Frontrunning: August 31

Tyler Durden's picture
  • Romney Promises to 'Restore' U.S. (WSJ)
  • Dirty Harry Makes Surprise Appearance (WSJ)
  • It has always been about the gold: Time for eurozone to reach for the gold reserves? (FT)
  • EU Plan Said to Give ECB Sole Power to Grant Bank Licenses (Bloomberg)
  • More attempts to marginalize Germanty: Brussels pushes for wide ECB powers  (FT)
  • Justice may be blind but it has geographic limits: Apple Loses Patent Lawsuit Against Samsung in Japan (BBG)
  • ECB Said to Use Greek Myth for Security on New Euro Banknotes (Bloomberg)
  • Reid's ties to China-Nevada solar plan draw ire (Reuters)
  • Alberta deficit set to triple on slumping oil prices (Globe and Mail)
  • Bernanke may hint at QE without boxing Fed in (Reuters)
  • Berezovsky loses against Abramovich  (FT)
  • Spain Considers Bankia Re-Capitalization Without EU Money (Bloomberg)

Overnight Media Digest


* Mitt Romney accepted the Republican nomination for president and took aim at Barack Obama as a failed steward of the nation's economy.

* JP Morgan is reviewing its dealings with dozens of brokerages that use the bank to settle trades in an effort to reduce its risks.

* Barclays tapped longtime executive Antony Jenkins to become its new CEO. His tasks: repair the bank's reputation with regulators and settle questions about the future of the investment bank.

* Glencore's attempt to form the world's fourth-largest mining conglomerate by acquiring Xstrata edged closer to collapse after sovereign wealth fund Qatar Holding said it would vote against a deal at the current offer price.

* After failing to gain significant market share with tablets running on Google Inc's Android operating system, Samsung Electronics Co now is betting on devices using Microsoft Corp's Windows.

* Apple Inc is flexing its legal muscle more squarely at Google Inc in another patent fight against Samsung Electronics Co.

* Japan's Sharp Corp hasn't started mass producing screens for Apple Inc's next iPhone, a person with knowledge of the situation said Friday, signaling potential supply problems for the U.S. company as it gears up to unveil its next-generation smartphone next month.

* Twitter Inc on Thursday said it will allow advertisers to more easily target their Twitter ad messages to people based on their interests, a shift some advertisers have been demanding of the short-messaging service.

* Egypt's President Morsi, speaking at a summit in Iran, slammed Tehran's policies on Syria and Israel. U.N. chief Ban blasted Damascus for using "ruthless force."




Barclays named retail banker Antony Jenkins as chief executive on Thursday.


Qatar's RasGas has become the second major state-owned Middle East energy company to be hit by a severe computer virus in weeks.


The European Commission, the executive arm of the European Union, plans to give the European Central Bank oversight of all banks in the euro zone.


Fast-growing technology companies would be allowed to float as little as 10 percent of their business on the London Stock Exchange under proposals being weighed up by Downing Street.


Investors have decided not to take up an unusual bond offering backed by royalties from songs penned by Bob Dylan and other musicians.


Simon Fox, chief executive of entertainment retailer HMV Group will take over the helm at Trinity Mirror next month.


Cash bonuses for bankers should be capped and shareholder approval required for longer-term incentive plans, Germany's finance minister said.


The founder of Admiral Insurance Henry Engelhardt said aggressive pricing and rising customer claims are likely to hit UK motor insurers.


Twitter users will soon be seeing advertisements targeted to what the short-messaging site has learnt about their interests.



* Two researchers say an off-the-shelf computer program has been used to monitor and spy on dissidents in countries around the world.

* An Irish court has set Friday as the deadline for Sean Quinn, a bankrupt former billionaire, to provide information on what the Irish government contends is his byzantine collection of offshore assets and opaque owners.

Authorities are trying to determine whether Mr. Quinn, former head of the Quinn Group conglomerate, and his family are hiding assets to avoid repayment of the 2.8 billion euros, or $3.5 billion, he owes to the state-controlled bank that seized control of his business empire last year. He then filed for bankruptcy, saying he was down to his last 11,000 euros, an old Mercedes-Benz and 166 acres of land.

* The British bank Barclays named its retail boss, Antony Jenkins, as its new chief executive to replace Robert Diamond, who stepped down in June over the rate-manipulation scandal.

* Al Jazeera, once known in the United States mostly for televising videos of Americans and others taken hostage in foreign countries, but now a serious presence as a worldwide network, is betting heavily on sports to win American viewers.

* The Food and Drug Administration on Thursday approved a drug made by Ironwood Pharmaceuticals to treat chronic constipation and irritable bowel syndrome with constipation in adults.




