Fed Promised to Buy Bonds but Is Finding Few Takers [WSJ]
“I really don’t think the market needs it anymore,” said Columbia Threadneedle Investments portfolio manager Thomas Murphy. “They are the victim of their own success….” The Fed has yet to officially launch the initiative, which enables it to buy limited amounts of new and pre-existing bonds of companies….

Japan Warns Its Banks About Risky U.S. Debt [WSJ]
Until recently, the Financial Services Agency, Japan’s main bank regulator, had paid relatively little public attention to the CLO issue…. The review said banks’ capital buffers could be dented by investing in CLOs. “Even if they do not intend to sell their investments before maturity, there still is the risk of write-downs if credit ratings on their investments were downgraded, causing huge price fluctuations in the market,” the regulators said.

U.S. small business program handed out virus aid to many borrowers twice [Reuters]
The money mistakenly handed out could amount to hundreds of millions of dollars that the government and lenders - which made the loans - have been trying to identify and recover in recent weeks, one of the people briefed on the matter said….
The error was caused by a blind spot in the SBA’s loan processing system which failed to see when some borrowers submitted applications multiple times typically with several different lenders, three of the sources said.
Information provided by the sources, which include industry executives and borrowers, as well as Reddit posts, suggest at least 1,020 duplicate deposits were issued. While that is a tiny fraction of funds disbursed under the huge program, it could amount to roughly $116 million dollars based on average loan sizes.

Lockdown Winners and Losers Shouldn’t Both Be Rallying [WSJ]
The laggards have had a roaring comeback as states begin to reopen and investors bet the worst of the economic fallout is in the rear-view mirror…. That rebound could still make sense even if nightlife and recreation haven’t picked up in earnest. After all, a single lousy year should have a modest impact on most Wall Street valuation models that rely on discounting cash flows. And since markets are forward-looking by nature, stock prices ought to rally before business prospects begin to improve meaningfully….
But stocks that benefit from consumers staying home also should be valued on a longer-term basis, and their prices imply a bet that life won’t be normal for a long time.

SoftBank and Masayoshi Son search for path out of ‘coronavirus valley [FT]
“There is a big question mark over [the company’s] financial discipline and SoftBank’s commitment to keeping it sound,” said Hiroyuki Nishikawa, an analyst at S&P Global Ratings, which cut SoftBank’s credit rating outlook from stable to negative in March….
“The fact that SoftBank is being forced to dispose of its most prized assets shows that it is facing a challenging situation,” said Tomoichiro Kubota, an analyst at Matsui Securities. “In the past, it would sell mature assets to invest in ventures. This time, the objective is very different: to improve its financial health.”

Billionaire Hintze’s Hedge Fund Rocked by Pandemic Losses [Bloomberg]
The Hintze-managed fund plunged as much as 45% in March and April -- its worst-ever loss -- missing the rebound that followed the initial shock from the coronavirus pandemic even as peers recovered to post gains in April. More than $3 billion of assets were erased…. The firm sold a portfolio of European collateralized loan obligations in April for about a fifth of their face value to raise cash, say people with knowledge of the matter….
“The global market sell-off has been severe and indiscriminate,” Hintze wrote to clients in April, explaining the decline. “We look forward to continuing with our opportunistic approach while remaining cognizant of the near-term challenges relating to the unknown effects of Covid-19 on the global economy.”

Contactless Payment on New York City Subway Is Delayed by Coronavirus [WSJ]
The new way of paying for subway and bus trips using a smartphone or contactless credit card couldn’t have come at a better time for New Yorkers wishing to avoid touching a MetroCard vending machine.
But the coronavirus pandemic has delayed by about two months the completion of the Metropolitan Transportation Authority’s new fare payment system, OMNY, across the subway, officials said Tuesday…. MTA officials say installation work resumed at the beginning of May, and they expect the system to be available at all subway stations by the end of December.

U.S. Temporarily to Allow Certain Impurities in Hand Sanitizer [Reuters via NYT]
The move will provide clarity on impurity limits for a slew of fuel ethanol companies that had switched to producing hand sanitizer during the outbreak, after regulators discovered some of the impurities, including cancer-causing acetaldehyde, several weeks ago….
"We do not believe the new guidance will help alleviate the hand sanitizer shortage in any meaningful way," Cooper said, adding that benzene is not present at any level in the ethanol the industry provides for sanitizer or other purposes.

