Frontrunning: January 19

Tyler Durden's picture
  • The Fed's HFT price manipulation code stolen? U.S. Charges Programmer With Stealing Code (Reuters)
  • One million homeowners may get mortgage writedowns: U.S. (Reuters)
  • In MF Global, JPMorgan again at center of a financial failure (Reuters)
  • China's Money Rates Slump After PBOC Injects Money (Reuters)
  • Athens closes in on bondholder pact (FT) - or not
  • Hedge Funds May Sue Greece If Loss Forced (NYT)
  • China Said to Weigh Easing Constraints on Banks as Growth Slows (Bloomberg) - But wasn't a rate cut already priced in on Monday?
  • Obama Under Attack Over Keystone Rejection (FT)
  • Chinese Economy Heads for Soft Landing in 2012 (China Daily) - don't really expect "China Daily" to tell you otherwise
  • Brazil Cuts Interest Rates Further to 10.5% (FT)
  • India to Launch $35bn of Public Investments (FT)

Press digest:

WSJ

* Goldman Sachs, facing declining revenue amid a slump in capital-markets activities, has turned its focus to expense controls and managing the size of its divisions.

* The Financial Industry Regulatory Authority fined Citigroup's capital-markets unit $725,000, alleging that it failed to disclose some conflicts of interest.

* General Motors Co is revamping its Chevrolet Volt plug-in electric vehicle to meet California emissions requirements, aiming to juice sales after failing last year to qualify for state incentives that helped fuel the rise of Nissan Motor Co's rival Leaf.

* AT&T Inc is raising prices by as much as 33 percent for the data plans sold with its smartphones and tablet computers.

The Dallas-based carrier said that effective Jan. 22, new customers on its least-expensive smartphone plan will pay $20 a month for 300 megabytes of data, compared with the current 200-megabyte plan at $15. Smartphone or tablet users needing more data will need to pay $30 for a 3 gigabyte plan, up from $25 for 2 gigabytes.

* A pending settlement of an investigation into U.S. banks' foreclosure-processing problems would benefit about one million families with cuts in the amount they owe on their home loans, Housing and Urban Development Secretary Shaun Donovan said Wednesday.

* The entertainment industry moved to counter growing opposition to antipiracy bills that seemed certain to be laws just weeks ago. But its efforts appeared to have little effect as a number of congressional leaders dropped their support for the legislation.

* The Obama administration rejected the construction of the Keystone XL oil pipeline from Canada to the Gulf of Mexico, saying there isn't enough time to review the project's environmental impact.

* Blasted by the opposition as the man who lost France's triple-A credit rating and lagging in the polls, President Nicolas Sarkozy on Wednesday said he would use the last three months of his mandate to focus on quelling unemployment and making French companies more competitive

FT

FEARS RISE OVER LOOMING COMMERZBANK AND MPS FISCAL PLANS

European regulators are convinced that two of the continent's banks, Commerzbank and Monte dei Paschi , will fail to produce credible plans to plug capital deficits by Friday's deadline, exposing both to the risk of full or partial nationalisation. http://www.ft.com/cms/s/0/7e956578-4202-11e1-9506-00144feab49a.html#axzz...

RBS PAY PLANS TEST RESOLVE ON REWARDS

David Cameron's pledge to curb executive pay and stop "rewards for failure" is set to face its biggest test, as Royal Bank of Scotland prepares to offer a bonus of more than 1 million pound to its chief executive, even though the state-controlled bank's share price has almost halved in a year. http://www.ft.com/cms/s/0/eb2aa428-41c1-11e1-a586-00144feab49a.html#axzz...

CAIRN INVESTORS CRITICISE CHIEF'S BONUS

Some of the biggest shareholders in Cairn Energy, the oil group, are marshalling support to vote down a pay award worth nearly 2.5 million pounds for the Edinburgh-based oil group's chief executive-turned-chairman Bill Gammell. http://www.ft.com/cms/s/0/e499aca4-41e8-11e1-a586-00144feab49a.html#axzz...

