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Frontrunning: July 3

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  • The next Enron: JPMorgan at centre of power market probe (FT)
  • Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others (NYT)
  • Ex-JPMorgan Trader Feldstein Biggest Winner Betting Against Bank (Bloomberg)
  • Finland Firm On Collateral As Spain Aid Terms Discussed (Bloomberg)
  • Heatwave threatens US grain harvest (FT)
  • Wall Street Is Still Giving to President (WSJ)
  • Greenberg Suit Against U.S. Over AIG To Proceed In Court (Bloomberg)
  • Crisis forces "dismal science" to get real (Reuters)
  • Hope continues to be as a strategy: Asia Stocks Rise On Expectation Of Monetary Policy Easing (Bloomberg)
  • Microsoft in $6.2bn ad business writedown (FT)
  • Under siege: "Stop and frisk" polarizes New York (Reuters)
  • Best evidence yet found for "God particle:" U.S. physicists (Reuters)

Overnight media digest:

WSJ

orp is booking a $6.2 billion charge for its money-losing Internet division, an admission that a business anchored by the Bing search engine has failed to live up to its expectations.

* Drug maker GlaxoSmithKline Plc agreed to plead guilty to criminal charges of illegally marketing drugs and withholding safety data from U.S. regulators, and to pay $3 billion to the government in what the Justice Department called the largest health-care fraud settlement in U.S. history.

* Airbus detailed plans to spend $600 million to build jetliners in Alabama - its first assembly plant in the U.S. - in a bid to grab more American orders from U.S. rival Boeing Co and to defuse political opposition to the European aerospace giant.

* Barclays Plc Chief Executive Robert Diamond apologized for the interest-rate manipulation scandal that has engulfed the U.K. bank but resisted outside pressure to resign.

* Micron Technology Inc agreed to acquire troubled Japanese rival Elpida Memory Inc for about $2.5 billion, as the U.S. memory maker bulks up to compete against rivals in South Korea and Taiwan.

* The chief executive of Full Tilt Poker, the beleaguered one-time Web poker giant, was arrested Monday on a plane that had just landed at John F. Kennedy International Airport as the government unveiled new criminal charges against him related to an alleged Ponzi scheme.

 

FT

BARCLAYS CHIEF THREATENS TO HIT BACK

Bob Diamond is threatening to reveal potentially embarrassing details about Barclays' dealings with regulators if he comes under fire at a parliamentary hearing on Wednesday over the Libor rate-setting scandal, according to people close to the bank's chief executive.

GSK TO PAY $3 BILLION TO SETTLE U.S. CHARGES

GlaxoSmithKline has agreed to pay a record $3 billion to settle U.S. regulators' charges of aggressive marketing and the selective use of data from clinical trials in its promotion of drugs beyond their authorised uses, including an antidepressant that one of its sales reps called the "happy, horny, skinny pill".

AMBITIOUS GOALS SET FOR PROBE INTO BANKS

British Finance Minister George Osborne has announced a six-month parliamentary inquiry into standards in the banking industry, an exercise immediately dubbed a "truth and reconciliation" process for the City of London and the British political elite.

HEATWAVE THREATENS US GRAIN HARVEST

An intense heatwave is threatening havoc with this year's U.S. grain harvest, burning up hopes of blockbuster yields and sending prices soaring.

DELL PUSHES INTO SOFTWARE WITH $2.4 BLN DEAL

Dell has laid the foundation for a broader move into software with a $2.4 billion all-cash acquisition that will accelerate the U.S. company's push beyond its core personal computer business.

DREYFUS SUED OVER COTTON 'PRICE-FIXING'

The former head of cotton at Glencore has personally sued rival Louis Dreyfus Commodities, accusing the trading house of market manipulation in a rare move that sheds light on the inner workings of the markets in the commodity.

MEXICO LEADER SHIFTS FOCUS ON DRUGS WAR

The winner of Mexico's presidential election will pursue a new strategy in the country's almost six-year war on drugs by creating a 40,000-strong security force to protect citizens rather than chasing drug traffickers and eradicating illicit crops.

NYT

 

ng a pharmaceutical company, the British drugmaker GlaxoSmithKline Plc agreed to plead guilty to criminal charges and pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug, federal prosecutors announced Monday.

- Robert Diamond, the chief executive of Barclays Plc , told employees on Monday that he was "disappointed and angry" about the bank's past attempts to manipulate key interest rates to bolster its bottom line.

- Microsoft Corp owned up on Monday to the collapse of its biggest push into digital advertising, announcing that it would take a $6.2 billion accounting charge in its online services division for a failed acquisition.

- Airbus, the European airplane maker, announced Monday that it would invest $600 million over the next five years to build an assembly line here for its popular A320 single-aisle jet - its first factory in the United States.

- Documents in a civil suit in federal court appear to threaten a legal defense that credit ratings agencies have long used to fend off liability for misjudging securities that later cost investors vast sums in losses.

 

Canada

THE GLOBE AND MAIL

- The impending end of the Canadian Wheat Board monopoly has inflamed passions among Western Canadian farmers. It has also sparked an unusual and nasty takeover fight between two century-old Canadian agriculture firms.

Report in the business section:

- The federal government's efforts to cool the overheated housing market are raising concerns among Canada's biggest banks that the changes might hit the economy harder than intended, particularly if the new measures are left in place for too long.

NATIONAL POST

- Mexican President-elect Enrique Pena Nieto pledged to focus on energy, labour and tax reforms and said he hopes to strike deals with opponents to help shepherd changes through Congress before he takes office in December.