Related

Opening Bell: 03.13.13

Ackman Applauds Call For Herbalife Investigation (AP) The National Consumers League said that it wants the FTC to investigate the claims against Herbalife as well as the vitamin and supplement products company's responses. Ackman alleged in December that Herbalife was a pyramid scheme and made a bet the stock would fall, arguing that the company makes most of its money by recruiting new salespeople rather than on the products they sell. Herbalife disputes that. In a statement late Tuesday, Pershing Square Capital Management's Ackman said that he was pleased that the NCL was requesting an FTC investigation and believes it will show that the company is a pyramid scheme. On Wednesday, Herbalife said in a statement that "We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife." Troika, Cyprus In Talks To Shrink Bailout Package (WSJ) Officials from the troika of lenders—the European Commission, the European Central Bank and the International Monetary Fund—are working with the Cypriot government to bring the headline figure for the bailout package to about €10 billion ($13.03 billion), two officials said. The aid package had been earlier expected to be as much as €17 billion—with just shy €10 billion of that going for bank recapitalizations. Big Sugar Set For Sweet Bailout (WSJ) The U.S. Department of Agriculture is considering buying 400,000 tons of sugar—enough for 142 billion Hershey's Kisses—to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The action aims to prop up tumbling U.S. sugar prices, which have fallen 18% since the USDA made the nine-month operations-financing loans beginning in October. The purchases could leave the price-support program with an $80 million loss, its biggest in 13 years, said Barbara Fecso, an economist at the USDA, in an interview. U.S. Tax Cheats Picked Off After Adviser Mails It In (Bloomberg) Everybody knows the danger of sending things inadvertently in an e-mail. Beda Singenberger’s case shows you also have to be pretty careful when you mail things the old-fashioned way. Over an 11-year period, federal prosecutors charge, Swiss financial adviser Singenberger helped 60 people in the U.S. hide $184 million in secret offshore accounts bearing colorful names like Real Cool Investments Ltd. and Wanderlust Foundation. Then, according to a prosecutor, Singenberger inadvertently mailed a list of his U.S. clients, including their names and incriminating details, which somehow wound up in the hands of federal authorities. Now, U.S. authorities appear to be picking off the clients on that list one by one. Singenberger’s goof has already ensnared Jacques Wajsfelner, an 83-year-old exile from Nazi Germany, and Michael Canale, a retired U.S. Army surgeon, court records show. Another customer, cancer researcher Michael Reiss, pleaded guilty, though his court records don’t mention the list. White Pressed On Past Representing Banks (WSJ) Since 2002, President Barack Obama's pick to become chairman of the Securities and Exchange Commission has worked for the law firm Debevoise & Plimpton LLC, where she often represented large corporations and banks. Members of the Senate Banking Committee, often from the president's own party, pressed her to guarantee that her law-firm work wouldn't stop her from taking on Wall Street's wrongdoers. "What have you done [in] the last decade that ordinary investors can look at and be assured that you will advocate for them?" Sen. Sherrod Brown (D., Ohio) asked Ms. White. Wearing a bright red jacket, her hands neatly folded on the table before her, Ms. White said her work at Debevoise "hasn't changed me as a person." Killer Ukrainian dolphins on the loose (JustinGregg) After rebooting the Soviet Union’s marine mammal program just last year with the goal of teaching dolphins to find underwater mines and kill enemy divers, three of the Ukrainian military’s new recruits have gone AWOL. Apparently they swam away from their trainers this morning ostensibly in search of a “mate” out in open waters. It might not be such a big deal except that these dolphins have been trained to “attack enemy combat swimmers using special knives or pistols fixed to their heads.” Dimon’s Extra $1.4 Million Payout Hangs on Fed Decision (Bloomberg) That’s how much extra income Dimon could get from his stake of about 6 million shares if his New York-based bank raises its payout as much as analysts predict. The sum dwarfs the combined $73,300 of new annual dividends at stake for his CEO peers at Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co., based on forecasts compiled by Bloomberg. Bankers will find out whether they get any boost tomorrow when the Fed announces which capital plans at the 18 largest U.S. lenders won approval. Regulators have pressed firms since the 2008 credit crisis to give executives more stock and less cash to align their interests with those of shareholders. CEOs are poised to get a windfall if payouts increase and shares rise -- or to suffer with their investors if results sputter. BofA Ordered to Pay Ex-Merrill Banker Jailed in Brazil (Bloomberg) Sao Paulo’s 26th labor court said it was “incontrovertible” that the imprisonment was because of his position as a junior financial consultant at Merrill Lynch, now a division of Charlotte, North Carolina-based Bank of America, according to a document published in the nation’s official Gazette earlier this month. Caiado wasn’t convicted of any wrongdoing. Caiado, 42, was jailed in June 2006 in a Curitiba federal prison over allegations he helped Merrill’s clients make illegal overseas money transfers. His arrest was part of an investigation that resulted in indictments of 18 bankers at Credit Suisse AG and UBS AG in Brazil. Merrill fired Caiado nine months later, saying the dismissal was part of a restructuring. Carlyle Group Lowers Velvet Rope (WSJ) In the latest effort by private-equity firms to broaden their customer base, Carlyle Group is letting some people invest in its buyout funds with as little as $50,000. The move comes as other large firms—known for offering exclusivity to big-money clients—have broadened their investment offerings in search of fresh sources of funds. KKR, for example, recently began offering mutual funds investing in bonds, with minimum investments set at $2,500. Blackstone Group launched a fund last year that for the first time lets affluent individuals invest in hedge funds and has told regulators it plans to offer another fund, though it hasn't disclosed many details about the forthcoming offering. Greenland Votes for Tougher Rules for Foreign Investors (WSJ) Voters in Greenland have elected a new ruling party that has pledged to toughen up on foreign investors looking to take advantage of the nation's wealth of natural resources. The Social Democratic Siumut party collected 43% of the votes in an election held Tuesday, enabling the party to leapfrog the ruling Inuit Ataqatigiit, which over the past four years has worked to open up the secluded country to mining companies and others capable of advancing industry. Greenland is believed to have a vast supply of untapped rare-earth minerals, oil, gas and other resources. Blankfein On Trader Talent Hunt At Morgan Stanley (NYP) The Goldman Sachs CEO is taking dead aim at Morgan Stanley’s most prized assets — its best and brightest employees — after his rival decided to defer pay for senior bankers. Blankfein, as a big game hunter, recently landed 13-year Morgan Stanley veteran Kate Richdale, head of its Asia Pacific investment banking business. The CEO’s talent hunt is continuing, sources said. Goldman currently is in selective talks with other Morgan Stanley bankers and has also lured a handful of traders from the bank. Golfer Survives Fall Into Course Sinkhole (AP) Mark Mihal was having a good opening day on the links when he noticed an unusual depression on the 14th fairway at Annbriar Golf Club in southern Illinois. Remarking to his friends how awkward it would be to have to hit out of it, he went over for a closer look. One step onto the pocked section and the 43-year-old mortgage broker plunged into a sinkhole. He landed 18 feet down with a painful thud, and his friends managed to hoist him to safety with a rope after about 20 minutes. But Friday's experience gave Mihal quite a fright, particularly after the recent death of a Florida man whose body hasn't been found since a sinkhole swallowed him and his bedroom. "I feel lucky just to come out of it with a shoulder injury, falling that far and not knowing what I was going to hit," Mihal, from the St. Louis suburb of Creve Coeur, told The Associated Press before heading off to learn whether he'll need surgery. "It was absolutely crazy."

