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Frontrunning: March 28
- Greece's Fringe Parties Surge Amid Bailout Ire (WSJ)
- ECB fails to stem reduction in lending (FT)
- More Twists for Spanish Banks (WSJ)
- Banks use ECB cash to buy bonds, lend less to firms (IFR)
- UK still long way off pre-crisis growth – King (Reuters)
- Dublin confident of ECB deal to defer payment (FT)
- Goldman's European derivatives revenue soars (Reuters)
- Japan Faces Tax Battle as DPJ Finishes Plan on Sales Levy (Bloomberg)
- Insurance Mandate Splits US Court (FT)
- Chinese President Leaves Seoul for BRICS Summit in New Delhi (Xinhua)
- Leaders Reiterate Opposition to "Taiwan Independence", Spokesman Says (Xinhua)
Overnight Media Digest
WSJ
* Goldman Sachs agreed to change its board structure in order to persuade a union pension fund to drop a shareholder proposal that could have cost Lloyd Blankfein his job as chairman.
* Basketball legend Magic Johnson led a group that won an auction for the Los Angeles Dodgers baseball team, marking the final chapter of a soap-opera style saga for the franchise.
* BATS Global Markets' directors voted to remove Joe Ratterman as chairman, while expressing unanimous support for him to stay on as the company's chief executive.
* In recent months, lawyers for Edith O'Brien, the assistant treasurer at MF Global, offered a so-called proffer as part of an effort to negotiate immunity from prosecution in exchange for her cooperation with federal investigators.
* Japanese securities regulators sought additional charges against Olympus and five individuals for their alleged involvement in the company's $1.5 billion accounting scandal.
* The Fed's response to the 2008 financial crisis prevented a more severe recession, Chairman Ben Bernanke said in a comprehensive defense of the central bank's actions.
FT
NEWS CORP FACING A FRESH PHONE HACKING STORM
Rupert Murdoch's News Corp was on Tuesday facing a fresh barrage of allegations over its business practices after an Australian newspaper released 14,000 emails concerning one of the group's security subsidiaries.
ABU DHABI EYE $15 BILLION INJECTION INTO RBS
Abu Dhabi has discussed a 10 billion pounds ($15.97 billion)investment into Royal Bank of Scotland, as part of a complex transaction that would help pave the way for the government's eventual exit.
SHUVALOV DEAL HIGHLIGHTS KREMLIN BUSINESS LINKS
The family of Igor Shuvalov, Russia's first deputy prime minister, bought nearly $18 million in Gazprom shares through an offshore company as the government prepared to liberalise share trading, a reform which greatly increased their market value, documents show.
PROBE LAUNCHED INTO INSURANCE SALES CLAIM
The Ministry of Justice has launched an investigation into claims management companies following a glut of invalid compensation claims filed on behalf of consumers allegedly mis-sold personal protection insurance (PPI).
BUMI GOVERNANCE PROBLEMS 'PUT TO BED'
The new chairman of Bumi has insisted that the London-listed miner is working through the corporate governance issues that have blighted the company's share price over the past five months and expects no more public rows.
OIL FUTURES SPARK DEBATE ON $100 LEVEL
Oil contracts for delivery in three to five years' time are trading at their biggest ever discount to spot prices, prompting a debate about whether the era of triple-digit oil prices will be a short-term phenomenon.
MF GLOBAL WON PRAISE FOR RISK HANDLING
The consultancy Promontory Financial found that MF Global had a "robust enterprise-wide risk management" programme in early 2011, five months before the U.S. broker-dealer's high exposure to European debt led to its bankruptcy.
CVC PREPARES TO REFINANCE FORMULA 1 LOAN
CVC Capital Partners is lining up a refinancing of its Formula One acquisition loan in a deal that will enable the private equity group to pay itself a dividend of about $1 billion from the operating profits of the motor racing series.
NYT
* As power shifts to consumers, propelled by the Internet and apps, many stores are scrambling to move beyond the time-worn cycle of markups and discounts - and still make money.
* Critics and supporters sparred over whether a foreclosure deal helps banks even more than struggling homeowners.
* The House gave overwhelming final approval on Tuesday to a package of measures intended to ease access to capital and investments for entrepreneurs, sending the bipartisan legislation to President Obama, who has said he will sign it.
* Some MF Global employees were aware of a shortfall in the firm's customer accounts days before filing for bankruptcy on Oct. 31, according to people involved in the case, a revelation that raises questions about why the firm failed to safeguard client money and whether it withheld information from authorities.
* The market for Web sites, night classes and online lectures in computer programming is booming, as demand grows for knowing how the digital pieces of the Internet fit together.
* The new owner of Pfizer's former factory in Williamsburg, Acumen Capital Partners, is bringing manufacturing jobs back to the borough in what was the pharmaceutical giant's original home.
* The Food and Drug Administration approved a new anemia drug called Omontys, developed by a small company, Affymax , for dialysis patients, which will end Amgen's 24-year monopoly led by its Epogen drug.
* Under a pretrial ruling in Rajat Gupta's criminal case, federal prosecutors must review the Securities and Exchange Commission's notes about 44 interviews of witnesses during its investigation.
* The troubled New York law firm Dewey & LeBoeuf's chairman, Steven Davis, has been stripped of his title and will relocate to London to work with five co-equal members representing the heads of the firm's most profitable practice areas.
* The European Union should increase its financial firewall to about 1 trillion euros to restore market confidence in the euro zone and prevent the spread of fiscal contagion, the head of the Organization for Economic Cooperation and Development, Ángel Gurría, said on Tuesday.
