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Frontrunning: September 4

Tyler Durden's picture




 
  • The ESM Violates the Law And EU Treaties (Welt)
  • Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain (NYT)
  • RBA stays put for third straight month (SMH)
  • Why PBOC will not cut rates: China’s Repo Rate Drops Most in Six Months as PBOC Injects Cash (Bloomberg)
  • Manufacturing Downturn Spreads Gloom Across Asia, Europe (WSJ)
  • "Sources" tell Dutch Dagblad that Weidmann is isolated in his objection to ECB monetization (Reuters, FD)
  • Europe Bank Chief Hints at Bond Purchases (WSJ)
  • Australia's Fortescue slashes capex as iron ore mkt drops (Reuters)
  • Loan rates point to eurozone fractures (FT)
  • U.S. nears deal for $1 billion in Egypt debt relief (Reuters)
  • Majority of New Jobs Pay Low Wages, Study Finds (NYT)
  • EU Outlook Cut by Moody’s on Germany, France, U.K. Risks (Bloomberg)
  • Clinton Seeks Unified Asian Front to Ease Disputes With China (Bloomberg)

Overnight Media Digest

WSJ

* With Republicans trying to fan disappointment with President Barack Obama's leadership, Democrats begin the final run to the election with a convention beginning here Tuesday that aims to convince economically struggling voters the president has a workable plan for a turnaround.

* American diplomats are closing in on an agreement to dole out $1 billion in debt relief to Egypt, part of a gilded-charm offensive that Washington hopes will help shore up the country's economy and prevent its new Islamist leadership from drifting beyond America's foreign-policy orbit.

* Valeant Pharmaceuticals International Inc has agreed to buy Medicis Pharmaceutical Corp for $2.6 billion, the latest in a string of acquisitions that have transformed the Canadian drug maker into a multibillion-dollar global company.

* The International Cotton Association, a group backed by the world's largest cotton traders, wants to strengthen what is effectively a blacklist that is supposed to prevent its members from doing business with companies that renege on contracts and then ignore arbitration awards.

* Hyundai Motor Co's labor union voted to approve a revised wage and working-conditions deal on Monday, putting an end to prolonged strikes that have hurt sales at South Korea's biggest car maker.

* Guggenheim Partners has agreed to buy Dick Clark Productions, according to a person familiar with the matter. The value of the deal could not be learned, but an official announcement is expected as soon as Tuesday morning.

* Texas authorities are investigating whether Xerox Corp played a role in allowing dentists to allegedly overbill the state's Medicaid system by millions of dollars.

 

FT

CAMERON BEGINS SHAKE-UP OF TEAM

David Cameron began a key overhaul of his ministerial team on Monday night.

LOAN RATES POINT TO EURO ZONE FRACTURES

ECB data on Monday showed interest rates paid by companies in the euro zone's weaker economies have surged.

EU PLAN FOR WOMEN QUOTAS ON BOARDS

Europe's listed companies must have 40 percent of their non-executive director board seats filled by women by 2020 or face fines.

DIRECT LINE BOOSTS OPERATING PROFIT

Royal Bank of Scotland's insurance arm has set targets to improve its profitability, seeking to boost investor confidence.

FSA CHALLENGES BANK CHAIRMAN OVER IT

The chairmen of the main UK banks have been told by the FSA to disclose details to avoid any future IT glitches.

SENIOR BANKER QUITS TOP NOMURA ROLE

One of Nomura's most senior investment bankers has resigned his post.

UK MANUFACTURING ENJOYS AUGUST BOUNCE

The downturn in Britain's manufacturing sector eased in August after domestic clients placed more orders.

CHALCO ABANDONS MONGOLIA COAL MINE DEAL

Chalco has dropped its $926 million offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources Ltd.

BUSINESS WARNS ON OSBORNE BANK PLAN

George Osborne's plan for a state-backed small-business bank needs to go well beyond a "rebranding exercise", business leaders have warned.

 

NYT

* It still remains unclear whether the United Automobile Workers union will agree to the health care overhaul sought by the carmakers, and how much General Motors Corp (GM.N), Ford Motor Co (F.N) and Chrysler will be willing to pay to make that happen.

* More than a decade after the drive began to convert electricity from a regulated industry into a competitive one, many states are rolling back their initiatives or returning money to individuals and businesses.

* This week will offer the first big test of the credit market as seven banks try to entice investors to buy $24 billion in loans and bonds to pay for the sale of the First Data Corp FDC.N, the credit card payments processor, to the private equity firm Kohlberg Kravis Roberts & Co [KKR.UL].

* Driven by a roaring world economy, among other things, global milk prices have doubled over the last two years.

* The European Union's ambitions to open its energy sector to greater competition were dealt a fresh blow after the French state-owned company Gaz de France GAZ.PA announced that it would merge with the utility Suez to create one of the world's largest energy groups.

