This page has been archived and commenting is disabled.

Frontrunning: February 20

Submitted by Tyler Durden on 02/20/2012 08:09 -0400

Germany FinMin: More Talks Needed On 2nd Greece Bailout Plan (MarketNews)
You stand up to the bankers, you win - Icelandic Anger Bringing Record Debt Relief in Best Crisis Recovery Story (Bloomberg)
Iranian ships reach Syria, China warns of civil war (Reuters)
Men's suit bubble pops? Zegna CEO Says China Sales Slowing (WSJ)
German presidency row shakes Merkel's coalition (Reuters)
Greece must default if it wants democracy (FT)
Decision day for second Greek bailout despite financing gaps (Reuters)
So true fair value is a 30% discount to "market" price? Board of Wynn Resorts Forcibly Buys Out Founder (WSJ)
Spain Sinks Deeper Into Periphery on Debt Rise (Bloomberg)
Walmart raises stake in China e-commerce group (FT)
Iron Lady Merkel Bucks German Street on Greek Aid (Bloomberg)
S&P Affirms Japan Rating (WSJ)

Media Digest:

US HEDGE FUNDS TO TAKE CONTROL OF TRAVELODGE

The ownership of Travelodge, the debt-laden UK budget hotel group, is moving out of the hands of its Dubai backers and into the grasp of two U.S. hedge funds that have been long-term buyers of its debt. http://link.reuters.com/byt66s

PFIZER PLANS TO RAISE $3 BILLION THROUGH IPO

Pfizer is weighing plans to raise about $3 billion this year through a part-flotation of its animal health division, as the drugs giant examines the best way to spin off a business valued at as much as $18 billion. http://link.reuters.com/cyt66s

EURO ZONE SEEKS ECB TO HELP WITH GREEK BAILOUT

Euro zone governments are looking to the European Central Bank and national central banks to help pare back the cost of a second rescue package for Greece which would otherwise amount to 170 billion euros ($224 billion). http://link.reuters.com/dyt66s

OVERCROWDING PUTS PRESSURE ON FEES, SAY BANKERS

Investment banking in Asia is overcrowded, with too many institutions putting too much pressure on fees, according to senior bankers, giving the industry a longer-term problem than the fall in market activity at the end of 2011. http://link.reuters.com/fyt66s

RESOURCE GROUPS AIM TO COUNTERACT ANTI-CORRUPION RULES

Royal Dutch Shell and other natural resources companies have stepped up efforts to counteract planned anti-corruption rules that would force them to disclose payments to governments in countries where they operate. http://link.reuters.com/gyt66s

FUJITSU TO LAUNCH MOBILE DEVICES IN EU MARKET

Fujitsu will launch a wide range of smartphones and tablets for the first time in Europe, as the Japanese electronics company seeks to stake a claim in the fast-growing and high-margin mobile device market. http://link.reuters.com/hyt66s

REPORT FINDS NHS HOSPITALS OFFER VALUE FOR MONEY

Contentious moves to stimulate competition in the health service have been bolstered by a groundbreaking study of 2 million patients that shows forcing NHS hospitals to compete with one another saves money and improves efficiency. http://link.reuters.com/jyt66s

UK BANKS QUESTION 'CREDIT EASING' POLICY

Several of the UK's biggest banks have raised doubts as to whether a flagship government scheme aimed at boosting demand for credit will result in cheaper loans for small and medium-sized enterprises. http://link.reuters.com/kyt66s

INVESTORS SEEK TO HEDGE AGAINST EURO SPLIT

Leading investment banks are considering creating currency products that would protect companies and investors in the event of a partial break-up of the euro. http://link.reuters.com/myt66s

TRUCE CALLED IN BATTLE FOR BUMI

Financier Nat Rothschild and Samin Tan, the Indonesian mining entrepreneur, called a truce in their power struggle for control of UK-listed coal miner Bumi, agreeing at talks in London that Rothschild would step down as co-chairman but remain on the Bumi board. http://link.reuters.com/nyt66s

WSJ

* The International Monetary Fund is likely to offer minimal funds for a second Greek aid package that is expected to be approved by euro-zone finance ministers on Monday, leaving the bloc's governments to provide a much bigger share of the loans than they did in the euro zone's three earlier bailouts.

