Daily Archives: September 22, 2014

Citigroup : seeks stay on Argentine debt order; government threatens penalties

Citigroup Inc (>> Citigroup Inc) plans to ask a U.S. judge to put on hold an order barring it from processing payments on $8.4 billion in bonds issued under Argentine law following the country’s record 2002 default, court documents showed.

Citigroup Inc (>> Citigroup Inc) plans to ask a U.S. judge to put on hold an order barring it from processing payments on $8.4 billion in bonds issued under Argentine law following the country’s record 2002 default, court documents showed.

Citigroup says it faces regulatory and criminal sanctions by the South American country, which defaulted on some of its debt in July, if it cannot process the $5 million interest payment due to bondholders by Sept. 30.

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Plosser, hawkish chief of Philadelphia Fed, to retire in March

Richard Fisher, Fed Chief of Dallas and outspoken critic for TBTF banks, is retiring in April.

(Reuters) – Philadelphia Federal Reserve Bank President Charles Plosser, one of the sharpest internal critics of the central bank’s loose monetary policy, will retire next year in a move that could ease pressure to raise interest rates more quickly.

Plosser, 66, has dissented on policy decisions six times during his eight-year stint at the Fed, including at the central bank’s last two meetings.

He has frequently argued that the Fed’s aggressive easing of monetary policy could spark inflation, and in July and September he broke with colleagues over the central bank’s pledge to keep rates near zero for a “considerable time” after a bond-buying stimulus program ends.

The former economics professor will step down on March 1, the Philadelphia Fed said in a statement on Monday.

The tenor of the debate on the policy-setting Federal Open Market Committee could change with Plosser’s departure and the impending retirement of Dallas Fed chief Richard Fisher, who like Plosser is one of the central bank’s most vocal inflation “hawks.” Both take to the public podium frequently.

“The absence of Plosser and Fisher will certainly be felt,” said OSK-DMG economist Tom Lam. Because of their “hardcore” views, he said, they may play a role in balancing market expectations about a Fed that may otherwise be perceived as dovish.

Although the chiefs of the Philadelphia and Dallas Fed won’t have a vote on monetary policy next year, all 12 Fed bank presidents take part in the central bank’s meetings, and decisions often incorporate views of both voters and non-voters.

Fisher, 65, had said previously he planned to leave the Fed in April. Regional Fed presidents generally face mandatory retirement after 65.

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Should The U.S. Break Up The Big Banks?

Title: Should The U.S. Break Up The Big Banks?
START DATE: Sunday September 21
TIME: 6:00 PM – 8:00 PM
Location Details:
Stream or download at http://greatspeechesandinterviews.blogspot.com/ Broadcast at Access Sacramento, Sundays 6-8pm PDT at http://www.live365.com/stations/accesssacramento?site=pro
Event Type: Radio Broadcast
Contact Name steve lerman
Email Address great.speeches [at] yahoo.com
Phone Number
Douglas Elliott (left) and Paul Saltzman argue against the motion
“Break Up The Big Banks” Samuel LaHoz/Intelligence Squared U.S.

In 2008, the U.S. Treasury committed 245 billion in taxpayer dollars to stabilize America’s banking institutions. Banks that were once “too big to fail” have only grown bigger. Was size and complexity at the root of the financial crisis, or do calls to break up the big banks ignore real benefits that only economies of scale can pass on to customers and investors? The debaters are Richard Fisher, Simon Johnson, Douglas Elliott, and Paul Saltzman.

Richard Fisher (left) and Simon Johnson argue in favor of breaking up big banks,
as moderator John Donvan looks on. Samuel LaHoz/Intelligence Squared U.S.

Before the debate, the audience at New York City’s Kaufman Center voted 37 percent in favor of the motion and 19 percent against. Forty-four percent were undecided. After the debate, 49 percent supported breaking up big banks which is an increase of 12 percentage points and 39 percent opposed which is an increase of 20 points. That made the side arguing against breaking up the banks the winners of the debate.
Source: intelligence2 Debates: Should The U.S. Break Up Big Banks?

