Summers Quit Fed Quest as Democrats Spurned Obama Favorite (Bloomberg)
The decision by Summers, the former Treasury secretary and economic adviser to President Barack Obama, followed Democrats on the Senate Banking Committee publicly and privately signaling their concerns about Summers to the White House. Several Democratic senators, including Jeff Merkley of Oregon and Sherrod Brown of Ohio, mounted a sustained lobbying campaign, pressing colleagues in their own party to oppose Summers on the grounds that he was too lax on financial regulation. They pressed forward as the White House was focused on building support for a military strike in Syria. “Any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the administration, or ultimately, the interests of the nation’s ongoing recovery,” Summers wrote in a letter yesterday to Obama.
Pimco Says Short-Term Debt to Benefit as Summers Withdraws (Bloomberg)
“Markets will likely interpret this as significantly increasing the probability of broad policy continuity at the Fed,” El-Erian wrote in a commentary on the Business Insider website. “This would be seen as being particularly supportive for the front end of the Treasury curve,” referring to the spectrum of maturities.
‘Too big to fail’ is still a threat to the financial system, by Bob Diamond (FT)
“Political leaders, regulators and banks need to collaborate on the core issues in an internationally-co-ordinated effort to establish a robust resolution regime. Why is finding a solution to this problem so important? Without an international plan to wind down an important bank in an orderly fashion, political and regulatory leaders are compelled to create more rules – often to protect national and regional markets and economies.”
Lehman Haunts Banks Even After Shares Triple (Bloomberg)
While the Standard & Poor’s 500 Index trades at a level that’s 16.2 times reported operating earnings, up 11 percent from this time last year, banks, brokers and insurers are at 13.2 times profits, the cheapest among 10 American industries, according to data on average valuations this month compiled by Bloomberg. Even after financial shares tripled in the four-year bull market, the gap between their valuations and the S&P 500 is as wide as in early 2008.
Ex-Lehman CEO Can’t Get A Wall Street Job (NYP)
Fuld spends most of his days at the Midtown office of his consulting and advisory firm, Matrix Advisors, sources say. Wall Street execs are happy to talk or break bread with him discreetly, but to do business with him in the public eye is a nonstarter, one source noted. Sources say they’ve noticed a change in Fuld from the animated, hard-nosed character he once projected. One former Lehman employee said they’d recently run into Fuld entering a building. The former Lehman chief , known as “The Gorilla” for his take-no-prisoners mentality, offered nothing but a blank stare by way of greeting and said nothing to the ex-staffer. “It was weird. He sort of just gave me an icy stare,” the ex-employee said. “I couldn’t really interpret it.”
Banks In Spain, Italy Look For Relief In Accounting (WSJ)
In Spain, where a deep recession has left some banks with thin capital cushions, bank executives are lobbying the government to transform potentially worthless tax assets into government-guaranteed tax credits that would bolster the banks’ capital positions. In Italy, where lenders hold ownership stakes in the country’s central bank, top banking executives are pushing for a revaluation of the Bank of Italy that would translate into an accounting windfall for the banks and thereby inflate their capital levels.
Barclays Faces Fine Over Qatar Deal (WSJ)
Barclays is contesting a £50 million ($79.4 million) regulatory fine relating to agreements the bank struck with Qatar in 2008. The lender disclosed the fine Monday in its prospectus for a planned £5.8 billion share sale, saying the U.K. Financial Conduct Authority issued warning notices and the penalty last week.
Frank, Dodd Would’ve Had Summers’s Back (CNBC)
“Larry made the right decision given the Senate opposition,” the Democrat Frank continued. “[But] if I had been a senator, I would have voted to confirm him.” Fellow Democrat Dodd said while it would have been tough, the president would have gotten Summers through the confirmation process. “It would have been ugly and would have taken a long time,” he said. “[But] presidents normally get their choices in these matters.”
Coked-Up Knicks Players Fixed Games for their Dealer in the ’80s (Gawker)
During the 1981-1982 season, at least three Knicks players fixed games for their unnamed cocaine dealer, “one of the largest dealers on the East Coast,” according to FBI files. According to informants, the coke dealer usually bet $300 a game, but soon began putting down $10,000 bets, winning six of seven bets through the season. The FBI also suspected the players were shaving points and betting against themselves.