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Citigroup’s
CFO Says Trading Revenue Could Slide 25% - (www.bloomberg.com) Citigroup Inc. (C) Chief
Financial Officer John Gerspach said second-quarter
trading revenue could be down 20 percent to 25 percent from year-earlier levels
in a market he described as “becalmed.” The decline might curtail overall
institutional revenue for the period, Gerspach, 60, told analysts and investors
today. He spoke during an investment conference in New
York, where the third-largestU.S.
bank has its headquarters. The market feels like participants
are “sitting on the sidelines,” Gerspach said, referring to both fixed-income
and equity trading. “There isn’t a lot of direction.” Gerspach and Chief
Executive Officer Michael Corbat are grappling with
setbacks that include a $400 million loan fraud in Mexico and
rejection by regulators of a proposed dividend increase. The bank has sold $600
billion in assets and exited more than 60 businesses to shake off lingering
effects of the 2008 financial crisis.
After
seismic elections, EU leaders assess damage - (www.bloomberg.com) European Union leaders, stunned by a big
Eurosceptic protest vote in European Parliament elections, agreed on Tuesday to
seek a package deal of appointments to top EU jobs with an economic agenda to
win back public confidence. German Chancellor Angela Merkel, the 28-nation
bloc's most powerful leader, acknowledged that her center-right party's
candidate, former Luxembourg prime minister Jean-Claude Juncker, may not end up
heading the executive European Commission. British Prime Minister David
Cameron, under pressure after the anti-EU UK Independence Party won the
European Parliament election in Britain, came to the EU summit in Brussels
determined to block the nomination of Juncker, seen in London as an old-style European
federalist.
Goldman’s
Cohn Says Inactive Trading Environment Is Abnormal - (www.bloomberg.com) Goldman Sachs Group Inc. (GS) President Gary
Cohn said low volatility and interest rates that are holding in
tight ranges have resulted in an “abnormal” trading market. “The environment
for all the firms is quite difficult right now,” Cohn, 53, said today at an
investor conference in New York. “What drives activity in our business is
volatility. If markets never move or don’t move, our clients really don’t need
to transact.” Citigroup Inc. (C) Chief Financial
Officer John Gerspach, 60, said yesterday that second-quarter trading revenue
could fall as much as 25 percent from year-earlier levels, and JPMorgan Chase & Co. (JPM) estimated
a 20 percent drop earlier this month. Cohn stopped short of forecasting the
decline for New York-based Goldman Sachs. “We think, at the end of the day,
it’s economic in nature,” Cohn said of the cause of lower client volume. “We don’t
have clear vision of economic growth or lack of growth.”
Analysis
- Ferocity of Ukraine clashes increases risks for Putin - (www.reuters.com) An army assault on pro-Russian rebels in east
Ukraine will not have taken Vladimir Putin by surprise, but the ferocity of the
clashes may have - and could be a game-changer if they spin out of control. In
the last two weeks, with Western sanctions starting to bite, the Russian
president has softened his tone against the pro-European leadership in Kiev and
promised to pull troops back from the frontier with Ukraine. The likelihood of
Russian forces pouring into east Ukraine to capture mainly Russian-speaking
areas has receded, and Putin appears to have settled for the gains he has made
so far in the worst East-West standoff since the Cold War. But Putin's careful
planning could quickly unravel under one circumstance - if a large number of
civilians are killed in a single incident, putting public pressure on him to
send in the army to protect Russian speakers.
Libyan
militant leader warns U.S. against interference - (www.bloomberg.com) The leader of Islamist militant group Ansar
al-Sharia in Libya's Benghazi city warned the United States on Tuesday against
interference or it would face worse than the conflicts in Somalia, Iraq, or
Afghanistan. Libya's young democracy is in turmoil three years after the
NATO-backed war that ousted Muammar Gaddafi, with rival Islamist,
anti-Islamist, regional and political factions locked in a complex struggle for
influence in the OPEC member state. Four decades of Gaddafi's one-man rule left
few institutions or national army to resist competing militias and brigades of
former rebels who have become de facto power-brokers.
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