected to borrow about 250 billion euros ($334.75 billion) in cheap four-year money from the European Central Bank in September and December, according to projections by Morgan Stanley.

Shareholders in BHP Billiton and Glencore, two of the world's largest mining companies, could hear this week when surplus capital will be returned to them, in what would mark a milestone in the mining sector's recovery.

A British government report on Egypt's Muslim Brotherhood has been delayed as ministers and officials disagree over its findings.

Private equity firms Blackstone and TPG are close to buying the UK subprime mortgage lender Kensington from Investec Ltd, the Anglo-South African financial services group.

 

NYT

* PricewaterhouseCoopers has agreed to pay a $25 million penalty imposed by the New York State's financial regulator, taking aim at the consulting firm for watering down a report about one of the world's biggest banks, Bank of Tokyo-Mitsubishi UFJ. The settlement also includes prevention of one of its consulting units from taking on certain assignments from New York-regulated banks for two years.(http://nyti.ms/YmBhtn)

* More than 1,000 writers from Germany, Austria and Switzerland have united to vent their frustration over the tactics Amazon.com Inc is using against the Bonnier Group and the authors who are published under its name. (http://nyti.ms/1o3Lsrz)

* Companies like Google Inc, Facebook Inc and Cisco Systems Inc are employing unorthodox criteria - say, whether a product is used daily, like a toothbrush - to size up their deal targets, and they are handling most acquisitions internally instead of relying on Wall Street bankers. (http://nyti.ms/YmZsaZ)

* The "Ice Bucket Challenge," a campaign to raise money to fight Lou Gehrig's disease, has caught fire on social media, with celebrities drenching themselves in ice water. (http://nyti.ms/1pVpXgQ)

 

Canada

THE GLOBE AND MAIL

* The British Columbia government says an independent investigation into the Mount Polley spill is needed, and the province is indicating there could also be new inspections at other mines. It said the communities in the affected areas, First Nations, industry and other British Columbians "deserve to know in a clear and timely way what happened and what can be done to ensure such incidents never happen again." (http://bit.ly/1pEfwzc)

* About 200 kilometres before an ill-fated oil train was left idling on the main track near Lac-Megantic, Quebec, Transport Canada conducted a routine inspection and allowed it to proceed. The inspector didn't report any concerns about the engine in the train's lead locomotive. The Globe and Mail has learned that part of the federal investigation into the rail disaster focused on a repair conducted nine months earlier that played a role in a series of events that led to the train's derailment and explosion in Lac-Megantic, Quebec. (bit.ly/1kNECvl)

Reports in the business section:

* Chinese companies have shelled out more than $30 billion in Canada's energy industry, but many of those investments have been hit with operational problems, delays and weak returns, leading to growing impatience in some quarters in China. PetroChina Co Ltd, Sinopec , CNOOC Ltd, China Investment Corp and other state-owned enterprises made a raft of big bets on oil sands projects, shale developments and domestic companies since 2005 and many have yet to pay off. (http://bit.ly/1px0jQj)

NATIONAL POST

* Federal officials closely tracked the fallout of a Royal Canadian Mounted Police raid on a First Nations protest against shale-gas exploration in New Brunswick. At one point, the protests raised concerns it could spawn another countrywide movement like "Idle No More." Members of the Elsipogtog First Nation, who were concerned about the environmental impact of shale-gas development, didn't want energy company SWN Resources to do testing work on their traditional territory. (http://bit.ly/1lcBv0D)

* Three groups representing doctors say they will not take part in an anti-drug campaign by Health Canada that will target young people because it has become a political issue. A statement issued on Saturday by the College of Family Physicians of Canada, Canadian Medical Association and Royal College of Physicians and Surgeons of Canada says they were invited to be involved in the campaign. It says the groups "did not, and do not, support or endorse any political messaging or political advertising on this issue." (http://bit.ly/VyGVXf)

FINANCIAL POST

* CTV has made deep cuts to its flagship newsmagazine show W5, blaming falling advertising revenue and changing viewer habits. Bell Media Inc, which runs CTV, said that seven contract positions on the production team at W5 were not renewed. As a result, the network is trimming the number of episodes it will air this season to 14 from the usual 23. (http://bit.ly/1kNAtrl)

* Beleaguered miner Imperial Metals Corp plans to issue $100 million of convertible debt to help fund the cleanup of its stricken Mount Polley mine and finish building its new Red Chris operation, both in British Columbia. (http://bit.ly/Vya7Ov)

 

China

- Several domestic banks in Shanghai, including Bank of China Ltd, China Construction Bank Corp, Industrial and Commercial Bank of China Ltd and Agricultural Bank of China Ltd, denied that they had lowered interest rates on property loans, sources told the newspaper.