* Quebec police are on the hunt for a sticky-fingered thief after millions of dollars of maple syrup vanished from a Quebec warehouse. The theft was discovered during a routine inventory check last week at the St-Louis-de-Blandford warehouse, where the syrup is being held temporarily.

* The trophy case of empty liquor bottles that has become a standard of dorm-room decor will not be tolerated at Acadia University next week. The school in Wolfville, N.S., has rolled out what may be the most comprehensive campus alcohol strategy of any university in response to the alcohol-related death of a student in residence last year.

Reports in the business section:

* Alberta is veering toward a deficit as high as $3-billion this year, more than three times larger than expected, as a slump in oil prices forces the government to find ways to slash spending.

* Inc said on Thursday that its Kindle Fire tablet accounts for 22 percent of U.S. tablet sales and that the device is sold out. The news from Amazon comes one week before it holds a press event in Santa Monica, California, fueling speculation it will launch new tablet devices.


* A man charged with the slaughter of more than 50 sled dogs near Whistler, B.C., two years ago has pleaded guilty to a charge of causing unnecessary pain and suffering to animals. Sled dog operator Robert Fawcett entered his plea while standing next to his lawyer in a North Vancouver court, while outside, about a dozen animal rights advocates gathered, calling for a prison sentence for Fawcett.

* An Ontario woman who started a family with another inmate while serving a life sentence for killing an eight-year-old boy will get a second chance at building a life outside prison. Amina Chaudhary, 51, gasped and shook with relief Wednesday when members of the Parole Board of Canada handed down their decision to release her to a halfway house in Hamilton.


* The start of Ottawa's review of a bid by China's state-owned energy company for Nexen Inc has sparked another round of political acrimony over who should ultimately control Canada's resources and who stands to gain or lose.

* The National Bank of Canada isn't following the dividend-increasing example of the country's large banks, even though the Quebec-based bank's profits grew by 13 percent in the third quarter to $379-million.


European Economic Update

  • UK GfK Consumer Confidence Survey -29 – lower than expected. Consensus -27. Previous -29.
  • Germany Retail Sales -0.90% m/m -1.00% y/y - lower than expected. Consensus 0.20% m/m 0.10% y/y. Previous -0.10% m/m 2.90% y/y. Revised 0.50% m/m 3.70% y/y.
  • UK Nat'wide House prices sa 1.30% m/m -0.70% y/y – higher than expected. Consensus 0.10% m/m -2.20% y/y. Previous -0.70% m/m -2.60% y/y. Revised -0.80% m/m.
  • Spain Adjusted Real Retail Sales -7.30% y/y. Previous -5.20% y/y.           
  • Norway Retail sales - vol sa - 0.10% m/m - lower than expected. Consensus 0.40% m/m. Previous -1.10% m/m.                   
  • Norway Unemployment Rate 2.60% - in line with expectations. Consensus 2.60%. Previous 2.70%.                      
  • Spain Current Account (Euros) -0.3B. Previous -0.8B.               
  • Euro-Zone CPI Estimate 2.60% y/y – higher than expected. Consensus 2.50% y/y. Previous 2.40% y/y.                  
  • Euro-Zone Unemployment Rate 11.30% - in line with expectations. Consensus 11.30%. Previous 11.20%. Revised 11.30%.
  • Italy CPI - EU Harmonized 0.20% m/m 3.50% y/y – lower than expected. Consensus 0.30% m/m 3.60% y/y. Previous -1.70% m/m 3.60% y/y.


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Meesohaawnee's picture

algos got some early coffee.. comical. they know we know its fake and yet the audacity to continue this silly game just makes my head spin.

Slack Jack's picture



China and Germany will no longer do business in USD, Euros and Yuan preferred;

Should I be buying EUR/USD ???????

Should I be buying Yuan ???????

So,... How come the Tylers haven't picked up on this?

Come on Tylers, why ain't you helping us out.

I don't understand why the Tylers are ignoring this development.

It just doesn't make sense.

AGuy's picture

Yawn, If they said deutschmarks instead of Euros, that will be news. A bilaterial currency agreement using Euros is pointless, especially after Sept 12, when the German court rules ESM as invalid.



quasimodo's picture

"Romney Promises to 'Restore' U.S."

LMAO, all I heard were the childish sheep chanting "USA! USA! USA!"


"Dirty Harry Makes Surprise Appearance "


God Bless him, and he is one of my favorites--he did not do them any favors last night stumbling thru that "speech"



machineh's picture

'EU plan to give ECB sole power to grant bank licenses'

So then the ECB can grant a bank license to the ESM???

* claps hand to forehead *

Crikey, why didn't we see this coming? FOILED AGAIN!

Orly's picture

"ECB Said to Use Greek Myth for Security on New Euro Banknotes (Bloomberg)..."


Oh, the irony.


