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Frontrunning: February 17

Submitted by Tyler Durden on 02/17/2012 08:16 -0400

German president resigns in blow to Merkel (Reuters)
China central bank in gold-buying push (FT)
Germany Seeks to Avoid Two-Step Vote on Greek Aid, Lawmakers Say (Bloomberg)
Eurozone central bankers and the taboo subject of losses (FT)
Bernanke: Low Rates Good for Banks in Long Run (WSJ)
Cameron and Sarkozy to test rapport at talks (FT)
Chinese Enterprises encouraged to invest in US Midwest (China Daily)
Goldman Sachs Group Inc. and Morgan Stanley have reduced their use of "mark-to-market" accounting (WSJ)
Regulators to raise trigger for rules on derivatives (FT)
China raises mining taxes on iron, tin, other minerals-paper (Reuters)

Overnight Press Summary

WSJ

* The web giant and other ad companies bypassed privacy settings in Apple's Safari browser on mobile devices and computers-tracking the online habits of people who intended for that kind of monitoring to be blocked.

* A group of traders and brokers successfully manipulated LIBOR interest rate that affects loans around the world, one of the banks being investigated has told regulators.

* Despite deep financial problems that are forcing them to unload assets around the world, most big European banks consider their U.S. retail divisions to be among their most stable operations.

* Independent research analyst John Kinnucan was arrested Thursday night by federal agents at his home in Portland, Oregon, as part of an ongoing insider-trading investigation.

* Bank of America lists U.S. Trust and its Texas branches as potential assets to sell in the event of a market shock or economic downturn.

* Philip Falcone has hired lawyers to map out a strategy to overcome a regulator's decision blocking the launch of wireless network start-up LightSquared.

* Clearwire Corp warned it may need to raise more money -- even after getting about $1 billion in the past two months -- as it faces the hefty costs of building out a new fourth-generation mobile broadband network and the expected loss of sales at its Clear Internet brand.

* A debt restructuring and second bailout for Greece appeared likely to go ahead, as German officials scrapped an idea to pressure Greece by withholding part of the bailout and the European Central Bank developed a plan to protect its holdings of Greek bonds from the restructuring.

NYT

* Next week, advisers to the Food and Drug Administration will recommend whether the agency should approve the first new prescription diet pill in 13 years. The F.D.A. rejected the drug under review, Qnexa, in 2010, amid safety concerns, and the drug's manufacturer is now presenting additional data to argue its case.

* Debt collectors and credit reporting companies are bracing for intense scrutiny after the government's consumer finance watchdog unveiled a broad plan to regulate financial firms that have largely evaded federal oversight. On Thursday, the Consumer Financial Protection Bureau proposed regulations that would allow the agency to supervise those two controversial corners of the finance industry, which have drawn complaints of aggressive tactics and unfair practices.

* Moody's is reviewing 17 global banks, including Morgan Stanley, Citigroup, Goldman Sachs, Bank of America and Credit Suisse, for possible downgrades to their long-term credit ratings, dulling optimism caused by a monthlong rally in which major banks have recovered some of last year's losses.

* The president of a nonprofit group hired by Apple to inspect its suppliers' factories has begun praising the Chinese plants of Foxconn, Apple's largest supplier, just days after his group began inspections there. Heerden's apparent praise of conditions at Foxconn came despite previous reports of employees committing suicide, dying in factory explosions and complaining of sometimes working more than 70 hours a week.

Assorted

EX-MERRILL BROKER FINED IN MARKET ABUSE CASE

The crackdown on insider trading in the UK's financial district
intensified on Thursday when a former senior Merrill Lynch broker was
fined 350,000 pounds for market abuse.

UNION THREATENS BANK OF IRELAND WITH STRIKE

Ireland's largest banking trade union has threatened Bank of Ireland
with industrial action, arguing that government efforts to micromanage
the sector were proving "increasingly problematic".

The Daily Telegraph

UK BANKERS CAUGHT UP IN TAX EVASION ALLEGATIONS

Three senior investment bankers have emerged as being among the 16
individuals arrested last week as part of an investigation into
allegations of tax evasion involving film financing schemes.

BANKS AND HEDGE FUNDS FACE RANGERS' TAX PENALTY

Banks and hedge funds are among around 300 companies that have been
drawn into the tax crackdown that pushed Scottish football club Rangers
into administration this week.

TESCO CRITICISED OVER UNPAID JOB ADVERT

Tesco incurred the wrath of thousands of customers and jobseekers on
social networking site Twitter on Thursday after a job paying no wages
was advertised through Jobcentre Plus.

The Guardian

GM POSTS RECORD PROFIT OF $7.6 BILLION

In its first full year since emerging from bankruptcy, General Motors
has posted a record profit of $7.6 billion, though European woes weighed
on the car firm's results in the last months of 2011

The Independent

BAE SYSTEMS IN RETREAT AFTER WEAK SALES

BAE Systems raised the prospect of even more job cuts on Thursday as
Britain's biggest defence contractor announced disappointing results for
2011 and forecast that sales would remain stagnant this year.

MOODY'S STOKES FEAR WITH BANKS DOWNGRADE THREAT

Moody's sent shockwaves through the global banking system and sparked
fury in the UK's financial district on Thursday as the ratings agency
threatened to slash the credit scores of more than 100 banks in the wake
of Europe's debt crisis.

European Economic Summary

Germany Producer Prices 0.6% m/m 3.4% y/y – higher than expected. Consensus 0.3% m/m 3.2% y/y. Previous -0.4% m/m 4.0% y/y.
Euro Area Current Account (s.a) 2.0B. Previous -1.8B. Revised -0.9B.
UK Retail Sales ex Auto Fuel 1.2% m/m 1.9% y/y – higher than expected.
Consensus -0.3% m/m -0.1% y/y. Previous 0.6% m/m 1.4% y/y.

- advertisements -

Fri, 02/17/2012 - 08:20 | 2168890 PaperBear

"Bernanke: Low Rates Good for Banks in Long Run (WSJ)"

The continuation of that is 'but bad for savers'.

Fri, 02/17/2012 - 10:27 | 2169229 Dermasolarapate...

Savers and seniors don't matter...they have no lobby, no organized effort.

Fri, 02/17/2012 - 08:21 | 2168892 PaperBear

"Goldman Sachs Group Inc. and Morgan Stanley have reduced their use of "mark-to-market" accounting" ?

Yeah, mark-to-swimming-with-the-fishes accounting.

Fri, 02/17/2012 - 08:30 | 2168901 CrashisOptimistic

Remember when abandoning mark to market was only supposed to last 6 months for banks? That was in March 2009.

Fri, 02/17/2012 - 08:32 | 2168906 LongSoupLine

Frontrunning:

The market will ramp to draw more suckers, then fall to strike prices as MM's manipulate options expiration.

Fri, 02/17/2012 - 08:33 | 2168908 youngman

"Bernanke: Low Rates Good for Banks in Long Run".....what a statement..sure it is..they can borrow at 0% and loan at 8%..DUH......it kills the savers ...no savings ..no security...no rainy day fund....no cushion...yeah that is great for a country...

Fri, 02/17/2012 - 08:56 | 2168956 Jendrzejczyk