- Total revenues of China's 838 listed companies reached 2.23 trillion yuan ($362.78 billion), up 8.9 percent from a year ago, according to the newspaper's calculations.

CHINA DAILY

- Despite recent progress, China' antitrust team lacks real enforcement capability, especially when challenging dominant state-owned enterprises, due to a shortage of manpower, legal experts say.

- China is keen to export technology and equipment to the United States to take part in its upgrading of transport infrastructure, Premier Li Keqiang said while meeting a U.S. delegation on Saturday.

SHANGHAI SECURITIES NEWS

- Almost 3,000 small and medium enterprises (SMEs) have expressed interest in listing on China's SME board, the newspaper said.

Britain

The Times

BANKS 'ABUSED' LOAN GUARANTEE FOR FIRMS

The Serious Fraud Office is examining allegations that government schemes designed to increase lending to small businesses have been abused by high street banks.

CARILLION PLANS FURTHER TILT AT BALFOUR BEATTY

The board of Carillion is weighing up options to sweeten its proposal for a 3 billion pound merger with Balfour Beatty.

The Guardian

INTEREST RATES WILL RISE BEFORE REAL PAY STOPS FALLING, SAYS CARNEY The Bank of England governor says the economy is halfway there, but the most difficult part of the UK's recovery lies ahead

The Telegraph

'GET NEW INDEPENDENT DIRECTORS AT BETFAIR', SAYS PENSION FUND

The Local Authority Pension Fund Forum (LAPFF) has called for "new independent directors" to be appointed to investigate the Betfair's dividend payments over the past three years and the role of its directors and auditors, KPMG.

Sky News

WALL STREET GIANTS SWOOP ON SUB-PRIME LENDER

Blackstone and TPG, the U.S.-based private equity groups, are close to securing a takeover of sub-prime mortgage lender Kensington, which is owned by the Anglo-South African financial services provider Investec.

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Housing market index for August at 10am -- consensus 53.0

ANALYST RESEARCH

Upgrades

Equity Residential (EQR) upgraded to Hold from Underperform at Jefferies
HMS Holdings (HMSY) upgraded to Overweight from Equal Weight at First Analysis
Halcon Resources (HK) upgraded to Buy from Hold at MLV & Co.
KapStone (KS) upgraded to Buy from Hold at Deutsche Bank
Sportsman's Warehouse (SPWH) upgraded to Outperform from Neutral at RW Baird
WisdomTree (WETF) upgraded to Neutral from Sell at Citigroup

Downgrades

Arrow Electronics (ARW) downgraded to Neutral from Buy at Goldman
Constellium (CSTM) downgraded to Neutral from Outperform at Credit Suisse
Federal Realty (FRT) downgraded to Hold from Buy at Jefferies
InvenSense (INVN) downgraded to Neutral from Buy at Goldman
Liberty Ventures (LVNTA) downgraded to Sell from Neutral at Citigroup
Monster Beverage (MNST) downgraded to Hold from Buy at Jefferies
NXP Semiconductors (NXPI) downgraded to Sell from Neutral at Goldman
Werner (WERN) downgraded to Underperform from Neutral at BofA/Merrill

Initiations

Descartes Systems (DSGX) initiated with an Overweight at Barclays
Immune Design (IMDZ) initiated with a Buy at Jefferies
Intersect ENT (XENT) initiated with an Overweight at Piper Jaffray
Pfenex (PFNX) initiated with a Buy at Mizuho
Pfenex (PFNX) initiated with an Outperform at JMP Securities
Pfenex (PFNX) initiated with an Outperform at William Blair
Semiconductor Manufacturing (SMI) initiated with an Overweight at Barclays
Synergy Resources (SYRG) initiated with a Buy at Canaccord
Townsquare Media (TSQ) initiated with a Buy at BofA/Merrill
Townsquare Media (TSQ) initiated with a Buy at Jefferies
Townsquare Media (TSQ) initiated with an Outperform at RBC Capital

COMPANY NEWS

Dollar General (DG) offers to acquire Family Dollar (FDO) for $78.50 per share
Sensata (ST) to acquire Schrader International for $1B
Tesla (TSLA) announced increase to Model S drive unit warranty, said change to have 'moderately negative' impact on earnings in the short-term
Rio Tinto (RIO) to review options in Bougainville Copper Limited
Yahoo (YHOO) acquired Israel-based ad startup ClarityRay, terms not disclosed

