Draghi Says ECB Won’t Hesitate to Fail Banks in Stress Tests (Bloomberg)
“Banks do need to fail” to prove the credibility of the exercise, Draghi said in a Bloomberg Television interview with Francine Lacqua in Frankfurt, after the ECB published plans for its bank-asset check. “If they do have to fail, they have to fail. There’s no question about that.”
U.S. SEC releases long-awaited ‘crowdfunding’ rule (Reuters)
Entrepreneurs and start-up companies looking for backing will be able to solicit small investments over the Internet from the general public under a new proposal unveiled by U.S. regulators on Wednesday. The Securities and Exchange Commission’s “crowdfunding” plan is a requirement in the Jumpstart Our Business Startups (JOBS) Act, a 2012 law enacted with wide bipartisan support that relaxes federal regulations to help spur small business growth.
Third Point To Return $1.4 Billion To Investors (NYP)
Dan Loeb has joined the ranks of big money managers to scale back their business by returning capital to investors. Loeb plans to return around $1.4 billion to his Third Point investors at the end of the year, he told investors in his third-quarter letter dated Oct. 22. Third Point’s assets have grown to $14 billion since 2009. Loeb is up 24 percent on an annualized basis since then, far outdoing most of his peers, and is up 18 percent this year through September. But Loeb has met resistance with two of this year’s activist plays, Sony and Sotheby’s, which implemented a “poison pill” shareholder plan to thwart his moves. He also announced a new equity position in Nokia, the Finnish cell phone maker, in the investor letter.
Michael Jackson Is Top-Earning Dead Celebrity (NYP)
Jackson surpassed long-time pal Elizabeth Taylor as the top-earning dead celebrity, with his postmortem empire pulling in $160 million in the past year, according to Forbes. Jackson, who died of an overdose in 2009, took the honors thanks to two Las Vegas shows, Cirque du Soleil’s “Immortal” and “One,” that pay tribute to the Gloved One. Jackson’s estate raked in more than any pop star — living or dead — and easily beat Madonna, who ranks as the top earner on the magazine’s annual Celebrity 100 list…Jackson also far outstrips his nearest deceased rival, Elvis Presley, who came in at No. 2 with earnings of $55 million — a figure that’s been relatively static the past few years.
JP Morgan Chase Nears $6 Billion Settlement (NYP)
JPMorgan Chase is nearing an agreement worth close to $6 billion with a group of institutional investors to settle claims over shoddy mortgage-backed securities issued in the run-up to the financial crisis, a source familiar with the talks said. Representatives of JPMorgan, headed by Jamie Dimon, and the investors met on Friday to discuss the settlement, though the two sides have not yet agreed to formal terms, the source said. The potential deal is separate from the preliminary $13 billion settlement JPMorgan has reached with the US government that would resolve a raft of civil actions brought by several enforcement agencies.
Yankees Among 10 MLB Teams Valued at More Than $1B (Bloomberg)
The New York Yankees are worth $3.3 billion, making them the sport’s most-valuable enterprise. The Los Angeles Dodgers rank second with a value of $2.1 billion. “Major League Baseball is catching up to valuations of the National Football League,” Anthony Di Santi, the managing director of the sports finance advisory division of New York-based Citigroup Inc.’s private bank, said at the Bloomberg Sports Business Summit on Sept. 10.
Bubbles and leverage cause crises: Alan Greenspan (CNBC)
Asset bubbles alone don’t cause financial crises like the one in 2008, former Federal Reserve Chairman Alan Greenspan told CNBC on Wednesday. Instead, the combination of bubbles and leverage is the problem, he said. “We missed the timing badly on September the 15th, 2008 [the day Lehman Brothers filed for bankruptcy]. All of us knew there was a bubble. But a bubble in and of itself doesn’t give you a crisis,” he said in a “Squawk Box” interview. “It’s turning out to be bubbles with leverage.” Take the explosion of the dotcom bubble in the 1990s and even the stock market crash of 1987, he continued, they barely showed up in longer-term economic growth figures. In his new book, “The Map and the Territory,” the 87-year-old Greenspan reflected on the 2008 financial crisis and the questions it raised about the economic models used to predict risk. He looked at the shortcomings of current forecasting tools and how they can be updated to take better account of human nature. “If you’re looking at the distribution of outcomes, fear is hugely more important than euphoria or greed,” Greenspan told CNBC. “Bubbles go up very slowing and then they go bang.”
Vatican Suspends ‘Bishop of Bling’ (BBC)
The Vatican has suspended a senior German Church leader dubbed the “bishop of bling” by the media over his alleged lavish spending. Bishop of Limburg Franz-Peter Tebartz-van Elst is accused of spending more than 31m euros (£26m; $42m) on renovating his official residence. The Vatican said it deemed “appropriate… a period of leave from the diocese” for the bishop. The suspension comes two days after he met the Pope to discuss the matter. “A situation has been created in which the bishop can no longer exercise his episcopal duties”, a Vatican statement said. It said a Church commission would rule on the matter, but did not say where Bishop Tebartz-van Elst, 53, would go or what he would do while the inquiry was held…Calls were made for the bishop to resign after he was accused of lying under oath about his spending. He was criticised for a first-class flight to India to visit the poor. But his official residence is at the heart of the criticism, after renovations were originally costed at 5.5m euros. German media are reporting that the residence was fitted with a bath that cost 15,000 euros, a conference table for 25,000 euros and a private chapel that cost 2.9m euros.