* Private equity firms are setting records in the size of Asian buyout funds, adding to an existing pool of more than $35 billion that is waiting to be invested in deals in the region.

* Amid intense lobbying, Microsoft Corp (MSFT.O) is expected to squeak out a victory this week to have its open document format, Office Open XML, recognized as an international standard.

* As the 2008 presidential campaign picks up speed, Indian outsourcing companies have returned to Washington as veritable insiders, slicker and better connected than ever.

* In July, German auto parts maker, Continental (CONG.DE), clinched a major deal to acquire Siemens' (SIEGn.DE) VDO automotive unit. Now the company must integrate a company nearly its own size.

 

Canada

THE GLOBE AND MAIL

* A winner will be declared in the wee hours of voting day in this tight Quebec election, but the most probable result is that no leader emerges with a mandate for bold action.

Reports in the business section:

* Canaccord Financial, Canada's largest independent securities firm, is showing its ability to attract big name hires by adding a senior Lazard banker as its new head for Britain and Europe. Canaccord is bringing on Alexis de Rosnay as Chief Executive of the firm's U.K. and Europe investment banking operations.

* Trapeze Group, a Mississauga-based transit consultant and software company, has bought German ticketing company Elgeba Gerätebau GmbH, beefing up its portfolio of services for transportation companies internationally.

NATIONAL POST

* Nobel Peace Prize Laureate Desmond Tutu called Sunday for Tony Blair and George Bush to face prosecution at the International Criminal Court for their role in the 2003 U.S.-led invasion of Iraq.

FINANCIAL POST

* Valeant Pharmaceuticals International Inc, possibly the most acquisitive company in Canada and definitely one the country's most successful stocks, is looking to pull off another big buy. The Montreal-based company said it has agreed to buy dermatological product company Medicis Pharmaceutical Corp for $2.6-billion.

* Athabasca Oil Corp confirmed Friday it had signed a letter of intent that "contemplates a joint venture" involving two properties in northern Alberta - Hangingstone and Birch - both within an hour's drive from Fort McMurray. No details regarding the identity of the partner company or the value of the potential deal were released and the company stressed "that no assurance can be given that the transaction will be completed."

 

European Economic Update

  • Switzerland GDP -0.1% q/q 0.5% y/y – lower than expected. Consensus 0.2% q/q 1.6% y/y. Previous 0.7% q/q 2.0% y/y.
  • Spain Unemployment for August 38,200. Previous -27,800.
  • UK PMI Construction 49.0 – lower than expected. Consensus 50.0. Previous 50.9.
  • Eurozone PPI 0.4% m/m 1.8% y/y – higher than expected. Consensus 0.2% m/m 1.6% y/y. Previous -0.5% m/m 1.8% y/y.
 

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Tue, 09/04/2012 - 07:14 | 2759605 govttrader
govttrader's picture

I'll say it again...the early bird gets the worm...and gets to buy the dip in US treasuries.

http://govttrader.blogspot.com/

Tue, 09/04/2012 - 07:19 | 2759610 Irelevant
Irelevant's picture

The US bond market is the biggest bubble that ever existed, who is going to pay the 16+ trillion dollars? This is insanity at its finest and it will collapse, sooner rather than latter.

Tue, 09/04/2012 - 08:20 | 2759729 firstdivision
firstdivision's picture

I'd say the OTC market is an even bigger bubble that ever existed at over 10 times the GDP of the entire planet.

Tue, 09/04/2012 - 07:20 | 2759613 OttoMBMP
OttoMBMP's picture

"The ESM Violates the Law And EU Treaties "

Yep. But the only thing that matters is a corrupt "constitutional" court that says otherwise.

Tue, 09/04/2012 - 07:27 | 2759619 magpie
magpie's picture

Take it easy - since Germany has no real constitution it is only fit that the "Fourth Reich" Europe won't have one either.

Tue, 09/04/2012 - 07:43 | 2759636 Ghordius
Ghordius's picture

Otto, a constitution is nothing else than a "strong law" requiring much more than a simple majority in the two chambers of parliament. If the court rules against it, the "Grundgesetz" could still be amended. It's a question of political will. You are attacking a court before it even gave a verdict. Would you explain why? Past rulings you don't agree with?

Tue, 09/04/2012 - 07:51 | 2759646 nmewn
nmewn's picture

Yeah, I read that one...

Basis of the nation and the rule of law is questioned

 

Der ESM-Vertrag begründet ein System, mit dem durch Immunität geschützte ESM-Banker über hohe Summen nationaler Steuergelder verfügen und die Kontrollrechte der nationalen Parlamente umgehen können. The ESM Treaty establishes a system by which protected by immunity ESM bankers over large sums of national tax dollars and be able to bypass the control of national parliaments. Damit und durch die Schuldenvergemeinschaftung verstößt der ESM gegen Grundgesetz wie EU-Verträge. Activities and the Denver School Communities Tung violates the constitution as against ESM EU treaties.

