Frontrunning: August 17

Tyler Durden's picture
  • 'Pussy Riot' band members found guilty (Al Jazeera)
  • Merkel Says Germany Backs Draghi’s ECB Aid Conditionality (Bloomberg)
  • Now, the reverse psychology: Hilsenrath: Fed 'Hawks' Weigh In Against More Action (WSJ)
  • London Firings Seen Surging As Finance Firms Add NY Jobs (Bloomberg)
  • Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg)
  • Kocherlakota Says FOMC Goes Too Far With 2014 Rate Pledge (Bloomberg)
  • China Said to Order Action by Banks as Developer Loans Sour (Bloomberg)
  • Australian Treasury Dismisses AUD Intervention Calls (Dow Jones)
  • Brevan Howard Loses Third Founder As Rokos Said To Leave (Bloomberg)
  • Japan eyes end to decades long deflation (Reuters)... for 30 years now
  • Ex-Morgan Stanley Executive Gets Nine Months in China Case (Bloomberg)

Overnight Media Digest

WSJ

* Facebook Inc's stock price plumbed a new low on Thursday as early investors were freed to sell some of their stakes, leaving the once-prized stock down nearly 50 percent from its debut and forcing executives of the young internet giant to pump up morale.

* Apple Inc's vision for a new device that can be used as a set-top box includes features designed to simplify accessing and viewing programming and erase the distinction between live and on-demand content, people briefed on Apple's plans said.

* Verizon Wireless won Justice Department approval of its $3.9 billion deal to acquire airwaves from Comcast Corp and other cable companies while agreeing to some relatively light conditions on the deal.

* In a statement, Eastman Kodak Co said discussions with buyers are active and that it isn't ready to announce a result. The company added that it might decline to sell some or all of the patents, depending on how the auction progresses.

* Barrick Gold Corp said it is in talks to sell a big chunk of its African assets to China National Gold Group Corp in a deal that analysts say could fetch as much as about 2.5 billion pounds ($3.94 billion) -the latest move by the world's largest gold miner to boost shareholder value.

* International Business Machines Corp said it would buy closely held Texas Memory Systems Inc for undisclosed terms.

* Best Buy Co Inc founder Richard Schulze pushed his takeover offer for the electronics retailer with a letter to the board requesting permission to form a group and conduct due diligence in order to present a fully financed offer for the company.

* Wal-Mart Stores Inc reported a 5.7 percent increase in second-quarter earnings on strong sales in its U.S. and international markets, but the discount retailer continues to see tough economic conditions around the globe.

* Gap Inc fiscal second-quarter earnings rose a better-than-expected 29 percent as the casual-apparel retailer reported stronger sales in North America and improved margins.

* Oracle Corp paid $2 million to settle Securities and Exchange Commission accusations that an Indian subsidiary of the company violated U.S. laws designed to prevent bribery overseas.

* The United States Food and Drug Administration ordered St. Jude Medical Inc to launch new studies gauging the scope of heart-device failures that have plagued the company for months.

* Former partners from defunct law firm Dewey & LeBoeuf LLP have agreed to give back at least $50 million in past earnings in exchange for immunity from lawsuits relating to the New York firm's demise.

 

FT

FACEBOOK SHARES HIT NEW LOW

Shares in Facebook fell sharply to a fresh record low on Thursday, as a lock-up period that had prevented some shareholders from selling expired.

MINE VIOLENCE FLARES IN SOUTH AFRICA

South African police fired on protesting mine workers on Thursday, in the worst violence to afflict South Africa's mining industry in recent years.

ROMNEY LINK TO UNION SUPPRESSION RULING

A company controlled by Republican presidential candidate Mitt Romney's Bain Capital ran an unlawful campaign to suppress a potential union in the 1980s.

BREVAN HOWARD CO-FOUNDER TO STEP DOWN

Christopher Rokos, co-founder of Europe's second largest hedge fund manager, Brevan Howard, is to leave the firm.