Ghordius's picture

yeah, security from rape, eh? but it's an interesting myth:

Phoenician Princess

In Greek mythology, Europa, the beautiful daughter of Phoenician king Agenor and his queen Telephassa, was abducted by Zeus. Taking the form of a white bull, the king of the Greek gods seduced Europa and stole her away to the island of Crete.

Europa, whose moniker could be translated as “wide- gazing” or “far-seeing,” is already depicted on Greek two- euro coins and several commemorative pieces.

The ECB said in 2008 that it wanted to put the first notes of a second series into circulation on Jan. 1, 2011, and roll out the complete set over a period of several years.

Rehab Willie's picture

(Letter from the Vampire Squid to Prince Harry)  

Dear Prince Harry,

It has come to our attention that you have been offered a role in a porn film for $10 million. We urge you to reject it.

Goldman Sachs is prepared to pay you much better than porn, and as a partner, your position will be much more prestigious than the Duke of York's role as a representative for international trade and investment. We twist country treasurers and central bankers around our little fingers. Politicians are at our beck and call. We even pay a lower tax rate than your grandmother.

As a royal, you'll regain your rightful status. We've managed to pervert capitalism and have even infiltrated our own regulators and government. If you join us, your elite status will be assured in perpetuity.

Our mortgage unit, Goldman Sachs Alternative Mortgage Products (GSAMP) was nicknamed "Garbage Sold at Mythical Prices" by financial professionals. In 2007, Ohio barred California-based New Century mortgage lenders from doing business after despicable practices. A complaint of alleged fraud against us detailed our close relationships with imploding mortgage lenders: Countrywide, New Century, and Fremont. They were bailed out, bankrupt, and/or sued.

The complaint showed "an accelerating meltdown for these subprime lenders, and despite known serious loan problems, we continued to securitize the loans and sell them in packages of residential mortgage backed securities." Rotten deals like GSAMP-2006 S3, (a $494 million deal from April 2006) were created and distributed by us and repackaged in other deals.

We paid a record $550 million to settle SEC fraud charges related to one subprime collateralized debt obligation (CDO) called Abacus. But that was chump change to what we would have paid if our GSAMP subsidiary and our own securitization department had been investigated.

Congress and TARP investigators uncovered further damaging evidence. Senator Carl Levin (D-MI), Chairman of a senate investigative panel, issued a memo stating that we at Goldman Sachs "magnified the impact of toxic mortgages". For example, The Wall Street Journal reviewed data showing that a $38 million subprime-mortgage bond created in June 2006 was referenced in more than 30 debt pools (via derivatives) causing around $280 million in losses to investors by 2008. In other words, we kept repackaging, reselling or buying credit default protection on losers, thus multiplying losses to others many times over on the same trash.

Were we seriously investigated? Were we indicted? Of course we were not. Were any criminal charges brought? Of course they were not.

We dodged questions by claiming we lost money. But that's the nature of control fraud. Parasites earn high pay while eating their host. That's why we needed taxpayer subsidies like the bailout of our credit default swap contracts with AIG.

William K. Black, a renowned fraud investigator, explains control fraud in his book, THE BEST WAY TO ROB A BANK IS TO OWN ONE. His team had over 1,000 felony convictions of major financial figures after financial fraud in Savings & Loans resulted in a financial crisis a couple of decades ago. Our current crisis was 70 times larger after we neutered enforcement. Today our Department of Justice ("DOJ") is our private Department of Jesters.

You've been overexposed. We completely understand that feeling! We felt the same way when we bought credit default protection from AIG on rotten CDOs, some of which we manufactured ourselves for ourselves and for foreign banks. We nearly sunk AIG, but U.S. taxpayers were forced to bail it out.

We nearly went under, too! Washington, the Federal Reserve and Treasury are all in our pocket, so they bailed out AIG's credit default swaps on which we got a big payday. They paid our friends at foreign banks for which we originated rotten CDOs; thank goodness, or they might have sued us! Our friends in the U.S. government paid 100 cents on the dollar when other bond insurers were settling the same deals for as low as 10 cents on the dollar. We'll stack our taxpayer subsidies against a royal's any day.

Oh, and you'll love this. A German bank sued us for securities fraud over Davis Square VI, one of the CDOs we originated, against which AIG sold protection. Our Department of Jesters is great at looking the other way. No criminal indictments for us!

The Shah of Iran, the son of a mere commoner, claimed he ruled by "divine right." That didn't end well for him. We've got spin that sounds better. We've done deal after deal like the previously mentioned reprehensible trash for which we've been unindicted. We call this doing "God's Work." It's working out great for us.

In November 2008, your grandmother asked why no one foresaw the credit crunch. Yet many financial professionals have well documented track records that show they did. Moreover, they warned that high leverage combined with securities that were a classic situation for fraud just begged disaster.

