Rules May Hit Every Corner of JPMorgan (NYT)
“Given its franchise diversity, JPM is impacted by virtually all of the coming regulatory reforms,” Keith Horowitz, an analyst at Citigroup. In his research note, Mr. Horowitz estimated that the legislation would ultimately reduce the bank’s earnings by as much as 14 percent. That estimate could be cut in half or more because several of the most severe measures in the bill have since been dropped or diluted.
G20 backs drive for crackdown on banks (FT)
At the Toronto summit, the Group of 20 pledged that banks must hold sufficient capital to withstand future losses in a crisis as severe as that in 2008. The G20 also agreed a compromise pledge to halve fiscal deficits by 2013, which papered over cracks between continental European countries such as Germany on the one hand, and the US and some emerging markets on the other. Barack Obama denied any rift over deficits, saying that the G20 was in “violent agreement” on the issue, but he warned that other countries must boost domestic demand. “No nation should assume its path to prosperity is paved with exports to America,” he said.
Wall Street Hiring Jumps Most Since 2008 as Guarantees Return (Bloomberg)
“Employee power is back,” Whiteing said. “Certainly in investment banking we’re in a situation where it’s an employees’ market. Making them stay at cheaper properties, fly economy when they could go business, is not going to wash. They’re just going to leave us and go to another institution.”
BP Loses Trading Floor Swagger In Energy Markets (NYT)
There are already signs that trading partners are becoming wary of BP’s financial outlook; one market participant, Bank of America Merrill Lynch, is halting long-term contracts with BP. The company’s deteriorating credit rating — on June 15, it was downgraded by Fitch to one notch above junk bonds — makes it harder for traders to cheaply deploy vast amounts of cash. And with its stock down by more than half since the blowout in the gulf, BP can only watch as rival firms try to poach its best traders. “A lot of the swagger comes from the amount of money they have to trade with,” said Craig Pirrong, a director at the University of Houston’s Global Energy Management Institute. “And traders realize they don’t have the capital they had just a couple of weeks ago.”
BP oil spill costs hit $100 million/day (Reuters)
BP said it had spent $300 million on its Gulf of Mexico oil spill response effort in the past three days, hitting the $100 million/day spend rate for the first time and bringing its total bill to $2.65 billion so far. BP added it remained on track to complete its relief well.
RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve (Telegraph)
Andrew Roberts, credit chief at RBS, is advising clients to read the Bernanke text very closely because the Fed is soon going to have to the pull the lever on "monster" quantitative easing (QE)." We cannot stress enough how strongly we believe that a cliff-edge may be around the corner, for the global banking system (particularly in Europe) and for the global economy. Think the unthinkable," he said in a note to investors.
SEC Loss Shows Difficulty of Insider-Trading Cases (WSJ)
Can anyone think of anything that would make the staff feel any better? Off the top of your head?
Goldman Must Pay $20.6 Million in Bayou Scam (AP)
The $20.6 million award represents the money Bayou deposited into its accounts at Goldman, said attorney Ross Intelisano of Rich & Intelisano, a New York firm that represents investors in securities cases. Goldman handled all of the hedge fund's trading between 1999 and 2004, when it stopped trading altogether, he said.
German Economics Is World's New Punching Bag (WSJ)
Germany's critics, which include the French government in candid moments, usually argue Germany needs to drop its obsession with fiscal discipline and wage restraint. Tax cuts and more generous pay deals would help German consumers, and the benefits would outweigh slightly higher inflation and public borrowing, the argument goes. But paltry pay raises aren't that easy to influence. "This is a market outcome. Wages are not set by the government," says Dirk Schumacher, an economist at Goldman Sachs in Frankfurt.