A Tax Too High

A Tax Too High  |  Wall Street doesn't exactly love the idea of higher taxes. But a proposal in France looks much scarier than anything being discussed in this country: a 75 percent marginal tax rate on all income over $1.3 million, with capital gains taxes as high as 60 percent.

This was not what French executives were expecting when they signed a petition asking for higher taxes (yes, higher taxes), and now many are “crying foul,” writes Andrew Ross Sorkin in the DealBook column. “The idea of soaking the rich is often a popular one. But if there is lesson in the French experience, despite the economic models, it is that there are limits.”

 

Another Gloomy Forecast for Banks  |  It's already bad, and it could get worse. So predicts the latest report on the global banking industry, this one by McKinsey & Company. In it, the consulting firm calls for cost-cutting and changes in culture. It also suggests that some lenders may be forced to put themselves up for sale. “You will see significant consolidation, particularly among banks with less diversified income streams,” Toos Daruvala, a McKinsey director and co-author of the report, told Reuters.

The sluggish economy doesn't help. The International Monetary Fund is lowering its forecast for global economic growth to 3.3 percent this year and 3.6 percent in 2013, predicting a 15 percent chance of a recession in the United States next year. The I.M.F.'s Global Financial Stability report is due out this evening.

With the economy potentially slowing, regulators are paying close attention to the banks' capital levels. But the banks are not necessarily happy. Some are clashing with the Federal Reserve over its stress tests, demanding more information on the Fed's calcula tions, The Wall Street Journal reports. Sallie Krawcheck, former head of Bank of America's wealth management division, said in a Twitter message on Monday that the discord was “not a bad thing,” adding that she would “worry if they agree.”

 

Ireland's Bold Move  |  Ireland is going where no country has gone before. The government is close to passing a law that could encourage banks to reduce the amount that borrowers owe on their mortgages, “a step that no major country has been willing to take on a broad scale,” DealBook's Peter Eavis reports. “The initiative, which would lower a borrower's monthly payment, could prevent a tide of foreclosures, an uncertainty that has been hanging over the Irish housing market for years.” In other words, it could help Ireland's troubled economy.

 

Billion-Dollar Frau d Fighter  |  Max W. Berger, the plaintiffs lawyer, won six major securities class-action settlements, including the recent $2.43 billion deal with Bank of America, DealBook's Peter Lattman reports. But Mr. Berger, of Bernstein Litowitz Berger & Grossmann, is not celebrating.” It makes me sad that in all of these scandals, no matter how good a job we do of getting results and inflicting pain, the government doesn't seem to follow suit, and nobody learns, and it's business as usual,” Mr. Berger laments.

It's not just about the billion-dollar cases. DealBook's Peter J. Henning, the White Collar Watch columnist, highlights a recent case in which the Justice Department accused two brokers of secretly adding pennies to the cost of securities trades to generate $18.7 million in gains. Mr. Henning writes that “conduct involving relatively small amounts can add up to millions of dollars if allowed to go on long enough.”

 

Buyouts Lift Carlyle  |  The Carlyle Group's bread-and-butter private equity business generated most of the growth among its funds in the third quarter. The value of the firm's leveraged buyout funds increased about 5 percent, while its global market strategies platform rose 2 percent.

Business has been good to David M. Rubenstein, the firm's co-founder, who appeared on CBS News on Monday to talk about the Giving Pledge, the effort by Warren E. Buffett and Bill Gates to encourage philanthropy.

 

On the Agenda  |  A court in Ghana is set to rule Tuesday on Argentina's battle with Elliott Management, whose affiliate recently seized an Argentine naval ship. Procter & Gamble has an annual shareholder meeting Tuesday after the hedge fund manager William A. Ackman was said to call for the chief executive to resign. The jury trial begins Tuesday in the Securities and Exchange Commission's case against the co-founder of the Reserve Primary money market fund, which “broke the buck” in the financial crisis. Alcoa and Chevron report earnings after the market closes. Chancellor Angela Merkel of Germany is visiting Greece. Sallie Krawcheck is on Bloomberg TV at 10 a.m.
Aaron Levie, the C.E.O. of Box, is on CNBC at 1:30 p.m. and Bloomberg TV at 6 p.m. Glenn Hutchins, co-chief executive of Silver Lake, is on CNBC at 4:10 p.m.

 

Aerospace Deal on the Rocks  |  The European aerospace companies EADS and BAE, which face an Oct. 10 deadline to submit a merger plan, are moving “toward filing an extension,” Bloomberg News reports. Negotiations among leaders in Britain, France and Germany became more heated as Britain opposed a plan for France to increase its stake in the combined company, Reuters reports. And there may be further trouble from shareholders, as Invesco, the biggest investor in BAE, said it had “significant reservations” about the deal.

 

Silicon Valley's Reality Show  |  A new trailer for Bravo's “Start-Ups: Silicon Valley,” features lots of partying and insightful lines like “geeks are definitely the new rock stars.”

