Jobless claims, total unemployment level worse than expected [CNBC]
“Even as states reopen, claims in the millions are an indicator that the economic pain of the COVID-19 crisis is still acute,” said Daniel Zhao, senior economist at job placement site Glassdoor…. Continuing claims, which provide a clearer picture of how many Americans remain unemployed, totaled 21.5 million, a gain of 649,000 over the past week, also worse than Wall Street expected….
The numbers came the day before the Labor Department releases its nonfarm payrolls report for May. Economists surveyed by Dow Jones are expecting a decline of 8.3 million and a 20.5% unemployment rate, more than double the highest previous level since the Great Depression.
Senate approves House-passed Paycheck Protection Program reform bill [CNN]
The legislation would give small businesses more time to use emergency loans under the program by extending the eight-week period in which they must use the money to qualify for loan forgiveness to 24 weeks…. The bill would also give small businesses more flexibility by changing the so-called 75/25 rule, which requires recipients of funds under the program to use three-quarters of the money for payroll costs and to limit other costs to no more than 25% in order to be eligible for loan forgiveness. The new ratio would be at least 60% on payroll and no more than 40% on other costs.
Fed Flirting With Moral Hazard to Keep Markets Open, Dudley Says [Bloomberg]
“People who have high-yield debt that’s outstanding, a lot of times that’s happened by choice,” he told Bloomberg Television Wednesday in an interview with Tom Keene, Lisa Abramowicz and Jonathan Ferro. “So for the Federal Reserve to intervene and support those asset prices, is basically creating a little bit of moral hazard in the sense you’re encouraging people to take on more debt….”
“We had a number of players in these last few months that have essentially been bailed out by the Fed: Hedge funds that were invested in cash Treasuries, and short Treasury futures,” said Dudley, noting Fed Treasury purchases helped “those entities unwind what turned out to be a bad trade….”
“If people become very leveraged and they’re big enough to be systemic, then I think there needs to be some regulation to reel that in,” he said. Dudley stepped down from the New York Fed in 2018
European Central Bank Ramps Up Stimulus Program Beyond $1.5 Trillion [WSJ]
“The ECB is very well known to be behind the curve, only acting at five minutes to midnight, but now they are ahead of the curve,” said Alberto Gallo, a fund manager at Algebris Investments in London…. The bank said it would reinvest the principal payments from maturing bonds bought under the program through the end of 2022. The bank left its key interest rate unchanged at minus 0.5%.
Banks Took $11 Billion in Overdraft Fees in 2019, Group Says [NYT]
Nine percent of account holders paid 84 percent of the overdraft fees, according to the review, which focused on banks with assets of more than $1 billion. Those customers tended to carry low balances, averaging less than $350.
The organization said banks should halt overdraft fees during the pandemic, which has led to 40 million new unemployment claims and significant uncertainty about how any recovery will play out....
“Banks should not experience an unprecedented windfall as the direct result of their customers’ unprecedented distress,” he said.
SoftBank put together a $100 million investment fund for minority-owned businesses in 24 hours [CNBC]
“We spoke to Masa Son about the privilege that we see at SoftBank, being one of the largest tech investors in the world, and we needed to do something big about it,” Claure said….
The fund will start with $100 million of its own capital and could grow that with more investments…. SoftBank will not take a traditional management fee, the company said in a statement. Half of its gains will be reinvested into subsequent Growth Opportunity Funds.The company will also donate a portion of its gains to organizations that create opportunities for people of color.
HSBC and StanChart back China security laws for HK [BBC News]
HSBC "respects and supports all laws that stabilise Hong Kong's social order," it said in a post on social media in China…. Standard Chartered also has a strong presence in Asia. "We believe the national security law can help maintain the long-term economic and social stability of Hong Kong," it said in a statement….
Meanwhile, Japanese investment bank Nomura said it was reviewing the scale of its operations in Hong Kong.
The bank's chief executive, Kentaro Okuda, said that while Hong Kong remained its most critical Asian hub outside Japan, the situation now was "not the same as it used to be…."
Lender to Ponzi schemer Petters can renew claims against big banks - 8th Circuit [Reuters]
In a 2-1 decision, the 8th U.S. Circuit Court of Appeals in Kansas City, Missouri said a lower court judge prematurely dismissed claims by three Cayman Islands-based Ritchie entities against JPMorgan Chase & Co and several other banks.
Brady Dougan Unfurls Wall Street Dream [finews]
After Brady Dougan left the CEO seat at Credit Suisse in 2015, the American investment banker wanted to found a new type of investment bank… Five years on, the world is radically different – and Dougan has opted to register Exos Financial as a broker-dealer, and not a bank….
He collected $750 million, including from Atlas Merchant Capital, the venture arm of ex-Barclays boss Bob Diamond.
Pair hired for man's broom sexual fantasy turn up in bedroom at wrong address with machetes [Sky News]
At one point, one of them asked: "Are you sure you are not Kevin as we were told to come to [this address] and pick up Kevin."
Eventually accepting their error, the duo then left, with one saying "sorry mate" and shaking the resident's hand, while the other said "bye".