Frontrunning: March 26, 2012
- BOJ Crosses Rubicon With Desperate Monetary Policy, Hirano Says (Bloomberg)
- Europe’s bailout bazooka is proving to be a toy gun (FT)
- Monti Signals Spanish Euro Risk as EU to Bolster Firewall (FT)
- Merkel set to allow firewall to rise (FT)
- Banks set to cut $1tn from balance sheets (FT)
- Supreme Court weighs historic healthcare law (Reuters)
- Spain PM denied symbolic austerity boost in local vote (Reuters)
- Anti-war movement stirs in Israel (FT)
- Obama to Ask China to Toughen Korea Line (WSJ)
- Pimco’s Gross Says Fed May ‘Hint’ at QE3 at April Meeting (Bloomberg)
- How to ensure stimulus today, austerity tomorrow (FT)
- Merkel’s Party Wins Saarland State in Show of Crisis Backing (Bloomberg)
Overnight Media Summary:
MERKEL SET TO ALLOW FIREWALL TO RISE
Germany is poised to bow to international pressure and allow a temporary increase in the euro zone's financial "firewall" this week, to prevent the crisis in the region's periphery spreading to other member states.
BANKS SET TO CUT $1 TRILLION FROM BALANCE SHEETS
Investment banks are to shrink their balance sheets by another $1 trillion or up to 7 percent globally within the next two years, says a report that foresees a shake-up of market share in the industry.
HEDGE FUNDS FACE HIGHER TRADING COSTS
Leading prime brokerages are preparing to hit clients with across-the-board increases in the cost of trading, which could dry up liquidity and cause niche global markets to shut down.
BIRDS EYE IGLO PUT UP FOR SALE BY PERMIRA
Birds Eye Iglo, the frozen foods business bought out of Unilever by Permira, is joining the shopping trolley of food assets up for sale.
UBS TO OFFER ORCEL FULL BACKING
UBS is gearing up to use its balance sheet heft to back its new co-head of investment banking as the Swiss group steps up efforts to revive its status in the market.
LLOYDS' DEAL FACES BUYOUT OPPOSITION
Two private equity firms are looking for ways to block Lloyds Banking Group's sale of their loans to a Bain Capital arm, according to a person familiar with the matter.
LUXEMBOURG FACES EU RAP ON INVESTMENT RULES
Luxembourg, the main home for one of Europe's most popular investment products, is to be singled out as a regulatory weak link in an unusually undiplomatic European Commission proposal.
US REGULATOR POINTS FINGER OVER FREDDIE AND FANNIE
The U.S. regulator overseeing state-controlled home loan financiers Fannie Mae and Freddie Mac has said the companies are being pushed to accept losses to keep big U.S. banks from writing down their holdings.
OUTGOING FSA ENFORCER SAYS WATCHDOGS NEED MORE BITE
UK financial watchdogs should step up penalties and tackle a wider range of fraud cases to make sure the London's financial district continues to take the law seriously, Margaret Cole, a top Financial Services Authority official, has urged as she prepares to leave for the private sector.
UK'S ROYAL MAIL TO DELIVER IPO IN 2013
Britain's coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator's finances continue to improve.
SPAIN'S CAIXABANK SET TO BID FOR CIVICA
Caixabank, the listed arm of the Barcelona-based savings bank La Caixa, is poised to announce a bid as early as Monday to take over its smaller rival Banca Civica in the latest move to restructure Spain's financial sector, according to executives from both banks.
SWEDISH OIL GROUP SVENSKA UP FOR SALE
Mohammed Hussein al-Amoudi, the Saudi billionaire, has put Swedish oil explorer Svenska Petroleum up for sale in a deal that could raise $2 billion.
IAG WEIGHS ITS NORTH ATLANTIC OPTIONS
The owner of British Airways, IAG, is close to appointing an adviser to help safeguard its north Atlantic joint venture with American Airlines.
