Frontrunning: August 16

Tyler Durden's picture
  • JPMorgan provided rescue financing to Knight (WSJ)
  • HSBC hands U.S. more staff names in tax evasion probe (Reuters), HSBC, Credit Suisse Sacrifice Employees to U.S., Lawyers Say (BBG)
  • Hong Kong shares slide to two-week closing low, China weak (Reuters)
  • Israel Would Strike Iran to Gain a Delay, Oren Says (Businessweek)
  • Britain 'threatened to storm Ecuador's London embassy' to arrest Julian Assange (AP)
  • You have now entered the collateral-free zone: Spain Said to Speed EU Bank Bailout on Collateral Limits (BBG)
  • China Can Meet Growth Target on Positive Signs, Wen Says (BBG)
  • Risk Builds as Junk Bonds Boom (NYT)
  • Berlin maintains firm line on Greece (FT)
  • Brazil unveils $66bn stimulus plan (FT)

Overnight Media Digest:


* Apple Inc is in talks with some of the biggest U.S. cable operators about letting consumers use an Apple device as a set-top box for live television and other content, according to people familiar with the matter.

* Private-equity firm Carlyle Group LP and Getty Images management said they have formed a partnership to acquire stock-photo agency Getty Images Inc from buyout firm Hellman & Friedman for $3.3 billion.

* Zynga Inc has begun investing in state and federal lobbying efforts around gambling with real money, even as the social-gaming firm predicts the United States won't be an initial market for the potentially lucrative new line of business.

* Cisco Systems Inc reported a jump in quarterly profit and said it would pay a bigger dividend, continuing the networking-equipment giant's transformation from a fast-growing upstart to a more mature company.

* A U.S. bankruptcy judge said the parent of American Airlines couldn't scrap its pilots' contract and impose more draconian terms, further delaying AMR Corp's efforts to emerge from bankruptcy.

* The bankruptcy trustee, James Giddens, trying to recover money for U.S. customers of MF Global Holdings Ltd agreed to cooperate with lawyers suing the securities firm's former executives for damages related to its collapse last year.

* Chinese computer maker Lenovo Group Ltd said first-quarter net profit rose 30 percent from a year earlier due to strong growth in personal-computer shipments in emerging markets.

* Warburg Pincus LLC and TPG Capital Management LP , the private-equity owners, of Neiman Marcus Group Inc are looking for an exit after holding on to the company for an unexpectedly long seven years, people familiar with the matter said.

* Union leaders are split on the merits of a slightly revised pay offer made by Caterpillar Inc in an effort to end a strike that began May 1 at the company's plant in Joliet, Ill.

* Land prices in key U.S. farm states continued to soar in the second quarter, though the pace slackened as concerns over the drought pared down interest among farmers and other buyers, according to a new survey.




Standard Chartered's shares rallied on Wednesday after the bank settled allegations of wrongdoing with U.S. regulators.


Unemployment in Britain fell to its lowest level in nearly a year in the second quarter.


Paul Singer, the billionaire hedge fund manager who is one of the Republican party's most influential donors, is pressing Mitt Romney to tighten bank regulation.


Resolution is to scrap its complex corporate structure in the face of regulatory pressure as part of revamp.


British billionaire Richard Branson attacked as "insanity" a decision to award a key mainline train service to a rival to his Virgin Trains.


Canada's Barrick Gold, the world's largest gold producer, has been exploring a sale of its 74 per cent stake in African Barrick.


Brazil's government has unveiled measures to lure up to $133 billion reais ($66 billion) in private investment for road and rail projects.


Facebook is seeking to expedite the payout of its Instagram acquisition before the deal closes.



* The buyout firm, Carlyle Group LP, said that it would buy Getty Images, the big provider of high-quality images and video, from another private equity shop for $3.3 billion.

* Investors in Standard Chartered breathed a collective sigh of relief on Wednesday after the British bank agreed to a $340 million fine related to charges that it had laundered hundreds of billions of dollars in money with Iran and lied to regulators.

* Cisco Systems Inc, the world's largest maker of computer networking equipment, delivered quarterly results that slightly surpassed Wall Street's expectations in a challenging environment for corporate technology spending. Net profit rose to $1.9 billion, a 56 percent increase from the quarter a year earlier.

* Johnson & Johnson, which makes a range of personal care products like baby shampoo and acne cream announced plans to remove a host of potentially harmful chemicals, like formaldehyde, from its line of consumer products by the end of 2015.

