Within a point of the record high -- and then it fell. The S&P 500 rose as high as 1,564.91 on Monday, just below its 2007 high of 1,565.15. Jitters over Cyprus and bank stocks then pushed the index lower. It closed down 0.33 per cent at 1,551.69 (Reuters).
Cyprus marks a tough new approach for making senior bank creditors and depositors take losses, the eurozone signalled -- before walking it back. "If we want to have a healthy, sound financial sector, the only way is to say: 'Look, where you take the risks, you must deal with them, and if you can't deal with them you shouldn't have taken them on and the consequence might be that it is end of story'," Jeroen Dijsselbloem, President of the Eurogroup of finance ministers, said hours after brokering the deal for Cyprus (Financial Times, Reuters).
Hours later, the Eurogroup denied Cyprus was a template. "Cyprus is a specific case with exceptional challenges," it said (Eurogroup statement). European bank stocks fell sharply after Mr Dijsselbloem's initial comments about making bail-ins the norm (Wall Street Journal).
Dell found itself in a three-way bidding war. The special committee which is evaluating Michael Dell's $13.25 a share buyout offer announced it had received potential bids from both Blackstone, offering at least $14.25, and Carl Icahn, proposing $15 for a 58 per cent stake in the company (Financial Times, Dell statement). The committee has not said whether it thinks either offer is a superior proposal to Michael Dell's, a move which would begin formal bidding. While Michael Dell is said to consider Blackstone's bid "management friendly", he is preparing to make the case for why his turnaround strategy for the company necessitates leaving the public market (Wall Street Journal).
Calpers is considering a switch to all-passive investing. The United States' second-largest pension fund is currently reviewing its 'investment beliefs', including the future of its use of actively-managed funds. More than half of Calpers' $255n in assets is already passively invested (Investment News).
Senator Tim Johnson is expected to announce tomorrow that he will not seek reelection in 2014 (Bloomberg). Chairmanship of the Senate Banking Committee could fall to Senator Sherrod Brown if the Democrats retain Senate control next year (The Hill).
Regulators approved Nasdaq's $62m compensation offer for market-makers of Facebook's glitched IPO. The rule-change by the SEC will allow the exchange to pay brokers much more than current regulations would have allowed. UBS will continue to press for a larger payout through arbitration, calling Monday's deal "inadequate and insufficient" (Financial Times).
Goldman: No plans for the bank to run for office (Bloomberg).
FURTHER FURTHER READING
- Why official data didn't underrate China's slowdown last year.
- John Hempton on 'Vodafail': "These clowns are so bad it might be worth half a billion dollars to make them go away."
- Felix finds a principle in Dijsselbloem.
- Pawelmorski... doesn't.
- MRUniversity does Mexican economic history.
- Ironic ECB speech du jour: "New Face of the Euro"
- Bob Geldof talks private equity in Africa.
- "He always carries on his person a business card sized summary of China's Five-Year Plan"
- The "slightly Nemo-like adventures" of 21st-century CEOs.