LSE IN U-TURN ON ITALIAN STOCKS

The London Stock Exchange plans to shift the trading system used for trading Italian stocks back to Milan after complaints from Italian banks and brokers that their trades had been slowed down by taking place in the UK capital. http://www.ft.com/cms/s/0/c0a28298-41f3-11e1-a1bf-00144feab49a.html#axzz...

WPP HOPING FOR US ELECTION BOOST

WPP saw a stronger than expected finish to 2011, according to Martin Sorrell, chief executive, as the marketing services group looks forward to improving conditions in the U.S. ahead of a lucrative period of election campaign spending. http://www.ft.com/cms/s/0/eaeb582e-41fb-11e1-a1bf-00144feab49a.html#axzz...

SEVEN CHARGED OVER WALL STREET INSIDER TRADING

Seven hedge fund portfolio managers and analysts have been charged in a $61.8 million insider trading scheme as U.S. authorities escalate their crackdown on Wall Street corruption. http://www.ft.com/cms/s/0/f8ef1b2c-41d3-11e1-a1bf-00144feab49a.html#axzz...

IMF REQUESTS $500 BILLION FOR BAIL OUT LOANS

The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world's spreading fiscal emergencies, which it estimates will generate demand for bail out loans totalling $1 trillion over the next two years. http://www.ft.com/cms/s/0/b0d1a476-41e3-11e1-a586-00144feab49a.html#axzz...

GERMANY'S CENTRAL BANK TO SELL LEHMAN LOANS

Germany's central bank is set to sell almost 2 billion euros ($2.6 billion) of property loans left over from the collapse of Lehman Brothers, in a deal that marks the latest sign of the growing appetite for distressed real estate debt. http://www.ft.com/cms/s/0/55c10ddc-41e4-11e1-a586-00144feab49a.html#axzz...

PAYPAL DRIVES EBAY'S GROWTH

Ebay reported strong revenue growth in the fourth quarter of 2011, driven mainly by its payment arm, PayPal, which the company expects to be at the centre of its innovation in the coming year. http://www.ft.com/cms/s/0/cbf677f0-422d-11e1-9506-00144feab49a.html#axzz...

NYT

* Eastman Kodak filed for bankruptcy protection on Thursday, after the 131-year-old film pioneer's efforts to adapt to a world of digital cameras ran aground.

* EBay's net income soared in the fourth quarter, in large part because of the sale of its remaining investment in Skype and continued success of PayPal.

* Above-average temperatures across the United States thus far are hurting retail sales, and retailers are running out of time to sell their winter inventory.

* The International Monetary Fund announced Wednesday that it was seeking as much as $500 billion more to lend as it prepared to slash its forecasts of global growth. The fund, based in Washington, estimated that the world would need $1 trillion in the coming years for loans to countries with short-term difficulties paying their bills or because of concerns about prospective trouble in the volatile bond markets.

* Several funds have plans to go to the European Court of Human Rights if Greece doesn't make good on its bond payments.

* A federal jury decided that TD Bank owed an investment group $67 million for its role in a $1.2 billion Ponzi scheme operated by a former lawyer.

The verdict came in a lawsuit filed by Coquina Investments, based in Corpus Christi, Texas. It was the first to go to trial of several pending lawsuits filed by wronged investors against the bank and others.

* The Web buzzed with protests large and small on Wednesday as the tech industry rallied against Congressional legislation to curb Internet piracy.

Some sites blacked out - among them, the English-language Wikipedia, though it was possible to access the encyclopedia through several clever workarounds - while others, including Google and Craigslist, draped their pages with information about the bills, or restricted access.

European economic news:

  • UK Nationwide Consumer Confidence 38 – in line with expectations. Consensus 38. Previous 40.
  • Eurozone Current Account n.s.a. for November EUR1.0B. Previous EUR1.7B. Revised EUR2.6B.
  • ECB Euro-Zone Current Account Net w.d.a. s.a. for November EUR -1.8B. Previous EUR -7.5B. Revised EUR -6.6B.