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Frontrunning: May 12
- Bonds Extend Global Rout as Europe Stocks Slide, Dollar Weakens (BBG)
- Verizon Communications to Buy AOL for $4.4 Billion (BBG)
- Fresh Nepal earthquake kills dozens, triggers panic (Reuters)
- Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny (WSJ)
- Bill Gross: The Amount of Money I'll Give Away 'Is Staggering, Even to Me' (BBG)
- U.S. rejects notion that Gulf rulers snubbing Obama summit (Reuters)... what about AIIB?
- In Asia, Debt Market Gets Tougher (WSJ)
- Iran’s Mahan airline defies sanctions in shadowy aircraft deal (FT)
- After Galaxy Smartphone Debacle, Samsung Questions Game Plan (WSJ)
- Nomura, RBS Defective-Bond Suit Loss Seen Spurring Deals (BBG)
- MCD is "simplifying" its drive through menu (WSJ)
- U.S. media CEOs are top paid even in year when stock prices lagged (Reuters)
- Putin’s Next Takeover Target Is Oil Giant's $34 Billion Cash Pile (BBG)
- U.S. Conditionally Approves Shell Arctic Drilling Plan (WSJ)
Overnight Media Digest
WSJ
* Representative Bill Shuster, a Pennsylvania Republican and the chairman of the House Transportation and Infrastructure Committee, and his staff are drafting legislation to strip the nation's 15,000 civilian controllers and more than 230 air-traffic facilities from the Federal Aviation Administration, possibly putting them under the control of a nonprofit corporation, people familiar with the plan say. (http://on.wsj.com/1zWMliJ)
* As banks scaled back lending during the financial crisis, the bond market bloomed in Asia. Now, as global interest rates begin to rise, the days of easy financing appear to be over. With growth slowing in Asia, bond investors have become more demanding, seeking higher interest rates and better terms for the debt. (http://on.wsj.com/1JDvam6)
* McDonald's Corp unveiled plans to simplify its drive-through menu and revamp its midprice offerings as it seeks to turn around its struggling U.S. operations. (http://on.wsj.com/1zWO8UV)
* The U.S. government on Monday conditionally approved Royal Dutch Shell Plc's plans to drill in the Arctic Ocean this summer, removing the biggest remaining obstacle before the company can explore for oil and natural gas in the Arctic's frigid, isolated waters. (http://on.wsj.com/1KXZhpg)
* Morgan Stanley struck a deal to sell its oil-trading and storage business to Castleton Commodities International LLC, bringing the bank closer to unloading a unit that has attracted heightened regulatory scrutiny. (http://on.wsj.com/1Pfnkpt)
FT
Court finds Nomura and RBS misled investors (http://on.ft.com/1EuE9T4)
Shell secures conditional approval for Arctic drilling plan (http://on.ft.com/1EuEzIZ)
Morgan Stanley oil business sold for $1 bln (http://on.ft.com/1EuEUvs)
Overview
A U.S. judge on Monday ruled that Nomura Holdings Inc and Royal Bank of Scotland made false statements in selling mortgage-backed securities to investors ahead of the 2008 financial crisis.
Royal Dutch Shell's return to oil drilling in the U.S. Arctic for the first time since 2012 took a big step forward on Monday when the Obama administration conditionally approved the company's exploration plan.
Castleton Commodities International will buy Morgan Stanley's physical oil business, the largest and oldest on Wall Street, for an estimated value of more than $1 billion, vaulting the Connecticut-based merchant into the big leagues of global crude and fuel traders.