* Wal-Mart Stores Inc. said it plans to buy a majority stake in Chinese e-commerce company Yihaodian, a move to boost its online efforts as consumers there flock to the Internet to shop.

* The co-founder of Wynn Resorts Ltd., who was forcibly bought out over the weekend, fired back at the company Monday, saying he would take legal action to block the board's "outrageous" action and accused it of operating like a "star chamber."

* Japan's economy got off to a bad start this year, posting a record ¥1.475 trillion (US$18.5 billion) merchandise trade deficit in January as a global economic slowdown and the strong yen hurt exports and fuel imports continued to increase.

* Standard & Poor's Corp. on Monday reaffirmed Japan's sovereign debt rating at AA- and maintained its negative outlook, a move that leaves Prime Minister Yoshihiko Noda under pressure to deliver on tax increases to improve the country's dire fiscal position.

* Billabong International Ltd. said Monday it will consider a revised 765.3 million Australian dollar (US$825.3 million) takeover offer from U.S. private-equity firm TPG Capital.

* The U.S.'s enormous debt load has been overshadowed recently by other global financial problems, but, as those start dissipating, bond investors are wondering how long the U.S. government will keep getting a free pass. Treasury yields are still at historic lows after last summer's remarkable rally, when investors were bracing for a messy fallout from the European debt crisis.

NYT

* The pair of deals to split EMI between Sony and Universal would give those music companies substantial advantages over Warner, the only other major player still in the market.

* State and local entities all across the country issue municipal bonds, which are often their lifeblood. But not all are adapting well to a new, more open world.

* The announcement Saturday that Foxconn Technology - one of the world's largest electronics manufacturers - will sharply raise salaries and reduce overtime at its Chinese factories signals that pressure from workers, international markets and concerns among Western consumers about working conditions is driving a fundamental shift that could accelerate an already rapidly changing Chinese economy.

- advertisements -

Mon, 02/20/2012 - 08:11 | 2177065 RagnarDanneskjold

Supply of homes to surge in March; Beijing real estate market faces first big test in 2012; Polls indicate lower prices

http://investinginchinesestocks.blogspot.com/2012/02/supply-of-homes-to-surge-in-march.html

Mon, 02/20/2012 - 08:13 | 2177066 Irish66

Lets have another meeting and talk some more

Mon, 02/20/2012 - 10:04 | 2177238 LongSoupLine

Hmmm, i'm not so sure about that. Could we just have a phone conference to discuss a meeting?

Mon, 02/20/2012 - 11:24 | 2177458 BeetleBailey

but first, lets email about a go-to-meeting online conference (like that ubiquitous Citrix Kenya water project ad, (that if reality is anything, Kenya should have Niagra falls now) - with the same liberal (slanted) actors (the bike, the Volvo, the diversity)....THEN after several of those pats on the back...THEN email some more.....then a phone call..or two

Mon, 02/20/2012 - 08:16 | 2177068 Racer

"You stand up to the bankers, you win"

Now there's something you don't see often enough!

Mon, 02/20/2012 - 08:23 | 2177073 SmoothCoolSmoke

If nothing else happens this week, Bernanke's already won. Euro +120.

Mon, 02/20/2012 - 08:58 | 2177112 juggalo1

It's interesting how Iceland has come out of the crisis so quickly. I wonder if it is because they seized the first mover advantage. Writing off debts and telling foreign creditors to f$%k off might work for a tiny country in the North Atlantic, but I wonder if things would work so well for the largest economy on Earth. It would represent a massive reordering of wealth in this country which is of course off the table and out of the kitchen.

Mon, 02/20/2012 - 09:08 | 2177126 Swain

Icelandic debt foregiveness has disporportionately been wasted on insiders of banks who received cov-lite loans to finance their speculation in pre-crash years. They are mostly high and dry while the man on the street is hurting.

Inflation and wealth tax are eroding the assets of savers, including retired people, who earned their money fair and square.

