New Worry in ‘Repo’: Just One Bank for $3.5 Trillion Market (WSJ)
Bank of New York’s onetime sole rival in the business of clearing U.S. Treasurys and repos backed by them, J.P. Morgan Chase, is exiting the business, prompting more than two dozen brokers to move to BNY. Individual brokers’ transitions have by all accounts been smooth. Yet many traders fret over the risks of having a single bank handle all clearing and settlement in a short-term lending market estimated by the Treasury at $3.5 trillion.
Six global banks join forces to create digital currency (FT)
Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have teamed up to work on the “utility settlement coin” which was created by Switzerland’s UBS to make financial markets more efficient.[...] The utility settlement coin aims to let financial groups pay each other or to buy securities, such as bonds and equities, without waiting for traditional money transfers to be completed.
Goldman plots return to banking growth mode through hires, investments (Reuters)
Goldman Sachs Group Inc plans to add about half a dozen senior bankers over the next six months or so and invest more in Asia using its balance sheet as the Wall Street firm seeks to switch to a growth mode in investment banking, a top executive said. After years of squeezing costs with lower headcount, tighter compensation and retrenchment from some segments in investment banking following the global financial crisis, Goldman is ready to change tack, said Gregg Lemkau, who was named co-head at its investment banking division in May.
Travis Kalanick's Great Defender Writes A Hell Of A Motivational Letter (Wired)
“Let us strike tomorrow with the full and fulsome courage of our convictions. Let our just cause give pause to those who would ever dream of ever emulating the shameful shenanigans of these sanctimonious hypocrites who fling filings and letters de haut en bas; when it is we who have the higher moral ground and our letters and filing will hail down upon their platforms, exposing them as bitterly barren barons of moral turpitude. And as the summer sets, we let us be steward of truth who in unison proclaim: fiat justitia ruat caelum.” ALSO: New Uber CEO Hints at 2019 IPO as He Takes Over Troubled Startup
Portfolios in Wonderland & The Weird Portfolio (Newfound Research)
We’ll be the first to admit that almost no investor would be willing to actually hold this portfolio. With nearly 25% of the portfolio in gold and long-term U.S. Treasuries, the tracking error alone would drive most investors mad. And all just for what amounts to a 1% bump in expected return. While 1% may not seem like much, in a low-return world it is nearly a 25% increase from a traditional stock/bond mix.
A Provocative Look at the Harm From Corporate Heft (WSJ)
The latest study goes even further, arguing the prevalence of market power helps explain deeper economic maladies. A company with such power often restricts production to prop up prices and profits. Messrs. De Loecker and Eeckhout argue this reduces demand for labor and thus explains why wages for low-skilled workers have stagnated in recent decades. Lower wages also discourage people from working, which depresses labor-force participation.
If Unilever Can’t Make Feel-Good Capitalism Work, Who Can? (Businessweek)
Proving a feel-good approach can deliver profits as well as plaudits is now an existential struggle for Unilever. Polman says he can do it. But he’s fighting some fundamental laws of the financial system. And if Unilever can’t make conscientious capitalism work, there’s little reason to believe anyone else can in numbers big enough to matter.
Maniac beheads pigeons, drinks their blood in crowded park (NYP)
While the man behind the fowl fatalities is known to sit in the Bryant Park fountain drinking beer, witnesses said he’s never gone after any of his feathered friends before. “He’s here every day, but I’ve never seen him do this before,” said Dominic.