US confirms it will deploy forces to Saudi Arabia and increase maritime surveillance in the Arabian Gulf
- US goal is to promote safety in the Arabian Gulf and Strait of Hormuz
BoJ Gov Kuroda: must seek price stability without political pressure; central bank independence is well established in Japan with little risk of being undermined - NY event
- Public confidence in central banks is important
- BOJ considers financial stability questions
- Completely disagree with Modern Monetary Theory, MMT is fashionable in Japan but I disagree with it
- Japanese economy is no longer in deflation
Wirecard makes serious allegations against the Financial Times
New dispute over the payment service provider: The Financial Times defends itself against serious allegations that Wirecard has raised in a letter. At the center is an ominous audio recording.The permanent feud between Wirecard and the renowned British financial paper "Financial Times" (FT) puts a lot of money at stake.
Source: dpaDusseldorf, Frankfurt It is far more than a dispute between a DAX company and a medium. It's not just about the reputation of a company in the elite class of the German capital market. The permanent feud between Wirecard and the prestigious British financial paper "Financial Times" (FT) puts a lot of money at stake, as every new critical article on Wirecard was usually followed by heavy stock market losses.
The core of the dispute: Wirecard accuses the FT of spreading false accusations , the newspaper writes about strange cash flows and a lack of compliance at the company.
Now the dispute has gotten a new dimension: In a letter Wirecard asks the newspaper to publish until further notice, no articles about the Group, and instead to start an internal investigation to detect misconduct in its own ranks.
Reason: Wirecard claims in a letter that it has "irrefutable evidence of collaboration between Financial Times employees and short sellers". This refers to investors who bet on falling prices of a particular stock.
The newspaper should "refrain from any publication that could lead directly or indirectly to market manipulation or insider trading in connection with Wirecard shares," says Wirecard. The letter from the law firm Herbert Smith Freehills, which Wirecard represents, and the statement of the German corporation contained therein are available to Handelsblatt.
According to the written Wirecard statement, the trigger for the latest escalation is the sound recording of a conversation that took place last Wednesday in London. In this, the British businessman Nick X. reported to the confidant of another investor of another upcoming critical article in the FT, it says in the statement. He himself has already built a five million pound short position, pending the negative article that will be released in the next 48 hours.
"Another distraction attack on the journalism of the FT"
The businessman had suggested to his interlocutor to speculate even with five million pounds on a price decline of the Wirecard share. In return for his tip he had demanded from the potential investor half of the expected profit. And he claimed to have successfully speculated against Wirecard several times in the past, each based on an upcoming Financial Times article.
Wirecard did not want to comment officially on the audio file and the lawyer's threat against the FT. The authenticity of the audio material could not be verified so far. The investor who initiated the recording did not want to comment officially. Nick X was not available for a statement. Documents available to the Handelsblatt show that the FT was indeed researching another report on Wirecard and had previously confronted the Group with a series of critical questions.
Wirecard responded to these questions "with another diversionary attack on FT journalism," the newspaper said. "There was no collusion between FT journalists and short sellers or other third parties about the content or release date of FT articles on Wirecard," a spokeswoman for the newspaper said.
In his statement to the business paper, Wirecard describes the genesis of the recording as follows: In recent days, the corporation has received information that Nick X. is trying to raise money for a short-term speculative attack on Wirecard ahead of another negative FT article. For this purpose, Nick X. and a business partner met with potential investors on the morning of July 17th.
Recording is at the Munich Public Prosecutor's Office
This conversation was "legally in accordance with all applicable British laws" been added. The record has now been passed along with further evidence and documents to the criminal investigation authorities in Germanyand the United Kingdom , it says in the Wirecard statement. According to the Handelsblatt, the material has since been received by the Munich Public Prosecutor's Office.
The agency has been investigating potential shorts and contacts since February . An investor had filed a criminal complaint in Munich against the FT. A London stockbroker had said he had been informed before the release of a larger article on January 30th. As a result, Wirecard filed civil action against the FT. In April, Bafin filed criminal charges against a single-digit number of people, including FT journalists.
