Receiving Wide Coverage ...
Bitcoin's Big Coming Out: So maybe Bitcoin isn't just for money launderers and drug dealers. Some well-placed folks must think Bitcoin has a role in the mainstream. Two examples emerged on Tuesday of new efforts to expand Bitcoin's use by the broader establishment. Blythe Masters, a former JPMorgan Chase executive, has been named chief executive of Digital Asset Holdings, a new Bitcoin trading platform. Masters helped pioneer the credit-derivatives market in the 1990s as head of JPMorgan's global commodities unit and is often credited with creating the credit default swap. Masters resigned as head of JPMorgan's commodities unit in April after it was sold following a $410 million settlement with the Federal Energy Regulatory Commission, and being passed over for potential promotion opportunities. In describing her new gig at Digital Asset, Masters told the Financial Times, "There is a school of libertarian 'visionaries' who want to imagine a world without big banks, big governments. That's nice, but completely irrelevant to this business model. We don't imagine a world in which big banks and big governments don't exist. The world will change by adopting new technology to do a better job." Masters has talked to regulators about Digital Asset's plans, although she said the company doesn't need regulatory approval for what it wants to do. In the other example of Bitcoin perhaps moving to a broader acceptance, San Francisco firm 21 Inc. has raised $116 million in venture capital to fund its business plan to develop Bitcoin-based products for the general public. The backers of 21 include Andreessen Horowitz, RRE Ventures, Khosla Ventures, U.S. chipmaker Qualcomm, China's Yuan Capital and the founders and CEOs of companies like PayPal, eBay, Dropbox, Expedia and Zynga.
Wall Street Journal
In the final results of the Federal Reserve's stress tests, slated to be released later Wednesday, a few banks are in danger of disappointing investors. Several banks may have their plans for buybacks or dividend increases rejected by the Fed, or the Fed may ask the banks to scale back the plans. "Some analysts lowered their estimates for 2015 dividends after the Feds initial round of stress tests were disclosed last Thursday," the paper notes. Of the institutions subjected to the stress testing, there were 10 banks for which the average analyst estimate for 2015 dividends fell in recent days. Those include Bank of America, Citigroup, Regions Financial and Zions Bancorp. JPMorgan Chase may also be forced to lower its share-buyback plans, according to a projection by Citigroup analyst Keith Horowitz.
Bank of New York Mellon has another activist investor banging on its front door. Just a couple months after the New York-Pittsburgh custodial bank gave a board seat to Trian Fund Management, now BNY-Mellon is coming under heavy fire from Marcato Capital Management. Marcato is calling for CEO Gerry Hassell to be fired and for deep expense cuts.
Two articles look at Tidjane Thiam, the new CEO of Credit Suisse. One story focuses on Ivory Coast native Thiam's background, as he becomes "one of the most high-profile African executives in global business" and who has been commended for his job leading U.K. insurer Prudential. Both that article, and a "Heard on the Street" column, examine Credit Suisse's litany of problems that Thiam must confront.
Is good news on the horizon for holders of student loan debt who wish to purge the debts through bankruptcy? Possibly, as President Obama on Tuesday told his administration to study the option for borrowers who have debt not backed by the U.S. government, issued by private lenders. Still, the proposal is a longshot for becoming law, as the GOP-controlled Congress has "broadly opposed the president's agenda." Obama disclosed his plan on Tuesday during an appearance at the Georgia Institute of Technology.
New York Times
The paper proclaims that Citigroup has made a full comeback from the brink, or at least its Wall Street trading operations have. Thanks to Citi's acquisition of "vast amounts of derivatives," Citi has advanced in trading and investment banking while JPMorgan Chase and Goldman Sachs have "remained steady or shrunk during the last four years." Consider that Citi's holdings in derivatives totaled $32 trillion in 2009. That figure rose to $70 trillion by the end of the third quarter of last year. Even so, analysts like CLSA's Mike Mayo question whether this is the best use of Citi's capital.