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Frontrunning: June 4

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  • Spain Seeks Joint Bank Effort as Pressure Rises on Merkel (Bloomberg)
  • Banks Cut Cross-Border Lending Most Since Lehman: BIS (Bloomberg)
  • Shirakawa Bows to Yen Bulls as Intervention Fails (Bloomberg)
  • Merrill Losses Were Withheld Before Bank of America Deal (NYT)
  • Investors Brace for Slowdown (WSJ)
  • China's lenders ordered to check bad loans (China Daily)
  • Obama Seeks Way Out of Jobs Gloom (WSJ)
  • Noda Reshuffles Japan Cabinet in Bid for Support on Sales Tax (Bloomberg)
  • China to open the market further (China Daily)
  • Australian Industry Must Adapt to High Currency, Hockey Says (Bloomberg)
  • Tax-funded projects to be more transparent (China Daily)

Overnight Media Digest

WSJ

* Pressure is growing on policy makers around the world as investors react with increasing alarm to bad economic news. Asian markets fell sharply early Monday.

* Facebook is developing technology that would allow children younger than 13 to use the social networking site under parental supervision, a step that could help the company tap a new pool of users for revenue but also inflame privacy concerns.

* Federal investigators are scrutinizing a series of conversations among MF Global employees shortly before the firm erroneously told regulators that its customer funds were safe.

* A federal prosecutor who helped lead a U.S. government tax-evasion crackdown that has rattled the Swiss offshore-banking industry is leaving the Justice Department for a Washington law firm.

* At a time when the Fed looks persistently polarized, Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, has positioned herself as a consensus seeker.

* Samsung Electronics is revealing launch plans for its Galaxy S III smartphone for the U.S. market. It will be the Korean company's first top-of-the-line phone to use the same name at all four U.S. national wireless carriers.

* The Justice Department has grown increasingly restless with the attorney fees -- often exceeding $1,000 an hour -- that companies going through bankruptcy reorganization pay. On Monday, the attorneys will press their case for the fees at a public meeting in Washington.

* A federal agency that oversees JPMorgan Chase is taking heat over how much it knew about risk-taking in the part of the bank that suffered more than $2 billion in trading losses.

 

NYT

* Some daily newspapers are cutting printing and delivery schedules and shifting their emphasis to the Web, but industry analysts warned that such moves might alienate once-loyal readers.

* Days before shareholders voted on Bank of America's 2008 purchase of Merrill Lynch, top executives were told the investment firm's losses would most likely hammer future earnings.

* The economic crisis in Europe is becoming an existential one for the monetary union, officials say, unless governments act to solidify the alliance.

* Internet security expert Eugene Kaspersky says his discovery of the Flame virus adds weight to his warnings of the grave dangers posed by governments that manufacture and release viruses on the Internet.

 

Canada

THE GLOBE AND MAIL

- The Harper government is redrafting its extensive, multi-billion shopping list of equipment for the Canadian military in an exercise many observers believe will set more sober expectations in a time of austerity.

Reports in the business section:

- Frustrated with a recent ratings downgrade and worried by the imminent possibility of another, Royal Bank of Canada is intent on proving that its capital markets arm poses no real threat to its future.

NATIONAL POST

- Thousands of Encana Corp employees this summer will move into their new headquarters spanning the top levels of The Bow - a gargantuan structure of glass, steel and green architecture that dwarfs the iconic Calgary Tower.

FINANCIAL POST

- With the Canadian economy slowing to a snail's pace - and U.S. job creation badly off the rails - analysts here are turning down the volume on calls for higher borrowing costs.

 

UK

Sunday Telegraph

WONGA WEIGHS 1 BLN POUNDS U.S. STOCK MARKET FLOAT

British short-term loans provider Wonga is considering a stock market float in the United States as early as next year, which could value the company at more than 1 billion pounds ($1.53 billion).

BP SHAREHOLDERS TO LAND $15 BLN WINDFALL

Oil giant BP has told leading shareholders that they could be in line for a $15 billion windfall from the sale of its stake in Russian joint venture TNK-BP. BP plans to keep half the money from the sale for new assets and give half back to investors. [ID: nL5E8H1D26]

CIRCLE TO PITCH TO RUN SECOND NHS HOSPITAL

Circle, the first private health company to take over day-to-day running of a National Health Service (NHS) hospital, is poised to pitch for the management of a second facility, Nuneaton's George Eliot hospital.

RBS LOOKING TO SELL OFF LONDON PROPERTIES

The investment banking arm of Royal Bank of Scotland is considering vacating some of its central London properties as a result of plans to cut 3,500 jobs.

Sunday Times

BOE POISED FOR NEW 50 BLN POUNDS ROUND OF QE

Economists predict the Bank of England will launch a new 50 billion pounds round of quantitative easing (QE). Economists at Deutsche Bank and Citigroup are among those expecting further QE.

