What Is Bernanke Thinking?

WHAT IS BERNANKE THINKING?  |  Second-guessing the Federal Reserve may be a Wall Street parlor game, but it is one that has taken on heightened significance in recent years, as markets have become more dependent on central bank support than at any time in recent memory, DealBook’s Peter Eavis writes. Since May 22, when Ben S. Bernanke, the Fed chairman, said the stimulus might diminish, global stock markets have lost $3 trillion in value, according to Bank of America Merrill Lynch.

The question focusing the minds of investors across Wall Street is: Why did Mr. Bernanke say that? The Fed chairman will get another chance to explain his intentions at a scheduled news conference next week and in his semiannual testimony to Congress next month. But in the meantime, four theories are circulating about his comments in May, Mr. Eavis says. Some speculate that Mr. Bernanke may be throwing a bone to hawks within the Fed; others say Mr. Bernanke may be tying to put a damper on some of the frothiest markets. A different theory holds that the Fed was treating that message as a dress rehearsal, and yet another notion is that Mr. Bernanke has indeed shifted his stance.

Jon Hilsenrath, a reporter for The Wall Street Journal whose writings are closely scrutinized by investors, weighed in on Thursday, saying the Fed is not close to ending its stimulus. “An adjustment in the program won’t mean that it will end all at once, officials say, and even more importantly it won’t mean that the Fed is anywhere near raising short-term interest rates,” Mr. Hilsenrath reported. “Investors aren’t listening.”

GANNETT’S TV PLAY  |  “Owning a big-city television station can be a good business bet, even as the sector faces formidable competition from the Internet. But a better bet is owning 30 or 40 of them,” Brian Stelter and Michael J. de la Merced report in DealBook. “That is the thinking behind a surge of consolidation in local television that crested on Thursday when the Gannett Company agreed to buy the Belo Corporation for about $1.5 billion in cash. Analysts said the deal was the biggest deal in local television in more than a decade.”

“For Gannett, best known for owning USA Today and a batch of smaller newspapers from coast to coast, the addition of Belo will nearly double its number of stations, to 43, from 23. It is the latest step in a yearlong strategy by Gannett to diversify its media operations amid continued struggles in the print industry.” Investors welcomed the news, sending the stock up 34 percent to close at $26.60 on Thursday.

R.B.S. FACES DOUBTS  |  A day after the announcement that Stephen Hester, the chief executive of the Royal Bank of Scotland, was leaving, British lawmakers and international investors registered their displeasure, with the bank’s shares falling as much as 8 percent on Thursday before closing down about 3.3 percent. “Much of the criticism has centered on whether George Osborne, the chancellor of the Exchequer, played a role in Mr. Hester’s ouster,” Mark Scott and Julia Werdigier write in DealBook. “Mr. Osborne is to make a speech next week outlining how to privatize the bank and another British rival, the Lloyds Banking Group, though some opposition politicians say they believe he has already decided on how to proceed.”

ON THE AGENDA  |  Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corporation, and H. Rodgin Cohen, senior chairman of Sullivan & Cromwell, are discussing “too important to fail” banks at the Brookings Institution. Data on industrial production in May is out at 9:15 a.m. Christine Lagarde of the International Monetary Fund is on Fox Business Network at 12 p.m. Richard Cordray of the Consumer Financial Protection Bureau is on Bloomberg TV at 4:30 p.m.

WHEN COMPANIES GO DARK  |  Public companies that do not have very many shareholders are increasingly availing themselves of the right to “go dark,” meaning they no longer have to file financial information with the Securities and Exchange Commission but remain publicly traded, Floyd Norris, a columnist for The New York Times, writes. When a company goes dark, “investors are in, but they may or may not be told what is going on. Companies that go dark sometimes make audited financial statements public, and sometimes they do not.”

“There is no better example of the perils of going dark â€" as well as proof that ‘preferred’ can be a misnomer when it comes to stock â€" than the former Equity Inns, an owner of hotels, whose common shares were acquired by Goldman Sachs in 2007.”

