Dual-track Libor replacement lined up (FT)
The scandal-plagued Libor benchmark is likely to be replaced by a dual-track system with survey-based lending rates running alongside transaction-linked indices as soon as next year. ... A UK committee charged with selecting a new Libor administrator is looking for a group that would be comfortable running rates based on estimates and qualified to design and administer a transaction-based replacement, he said. Short-listed candidates are to be interviewed next month.
A Top Contender at the Fed Faces Test Over Easy Money (WSJ)
Janet Yellen is a top contender for the job, assuming Mr. Bernanke steps down when his term ends in January, but her selection is far from certain. She faces a big question among investors: Is she wary enough about the risks of easy money to close the Fed's credit spigot before financial bubbles emerge or consumer prices rise too far? As a first step, Fed officials have mapped out a strategy that maintains flexibility for winding down its $85 billion-a-month bond-buying program intended to spur the economy. But the timing of the withdrawal is still being debated.
Big Vote on Dimon May Hinge on Views on JPMorgan’s Top Director (DealBook)
Yet a year after the bank posted a multibillion-dollar trading loss that has helped drive out top lieutenants, spurred federal inquiries and prompted Congressional hearings, a growing number of investors are questioning whether Mr. Raymond has done enough to fortify risk controls and root out problems, say some of JPMorgan’s biggest shareholders. “I am really surprised that there has not been more blood spilled in the boardroom,” Mr. Gheit said. “It’s totally alien to the Lee Raymond I know.”
Holding Ourselves Accountable (Bloomberg)
Last month, we immediately changed our policy so that reporters now have no greater access to information than our customers have. Removing this access will have no effect on Bloomberg news-gathering. Now let’s also be clear what our reporters had access to. First, they could see a user’s login history and when a login was created. Second, they could see high-level types of user functions on an aggregated basis, with no ability to look into specific security information. This is akin to being able to see how many times someone used Microsoft Word vs. Excel. And, finally, they could see information about help desk inquiries.
Wall Street: How Much Does Bloomberg Know? (CNBC)
One hedge-fund manager, who wished to remain anonymous, described the Bloomberg practice as "shocking," and he has asked his lawyers to review his agreement with Bloomberg to determine what kind of usage information Bloomberg can access from his fund's terminal. "My initial reaction was a bit of schadenfreude. Like, finally, Goldman's getting spied on. But then I realized, while it's fine to spy on Goldman, they could be spying on me," he said.
Horse-riding goat a normal occurrence, owner says (CBC)
"The goats like to always, of course, be close to the horse, and when she lies down, they lie down on her back," Power said. "And, of course, goats being goats — you know, they're pretty sure-footed little things — [the horse] gets up and most of the time they'll just stay on and go for a ride around the farm."
Schäuble warns EU bank rescue agency needs treaty changes (FT)
Germany’s finance minister has warned that a single EU bailout agency and rescue fund for ailing banks is legally untenable until the bloc’s treaties have been overhauled. ... “The EU does not have coercive means to enforce decisions. Its historical roots are young. Its democratic legitimacy could be improved upon,” Mr Schäuble writes. “What it has are responsibilities and powers defined by its treaties. To take them lightly, as is sometimes suggested, is to tamper with the rule of law.”
Risks to China recovery seen as factory output underwhelms (Reuters)
China's factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling concerns that a nascent recovery is stalling and adding to pressure on policymakers to take action to stimulate the economy. However, China's already-easy monetary policy and rising home prices complicate the options available to Beijing's new leadership, leading some analysts to say that any response could be limited to fiscal measures. Annual industrial output grew 9.3 percent last month, according to data released by the National Bureau of Statistics on Monday, up from a seven-month low hit in March but still missing market expectations for a 9.5 percent expansion. "Economic activity remains weak," said Liang Youcai, a senior economist at the State Information Centre, a government think-tank. "We now expect second-quarter gross domestic product growth of around 7.8-7.9 percent if there are no stimulus measures."
IPOs Set to Raise Most Cash Since Crisis (WSJ)
Already this year, 64 U.S.-listed public offerings have raised $16.8 billion, according to Dealogic. In the same period in 2012, the biggest year in dollars since the financial crisis, 73 companies raised a total of $13.1 billion. Last week alone brought 11 U.S.-listed IPOs, making it the busiest week for such deals since December 2007.
Dell to Icahn: Show us the money (Fortune)
Dell Inc.'s special committee this morning told Carl Icahn that it needs more information about his offer to buy the company, including where he intends to get the debt financing. ... In addition to financing sources, Dell's special committee also is asking Icahn for a formal purchase agreement (so far he only has submitted a letter of interest), the names of those he would place in senior management (he has said that Michael Dell wouldn't be CEO) and for commitment letters from other existing shareholders who would elect to take stub equity instead of $12 per share (Icahn needs a total of 20% to do so, under his formulation).
Citigroup’s Corbat Says Spending Needed for Full Recovery (Bloomberg)
By the end of 2011, when Corbat was transferred to become the bank’s European regional chief, the assets in Citi Holdings had been cut 61 percent to $225 billion. When overseeing businesses, he said he prefers a methodical, multistep process - - a management approach Fortune magazine called “a little dull” in an article this month. “I like to study the question or the problem or the opportunity in hand, work with the team to come with the right answer, make a decision and act upon it,” Corbat said in the Bloomberg interview. “Some people have said that, actually, today they pretty much like their bankers dull.”
Carson Block: Why We Are Betting Against StanChart (CNBC)
Standard Chartered's asset quality is deteriorating and investors are miscalculating risk in the loan book of the British lender, according to Carson Block, founder of U.S.-based short seller Muddy Waters Research. Block told CNBC his firm is buying 5-year credit default swaps for the bank, a trade that would profit from a default.
Preschool owner, who stole federal lunch money, unleashes devious plan in hopes of fleeing the big house (NYDN)
A preschool owner who stole federal lunch money grants has been gorging on junk food behind bars — and a judge says he’s doing it to intentionally worsen his health in a bid for freedom. Ziming Shen, 54, was convicted in April 2012 of using his Red Apple Child Development Center and day care centers to steal money earmarked for needy children — but his bail was revoked last September after he allegedly planned to flee to China. In a dramatic, Perry Mason-like moment in Brooklyn Federal Court Friday, prosecutor Robert Capers produced Shen’s high-carb shopping list at the jail commissary: sticky buns, Chips Ahoy cookies, chocolate wafers, candy, nachos, potato chips, rice.