NYT
* A Manhattan federal judge ruled that two banks misled Fannie Mae and Freddie Mac in selling them mortgage bonds that contained numerous errors and misrepresentations. The ruling came in a closely watched case brought by the government against Japanese bank Nomura Holdings and Royal Bank of Scotland. (http://nyti.ms/1HdSyZW)
* Television networks are offering new data-driven products to help advertisers reach targeted audiences even as they shift to digital and social media. (http://nyti.ms/1F3npEY)
* JPMorgan Chase has hired a senior banker to lead its effort to provide private financing for companies like hot Silicon Valley start-ups, the bank said in an internal memorandum on Monday. (http://nyti.ms/1zUS6NB)
* General Motors' compensation fund said it had approved the 100th death claim tied to faulty ignition switches. The toll far exceeds the 13 victims that GM had said last year were the only known fatalities linked to ignitions that could suddenly cut off engine power and disable airbags. (http://nyti.ms/1PfmoS9)
* The Obama administration on Monday gave conditional approval to allow Shell to start drilling for oil off the Alaskan coast this summer, a major victory for the petroleum industry and a devastating blow to environmentalists. (http://nyti.ms/1Evhu9h)
Canada
THE GLOBE AND MAIL
** Bombardier Inc is set to soon unveil details of another key feature for its new C Series jet that lets airlines monitor their airplanes' systems and engines in real time. The aircraft health-management system (HMS) will prepare any troubleshooting required while the jets are still flying and company has hesitated to talk about it because it's still a work in progress. (http://bit.ly/1cMeFKc)
** Enticing large pension funds to spend big on Canadian infrastructure projects will form a key part of the Liberal Party's cities agenda, which is among the next policy planks that Leader Justin Trudeau will announce in the coming weeks. (http://bit.ly/1QEXc4P)
** Ontario's Health Minister is promising a quick fix to problems that are holding up a pay raise for personal support workers, and says further changes are on the way to improve the home-care system. (http://bit.ly/1cshcbQ)
NATIONAL POST
** Almost one in five Canadians with a Tax Free Savings Account have maximized the contribution room in their account, according to documents from the Canada Revenue Agency. Right across the income spectrum, significant percentages of Canadians appear poised to benefit from the increase in contribution limits. (http://bit.ly/1F4iFPe)
** The Harper government claims the C$2-billion ($1.66 billion) hole in the Liberal Party's child benefit plan has grown by another billion dollars because they have miscalculated the cost of cancelling the existing Conservative program. (http://bit.ly/1J8QyBy)
** Former Toronto mayor Rob Ford underwent surgery Monday to remove a large, cancerous tumour from his abdomen - a procedure his office declared a success. Ford is "fully conscious and recovering from his surgery," his office said in a release. (http://bit.ly/1zXd8vk)
China
CHINA SECURITIES JOURNAL
- China's investor confidence index hit 65.2 in April, up 26.6 percent from a year earlier, but down 7.5 percent from March, according to a report from China Securities Investors Protection Fund.
- Seventy-one listed companies in China have changed their company names so far this year to expand business to emerging industries, according to data compiled by the paper.
SHANGHAI SECURITIES NEWS
- China will maintain its prudent monetary policy with certain relaxation, which is definitely not quantitative easing, Yu Pingkang, chief economist at Huatai Securities in Shenzhen, said in an editorial. The reason is because no economic recession and high unemployment rate in China, where common monetary policy is still effective.
CHINA DAILY
- China should further raise its cigarette tax after the recent hikes to reduce tobacco use and promote the development of health and medical sectors, the paper said citing an industry expert.
- ZTE Corp is in its final stage of an investment plan to build a factory in Belarus, the paper said citing heads of the company.
SHANGHAI DAILY
- China's State Council issued an instruction on Monday to introduce private money to expand government procurement of cultural services.
Britain
The Times
ALL EYES ON INFLATION REPORT AS MPC KEEPS RATES ON HOLD
The Bank of England's monetary policy committee kept interest rates on hold at a record low of 0.5 percent for the 74th month in a row. At the same time, it held the amount of asset purchases steady at 375 billion pounds ($583.88 billion). (http://thetim.es/1QDrk0m)
SHATTERED CHINA CUP MAKER'S RECOVERY GETS PERFECT FINISH
KPS Capital Partners has sold the parent of Wedgwood, Waterford Crystal, Royal Albert and Royal Doulton to Fiskars for $437 million in cash. (http://thetim.es/1Eymn0n)
The Guardian
DAVID CAMERON MAY BRING EU REFERENDUM FORWARD TO 2016
David Cameron is drawing up plans to bring forward an in/out referendum on Britain's membership of the European Union by a year to 2016 in order to avoid a politically risky clash with the French and German elections in 2017. (http://bit.ly/1IxpStD)
WHISTL: ABOUT 2,000 JOBS AT RISK AS POSTAL GROUP SUSPENDS DELIVERIES
