- China clears JVs for JPMorgan, Morgan Stanley. Chinese regulators granted separate approvals this morning to JPMorgan's (JPM) planned joint venture with First Capital Securities Co, a Shenzhen-based brokerage, and to Morgan Stanley's (MS) planned JV with Huaxin Securities, also known as China Fortune Securities Co Ltd. The long-awaited approvals were expected, and will allow the two U.S. firms to underwrite stocks and bonds in one of the fastest growing securities markets in the world. JPMorgan and Morgan Stanley will have to wait another five years before their joint ventures are able to start the more lucrative broking operations.
- Borders spikes on restructuring talks. Borders (BGP) is reportedly in talks with restructuring advisers including Jefferies & Co. about ways to rework its debt-heavy balance sheet. Borders said "we are seeking to restructure our finances and are not in a liquidity crisis," and sources confirmed that a bankruptcy filing is not being considered for the time being. Shares of the bookstore chain shot up 17% in AH trading on the reports.
- Sara Lee looks to split meat, coffee businesses. Sara Lee (SLE) is said to be moving ahead with plans to split up its meats and coffee businesses into two separate companies after it rejected a takeover offer from Brazil's JBS last month. JBS may try to come back with a higher offer, but might have trouble securing the necessary financing, and with no other potential buyers on the horizon, Sara Lee executives have come to believe that breaking up the two core businesses makes the most sense.
- AIG issues warrants, settles lawsuit. AIG (AIG) announced late yesterday that it would issue 75M warrants for its stock at a price of $45/share, a further step towards recapitalization and repaying its government bailout. The warrants are expected to be issued Jan. 19. Separately, AIG agreed in principle to pay $450M to settle a lawsuit with rival insurance companies over alleged under-reporting of premiums on workers' compensation policies. The civil lawsuit was filed in 2009 by Safeco Insurance of America and Ohio Casualty Insurance. Premarket: AIG +3.3% (7:00 ET).
- Bond insurer sues Goldman over Abacus. Bond insurer ACA Financial Guaranty filed suit against Goldman Sachs (GS) yesterday for alleged fraud and unjust enrichment, claiming Goldman deceived it into insuring a transaction that was designed to fail. The transaction in question is the now-infamous Abacus deal, and Goldman was eventually forced to pay $550M to settle civil fraud charges related to the Abacus transaction. ACA is seeking $120M in damages.
- Citigroup seeks buyers for CitiFinancial. Citigroup (C) is looking to sell CitiFinancial, reports the Financial Times, in a deal that could possibly bring in as much as $1B. Citigroup has begun contacting potential buyers for CitiFinancial, which is the largest consumer finance company in the country and was originally meant to help Citi transform itself into an all-purpose 'financial supermarket.' Talks with private-equity firms and other finance companies are in early stages.
- Obama names new chief of staff. President Obama named former Commerce Secretary Bill Daley as his new chief of staff, a move meant to bring more business experience to his team. Daley, a politician turned financier, was an outspoken critic of the financial reform regulations and had publicly called on Pres. Obama to steer a more centrist course for the economy. Pres. Obama is expected to reshuffle several other key positions as well.
- Facebook signals possible IPO date. According to a private-placement document sent to a group of potential investors, Facebook plans to increase its number of investors above 500 this year, crossing the SEC threshold for financial disclosure requirements. As a result, Facebook will likely begin disclosing large amounts of financial information or else go public by April 2012.
- In Asia, Japan +0.1% to 10541. Hong Kong -0.4% to 23687. China +0.5% to 2839. India -2.4% to 19692.
- In Europe, at midday, London -0.6%. Paris -0.3%. Frankfurt -0.1%.
- Futures at 7:00: Dow flat. S&P flat. Nasdaq flat. Crude +0.4% to $88.71. Gold -1% to $1357.90.
Friday's Economic Calendar
- 8:30 Nonfarm payrolls
9:30 Hearing: Bernanke Testifies on Economic Outlook
10:30 ECRI Leading Index
11:00 Fed's Duke: Economic Outlook
12:15 PM AEA Conference (Fed's Evans, Rosengren, Kocherlakota)
3:00 PM Consumer Credit
- Notable earnings before Friday's open: KBH
The SA Currents team contributed to this post.
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