Frontrunning: June 6

Tyler Durden's picture
  • Wisconsin's Walker makes history surviving recall election (Reuters)
  • China Labor Shortages in Guangdong Show Stimulus Limits (Bloomberg)
  • Oil rises toward $100 ahead of ECB (Reuters)
  • China's Property Controls to Stay (China Daily)
  • Spain Makes Explicit Plea for Bank Aid (FT)
  • Fed Considers More Action Amid New Recovery Doubts (WSJ)
  • Noda Sales-Tax Push Confronts Rising Japan Majority Opposition (Bloomberg)
  • National Interests Threaten EU Bank Reforms (FT)

Overnight press digest:


* Wisconsin Governor Scott Walker withstood a recall effort, dealing a blow to organized labor, unsettling Obama's re-election strategy and signaling to GOP lawmakers that challenging government unions could pay dividends.

* Disappointing U.S. economic data, new strains in markets and deepening worries about Europe's fiscal crisis have prompted a shift at the Fed, putting back on the table the possibility of action to spur the recovery.

* U.S. defense contractors are preparing to disclose mass job cutbacks ahead of November elections if Congress fails to reach a deficit-reduction deal by then.

* The $2 billion JPMorgan loss stemmed from a breakdown in the firm's risk-management activities that started in late 2011.

* The regulatory concerns are the latest security questions about the third-party firms that process transactions for banks.

* Nasdaq OMX Group is considering offering discounted trading fees to the financial firms that lost money after the exchange botched their trades during the ill-fated debut of Facebook shares.

* Italy, where fewer women work compared with most other industrialized countries, is trying to turn a page - starting in the boardroom.

A new law requires Italian listed and state-owned companies to ensure that one-third of their board members are women by 2015. Currently, only around 6 percent of the total number of corporate board members in Italy are women - one of the lowest levels in Europe and a number that reflects how few women work here.

* The largest U.S. wireless carriers expect to get rid of plans that let subscribers buy only the number of minutes they need and replace them with a flat rate covering unlimited calls.




Naguib Sawiris, the Egyptian telecommunications mogul, has decided against joining a consortium of investors attempting to take over EFG-Hermes, the Middle East investment bank.


Alessandro Profumo, former chief executive of UniCredit , and 19 others must stand trial for alleged tax fraud involving a scheme set up by Barclays, a Milan judge said on Tuesday.


Sir Martin Sorrell, chief executive of WPP, has issued a robust defence of his pay ahead of a showdown with some big shareholders in the world's largest advertising group that is shaping up as a test case for executive remuneration in the UK.


The world's big international banks are paying out much more on staff costs relative to profits since the financial crisis while slashing the portion of income paid out in dividends, according to data compiled by the Financial Times.


Spain has made its most explicit call to date for European institutions to recapitalise the country's banks amid concerns about its own ability to raise the billions of euros needed on sovereign bond markets.


The top City of London regulator is relaxing its scrutiny of non-executive recruits to banks and other financial services groups amid company complaints that the tests hinder them in making appointments.


Sean Parker, an early executive at Facebook, is starting a video chat site because he thinks social media is making people lonelier.



* Officials in Greece said that despite the latest bailout, the government faces a shortfall of 1.7 billion euros because tax revenue and other sources of income are drying up.

* Robert F.X. Sillerman made the concert business more corporate and wants to do the same with the latest trend in the music industry.

* Congress is expected to quiz regulators on Wednesday about their failure to keep an eye on the JPMorgan unit responsible for a trading loss of more than $2 billion.

* Airtime, a live video chat service designed by Napster founders Sean Parker and Shawn Fanning, hopes to recreate the spontaneity of the 1990s AOL chat rooms.

* A new survey finds that those without a college degree have dismal job prospects and considerable obstacles blocking improvement.

* Republicans united against a bill that would make it easier for women to sue employers for pay discrimination.

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fiercekitty's picture

Wallker won! Yeah, baby!  Bullish! :P


lakecity55's picture

PMs and miners are up!

