Germany Appears To Backtrack On EU Banking Deal (WSJ)
EU finance ministers have promised to agree on a so-called single-resolution mechanism—consisting of more centralized decision-making and financing for the shuttering or downsizing of failing banks—before the end of the year. But a letter sent by Wolfgang Schäuble to some of his counterparts sets clear limits on how far Europe’s biggest economy is willing to go. Mr. Schäuble’s letter, dated Dec. 12 and seen by The Wall Street Journal, was described by German officials as reiterating Berlin’s concerns expressed in recent talks. But several other European officials see it as backtracking on earlier German concessions that had made possible an agreement last Tuesday on broad principles among the finance ministers of the euro zone’s biggest countries. That preliminary agreement was meant to lead to a more-specific and detailed deal among 28 EU countries this week.
UBS Wins End to Suit Over Adoboli’s $2.3 Billion Losses (Bloomberg)
UBS won dismissal of a suit claiming the bank lied to investors about its risk-management practices before its disclosure of a $2.3 billion trading loss by “rogue trader” Kweku Adoboli. Adoboli, who worked in UBS’s London office, was convicted of fraud and sentenced to seven years in prison last year. The unauthorized trading loss was the biggest in British history. “That a ‘rogue trader’ was able to cause such a significant loss to UBS is more akin to a claim of mismanagement than of fraud,” U.S. District Judge Katherine Forrest in Manhattan said yesterday in a ruling dismissing the suit.
Fed could set off year-end fireworks (Reuters)
Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later. If it acts it may reflect as much a growth in confidence in the global economy, for whom the withdrawal of the flow of cheap dollars will be a shock, as in the recovery in the United States alone. Growth in jobs, retail sales, services and overall output in the world’s biggest economy – combined with last week’s breakthrough budget deal in Washington – has convinced some economists that the Fed will announce a reduction to its $85-billion a month in purchases on Wednesday.
Gold Funds See Unprecedented 31% Slump as World Loses Faith (Bloomberg)
Holdings in the 14 biggest ETPs plunged 31 percent to 1,813.7 metric tons since the start of January, the first annual decrease since the funds started trading in 2003, data compiled by Bloomberg show. The removals erased $69.5 billion in the value of the assets as prices fell by the most since 1981. A further 311 tons will be withdrawn next year, according to the median of 11 analyst estimates compiled by Bloomberg. ETP investments reached a record $148 billion last year, helping sustain the bull market that drove a more than sixfold increase in prices since 2001 by offering a way to own bullion without needing to store it. The slump shows some investors losing faith in gold as a preserver of wealth after inflation failed to accelerate and the Federal Reserve signaled it may curb stimulus. John Paulson, the biggest investor in the largest ETP, said last month he doesn’t plan to buy more.
A Cold Meal (NYP)
Billionaire businessman Steve Schwarzman likes cold hard cash. But a meat-locker-cold steakhouse? Not so much. With temperatures already dipping into the teens on Thursday night, a shivering Schwarzman groused multiple times at a private dinner hosted by the private-equity tycoon’s Blackstone Group at Smith & Wollensky. “Can we get some heat in here?” Schwarzman griped during the event at one point.
Wal-Mart Employee Arrested For Shooting Co-Worker’s Car Over Award (CBS)
According to a Broward Sheriff’s Office arrest report last month’s employee of the month at a Deerfield Beach Wal-Mart store on South Military Trail had her car shot up by a co-worker who was angry after she won the award. Willie Mitchell is charged with discharging a firearm from a vehicle. The Broward Sheriff’s Office said surveillance video from a Wal-Mart parking lot shows Mitchell parking next to a co-worker’s earlier in December. A few minutes later, investigators said Mitchell rolls down a back window, fires a shot into his co-worker’s car then drives off. The co-worker was not in her vehicle at the time. BSO Spokesperson Veda Coleman-Wright said the shooting stemmed from some bad feelings after the victim won an Employee of the Month Award. “She was announced as the employee of the month which you would think that would be something good, people would be happy for her,” Coleman-Wright said. “But there was one employee who wasn’t happy.”
Government Rests Case Against Former SAC Trader (Dealbook)
After three weeks and 13 witnesses, the government on Friday rested its insider trading case against Michael S. Steinberg, a former fund manager at SAC Capital Advisors. The defense’s case will take considerably less time. It said it might call one witness on Monday, and then both sides will present their closing arguments. Mr. Steinberg will not take the witness stand.
Banks Live Up to Too-Big-to-Fail Name (WSJ)
For the first time in years, the cost of insuring $10 million of debt against default at all six of the biggest U.S. banks has fallen to about $100,000 or less annually, according to data from Markit. In the wake of the financial crisis, credit-default swaps for some of the banks were at various points priced as much as four to six times higher.
U.S. Exchanges Near Deal for Infrastructure Upgrade (WSJ)
U.S. exchanges are near an agreement to upgrade a central piece of the country’s trading infrastructure that critics say has been neglected and caused a serious market outage in August, according to people with knowledge of the discussions. Designed to avoid another large-scale breakdown, the plan would establish faster backups for a key part of the market’s plumbing known as securities information processors, or SIPs, which consolidate the quote and trade data from exchanges before it is displayed to the public.
Madoff: I Helped Feds Nab JP Morgan (NYP)
The 75-year-old felon boasted in an email made public Friday that he provided “key information” to the Treasury’s Inspector General’s office that, presumably, was relayed up the chain of command and eventually used by Manhattan prosecutors in their expected $2 billion criminal action against the bank. At this point, it isn’t clear if the disgraced swindler provided any substantial evidence, or any evidence at all, in identifying JPMorgan or any other banks as being aware of his $20 billion-plus scheme. Madoff made his claim from the Butner (NC) Federal Correctional Complex — where he’s serving a 150-year sentence — in an email to CNBC correspondent Scott Cohn.
Sex party couple accused of €1m tax fraud (The Local)
The husband and wife were questioned by police after officers broke up one of their sex parties in a Frankfurt hotel room on Wednesday evening. There were five people present including the couple. The pair from Brandenburg are accused of failing to declare takings for the last eight years from their pricey events where entry cost €180 ($247) per person. They now owe the treasury almost €1 million in tax payments from earnings made from around 450 sex parties organized since 2005, authorities said. The man, aged 51, and woman, aged 49, organized parties across the country, a Frankfurt police spokesman told The Local on Friday. He added that the couple had been barred from the hotel. Both of the organizers claimed…unemployment benefits and are officially registered as unemployed.