Christie’s Pension Overseer Invested New Jersey Money In Fund He Is Linked To Privately

In the context of a New Jersey pension system stocked with $81 billion in assets, here was a transaction that seemed unremarkable. It was 2011, the year after Gov. Chris Christie had installed his longtime friend Robert Grady to oversee the state pension fund’s investments. A former executive from the heights of finance and a national Republican Party power broker, Grady was pursuing a new strategy, shifting money into hedge funds and private equity holdings in the name of diversification and higher returns. He was now pushing to entrust up to $1.8 billion of New Jersey pension money to the Blackstone Group, one of the largest players in private equity.

But one special feature of that Blackstone bet underscores the interlocking relationships at play as states increasingly rely on the counsel and management of Wall Street institutions to invest their pension dollars: One of the private equity funds New Jersey was investing in – a pool of money called Blackstone Capital Partners VI – claimed among its investors a Wyoming-based company named Cheyenne Capital. That company’s list of partners included one Robert Grady.

In short, Grady was pushing to invest New Jersey public money in the same Blackstone fund in which his own firm was investing — without disclosing that fact to N.J. officials.

This sort of arrangement is generally anathema in the realm of public pension oversight, where state rules often bar public officials from being involved in investments in which they or their companies have a financial interest.

Such rules aim to protect public funds from being used to grease the wheels for private deals. Without such strictures, a private equity firm might be tempted to court managers of state pension funds by giving them their own piece of the action in exchange for delivering public money on terms less-than-optimal for taxpayers. Managers of state pension money might, say, be rewarded with lower fees on their own investments while agreeing to turn over public pension money to be managed at higher fees.

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CEO of shoe maker: I didn’t disappear with any money, I was on holiday

The chief executive of a shoe company who disappeared at the same time as some of the firm’s cash has denied absconding with any money, saying he was on holiday.

Wu Qingyong, who was fired from German-listed Chinese shoe maker Ultrasonic after he went missing, said reports he had taken any of the company’s funds were “purely rumours”.

Wu Qingyong claimed he was on holiday in Hong Kong before travelling to the Philippines for medical treatment. During the trip he lost his mobile phone, he said.

“Rumours say that I took more than a billion (yuan). This is pure rumour. No such thing has happened. The company’s financial situation remains normal,” Wu Qingyong said in a video interview with Chinese news outlet Sina.

Ultrasonic warned investors last Thursday that insolvency procedures were “imminent” following the financial loss. The company claimed that Wu Qingyong and his elder son Wu Minghong, the chief operating officer, had “drawn the credit facility in two tranches in August and transferred most of the money from Hong Kong to China shortly before their getaway”. Wu Minghong has also been sacked.

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Wells Fargo Advisors to pay $5 million fine over controls failure

WASHINGTON (MarketWatch) — Wells Fargo Advisors will pay a $5 million penalty to settle Securities and Exchange Commission charges it didn’t have adequate controls to prevent an employee from insider trading. The agency said Wells Fargo Advisors admits wrongdoing, and that multiple groups were at fault by not preventing a broker from trading on a client’s nonpublic information. The SEC said the broker learned from a customer that Burger King was going to be acquired by a private-equity firm, and traded on that information. The charges are the first against a broker-dealer for failing to protect a customer’s material nonpublic information.

Source: MarketWatch

N.Y. financial regulator says to focus on cyber security

New York’s financial regulator said on Monday his agency will focus on cyber security over the next year, saying the possibility of a systemic attack to the financial system is one thing that keeps him awake at night.

“It is impossible to take it seriously enough,” said Benjamin Lawsky, superintendent of the Department of Financial Services (DFS) for the state of New York.

Cyberterrorism is “the most significant issue DFS will work on in the next year,” he said, speaking at a Bloomberg Markets event at the Museum of Jewish Heritage in lower Manhattan.

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