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Feb 26, 2016

Wall Street at Close Report on February 26, 2016, by CNBC: Stocks End Mixed But Higher for Week< Transports Post 6-Week Win Streak.

cnbc.com

Evelyn Cheng
 
U.S. stocks closed mixed Friday, giving up most of their opening gains as oil reversed and inflation data increased expectations for a rate hike in the coming year.

The Guardian | Opinion | Mental Health - Mental Ilness ia a Result of Missery, Yet Still We Stigmatise It by Richard Bentall.

theguardian.com
 
Richard Bentall
 
It matters how we talk and think about mental health. Get it wrong, and people can end up being misled, or even worse, hurt. Last week the BBC ran a well-intentioned season about mental health that, unfortunately, gave a completely lopsided view of psychiatry.

CMI Spot Prices as of Close of Trading in New York on February 26, 2016.

CMI Gold & Sliver

Spot Prices as of traditional New York closing times

Friday, February 26, 2016


 

FRB Speech - February 26, 2016: Speech by Governor Brainard on What Happened to the Great Divergence.

www.federalreserve.gov

Speech

Other Formats

Governor Lael Brainard

At the 2016 U.S. Monetary Policy Forum, New York, New York

February 26, 2016

What Happened to the Great Divergence?

FTC Competition Matters - February 26, 2016: Antitrust Violation vs. Injury-in-Fact: A Distinction that Makes a Difference.

Competition Matters Banner


By Dan Butrymowicz, Bureau of Competition
February 26, 2016
 
There is a basic but important difference between antitrust cases brought by the government and those brought by private parties: All plaintiffs, including government enforcers like the FTC, must prove an antitrust violation, which requires showing harm to competition. But private plaintiffs must make an additional showing: to establish antitrust ‘standing,’ private plaintiffs must prove that the antitrust violation caused harm to them. This distinction is deeply rooted in our system of antitrust enforcement, which permits many types of enforcers but limits standing to those with a cognizable claim of injury. In private cases, the distinction between harm to competition and harm to an individual often seems academic because the private plaintiffs typically attempt to prove harm to competition by showing they were injured. But when courts and litigants miss this doctrinal distinction on the road to resolving a case, it can have significant implications for antitrust law and policy.

European Markets at Close Report on Februuary 26, 2016> Stocks End 1.6% Up on Oil, Miners< DAX Up 2%< RBS Tank

cnbc.com
 
Arjun Kharpal, Alexandra Gibbs
 
European markets finished sharply higher on Friday, buoyed by a recovery in mining stocks and oil prices, on top of a positive set of company updates.

Reuters | Markets - February 26, 2016: China Talks Up Growth Agenda at G20 Amid Lack of Wider Policy Unity

reuters.com
 
By Gernot Heller and Brenda Goh
 
SHANGHAI China sought to restore confidence in its economy as financial leaders from G20 nations gathered in Shanghai on Friday, and Premier Li Keqiang urged greater global coordination and consideration of policy spillovers.

U.S. Stock Market Future Indications Update - February 26, 2016, by MarketWatch: Stock Futures add toGains After GDP Data.

marketwatch.com
 
Ellie Ismailidou, Victor Reklaitis
 
U.S. stock futures added to gains after the annual pace of economic growth in the U.S. was unexpectedly marked up in the fourth quarter to 1%.

BEA News: Gross Domestic Product, 4th quarter and annual 2015 (second estimate): GDP Increased Increased at an annual Rate of 1.0% in Q4 of 2015.


The U.S. Bureau of Economic Analysis (BEA) has issued the following news release today:

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 1.0 percent in the fourth quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.

The full text of the release on BEA's Web site can be found at www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

NYT First Draft on Politics - February 26, 2016: In The Line of Fire by Maggie Haberman.

Friday, February 26, 2016

The New York Times

NYTimes.com/FirstDraft »

The New York Times

Friday, February 26, 2016


Senator Marco Rubio, Donald J. Trump and Senator Ted Cruz at the CNN Republican presidential debate at the University of Houston on Thursday.
Senator Marco Rubio, Donald J. Trump and Senator Ted Cruz at the CNN Republican presidential debate at the University of Houston on Thursday. Eric Thayer for The New York Times
In the Line of Fire
By MAGGIE HABERMAN

Reuters | Business - February 26, 2016: FrankFurt Deal is Brexit-Proof Say Exchanges

reuters.com
 
By Simon Jessop
 
LONDON Europe's biggest financial exchanges said on Friday their proposed merger is effectively bullet-proofed against a British vote on European Union membership.

