Frontrunning: March 14

  • Euro zone formally approves 2nd Greek bailout: statement (Reuters)
  • In a First, Europeans Act to Suspend Aid to Hungary Unless It Cuts Deficit (NYT)
  • UK Chancellor Looks at 100-Year Gilt (FT) - What? No Consols?
  • Hilsenrath: Fed's Outlook a Tad Sunnier - (WSJ)
  • Banks Shored Up By Stress Test Success (FT)
  • U.S. dangles secret data for Russia missile shield approval (Reuters)
  • Wen Warns of Second China Cultural Revolution Without Reform (Bloomberg)
  • Wen Says Yuan May Be Near Equilibrium as Gains Stall (Bloomberg)
  • Merkel Says Europe Is ‘Good Way’ Up Mountain, Not Over It (Bloomberg)
  • Japan to Buy $10.3b in Chinese Govt Bonds (China Daily)

Overnight Press Digest


* The Federal Reserve cleared the way for many large banks to raise dividends and buy back shares as it released the results of its latest round of "stress tests."

* More Asian governments are pressing businesses to hike wages as a way to prevent outbreaks of labor unrest, raising the specter of higher manufacturing costs for global companies -- and the products they sell worldwide.

* A panel at Calpers voted to lower a crucial investment target at the nation's largest pension fund, a step that could lead to higher retirement plan costs or more job cuts in cities and counties across California.

* Beijing's tough defense of its rare-earths export quotas is expected to escalate trade disputes over the minerals and spur mining investments elsewhere, though China's dominance is likely to continue.

* On Tuesday, Encyclopaedia Britannica Inc said it would stop printing its namesake books, a sign of how readers in recent years have abandoned printed reference volumes for websites such as Wikipedia and Google.

* U.S. regulators sued three firms and fined a unit of Goldman Sachs Group Inc over alleged missteps in the oversight and handling of customer accounts, an issue that has been the subject of intense scrutiny since the collapse of MF Global Holdings Ltd last fall.

* Dell Inc said it would buy tech-security company SonicWall Inc, the computer maker's latest effort to expand beyond its traditional hardware businesses.



Carlyle, the private equity group preparing to go public on Nasdaq, raised money from a shareholder late in 2010 only to then pay most of the proceeds out to its shareholders in the form of a dividend, according to regulatory filings.


Citigroup and three other U.S. banks have failed Federal Reserve "stress tests" to assess whether they were healthy enough to return more capital to shareholders, the central bank said.


James Murdoch has written a lengthy letter to a parliamentary committee expressing deep regret for the phone hacking scandal but reiterating his innocence ahead of a crucial report that could determine whether he stays chairman of BSkyB .


The UK chancellor is aiming to launch an "Osborne bond" - a 100-year debt issue or even a perpetual gilt that never matures - to take advantage of the country's historically low interest rates.


Europe's biggest telecoms companies are facing the threat of a European Commission probe focusing on whether meetings between their top executives led to possible collusion.


The Encyclopedia Britannica will stop publishing its 32-volume print edition after 244 years and instead focus on its digital efforts, a watershed moment that highlights the changing fortunes of content producers in the internet era.


Goldman Sachs is working on a potential bid for Veolia's UK water business, which supplies water to London and south-east England, in a deal estimated at about 1.2 billion pounds ($1.89 billion).


Pfizer has abandoned its insulin partnership with Biocon of India, in the latest blow to deals between multinational drug groups and companies from developing markets.


Supermarket chain Tesco is opening a consultation to raise the pensionable age for members of its retirement scheme to 67 from 65 and taking steps to slow the rate at which pension payments rise.


* Bowing to the competition online, Encyclopaedia Britannica's publisher said the 2010 edition, a 32-volume set that weighs in at 129 pounds, would be the last.

* On Tuesday, the central bank said that 15 of the 19 largest financial firms had enough capital to withstand a severe recession. The results, announced two days ahead of schedule, paved the way for JPMorgan Chase and other banks to bolster dividends and buy back shares.

* The Federal Reserve on Tuesday offered a slightly more upbeat account of the American economy, but added that it planned to continue its efforts to improve growth.

But, the Federal Reserve acknowledged that rising oil prices would result in a temporary increase in inflation.

* If there was ever any doubt about the political salience of China in an election year, it was erased Tuesday, when President Obama stepped before cameras in the White House Rose Garden to announce a procedural move in a long-running trade dispute with China over rare earth metals.