The newspaper had repeatedly reported dubious events and a search at the Wirecard Singapore office. At the end of March, the Group acknowledged that employees could have been prosecuted under local law.
According to findings of the German financial regulator Bafin, about which the Handelsblatt reported a week ago , 2019 scarcely new shorts in the environment of the FT reports entered the speculation. Rather, they are well-known actors. The 2019 active shorts were "known insofar as they held mainly in the past net short positions in Wirecard AG," said the responsible Federal Ministry of Finance.
Against Wirecard is speculated for years, from 2016 to 2018, the Bafin registered five attacks. There are no indications that short-shifters have broken their positions to stay below the reporting threshold of half a percent of the share capital.
Significantly increased the positions from the 1st and from 7 February 2019. After indications of planned attacks, the Bafin had adopted on February 18, a temporary short sale ban on Wirecard shares - an unprecedented step. The ban expired in April.
Gapping up
In reaction to earnings/guidance:
- NVS +5.5%, EBAY +5.3%, SM +4.7%, PM +2.7%, ALLY +1.9%, BX +1.6%, TSM +1.4%, DHR +0.8%, DOV +0.8%, MS +0.7%, UNH +0.6%, ADTN +0.5%
Other news:
- EPRT +1.4% (prices secondary offering by selling shareholders of 22,859,406 shares of common stock at $19.75 per share)
- VOD +1.1% (confirms that the European Commission has cleared its acquisition of Liberty Global's (LBTYA) operations in Germany, the Czech Republic, Hungary and Romania
- SDRL +0.5% (has secured a nine well contract with three options, each for two wells, for the West Gemini in West Africa)
Analyst comments:
- NGVT +0.8% (initiated with an Outperform at BMO Capital Markets)
- AAPL +0.5% (upgraded to Outperform from Mkt Perform at Raymond James)
After Paris’s Clown Bar, a Second Act
Chef Sota Atsumi, just 33, has been the culinary phenom behind one of Paris’s toughest tables. Now he’s left Clown Bar to open a place of his own: the Japanese-accented Maison
Sota Atsumi wants to invite you home. For the past two years the 33-year-old Japanese chef, whose signature custardy calves’ brains and game-filled pithiviers helped make Clown Bar one of the hottest restaurants in Paris, has been developing a cozy new residence for his Japanese-accented French cuisine on a block in the city’s 11th arrondissement. The restaurant, simply called Maison, will be a convivial setting for his most ambitious—and personal—cooking to date. It’s “a relaxed place with a domestic ambience but serious food,” says his wife and muse, Akiko Otsu, who works in fine-art printing.
The couple met in Paris a decade ago when she was an art student and he was a young chef working at Stella Maris, a pioneering Japanese-run French restaurant near the Arc de Triomphe. Maison, their first project together, debuts this fall after a year of construction delays. It features a sunny logo from David Lynch (a friend and a client of the print studio where Otsu works) and food and design that bridge French and Japanese cultures.
The gable-roofed building’s glass façade and terracotta interiors are by Tsuyoshi Tane, a young Paris-based Japanese architect who is best known for working on the new Estonian National Museum. Dishware was made in a French style by traditional ceramic artisans in Japan, and Japanese-inspired steak knives were conceived by French designer and illustrator Philippe Weisbecker (a friend of Otsu’s).
The restaurant’s ambitions have grown during the yearlong wait, which has given Atsumi time to travel and cook collaborative dinners in California, Mexico and Ukraine, picking up new ideas along the way. Maison’s menu will feature flavors from around the world and a radical tasting format. Along with a la carte dishes, a procession of a dozen or so small plates will be served as three mini menus in a row, veering from savory to sweet, entrée to dessert and back again. “It follows a rhythm you’ve never seen before,” Atsumi says. He hopes the approach will combat palate fatigue and highlight the work of his pastry chef, Rikako Kobayashi, another Japanese expat immersed in French cooking. Her kouign-amann with mango-ginger chutney is already a signature dish after appearing at pop-up dinners and at a residency at Chef’s Club in New York last summer. maison-sota.com
The Rise of Passive Investing Resumes Its March
After slowing last year, a stream of cash into funds that track markets is picking up once again
A decadelong shift of money and power from old-fashioned money managers into index funds resumed its march in 2019.
