Global Regulators Increase Capitalization

Daily Market Commentary for June 27, 2011

Regulators meeting in Basel over the weekend recommended that capital requirements be increased for banks deemed 'too large to fail'. (read more at Millennium-Traders.Com)
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Gary Foster, former VP for Citigroup internal treasury-finance department was arrested at New York’s John F. Kennedy International Airport Sunday morning on a flight from Bangkok. Foster allegedly moved cash from Citigroup accounts to a personal account at J.P. Morgan Chase between July and December 2010 to the tune of $19 Million, according to the U.S. Attorney for the Eastern District of New York and the Federal Bureau of Investigation. The complaint reports that Foster supervised the treasury-finance department’s derivatives unit from Long Island and was detected after a recent Citigroup internal audit, per an affidavit from a FBI special agent. The complaint alleges that Foster caused a fraudulent contract or deal number to be placed in the reference line of the wire-transfer instructions to create the appearance that the transfers were in support of an existing contract. Foster could face a maximum sentence of 30 year imprisonment on the bank fraud charges, if convicted.

Icagen (NasdaqGM: ICGN) shares were higher by 126% after Pfizer (NYSE: PFE) announced in a regulatory filing late Friday that it was looking at a possible strategic alliance with the biopharmaceutical company.

Best Buy (NYSE: BBY) shares were down 3% into early afternoon trading after credit rating cut due to sluggish same-store sales and weak performance compared with those of its peers.

Los Angeles Dodgers, filed for Chapter 11 bankruptcy protection today. Frank McCourt, Dodgers owner, made the announcement just three days before payroll comes due. In an effort to keep from losing the franchise McCourt blamed the filing on Major League Baseball Commissioner Bud Selig’s refusal to approve a $3 billion, 17-year deal with Fox. “He’s turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today,” McCourt said. “I simply cannot allow the commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer.” Dodgers received a commitment for $150 million in debtor-in-possession financing to allow it to meet its obligations and said there will be no disruption in day-to-day operations, per the terms of the bankruptcy. The filing in U.S. bankruptcy court in Wilmington, Del. shows assets of between $500 million and $1 billion and liabilities in a range of $100 million and $500 million. According to the bankruptcy papers, topping the list of creditors, is former outfielder Manny Ramirez who is still owed $21 million. The LA Dodgers are currently mired near the bottom of the National League West, trailing the World Champions San Francisco Giants by nine and a half games.


Economic data released today:

Core PCE Price Index: May PCE Price Index +0.2% rate on month; May PCE Price Index +2.5% rate on year; May PCE Core Price Index +0.3% rate on month; May PCE Core Price Index +1.2% rate on year.

Personal Income: April Personal Income Revised to +0.3% from +0.4%; U.S. Personal Income +0.3% in May vs. Consensus +0.4%.

Personal Spending: April Spending Revised to +0.3% from +0.4%; U.S. Personal Spending Unchanged in May vs. Consensus +0.1%.

Chicago Fed: May Resources Output -0.5% month over month; May Resources Output +1.4% year over year; May Machinery Output +1.1% month over month; May Machinery Output +12.1% year over year; May Steel Output +1.6% month over month; May Steel Output +16.5% year over year; May Regional Auto Output +0.8% month over month; May Regional Auto Output +6.7% year over year; May Midwest Manufacturing Index +0.6% on month; May Midwest Manufacturing Index +7.1% on year.


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