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Frontrunning: June 8
- Obama Seeking Ally on Europe Finds Merkel a Tough Sell (Bloomberg) - but he has an election to win
- China rate cut sparks fears of grim May data (Reuters)
- China faces stimulus dilemma (FT)
- Papademos warns of Grexit vortex (FT)
- China’s Shipyards Fail to Win Orders as Greek Owners Shun Loans (Bloomberg)
- Rajoy Holds Bank Talks With EU Leaders as Fitch Downgrades Spain (Bloomberg)
- Capital Rule Is One Size Fits All (WSJ)... now the modest question of where to get the $3.9 trillion in capital
- Merkel Pokes at Cameron With Backing for Two-Speed Europe (Bloomberg)
- City safeguards set Britain at odds with EU (FT)
- Bernanke says Fed to act if Europe crisis deepens (Reuters)
- Indonesia to Push Through Down-Payment Rules Amid Protest (Bloomberg)
Overnight Media Digest:
WSJ
* The Federal Reserve shocked bankers Thursday by approving a proposal that would force even the smallest lenders to comply with the elaborate international bank capital standards known as Basel III.
* As sluggish global growth prompts central banks to spring into action once again, the U.S. dollar is emerging as the best of a bad bunch of currencies.
* Spain sold more than 2 billion euros ($2.5 billion) in bonds in a closely watched auction Thursday, reflecting rising hopes that the European Union would help recapitalize the struggling Spanish banks that have become the latest flash point in Europe's debt crisis.
* Former top executives at Bear Stearns Cos, including James Cayne and Alan Greenberg, have agreed to a $275 million settlement of a shareholder lawsuit over the demise of the Wall Street firm four years ago.
* Prosecutors in the insider-trading trial of Rajat Gupta sought to tie together their case for jurors Thursday by condensing a hodgepodge of phone records, trading documents and witness testimony into a concise pattern of events.
* Japan's economy expanded at a faster pace than initially estimated in the January-March period, the government said Friday, largely on slightly better capital spending.
Japan's gross domestic product grew a price-adjusted 4.7 percent in annualized terms during the first quarter, according to revised data released by the Cabinet Office. That compares with an initial reading of a 4.1 percent expansion released last month.
* A federal judge in Illinois said he had "tentatively decided" to dismiss patent litigation between Apple Inc and Motorola Mobility, which was recently acquired by Google Inc .
U.S. District Judge Richard Posner canceled a trial in the case, which was set to begin Monday.
* Federal Reserve Chairman Ben Bernanke cited significant risks to the U.S. economic recovery but stopped short of signaling Fed action to combat them, during testimony on Capitol Hill Thursday.
FT
EX-BEAR STEARNS EXECUTIVES TO PAY $275 MILLION
Former executives of Bear Stearns have agreed to pay $275 million to investors in a rare example of senior Wall Street figures being held liable for allegations of misconduct.
IIF SEEKS NEW PLAN ON BANK FAILURES
Regulators need to form a common international framework to manage any future banking failures, but the rules should be built around the needs of the banks and not just imposed from above, said the Institute of International Finance.
BEST BUY FOUNDER RESIGNS FROM BOARD
Richard Schulze, Best Buy's founder and chairman, raised the prospect of selling his 20 percent stake in the electronics retailer by saying he was "exploring all available options" as he announced his immediate resignation from its board.
EURO ZONE WOES HINDER BARCLAYS DISPOSALS
Barclays' ambitious asset disposal programme launched early last year to boost profitability has been hampered by the eurozone crisis and uncertainty over financial regulation in the UK.
HACKERS GET SOCIAL IN LATEST NETWORK ATTACKS
Security breaches at LinkedIn and eHarmony have highlighted an escalation in attacks on social networks from hackers seeking to exploit personal data, according to security firms.
