Rate Surge Catches Banks Off Guard (WSJ)
A swift, steep rise in long-term interest rates since early May, stoked by comments from the Fed chairman, is presenting challenges and opportunities for the largest U.S. banks as they struggle to overcome lackluster loan demand, a weak economy and a slew of new regulations that are crimping profits. Their stock performances will be determined largely by how they adjust to the rate rise, which "really caught bankers off guard," said Christopher Marinac, a bank analyst with FIG Partners LLC in Atlanta. The full percentage-point jump in long-term rates, the sharpest increase since 2010, already has eroded $31 billion in accounting gains from banks' securities portfolios through late June, according to Federal Reserve data.
BoJ says Japanese economy is ‘recovering’ (FT)
The Bank of Japan issued a more upbeat assessment of the Japanese economy on Thursday, saying for the first time in more than two years that conditions were “recovering”. The central bank’s growing optimism suggests it believes the aggressive monetary easing measures it implemented in April are working to stimulate the economy and reverse consumer-price deflation, and is unlikely to take additional steps soon.
Newedge Fined for Lax Oversight of Manipulative Trades (WSJ)
Wall Street's stock-market cops slapped a New York brokerage firm with a record fine for failing to stop computer-driven trading clients who sought to manipulate U.S. markets for nearly four years. The Financial Industry Regulatory Authority and several stock-exchange regulators fined Newedge USA LLC $9.5 million for lax oversight of the trading firms from early 2008 to late 2011, according to a regulatory filing and documents reviewed by The Wall Street Journal. ... Newedge "turned a blind eye toward a lot of red flags," said Thomas Gira, head of market regulation for Finra, in an interview. "It was really unbridled access into the marketplace that some of these customers had."
Confessions of the bottle service girls (NYP)
Patrons have asked her to secure everything from decorative ladies to cocaine — “I tell them, ‘I’m not your drug dealer. I am not judging you, right or wrong, but I have nothing to do with anything outside of what we sell,’ ” Ross says. ... “It’s amazing money,” admits Dekhman, who’s worked at Show and Marquee. “When I started, I was 20 and I was making $150,000 to $160,000 a year. Now it’s less because people don’t have budgets, and everything’s on the books.”
Gutsy NYC woman tells her armed mugger that he doesn’t 'have the b---s' to shoot her (NYDN)
Anna Graham said she was standing in her pajamas in front of her home on Grand St. in SoHo, smoking a cigarette and watching a car for two friends who were about to leave for the Hamptons, when a pair of thugs confronted her around 1 a.m. on July 3. One whipped out a black handgun and pointed it at Graham as his cohort began rummaging through the unlocked car, cops said. “He asked me for my wallet and I said, ‘Are you kidding me?’ ” the feisty 54-year-old recounted. “I was in my pajamas, for Christ’s sake! “That’s when the gun went against my forehead,” Graham, the wife of Russian-born artist Ernst Neizvestny, told The News. “He said, ‘I’ll shoot you, b---h!’ I said, ‘No, you won’t.’ ” ... “I said, ‘It’s not easy to shoot someone. You have to have b---s to do that. And you have none.’ ” Her words hit the gunman like a kick to the groin. “I was looking into his eyes all along,” Graham said. “For a second there, I saw fear — for just a split second. I went against all the rules, everything he knew about life.”
Brazil Signals World’s Biggest Key Rate Increase Far From Over (Bloomberg)
Brazil’s central bank raised the benchmark interest rate a third consecutive time and said it was giving continuity to the world’s biggest tightening cycle, signaling increases may be extended through year-end as policy makers battle inflation. The bank’s board, led by President Alexandre Tombini, yesterday raised the benchmark Selic rate by 50 basis points to 8.50 percent, as forecast by all 51 analysts surveyed by Bloomberg. The move led Itau Unibanco to reiterate its call for a rate increase in each of the three meetings left this year.
Crédit Agricole Bids Adieu to Pricey Lunch (WSJ)
A few weeks ago, French bank Crédit Agricole SA sent members of its investment-banking unit a memo that conveyed a clear message: Time to go on a diet. No more taxis in Paris, London or New York during daytime; hotel bills shouldn't exceed €165 a night ($211) in euro-zone countries; when not entertaining clients, restaurant meals should cost no more than €25 a head in the French capital, and flights were highly restricted, said the June 17 email, a copy of which was reviewed by The Wall Street Journal.
Apple to Cisco Lead Record Dividends as Google Holds Out (Bloomberg)
Technology companies are paying out dividends at the fastest pace in more than a decade, boosting cash returns to appease investors dismayed by slowing growth. Led by Apple Inc. and Cisco Systems Inc., technology companies in the Standard & Poor’s 500 Index distributed $10.8 billion in dividends in the most recent quarter, up from $5.1 billion in the same period in 2010. They paid a record $11.9 billion in dividends in the previous quarter, according to data compiled by Bloomberg. Their average dividend yield, a metric for measuring payments in the past 12 months as a percentage of market value, stands at 1.21 percent for technology companies, the first time it has exceeded 1 percent in at least 15 years, the data show.
Russia convicts Magnitsky of tax evasion in posthumous trial (FT)
A Russian court on Thursday found Sergei Magnitsky, the deceased lawyer, guilty of tax evasion, in a posthumous trial that has garnered widespread criticism in the west. Magnitsky was convicted of tax evasion alongside his former client William Browder, the US-born chief executive of Hermitage Capital, who Russian authorities allege evaded approximately $17m in taxes. Magnitsky’s conviction comes almost four years after he died amid murky circumstances in a pre-trial detention centre after he had accused Russian police of complicity in a $230m tax fraud.
U.S. Air Force sees no wrongdoing by Booz Allen in Snowden matter (Reuters)
The U.S. Air Force said it sees no evidence that a defense contractor that employed Edward Snowden is responsible for his disclosure of classified U.S. information, a finding that allows the company to continue doing business with the Pentagon. ... Booz Allen Hamilton generated $5.76 billion in revenues, mainly through government work, in the year ended March 31, a drop of just under 2 percent from the year earlier.
China security ministry says GSK executives confess to economic crimes (Reuters)
Executives of GlaxoSmithKline Plc in China have confessed to charges of bribery and tax law violations, the country's security ministry said, in one of the most prominent graft cases involving a foreign company in three years. Bribes were offered to Chinese government officials, medical associations, hospitals and doctors to boost sales and prices, the ministry said in a statement on its website on Thursday. GSK executives also used fake receipts in unspecified tax law violations, it added.
Saudi Princess Arrested on Suspicion of Holding Maids Captive in Irvine (NBC)
A Saudi princess was arrested Wednesday on suspicion of keeping slaves after police say a forced domestic servant from Kenya escaped from a three-story building in Irvine and alerted authorities. Meshael Alayban, 42, was booked into jail in Orange County on Wednesday morning after police said they found four additional women allegedly being held against their wills at her building. Jail records listed Alayban's occupation as "princess."
N.Y. Summer Reading List Includes Fitzgerald’s The Great Gypsy and Ornell’s Animal Farm (DI)
The summer reading list for Long Island's Hempstead public school district has more than 30 typos and errors, including assignments of Maya Angelou's I Know Why Caged Birds Sing, F. Scott Fitzgerald's The Great Gypsy, Charlotte Bonte's Jane Eyre, and George Ornell's Animal Farm.