Opening Bell: 7.13.20 - Dealbreaker

'It's going to be really ugly.' Here come the big bank earnings [CNN]
JPMorgan Chase, Bank of America and Citigroup are all expected to reveal their second-quarter profits crashed by 50% or more. Wells Fargo is likely to slash its coveted dividend and announce the scandal-ridden bank's first quarterly loss since the financial crisis.
"2020 has been a disaster," said Jim Shanahan, who covers banks at Edward Jones. "It wasn't the banks' fault. It was like we had an alien invasion in the second quarter."

Fed, Treasury Disagreements Slowed Start of Main Street Lending Program [WSJ]
Fed officials generally favored easier terms that would increase the risk of the government losing money, while Treasury officials preferred a more conservative approach, people familiar with the process said…. The disagreements over relatively narrow design issues reflect broader philosophical differences over what the program is trying to accomplish and how much risk the government should take as a result. The upshot is that the program, announced in March, went through multiple revisions and opened for business this past week. As of Wednesday, it hadn’t purchased any loans.

Chatham Hedge Fund Has the Winning Bid for McClatchy Newspapers [NYT]
McClatchy, the publisher of The Miami Herald, The Kansas City Star, The Charlotte Observer and its flagship publication, The Sacramento Bee, filed for Chapter 11 bankruptcy protection in February. Chatham, an investor in the company since 2009, is its largest creditor…. It will not be split up, McClatchy said, its 30 news outlets remaining intact….
In a statement, a Chatham spokesman said the company was “pleased with the outcome of the auction,” adding, “Chatham is committed to preserving newsroom jobs and independent journalism that serve and inform local communities during this important time.”

Controversial Trump Fed nominee Shelton may move forward as Senate panel sets vote [MarketWatch]
The stalled nomination of Judy Shelton, President Donald Trump’s controversial pick for the Federal Reserve, got a potential boost Friday when the Senate Banking Committee announced a July 21 vote on her nomination…. [Sen. Mike] Crapo has previously hesitated to bring her nomination to a committee vote because Sen. John Kennedy, a Louisiana Republican, remained undecided. If Kennedy voted with all the Democrats on the panel, Shelton’s nomination would be defeated 13-12.

London Banks Urged to Pay Reparations for Historical Slavery Links [WSJ]
The Bank of England, Barclays PLC and Lloyd’s of London insurance market are among those to apologize for or acknowledge links to slavery since the May killing of George Floyd by a police officer in Minneapolis prompted protests world-wide…. “Britain was the most efficient and profitable slave trader in terms of return on capital largely because of the role of the City of London in providing cheaper finance, better insurance rates, better reinsurance rates and, critically, funding the construction of the shipping industry,” Hilary Beckles, chairman of a reparations commission representing Jamaica, Barbados and 10 other Caribbean nations, said in an interview.

Demand for Chief Diversity Officers Is High. So Is Turnover. [WSJ]
“When they get in these institutions, they can find they don’t have the ability to effect change,” she said….
Christie Smith was Apple Inc.’s head of inclusion and diversity until she left the company recently, making her the third person to vacate that role after less than three years in the job…. The former head of diversity at Morgan Stanley sued the bank last month, saying it hadn’t done enough to promote people of color and that it fired her in December for pushing it to move faster. The bank has rejected the allegations.

Wall Street Journal Staff Members Push for Big Changes in News Coverage [NYT]
“In part because WSJ’s coverage has focused historically on industries and leadership ranks dominated by white men, many of our newsroom practices are inadequate for the present moment,” the letter said…. “Reporters frequently meet resistance when trying to reflect the accounts and voices of workers, residents or customers, with some editors voicing heightened skepticism of those sources’ credibility compared with executives, government officials or other entities,” the letter said. “We should apply the same healthy skepticism toward everyone we cover.”

Delaware top court rejects hedge funds' bid for higher payout in Jarden deal [Reuters]
The Supreme Court, upholding a lower court ruling, found Friday that the fair value of the stock at the time of the acquisition was $48.31. The price is well below both the $71.35 sought by funds affiliated with Fir Tree Partners and Verition Fund Management, and the $59.21 per share Newell had originally agreed to pay.