About 2,000 private postal workers are facing layoffs after the collapse of private equity funding caused Whistl to suspend deliveries. The logistics group formerly known as TNT and owned by Dutch private postal group PostNL said it was reviewing the viability of shipping directly to UK homes and businesses. (http://bit.ly/1IuSANk)
The Telegraph
RBS FACES LARGE DAMAGES BILL OVER 'ENORMOUS' MORTGAGE DECEPTION
Royal Bank of Scotland Group Plc and Nomura Holdings Inc could be forced to pay out nearly a half billion dollars in damages following an "enormous" deception in selling mortgage-backed securities. A U.S. judge ruled the banks made false statements when they sold the securities to Fannie Mae and Freddie Mac prior to the 2008 financial crisis. (http://bit.ly/1Fa0k4I)
Sky News
BARCLAYCARD CHIEF KEATING TO QUIT UK LENDER
Barclays Plc will announce on Tuesday that Valerie Soranno Keating is stepping down from the UK's biggest credit card provider, Barclaycard. (http://bit.ly/1HaFAcC)
LORD SUGAR QUITS 'ANTI-ENTERPRISE' LABOUR
Lord Sugar has announced he has quit the Labour party because of its "negative business policies and the general anti-enterprise concepts". (http://bit.ly/1IuUfCv)
The Independent
LONDON HOMEOWNERS 3,500 POUNDS WORSE OFF A YEAR SINCE CAMERON TOOK OFFICE
Rent and mortgage payments have risen so far beyond the wages of Londoners that they are on average 3,500 pounds worse off a year than when David Cameron first took office. (http://ind.pn/1J7pgvo)
DAVID CAMERON PAVES WAY FOR SHAKE-UP OF THE BBC AS LICENCE FEE CRITIC JOHN WHITTINGDALE JOINS ALL-TORY CABINET
David Cameron has paved the way for a radical shake-up of the BBC as he appointed a new Cabinet, which he will order to pursue "blue-collar Conservatism" to help working people. (http://ind.pn/1cKW4OL)
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It's all about Verizon - AOL for the talking heads on CNBC
Sure beats talking about the bond markets.
Investors in some top U.S. media companies have had a rough ride as their shares have lagged the rest of the market. You just wouldn’t know it if you looked at the bank accounts of their top executives.
The CEOs of 11 major media companies were given median compensation of $32.9 million for 2014, much higher than any other industry group in the Standard & Poor's 500 index, according to regulatory filings posted in the first four months of this year and analyzed by executive pay consulting firm Farient Advisors for Reuters. Food & staples retailers came in a distant second at $24.5 million.
It is set to be the seventh successive year media industry executives come out on top – figures before 2008 are not comparable because of the way pensions and stock options are disclosed.
In many of the years, media company stocks were outperforming the broader market as revenue and earnings surged. Last year, though, the median total return of the 11 companies was 10.76 percent against 13.69 percent for the S&P 500 as a whole.
The weakness reflects more challenging times in much of the business, with advertising growth stuttering and the increasing amounts of video delivered and viewed over the Internet upsetting a cozy business model for program makers and the traditional pay-TV distributers, such as cable companies.
Many companies justify big awards by stressing difficulty retaining top talent in a competitive market.
But some compensation experts say there is another explanation – a number of the major media companies are controlled by top executives and their families, which means boards don’t have to worry much about objections from other shareholders. CEOs at companies with less family influence benefit anyway because boards tend to benchmark pay against their major rivals.
Robert McCormick, chief policy officer of proxy adviser Glass Lewis & Co, said the controlling shareholders “can pay whatever they want," and disregard views of other shareholders.
For example, Sumner Redstone, 91, controls about 80 percent of the voting shares in CBS (CBS.N) and Viacom (VIAB.O) through a holding company.
So far this year, the CEOs of Discovery Communications Inc (DISCA.O), CBS, Walt Disney Co (DIS.N) and Viacom accounted for the first, third, fourth and fifth spots among the five highest-paid CEOs across the S&P 500. The only non-media CEO in that group was Steven Mollenkopf of telecom technology company Qualcomm Inc (QCOM.O), who was second.
Often in the media industry, "the pay is not reflecting the performance," said Michael McCauley, senior officer for the Florida State Board of Administration, which manages pension assets for Florida state and other local authority employees, and holds shares in all four of these media companies...
With first-quarter numbers trickling in, job-growth estimates have begun to be revised downward, which doesn't bode well for the length or depth of Houston's downturn.
With that, the real estate "pause" could be extended into 2017, said Bill Gilmer, director of Bauer College’s Institute for Regional Forecasting at the University of Houston.
"I was at about 50,000," Gilmer said of his initial job-growth predictions, "and that will be cut significantly."
http://www.bizjournals.com/houston/morning_call/2015/05/houston-job-grow...
Hey, Reuters pulled the Saudis boycott meeting Obama article, link is "article not found" and the subject is missing from searching Reuters.
even though all other news outlets are reporting it.