Reuters | Technology - February 26, 2016: Foxconn Says in Talks With Sharp Over Deal Hitch; Hopes for Agreement

reuters.com
 
By Ritsuko Ando and J.R. Wu
 
TOKYO/TAIPEI Foxconn, a major supplier to Apple Inc (AAPL.O), said on Friday it was in talks with Sharp Corp (6753.T) to clarify a late hitch to its takeover of the Japanese firm, worth an estimated near-$6 billion. It said it hopes for a "satisfactory agreement".

RT "Cross Talk" Partitioning Syria - February 26, 2016.

"CrossTalk" Partitioning Syria?

RT Shows
Published on Feb 26, 2016
Even before the agreed Syria ceasefire deal goes into effect, Secretary of State Kerry is talking about the possible partition of Syria. The implications of this are crucially important – is Washington really interested in a ceasefire? Is regime change still front and center? And will the international community stand by as ISIL is given its own state?
CrossTalking with Mohammad Marandi, Ammar Waqqaf and Michael Vlahos.
Recorded from RT, CrossTalk, February 26, 2016

Bloomberg View - February 26, 2016: How to Get Irish Taxpayers Smiling by The Editors.

bloombergview.com

The Editors
Ireland's next government will inherit strong economic growth and a lopsided tax system. Its main task will be to fix the second without spoiling the first.

DealBook Today's Top Headlines - February 26, 2016: Legal Costs Create a Loss for R.B.S. | Nightmare in the Pipeline | Companies Required to Report Leases | Sharp Says Foxconn Talks Are Continuing.

Friday, February 26, 2016
TODAY'S TOP HEADLINES
By AMIE TSANG
LEGAL COSTS CREATE A LOSS FOR R.B.S. The Royal Bank of Scotland reported another multibillion-dollar loss in the fourth quarter of 2015, largely the result of having to put aside 2.21 billion pounds, or about $3 billion, for legal and regulatory matters, Chad Bray reports in DealBook.

The bank posted a loss of £2.74 billion, compared with a loss of £5.79 billion in the fourth quarter of 2014.

It had to make a provision of £1.5 billion for mortgage-backed securities litigation in the United States and £500 million related to payment protection insurance, an insurance product that was sold to customers when taking out mortgages, applying for credit cards or seeking other loans. British banks have had to pay billions to compensate customers over improper sales of the product. Including the latest charge, the bank has set aside about £4.3 billion to cover customer redress related to payment-protection insurance.

The bank is also in the process of restructuring - dismantling its global investment bank and focusing on retail and corporate banking in Britain.

Ewan Stevenson, the chief financial officer of R.B.S., warned that the bank expected "further substantial conduct costs to come."

For the full year, the bank reported an annual loss of £1.98 billion, from a loss of £3.47 billion in 2014. The full-year results included restructuring costs of £2.93 billion.

R.B.S has not posted a full-year profit since 2007.
NIGHTMARE IN THE PIPELINE Shares in Williams Companies plunged on Thursday after The New York Times reported that Energy Transfer had considered offering a payment of more than $2 billion for it to walk away from a deal, Reuters reports.

The plunge in oil prices created plenty of problems for energy companies, but Energy Transfer has also had to struggle with buyer's remorse after striking a $38 billion deal to buy Williams Companies, Leslie Picker and Julie Creswell report in DealBook.

Kelcy Warren, Energy Transfer's chief executive, pursued Williams Companies doggedly for months, but the deal seems to have soured just five months after signing.

Shares of both companies had plummeted more than 60 percent even before the Times report, shedding a combined $37 billion in market value. This was partly because of the decline in energy prices, but investors are also quavering about the complicated merger.

The value of the deal took another hit on Thursday after Energy Transfer published disappointing earnings.

Now Energy Transfer is frantically searching for a way out, although it never presented the offer of a $2 billion payment for walking away.

It also has another looming problem. Under the terms of the deal, Energy Transfer has to pay $6 billion in cash to Williams as part of the cash-and-stock acquisition. It will have to either raise additional debt or sell assets, but cascading energy prices have made both options unattractive. One of Williams's biggest customers is also facing bankruptcy.

Short of filing for bankruptcy itself, Energy Transfer is stuck buying Williams, people involved in the transaction say. Williams shareholders, however, could still vote down the merger.
COMPANIES REQUIRED TO REPORT LEASES The Enron accounting scandal happened nearly 15 years ago, but a new accounting rule announced on Thursday shows that its effect is still being felt in corporate America.