Judge Denies Bail for Ex-Green Beret, Son Tied to Carlos Ghosn Escape [WSJ]
The Taylors’ lawyers had argued that the pair didn’t commit a crime in Japan by helping Mr. Ghosn violate his bail conditions and flee the country. Bail-jumping isn’t itself a crime in Japan. A Japanese law against harboring criminals didn’t apply, they argued.
In his ruling Friday, U.S. Magistrate Judge Donald L. Cabell rejected those arguments, saying the alleged crimes “would appear to fall squarely within the heartland” of Japan’s criminal-harboring statute.

M.B.A. Programs Debate Dropping GMAT [WSJ]
A growing list of M.B.A. programs, including the University of Virginia’s Darden School of Business and the Wisconsin School of Business, said they plan to extend their test-optional format to the 2021 admissions cycle. Several other M.B.A. programs say they are considering a similar move, citing challenges students continue to face despite the exam moving online. Schools also say the test-optional format enables them to recruit from a broader pool of applicants…. Some top-tier graduate-level business programs, however, have been more reluctant to remove the GMAT requirement. Harvard Business School and other prestigious business programs say the GMAT is still a crucial part of their evaluation process and that a waiver for the in-person test isn’t necessary because they accept results from online versions of the GMAT and GRE, a different standardized test required for admission to many graduate schools.

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haikouairport

Opening Bell: 7.9.20

Capital-raising easier than ever, but no one wants the Fed’s Main Street money; and more!

