Wall Street Breakfast: Must-Know News 20 comments
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- Xstrata offer rebuffed. Anglo American's (AAUK) board unanimously rejected a merger offer from Xstrata (XSRAF.PK) due to "totally unacceptable" terms. Xstrata would have been the 'best fit' for Anglo American, say some analysts, but rival bids may emerge from companies like Vale (VALE). A 'disappointed' Xstrata may also make another bid, though its limited capacity to take on more debt could prevent it from offering Anglo American a premium. AAUK +0.5% premarket (7:00 ET).
- 3 banks suspend TARP dividends. At least three small, cash-strapped banks have stopped paying TARP dividends to the government. Pacific Capital Bancorp (PCBC), which received $180.6M in November, has since posted net losses of $49.7M and suspended dividend payments as part of a wider effort to save $8M per quarter. The other two banks - Seacoast Banking Corp. of Florida, which received $84.8M, and Midwest Banc Holdings, which received $50M - pointed to industry turmoil and a desire to strengthen their balance sheets as the reasons for suspending the dividend payments. Treasury said it "respects the contractual rights of [TARP recipients] to make decisions about dividend distributions, and that banks are best positioned to decide how to manage their own capital base."
- SEC wants OTC regulatory power. Testifying in the Senate, SEC's Mary Schapiro told lawmakers the SEC should get expanded authority over security-based swaps and certain non-banking derivatives dealers that offer securities-related over-the-counter products. The SEC currently has only antifraud authority over security-based swaps, which makes investigations 'far more difficult and time-consuming.' According to Schapiro, the Commodity Futures Trading Commission would handle oversight of foreign exchange, interest-rate and commodity swaps, and the Federal Reserve would oversee banks that also deal in derivatives. (Read Schapiro's testimony)
- UBS settlement likely. Amid a fierce lobbying campaign by UBS (UBS) and Swiss officials, and following a recent tax treaty signed with Switzerland, sources say the U.S. Justice Department may be nearing a decision to drop a closely watched tax evasion case against UBS. The complaint could be dropped by July 13, when a federal judge is expected to hold a short trial on the issue.
- Ford, Nissan to tap retooling loans. The White House is expected to announce this morning that Ford (F), Nissan (NSANY) and Tesla Motors are among the first recipients in a $25B loan program to help automakers retool their factories. The loans are designed to help automakers revamp plants in order to produce new models at least 25% more fuel-efficient than vehicles made in 2005.
- Intel lands Nokia deal. Intel (INTC) will reportedly sell processors to Nokia (NOK) for mobile devices, marking a major breakthrough in Intel's efforts to expand into the phone market. Intel's microprocessors run over 80% of the world's PCs, but the company has been working for a decade to crack into the market for mobile-phone chips. An announcement of the deal is expected today. INTC +0.6% premarket (7:00 ET).
- More fraud lawsuits in Madoff case. Three Madoff-related lawsuits were filed yesterday, providing new details about who might have helped perpetuate the long-running Ponzi scheme. The SEC filed civil fraud charges against money manager Stanley Chais, one of Madoff’s earliest investors, accusing Chais of deceiving his clients and ignoring obvious signs of fraud. A civil fraud case was also filed against three senior executives of brokerage firm Cohmad Securities Corporation, alleging they knowingly helped finance and conceal the scheme for years. The third suit named Cohmad and several of its executives and employees, and seeks to recover millions of dollars in fees and profits the defendants received from Madoff.
- Google phones coming soon. Verizon Wireless (VZ) and T-Mobile USA (DT) are planning to launch Motorola (MOT) smartphones based on Google's (GOOG) Android operating system by the end of the year. Motorola has bet heavily on Android as a way to regain traction in the cellphone market, but the new handsets will be released into a market already flooded with new offerings by Apple (AAPL) and Palm (PALM).
Earnings: Monday After Close
Today's Markets
Asian markets closed broadly down, but European markets are pushing into positive territory.
- In Asia, Nikkei -2.8% to 9,550. Hang Seng -2.9% to 17,538. Shanghai -0.1% to 2,893. BSE -0.02% to 14,324.
- In Europe at midday, London +0.3%. Paris -0.15%. Frankfurt +0.5%.
- U.S. futures: Dow +0.2%. S&P +0.3%. Nasdaq +0.2%. Crude -0.4% to $67.20. Gold +0.15% to $922.40.