Ist der ESM einmal in Kraft, ist die Grundlage des National- und Rechtsstaats infrage gestellt: das Budgetrecht des Bundestages und seine Fähigkeit, durch Steuer- und Ausgabepolitik die Lebensverhältnisse der Bevölkerung erheblich zu bestimmen. ESM is the once in power, the basis of the nation and the rule of law is called into question: the Budget Law of the Federal Parliament and its ability to determine through tax and spending policies, the living conditions of the population significantly. Dennoch erwartet kaum jemand, dass das Bundesverfassungsgericht oder der EuGH den ESM zu Fall bringen; allenfalls geringfügige Korrekturen gelten als denkbar. Yet hardly anyone expected that bring the Supreme Court or the Court of the ESM to case, only slight corrections are considered feasible.

Es wäre eine rechtsstaatliche Tragödie, wenn das Bundesverfassungsgericht bei eindeutiger Rechtslage nicht den Mut aufbringt, Verfassung und Bürger gegen die "große politische Koalition" zu schützen. It would be a constitutional tragedy, when the Constitutional Court if clearly not legal summons the courage to protect the Constitution and citizens against the "great political coalition."

Und doch ist Recht auch immer die Fortsetzung der Politik mit anderen Mitteln. >>>Yet law is always a continuation of politics by other means.<<<

Laws are meant to be timeless if constructed properly. It appears our friends in Europe are suffering from the same malady we are...regulatory capture, disguised as law.

Tue, 09/04/2012 - 08:00 | 2759665 SWRichmond
SWRichmond's picture

Not that "law" matters to these bankerfucks and their lapdog politicians anyway.

Tue, 09/04/2012 - 08:18 | 2759717 nmewn
nmewn's picture

Definitely.

"The ESM Treaty establishes a system by which protected by immunity ESM bankers over large sums of national tax dollars and be able to bypass the control of national parliaments."

Something tells me they didn't read the fine print or ignored it. I wonder what they'll do when the "peasants" beat down their doors and drag them into the streets?...probably claim diplomatic immunity under the law...lol.

Tue, 09/04/2012 - 08:06 | 2759677 Ghordius
Ghordius's picture

LOL, yes, though there is a philosophical touch to it, from Carl von Clausewitz, who famously wrote "Der Krieg ist die blosse Fortsetzung der Politik mit anderen Mitteln" - War is only the simple continuation/escalation of politics (policy, diplomacy) with different methods / by other means.

It's the core of Realpolitik, in a way, and holds many truths. At the end, as I wrote elsewhere in the thread, it's a question of political will.

Constitutions and Treaties can be changed. They should not be changed lightly, but they can be changed.

Having said that, I hope the court smacks down the ESM and gives a green light to the European Fiscal Compact.

Tue, 09/04/2012 - 09:33 | 2759734 nmewn
nmewn's picture

Hmmm, all nations wind up bound under the "European Court of Justice" eh?

What could possibly go wrong there right?

How is membership to this court chosen?

/////////////////////////////////

Well, I was curious on my latter question...it seems to me the Advocate Generals have an inordinate amount of power/influence on the judges. And according to it (the ECJ) and Costa v ENEL, the countries of Europe within the union, have already tranferred their sovereignty to the EU...again, according to this court.

I wonder how many european taxpayers understand the implications of that and what their elected officials have done? ;-)

Tue, 09/04/2012 - 07:41 | 2759633 Gazooks
Gazooks's picture

'the early bird gets the worm'

 

soon and hard from both ends

Tue, 09/04/2012 - 07:16 | 2759607 Irelevant
Irelevant's picture

Another day, another sequel in the funny money show.

Tue, 09/04/2012 - 07:24 | 2759617 firstdivision
firstdivision's picture

With Republicans trying to fan disappointment with President Barack Obama's leadership, Democrats begin the final run to the election with a convention beginning here Tuesday that aims to convince economically struggling voters the president has a workable plan for a turnaround.

 

The only plan that'll work is dissolving insolvent banks, cutting off all aid to the TBTF's, and putting those resources to creating sustainable jobs that actually make "things".

Tue, 09/04/2012 - 07:32 | 2759625 Bobbyrib
Bobbyrib's picture

I hope you mean private citizens use their own resources to create sustainable jobs that actually create thingamajigs. The government has wasted enough resources.

Tue, 09/04/2012 - 07:28 | 2759620 bushwarcrime
bushwarcrime's picture

Note to self:  Do not vacation in the Netherlands.  UK ok, Orangeland NG.  They're closing the coffee shops anyway, meh.

Tue, 09/04/2012 - 07:45 | 2759638 Ghordius
Ghordius's picture

I thought they were closing them for foreigners? With a "wink, wink, say two words in Dutch and it's fine"?

