Argentine Default Drama Nears Critical Stage (WSJ)
Argentina could make unfortunate history this week if it defaults on its foreign debt for the second time in 13 years as a showdown with creditors comes to a head. When Argentina last defaulted on this debt, in 2001, it was the biggest sovereign default ever. It led to a debt restructuring and the country’s deepest recession since the Great Depression. The political turmoil was so bad that the country had five presidents in just over a week. The seeds of the current drama were sown not long after that, when investors bought the country’s defaulted bonds but never accepted its terms for restructuring the debt. Now they are standing in the way of payouts that would avoid a default this week. Although there is little fear of contagion for other emerging markets and minimal concern Argentina would suffer the kind of economic implosion of 13 years ago, a default still could cost one of Latin America’s biggest economies dearly, keeping it shut out of international credit markets and crimping credit to companies. It also could complicate the transition to a new government after next year’s presidential election.
No meeting scheduled on Monday between Argentina and court mediator (Reuters)
Argentina does not have a meeting scheduled for Monday with a court-appointed mediator in New York in its debt dispute with creditors but talks continue, a government source said on Sunday, as the country looks to avoid a possible debt default next Thursday. Argentina, Latin America’s third-largest economy, has for years fought the “holdout” hedge funds which snapped up its junk bonds after its $100 billion default in 2002 and then refused the restructuring terms, suing for repayment in full. “There is no meeting scheduled for Monday. Talks are continuing,” the government source told Reuters.
J.P. Morgan Questioned for Conflicts of Interest (WSJ)
Regulators have questioned J.P. Morgan Chase & Co. executives in recent months about whether the firm steers private-banking clients to its own investment products, according to people familiar with the matter. The queries helped prompt J.P. Morgan to spell out more clearly to private-banking clients the differences between its own products and outside offerings, and how much of clients’ assets were invested in each, these people said. The latest changes were set in motion several months ago when the Office of the Comptroller of the Currency, one of J.P. Morgan’s primary regulators, began asking officials at the firm about the percentage of clients’ assets that were being directed to J.P. Morgan’s own funds and products instead of third-party options, these people said.
Deutsche Bank, HSBC Accused of Silver Fix Manipulation (Bloomberg)
Deutsche Bank, HSBC Holdings, and Bank of Nova Scotia were accused in a lawsuit of rigging the price of billions of dollars in silver, an allegation similar to earlier suits involving the London gold fix. The banks unlawfully manipulated the price of the metal and its derivatives, an investor claims in a complaint filed yesterday in federal court in Manhattan. The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit. “The extreme level of secrecy creates an environment that is ripe for manipulation,” according to the complaint. “Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits.”
Goldman mortgage deal with federal agency could reach $1.25 billion: source (Reuters)
A deal to resolve a U.S. regulator’s claims against Goldman Sachs Group Inc over mortgage-backed securities sold to Fannie Mae and Freddie Mac leading up to the financial crisis could cost the bank between $800 million and $1.25 billion, according to a person familiar with the matter. The person said Goldman Sachs is discussing a settlement with the Federal Housing Finance Agency (FHFA), which filed 18 lawsuits against Goldman and other banks in 2011 over about $200 billion in mortgage-backed securities that later went sour.
Doughnut-Wielding Vandals Terrorize Neighborhood (AP)
There’s mischief afoot in one suburban Portland neighborhood, but police say it doesn’t involve the typical spray paint or broken windows. No, we’re talking pastry here — maple bars smeared on cars, doughnuts left atop windshield wipers, pastries littering a yard. One woman told officers she’s seen more than a dozen incidents of food smeared on cars. Not just pastry, but yogurt, cakes and eggs. She alerted police July 11. The next day, another woman told police her vehicle had been hit six times — twice with a maple bar, once with a cinnamon doughnut, once with pink yogurt, once with “bread soaked in a white slimy liquid” and once with red potato salad. The crime wave in a northeast Hillsboro neighborhood has been going on for six weeks, The Oregonian reported. Police think the victims of the night-time vandalism are chosen at random and kids are likely behind it. Lt. Mike Rouches says officers are investigating and extra patrols have been added. Still, he adds, “In my 25 years in police services, I have never investigated or seen a criminal mischief involving pastries.” Read more »