SPORTS DIRECT AIMS TO BUY UMBRO

Sports Direct is poised to swoop on Umbro, the football kit maker put up for sale by Nike. The sportswear firm owned 30 percent of Umbro before Nike took it private.

AMERICAN GREETINGS TO BUY CLINTON CARDS STORES

American Greetings is expected this week to take possession of up to 400 stores run by Clinton Cards, which collapsed into administration last month.

TARMAC, LAFARGE TO SELL 400 MLN POUNDS OF ASSETS

Anglo American's Tarmac unit and cement maker Lafarge are set to launch the sale of 400 million pounds of British quarries and cement works. The groups must sell assets to win clearance for a tie-up of their building materials businesses.

Independent on Sunday

NEWSTRIKE CAPITAL MULLS LONDON LISTING

Gold miner Newstrike Capital, which is exploring in Mexico, is looking at a secondary listing in London to tap into institutional investors.

Mail on Sunday

BAA THREATENS TO SUE OVER THIRD RUNWAY

Heathrow operator BAA, owned by Spain's Ferrovial, is threatening to sue the British government if it continues to rule out considering a third runway as an option to expand airport capacity.

CHINA EYES BP'S STAKE IN RUSSIAN JV

Leading Chinese oil companies Sinopec and China National Offshore Oil Corp are understood to be eyeing BP's half-stake in the TNK-BP energy venture in Russia.

HSBC RUNS TESTS ON ATMS FOR DRACHMAS

HSBC has tested its cash machines in Greece to check whether they could cope with the reintroduction of the drachma if the country crashes out of the euro.

Sunday Express

NEW LOOK TO RESTRUCTURE 1.1 BLN POUNDS DEBT

Fashion group New Look is expected to complete a restructuring of its 1.1 billion pounds debt pile this week, with the deadline for repayment extended to 2015 from 2013.

 

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Mon, 06/04/2012 - 07:27 | 2491106 cnhedge3
cnhedge3's picture

Is the Euro Ending or Beginning?
http://www.cnhedge.com/thread-6926-1-1.html

Mon, 06/04/2012 - 07:30 | 2491108 disabledvet
disabledvet's picture

"Man covered with pork chops chased by rabid pack of wild dogs."

Mon, 06/04/2012 - 07:51 | 2491142 Snidley Whipsnae
Snidley Whipsnae's picture

"pack of rabid wild dogs" ???

Soon to be pack of hungry ______ citizens... Pick a country, fill in the blank.

Mon, 06/04/2012 - 07:31 | 2491113 Catullus
Catullus's picture

The NYT article on ML/BoA deal: "The disclosure, coming to light in private litigation, is likely to reignite concerns that federal regulators and prosecutors have not worked hard enough to hold key executives accountable for their actions during the financial crisis"

How about reignite concerns that regulators TOLD BoA executives that they were being forced to buy ML?  We'd all love to see a federal prosecutor bring in Paulson, Bernanke, Geithner, and Kashkari. 

Mon, 06/04/2012 - 08:50 | 2491254 GeneH3
GeneH3's picture

Right. 

Shareholders (and everyone else) have known about this for over three years. 

See http://thematrixnot.blogspot.com/2009/04/two-criminals-much-worse-than-n...

and  

http://www.zerohedge.com/article/how-hank-paulson-broke-law-will-be-disc...

I am surprised the shareholder suit has not been filed until now. 

Mon, 06/04/2012 - 07:32 | 2491115 insanelysane
insanelysane's picture

And Bloomberg TV has segment on why it's the muppets fault for falling for the FB ipo hype.

Should just run a segment on why muppets shouldn't pay attention to anything said on Bloomberg or CNBS.

Mon, 06/04/2012 - 07:42 | 2491125 JustObserving
JustObserving's picture

"his discovery of the Flame virus adds weight to his warnings of the grave dangers posed by governments that manufacture and release viruses on the Internet.".  

Cannot compete with other nations?  Release a virus to destroy their competitive advantage. Cyberwars have started.  Real wars cannot be far behind.

Are there any conventions banning cyber attacks by a state? Apparently, there are no such restrictions now.  We need a Geneva convention on cyberwar pronto.


Mon, 06/04/2012 - 07:48 | 2491132 Snidley Whipsnae
Snidley Whipsnae's picture

RE: China article... Perhaps the understatement of the day... so far...

"Currently and in a coming period of time, the global economic structure will be faced with deep adjustments," said the document, also signed by the People's Bank of China, the central bank, and the Ministry of Finance."

Mon, 06/04/2012 - 07:57 | 2491149 sampo
sampo's picture

Well well, China really preparing to dump western currencies.

Mon, 06/04/2012 - 08:26 | 2491190 ciaoant1
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