Tue, 09/04/2012 - 07:54 | 2759651 Haager
Haager's picture

They've designed some form of a license card to block foreigners, actually. The only measurable result so far are shop-closures and an increase in criminality, eg- illegal supply.

Tue, 09/04/2012 - 07:28 | 2759621 Ace Ventura
Ace Ventura's picture

"Europe's listed companies must have 40 percent of their non-executive director board seats filled by women by 2020 or face fines." 

 

LOLZ! Hey what about transgendered people? Men trapped in women's bodies and vice versa? How soon before this 40% becomes 50% or higher? After all, aren't womenz a higher percentage of the overall population?

You know, the insanity of it all gets to the point where all that's left is to kick back and laugh hysterically.

Tue, 09/04/2012 - 07:32 | 2759624 magpie
magpie's picture

It's a dumb idea, in so far they will be presiding over the bankruptcy of said companies in the near future.

Can't blame the Man for holding them down then.

Tue, 09/04/2012 - 08:53 | 2759827 ZeroAvatar
ZeroAvatar's picture

"You know, the insanity of it all gets to the point where all that's left is to kick back and laugh hysterically."

 

I find myself doing more and more of that, lately.

Tue, 09/04/2012 - 07:41 | 2759629 Son of Loki
Son of Loki's picture

“…I just don’t want to end up holding devalued pesetas.”

 

http://www.nytimes.com/2012/09/04/business/global/money-and-people-leave...

 

The wealthy people have already taken their money out,” said José García Montalvo, an economist at Pompeu Fabra University in Barcelona.

 

Last one out is a rotten egg!


Devaluation and resulting inflation is the future….the “new paradigm.”

 

 

Tue, 09/04/2012 - 07:56 | 2759655 Temporalist
Temporalist's picture
Spanish Unemployment to Swell as Public Jobs Vanish: Euro Credit

http://www.bloomberg.com/news/2012-09-04/spanish-unemployment-to-swell-a...

Tue, 09/04/2012 - 08:32 | 2759759 youngman
youngman's picture

So they are having a brain drain....this is going to be good for the long term success of the country...get rid of those "RICH PEOPLE"  Johhny Depp is leaving France because of the taxes....what liberal wants to pay their fair share... Spaniards will flee to the UK or Germany...but I owuld think after awhile...the Brits and the Germans are not going to like all the new immigrants...especially if they are flooding their welfare system....this guy had a job..suprising actually...but I am sure thousands do not..

Tue, 09/04/2012 - 07:41 | 2759635 Catullus
Catullus's picture

* Texas authorities are investigating whether Xerox Corp played a role in allowing dentists to allegedly overbill the state's Medicaid system by millions of dollars.

They should also go after the manufacturers of the ink on the bills as well.  And anyone from Northern Italy for having created double-entry accounting 600 years ago. 

Tue, 09/04/2012 - 07:47 | 2759641 Ghordius
Ghordius's picture

That was a very pious monk, that guy. And double-entry accounting used to mean something, until recently.

Tue, 09/04/2012 - 07:48 | 2759644 magpie
magpie's picture

If we are going way back, let's start with the monster of Fraud

http://en.wikipedia.org/wiki/Geryon

Tue, 09/04/2012 - 07:49 | 2759645 Dapper Dan
Dapper Dan's picture

"overbill" sounds so much better than "cheat" or "steal"

OT:

Hundreds of Lufthansa flights cancelled at Berlin, Munich and Frankfurt airports due to industrial action - @NBCNews

I'll have to check my newspeak translator book to confirm what "industrial action" means.

http://www.newspeakdictionary.com/

Tue, 09/04/2012 - 09:28 | 2759931 i-dog
i-dog's picture

 

"newspeak translator book to confirm what "industrial action" means"

It certainly won't include any reference to "productive work".

Tue, 09/04/2012 - 07:59 | 2759660 nmewn
nmewn's picture

lol...when all else fails...try to bribe them...

"American diplomats are closing in on an agreement to dole out $1 billion in debt relief to Egypt, part of a gilded-charm offensive that Washington hopes will help shore up the country's economy and prevent its new Islamist leadership from drifting beyond America's foreign-policy orbit."

CBS reporter Lara Logan could not be reached for comment ;-)

Tue, 09/04/2012 - 09:46 | 2759984 ZackAttack
ZackAttack's picture

Big story I noted today - Ministry of Love is compromised:

http://thenextweb.com/apple/2012/09/04/heres-check-apple-device-udid-compromised-antisec-leak/

Two questions:

1) Were these 12 million Apple users part of some ongoing investigation, for which the FBI had an actual, you know, reason to need this information, or were they just collecting it for kicks?

2) Assuming there's some valid answer to #1, WTF was it doing on an unsecured laptop?

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