Tuesday, April 20, 2010


·         China FX decision could come this week - The U.S. Commerce Department could decide this week whether to launch a groundbreaking investigation into charges Chinais subsidizing exports of an aluminum product by undervaluing its currency; while Treasury recently delayed a report into whether China was a currency manipulator, this Commerce Dept probe could bring the issue front-and-center again (Reuters)
·         China & Yuan - The U.S. will take action over the Chinese currency, possibly by bringing a case to the World Trade Organization, should multilateral pressure fail to work, House Ways and Means Committee Chairman Sander Levin said yesterday – Bloomberg
·         SEC vote on whether to pursue Goldman case was split along party lines, the 5-member panel voted 3-2, w/the two Republicans against pursuing action.  Such a split is a relatively unusual development that shows the agency wasn't fully behind one of its most recent major decisions.  WSJ 
·         Banks could be subject to a fiduciary responsibility when entering into interest-rate swps w/cities, towns, and other muni issuers – Bloomberg
·         Financial regulatory overhaul – the White House and Congressional Dems appear increasingly willing to jettison a controversial ~$50B future bailout fund.  WSJ   note that this was reported by Bloomberg over the weekend.
·         Mortgage aid – according to a report from the TARP watchdog, the White House should consider forcing lenders to make principal reductions for struggling homeowners who owe more than their home is worth; Barofsky said the voluntary nature of the Home Affordable Modification Program (HAMP) principal reduction plan sets up situations where some borrowers benefit, while others who may be just as deserving, do not. – Reuters
·         White House favors vague "Volcker Rules" - the so-called "Volcker rule" incorporated into Senate Finance Chairman Chris Dodd's proposed financial regulatory reform bill is likely to remain intentionally vague because it gives the regulators more discretion in determining if banks are running afoul of the government's policies.  NY Post. http://www.nypost.com/p/news/business/white_house_favors_vague_volcker_ciprho2wqyWcGJWGwnQafM?CMP=OTC-rss&FEEDNAME=  
·         Financial regulatory reform – White House chief of Staff Emanuel meets w/some of NY's top investors Sunday night – he emphasized that there was a "12-week legislative calendar" to get the administration's main goals accomplished. According to the attendee, Emanuel said the administration intended to confirm a Supreme Court nominee, appoint three members to the Federal Reserve, pass an energy bill and finish financial regulation legislation.  Washington Post.  http://www.washingtonpost.com/wp-dyn/content/article/2010/04/19/AR2010041904050.html?wprss=rss_politics
·         Obama coming to Wall St on Thurs for speech on financial regulatory reform - In his speech on Thursday, aides said Obama will take aim at the "multi-trillion" derivatives industry and will take the opportunity to remind voters of the irresponsibility that had taken hold in the financial firms – Washington Post. http://voices.washingtonpost.com/44/2010/04/obama-speech-will-castigate-so.html 
·         Lehman Bros – House hearing to start @ 11amET looking into Lehman; we will hear from several officials, inc. former CEO D Fuld, Bernanke, SEC head Schapiro, and Geithner.
·         Lehman Bros - Bernanke released prepared testimony Mon during trading ahead of his appearance before the House hearing on Lehman.  According to Bernanke: "The Federal Reserve was not aware that Lehman was using so-called Repo 105 transactions to manage its balance sheet. Indeed, according to the bankruptcy examiner, Lehman staff did not report these transactions even to the company's board. However, knowledge of Lehman's accounting for these transactions would not have materially altered the Federal Reserve's view of the condition of the firm; the information we obtained suggested that the capital and liquidity of the firm were seriously deficient, a view that we conveyed to the company and that I believe was shared by the SEC and the Treasury Department"   http://www.federalreserve.gov/newsevents/testimony/bernanke20100420a.htm  
·         Lehman Bros – former CEO Dick Fuld released prepared testimony ahead of his appearance at the House hearing during trading on Mon.  Fuld says the firm used so called "Repo 105" transactions in order to stay in compliance w/accounting rules.  "Lehman should not be criticized for complying with the applicable accounting standards,"  Bloomberg
·         Fed's Evans says should keep rates low - "With unemployment high, and inflation very low, I'd say accommodation is very important,"  Reuters  http://www.cnbc.com//id/36658528 
·         General Motors to repay US and Canadian govts sooner than expected...will refund $4.7B to both governments "well before June 1"....had previously expected to repay prior to June 1.  GM to make announcement today on Wed (CNBC)
·         Emanuel Says He'd Like to Add Title of Chicago Mayor to Resume; "I hope Mayor Daley seeks re-election. I'll work and support him if he seeks re-election. But if Mayor Daley doesn't, one day I would like to run for mayor,"  Bloomberg
·         Hamptons home sales doubled in Q1 Y/Y - Transactions climbed to 292 from 106 a year earlier – Bloomberg
·         New Yorkers in favor of bonus tax – voters in the state were 53 percent to 38 percent in favor of imposing a tax of as much as 50 percent on annual payouts – Bloomberg

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