Daily Archives: June 24, 2016

Here’s What the Goldman Sachs and JP Morgan Told Staff to Calm Fears About Brexit

Yahoo Finance:

Here are the memos, via Business Insider.

Blankfein’s memo:

As you may have seen by now, the British people have voted to leave the European Union, and we respect this outcome. We have had a strong team focused on this potential result for many months. There is no immediate change to the way we conduct our business. A process of negotiating the terms of the exit will now begin, and is expected to take a considerable period of time. Goldman Sachs has a long history of adapting to change, and we will work with the relevant authorities as the terms of the exit become clear. We are committed to our people and our clients, and will work diligently to ensure the best possible outcome. We will continue to communicate with you as relevant information becomes available.

Lloyd C. Blankfein

Gary D. Cohn

Dimon’s memo:

British citizens voted yesterday to begin a new, independent relationship with the European Union. This decision is a seminal moment in European politics and in the history of the United Kingdom.

J.P. Morgan has 16,000 employees in the U.K. We are extremely proud of the work they do and our long history in the country. Regardless of today’s outcome, we will maintain a large presence in London, Bournemouth and Scotland, serving local clients as we have for more than 150 years.

The framework of the U.K.’s engagement with the EU, including trade agreements, will be negotiated over a period of years. For the moment, we will continue to serve our clients as usual, and our operating model in the U.K. remains the same.

In the months ahead, however, we may need to make changes to our European legal entity structure and the location of some roles. While these changes are not certain, we have to be prepared to comply with new laws as we serve our clients around the world. We will always do our best to take care of our people and do the right thing during times of change.

We recognize the potential for market volatility over the next few weeks and we are ready to help our clients work through it. As of today, there are no changes to the structure of our clients’ relationships with JPMorgan Chase or their ability to work with our firm, but again this may change in the coming months or years.

We are hopeful that policymakers will recognize the immense value created through a continued open economic engagement between the U.K. and EU members. As negotiations offer more clarity over the coming months, we will communicate with you and with our clients regarding any relevant changes.

Jamie Dimon, Daniel Pinto, Mary Erdoes

Panama Papers are available. Why hasn’t U.S. asked to see them?

Panamanian government has received 3 requests from countries, but not U.S.

Little action apparent on Capitol Hill, other than questions from a committee

The Obama administration announced plans in May, but nothing has come of them

Nearly three months after the revelations from the Panama Papers exposed politicians, drug cartels and the wealthy hiding millions behind offshore companies, the U.S. Justice Department has yet to ask its Panamanian counterpart for access to seized records.

The inaction raises questions about the response by Congress and the Obama administration to the unprecedented leak that rocked governments in Iceland, Pakistan and the United Kingdom and prompted investigations worldwide.

“The biggest financial scandal involving offshores is greeted with a yawn by U.S. law enforcement officials?” said Charles Intriago, a former federal prosecutor and money-laundering expert in Miami. “It doesn’t make any sense that a pot of evidentiary gold is going unpursued by the U.S. Department of Justice.”

Brexposure: The US companies being hit hardest by Brexit vote

Well, these companies have less exposure. But, what about the other companies that have more exposure? CNBC:

Among the most exposed companies are global brands like Molson Coors, BlackRock and eBay. Each of them get more than 15 percent of their revenue from the United Kingdom.

As a broad sector, energy names in particular are heavily exposed to the U.K. Newmont Mining generated 64 percent of its revenue in the U.K., the highest figure among the S&P 500. Bucking the trend of exposed companies’ poor performance, the company’s stock is leading the index, up 5.3 percent today. Newmont is likely benefiting from its gold mining operations as investors seek safe havens from the otherwise volatile markets.

Apache Corp., Transocean, ConocoPhillips and Marathon Oil Corp. are not as lucky. The oil and gas companies are exposed to U.K. markets and have no security like gold. The energy sector has already been hit hard in the past year by falling oil prices and shifts in fossil fuel demands.

All energy stocks in the S&P 500 were down as of 10:30 a.m. ET.

Financials, energy lag

Financials and energy companies led the index lower, averaging declines of 3.6 percent and 3.5 percent, respectively. Invesco, which generates 23 percent of its revenue in the U.K., fared the worst, down 10 percent after an hour of trading. E*Trade, Morgan Stanley and Citigroupwere also down around 8 percent.