CHINA GOLD IN TALKS TO BUY AFRICAN BARRICK

Barrick Gold Corp, the world's top gold miner, is in talks to sell all or a part of its stake in its African arm to a Chinese buyer.

GOLD PRICE FALLS AS ASIA PURCHASES DWINDLE

Global demand for gold is seeing a significant slowdown as top consumers in India and China pare purchases.

BOE DIRECTOR BULLISH ON LATEST LENDING SCHEME

Paul Fisher, the Bank of England's executive director of markets, is confident the Bank's latest attempt to kick-start the UK economy will be a success.

NO SAFE PASSAGE TO ECUADOR FOR ASSANGE

The UK will not allow Julian Assange safe passage to Ecuador, after the South American country granted the founder of WikiLeaks asylum.

WORLDWIDE BUSINESS ARE BACKING OBAMA

Business executives across the world think it would be better for the global economy if Barack Obama remained U.S. president.

 

NYT

* The Facebook Inc slide on Wall Street continued on Thursday amid fears that early investors eligible to sell their shares would create a surplus on the market. Shares fell more than 6 percent, closing at $19.87 - its lowest close since the initial public offering in May.

* The United States Justice Department approved a deal struck by Verizon Wireless to purchase spectrum from the country's largest cable operators, but officials also required that the agreement be altered to protect against higher prices for consumers.

* The founder of Best Buy Co Inc, Richard Schulze, pressed his case for a takeover of the electronics retailer, again trying to prod the company into considering his offer.

* Gary Friedman, the chairman and co-chief executive of Restoration Hardware Holdings Inc, has stepped down from his positions after an internal inquiry into an intimate relationship he had with a 26-year-old female employee, according to people involved in the matter.

* On Thursday, Instagram rolled out the third version of its application. The update makes several improvements, including refreshing the look of profiles, smoothing out performance bugs and allowing users to mark comments as spam.

* A123 Systems Inc, a government-backed maker of batteries for electric vehicles, said it had reached a final agreement with the Wanxiang Group, one of China's biggest auto suppliers, that will provide emergency capital and eventually acquire a controlling stake.

* Former partners at Dewey & LeBoeuf agreed to return more than $60 million of their compensation to help pay the failed law firm's creditors.

* Federal regulators have accused Jim Donnan, a head coach of Marshall University and the University of Georgia during the 1990s, of running a Ponzi scheme that defrauded fellow coaches and his former players.

 

Canada

THE GLOBE AND MAIL

* The Ontario Liberal government has taken a hard line against teachers, threatening to bring in legislation that will block them from getting a hefty pay raise or going on strike.

Reports in the business section:

* Jamie Sokalsky has made his first big move as Barrick Gold Corp's chief executive officer, putting the company's high-cost Africa unit on the block as part of a larger shift in strategy.

* Canada is keeping its coveted membership in the shrinking club of countries with a stable triple-A credit rating. But in its annual report on Canada, Moody's Investors Service Inc warned Thursday that the country's heavy reliance on now-falling crude prices is likely to be a drag on the economy.

NATIONAL POST

* Radon seeping invisibly into some Canadian homes causes hundreds more lung-cancer deaths a year than previously thought, a Health Canada study based on a recent testing blitz has concluded.

FINANCIAL POST

* Alberta's oil sands producers have some very ambitious output forecasts that could see them producing about a sixth of what OPEC now pumps out on a daily basis by the end of the decade. But there are some potentially nasty roadblocks that could force the Canadian producers to slash millions of barrels per day from those targets, not the least of which is transportation.

European Economic Summary

  • Germany Producer Prices 0.0% m/m 0.9% y/y – lower than expected. Consensus 0.3% m/m 1.2% y/y. Previous -0.4% m/m 1.6% y/y.
  • Switzerland PES Unemployment Rate 4.6% - higher than expected. Consensus 4.5%. Previous 4.4%.
  • Euro Area Current Account (sa) 15.7B. Previous -3.2B.
  • Euro Area Trade Balance (sa) 5.0B – lower than expected. Consensus 10.5B. Previous 6.8B.