polarcave

Opening Bell: 5.11.20

No negative rates; no joy for private equity in retail; no PPP money for restaurants that don’t exist; no privacy at work anymore; no ice cream for you; and more!

By Remy Steinegger, World Economic Forum from Cologny, Switzerland (World Economic Forum Annual Meeting Davos 2008) [CC BY-SA 2.0], via Wikimedia Commons Copyright by World Economic Forum    swiss-image.ch/Photo by Remy Steinegger +++No resale, no archive+++

Opening Bell: 10.25.17

Carlyle shakes up leadership; Trump wants to decide Fed chair by show of hands; Overstock is launching an ICO do to buybacks; oldest living creature gay; and more.

Opening Bell: 04.23.12

IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. Buffett Joined by 12 Families Pledging Wealth to Charity (Bloomberg) Twelve families promised to donate most of their wealth to philanthropy, joining the Giving Pledge initiative started by Warren Buffett and Bill and Melinda Gates. The families include hedge-fund manager Bill Ackman and his wife Karen, Tesla Motors Inc.’s billionaire owner Elon Musk and film producer Steve Bing, according to an e-mailed statement from the initiative. Arthur M. Blank, Edgar M. Bronfman, Glenn and Eva Dubin, Red and Charline McCombs, Michael Moritz and Harriet Heyman, John and Ginger Sall, Henry and Susan Samueli, John A. and Susan Sobrato, John Michael Sobrato, and Ted and Vada Stanley also signed the pledge. Aiming for Clarity, Fed Still Falls Short in Some Eyes (NYT) But as Mr. Bernanke prepares to meet the press for the fifth time Wednesday afternoon, after a scheduled meeting of the Fed’s policy-making committee on Tuesday and Wednesday, there are reasons to doubt that the efforts are increasing public understanding of monetary policy. Experts and investors have continued to disagree about the plain meaning of the Fed’s recent policy statements. Some say the increased volume of communication is creating cacophony rather than clarity. Political criticism of the Fed has continued unabated. Man's nightmare since NYPD labeled him ‘Gentleman Groper’ (NYP) A citywide manhunt ensued after four Manhattan women were fondled in tony neighborhoods in a 35-day stretch. On April 13, authorities paraded their main suspect past snapping cameras. He defied the conventional image of a creepy perv. He was young, handsome, well-dressed, affluent, educated, a churchgoer. A gentleman groper. That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"

