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Frontrunning: August 5

  • Turkey says coalition to launch 'comprehensive battle' against Islamic State (Reuters)
  • Buffett’s Celebration Tempered by 50th Anniversary Stock Slump (BBG)
  • SEC Set to Approve CEO Pay-Gap Disclosure Rule (WSJ)
  • Greece wants full bailout, not bridge loan, ruling party says  (Reuters)
  • Stocks Rise Fueled by Strong European Corporate Earnings and Chinese Data (WSJ)
  • JPMorgan Reclaims Place Among U.S.'s Top 10 Biggest Stocks (BBG)
  • Eurozone retail sales fall sharply in June (MW)
  • Kasich, Christie make the cut for prime-time Republican debate (Reuters)
  • The Oil Crash Has Caused a $1.3 Trillion Wipeout (BBG)
  • Hedge funds make quick buck after getting wind of RBS stake sale (FT)
  • Raising interest rates with zero inflation is a hard sell (Reuters)
  • How Jeb Bush Spent His Years on Wall Street (WSJ)
  • Apple's momentum 'meltdown' bites investors (Reuters)
  • J.P. Morgan Loosens Terms for Jumbo Mortgages (WSJ)
  • Nazi-Fighter Grynberg Girds for Swiss Last Stand Against Big Oil (BBG)
  • Egypt Prepares to Inaugurate Expanded Suez Canal (WSJ)
  • Japan's Abe asks Biden for investigation of possible U.S. spying (Reuters)
  • Activist Investors Are Shaking Up Business Schools, Too (WSJ)
  • Zimbabwe court postpones trial of Cecil the lion's accused (Reuters)
  • Investor Group Challenges Access to Companies’ Boards (WSJ)

 

Overnight Media Digest

WSJ

* Jeb Bush's time at Lehman Brothers Holdings Inc and Barclays Plc sets him apart from other presidential hopefuls. For more than seven years, he spent as much as half of his working hours advising Lehman and later Barclays. (http://on.wsj.com/1gJ34O9)

* Niloofar Rahmani, Afghanistan's first female fixed-wing pilot, faces opposition from the Taliban as well as members of her own extended family. (http://on.wsj.com/1N90Hhw)

* A group of pension funds that has pushed companies to increase investors' ability to choose board members is now taking issue with how companies have done it. (http://on.wsj.com/1hiGRX9)

* Regulators are set to approve a contentious new rule requiring companies to disclose the pay gap between rank-and-file employees and the chief executive. (http://on.wsj.com/1DoVe6m)

* Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ready for the first increase in short-term rates in more than nine years and it would take a significant deterioration in the data to convince him not to move in September. (http://on.wsj.com/1Inkc2l)

* JPMorgan Chase & Co is lowering the minimum down payment and credit score for some big mortgages, as lenders vie to cater to borrowers in the high-end market. (http://on.wsj.com/1eRUk6c)

 

FT

Hedge funds made quick money after getting information that the British government was offloading some stake in Royal Bank of Scotland. Some of investors placed bets that RBS' share price would go down. The deal proved profitable for the investors as the bank's share fell 8 percent between Thursday last week and Monday night.

Pharma major Shire plc has approached Baxalta - the drug company spun off from Baxter - with a hostile takeover, valuing the company at $30 billion (27.6 billion euros).

Japan's telecom billionaire Masayoshi Son has announced the creation of two new equipment leasing companies that will free up cash to overhaul Sprint's network, the U.S. telecom carrier in which Son invested in 2013.

Soros Fund Management's Chief Investment Officer, Scott Bessent, has quit the firm to launch his own hedge fund named Key Square Group. Bessent will begin with an initial investment of $2 billion, contributed by George Soros himself.

 

NYT

* General Electric Co is announcing on Wednesday a push into computer-based services, connecting sensors that are on machines to distant computing centers where data will be scanned for insights around things like performance, maintenance and supplies. The company plans to spend about $500 million annually building the business, according to the executive in charge. (http://nyti.ms/1W0DtQv)

* Shire Plc, which last year had sought to sell itself to AbbVie Inc, disclosed that its $30 billion offer for the biopharmaceutical company Baxalta Inc had been rebuffed last month. The rejection of the offer was affirmed later on Tuesday, as Baxalta said that its board and advisers had reviewed Shire's proposal and concluded that it "significantly undervalues" the biopharmaceutical company. (http://nyti.ms/1hiHsYV)

* After more than a decade under private equity ownership, and two different sets of investors, Neiman Marcus - home to $10,000 gowns and sometimes outlandish Christmas presents - is preparing to head back to the stock market. The high-end retailer filed on Tuesday for an initial public offering, paving the way for its current owners to exit after their $6 billion takeover of the company just under two years ago. (http://nyti.ms/1hiHvUy)