FINANCIAL POST

- The U.S. Justice Department is probing Chesapeake Energy Corp and Encana Corp for possible collusion after a Reuters investigation showed that top executives of the two rivals plotted in 2010 to avoid bidding against each other in Michigan land deals, a source close to the probe said.

European economic update:

  • Spain Unemployment m/m net (‘000s) -98.9 – lower than expected. Consensus -51.6 m/m. Previous -30.1 m/m.
  • UK PMI Construction 48.2 – lower than expected. Consensus 52.9 Previous 54.4.
  • UK Net Consumer Credit 0.7B – higher than expected. Consensus 0.2B Previous 0.4B.
  • UK M4 Money Supply -0.1% m/m -4.1% y/y. Previous 0.9% m/m -4.0% y/y.
  • Euro Zone PPI -0.5% m/m 2.3% y/y – lower than expected. Consensus -0.3% m/m 2.5% y/y. Previous 0.1% m/m 2.6% y/y.
 

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Tue, 07/03/2012 - 07:35 | 2583089 Benjamin Glutton
Benjamin Glutton's picture

I said from the beginning that JPM "losses" would be traced to a friend of the company(Feldstein).

 

How much longer must we endure these wholly transparent criminal activities?

Tue, 07/03/2012 - 07:42 | 2583100 EL INDIO
EL INDIO's picture

Important news not mentioned here:

Iran parliament debating closing the strait of Hormoz and new military exercise where a mock us air base is to be attacked !

 Could explain Oil’s surge.

 

(source: http://www.rt.com/news/iran-us-military-strike-254/)

Tue, 07/03/2012 - 07:45 | 2583110 LULZBank
LULZBank's picture

Was covered yesterday.

Tue, 07/03/2012 - 07:50 | 2583127 EL INDIO
EL INDIO's picture

Are you sure ?

That’s today’s news !

 

Tue, 07/03/2012 - 08:56 | 2583304 Bob
Bob's picture

Yesterday's news at ZH:

http://www.zerohedge.com/news/crude-spikes-news-iran-lawmakers-propose-h...

Damn, who is Tyler Durden???

Tue, 07/03/2012 - 07:56 | 2583139 overmedicatedun...
overmedicatedundersexed's picture

Iran found a back pack near the strait and must remove all for their own safety.

Tue, 07/03/2012 - 08:24 | 2583198 Savyindallas
Savyindallas's picture

So Wall Street still gives Obama tons of money  -even though he called them greedy and "fat cats"? My they are a forgiving bunch. Never mind that he has been the most friendly Bankster President in history, and has not prosecuted a single person for any of the quadrillions in blatant fraud. He should treat them with respect and be gracious for the $100 million they gave him in 2008 -even though he had only one year experince in the senate, knew nothing about finance or the economy. The Wall Street Community recognized his vision for America, and the need to provide not only the business Community-but all Americans   -with Hope.

I am glad to see that Wall Street has forgiven Obama for his harsh words. We don't need divisiveness- we all need to work together.  Joe the (unemployed) Plumber, Jamie Diamond, Lloyd Blankfein and all the other Titans of Finance who are working tirelessly to put America back to work -need to work together. We're making progress -hell have you looked at the price of Simon Property Group stock lately? We need some positivism. Cut out the negativity. No longer is it "Yes, we can!" - Instead it shall be "Hell Yes We can!!" God bless America.

Tue, 07/03/2012 - 08:31 | 2583199 El Hosel
El Hosel's picture

Wow, what a suprise, Bankers get caught rigging Money Markets. Its called Treason, off with their heads?....  or give them a 20 Million Dollar "parting gift" from the cartel?

  Wich will it be?

Tue, 07/03/2012 - 08:51 | 2583285 Bob
Bob's picture

"The God Particle" was the title of a 1993 book by Leon Lederman, a Nobel-winning physicist and former head of Fermilab, and science writer Dick Teresi. The publisher vetoed titles with "Higgs" or anything else too esoteric. Lederman later said he wanted to call the book "The Goddamned Particle" because the Higgs was so elusive."

Looks like all that's missing now is the ever elusive honest man. 

Tue, 07/03/2012 - 09:04 | 2583323 Sean7k
Sean7k's picture

"Crisis forces the dismal science to get real"

This is a fantastic read. Not one mention of Austrian theory, which explains most of the flaws in the establishment thinking. Instead, they want to take another look and create new models. This is the power of control over the established curriculum within a profession.

They would rather destroy the subject area than give a hint to the real working ideas in Economics. Intellectual tyranny.

Tue, 07/03/2012 - 09:03 | 2583327 Bob
Bob's picture
GSK says problems from 'different era'

In a statement issued Monday, GSK CEO Andrew Witty said the problems at the heart of the case originated "in a different era for the company" and that since then the company has instituted reforms and learned from its mistakes.

He expressed regret on behalf of the company and said action to resolve the issues that prompted the lawsuit has been taken "at all levels in the company" in the U.S.

"We have fundamentally changed our procedures for compliance, marketing and selling," he said in the statement. "When necessary, we have removed employees who have engaged in misconduct.

http://www.cbc.ca/news/business/story/2012/07/02/health-glaxosmithkline-...

Another corporate monstrosity "learns its lesson" and pays the fine with shareholder money.  As usual, some token players were sacrificed and now all is well. 

Tue, 07/03/2012 - 10:39 | 2583704 JLee2027
JLee2027's picture

JP Morgan - the Jerry Sandusky of the Financial Markets.  Those in power know they are abusing the markets, committing financial rape; and yet it continues...endlessly.

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