The Financial Accounting Standards Board issued a rule that changes how companies account for most of their leases, Peter Eavis reports in DealBook.

Leases are similar to loans, but companies have been allowed to exclude leases, and thus their true financial obligations, from their financial statements.

The new rules requires that the most common type of lease be included on a company's balance sheets.

Regulators started considering this change after Enron collapsed in 2001. Its executives made the company look stronger by keeping some of its financial obligations "off-balance sheet."

The Financial Accounting Standards Board estimates that the rule could add more than $1 trillion of obligations to liabilities on the balance sheets of public companies traded in the United States. This compares with $26 trillion of total liabilities.

Companies had criticized the rule because of the possibility that it might make them look more indebted, but the lease obligations would be offset by corresponding assets and would not erode a company's net worth. It would also make it easier for investors to compare the strength of several companies in one sector.
ON THE AGENDA A revised estimate of economic growth in the fourth quarter of 2015 will be released at 8:30 a.m. Data on consumer spending during January will be released at 10 a.m.
SHARP SAYS FOXCONN TALKS ARE CONTINUING After confusion on Thursday over whether the deal for Foxconn to buy Sharp was going ahead, Sharp said on Friday that talks were continuing, The Wall Street Journal reports.

"Sharp is in talks with Foxconn to seal a deal, including cross-checking various of our business conditions, including potential risks including contingent liabilities," Sharp said in a statement to the Tokyo Stock Exchange.

"We've been appropriately disclosing contingent liabilities through financial reports, based on accounting rules. We recognize no more such risks that need to be disclosed."

Sharp announced on Thursday that it had agreed to a takeover by Foxconn, but Foxconn unexpectedly balked just before the deal was to be completed , as Jonathan Soble and David Barboza report in DealBook.

Foxconn had delayed because Sharp had said the day before that it could be liable for close to $3 billion in potential liabilities, according to a person with knowledge of the talks. Foxconn said it needed to review "new material information" from Sharp before committing.

The decision raises questions about what might be lurking in Sharp's books.

It was not meant to be like this, Quentin Webb writes in Breakingviews.

When Foxconn became the leading bidder, it seemed like a promising sign of change in corporate Japan. A victory would mean the board picked the most compelling pitch, not the establishment favorite.

In truth, Foxconn's bid is far more respectful of the status quo than Innovation Network's breakup proposal, and softer on creditors, too.

Failure at this stage would embarrass all concerned and the communications breakdown does not bode well for any deal in the future.