We handle the media better than you royals. Our media shills say "greed and venality do not make a criminal case." That sentence is true. But the issue is fraud, which is cause for a criminal case. You don't think that we used derivatives to reference the same dodgy $38 million bond over 30 times by accident, do you? Securities experts called us out on this B.S. in real time. That Tavakoli broad from Chicago wrote an entire book about CDO malfeasance in 2003. But we took it as a playbook and escalated, and our Department of Jesters is letting us get away with it!

British academics who are useful idiots wrote the Queen that a "psychology of denial", was responsible for intentional behavior. We'd be most grateful if you could keep your grandmother occupied with your shenanigans so she doesn't ask any more questions.

After seeing the following in the Daily Mail, we're 100 percent certain you have the right stuff for a long and extremely lucrative career with Goldman Sachs.:

A witness at the casino said: "Harry was playing craps with his friends. They were wasted. He was calling other punters at the table 'muppets' and he joked to the dealer that he would kick his head in if he didn't win."

We love your jokes! We only ask for a little more discretion. No, we don't mean about the nude photos; we don't care about that. But these days when we call our clients muppets, there are no witnesses.

We look forward to your answer, and no matter what you decide, let it never be said that you were uninvited by the unindicted.

Yours sincerely,

The Unindicted Goldman Sachs

ps....more about that Tavakoli broad from Chicago....

Catullus's picture

Did the republicans roll out Eastwood as their symbol of old, angry white man?

Mark it down: that was the last convention for most of these folks in the republican party.  The power hungry among them will realize they're not going to ever win with their platform.  You can't convince the majority to vote for you to cut welfare if the majority of households pay no net taxes.  And all of their money comes from either the Military Industrial Complex or energy conglomerates who will take the brunt of blame for the inflation in the coming years. It's not like republicans are going to cut war spending or corporate welfare.

A democrat would literally have to be caught in the most unimaginably embarrassing situation worthy of Lewinsky to not win against this. Or nominate someone like Al Gore again.  Just find some jerk with charisma and the ability to parrot triangular arguments that you force feed him or her (even better!).

Those of you who donate to the republican party -- unless you're getting a political favor out of them, you have sucker tattooed on your soul.  Republicans are just going through the motions here to pay out political operatives.

AGuy's picture

"A democrat would literally have to be caught in the most unimaginably embarrassing situation worthy of Lewinsky to not win against this. Or nominate someone like Al Gore again."

Its seems unlikely O'Bama will win. "Its the economy, Stupid" very much applies to this election. With the exception of FDR, no incumbent  has won another term.


machineh's picture

With the exception of FDR, no incumbent  has won another term.

Do the names Eisenhower, Reagan, Clinton and Bush ring a bell?

Catullus's picture

I know it seems that the guy couldn't possibly win again, but I can't really say that O'bama is more unpopular than W back in 2004.  It's unfortunate, but the incumbent in the US wins more than the incumbents in the Soviet Union won.

It's a pretty known phenomenon in voter theorem.  You go with what you know. The challenger doesn't have much to sell you other than he or she is different.

Temporalist's picture

Three cheers for Gillian Tett!

Someone is starting to discuss the big elephant in the room...that shiney barbarous relic.

One thing that the Krugmans of the world will not discuss, and what Ms. Tett didn't mention about the dreaded gold standard, or any commodity mixed standard, is that real tangible exchangeable items keep people honest when it's time to pony up the goods.  Honesty is what is needed in the system.  Integrity needs to be restored.  However it's done in the future it is not being done now.

So thank you Gillian for being one that speaks up on many occassions about many things.  I hope someone is listening and for the right reasons.

Ghordius's picture

+1 for cheering for Gillian and for the rest +100

though she tones down at the end of the article. remember that she is an anthropologist by education. she knows that traditions shift, barbaric or not.

youngman's picture

Bloomberg TV had their usual hit piece on gold today...they had some fat guy on..a gold reserve specialist....he said it was mining problem...not enough new production to have a gold standard...then the "little bond tart" quipped that ..using todays would take --------tons of gold for a 100% backing of the dollar....not possible she said.....and then they moved on to something else.....the fat man should have what price and at what %...anyway they all chuckled that a gold standard is stupid and only stupid people talk of it.......Call ME STUPID THEN

Never One Roach's picture

Alberta Housing Bubble is leaking..."grim" report for Canada RE:


House Sales and Prices Projected to Fall 10% Through to 2013


House Prices to Fall 25%


A grim report released by Capital Economics today indicates that house prices in Canada are not immune to the drops seen in other countries, including the US.

goldenboy's picture

It has, indeed, always been all about the Gold Bullion. And it's the BIS in charge. Watch the paper gold market bring this whole sorry theatre to its inevitable denouement.