Last year, net inflows into funds that track markets fell about 30% from the year before, according to Morningstar data. Some firms said fears around slowing global growth and a particularly volatile stock market led investors to take money from asset management’s most popular products.
The 2018 slowdownwas noticeable at BlackRock Inc., Vanguard Group and other large money managers. It led to concerns from some investors about whether a major growth engine for the firms was sputtering.
But now, a stream of cash into funds that track markets is picking up once again.
The recent pickup comes as BlackRock, State Street Corp. and some others report financial results in the coming days. A rise in flows could help soften the impact of a continuing price war.
Net inflows into index-tracking U.S. mutual funds and exchange-traded funds rose by around 50% in the second quarter of 2019 from a year earlier, according to Morningstar data. For the year ended June 30, passive net inflows increased by about 1% after contracting in the year-ago period. Net inflows measure the difference between money coming in and leaving.
“There’s been some swings quarter-to-quarter, but overall passive flows have been very strong the past three years,” said Morningstar analyst Kevin McDevitt. “It’s possible the momentum could slow, but it’s difficult to see a reversal anytime soon.”
Indexing giant Vanguard Group illustrates that pickup.
The firm’s full-year net inflows fell between 2018 and 2017. But Vanguard’s overall second-quarter net inflows this year of $57.3 billion rose nearly 40% from the same period in 2018, according to the latest preliminary numbers from the firm.
The Malvern, Pa., firm reported $54.2 billion in net inflows into indexed strategies in the second quarter, up about 35% from a year earlier.
Vanguard’s assets under management grew to about $5.6 trillion as of June 30 from $5.1 trillion a year ago, getting a boost during a quarter in which the U.S. stock market hit new records.
oversee trillions of dollars in investments.
But they face growing scrutiny over how they are wielding influence over American corporations as they become bigger shareholders. Virtually every S&P 500 company has either BlackRock, Vanguard or State Street as an at-least-5% owner, according to a Wall Street Journal analysis.
As the passive-investment giants continue to grow, active managers have been squeezed again this year.
Net outflows from actively managed funds in the second quarter of 2019 roughly doubled from the year-ago period, Morningstar data show. In the year ended in June, their net outflows deepened more than 10-fold.
Some investors believe that active managers could still rebound should the stock market face a sustained period of weakness. Many stock- and bond-picking firms are also exploring ways to diversify their businesses and bring in new assets.
Among the active-management firms whose assets have increased is T. Rowe Price Group Inc. Its assets rose to $1.13 trillion as of June 30, from $1.04 trillion a year ago, according to preliminary numbers from the firm.
Even so, a rise in assets doesn’t always translate into larger profits. Margins at all types of managers have been squeezed by the rise of low-cost indexing. Lately, there has been a fee war in many corners of the industry.
“If flows are good but you’re charging less, that’s a hard thing for asset managers to outrun,” said Kyle Sanders, an analyst at Edward Jones.
One way that both active and passive managers have looked to boost profits is by pushing more aggressively into more complex and lucrative strategies. Others have started to offer more funds that lock up investors’ cash for longer periods.
Within the passive-management industry, the pickup in flows was pronounced in U.S. equities.
Funds that track U.S. stock-market indexes took in roughly $267.3 billion in the year ended June 30, up more than 60% from a year ago, Morningstar data show. Actively managed U.S. equity funds saw net outflows increase by more than 3% in that period; they have suffered net outflows for every consecutive quarter since mid-2014.
Meanwhile, bond funds received an influx of new cash as investors sought safer bets amid a flare-up in trade tensions and mounting anxiety over an economic downturn.
Actively managed funds focused on taxable bonds took in $26.4 billion of net inflows in the year ended June 30, but that was a fifth of what they took in a year ago. They face a growing threat from passive funds. Those funds took in more than $170 billion in net inflows, nearly matching the year-ago period.