* Netflix Inc announced on Tuesday that it was starting an unlimited leave policy for new mothers and fathers for the first year after the birth or adoption of a child. As part of the new maternity and paternity policy, employees will receive their normal pay. They will be able to return to work part time or full time, and they may also return to work and then take additional time off, if needed. (http://nyti.ms/1KPpgCB)

* To oversee international expansion, the Alibaba Group Holding Ltd is turning to a former Goldman Sachs Group Inc executive who has long worked with the Chinese Internet giant. Alibaba on Tuesday named Michael Evans, who already serves on its board, as its president. (http://nyti.ms/1Ijl4Hu)

 

Canada

THE GLOBE AND MAIL

** Canada and Mexico are joining forces to try and break a major logjam over Japanese autos at the Trans-Pacific Partnership talks. A source familiar with the negotiations said Canadian negotiators showed up at the Maui talks to find that the United States had already cut a deal with Japan on how much vehicle content needs to come from Trans-Pacific Partnership (TPP) countries. (http://bit.ly/1eSaiNR)

** Alberta's deficit will be "in the range" of C$5.4 billion ($4.09 billion) next year, Finance Minister Joe Ceci said on Tuesday, sticking to a spring forecast even as skidding oil prices prompt deeper cuts in the energy sector. (http://bit.ly/1JLzRgy)

** The federal Conservative campaign pledge to revive the popular home renovation tax credit comes at a time when Canada's renovation industry is already outperforming the broader economy and booming past the market for new homes. (http://bit.ly/1gJEEEa)

NATIONAL POST

** A second U.S. investment firm, Mudrick Capital Management LP, is suing Lightstream Resources Ltd over the Calgary-based light oil producer's recent debt restructuring deal, as a growing number of the company's bondholders voice their anger over the debt swap. (http://bit.ly/1eSq2R3)

** Stephen Harper is looking "weak and vulnerable" on the trade file as the government continues to negotiate a massive trade pact with Asian-Pacific nations during a lengthy election campaign, New Democratic Party leader Tom Mulcair said on Tuesday. (http://bit.ly/1gJFd0F)

 

Britain

The Times

One of Britain's biggest drug companies, Shire, has initiated a $30 billion hostile takeover of Baxalta Inc , an American rival, as it seeks to become the world's leading supplier of medicines for rare diseases. (http://thetim.es/1KPcj96)

The British housing market may have had a brief summer lull, but prices are on the rise again. The latest figures from mortgage lender Nationwide indicate that house prices increased by 0.4 percent last month, pushing the annual rate of house price growth up to 3.5 percent. (http://thetim.es/1KPctNF)

The Guardian

ValueAct, a U.S. hedge fund that agitates for change at companies, has emerged as a shareholder in British engineer Smiths Group Plc, days after revealing it was the biggest investor in Rolls-Royce. The San Francisco-based activist investor is believed to own between 3 percent and 5 percent of Smiths. (http://bit.ly/1KPcyRx)

George Osborne has tried to justify a 1 billion-pound ($1.56 billion) loss on the first sale of shares in Royal Bank of Scotland in the face of criticism from politicians and City analysts by saying it was the right thing to do for British taxpayers. (http://bit.ly/1KPcD7I)

The Telegraph

The Financial Conduct Authority has dropped an investigation into a former senior UBS Group AG banker caught up in the Libor scandal, after its own review panel found there was not a strong enough case to pursue him. The financial regulator will not take enforcement action against Panagiotis Koutsogiannis after its regulatory decision committee found that dishonest conduct was not proven. (http://bit.ly/1KPcIsi)

Just Eat has brushed off concern it faces mounting competition from rivals muscling into the online food delivery industry after reporting that first-half orders, revenues and profits all surged by more than 50 percent. Revenues for the six months to the end of June climbed 54 percent to 107.8 million pounds. (http://bit.ly/1KPcKQP)

Sky News

A city trader has been sentenced to 14 years in jail for fixing the rates of interest at which banks lend to each other - the so-called Libor rate. Tom Hayes had been accused of eight counts of conspiracy to defraud between 2006 and 2010 for setting the rate on which trillions of dollars of financial deals are based. (http://bit.ly/1KPcQb4)

Another strike will bring the London Underground network to a halt this week after unions unanimously rejected the latest offer from Tube bosses. The walkout by thousands of workers will see no Tube service from 6.30 p.m. on Wednesday and none at all on Thursday. (http://bit.ly/1KPcYr5)

The Independent

Rolls-Royce has won a leading role in a multi-billion-dollar nuclear decommissioning contract in Canada - prompting speculation the engineering giant will launch another assault on the lucrative British market. (http://ind.pn/1KPd3ey)

The former leader of the Conservative Party, Lord Howard of Lympne, is to be questioned by the Serious Fraud Office in a criminal investigation into an oil explorer where he is chairman. Last week the SFO searched the offices of Soma Oil & Gas after a whistleblower made allegations about the London-based company, believed to relate to the manner in which it obtained exploration and drilling rights in Somalia. (http://ind.pn/1KPd4yU)