* Rebekah Brooks, the former chief executive of News International, was arrested early Tuesday on suspicion of obstruction of justice, according to a person with knowledge of the arrest.

* Las Vegas Sands, the casino operator controlled by the billionaire Sheldon Adelson and his family, is facing a new, $375 million lawsuit over how the company won a lucrative gambling license in Macau.

* European Union finance ministers agreed Tuesday for the first time to punish one of their members for flouting the bloc's budget rules, deciding to suspend payment to Hungary of nearly 500 million euros in development money next year unless it makes progress on reducing its deficit.

* The White House has not yet announced its nominee to lead the 67-year-old World Bank, whose president, Robert Zoellick, will step down when his term is over at the end of June. But administration officials said this week that they would pick an American by the March 23 deadline for nominees

Canadian Press


- British Columbia may be on the left coast of Canada but it has become the centre of the battle to lead the federal New Democrats.

Amid reports that thousands of Martin Singh supporters in B.C.'s South Asian community are being urged to rank front-runner Thomas Mulcair as their second choice on the preferential ballot, the Quebec MP and two other contenders for the party's top job are announcing endorsements from key British Columbia New Democrats.

- Elections Canada is combing through internal Conservative Party e-mails and database records as it tries to close in on Guelph robo-call scammer "Pierre Poutine," sources said.

The election watchdog has gained access to the electronic logs that track who drew down information from the party's database of voters in the riding of Guelph during the 2011 campaign.

- The Harper government is conceding it might back out of its multibillion-dollar plan to buy F-35 stealth fighters.

Delays and setbacks have cast confusion over the price tag of the fighter jets, so Ottawa is now acknowledging it will have to wait and see how much they will cost - even if it doesn't have a clear idea of a Plan B.

Reports in the Business Section:

- Federal politicians worked late into the night to debate a back-to-work bill to send a pair of Air Canada labour disputes to binding arbitration in order to keep the airline flying.

Bill C-33, which passed 155-124 at about 0130 ET Wednesday, covers about 8,600 mechanics, baggage handlers and other ground crew at Air Canada and about 3,000 pilots.

- Tens of thousands of homeowners are at risk of break-ins and assaults if their personal information is made available online when they sell their homes, the country's largest real estate board charges in a blistering attack against the country's competition commissioner.

The Toronto Real Estate Board will launch a major public relations campaign on Tuesday against a Competition Bureau demand to include more detailed information in online listings, arguing that making information such as a seller's name and phone number available to casual browsers endangers lives.


- Mired in a $16-billion deficit and facing an uncertain financial future, Ontario is turning to consumers to help it dig out of trouble.

The province announced on Tuesday it will raise a range of driver fees, including licence validation, renewals, replacement, driver exam fees, trailer permits, as well as a range of other fees for commercial vehicles.

Reports in the Business Section

- Two directors at Canadian Pacific Railway Ltd acknowledged for the first time on Tuesday the company's board could consider a management shake-up ahead of the railway's annual general meeting in May if the proposed plan by activist shareholder Bill Ackman gains enough traction with shareholders.

- An Ontario Superior Court judge has approved a plan by securities regulators to distribute among holders nearly $60 million collected from a group of financial institutions as part of a settlement related to the failure of the third party asset-backed commercial paper.

European Economic News:

  • Switzerland PES Unemployment 4.7% - lower than expected. Consensus 4.8%. Previous 4.8%.
  • UK Claimant Count Rate for February 5.0% - in line with expectations. Consensus 5.0%. Previous 5.0%.
  • UK Average Weekly Earnings for January (3m/y/y) 1.4% - lower than expected. Consensus 1.9%. Previous 2.0%.
  • UK ILO Unemployment Rate for January 8.4% - in line with expectations. Consensus 8.4%. Previous 8.4%
  • Europe CPI for February 0.5% m/m 2.7% y/y – in line with expectations. Consensus 0.5% m/m 2.7% y/y. Previous -0.8% m/m 2.7% y/y.
  • Europe IP for January 0.2% m/m -1.2% y/y – lower than expected. Consensus 0.5% m/m -0.8% y/y. Previous -1.1% m/m -2.0% y/y.
  • Switzerland ZEW Survey for March 0.0. Previous -21.2.