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JPMorgan Chase’s Jamie Dimon has said that a vote to leave the EU could threaten up to 4,000 jobs in the country that support the bank’s European business. JPMorgan employs some 16,000 people in Britain, according to Reuters. Toyota has said that a Brexit could lead to 10 percent duties on its cars built in the U.K.

REVEALED: Obama Administration Approved Gulf Fracking During Deepwater Horizon Disaster

Hydraulic fracturing (or “fracking”) technology has been widely used to maximize oil-and-gas production in the Gulf of Mexico in recent years, and the government allows offshore drillers to dump fracking chemicals mixed with wastewater directly into the Gulf, according to documents released to Truthout and the Center for Biological Diversity under the Freedom of Information Act (FOIA).

From 2010 to October 2014, the Obama administration approved more than 1,500 permit applications for offshore drilling plans that included fracking at hundreds of wells across the Gulf of Mexico, according to the documents. An unknown number of permit applications have yet to be released, so the scope of offshore fracking in the Gulf is likely larger.

During this time regulators issued more than 300 “categorical exclusions” to exempt drilling plans that included fracking from complex environmental reviews. The use of categorical exclusions has been under heavy scrutiny since 2010, when the media learned that BP’s drilling plan for the Deepwater Horizon rig was categorically excluded from review in the months before a deadly explosion on the platform caused the worst oil spill in United States history.

Federal records show that regulators approved several drilling plans involving fracking in the Gulf of Mexico even as the Deepwater Horizon disaster unfolded and oil from a broken well spewed into the Gulf for weeks on end.

“The Deepwater Horizon disaster should have been a wake up call that we need to move away from offshore drilling,” said Kristen Monsell, an attorney for the Center for Biological Diversity, in an interview with Truthout. “But now the federal government is rubber-stamping practices like fracking without doing any environmental review or notifying the public, and it’s just another disaster waiting to happen.”

Read on from Truthout.

Brexit rattles regulators weighing LSE-Deutsche Boerse merger

German regulators contested plans for a merged Deutsche Boerse-London Stock Exchange to be based in London following Britain’s vote to leave the European Union, while one politician even said the deal was now as good as dead.

Deutsche Boerse (>> Deutsche Boerse AG) and LSE (>> London Stock Exchange Group Plc) agreed in March to a $30 billion merger to create a European trading powerhouse that would be domiciled in Britain with headquarters in both London and Frankfurt.

Two German regulatory sources told Reuters on Friday, however, that there was increasing scepticism about London being the base for the holding company of the combined group.

“There is rising irritation and increasing concern that London as a base poses a problem,” one of the sources said after the Brexit vote.

The exchange regulator in the German state of Hesse, where Deutsche Boerse is based and which has the power to block the deal, declined to comment.

The state minister to whom the regulator answers, however, said Brexit would play a role in the decision about whether to approve the deal.

“We will take account of yesterday’s decision in our review,” Tarek Al-Wazir wrote on his Facebook page. “We will wait and see whether the plans remain in their current form.”

Read on.

 

#Brexit: Here is the immediate impact on U.S. mortgage and housing finance

After much speculation on the U.K.’s decision — British voters decided to leave the European Union — now many speculate about how this will affect the U.S. economy.

Here is a summary of the opinions that impact the housing and mortgage finance industry.

First, Standard & Poor’s reports it may downgrade UK sovereign ratings: now at “competitive disadvantage compared with other global financial centers.”

Stateside, financial institutions sought to downplay fears in the early hours Friday.

“We affirm our assessment that the U.K. economy and financial sector remain resilient and are confident that the UK authorities are well-positioned to address the consequences of the referendum outcome,” the G-7 finance ministers and central bank governors stated.

“We recognize that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability,” their statement continued.

Read on.

 

Obama says he doesn’t see his daughters on Wall Street

When asked about the likelihood of working on Wall Street after leaving the Oval Office, Obama just laughed.

NY Post:

Obama was asked about whether he would be happy if Malia, 17, and Sasha, 15, ended up working on Wall Street in an interview with Bloomberg Businessweek.

“Well, I’m pretty certain that my daughters will not end up working on Wall Street,” he said in the interview that touched on his reputation as an “anti-business” president.