Opening Bell: 07.26.10
Deutsche Bank Second-Quarter Net May Fall on Trading Slowdown (Bloomberg)
Net income probably slipped to 1.05 billion euros ($1.35 billion) from 1.09 billion euros a year earlier and 1.76 billion euros in the previous quarter, according to the average estimate of 16 analysts surveyed by Bloomberg.
Citigroup's Risk Chief Learned The Hard Way (WSJ)
As an options trader for Morgan Stanley in 1992, Brian Leach bet wrongly that European government bonds would track British government debt. He lost a half-year's worth of his trading profit after the surprise election of British Prime Minister John Major's Conservative party. Now, he is trying to apply at Citigroup one lesson he learned from the incident: quickly cutting losses. "It really helped define for me what downsides could look like," he says—particularly from extreme events that disrupt historical pricing models.At Brown University, Mr. Leach excelled at wrestling in the 134-pound weight class, showing "good quickness," says his coach, Joe Wirth. "In wrestling, there are multiple OK moves and one wrong move," Mr. Leach says. In risk management, "there are a fair amount of things that are actually OK but there is usually one thing that you can't do. And you've got to be able to understand what that is."
Embattled BP Chief To Exit (WSJ)
The BP board is scheduled to meet Monday to discuss and approve Mr. Hayward's departure, these people said, one describing the decision as "mutual."
Stress Tests Show Banks' Strength, Weren't Too Soft, EU Policy Makers Say (Bloomberg)
“The French banking system once again shows its capacity to resist crises,” Bank of France Governor Christian Noyer said yesterday after the four largest French banks were ruled to have enough capital to outlast an economic slump and sovereign debt crisis. In Germany, where Hypo Real Estate Holding AG was the only one of 14 banks to fail the test, the Bundesbank and financial regulator BaFin said the “banking system has shown itself to be robust and proved its resilience.”
Jim Rogers: Stress Test Is a PR Exercise (CNBC)
"Just as was America's," Rogers said. (He went there.)
In Trader's Cocoa Binge, Fear For Chocolate Lovers (NYT)
Anthony Ward, 50, is not some rabid chocoholic, former employees say. He simply has a head for cocoa. And, through his private investment firm, Armajaro, he now controls a cache equal to 7 percent of annual cocoa production worldwide, a big enough chunk to sway prices. His play has some people up in arms. While some see it as a simple bet that cocoa prices will rise on falling supply, others say Mr. Ward has created a shortage of cocoa simply to drive up the price himself. The German Cocoa Trade Association and others wrote an angry letter to the London exchange on which cocoa is traded, demanding that it take action against what the association characterized as a “manipulation.” The British news media has christened Mr. Ward “Chocolate Finger,” a nod to the Bond villain Auric Goldfinger. And on Facebook, someone has created a “Choc Finger” page featuring Mr. Ward’s face superimposed on a pig that is bellying up to the trough.
Goldman Threatened With Audit (FT)
“We have a deep level of questioning about whether we’re getting the straight scoop here and whether Goldman is working with us on information that they surely have,” said Phil Angelides.
Russian spy ring meets with Prime Minister Vladimir Putin for singalong (NYDN)
"I met them," Putin told a group of journalists asking questions about the 10 Russian spies deported from the U.S. earlier this month. Putin said they sang songs accompanied by live music, including the famous Russian ditty "What Motherland Starts From," the Russian news agency RIA Novosti reported. The Prime Minister was pleased with the crew of busted snoops and said he thinks they'll readjust to life in Russia just fine. "They will work," he said. "I have no doubts they will have interesting, bright lives."
Geithner: US Economy Seeing Gradual Recovery (MarketWatch)
Monday morning shocker: In an interview broadcast Sunday, Geithner said that Americans had been borrowing too much and the country had been living beyond its means. "But again, you are seeing a recovery," Geithner added. "You're seeing private investment expand again, job growth starting to come back. And that's very encouraging."
Apollo exploits loophole to create new bank (FT)
The company has hired a team from Countrywide Financial to run the bank, and is awaiting regulatory approval. Apollo plans to get round ownership restrictions which can force a private equity group to be considered a bank holding company by asking its investors to put money alongside it in the new bank, to be called Ares. The bank will have a separate board and operate independently of Apollo.
Government Won't Target Additional Swiss Banks Over Taxes (AP)
Great news: the U.S. is not planning to carry out new tax investigations against Swiss banks, the U.S. ambassador to Switzerland said. Asked whether he envisaged new probes after the Swiss parliament ratified a Swiss-U.S. deal in June that put an end to the UBS tax saga, Donald Beyer told Swiss newspaper Le Temps on Saturday he was not aware of any new probe. "To my knowledge no such thing is planned," Beyer, who became the top U.S. diplomat in Berne last year, was quoted as saying by the Swiss paper.
Feinberg: BP Is Stalling Payments To Oil Victims (CNBC)
"I have a concern that BP is stalling claims. Yes, BP is stalling. I doubt they are stalling for money. It's not that. I just don't think they know the answers to the questions (by claimants)," Feinberg told reporters.