Opening Bell: 06.12.13

Pimco Sees 60% Chance of Global Recession in Five Years (Bloomberg) Pacific Investment Management Co., the world’s largest active bond manager, said investors should cut risk amid a more than 60 percent chance of a global recession in the next three to five years. Global growth will slow, keeping inflation in check, and “economic volatility” will increase, Saumil Parikh, a portfolio manager at Newport Beach, California-based Pimco, said in a report being posted on the firm’s website today. Investors shouldn’t add risk in the search for yield, he said. “The global economy experiences a recession every six years or so, and the frequency of global recessions tends to increase when global indebtedness is high and falling as opposed to when indebtedness is low and rising,” Parikh, who focuses on asset allocation, multisector fixed income and absolute-return portfolios, said in the report. The last global recession was four years ago, he said. Banks Get Reprieve on New Swaps Rule (WSJ) Some of biggest banks on Wall Street will get an additional two years to comply with a post-financial crisis rule requiring they move risky swap activities into separate affiliates. The Office of the Comptroller of the Currency said it granted extensions to seven banks, giving them until July 2015 to comply with so-called "swaps push-out" rules required by the 2010 Dodd-Frank law. ... The OCC notified Bank of America Corp., J.P. Morgan Chase & Co., Citigroup Inc., Wells Fargo & Co., HSBC Holdings PLC, Morgan Stanley and U.S. Bancorp that they were granted a 24-month extension in response to their requests for a longer transition period. The move comes less than a week after the Federal Reserve said foreign banks also will be eligible for the two-year delay in complying with the rule, which is slated to take effect July 16. Emerging market assets suffer in fierce sell-off (FT) Emerging economies have been among the prime beneficiaries of ultra-loose global monetary policy as central banks led by the Fed have flooded financial markets with more than $12tn of extra liquidity since the financial crisis. But signs of an economic slowdown spreading from China and indications that the Fed could reduce the pace of its $85bn-a-month bond purchases have triggered a sharp correction in emerging markets. The South African rand and the Brazilian real touched four-year lows against the US dollar on Tuesday, and the Indian rupee fell to a record low. Even relatively robust countries like the Philippines and Mexico – long favourites of investors – have been hit by a spate of selling. Some central banks have begun to intervene to stem the currency slides. Is U.S. stock trading safer? Fewer erroneous trades seen (Reuters) More than three years after the "flash crash" terrified many by temporarily wiping out almost $1 trillion of U.S. stock market value in a few minutes, there are signs that the number of erroneous and aberrant trades is dropping. The use of circuit breakers for individual securities in the wake of the May 6, 2010 plunge, and the introduction of tougher risk-management controls for broker-dealers in November 2010 appear to have helped stabilize trading, market experts and regulators said. The Financial Industry Regulatory Authority, the security industry's watchdog, said the number of reports of "clearly erroneous" trades it received was down 84 percent in the last six months of 2012 compared with the first six months of 2009. Facebook Investors Press Zuckerberg on Stock Price at Annual Meeting (CNBC) Facebook CEO Mark Zuckerberg tried to tackle concerns about its stock head-on at the first annual shareholder meeting Tuesday, but investors pressed for answers about why the price is still down a year after the company went public. "The answer is we understand that a lot of people are disappointed with the performance of the stock, and we really are, too," Zuckerberg said in his opening remarks before taking questions. ... The stock, priced at $38 when the company went public in May 2012, hit $17 a few months ago and was trading at about $24 in afternoon trading Friday. Facebook can't control the stock price but is focused on developing the best products to create more shareholder value, Zuckerberg said. NJ Mayor Apologizes for Calling Residents "Annoying" (NBC) The mayor of Toms River apologized Tuesday night for comments he made about an area battered by Sandy, but not all residents were satisfied. Last week, Mayor Thomas Kelaher told Bloomberg News that he thought residents of Ortley Beach, where many are still without homes, were "annoying." "I certainly never intended to be disrespectful to the people who live in Ortley beach," Kelaher said at a meeting Tuesday. Marketfield Poet-Philosopher Pair Bet Europe for Top Fund (Bloomberg) Michael Aronstein, a poet, and Michael Shaoul, a doctor of philosophy, have made their MainStay Marketfield Fund the world’s fastest-growing by anticipating recoveries in the most-hated assets. Marketfield grew more than five-fold to $9.5 billion