Good morning New York,
FT ALPHAVILLE
Time to take basic income seriously? - Izzy notes that Paul Krugman has taken up the idea of basic income as a substitute for the monopoly effects of the new capital intensive tech-based economy. But she argues that it is perhaps better to think of it as a compensation system for "not working".
NEWS
G8 dispute breaks out on Syria arms: President Vladimir Putin bluntly warned the US and its allies not to arm opposition rebels in Syria, reasserting Russia's uncompromising support for Bashar al-Assad's regime and declaring that Moscow backs the country's "legitimate" government. (Financial Times)
Trade deal would benefit US more than EU, Ifo study finds: The US would gain more than the EU from a transatlantic trade deal, according to a study to be released on Monday. Its report concludes that a transatlantic agreement would reduce trade flows within Europe and damage many developing countries. (Financial Times)
Apple reveals US government data requests: Apple has joined Microsoft and Facebook in releasing details of requests from US law enforcement agencies for customer data amid continuing concerns over the extent of secret government surveillance. (Financial Times)
Bid to relaunch synthetic CDO unravels: An attempt by two big Wall Street banks to revive notorious credit boom-era securities blamed for exacerbating the global financial crisis has failed after investors balked at buying some of the derivatives on offer. JPMorgan Chase and Morgan Stanley have scrapped a plan to sell "synthetic collateralised debt obligations" – sliced and diced pools of credit derivatives – after failing to find investors willing to take on all of the deal's different pieces. (Financial Times)
Bolton to step down at Fidelity China fund: Anthony Bolton is to retire from running the Fidelity China Special Situations investment trust, ending a difficult three years for one of the UK's most successful fund managers. (Financial Times)
Official negative rate policy at SNB seen unlikely: Swiss National Bank President President Thomas Jordan is unlikely to make good on his threat of negative interest rates for now so as not to fuel the booming housing market, economists said. Jordan has previously said that a shift in its ceiling on the franc or a negative rate on commercial banks' excess deposits was in the SNB's toolkit. (Bloomberg)
Co-operative Bank outlines restructuring plan to raise £1.5bn: The deal will include a "bail in" of the group's junior bondholders, who will be offered shares in the bank. Retail investors hold about 5 per cent of the group's subordinated debt. Under the terms of the agreement, holders of £1bn of debt will be asked to swap it for shares in the bank and bonds in the group. (Financial Times)
Markets: Taper tension looks likely to keep markets on edge this week, but there are gains for many equity indices across Asia and Europe on Monday. Investors will be hoping for further clarity from Federal Reserve chairman Ben Bernanke on Wednesday on the US central bank's plans for the easing and eventual withdrawal of monetary stimulus, and this will set the parameters for trade in the following weeks. Tokyo's Nikkei 225 Average, the source of much volatility in recent weeks, rose 2 per cent on Monday, while the Hang Seng in Hong Kong added 1.1 per cent. There were moderate losses in Seoul, Mumbai and Thailand. The Shanghai Shenzhen CSI300 index eased 0.1 per cent on concern about the country's economic slowdown, after government reports showed industrial output and exports trailed estimates in May. In Europe, the stock markets got off to a better start. After an hour, the FTSE 100 is up 0.4 per cent, while the CAC 40 in Paris is 0.7 per cent higher and the Xetra Dax in Frankfurt trades 0.9 per cent higher. The pan-European FTSE Eurofirst 300 trades 0.6 per cent stronger at 1,184.