 

 

 

Mergers & Acquisitions '

Barclays Picks Up ING Unit in Britain  |  Barclays said it was buying the mortgages and deposits of ING Direct in Britain, in a transaction that leaves the Dutch firm with a $415 million after-tax loss. WALL STREET JOURNAL  |  REUTERS

 

Auction Begins for Anschutz Entertainment  |  The Anschutz Entertainment Group is expected to “draw bids in the $10 billion range,” Reuters reports, citing unidentified people familiar with the situation. REUTERS

 

BP's Russian Partners Look to Sell Stake in Joint Venture  |  The move by the Russian billionaires sets up a “race” with BP to exit TNK-BP first, Reuters writes. REUTERS

 

BP to Sell Texas City Refinery to Marathon Petroleum  |  BP said that it would sell its Texas City refinery and other assets to Marathon Petroleum for $2.5 billi on, as the British oil company nearly finishes up an aggressive plan to pare back assets. DealBook '

 

Principal Financial to Buy AFP Cuprum of Chile for $1.5 Billion  | 
BLOOMBERG NEWS

 

Russian Consumer Lender Says It May Sell Itself  |  Tinkoff Credit Systems is considering an I.P.O., but it also said it could put itself up for sale to a company like Google, Bloomberg News reports. BLOOMBERG NEWS

 

TPC Group Receives Higher Offer  |  The chemicals maker TPC Group said it had received a buyout offer of $721 million from Innospec, beating an earlier offer from two private equity fir ms, Reuters reports. REUTERS

 

 

INVESTMENT BANKING '

Julius Baer to Cut 1,000 Jobs After Deal for Bank of America Unit  |  The Swiss bank plans to eliminate up to 18 percent of its work force to cut costs after it struck a deal in August with Bank of America to buy the American bank's private banking operations outside the United States and Japan. DealBook '

 

Wal-Mart Partners With American Express for Prepaid Card  |  American Express, which previously had been focused on high-end consumers, is offering a prepaid card with Wal-Mart Stores that is being pitched as “an option for people turned off by bank fees,” The New York Times reports. NEW YORK TIMES

 

Goldman Sachs Staff Turns Against Obama  |  The firm's employees are now “top sources of money” for Mitt Romney and the Republican party, The Wall Street Journal reports. WALL STREET JOURNAL

 

Ex-S.E.C. Official Heads to Goldman Asset Management  |  Andrew Donohue, a former head of the investment management division of the Securities and Exchange Commission, is becoming the deputy general counsel of Goldman Sachs Asset Management, Reuters reports. REUTERS

 

PRIVATE EQUITY '

Allied World Assurance Buys Stake in MatlinPatterson  |  Along with the stake, Allied World will invest $500 million in MatlinPatterson's funds, a pattern seen in recent acquisitions by other institutional investors. DealBook '

 

Black's Latest Purchase  |  The chief executive of Apollo Global Management, Leon Black, is buying Phaidon Press, the art book publisher, according to The Wall Street Journal. Mr. Black was identified earlier this year as the buyer who paid almost $120 million for an edition of Edvard Munch's “The Scream.” WALL STREET JOURNAL

 

Nine Entertainment Proposes New Restructuring Plan  | 
REUTERS

 

Florida Newspaper Sold to Private Equity Firm  |  The Revolution Capital Group, based in Los Angeles, is buying The Tampa Tribune for $9.5 million. ASSOCIATED PRESS

 

HEDGE FUNDS '

Navistar Strikes a Deal With Icahn  |  Navistar International agreed to add three directors chosen by Carl C. Icahn and Mark Rachesky to its board, The Wall Street Journal reports. WALL STREET JOURNAL

 

Hedge Funds to Cut Trading Costs  |  A survey of hedge funds by Greenwich Associates found that 44 percent planned to spend less on their trading desks than in 2011, Bloomberg News reports. BLOOMBERG NEWS

 

New Hedg e Fund Focuses on Asian M.&A.  |  Ardon Maroon Fund Management has started a new hedge fund run by former executives of Morgan Stanley and Lehman Brothers, Reuters reports. REUTERS

 

I.P.O./OFFERINGS '

Facebook Offers to Sweeten a Settlement Over Advertising  |  Facebook is trying to reach a deal over Sponsored Stories, a form of advertising that may help the company make money on mobile devices, the Bits blog writes. NEW YORK TIMES BITS

 

MegaFon Files for I.P.O. in Russia  | 
BLOOMBERG NEWS

 

Questions Over Where Huawei Might List  |  The Chinese telecommunications company was said to be looking to go public in the United States, but after a government investigation, it may head to Hong Kong or London, The Wall Street Journal writes. WALL STREET JOURNAL

 

VENTURE CAPITAL '

Calxeda, Computer Chip Start-Up, Raises $55 Million  | 
WALL STREET JOURNAL

 

Another Finnish Start-Up Has a Hit Game  |  Finland, the country that is home to the company behind Angry Birds, has also produced the hit game Clash of Clans, made by the games start-up Supercell, the Bits blog writes. NEW YORK TIMES BITS

 

LEGAL/REGULATORY '

Fewer Banks Setting Libor  |  Though 18 banks contribute to setting Libor, submissions from a smaller number of those lenders are increasingly the ones with the most sway, as they “have been used in setting the rate on an almost daily basis in the past four months,” according to Bloomberg News. BLOOMBERG NEWS

 

European Officials Tell Greece to Accelerate Economic Reform  | 
NEW YORK TIMES

 

Goldman Agrees to Settle Claims Over Options Trades  |  The firm is paying $6.75 million to eight United States exchanges. BLOOMBERG NEWS

 

China's Central Bank Begins Monetary Stimulus  |  The People's Bank of China offered $42.14 billion of reverse repurchase agreements, The Wall Street Journal reports. WALL STREET JOURNAL