Tuesday's Economic Calendar
- FOMC Meeting
7:45 ICSC Retail Store Sales
8:55 Redbook
10:00 Existing Home Sales
10:00 State Street Investor Confidence Index
10:00 Richmond Fed's Manufacturing Index
5:00 PM ABC Consumer Confidence Index - Notable earnings before Tuesday's open: CMC, KR
- Notable earnings after Tuesday's close: DRI, JBL, ORCL
Seeking Alpha editor Eli Hoffmann contributed to this post.
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This article has 20 comments:
Could the green shoots be in trouble. Unemployment still out of control and unfortunately we do not have anything that even resembles a jobs plan from our wonderful leaders. Bailouts, tarp, health plans but no jobs.
We need jobs, jobs, jobs and I know I sound like a broken record but that should be priority one. Washington's not getting it.
Unfortunately, our "leaders" gave that 0% money to companies holding lots of level 3 and 4 "assets" that were worth a whole lot less than they claimed. So despite making easy money on new loans, they have continuing writeoff losses on the junk.
There's a LOT of junk left, thus a lot of losses yet to be booked. And if the economy keeps deteriorating, the losses will keep coming and growing.
On Jun 23 08:34 AM ScroogeMcduck wrote:
> You dont get more jobs by attacking big corporations.
We need manufacturing...we need companies here...we need private industry to come back...we need this.
Government is the problem.....not the solution....we basically need to shrink it as much as possible and reduce taxes....that is called a stimulus plan......not printing money.
How can a country increase wealth by producing nothing and adding government jobs?
How does Obama know where/how much/etc to allocate this money? The CZAR needs to follow the constitution.....and for our last however many presidents we have had...none have really done so.
"IT'S THE UNEMPLOYMENT STUPID!!!!!"
On Jun 23 09:40 AM a. palmer jr. wrote:
> I thought Nissan was a Japanese car company...How is it that they
> are getting loans from our government? Have they all gone crazy in
> Washington?
Nissan Plans to Make Electric Cars at Tennessee Plant
"Nissan, 44 percent owned by Renault SA, will initially produce 100,000 units a year at the plant..."
bloomberg.com/apps/new...
So the taxpayers get crushed and now the retail investors hold the bag.
You have to admit it was a work of genius however it unethical it was. But welcome to American Capitalism, the sucker int he room is the one who gets crushed.
Hopefully it isn't you.
"...So despite making easy money on new loans, they have continuing writeoff losses on the junk.
There's a LOT of junk left, thus a lot of losses yet to be booked. And if the economy keeps deteriorating, the losses will keep coming and growing. "
You can't build a sound house on rubbish foundations, and no matter how easy it is now for banks to make money on new business, they still have the old rubbish hidden away underground to deal with, and with more jobs and homes being lost, the write-offs and bad debts will only get worse, and the decay from below(before) will cause the whole new build to collapse unless something is done, now.
The first cracks are showing from the smaller banks first for obvious reasons: and it worries me about the eventual losses from the big boys, which are coming; and it'll hurt when they do.
Investors nowadays are facing many risks including risks of their investment managers committing frauds (ala Madoff and many other crooks.) As such, we believe now more than ever investors nowadays regularly (at least annually) should demand and request several key items/evidence below from their investment managers/advisors/sub-... to significantly reduce risks of frauds (or perhaps identify on-going frauds):
Read more detail at: www.sovestor.com/conte...
Think about the whole "Globalization" mantra - OH CRAP; THE WORLD NOW HAS ACCESS TO OUR TAX PAYER MONEY FOR THEIR OWN MONEY HOLES !!! TARP Is Hideous Legislation, If Not Treasonous.
T - Treasury
A - Assisted
R - Rip-Off
P - Plan
Got to love those "Representatives" that do not read the legislation they pass into law.
On Jun 23 09:40 AM a. palmer jr. wrote:
> I thought Nissan was a Japanese car company...How is it that they
> are getting loans from our government? Have they all gone crazy
> in Washington?
Check it out... it reviews the emerging technologies (like QCOM and GOOG) for the mobilization trend and wireless world
Intel is making the netbook to smartphone transition, quite the opposite of Qualcomm. Intel tried and failed at this before, but new Management may be able to push this through. this could revive nokia's dying market share, especially in the smartphone niche.