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Frontrunning: May 18

Tyler Durden's picture





 
  • Inside J.P. Morgan's Blunder (WSJ) - Where we learn that Jamie Dimon did not inform his regulator, the Fed, where he is a board member of the massive JPM loss even as he was fully aware of the possible unlimited downside
  • Euro Attempted Recovery Countered By Asian Sovereigns (MNI)
  • Santander, BBVA Among Spanish Banks Downgraded by Moody’s (Bloomberg)
  • Spain hires Goldman Sachs to value Bankia (Reuters)
  • Defiant Message From Greece (WSJ)
  • G-8 Leaders to Discuss Oil Market as Iran Embargo Nears (Bloomberg)
  • China to exclude foreign firms in shale gas tender (Reuters)
  • Fed Board Nominees Powell, Stein Win Senate Confirmation (Bloomberg)
  • Defiant Message From Greece (WSJ)
  • Fitch Cuts Greece as Leaders Spar Over Euro Membership (Bloomberg)
  • Madrid Hails Moves by Regions to Cut Spending (WSJ)
  • Japan Raises Economic Assessment for First Time in Nine Months (Bloomberg)
  • Japan, S. Korea Worried About Currency Moves as Stocks Slide (Bloomberg)

Overnight Media Digest

WSJ

* Alexis Tsipras, head of Greece's radical left party, said in an interview with the Journal that there is little chance Europe will cut off funding to the country and if it does, Greece will repudiate its debts.

* BATS's board is debating whether to list the company on a rival exchange once it revisits plans for an IPO, a step that would further undermine its bid to challenge the Big Board and Nasdaq.

* Facebook priced its initial public offering at $38 a share, a move that values the Internet company at more than $100 billion. It tried floating higher numbers to investors but was rebuffed.

* Hewlett-Packard plans to cut its workforce by 25,000 to 30,000 employees, a record number for the venerable tech giant as it grapples with declining revenue and profits.

* Several top corporate and Wall Street executives, including Goldman Sachs CEO Lloyd Blankfein, could be potential witnesses at the insider-trading trial of Rajat Gupta.

* In an action unrelated to U.S. sanctions against Tehran, Bank of Tokyo-Mitsubishi UFJ said it has frozen financial transactions with Iran's government and central bank, as ordered by a U.S. federal court.

* The Senate confirmed Obama's two nominees to the Federal Reserve Board, filling the seven-member panel for the first time since April 2006.

 

FT

IRAN HELPS SYRIA DEFY OIL EMBARGO

An oil tanker belonging to Iran's state-owned shipping line has been switching flags and using multiple companies to transport crude from Syria to Iran, illustrating how Tehran is helping to sidestep international efforts to choke the finances of Bashar al-Assad, Syrian president.

SPAIN MOVES TO CALM BANK FEARS

The Spanish government called for investor calm on Thursday as shares in Bankia, the country's second-largest bank, tumbled by nearly 30 percent and Moody's prepared a sweeping downgrade of the country's lenders.

FACEBOOK PRICES SHARES AT $38 EACH

Facebook priced its shares at $38 each in an initial public offering raising $16 billion that values the world's largest social networking group at $104 billion, vaulting the eight-year-old company into the ranks of top 25 public companies in the U.S.

GRAFF TO HAVE $3 TO $4 BILLION VALUE AT IPO

Graff Diamonds, known for selling multimillion-pound jewels to the super-rich, will be valued between $3 billion and $4 billion when it lists in Hong Kong, according to people familiar with the process.

LME'S SUITORS' BID PASS 1 BILLION POUND

The three remaining contenders to acquire the London Metal Exchange have all valued it at more than 1 billion pounds ($1.58 billion) and promised to preserve its open outcry trading pit, setting the scene for a close-run contest as they attempt to snatch control of the historic bourse.

JP MORGAN UNIT HAS BILLIONS OF RISKY BONDS

The unit at the centre of JP Morgan Chase's $2 billion trading loss has built up positions totalling more than $100 billion in asset-backed securities and structured products - the complex, risky bonds at the centre of the financial crisis in 2008.

 

NYT

* President Obama and four African leaders will introduce the group of companies, the Alliance for Food and Nutrition Security, on Friday at a forum on food security and agriculture.

* The United States Commerce Department concluded that Chinese producers had "dumped" their products on the American market.

* The one money matter that most Internet millionaires talk about openly is what start-ups they are investing in next. Expect many more such investments from Facebook executives. Indeed, that might be where the biggest chunk of their new wealth will go.

* A multibillion-dollar trading loss at JPMorgan may remind some of the disaster at the Long Term Capital Management hedge fund in 1998.

 

Canada

THE GLOBE AND MAIL

- Canada's National Energy Board expects the average cost of regular gasoline to be between $1.20 and $1.35 per litre this summer, mirroring last summer's range.

Reports in the business section:

- Several Canadian fund managers are queuing up for a slice of Facebook Inc's initial public offering, ignoring critics who suggest the stock could be an expensive bust. CI Investment Inc's Boston-based Cambridge Advisers unit has placed an order for a million shares of the social media giant.

NATIONAL POST

- The Quebec government is aiming for the pocketbook to help stamp out the turbulent student crisis that is rocking the province.

FINANCIAL POST

- If G20 nations ignore reforms agreed upon last fall in Cannes, the world economy will be 8 percent, or $6-trillion, poorer by 2015, the Bank of Canada says.

- Investors are now on pace to reduce their gold holdings for a third straight month, marking the longest bullion selloff since 2004.

