Fed Roils World Markets
Speaking on Wednesday, Fed Chairman Ben Bernanke stressed that the Fed isn't poised to raise interest rates any time soon. But assuming economic data keep improving in the world's biggest economy, it will look to trim its monthly bond purchases from the current level of $85 billion a month by the end of this year. Traders and investors have recoiled, with U.S. Treasury bonds extending the losses they made on Wednesday to reach 15-month lows. The dollar has moved higher—a typical response to prospects of tighter monetary conditions compared with those of other countries—pulling down other currencies in its wake, notably those from emerging markets and countries that are highly dependent on commodities exports. "Investors are spooked. The dollar rules," analysts at Citigroup wrote in a note to clients.
BOE: U.K. Banks Need More Capital (WSJ)
The U.K. banking regulator toughened rules Thursday on how much equity banks must hold against their assets, as it issued a damning report card showing a £27.1 billion ($41.96) capital shortfall across Barclays PLC, Royal Bank of Scotland Group PLC, Lloyds Banking Group, Nationwide Building Society and Co-op Bank PLC at the end of last year. Barclays, RBS and Lloyds, with the bulk of the shortfall, said they would sell assets and shrink parts of their businesses to address the shortfalls, and won't need to issue new shares. Nationwide, accounting for £400 million of the total, didn't immediately lay out its plans. Co-op Bank earlier this week asked its subordinated bondholders to take losses to help it raise the additional £1.5 billion in capital it needs.
Osborne Weighs Lloyds Sale as RBS Breakup Examined (Bloomberg)
Chancellor of the Exchequer George Osborne said the U.K. government is “actively considering” selling shares in Lloyds Banking Group Plc, though privatizing Royal Bank of Scotland Group Plc (RBS) is still some way off. “Five years on from the financial crisis, we can now take the first steps to returning Lloyds to the private sector where it belongs,” Osborne told financiers in his annual Mansion House speech in London yesterday. “Of course, we will only proceed if we get value for the taxpayer. And we have no pre-fixed timescale or method of disposal.”
John McAfee Resurfaces as Ranting Video Star, Mocks McAfee Software (Reuters)
In the video, McAfee uses a lot of vulgar language, purports to snort a powder and fire a gun into a computer, and is undressed and pawed by a group of young women. He said he did it all to mock the media's unfair portrayal of him as a mad man. "I did the best I could at a paranoid rant," he said in a telephone interview on Wednesday. McAfee said he made the video because he really does get harassed by McAfee software customers. "I was tired of seeing references to 'Please hang this man because he has created the worst software in the world,'" he said.
Jail me if I can't drink (NT News)
A man asked to be jailed for three months rather than continue his court-ordered ban to not drink alcohol for two years. Milo Manu Felix Wild, 22, asked to be sent to jail because he was depressed that he had to stay at home rather than socialising with friends in pubs and clubs. ... Wild had been banned from drinking alcohol for assault and behaving in an indecent manner on Anzac Day last year when he pushed over four port-a-loos, exposed himself and threw his own urine at rangers at Litchfield National Park.
Goldman Left Out of Smithfield Deal (WSJ)
Goldman Sachs Group Inc. lost out on an advisory role in one of the most significant deals this year—the sale of Smithfield Foods Inc. SFD -0.03% to China's Shuanghui International Holdings Ltd.—because of its investment in the Chinese company, according to people familiar with the matter. Goldman didn't get a role it had been promised advising Smithfield on a sale when the Virginia-based company learned that Goldman owns a stake in Shuanghui.
In Wake of Pay-to-Play Scandal, Riverstone Raises Its Largest Fund (DealBook)
Riverstone announced on Wednesday that it had raised its largest fund ever, a $7.7 billion vehicle that exceeded its $6 billion goal. The domestic oil-and-gas boom has created a sharp demand for energy investments, and Riverstone, one of the country’s leading private equity firms focused on energy and power, has posted some of the sector’s strongest returns. The fund is Riverstone’s first that it has raised independently from the Carlyle Group, the private equity giant that it worked with on its first six funds, which were co-branded Carlyle/Riverstone or Riverstone/Carlyle.
Sony plays for time on Loeb’s spin-off proposal (FT)
Sony’s chief executive told shareholders on Thursday that he was in no hurry to rule on a proposal by the Japanese group’s largest investor that it spin off its film and music business into a separately listed company. ... “This is an important proposal that concerns the fundamentals of Sony’s business, not just now but in the future,” he said. “I want to take time to discuss it, using information from outside advisers.”
SEC settlement policy may pressure other agencies to toughen up (Reuters)
The decision by the U.S. Securities and Exchange Commission to seek admissions of wrongdoing in select enforcement cases is expected to put pressure on other federal financial regulators to get tougher with their own Wall Street settlements. ... Like the SEC, the Commodity Futures Trading Commission and Federal Deposit Insurance Corp, for instance, regularly let defendants settle without admitting or denying charges. Other agencies, including the U.S. Department of Justice's civil division, are even more lenient than the SEC and permit defendants to deny allegations in some settlements.
Microsoft Explored Deal for Nokia (WSJ)
Microsoft Corp. recently held advanced talks with Nokia Corp. about buying its handset business, people familiar with the matter said, as laggards in the fast-moving mobile market struggle to gain ground. The discussions faltered over price and worries about Nokia's slumping market position, among other issues, these people said. One of the people said talks took place as recently as this month but aren't likely to be revived. "We have a deep partnership with Microsoft, and it is not uncommon for Nokia and Microsoft to meet on a regular basis," a Nokia spokeswoman said.
Italian designers Dolce and Gabbana convicted of tax evasion (Reuters)
Fashion designers Domenico Dolce and Stefano Gabbana were handed a 20-month suspended prison sentence and a heavy fine on Wednesday for hiding hundreds of millions of euros from the Italian tax authorities. The design duo, who are nearly as famous as the stars they dress, were not present in court in Milan and will lodge an appeal against their conviction on charges that they have always denied.
Sex-Toy Battle Shows Industry's Size Matters (CNBC)
In a highly watched case for the adult-entertainment crowd, a U.S. trade panel has ruled that several sex toy makers are violating a patent held by a Canadian company for a two-armed vibrator. The U.S. International Trade Commission ordered those competitors to stop making and selling products similar to Standard Innovation Corp.'s We-Vibe toy.
Feds: 2 plotted to build 'Hiroshima light switch' weapon (NBC)
Two upstate New York men, one of them said to be a member of the Ku Klux Klan, plotted to build a truck-mounted, industrial-strength X-ray weapon to kill “enemies of Israel” by poisoning them with radiation, federal authorities said Wednesday. One of them boasted that he could build a “Hiroshima light switch” and that “everything with respiration would be dead by morning,” authorities said. Investigators said the public was never in danger.