in the past year, the biggest increase of a fund with more than $5 billion in assets, after betting on a rebound in U.S. housing stocks and European shares. Now, their success relies on Irish and Italian stocks rallying and equities in China , Brazil and India tumbling. The New York-based fund has advanced 70 percent since July 2007, more than triple the return of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. “I don’t know where the level is,” Aronstein, a former Merrill Lynch strategist who writes poetry in his spare time, said of the potential for further declines in developing nations’ stocks in an interview April 4. “But if we are right, it’s going to get to the point where people cannot stand it anymore.” Metacapital in Worst Slide as Bloodbath Roils Funds (Bloomberg) Deepak Narula rose to fame as manager of the best-performing hedge fund last year by navigating the government’s stimulus efforts. He’s having a far harder time as the Federal Reserve moves closer to an exit. Metacapital Management LP’s flagship $1.5 billion fund lost an estimated 6.4 percent last month, the worst decline since it started in 2008, according to a letter to investors obtained by Bloomberg News. That followed drops of 0.5 percent in April and 0.1 percent in March, after 17 months of consecutive gains including a 41 percent return last year. ... “It’s been a bloodbath the last four to six weeks,” said Troy Gayeski, a senior portfolio manager who helps invest client money in hedge funds at SkyBridge Capital, which manages about $7.7 billion. “It was a confluence of just about everything” from investors’ concerns that refinancing would pick up among some borrowers who’ve had trouble qualifying to the slump in the mortgage debt that the Fed is buying, he said. SoftBank's Son Felt Time Pressure to Push Sprint Deal Forward (WSJ) In the end, SoftBank Corp. Chief Executive Masayoshi Son concluded that time was money. After a weekend of wheeling and dealing, he was willing to sweeten the Japanese company's bid for Sprint Nextel Corp. that Mr. Son for weeks had been saying already was high enough. His hope with the new bid is to keep the acquisition on track for midsummer completion and resolve complications raised by a rival offer. Mr. Son agreed for SoftBank to throw another $1.5 billion on top of the $20.1 billion already offered to achieve the "certainty of timing" for closing the deal in early July, a person familiar with the new proposal said. Pattern of negative correlation between HY bonds and treasuries has been broken (Sober Look) Since the financial crisis, the correlation between treasuries and many credit assets such as high yield bonds (HY) has been strongly negative. ... Recent events however broke that pattern. We've had a number of days with both the longer dated treasuries and HY selling off. That means the HY asset class is now responding to rate moves (not just spread). The 3-month correlation between prices of longer dated treasuries and HY bonds is nearing zero. This move toward a "less negative" correlation with treasuries is also visible in other credit assets as well. Sub-investment-grade credit investors are all of a sudden paying much closer attention to rates. US warns EU against exempting film industry from trade talks (FT) The US government has warned Brussels that EU efforts to placate French demands to exempt its film industry from high-profile transatlantic trade talks could unleash a torrent of demands in Washington for similar reciprocal carve-outs that would imperil a comprehensive deal. ... José Manuel Barroso, the European Commission president, met European filmmakers on Tuesday, including “The Artist” star Bérénice Bejo, to reassure them the trade deal will not jeopardise their protections. “Let me state loud and clear: the cultural exception is not negotiable,” Mr Barroso said after the meeting. Most Americans Aren’t Excited About Their Jobs (WSJ) FYI. State Dept. officials deny prostitution cover-up allegations (CBS) The allegations were first brought to light by CBS News' John Miller, who reported that according to an internal State Department Inspector General's memo, several recent investigations were influenced, manipulated, or simply called off. One specific example mentioned in the memo refers to the 2011 investigation into an ambassador who "routinely ditched ... his protective security detail," and inspectors suspect this was in order to "solicit sexual favors from prostitutes." ... In response to the allegation, Gutman said on Tuesday: "I am angered and saddened by the baseless allegations that have appeared in the press and to watch the four years I have proudly served in Belgium smeared is devastating. I live on a beautiful park in Brussels that you walk through to get to many locations and at no point have I ever engaged in any improper activity."

powell

Opening Bell: 7.2.20

Will no one take the Fed’s money? Will no one on Wall Street hire Black people? Will no one stand with Valeant? Will no one buy a place in Manhattan? And more??!!?!