European Economic Summary:

  • Portugal Producer Prices 0.6% m/m 3.6% y/y. Previous 0.2% m/m 3.5% y/y. Revised 0.4% m/m 3.7% y/y.
  • Italy Industrial Orders 3.5% s.a. m/m -14.3% n.s.a. y/y – higher than expected. Consensus 1.0% s.a. m/m. Previous -2.5% s.a. m/m -13.2% n.s.a. y/y. Revised -2.6% s.a. m/m.
  • Italy Industrial Sales  0.0% s.a. m/m -3.1% n.s.a. y/y. Previous 2.3% s.a. m/m -1.5% n.s.a. y/y.
  • Germany Producer Prices 0.2% m/m 2.4% y/y – lower than expected. Consensus 0.3% m/m 2.5% y/y. Previous 0.6% m/m 3.3% y/y.
  • Russia Money Supply Narrow Def. RUB 6.93T. Previous 6.88T.
  • Hungary Avg Gross Wages 2.7% y/y – lower than expected. Consensus 6.5% y/y. Previous 6.9% y/y. Revised 6.8% y/y.

 

 


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Fri, 05/18/2012 - 07:28 | Link to Comment Death and Gravity
Death and Gravity's picture

"Inside J.P. Morgan's Blunder (WSJ) - Where we learn that Jamie Dimon did not inform his regulator, the Fed, where he is a board member of the massive JPM loss even as he was fully aware of the possible unlimited downside "

Hmm. I wonder how the other governors will respond to the gentleman's egomaniacal behavior.

Fri, 05/18/2012 - 08:21 | Link to Comment Oh regional Indian
Oh regional Indian's picture

They're his buddies, his bum-chums, his co-insiders. They'll sap him on the ass and say, those are are some big one's you got there Jamie, you sly fux!

 

But it really looks like this coming Solar Eclipse is loaded.

May 20th, Annular, visible in North America, China, Japan....check it out. It's doing something...

ori

Fri, 05/18/2012 - 07:32 | Link to Comment PaperBear
PaperBear's picture

Jamie Dimon is going to get such a spanking.

Fri, 05/18/2012 - 07:32 | Link to Comment Mae Kadoodie
Mae Kadoodie's picture

You fucked up big time, Jamie.  Just resign.

Fri, 05/18/2012 - 07:42 | Link to Comment buckethead
buckethead's picture

Spain hires Goldman Sachs to value Bankia

 

It's like Deja Vu, all over again.

Fri, 05/18/2012 - 08:08 | Link to Comment bdc63
bdc63's picture

"Alright, Mr. Fox.  Your job is to gaurd this hen house.  Make sure nothing happens to these birds.  I want you to give me an accurate count twice a day, got it?"

Fri, 05/18/2012 - 07:43 | Link to Comment TooBearish
TooBearish's picture

Reported loss might be as much as 5bil now TY

Fri, 05/18/2012 - 08:01 | Link to Comment Tyler Durden
Tyler Durden's picture

In other words what we said last Thursday?

Is JPM Staring At Another $3 Billion Loss?

Fri, 05/18/2012 - 08:03 | Link to Comment Kiwi Pete
Kiwi Pete's picture

Who's on the other side of this I wonder? Or is it all just disappearing down the drain?

Fri, 05/18/2012 - 08:12 | Link to Comment youngman
youngman's picture

Probably the Fed......

Fri, 05/18/2012 - 07:54 | Link to Comment Kiwi Pete
Kiwi Pete's picture

"Unlimited downside" Doesn't sound good. I wonder when other banks will start cutting their exposure to JPM? 

Fri, 05/18/2012 - 08:10 | Link to Comment bdc63
bdc63's picture

Have you ever played "Jenga"?

Fri, 05/18/2012 - 08:08 | Link to Comment midgetrannyporn
midgetrannyporn's picture

another maggot joo banker. i feel so much better now.

Fri, 05/18/2012 - 08:08 | Link to Comment mendigo
mendigo's picture

Maybe there will be some Friends of Corzine (FOCers) investigating JPM

Fri, 05/18/2012 - 08:38 | Link to Comment MFL8240
MFL8240's picture

"Where we learn that Jamie Dimon did not inform his regulator, the Fed, where he is a board member of the massive JPM loss even as he was fully aware of the possible unlimited downside"

DIMON IS ONE THE PEOPLE RUNNING THIS GOVERNMENT HE DOES NOT OWE THEM A DAMN THING.

Fri, 05/18/2012 - 10:13 | Link to Comment spine001
spine001's picture

Guys/Gals,

If you were paid a lot if you made a lot out of managing somebody else's money and fired if you don't make a lot, with NO middle ground.

And, since we all know that profits is directly proportional to risk.

How in HELL can anybody expect ANYTHING other than these guys taking as much risk as they possibly can? And to fight tooth and nail against any regulatory effort that could limit that ability?

Please read the book "This time is different" and apply to what I just said to every market crash described there and you will see how it ALL fits. Nobody ever REALLY thinks "this time is different", the DO know it is the same, they just don't care, since the if they don't risk "society's" money they won't ever make "Big" money. And if they win, the win big and if they loose, they loose somebody else's money.

The system is wrong, it doesn't resist any mathematical analysis when you apply "Game theory" modeling to it. It is flawed. The problem we have is that democratic governments will never be able to change it. So that leaves us with a pretty ugle chaotic attractor in our model.

Until next time,

Engineer

(chaotic in the sense of chaos theory, "non-linear dynamic systems")

Sun, 07/15/2012 - 15:14 | Link to Comment adnan202
adnan202's picture

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