Opening Bell: 10.31.12

Questions Cloud Market Reopening (WSJ) The New York Stock Exchange said Tuesday that it plans to open as usual at 9:30 a.m. and that its trading floor and headquarters in lower Manhattan were "fully operational" despite widespread blackouts and flooding in that part of the city. The Nasdaq Stock Market and other exchanges will open as well. Bond markets will follow suit. While investors and industry officials breathed a sigh of relief, critics argued that the storm exposed how ill-prepared exchanges and their Wall Street customers are for such an event. Regulators on Tuesday said they plan to probe whether more needs to be done to get exchanges and the trading community ready for such disasters. After Hurricane, Wall Street Back To Work (Dealbook) On Tuesday, the scene around Wall Street was desolate. While the New York Exchange’s building appeared to be unscathed, many other offices in the vicinity were flooded. After an underground parking garage two blocks from the exchange was inundated with water, several cars floated to street level. Two Citigroup buildings were without power. The bank told employees in a memo on Tuesday that one of the buildings, 111 Wall Street, sustained “severe flooding and will be out of commission for several weeks.” Some JPMorgan Chase employees outside New York City were working in central New Jersey. At the bank’s main trading floor in Midtown Manhattan, employees, many in jeans, shirts and rain boots, booked hotels for the night and discussed strategy. The bank, which sustained minimal damages at a building downtown, expected to resume normal operations in Midtown. Credit Suisse also planned to open for business on Wednesday, with its main offices by Madison Square Park running on backup power. In downtown New York, Goldman Sachs was one of the few buildings with power. The firm has a generator in the event of outages, allowing its trading floors to continue to run. On Tuesday, televisions sets and lights inside the building were on, although few employees were there...In a memo to staff, Goldman announced its headquarters would be open on Wednesday. The firm also booked hotels in various locations to make sure employees could get to work. Deutsche Bank Rides Debt-Market Wave (WSJ) Deutsche Bank reported a surge in investment-banking revenues in the third quarter as a rebound in client activity fueled the best quarter ever for its fixed-income division. Deutsche Bank, Europe's largest lender by assets, reported group revenues of €8.7 billion ($11.5 billion), up 19% from the third quarter last year. The result was better than analysts expected, but the bank's legal problems and restructuring efforts nearly flattened net income. At €747 million, the total was up 3% from €725 million a year earlier. The bank's revenue increase was driven in part by bond-buying initiatives announced by the U.S. Federal Reserve and the European Central Bank in recent months. The moves have fueled a resurgence in client activity, including in fixed-income trading—an area where UBS AG and other competitors have announced significant cut backs, allowing Deutsche Bank to gain market share. UBS Moves Quickly On Job Cuts, Revamp (WSJ) Scores of traders at UBS were locked out of the Swiss bank's London offices Tuesday as the institution moved quickly to implement the first of thousands of job cuts in a strategic restructuring. The revamp effectively brings an end to UBS's attempts over the past two decades to build a world-class investment bank, which brought the institution to the brink of collapse in 2008 when it incurred more than $50 billion in losses from the fixed-income business that it is now exiting. Instead, UBS's strategy will center on its private bank, the world's second-largest in assets after Bank of America and a mainstay of the group's earnings. UBS confirmed Tuesday that it will cut risk-weighted assets by around 100 billion Swiss francs ($107 billion) by the end of 2017, eliminate about 10,000 jobs across the bank and reorganize its investment bank to deliver more products and services to ultra-wealthy clients at the private bank. The bank also said Tuesday that charges related to the moves, which come in response to a tougher regulatory and economic climate, helped push it into the red in the third quarter. UBS Chief Executive Sergio Ermotti said that London would bear the brunt of the cuts as the bank attempts to exit almost completely from fixed-income activities and move back to its wealth-management roots. Storm Cripples US East Coast, Death and Damage Toll Climb (CNBC) The U.S. death toll climbed to 50, according to The Associated Press, with many of the victims killed by falling trees. Damage estimates reached into the tens of billions, while the storm disrupted campaigning and early voting ahead of the November 6 presidential election. More than 8.2 million households were without power in 17 states as far west as Michigan. Nearly 2 million of those were in New York, where large swaths of lower Manhattan lost electricity and entire streets ended up under water. New York Subway System Faces Weeks to Recover From Storm (Bloomberg) If you laid the New York City subway system in a line, it would stretch from New York to Detroit. Now imagine inspecting every inch of that track. That’s the job ahead for Metropolitan Transit Administration officials, who must examine 600 miles of track and the electrical systems with it before they can fully reopen the largest U.S. transit system, which took a direct hit by Hurricane Sandy. Seven subway tunnels under New York’s East River flooded, MTA officials said. Pumping them out could take days, and a 2011 state study said it could take three weeks after hurricane- driven flooding to get back to 90 percent of normal operations. That study forecast damages of $50 billion to $55 billion to transportation infrastructure including the subways. How