EARNINGS

Fuel Systems (FSYS) sees FY14 revenue $335M-$355M, consensus $347.13M
FS Investment (FSIC) reports Q2 adjusted net investment income 26c, consensus 24c

NEWSPAPERS/WEBSITES

U.S. banks (BAC, C, MS) making plans for U.K. exit from EU, FT reports
Apache (APA) discovers oil field in Western Australia, WSJ reports
FCC must decide on Time Warner Cable (TWC) arrangement as it reviews Comcast (CMCSA) deal, WSJ says
Icahn's recent stake in Gannett (GCI) should reassure investors, Barron's reports
BB&T (BBT), Juniper (JNPR), ConocoPhillips (COP), United Technologies (UTX) look discounted, Barron's says
Mick Davis in talks to buy Colombia's CNR from Goldman (GS), Sunday Times reports
McDonald's (MCD) orders products from Thai supplier after food scare, Reuters reports

SYNDICATE

Extra Space Storage (EXR) files automatic mixed securities shelf
Hill International (HIL) files to sell 20M shares of common stock
Mercury Systems (mrcy) files $500M mixed securities shelf
New York Mortgage (NYMT) files automatic mixed securities shelf
Pathfinder Bancorp (PBHC) to commence stock offering
Uranium Energy (UEC) files to sell 199,755 shares for holders

 

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Mon, 08/18/2014 - 07:34 | 5107880 Cognitive Dissonance
Cognitive Dissonance's picture

"London Home Asking Prices Plunge Most in More Than Six Years (BBG)"

The problem with hot money is it flows in both directions.

Mon, 08/18/2014 - 08:03 | 5107886 Headbanger
Headbanger's picture

Here's WHAT REALLY HAPPENED IN THE MICHALE BROWN SHOOTING

http://www.ijreview.com/2014/08/168698-eyewitness-recalls-important-deta...

Now watch this whole story suddenly vanish from the liberal MSM starting today because it's now lost the "innocent victim" status it had.

 


Mon, 08/18/2014 - 09:20 | 5108235 falak pema
falak pema's picture

A bit like body fluids when attacked by Lord Ebola of the Bat-Vampire! 

But maybe they can quarantine the hot money by saying : Sanctions for you minions and extreme unction for Putin ! Can they do that to Ebola?

Well Putin is what Putin does and Putin does what Lord Gazprom ordains. As for Ebola...its running around in west point!

Its now all about Lords and Ladies once again and Queens and Kings who park their Jets in the Virgins.

70 virgins and whadya get? Hell in dystopia and high fives in Utopia. 

A Bransonista ride on a kite all the way to the moon, with a nude chick whose only role is to play the "useful soft-porn idiot" of Oligarchy thrust and sheeple envious lust.

Thats capitalism's KEY LAW for you without the wrapping on it. Dream on sheeple!

Madison Avenue's Mad men now go for the surge of unabashed primal urge without any compunction for sense and sensibility. Gay Capri of the Romans! 

In the raw! Let it all hang out! 

Gatsby forever! 

All the while the MIC goes for the surge of imperial urge that destroys both Empire and its foundations. 

Tipping times as WS's bell chimes :  we ain't gonna let that Bull market go Buddy Bear. No never!

There is a book coming out about another Hollywood icon : Liz Taylor's secret love life. How she shacked up with Ronnie R at 15 and became a hottie on the run.

She never stopped running by the sound of that book!

So the Internet world didn't invent hump a rump they just made it into a banal sexothon, 24/24.

We do live in strange times.

Not sure that's so true, as Capri stays forever the dream plum of Man's irrational exuberance.

Play on Sisyphus.

Mon, 08/18/2014 - 07:41 | 5107885 buzzsaw99
buzzsaw99's picture

clues from jackson hole are like clues about the afghanistan pullout. a constantly moving goalpost.

Mon, 08/18/2014 - 07:46 | 5107896 Winston Churchill
Winston Churchill's picture

It takes time for the Afghans to chew up and spit out empires, they have

thousands of years of experience at it though.

Mon, 08/18/2014 - 08:58 | 5108141 papaswamp
papaswamp's picture

FYI.... Some serious sesmic action in Iceland. Volcano activity below ground is picking up. Something to keep an eye on. http://en.vedur.is/about-imo/news/nr/2938

Mon, 08/18/2014 - 09:16 | 5108213 Headbanger
Headbanger's picture

Yep,  Could be an even moar colder winter for Europe if it erupts:

"This is the strongest earthquake measured in the region since 1996. As evidence of magma movement shallower than 10 km implies increased potential of a volcanic eruption, the Bárðarbunga aviation color code has been changed to orange."

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