Sharp now looks either desperate in leaving it so late to share important data points, or confused in failing to understand Foxconn.
MERGERS & ACQUISITIONS »
A plane taking off from London City Airport. The airport, which handled flights for 4.3 million passengers in 2015, is relatively close to the City of London, the traditional home of London's financial community.
Canadian-Led Consortium to Buy London City Airport The group was said to have agreed to pay $2.8 billion for the company that operates the airport, which is close to the center of London.
Merger Plans Fall Apart for Oi, Troubled Brazilian Telecom Telecom Italia's Brazilian operator said it was ending talks with Oi on a merger proposed by a Russian oligarch.
Chinese Suitors Said to Plan Offers for Ausgrid State Grid Corporation of China, the nation's biggest electricity distributor, and the billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings are among the suitors planning to submit bids for the Australian power network Ausgrid, Bloomberg News reports, citing people with knowledge of the matter.
Samsung Said to Be Restarting Talks to Buy Tidal According to The New York Post, a source close to the talks said, "Samsung is re-engaging; they are working on something really big, and they're keeping it very quiet in case it leaks."
Wanda Group Sets Its Sights on France's Europa City The Chinese real-estate and entertainment conglomerate Dalian Wanda Group is in advanced talks to invest in a retail and cultural development known as Europa City near Paris, The Wall Street Journal reports, citing people familiar with the situation.
Deutsche Börse Timed London Stock Exchange Bid to Exploit E.U. Uncertainty Deutsche Börse deliberately began its bid for the London Stock Exchange Group during the uncertainty surrounding Britain's referendum to upstage rivals in the United States, The Financial Times reports, citing people close to the negotiations.
INVESTMENT BANKING »
Lloyds Bank's Dividend Surprise Sweetens Profit Miss Lloyds Banking Group rewarded investors with a surprise £2 billion payout on Thursday, underlining its intent to be the biggest dividend payer among Britain's banks and its recovery after a state bailout.
Japan Post Bank Faces Bigger Hit from Negative Rates The negative rates policy, which came into effect last week, will subject an estimated 10 trillion yen, or about $88.6 billion, of cash parked at the Bank of Japan by the nation's combined financial institutions to an interest rate of minus 0.1 percent.
For the latest updates, go to NYTimes.com/DealBook
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PRIVATE EQUITY »
In College Endowment Returns, Davids Beat the Goliaths In the latest Nacubo-Commonfund study, endowments under $25 million averaged a five-year annualized return of 10.6 percent versus 10.4 in the $1 billion-plus category, James B. Stewart writes in the Common Sense column.
HEDGE FUNDS »
Elliott Defends Acquisition of Samsung C&T Stake The hedge fund Elliott Associates denied any wrongdoing on Friday in its acquisition of shares in Samsung's de facto holding company, after South Korea's top financial regulator announced it would investigate the deal.
Hedge Funds Spar Over Norske Skog Debt Restructuring The dispute centers on a contentious style of hedge fund trading that involves buying up the debt of distressed companies while at the same time seeking to profit from bets that the company will default.
LEGAL/REGULATORY »
Antonio Weiss, counselor to the Treasury secretary, Jacob Lew, told the House Natural Resources Committee that time was running out for Puerto Rico.
Treasury Official Urges Solution for Puerto Rico Some lawmakers worry that a debt restructuring for the island, similar to bankruptcy, could have broad implications for states' debt.
Eni, Hit by Falling Oil Prices, Reports $9.4 Billion Loss The Italian oil giant became the latest energy company to be hit by sharply lower crude prices, which have slashed revenue and led to asset write-downs.
Library of Congress Acquires Drawings of Courtroom Drama The sketches bring to life trials as varied as that of Charles Manson in the 1970s to those of recent terrorism suspects.
Sorting Out Dodd-Frank's Treatment of Failed Broker-Dealers Dodd-Frank's Title II provision for the broker-dealers, also known as "orderly liquidation authority," has always been a bit confusing.
Lawmakers Urge Commodities Agency to Keep Plan to Limit Futures Contracts Lawmakers criticized a report, by a committee composed largely of representatives from the energy and trading industries, that advised the C.F.T.C. to drop proposed limits.
Apple Goes to Court, and F.B.I. Presses Congress to Settle iPhone Privacy Fight In a court filing, Apple said the order had broad implications that would "inflict significant harm - to civil liberties, society and national security."
Chinese police stand guard ahead of a meeting of finance ministers and central bank governors on Thursday in Shanghai. China is struggling with heavy debts, a slowdown in manufacturing, stagnant exports and a flood of money leaving its borders.
Global Finance Leaders Meet as Economic Skies Darken Government and central bank officials are gathering in Shanghai with few easy answers to sluggishness in Europe, China and Japan.
China's central bank governor, Zhou Xiaochuan, center, and the first deputy governor, Yi Gang, left, spoke to reporters at the start of the Group of 20 finance ministers meeting.
In Rare Appearance, China's Central Bank Chief Says All Is Well At a news conference at the start of a G-20 meeting, Zhou Xiaochuan dismissed concerns about erosion of China's foreign currency reserves.
Herbalife Says It Is In Talks with F.T.C. The Federal Trade Commission opened an inquiry into Herbalife after allegations by the hedge fund manager William A. Ackman that it had a fraudulent business model that he compared to a pyramid scheme.
 

U.S. Stock Market Future Indications - February 26, 2016, by MarketWatch: Dow Futures Rise More Than 100 Points, Set Bump Up Weekly Gain.

marketwatch.com
 
Victor Reklaitis
U.S. stock futures signaled a step up at the open Friday, on track to add to a sizable weekly gain, as bullish investors seized on stocks regaining a key chart level.

The Guardian | Business | Banking | Chinese Economy - February 26, 2016: Chinese Central Bank Chief Hints at More Stimulus for Slowin Economy.

theguardian.com

Martin Farrer
 
The head of China’s central bank has dropped a strong hint that Beijing is preparing to launch another round of stimulus as he sought to reassure the financial markets about the country’s flagging economy.

The Guardian | UK | Media Briefing - February 26, 2016: Today's Media Stories From the Papers.

theguardian.com

Top story on MediaGuardian

Asian Markets at Close Report on February 26, 2016: China Stocks Jump 1% a Day After Tumble

marketwatch.com
 
Chao Deng 
 
Markets in Asia closed mostly higher Friday, with Chinese shares ultimately edging up after a choppy trading session, recovering from the previous day’s tumble.