PHILLIPS 66 TO BOOST RAIL CAPACITY FOR OIL
Phillips 66, the refining and chemicals group spun off from ConocoPhillips in May, is ordering 2,000 rail cars to transport crude from the North Dakota oilfields to its refineries on the east and west coasts of the U.S., in a sign of how the boom in onshore oil production is shaking up the American energy industry.
LOTUS SACKS CHIEF EXECUTIVE AFTER PROBE
Group Lotus has sacked Dany Bahar, its chief executive, throwing fresh doubts over the future of the loss-making UK sports car maker.
NYT
* The answer to Europe's problems seems to be greater fiscal and political integration, but that doesn't mean that such an outcome is a given.
* Proxy season is traditionally dominated by well-known activist investors, but this year has been different with mutual funds and other institutional investors applying more pressure to corporate boards.
* The China central bank's action cutting its lending rates is the strongest measure taken by Chinese officials this year to counteract the economic malaise that has already infected Europe and the United States.
* Economists warn that over the long term, Spain will have trouble meeting its substantial financial requirements until foreign investors inject new money.
Canada
THE GLOBE AND MAIL
- NDP leader Thomas Mulcair's complaint that unrestrained development of the Alberta oil sands is hurting other parts of the Canadian economy does not seem to have diminished support for his party.
Report in the business section:
- Canada is facing a potato shortage, mainly because of poor growing conditions last summer. That has sent wholesale prices for some spuds soaring and forced processors such as Toronto-based McCain Foods Ltd to temporarily close some plants.
NATIONAL POST
- The federal government paid C$1.2 billion in voluntary severance last fiscal year to 91,613 public servants who either remain in their jobs, retired or quit on their own - a perk unheard of to most Canadian taxpayers who are footing the bill.
FINANCIAL POST
- An aboriginal group along the proposed Northern Gateway pipeline says Enbridge Inc's claim of widespread support among First Nations is a "sham."
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Bernanke says Fed to act if Europe crisis deepens
Must be an incentive for Europe to improve.
After all that crap he spouted yesterday, he comes out with this. He could have used that one sentence yesterday and spared everyone hours of BS.
The life expectancy of each successive round of QE is shrinking. Bernanke is basically offering (at best) to buy a few more months. He's out of ammo, and he knows the price of oil will rip his face off if he tries anything more than a bandaid.
He's done.
Rand Paul endorses Romney
http://www.politico.com/blogs/burns-haberman/2012/06/rand-paul-endorses-...
This morning's WTF moment...
Yeah, WTF. I thought Obama would get it!
/
>Rand Paul endorses Romney
Wow. That makes me very sad.
WSJ
* The Federal Reserve shocked bankers Thursday by approving a proposal that would force even the smallest lenders to comply with the elaborate international bank capital standards known as Basel III.
So, I guess he's looking to make the TBTF banks even bigger by forcing the smaller banks to merge because they can't afford the cost of keeping up with expanding regulations? Same old song and dance...
Whatever happened to the Emergency DEPA Meeting(s)?
Seems Greece's domestic banks are going to supply a loan? With what money?
I like how "austerity" is the new Bird Flu
ATHENS, June 8 (Reuters) - Greece's state-owned gas provider DEPA is in talks with domestic banks to secure a loan to pay for its imports, a company official said on Friday, as the austerity-hit country seeks to avoid a collapse of its electrical power network...
http://in.reuters.com/article/2012/06/08/greece-gas-idINL5E8H83GX20120608
Am I reading this correctly? !!
"Almost 90 percent of China’s shipyards received no orders this year and about 28 percent have secured none since the end of 2009, Clarkson Plc (CKN), the world’s largest shipbroker, said May 16. Shares of China Rongsheng Heavy Industries Group (1101), China’s largest non-state builder, fell 55 percent in the past year, valuing the company at HK$13.6 billion ($1.8 billion)."
From the link above:
http://www.bloomberg.com/news/2012-06-07/china-s-ship-yards-fail-to-win-...