Thursday, June 10, 2010

Washington; Financial regulatory reform; Lincoln’s victory hardening anti-Wall St sentiment in Washington

· Financial regulatory reform – Dem leaders on Wed noted that Lincoln’s victory on Tues would help the chances of her swaps/derivatives bill staying in the final legislation; Lincoln said she would fight hard to retain her amendment while Dodd called the amendment a “strong” one; Sen Harkin said he supported Lincoln’s amendment (Reuters/DJ) 
· Lincoln’s victory hardening anti-Wall St sentiment in Washington – Dems now say her victory has strengthened the odds of her bill staying in the final legislation (WSJ)  
· Lincoln’s swaps amendment finds support in Fed - Hoenig has been studying the provision and finds "it is consistent with his desire to take the riskiest activities out of the commercial banking system."   WSJ
· Lincoln – some think that her victory may actually help soften language around derivatives – “Now that the primary challenge is behind her, she may be willing to compromise on the language, according to several senior executives at banks that have been attempting to gauge the direction of the financial reform negotiations”  CNBC
· Fin reg reform – House picks conference members – first meeting between Senate and House leaders to take place on Thurs (Reuters)
· Credit Cards – Sen Durbin told senior US anti-trust officials that he had serious concerns about the business practices of MA and V (Durbin in the past has threatened to bring the companies up to anti-trust officials); the DOJ’s anti-trust chief repeated that the card industry’s practices are already being investigated (DJ)
· Senate Democrats searched Wednesday for support to pass a $140 billion package of tax breaks, safety-net spending and tax increases; Dems were trying unsuccessfully so far to find the right balance to attract 60+ votes – NYT
· Treasuries - PIMCO turning more pos on TSYs     Steve Rodosky, head of Treasury and derivatives trading, said he has shifted his stance on TSYs to neutral from UW in short-term     DJ
· US beef – USDA to soon start talks w/Chinese officials on restarting US beef exports to China; such exports have been banned since ’03 (Reuters/DJ)
· Iran – on the heels of the UN Sec Council passing sanctions on Iran, the US Congress is expected to pass its own, tougher, measures later this month (Reuters)
· Senate seeks regular reports from the GAO on the risks of the US’ rising debt load; two amendments were attached to the Senate bill that would extend unemployment benefits and raise carried interest taxes, among other items; one, from Republican Senator Cornyn, would seek qtrly updates on the national security risks of having China and other nations own so much US debt; a more mild amendment from Sen Baucus would require annual reports from the Treasury.  In light of these amendments on Wed, Chinese officials on Thurs said the US shouldn’t be suspicious about its large Treasury holdings.  Reuters 
· AIG – a Congressional watchdog says US taxpayers could still face “severe” losses on its AIG exposure; the Congressional Oversight Panel says the US will prob. remain a sig shareholder in AIG in ’12 and its not clear if taxpayers will ever be repaid in full.  WSJ.

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