Receiving Wide Coverage ... The banker’s banker: Warren Buffett's Berkshire Hathaway, which loaned General Electric $3 billion during the 2008 financial crisis, is selling its shares in the company, according to a regulatory filing. In the second quarter, Berkshire sold 10.6 million GE shares, most of which it received as part of the 2008 deal. The deal netted Berkshire more than $1 billion, according to the Wall Street Journal.
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., listens while playing cards on the sidelines the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska, U.S., on Sunday, May 1, 2016. Dozens of Berkshire Hathaway subsidiaries will be showing off their products as Chief Executive Officer Warren Buffett hosts the company's annual meeting. Photographer: Daniel Acker/Bloomberg *** Local Caption *** Warren Buffett
Daniel Acker/Bloomberg
In a separate regulatory filing, hedge fund Viking Global Investors said it purchased 12.3 million shares of Wells Fargo. The stake was worth about $680 million at the time of purchase.
Berkshire’s filing also showed that it purchased a big stake in Synchrony Financial, the largest retail store credit card issuer and a former GE spinoff. Berkshire bought 17 million shares worth nearly $521 million at the end of the quarter.
In addition, Berkshire added more than 17 million shares to its stake in Bank of New York Mellon and maintained positions in U.S. Bancorp and Goldman Sachs. It also is the largest shareholder in Bank of America.
Wall Street Journal No guarantee, no problem: Investors have bought nearly $48 billion of so-called credit-risk transfer securities from Fannie Mae and Freddie Mac. These securities don’t carry the government agencies’ guarantee. The sales, according to the paper, “mark an early step toward reducing the government’s role” in the mortgage market and signal “that investors have greater comfort in the standards and transparency of these deals than in those issued by Wall Street banks that performed so poorly after the housing bust.”
New York Times Bitcoin booms: The recent surge in the price of bitcoin, which rose another 7% on Monday to more than $4,290, is largely due to the resolution of a “long-disputed update” to the network’s software and rules by the digital currency’s most important backers. The update, called Segregated Witness, or SegWit, increases the number of transactions that can run through the bitcoin system and makes it easier to build services on the network.
“The biggest backers of the network agreed last week to proceed with SegWit, and it is that agreement, on scaling the network, that is the most obvious reason for the recent surge,” the paper reports.
No justice: Wells Fargo’s behavior probably provides an “example of how a corporate culture devolved into an almost preternatural focus on expanding the bottom line at the expense of customers and the law,” Peter J. Henning, a law professor at Wayne State University Law School in Michigan, says in an op-ed. But he’s skeptical the bank will be “held to account for the many ways in which it mistreated its customers” in light of the financial deregulatory agenda of the Trump administration.
“The prospect of governmental action appears to be diminishing, and any fines it might face are likely to be at the low end of the scale based on recent enforcement trends since the start of the administration of President Trump,” Henning writes.
Quotable “Scaling has been the major catalyst for the price rally. The scaling debate has certainly been holding the bitcoin price back.” — Charles Hayter, founder of data company CryptoCompare, about the reason behind the recent surge in the price of bitcoin.
The Supreme Court will hear a case in December that could overturn a longstanding precedent bolstering regulatory independence. Should the court strike down that precedent, it could have major implications for the independence of the Federal Reserve.
Federal Reserve Governor Stephan Miran floated the idea of conducting monetary policy with an eye toward the neutral rate and suggested that the president's immigration and fiscal policies will exert downward pressure on inflation.
The credit card giant has reached an agreement to settle a class-action lawsuit involving its coupon-finding browser extension. Content creators had accused Capital One of stealing their sales commissions.
The company is selling its Genius platform to large restaurant and entertainment companies in an attempt to counter the wave of improvements from its rivals.
Federal Reserve Bank of St. Louis President Alberto G. Musalem would not directly say whether central bank independence is under threat, instead highlighting that the topic has received more attention.