Win! Win!

razorthin's picture
Cheers, Walker. But in my eyes, the republicratic system has proved to be nothing more than swinging over a shark tank on a burning rope.
DarkestPhoenix's picture

I'm glad he won.  Fuck unions.

This recall election was so laughable.  They trotted out all the propaganda and superstars they could to ruin this guy.  Hell, I saw even Clinton showed up.  Nice to see some common sense prevail vs unsustainable spending.

Have to road trip up to Milwaukee next month and support their local economy by getting sufficiently annihilated. 

razorthin's picture

You say that now.  But if this pig economy ever turns around and inflation inflates the salary of the private sector by the wide margin over public salaries as it has in past booms, then I give those public employees permission to use that piece in your avatar.

JohnKozac's picture

In the book, "When Money Dies, the author describes the winners in hyper-inflation (relative winners, anyway). They are 1. the public unions and 2. the wealthy industrialists. The unions demanded higher wages to cover their loss of purchasing power or they would paralyze the country with strikes. The industrialists were able to hold their moolaah overseas in a different (stronger) currency.

The private sector got totally wiped out--he cites doctors, lawyers, engineers, etc...any privately employed person who earned a living on his own was not able to keep up w/ inflation and suffered msierably.

We see similar right now: public employees are paid twice what people are paid in the private sector.....USA Today writes $122k compared to $55K.

For the better or worse, there you have it. If others have better numbers pls post.

jmc8888's picture

If that's common sense, then Forrest Gump is Einstein.

Walker is everything you DON'T want a politician to be.  A crony, a fascist, and will sell anyone down the river.  He doesn't know economics, except the money he gets to pass laws so others make money.

Divide and conquer, and you all fall for it. Sad.  Take on the banksters, they're the ones who got us here, not unions (who have their problems, but didn't create the 1.4 quadrillion in derivatives, nor create the housing bubble, nor pump and dumped stocks, so on and so forth).

It's amazing that people here can read all of the problems and still think unions have one cent in a dollar's fault in all of this.  Without unions, there would be no middle class.  Without unions, there'd be a few less people skimming from the top.  Which is the bigger loss? An entire middle class? Or a few people who skim from unions (that should be fired). 

Yep, Keynesians and Austrians only their know their oligarchical dogma.  They're really on the same side, and serve the same master.  Miss the entire point about economics, and cheer for their enemy to win. Sad.





toomanyfakeconservatives's picture

Unions for coal miners 100 years ago- hell yes. Unions for pencil pushing state employees- hell no! I sensed Walker would not be removed the minute I heard about the recall, but did not know he would he the first to survive one. Lastly, this tells me some state-level elections are still not rigged, because the demons-from-hell democrats must have pulled out all the stops to try and steal this one from the people.

oldgasII's picture


One of the interesting stats on the Walker recall election is that there were a significant number of public union members that voted for Walker.  

lakecity55's picture

Yay. Commies spent 65million$ and lost their shirt.

Where was O'bama?

Should he not have been in Cheeseland fighting for his Big Labour bundlers???

The Walker guy actually won more votes in the recall than he won in the general election.

shovelhead's picture

Not really a big surprise there. Many years ago I was a member of a private sector union and it was amazing to see the demands made by older members when a contract expired because every raise in wages and benefits would add to the retirement scheme at the direct expense of younger members who may have bought a house or have expensive young kids.

The young guys knew that higher wages would result in less jobs and they were the ones who would be benched in favor of the connected older crony crowd who could well afford to strike for months if need be.

And you never questioned the 'expense account skim' by the officers of the union...ever. Not if you liked working at all.

Unions are not a monolithic block as everyone would like to think but they can be forgiven for thinking so because the vote will always appear that way.

You'll find the dissenting voters in the unemployment line.

Grand Supercycle's picture

SPX rally warning & USDX retracement warning now confirmed & good (counter trend) equity upside expected.

jmc8888's picture

Walker is a fascist.  Anyone here cheering him might as well suck Bernanke's cock, they're on the same side, the oligarchs.

Walker or Bernanke? Who cares, they serve the same oligarch.

Scott Walker, a complete scumbag.