Right now, Larry Summers is the front-runner for Fed chair (Wonkblog)
That’s not to say Summers is anywhere near a sure thing. His confirmation would be far tougher than Yellen’s, as Republicans will make him answer for the stimulus and the bailouts, and progressive Democrats have a list of grievances going back to financial deregulation in the Clinton-era. There’s also the simple fact that appointing Yellen would break a significant glass ceiling — and do so in an administration that hasn’t always been great about appointing women to top economic positions. And Summers continues to be a polarizing figure: Those who like him love him, but those who don’t like him really don’t like him.
U.S. Readies SAC Charges (WSJ)
Federal prosecutors are preparing to announce criminal charges as early as this week against SAC Capital Advisors LP, the hedge-fund giant that has been the target of a multiyear investigation into alleged insider trading, according to people familiar with the matter. ... While criminal charges against the firm would deal a huge blow to the firm's founder and namesake, Steven A. Cohen, prosecutors aren't planning charges against him personally, the people said.
Witness in Tourre Case Describes Difficulty in Knowing Deal’s Friends From Foes (DealBook)
Mr. Coffey stressed to the jury that in a synthetic C.D.O., one investor bets the trade will fail while another bets it will succeed. So, even if Paulson & Company was a long, or bullish, investor, a short investor was still needed to complete the trade. Ms. Schwartz testified that she assumed Paulson & Company was wagering the trade would succeed and that she did not know who was on its other side. Mr. Coffey was also quick to zero in on how ACA carefully analyzed each component that went into the Abacus trade, so it should not have mattered if the portfolio had been picked by Paulson & Company or by Joe, a court clerk for Judge Forrest. “How about if you had found it on the floor?” he asked. Ms. Schwartz said that in each case, ACA would have done its own analysis of the various components of the C.D.O.
BlackRock Executive Says No to Top Job at R.B.S. (DealBook)
BlackRock’s top executive in Asia, Mark McCombe, has turned down an approach by the Royal Bank of Scotland, which is hunting for a new chief executive. “We can confirm that Mark has been approached by R.B.S. as part of its C.E.O. search process, but he has no intention of leaving his role as BlackRock’s Asia-Pacific chairman at this time,” a BlackRock spokeswoman in Hong Kong said on Wednesday.
Weiner caught sending dirty messages and photos a year after his sexting scandal (NYP)
The other shoe dropped yesterday for Anthony Weiner, who was forced to admit he engaged in a months-long sexting affair with a woman — a year after he resigned from Congress in disgrace — using the bizarre online alias Carlos Danger. ... Weiner, who at the start of his mayoral campaign said other instances of sexual high jinks might surface, sent snapshots of his penis to the woman and engaged in extremely raunchy talk last summer — long after he claimed to have been rehabilitated.
IMF pulls support for Argentina’s Supreme Court appeal (FT)
The International Monetary Fund has pulled plans to support Argentina’s push for a US Supreme Court review in the country’s court battle with creditors. Christine Lagarde, IMF managing director, withdrew her recommendation that the fund file an amicus curiae brief in support of Argentina. The IMF said she took the decision after the US made clear that it would not support the move. A US court last year ordered Argentina to pay $1.3bn to a group of investors who had refused to accept a debt restructuring following the country’s default in 2001. Last month, Argentina asked the Supreme Court to review the case as it continues its dispute with the creditors led by Elliott, a US fund.
European Banks Face Capital Gap With Focus on Leverage (Bloomberg)
Europe’s biggest banks, which more than doubled their highest-quality capital to $1 trillion since 2007 to meet tougher rules, may have further to go as regulators scrutinize how lenders judge the riskiness of their assets. Deutsche Bank AG, Barclays Plc and Societe Generale SA are among European banks that issued stock, sold units or hoarded earnings to bring capital, as a proportion of assets weighted by risk, into line with new global rules. Now some regulators are questioning the weightings, typically set by the banks’ own models, and embracing a broader measure of equity to total assets known as the leverage ratio that ignores risk. “Europe’s banks are far from done on efforts to raise capital,” Lutz Roehmeyer, who helps manage more than 11 billion euros ($14.5 billion) at Landesbank Berlin Investment, said in an interview. “We have to take out the arbitrary method by which banks assign the risk of their assets.”
Easing of Mortgage Curb Weighed (WSJ)
The watchdogs, which include the Federal Reserve and Federal Deposit Insurance Corp., want to loosen a proposed requirement that banks retain a portion of the mortgage securities they sell to investors, according to people familiar with the situation. ... An earlier proposal, issued in April 2011, said the skin-in-the-game rules wouldn't apply to mortgage securities containing loans where borrowers made at least a 20% down payment. Now, regulators want to scrap that requirement, meaning that banks would have to retain 5% only of mortgages that allow borrowers to make "interest-only" payments or that don't fully document a borrower's ability to repay a mortgage—a much smaller portion of the market that includes the riskiest loan products that caused much of the crisis-time losses.
Market turbulence revives ETF fears (FT)
The global sell-off last month sparked the highest amount of settlement failures in parts of the $2tn exchange-traded fund market in nearly two years, reviving a debate over whether the popular investment vehicles suffer from structural issues that flare up in times of market stress. The total value of failed trades for 30 of the biggest ETFs surged to $3.96bn on June 26, according to analysis by the Basis Point Group of data recently released by the US securities regulator. ... The steep number of fails raises fresh questions about the structure of the booming ETF industry, which offers “mom and pop” investors quick and easy access to a diverse range of assets that were previously available only to the most sophisticated money managers.
Aramark Taps Goldman, J.P. Morgan, Credit Suisse and Morgan Stanley for IPO (WSJ MoneyBeat)
It may file initial paperwork for the IPO in early August, one of the people said, cautioning that the timing may change. Earlier this month, The Wall Street Journal reported that Aramark, one of the biggest closely held companies in the U.S., was in early discussions with banks and analysts about a potential offering. If an IPO is held, it will be Aramark’s third. The company’s chairman, Joseph Neubauer, led a management buyout in 1984 that was aimed at fending off a hostile takeover attempt. The then-chief executive later helped bring the company back to public ownership in 2001 before engineering its 2007 buyout with a group of private-equity firms.
S.E.C. Says Texas Man Operated Bitcoin Ponzi Scheme (DealBook)
A Texas man, Trendon T. Shavers, was sued by the Securities and Exchange Commission on Tuesday and accused of running a fund that collected bitcoins from investors, promising them 7 percent weekly returns. Mr. Shaver ended up selling some of the bitcoins and using the proceeds for his “rent, car-related expenses, utilities, retail purchases, casinos, and meals,” according to the complaint.
Selling their skin: Japanese women paid to put adverts on their THIGHS to catch the attention of men (DM)
'It's an absolutely perfect place to put an advertisement as it's what guys are eager to look at and girls are OK to expose,' said Hidenori Atsumi, the CEO of WIT.
Todd Meister’s ex-assistant using kickstarter approach to raise $821,000 to pay him back (NYDN)
The sexy Ukrainian stunner who stole nearly $1 million from Nicky Hilton’s ex-husband has launched a Kickstarter-style campaign to pay off her $821,000 restitution. Renata Shamrakova, 28, was a personal assistant working for hedge fund prince Todd Meister when she used his credit cards to buy clothes, furniture, international trips and jewelry in 2011 and last year. The raven-haired beauty, who copped to grand larceny and evidence tampering on March 20, faces one to three years in prison if she can’t repay Meister. “I am 28 years old and a prison sentence would ruin my life both on a real level, as a health risk due to a fainting condition, and on an emotional level,” Shamrakova says in her appeal.