* A group of big retailers, including 7-Eleven, Best Buy Co Inc, CVS Caremark Corp and Wal-Mart Stores Inc , said that they were forming a company that would offer a way for customers to pay for purchases with their smartphones.

* Caterpillar Inc and the International Association of Machinists said that they had reached a tentative six-year settlement that could end a 15-week strike at the company's hydraulics parts plant in Joliet, Ill.

* A criminal investigation into the collapse of the brokerage firm MF Global Holdings Ltd and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.

* The market for junk bonds, risky corporate debt that pays high interest rates, is red hot. Such debt, also known as high-yield bonds, has returned 10.2 percent year-to-date, according to a JPMorgan high-yield index. Junk bond funds are on a pace to take in a record amount of money this year.




* Foreign Affairs Minister John Baird has abruptly reversed course on his plan to get badly needed medical supplies into Syria by way of a Canadian aid organization.

Reports in the business section:

* Canadian mining major Barrick Gold is in talks to sell all or part of its 74-per-cent stake in African Barrick Gold to China's largest gold producer, just two years after the underperforming Tanzanian assets were spun off.

* Target Corp is primping to bring its U.S. discount model to Canada next year, but not necessarily at American prices.


* Canadians are far from a consensus on what causes climate change, a new public opinion poll shows. Almost every Canadian surveyed in the online Insightrix Research poll said they believe climate change is happening, but a clear rift emerged on the more specific, and politically important, question of whether humans or natural factors, or some combination, is the catalyst.


* Quebec's finance minister says Canadians are "naive" in the way they are letting domestic corporate champions be bought by foreign interests and makes no apologies for intervening in U.S. home improvement chain Lowe's Cos' purchase offer for Rona Inc.


European economic update:

  • UK Retail Sales -0.3% m/m 2.8% y/y – lower than expected. Consensus -0.1% m/m 1.4% y/y. Previous 0.8% m/m 2.6% y/y.
  • Euro Zone CPI -0.5% m/m 2.4% y/y – in line with expectations. Consensus -0.5% m/m 2.4% y/y. Previous -0.1% m/m 2.4% y/y.
  • Switzerland ZEW Survey -33.3. Previous -42.5.

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Neethgie's picture

uk sales was +0.3 not -0.3

Haager's picture

+0.3 is including London, otherwise -0.3 is correct.

edmondantes's picture

China is going to buy African Barrick Gold for a pittance... confirms your thesis that China is going to own Africa ... whilst the West has been consuming itself into slavery

also that the management of Barrick Gold are morons

tu-ne-cede-malis's picture

I'd imagine that cost inflation is affecting Barrick's bottom line.  Thus, time to sell off assets.

GMadScientist's picture

Maybe the Chinese know more about the viabiity of Barrick's mines than you do?


youngman's picture

Its interesting Brazil is needing a stimilus plan.....its that bad there now.....?????

Snidley Whipsnae's picture

It's not bad in Brazil... if you're a soccer fan, enjoy carnival, great beaches with hot babes... and don't mind skipping a few meals. :)

Catullus's picture


* Apple Inc is in talks with some of the biggest U.S. cable operators about letting consumers use an Apple device as a set-top box for live television and other content, according to people familiar with the matter.

Ha. Apple, just do it anyway.  Fuck the cable providers.  Their business model was a one-time 30 year abberation sustained by monopoly rules granted to them by the various state governments. 

GMadScientist's picture

It's always amusing to see that goverment and businesses hold back the development of new services and markets more than any legitimate technical limitations ever could.


LoneStarHog's picture

"At about 9 p.m. on Aug. 1, Knight Chief Executive Thomas Joyce called Carlos Hernandez to seek emergency funding from J.P. Morgan, the lead bank on a primary credit line, to plug losses from errant trades caused by a software upgrade..."


Snidley Whipsnae's picture

RE: Berlin Maintains Firm Line on Greece... Hat tip to Mish


Face-to-Face Showdown With Merkel; Wicked Irony of Greece Bankruptcy

Greece is bankrupt. It cannot pay the bills. A Spending Moratorium proves just that.

Greece will only pay salaries and pensions.

If the state owes anyone else money, they can forget about it unless the Troika sends more money. If that causes more corporate and personal bankruptcies (and it will), then tough luck.

Even Der Spiegel admits the obvious: Only Bankruptcy Can Help Now.