David Tepper: No More Fed Easing Unless Stocks Drop More (CNBC)
Tepper said in an email to CNBC that stocks would have to fall considerably more before the Fed would start another round of quantitative easing, or QE. "If (the S&P 500 falls) a couple hundred points and financial conditions tightened maybe they would reconsider," Tepper wrote. "But there is no logic to QE3 now and the only result might be more food and energy inflation."
Richard Bove Does an About-Face on Goldman (DealBook)
“It is becoming increasingly apparent that a terrible wrong may have been done to Goldman Sachs,” the Rochdale Research analyst wrote in a recently released report on the big Wall Street firm. “Evidence is now mounting that the company did not have a net short position at a crucial time under study and that the Senate Committee may have misread the numbers.”
From Clinton aide, the ultimate denial: ‘The story is bogus’ (WaPo)
The queries were prompted by a Reuters news story that quoted unnamed sources as saying that Clinton was considering a job as World Bank president. Clinton’s deputies quickly denied the story, yet it persisted for hours, triggering innumerable tweets and breaking-news alerts on cable networks… Finally, just before 2 a.m. Friday, Abu Dhabi time, Philippe Reines, Clinton’s longtime aide and deputy assistant secretary of state, sat down to tap out the most sweeping denial he could muster: “Let me address this as definitively as I can, on the record,” he wrote. “The story is completely untrue. To be crystal clear…”
Germany Digs In on Greek Debt Extensions (Bloomberg)
Germany stepped up demands that investors pay some of the cost of a second Greek rescue after Jean-Claude Trichet rejected direct involvement by the European Central Bank. “Participation of private creditors in cases of insolvency is indispensable,” German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin today, ignoring warnings from credit- rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default.
A Bank Regulatory Logjam May Be Easing (NYT)
The Obama administration, moving to fill vacancies at several financial regulatory agencies, is considering nominating Thomas J. Curry to head the Office of the Comptroller of the Currency, which oversees most of the nation’s large banks, according to several people with knowledge of the deliberations…The White House would like to send Mr. Curry’s name to the Senate at the same time that it moves on its widely reported plan to nominate Martin J. Gruenberg as the new chairman of the F.D.I.C., those people said.
Maiden Lane Sales Spark Stampede to Dump Risk (Bloomberg)
Federal Reserve auctions of mortgage securities that the central bank assumed in the rescue of American International Group Inc. are fueling a selloff in credit markets as Wall Street rushes to hedge against losses on stockpiled debt.
Bruce Berkowitz: Just A Matter of Time for Financials (Deal Journal)
A year to a year and a half ago, said Bruce Berkowitz, manager of the $14.7 billion Fairholme Fund, he would have said it was difficult to evaluate what some financial firms were, who they owed and who owed them. But “with enough time and capital infusion, I’ve grown more comfortable,” Berkowitz told attendees at the annual Morningstar Investment Conference in Chicago Thursday. For now, Berkowitz said he is holding what he has dubbed “some of the most-hated companies in the United States.” The Fairholme Fund had more than 74% of its assets invested in financial-services companies as of Feb. 28, according to investment-research firm Morningstar Inc. Among the fund’s holdings are AIG, Bank of America, Citigroup and Goldman Sachs.
Bond Deal May Augur More European Travails (WSJ)
Investors balked at buying a €1 billion ($1.46 billion) bond offering by Banco Santander SA that was backed by debt of Spanish local governments, according to people familiar with the sale. That left a group of big European banks that managed the deal holding roughly €500 million of the debt.
China May trade gap smaller than expected, imports jump (Reuters)
China posted a smaller-than-expected trade surplus in May of $13.1 billion because of soaring imports and weaker global demand growth, giving mixed signals about how the economy fared when some of its best export customers faltered.
Bank of Korea Raises Benchmark Interest Rate to 3.25% to Tame Inflation (Bloomberg)
Governor Kim Choong Soo boosted the benchmark seven-day repurchase rate to 3.25 percent from 3 percent, following quarter-percent increases in January and March, the central bank said in a statement in Seoul today. Kim said the decision was unanimous. Eight of 17 economists surveyed by Bloomberg News predicted the decision with the rest expecting no change.
MSCI index shift poses ETF tax threat (FT)
Many investors in emerging markets exchange traded funds risk an unexpected tax bill if a potential upgrade of South Korea and Taiwan this month to developed-country status in a key market benchmark goes ahead. A rebalancing of MSCI’s emerging market index would expose US holders of ETFs based on the benchmark and other similar indices to taxable capital gains, drawing attention to the increasing complexity of the fast-growing market for exchange traded products.
Morgan Stanley faces suit by pension insurer (FT)
Morgan Stanley Investment Management “irresponsibly” concentrated about half the fixed-income assets of the pension plan of a New York City hospital in mortgage-backed securities even as the “rapid and dramatic deterioration” of that market became apparent, according to a claim lodged in the federal appeals court in late May.
New questions arise over Sino-Forest timber deal (Globe and Mail)
But a document on the website of the Huaihua Municipal Bureau of Commerce describes Huaihua City Yuda Wood as “a “subsidiary of Sino-Forest.” That would contradict the company’s claim that it has not done such related-party sales. Late yesterday, Sino-Forest fought back, saying the Chinese government website is wrong.
China to develop N Korea trade zones (FT)
China has broken ground on two economic development zones in North Korea, in a tentative sign that the authoritarian state is warming to Chinese-style economic reforms. China’s commerce ministry said on Thursday the countries would develop two “government-led, enterprise-based and market-oriented” economic zones close to the Chinese border.
Sacha Baron Cohen's 'The Dictator' (First Look) (Hollywood Reporter)
The film, due out May 11, 2012, tells the heroic story of a dictator who risked his life to ensure that democracy would never come to the country he so lovingly oppressed, the studio said earlier this year.