* France has so far been the main beneficiary of growing customer interest in wine, and Italy is only coming in third place after Australia.
Canada
THE GLOBE AND MAIL
- Ontario Premier Dalton McGuinty has played his hand, tabling a budget he says will steer the province out of deficit. Tim Hudak, the Leader of the Opposition Conservatives, has played his hand, too, insisting his party will vote against it.
That leaves New Democratic Party Leader Andrea Horwath to determine whether the province has another one.
- Canada needs the F-35 fighter to take part in international air missions with allies, Defence Minister Peter MacKay argued Tuesday, as he met with a U.S. counterpart who described the costly jet as the only option for his country.
- The Harper government will chop $7 billion from discretionary spending when the finance minister hands down his budget Thursday, The Canadian Press has learned.
Reports in the business section:
- Ontario is turning to the business community for help in trimming its deficit, but the move to suspend scheduled cuts to corporate income taxes could cast a shadow over investment in the province.
-
NATIONAL POST
- If long-time B.C. Liberal John van Dongen had second thoughts Monday before ditching his party and announcing he had joined forces with the provincial Conservatives, they must have dissolved after former colleague Rich Coleman opened his mouth and snarled.
Reports in the business section:
- It is a budget aimed at pleasing almost no one, except perhaps Ontario's creditors. With its much-anticipated 2012 budget, the Ontario government seeks to repair the province's deteriorating fiscal position, chip away at a debt burden headed toward unsustainability, and avoid a downgrade to its credit rating.
- Stornoway Diamond Corp on Tuesday signed a binding agreement with the Cree Nation of Mistissini and the Grand Council of the Crees for its Renard diamond project in the Otish mountains of northern Quebec.
European Economic Update
- France GDP 4Q 0.2% m/m 1.3% y/y – lower than expected. Consensus 0.2% m/m 1.4% y/y. Previous 0.2% m/m 1.4% y/y.
- Sweden Consumer Confidence 0.0 – higher than expected. Consensus -2.0. Previous -3.2.
- Sweden Manufacturing Confidence 1 – higher than expected. Consensus -11. Previous -13.
- Sweden Economic Tendency Survey 101.8 – higher than expected. Consensus 94.0. Previous 93.0. Revised 93.4.
- Euro Area M3 Growth 2.8% y/y – higher than expected. Consensus 2.4%. Previous 2.5%.
- Italy Business Confidence 92.1 – higher than expected. Consensus 91.5. Previous 91.5. Revised 91.7.
- UK GDP 4Q -0.3% m/m 0.5% q/q – lower than expected. Consensus -0.2% m/m 0.7% y/y. Previous -0.2% m/m 0.7% y/y.
- UK Current Account (British Pound) -8.5B – in line with expectations. Consensus -8.5B. Previous -15.2B. Revised -10.5B.
- UK Total Business Investment 4Q -3.3% m/m 1.6% y/y – higher than expected. Consensus -5.6% m/m -1.9% y/y. Previous -5.6% m/m -2.0% y/y.
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Gasp...JP Morgan up to no good? Shocking...but I'm sure Jamie knows nothing of these practices...(yeah, right).
http://www.bloomberg.com/news/2012-03-26/obama-relies-on-debt-collectors-profiting-from-student-loan-woe.html
"..a shareholder proposal that could have cost Lloyd Blankfein his job as chairman."
You would have thought the Non-Exec Board would have sacked Blankfein by now for bankrupting the bank and the ignomy and shame of having to go to taxpayers and Nanny Ben to bail out that over-leveraged sack of bankers crap, Goldman Sucks
...but the 'scrutiny' of Non-Exec Boards have been as abscent from the meltdown as every other legislated 'safety net', from inept auditors to inept regulators to inept politicians to inept compliance and risk officers
...enjoy your free lunches crones, there aren't many left (choke)
Spanish MFIs bought 39bn of Gov't bonds in January and Feb vs 38bn of gross
issuance so far this year.
Italian MFIs bought 46bn of Gov't bonds in January and Feb vs 54bn of gross
issuance this year.
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=117.BSI.M.ES.N.A.A30.A.1.U2.2100.Z01.E
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=117.BSI.M.IT.N.A.A30.A.1.U2.2100.Z01.E
Picking up on a major point made by Jim Sinclair, Jon Matonis in Forbes also hints that the recent political move by the USA along with its EU poodle, to block Iran from the international bank-transfer payment system or 'SWIFT' (located in Belgium) ...
That this act may mark the end of Western dominance of the global financial system. Other countries are seeing that the West cannot be trusted with the financial machinery, and that they need to develop alternate structures that are not under Western control.
From the Forbes article (which also later quotes Jim Sinclair), Matonis writes:
« Highlighting and exposing the structural importance of centralized financial institutions that sit at the very top of the payments pyramid will hasten the trend to more decentralized and regional payment structures.
Moreover, a single worldwide financial structure with near-absolute authority will begin to be seen as a vulnerability to many nations because they cannot always be expected to comply with U.S. and European Union directives.
Now that the precedent has been set for evicting a country’s financial institutions from the prevailing global payments network, all nations will be rightly suspicious of that powerful weapon. »
http://www.forbes.com/sites/jonmatonis/2012/03/27/the-payments-network-a...
MF GLOBAL WON PRAISE FOR RISK HANDLING
The consultancy Promontory Financial found that MF Global had a "robust enterprise-wide risk management" programme in early 2011, five months before the U.S. broker-dealer's high exposure to European debt led to its bankruptcy.
Sometimes it feels like the onion..