ECB will continue to accept Greek debt (FT)
The European Central Bank will continue to accept Greek debt as collateral for loans unless all the major credit rating agencies it uses declare it to be in default, said a senior finance official. The ECB would rely on the principle of using the best rating available from the agencies – Standard & Poor’s, Moody’s and Fitch – the official said. The comments came after S&P on Monday became the first agency to warn that a plan, pushed by France and endorsed by Germany, for banks to roll over their holdings of Greek debt into new bonds would constitute a “selective default”.
Deficit Talks Focus on Taxes (WSJ)
Democrats have floated ideas that could raise tax revenues by some $400 billion over the next decade as they negotiate deficit reductions with Republicans, according to people familiar with the plan, posing the most contentious issue as talks reach a critical stage this week.
Profits Thrive in Weak Recovery (WSJ)
Many economists predict the sluggish rebound may continue for years. Against this backdrop, many U.S. companies are expecting to report surprisingly robust profits when second-quarter earnings are announced later this month.
Profit Lag May Dampen Stock Rally (NYT)
“For the first time in this economic cycle, there is going to be a fair number of disappointments,” said Doug Cliggott, an analyst at Credit Suisse, referring to the earnings reports. “The economy is going to be without those drivers.”
St. Joe, Chairman Bruce Berkowitz Are Subject of Formal Probe by U.S. SEC (Bloomberg)
The probe “covers a variety of matters” including securities-law anti-fraud provisions for corporate officers and board members, internal controls and financial reports, the Watersound, Florida-based company said in a filing with the SEC made after the close of regular U.S. trading [Friday].
Sino-Forest Surges After Wellington Reveals Stake (Bloomberg)
Sino-Forest rose 30 percent yesterday in Toronto after the Boston-based investment firm said in a regulatory filing it held 28.3 million shares as of June 30. The stake was valued at C$90.7 million ($94.5 million) on that date. Wellington, which manages $663 billion, held 79,700 Sino-Forest shares, or 0.03 percent, as of Dec. 31, according to data compiled by Bloomberg.
Paulson enjoys $550m Lehman boost (FT)
The world’s third-largest hedge fund has made a profit of $554m before legal fees, on more than 2,000 trades in Lehman bonds that started the day the investment bank filed for bankruptcy in 2008, according to an analysis of court documents by the Financial Times.
Commodities Beckon Banks (WSJ)
In the past 18 months, Goldman, J.P. Morgan Chase & Co. and trading firms Glencore International PLC and Trafigura Beheer BV have snapped up warehouse operators, all of them accredited to house metal traded through the London Metal Exchange, or LME. The buying binge means the four firms now are landlords to about two-thirds of the LME's entire metal stocks, from aluminum to copper to zinc… For Wall Street, warehouses are a way to earn extra income, especially as core businesses like trading are suffering.
Pimco Wins in Bet on Inflation (WSJ)
Pacific Investment Management Co. and Morgan Stanley recently played a high-stakes game of chicken over inflation. Pimco won. The bond powerhouse, a unit of Allianz SE, scored gains of about $50 million on an inflation-related trade, according to people familiar with the matter. Morgan Stanley, meanwhile, suffered tens of millions of dollars in losses on an opposing trade and related moves, according to another person familiar with the matter.
French writer to file assault complaint on Strauss-Kahn (Reuters)
Lawyer David Koubbi said the complaint by Tristane Banon, 32, would relate to an incident that took place when she went to interview Strauss-Kahn, a former French finance minister, in an apartment in Paris. She was 22 at the time. "Tristane Banon will file a complaint Tuesday for attempted rape in Paris," Koubbi said.
DSK dines dines on $700 worth of wine and truffles at celebration dinner following release from bail (DM)
"They were very friendly, happy people," said Pedro Inga, the chef, who added that a solicitous Strauss-Kahn made a point of thanking him after their celebratory feast.
Dominique Strauss-Kahn 'refused to pay' hooker maid for sex (NYP)
Sources now tell The Post that when the two were finished, the woman demanded cash from Strauss-Kahn -- but he refused to pay.
Strauss-Kahn Accuser’s Call Alarmed Prosecutors (NYT)
“She did not know what to do,” her lawyer said. “She did not want to lose her job. She knew that her supervisor was going to be coming upstairs momentarily. So, she went into another room.” And yet, even this version was not corroborated by card-key data obtained by investigators on Friday, which indicated that the housekeeper went to the other room only after she had finished Mr. Strauss-Kahn’s room.
DA set to drop charges vs. DSK (NYP)
Prosecutors will agree to drop the charges against Dominique Strauss-Kahn -- either on his next court date in two weeks or even sooner, according to a top investigator in the case who called the eventual dismissal "a certainty."
UBS reviewing goals in tough conditions (Reuters)
When asked if the bank would be able to meet its mid-term goals, including a pretax profit of around 15 billion Swiss francs ($17.8 billion), Villiger said: "(Chief Executive Oswald) Gruebel has always emphasized these goals were based on a market assumption and the regulatory framework from earlier. "Now the market environment has sharply deteriorated and the regulatory environment is significantly different. But we are convinced that we will be able to earn returns in line with the market," he said.
China Banks’ Outlook May Be Souring on Loans (Bloomberg)
Chinese banks’ loans to local governments are about 3.5 trillion yuan ($540 billion) more than the national auditor’s estimate, and the industry’s credit outlook could decline, Moody’s Investors Service said. “The Chinese audit agency could be understating banks’ exposure to local governments,” Yvonne Zhang, a Moody’s analyst in Beijing, said in the report today.
New York Attorney General Steps Up Probe Into BofA-Merrill Disclosures (WSJ)
New York state Attorney General Eric Schneiderman has issued subpoenas seeking new depositions from the Charlotte, N.C., bank's chief executive and other current and former executives, according to people familiar with the situation.
In a Bill, Wall Street Shows Clout (DealBook)
In a piece of legislation recently passed by the House and the Senate to revamp patent law, a tiny provision was inserted at the last minute called Section 18. The provision, which my colleague Edward Wyatt detailed in an article ahead of the House’s vote on the bill last month, has only one purpose: to allow the banking industry to skirt paying for certain important patents involving “business methods.”
It’s weiner war! Major League Eating president calls Kobayashi’s win ‘a farce’ (NBC Sports)
Nathan’s Famous Hot Dogs should be glad that Takeru Kobayashi is around causing trouble for their hot dog eating contest, because he provided the only drama to be had on Monday. Joey Chestnut won the official Coney Island event, downing 62 weiners in 10 minutes, one short of his record. No one else came close … except for Kobayashi, who competed several miles away on the rooftop of a Manhattan bar. Kobayashi polished off 69 hot dogs in the same time, as the official Nathan’s event was broadcast on a big screen next to him.