Good morning New York,
FT ALPHAVILLE
No, the Comex is not going to default: There's a stupid rumour going around in the gold community that the Comex is "bleeding" inventory (especially from the JP Morgan vault) and that this will in some way compromise delivery that causes a default. Kid Dynamite has already done the bulk of the heavy lifting in trying to debunk this story, as has Miguel Perez-Santalla at the Buillionvault, but Izzy wanted to emphasise some points that go beyond the mechanics and which might be helpful.
NEWS
Japan posts highest inflation rate since 2008: Japan has posted its highest rate of inflation for nearly five years, an encouraging sign for policy makers seeking to overturn more than a decade of growth-sapping deflation. The year-on-year rise in the country's core consumer price inflation index, excluding fresh food, stood at 0.4 per cent in June, the government reported on Friday. That figure, rising for a fourth month in a row, was the highest since November 2008. But economists noted that the upbeat reading owes much to the effects of the 20 per cent fall in the yen since November last year, which has pushed up the cost of fuel and food. (Financial Times)
US indicts hackers in biggest cyber fraud case in history: "Federal prosecutors said on Thursday they have charged five men responsible for a hacking and credit card fraud spree that cost companies more $300 million and two of the suspects are in custody, in the biggest cyber crime case filed in U.S. history. They also disclosed a new security breach against Nasdaq, though they provided few details about the attack. Other companies targeted by the hackers include a Visa Inc licensee, J.C. Penney Co, JetBlue Airways Corp and French retailer Carrefour SA, according to an indictment unveiled in New Jersey." (Reuters) (Wall Street Journal)
Activision CEO leads $8.2bn buyout: "Bobby Kotick, chief executive of Activision Blizzard, is leading an $8.2bn investor buyout of most of Vivendi's controlling stake in the world's largest video games company." (Financial Times)
Halliburton to plead guilty over Gulf spill: The US Department of Justice announced late on Thursday that the company – which supplied cement used to line the well – would pay the $200,000 maximum permissible fine for destroying evidence during the investigation. As well as paying the fine, Halliburton had agreed, if a court accepted its guilty plea, to remain under probation for three years and co-operate with the remainder of the investigation, the DoJ said. It had also agreed to pay $55m to the National Fish and Wildlife Foundation. (Financial Times)
Cutifani unveils shake-up at Anglo American: Mr Cutifani cut down his executive team and said at least half of Anglo's $17bn project pipeline would not proceed. He pledged to improve Anglo's cash flow by $1.3bn annually by 2016 through spending less on developing projects and sharpening the miner's commercial performance. (Financial Times)
Samsung Electronics said smartphone would slow in Q3: It reported second-quarter revenue of Won57.5tn ($51.7bn), a year-on-year increase of 20.1 per cent. The figure was in line with guidance that Samsung gave at the start of this month. (Financial Times)
FHFA reaches $885m UBS settlement; more banks in regulators' sights: "Under the terms of the agreement with the Federal Housing Finance Agency, UBS must pay about $415 million to Fannie Mae and $470 million to Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007. " (Reuters) Meanwhile Bank of America, JPMorgan Chase and RBS are being pressed for multibillion-dollar payments to the US government over toxic mortgage-backed securities, according to people familiar with negotiations. UBS was a relatively small seller of MBS to Fannie Mae and Freddie Mac, with $6.4bn notional value. BofA, JPMorgan and RBS were much bigger, each with more than $30bn in notional value. (Financial Times)
GSK replaces China operations head: "Hervé Gisserot as its new head of operations in China. He will take over from Mark Reilly, who left Shanghai in early July and will continue to assist in handling the company's own investigation into the scandal from London. Mr Gisserot was previously co-head of GSK's pharmaceutical business in Europe." (Financial Times)
Greece clears last bailout hurdle: The country yesterday adopted the last piece of legislation its international lenders required to release the next batch of rescue loans, ending two months of wrangling over unpopular measures to overhaul the economy. It's expected to begin receivingn payments from an E5.8bn bailout tranche from Monday. (Reuters)
Activision to buy back most of Vivendi's controlling stake: "Activision Blizzard said it has reached an agreement to buy back nearly $6 billion worth of Vivendi SA's holding in the company, ending months of negotiations over the fate of the videogame giant." (Wall Street Journal)
CFTC mulled metals warehousing investigation for two years: "CFTC investigators began inquiring about aluminum warehouses at least two years ago but didn't open a formal investigation, according to someone familiar with the matter. In a meeting with Senate aides this spring, CFTC officials said they were unsure whether they had authority to do anything about potential price manipulation, according to someone familiar with the matter." (Wall Street Journal)
Fabrice Tourre said he "deeply" regretted an email in which he joked about selling subprime mortgage bonds "to widows and orphans"following a grilling from SEC lawyers. (Financial Times)
Markets: A mildly choppy week for global markets is finishing in suitably muddled fashion, adding to signs that bulls are struggling to maintain momentum, baited by the dog days of summer. Japanese stocks are a notably weak feature, the dollar index is down 0.1 per cent, helping gold add $2 to $1,335 an ounce, while industrial commodities are softer and Treasury yields are easing from recent highs. In Europe, the FTSE Eurofirst 300 is sporting a gain of 0.3 per cent, mainly reflecting Wall Street's late bounce off its session lows on Thursday. US index futures suggest the S&P 500 will slip 1 point to 1,689, leaving the benchmark near the middle of the 20 point intraday range in which it has twitched since hitting a record high of 1,699 on Tuesday writes the FT's Global Markets maester Jamie Chisholm.