CEOs Improvised In The Wake Of Sandy (WSJ) When the approach of Hurricane Sandy left Lands' End Chief Executive Edgar Huber stranded on a business trip, he retreated to an impromptu backup headquarters—in his mother-in-law's apartment complex...Foot Locker CEO Ken Hicks disregarded the shutdown of his New York headquarters on Monday and worked at his office until 3 p.m. Then he picked up the work again six blocks away at his home in Manhattan's Murray Hill neighborhood. When the power went out, he put on iTunes, lit a lantern and did paperwork for another 2½ hours. "You can be reasonably self-sufficient with a cellphone and a lantern," the CEO says. Celebrities React To Northeast Hurricane (NYDN) “WHY is everyone in SUCH a panic about hurricane (i’m calling Sally)...?” Lindsay Lohan tweeted Sunday night. “Stop projecting negativity! Think positive and pray for peace.” A Year Later, All Eyes Still On 'Edie' (WSJ) Who broke the law by raiding customer accounts at MF Global Holdings? Investigators seem no closer to the answer than they were when the New York brokerage firm filed for bankruptcy exactly a year ago Wednesday, owing thousands of farmers and ranchers, hedge funds and other investors an estimated $1.6 billion. Their money was supposed to be stashed safely at MF Global, but company officials used much of it for margin calls and other obligations. The last, best hope for a breakthrough in the probe is Edith O'Brien, the former assistant treasurer at MF Global. Working in the company's Chicago office, she was the go-to person for emergency money transfers as MF Global flailed for its life. MBA's Rethink Wall Street (WSJ) Many of the nation's top M.B.A. programs, including Harvard Business School and Stanford Graduate School of Business, reported declines in the share of students who took jobs in finance this year. And even those that posted some gains, such as University of Pennsylvania's Wharton School, are still well below their prefinancial crisis levels...A Wall Street gig "isn't as prestigious as it used to be" because the future—promotion opportunities, salary gains, even basic job security— is so unclear, says Mark Brostoff, associate dean and director of the career center at the Olin Business School at Washington University in St. Louis. Though the share of Olin students going into finance increased to 22% of job seekers this year from 15% in 2011, many of those gains came at boutique and regional Midwestern financial firms rather than on Wall Street. One factor affecting student demand: Banks expect young staffers to pick up the slack left by masses of laid-off midlevel employees, without necessarily offering more generous pay packages in return for the long hours. At Harvard Business School, for example, students heading into investment banking—7% of job seekers who accepted jobs, down from 10% in 2011—reported median salaries and signing bonuses were flat with last year, at $100,000 and $40,000, respectively, while other guaranteed compensation fell to $8,750 from $40,000. Disney $4 Billion ‘Star Wars’ Deal Spotlights Content Bet (Bloomberg) Walt Disney agreed to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion, pressing Chief Executive Officer Robert Iger’s $15 billion bet on creative franchises by adding “Star Wars” and “Indiana Jones.” Lucas, 68, the sole owner, will get half in cash and the rest in stock, making him a major investor in the film, theme park and TV company, according to a statement yesterday from Burbank, California-based Disney. The first of a new trilogy of “Star Wars” films will be released in 2015, Disney said. France Can’t Compete With Rest of Europe: WTO Chief (CNBC) France is uncompetitive not only versus China, but against the rest of Europe, according to Pascal Lamy, director general of the World Trade Organization. “The competitiveness of France on foreign markets has been damaged for the last 10 years. This is nowhere more obvious than in Europe, where France has lost market share for the last 10 years,” said Lamy in an exclusive interview with CNBC in Paris. Cop Tasers 10 Year-Old For Refusing To Clean His Car (CN) A New Mexico policeman Tasered a 10-year-old child on a playground because the boy refused to clean his patrol car, the boy claims in court. Guardian ad litem Rachel Higgins sued the New Mexico Department of Public Safety and Motor Transportation Police Officer Chris Webb on behalf of the child, in Santa Fe County Court. Higgins claims Webb used his Taser on the boy, R.D., during a May 4 "career day" visit to Tularosa New Mexico Intermediate School. "Defendant Webb asked the boy, R.D., in a group of boys, who would like to clean his patrol unit," the complaint states. "A number of boys said that they would. R.D., joking, said that he did not want to clean the patrol unit. "Defendant Webb responded by pointing his Taser at R.D. and saying, 'Let me show you what happens to people who do not listen to the police.'" Webb then shot "two barbs into R.D.'s chest," the complaint states. "Both barbs penetrated the boy's shirt, causing the device to deliver 50,000 volts into the boy's body.

powell

Opening Bell: 5.13.20

More money, (for) more (pandemic) problems; more negative oil prices; more power to Paul Singer; more steps for Tesla; more strip club bailouts; and more generally!

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??!!?!

powell

Opening Bell: 8.28.20

Of deviations and shortfalls; Argentine hopes; exchange espionage; and more!

NoelGallagherBrexit

Opening Bell: 9.17.18

Kavanaugh confirmation derailed; China trade talks getting hotter; Brexit still a hot mess; Snake throws up snake; and more!

powell

Opening Bell: 6.30.20

Bailouts, past and present; dividends good and bad; selling someone else’s shares; and more!

Greeks

Opening Bell: 8.20.18

Healthier Greece still a mess; China pushes Trump; Turkey too; Proud freaky mom pees in the shower; and more!