Frontrunning: June 20
- Prepare for Lehmans (sic) re-run, Bank official warns (Telegraph)
- Fed Seen Extending Operation Twist While Avoiding Bond Buying (Bloomberg)
- US Watchdog Hits at ‘Risky’ London (FT)
- G20 Bid to Cut Cost of Euro Borrowing (FT)
- Romney Says Rubio Being Examined as Possible Running Mate (Bloomberg)
- Hollande Says Worth Exploring ESM Bond Buys (Reuters)
- US Upbeat After Eurozone Debt Crisis Talks (FT)
- BOJ Members Say Japan Could Be ‘Adversely Affected’ by Europe (Bloomberg)
- China Steps Said to Grow Bond Market, Add Issuer Scrutiny (Bloomberg)
- How Asia Will Fare if Europe Cracks (WSJ)
- Nikkei Hits One-Month High on Fed Stimulus Speculation (Reuters)
- Martin Wolf—A Bitter Fallout From a Hasty Union (FT)
Overnight Media Summary:
* G20 leaders papered over their differences after clashing over euro-zone turmoil, deferring decisions to other meetings despite warnings of another global crisis.
* Microsoft's first-ever homegrown computer has created confusing new battle lines in the tech sector, turning longtime allies into rivals and underscoring a philosophical split over the purpose and future of tablet-style devices.
* Walgreen agreed to buy a minority stake in pharmacy giant Alliance Boots in a $6.7 billion cash-and-stock deal.
* Brady Dougan, long lauded for safely steering Credit Suisse Group through the financial crisis, finds himself under mounting pressure over the bank's recent performance.
* A CFTC subcommittee is expected to propose a roughly 60-word definition of high-frequency trading that would define it broadly, a bad sign for traders who had hoped for narrower language.
* News Corp has offered $2 billion to buy Consolidated Media Holdings in a move that if successful will strengthen the company's interest in Australia's largest pay TV network.
* Facebook Inc is getting support from two big-name advertisers after tough questions over the effectiveness of its ads.
On Tuesday, Ford Motor Co and Coca-Cola Co separately said they found value in Facebook advertising and Ford plans to expand its use of the social network in advertising.
* After a real-estate development drought that stretches back to 2008, a handful of high-risk real-estate projects are moving forward in major U.S. cities.
But instead of relying on debt markets as they did during the boom, developers are financing these projects with equity, mostly from outside investors.
* James Dimon's second visit to Capitol Hill in a week to discuss multibillion-dollar trading losses quickly morphed into a discussion of sworn oaths, gambling and making millions on Wall Street.
* Some pension funds and other big investors are rushing to cut their exposure to aging private-equity investments known as "zombie" funds-using various methods that demonstrate the complexity of the problem.
G20 BID TO CUT COST OF EURO BORROWING
Euro zone members of the Group of 20 leading economies will commit to driving down borrowing costs across the single currency area, according to a leaked draft of the communique from the summit in Mexico on Tuesday.
HEDGE FUNDS BET ON BIG BUNDS SELL-OFF
Leading hedge fund managers are betting on a significant sell-off in German government bonds in the coming months after a sharp fall in yields on the debt paper driven by a flight to safety in the euro zone.
EVERBRIGHT PLANS HONG KONG LISTING
Everbright Bank, a Chinese state lender that focuses on small businesses and consumers, is determined to buck a market trend of failed initial public offerings and list in Hong Kong before the end of this year, according to a senior executive.
CRISIS MANAGEMENT GROUPS TO AID WORLD BANKS
Formal cross-border crisis management groups have been set up for 24 of the world's 29 most important banks, but much more needs to be done before regulators can be confident they could safely be steered through a crisis, according to a report by a group of global regulators.
US WATCHDOG HITS LONDON AS 'RISKY'
U.S. lawmakers and regulators have attacked London as a source of financial crises and promised tougher crossborder rules in the wake of $2 billion in trading losses at the UK unit of JPMorgan Chase.
TRADING BEFORE DEALS HITS DECADE LOW
Trading ahead of London-listed mergers and acquisitions last year dropped to the lowest level in nearly a decade, according to the UK Financial Services Authority, as abnormal price movements preceded 19.8 percent of all deals.
RYANAIR MAKES THIRD BID FOR AER LINGUS
Ryanair has made an audacious third attempt at taking over Aer Lingus, Ireland's flag carrier.
- Companies have been slowly adding workers for more than two years. But pink slips are still going out in a crucial area: government.
- Jamie Dimon, the chief executive of JPMorgan Chase , tussled with lawmakers on Tuesday in his second showdown in Washington since JPMorgan, the nation's largest bank, disclosed a multibillion-dollar trading loss.
- The American drug store chain Walgreens has agreed to buy a 45 percent stake in Alliance Boots, the European pharmacy retailer, for $6.7 billion.
- Participants at the Group of 20 meeting in Mexico appeared to make only modest progress in persuading Chancellor Angela Merkel of Germany to support more government spending.
- Greek politicians face the dual challenges of enforcing Greece's loan agreement with its foreign creditors while renegotiating enough of the bailout terms to keep the government in power.
- As Greece's political parties maneuvered to form a new government Tuesday, the country's creditors were signaling a willingness to discuss revised terms.
- Facebook on Tuesday signaled its ambitions to grow as a payment platform, with changes to how its users can buy goods and services without leaving its site.
- The European low cost airline Ryanair offered 694 million euros ($883 million) to buy the Irish carrier Aer Lingus , the latest in a number of deals in the fast-consolidating airline industry.
- Barnes & Noble reported a fourth-quarter loss of $57.7 million on Tuesday, falling short of market expectations, even though sales of the popular "The Hunger Games" and "Fifty Shades of Grey" and the liquidation of Borders lifted same-store sales by 4.5 percent in the period.
THE GLOBE AND MAIL
- Environmental critics are calling for a major review of pipeline safety in Alberta after the province experienced a third large oil spill in a month.
Report in the business section:
- Canada has a chance to land a major investment by Pratt & Whitney Co Inc, which is looking for a site to assemble engines for Airbus SAS. The engines are in the same family as those Pratt & Whitney will make in Quebec for Bombardier Inc's new C Series plane.
- Israel has received private assurances Canada stands ready to help defend the Jewish state, but just how far the Harper government intends to take that commitment remains unclear.
Newly released documents say Defence Minister Peter MacKay told Israel's top military commander, Major-General Gabi Ashkenazi, during a 2011 visit to the Middle East, that 'a threat to Israel is a threat to Canada.'
- Quebec has fined Maple Leaf Foods Inc for advertising to children, a rare case in a province with strict limits on marketing to minors.
The Toronto-based company pleaded guilty to five charges laid against it under Quebec's consumer protection law, which prohibits advertising for commercial purposes to children under the age of 13. It faces a fine of C$10,000.
European economic update:
- Sweden NIER Business and Consumer Survey 98.7 – lower than expected. Consensus 99.7. Previous 100.9.
- UK Average Weekly Earnings 1.4% – higher than expected. Consensus 0.8%. Previous 0.9%.
- UK Claimant Unemployment 4.9% – in line with expectations. Consensus 4.9%. Previous 4.9%.
- UK ILO Unemployment Rate 8.2% – in line with expectations. Consensus 8.2%. Previous 8.2%.
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