* Distrust of the government's handling of money matters has turned Zimbabwe into a nation of hoarders. The grubby graying American dollars on Zimbabwe's streets -- including bountiful supplies of $2 bills -- attest to a robust cash economy that largely bypasses the country's banks.
* U.S. businesses see slowing sales growth in China this year, while nearly half rate the nation's economic slowdown as a top risk factor.
* Yahoo said it would appoint three new independent directors to its board in April, as the Internet company aims to complete an overhaul of its board and leadership while avoiding a proxy fight with an unhappy large shareholder.
* Some of the world's largest insurance companies are gearing up to compete for ING Groep NV's Asian life insurance arm, potentially creating a bidding war that could reach $6 billion for what is considered a good franchise in the world's fastest-growing insurance market.
* An experimental Merck & Co anticlotting drug proved effective in a study at preventing heart attacks for patients with heart disease, but the cost was a sharp increase in the risk of significant bleeding.
* Testifying recently in a lawsuit that is unrelated to Copper River's closing, its chief maintained that actions taken in the fall of 2008 by Goldman Sachs had done irreparable damage to his fund.
* Jon Corzine, the former chief executive of MF Global , was told during the brokerage firm's final day of business that a crucial transfer of $175 million came from the firm's own money - not from a customer account, according to an internal e-mail.
* Despite a very public setback for BATS Global Markets on Friday, the future of stock trading still looks to be one dominated by rapid-fire computerized trading platforms.
* Computer software giant, Microsoft, won a court order to enter two Web hosting facilities last week in a war against so-called botnets that scour the Internet for personal data to steal and exploit.
* As Congress begins work this week on legislation to shore up the finances of the debt-ridden post office, companies representing a cross-section of American business are spending millions of dollars lobbying lawmakers to oppose or support various proposals to keep the agency afloat.
* Acorn Media says it is now the second-largest distributor of British programming on DVD in North America, second only to the BBC.
* CASH Music is part of a growing number of behind-the-scenes companies that handle business tasks like marketing and merchandising that used to be the domain of record labels.
THE GLOBE AND MAIL
- Thomas Mulcair has taken control of the New Democrats in the same way that Stephen Harper took control of the Conservatives: by appealing to the party membership in the face of opposition from the old guard.
- It's hard to believe that a single provincial budget could be more important to the Canadian economy than Thursday's long-awaited federal budget.
But Ontario is in a bind. Growth is stuck in low gear as the province struggles with high unemployment, and challenges in its key manufacturing sector.
Reports in the business section:
- The McCains and Sobeys, two powerful business families with deep roots in rural Atlantic Canada, are joining forces for the first time in an investment venture, SeaFort Capital Inc.
- A major labour disruption has been averted for at least two more days after Toronto's largest civic employees' union reluctantly agreed to send the Ford administration's final offer to a ratification vote Wednesday.
- When Thorsten Heins took over as CEO of BlackBerry maker Research In Motion Ltd from long-time co-chiefs Mike Lazaridis and Jim Balsillie in January, he inherited a stumbling giant. Heins will oversee his first quarter as RIM's CEO this Thursday when fiscal fourth-quarter results are released.
- Canada's largest medical regulator is proposing an end to the age-old tradition of licences that give physicians almost unfettered freedom, as it steps up its drive to restrict doctors from dabbling in areas where they lack the proper skills.
- Prime Minister Stephen Harper acknowledged the potential difficulties in securing a trade deal with Japan, and admitted some sectors of the economy will be viewing the launch of trade talks with some hesitation.
European Economic Update:
- Finland PPI 1.2% m/m 2.2% y/y. Previous 1.0% m/m 1.8% y/y.
- Germany IFO – Business Climate 109.8 – higher than expected. Consensus 109.6. Previous 109.7.
- Italy Consumer Confidence Indicator s.a. 96.8 – higher than expected. Consensus 93.5. Previous 94.4.