The post-crash head of the Icelandic FSA has referred close to 100 cases of possible criminal conduct to the special prosecutor, but suffers constant attempts to discredit him by lawyers representing pre-crash insiders and political cronies of current government.

The Icelandic crash is far from resolved, it is still very much work in progress.

Mon, 02/20/2012 - 09:20 | 2177146 Cursive

@Swain

Maybe so, I don't know much about the situation and will defer to your comments. Still, this is a nice excerpt from the BBG article:

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

Mon, 02/20/2012 - 09:48 | 2177196 Swain

The government of 2008, the "Crash Government", first attempted to save the banks by an equity injection into Glitnir and a loan to Kaupthing. To no avail and at great cost. The banks were too big to rescue.

But ringfencing deposits and elevating them over other claims through emergency legislation certainly helped minimize damage to general public and non-financials, both local and cross-border.

Somehow the Supreme Court upheld that law, that's another story.

Regardless of the intentions of the "Crash Government", the fact is that the three largest banks failed, creditors suffered most of the losses.

The lesson from Iceland is to protect the sovereign, don't socialize losses of private banks.

Mon, 02/20/2012 - 09:32 | 2177149 lesterbegood

Global bank resignations
Resignations Global Banks ....

1 World Bank CEO Zoellick resigns
http://business.tim?.com/2012/02/15/worl?d-bank-president-zoellick-resigns/

2 Anz Bank CFO Australia resigns
http://www.proformative.com/news/1470243/cfo-anz-bank-resigns-amid-turmoil

3 Nicaraqua Central Bank Pres Rosales resigns
http://www.bloomberg.com/news/2012-02-14/nicaragua-central-bank-head-qui...

4 Credit Suisse Chief Joseph Tan resigns
http://www.businessweek.com/news/2012-02-17/credit-suisse-s-private-bank...

5 GERMAN PRESIDENT Christian Ruff resigns
http://www.dailymail.co.uk/news/article-2102524/German-President-Christi...

6 Royal Bank of Scotland Austrailin CEO Stephen Williams resigns
http://www.theaustralian.com.au/business/wall-street-journal/andrew-chic... /story-fnay3vxj-1226272513981

7 Kuwait Central Bank CEO resigns
http://www.washingtonpost.com/business/industries/kuwait-cen tral-bank-chief-resigns-amid-political-tensions/2012/02/13/g IQAcxrOAR_story.html

8 Slovenia TWO largest Banks CEO's (2) resign
http://www.bloomberg.com/news/2012-02-15/slovenia-s-nova-kreditna-banka-...

9 Bank of India CEO Chaturvedi resigns
http://www.livemint.com/2012/02/06160111/Dhanlaxmi-Bank-CEO-Amitabh-Cha....

10 Tamilnad Mercantile Bank CEO resigns
http://www.business-standard.com/india/news/tamilnad-mercantile-bank-md-...

11 GOLDMAN SACHS CEO Blankenfein to resign (Nothing printed on this yet UNLESS this JUST happened. Last article said he is not stepping down in 2011). http://www.huffingtonpost.com/2011/0..._n_858647.html

The Dragons own the central banks now and are cleaning house?

Mon, 02/20/2012 - 09:34 | 2177170 Martin W

Greece must default if it wants democracy

Default or civil war next months

Mon, 02/20/2012 - 10:01 | 2177229 jose.six.pack

The sooner they the default, the sooner they get any hope of recovery...

after the ripple hits the World Economy.

Mon, 02/20/2012 - 10:06 | 2177245 LongSoupLine

Long : Iceland passport makers.

Short : Iceland bankers.

Mon, 02/20/2012 - 11:06 | 2177407 monopoly

Bloomberg:

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

And here, the criminal banksters still have their security in their armored cars, still travel from home to home and their yachts are safe. It will go down in history that not one of these scum CEOs has gone to jail. I guess it is OK to have 47 million Americans on food stamps and these bullshit jobs at $9.00 an hour with 0 benefits.

Yup, this is America. And check out what Congress makes along with their benefits. Not one cutback there. And they sure have done a great job the last 11+ years.

Happy Presidents Day. I am sure they have all rolled over in their graves in disgust.

Mon, 02/20/2012 - 13:53 | 2177968 malek