Sunday, May 23, 2010

Washington; Financial regulatory reform; Derivatives trading and the Sen Lincoln amendment

· Financial regulatory reform – relatively quiet over the weekend (although Barron’s Washington column has an article w/bullish implications for the financials – see below); there were a bunch of additional articles in the major papers discussing the major differences between the Senate and House versions (as far as financial stocks are concerned, the big differences concern Collins/capital, Durbin/interchange, Levin/Volcker, and Lincoln/derivatives). The Senate is expected to name its conferencing committee on Mon.  WSJ/NYT/Politico. 
· Financial regulatory reform – House to soften Senate bill according to Barron’s – the Lincoln derivatives language will prob. wind up be softened although trading will move increasingly towards exchanges; the Durbin amendment will prob. wind up being stripped out of the final legislation; the Collins capital amendment, esp. re TruPS not being counted as tier-1, will prob. be removed.  Barron’s
· Derivatives trading and the Sen Lincoln amendment – she faces a crucial run-off election on June 8; many expect her view on derivatives trading to soften following this event.  NYT/WSJ 
· Munis – the Harrisburg Authority will miss $3.6MM in debt payments due June 1; the bonds are backed by Dauphin County and AGO – Bloomberg

· Geithner will travel to Europe next week after the Washington/Beijing strategic talks in Washington; Geithner is expected to press European officials to be more sensitive to market reactions to their policy moves and to also move faster to get their arms around the sovereign debt crisis – WSJ 
· Geithner makes comments ahead of his China trip – says the world economy can handle the strains from Europe - "You see some of the challenges in Europe now. But I think we are in a much stronger position to manage those challenges,"; Geithner to communicate this view to the Chinese during his trip   Reuters/Bloomberg 
· Fed’s Dudley comments at a Florida commencement address – says that the US economy is recovery and we are now seeing the first signs of sig. employment growth – Bloomberg   
· Gulf oil spill – BP execs in an interview in the WSJ attempt to shift blame to RIG; citing RIG documents, the BP officials claim RIG had responsibility for the Deepwater Horizon; RIG presented the Journal w/its own documents which show the succession of leadership on the well to have been less clear – WSJ    
· Gulf oil spill – Obama on Sat unveiled a commission to investigate the Deepwater crude spill; Obama also hints at potential criminal investigations – FT 
· NY State – Andrew Cuomo officially declared his candidacy for NY State governor on Sat; this was widely expected – NYT 

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