Opening Bell: 05.21.14 [Dealbreaker]
(Dealbreaker Via Acquire Media NewsEdge) U.S. Said to Seek More than $5 Billion in BNP Settlement (Bloomberg)
U.S. authorities are seeking more than $5 billion from BNP Paribas SA (BNP) to settle federal and state investigations into the lender's dealings with sanctioned countries including Sudan and Iran, according to a person familiar with the matter. The amount sought to resolve the investigation has escalated and now far exceeds the $2.6 billion that Credit Suisse AG (CSGN) agreed to pay in a settlement with the U.S. for helping Americans evade taxes. Discussions are continuing and the final number could change, the person said. Last week, four people familiar with the matter told Bloomberg News that U.S. authorities were asking for at least $3.5 billion to settle the BNP case. As they did with Credit Suisse, U.S. prosecutors are seeking a guilty plea from BNP, which said last month it may need more than the $1.1 billion it has set aside to settle the case.
BlackRock's Fink Says Housing Structure More Unsound Now (Bloomberg)
"We're more dependent on Fannie and Freddie than we were before the crisis," Fink said Tuesday at a conference held by the Investment Company Institute in Washington, noting that he was one of the first Freddie Mac bond traders on Wall Street.
Pot Bust: The SEC Issues a Warning on Marijuana-Related Investments (BusinessWeek)
The securities watchdog has temporarily suspended shares of five companies that claim to be operating in the cannabis industry over questions about the accuracy of their public statements and potentially illegal sales of securities and market manipulation, according to an SEC notice published last week. One of the companies suspended…Denver-based FusionPharm, sells a line of cultivation containers called PharmPods, touted as a "plug and grow" solution for cannabis. Information that FusionPharm disclosed on its assets, revenue, financial statements, business transactions, and current financial condition may be inadequate or inaccurate, according to the SEC's suspension order, which lasts until May 30. FusionPharm didn't immediately respond to a telephone message left with its sales and marketing department.
The Cheap Pimco Fund That Has Gross Reaching for His Wallet (Bloomberg)
Gross has been adding to his personal holdings this year in Pacific Investment Management Co.'s $1.5 billion Dynamic Income fund as demand picks up for an asset class that was left for dead in 2013, data compiled by Bloomberg show. The closed-end credit fund is up 16.6 percent in 2014 as the discount between its share price and the assets the fund owns has disappeared. Most other such funds are still inexpensive by this measure because they haven't yet generated enough demand to close the gap between their share prices and the value of the assets they own. The funds — which raise a fixed amount of money through public offerings and typically use leverage to amplify bets — tanked last year as the Federal Reserve signaled it would start tapering its stimulus.
Why Do Americans Name Babies After Kale and Other Foods? (Bon Appetit)Kale (2013: 257 boys, 5 girls) Looks like kale has been America's darling for longer than we originally thought—the name was first used in 1962. And while we were not surprised to learn that the highest concentration of little Kales can currently be found in California (#agriculture), we were intrigued to learn that the first baby Kale was born in Kansas. It's been gaining popularity since 2005—quite possibly due to the leafy green's parallel rise to prominence. Can Watercress and Mizuna be far behind? Chai (2013: 8 boys, 7 girls) Fewer folks preferred their babies' tea-related names to be of the specific variety: Chai was first used as a girl's name in 1989 and as a boy's name in 1984 (both in California), but each year produced fewer than 10 little Chais. It's possible the name's popularity has something to do with the introduction of Starbucks's chai tea drinks, but based on that logic we should be seeing a lot of little Pumpkin Spices running around, so we're still investigating this one. Tamari (2013: 14 boys, 26 girls) Although people have been eating fermented soybean product for centuries, Tamari as a baby name didn't appear in the U.S. until 2006—with five female Tamaris. Science may be on the fence about soy's health benefits, but sushi (and all of its accoutrements, like wasabi and soy sauce) have been taking the nation by storm in the last few decades. Miso, however—from which tamari is traditionally made—is missing from the SSA database.
Fed Officials: Rate-Hike Tack Will Be Flexible (WSJ)
New York Fed chief William Dudley and San Francisco Fed chief John Williams said this week that the new tools—including so-called reverse repos and interest paid on excess reserves—will likely have a role to play in lifting short-term rates from near zero, where they have been since the heights of the financial crisis in 2008. The discussions on the mechanics of an eventual increase in short-term rates didn’t address an explicit timetable. Mr. Dudley cautioned the Fed’s first rate increase likely lies well in the future and no one knows for sure when it will happen. Mr. Williams said Monday that he thinks it will likely come some time in the second half of next year.
Lloyd Blankfein on the future of Goldman Sachs (Quartz)
In recent months, Goldman has effectively outlined a strategy that zigs, while the rest of the financial world zags. The bank, led by CEO and chairman Lloyd Blankfein, has: 1. stated that it is staying put in commodities trading as others are exiting 2. called out investment banking as one of the keys to its success 3. committed to bond-trading business best known as fixed income currencies and commodities, or FICC. Taken as a whole, Goldman's refusal to part with key activities reflects Blankfein's deep skepticism that the business of large financial institutions has been as fundamentally altered as some think. Goldman Sachs is willing to bet that some of those businesses will be back. If and when they do rebound, Blankfein clearly states, Goldman will be ready. "I've just been doing this a long time. I've been doing this over 30 years," the Goldman Sachs CEO told Quartz in an interview after the firm's annual shareholder meeting in Dallas, Texas on May 16. "I think it's a vanity to say something that has worked is not going to work from this moment forward."
Billionaire Steyer picks fights with Kochs, Rubio in climate change push (NetNet)
The billionaire former hedge fund manager has continued his high-profile campaign against climate change this year, using his NextGen Climate group to create attack ads targeting conservative industrialists Charles and David Koch, Republican Sen. Marco Rubio, and Terri Lynn Land, the GOP Senate candidate in Michigan. Steyer continued his digs at the Koch brothers–prominent supporters of conservative politicians–by challenging them to a debate on climate change and energy policy. “We are using our resources to promote an interest that we believe will help our children, while they appear to be promoting an agenda that will benefit their economic self-interest,” Steyer said when issuing the challenge April 25. “We deal in science, while they are involved in efforts to attack science.”
Cat brings home bag of cannabis (BBC)
The worried owner, who has not been identified, apparently rang the authorities in Dunedin on the county’s South Island after she found the bag with 5g (0.2oz) of cannabis inside. ”You hear of cats bringing dead birds and rats home, but certainly in my career I’ve never seen anything like this before,” Sergeant Reece Munro tells the Otago Daily Times, adding the marijuana has a street value of about NZ$100 ($85, £51). While the origin of the cannabis remains a mystery, Munro says that – until now – he’d never stopped to think about the sniffing potential of cats. “We certainly have police dogs trained to detect drugs – this might be something police could explore in the future,” he says.
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