Mergers & Acquisitions »

I.S.S. Recommends Against Sprint’s Bid for Clearwire  |  Institutional Shareholder Services, the proxy advisory firm, recommended on Thursday that Clearwire shareholders reject a proposed takeover bid by Sprint Nextel.
DealBook »

News Corp. Financial Officer to Step Down After Company’s Split  |  David F. DeVoe, the chief financial officer of News Corporation for more than two decades, is retiring later this month.
NEW YORK TIMES

Ocwen to Buy Mortgage Servicing Rights for $2.53 Billion  |  The Ocwen Financial Corporation, a mortgage company that has experienced rapid growth recently, is buying the rights from OneWest Bank.
REUTERS

Indian Tire Maker’s Shares Tumble Over Deal for Cooper  |  Shares of Apollo Tyres plunged more than 25 percent in India on news of its proposed $2.5 billion acquisition of Cooper Tire and Rubber over concerns about the amount of debt it was taking on.
DealBook »

Harlem Globetrotters Said to Be for Sale  | 
REUTERS

INVESTMENT BANKING »

For Bloomberg, Reporters’ Practices Are Crucial Issue  |  Bloomberg L.P., which was at the center of a controversy over its reporters’ use of its data terminals to gather information about subscribers, “not only tolerated but encouraged an unusual symbiotic relationship between the company’s news operation and its business interests, including the use of the terminals to break news,” Amy Chozick reports in The New York Times.
NEW YORK TIMES

JPMorgan Executive to Return, But Perhaps Not for Long  |  John Hogan, the chief risk officer of JPMorgan Chase, is returning to the bank in a new role after taking time off, but he subsequently may decide to leave the bank altogether, Bloomberg News reports, citing an internal memo.
BLOOMBERG NEWS

Goldman Said to Offer Clients Automatic Block Trading  |  The technology “is the latest attempt by a Wall Street bank to automate block trading, a small sliver of the equities business that is still handled mostly by humans rather than specialized computer programs,” Reuters reports.
REUTERS

In Real Estate Dispute, Even Printing Fees Are an Issue  |  Apparently, no grievance is too small in a fight between Goldman Sachs and investors in a real estate investment trust, the Unstructured Finance blog of Reuters writes.
REUTERS

At BlackRock, Stock Unit Continues to Pose Challenges  | 
WALL STREET JOURNAL

PRIVATE EQUITY »

Billions Trapped in ‘Zombie’ Funds  |  Reuters reports: “Private equity firms are sitting on $116 billion of assets trapped in so-called zombie funds that lie dormant but still rake in fees from investors, research showed on Thursday.”
REUTERS

TPG and J.C. Flowers Said to Be in Bid for Allstate Unit  |  The private equity firms TPG Capital and J.C. Flowers, along with the British financial firm Resolution Group, are bidding for the Lincoln Benefit Life unit of the Allstate Corporation, Reuters reports, citing two unidentified people familiar with the situation.
REUTERS

HEDGE FUNDS »

Lampert Uses Stock to Meet Withdrawals From Fund  |  Bloomberg News reports: “Edward Lampert used $393 million of shares in AutoNation Inc. to meet client redemptions from his main hedge fund, whose investment in Sears Holdings Corp. has led to volatile returns.”
BLOOMBERG NEWS

I.P.O./OFFERINGS »

Not a Pretty Start for Coty Shares  |  Shares of the cosmetics and fragrance giant Coty slipped in their trading debut on the New York Stock Exchange, after one of the biggest I.P.O.’s in the United States this year.
DealBook »

With HD Supply I.P.O., a Reminder of the Buyout Boom  |  HD Supply Holdings is planning an initial public offering that would value the entire company at about $4.3 billion, far less than the price paid by three private equity firms six years ago.
DealBook »

Antero Resources Files for I.P.O.  |  Antero Resources, an oil and gas company controlled by Warburg Pincus, is looking to raise up to $1 billion in an I.P.O., Reuters reports.
REUTERS

VENTURE CAPITAL »

Smartphone Makers Pressed to Address Theft Problem  |  E.C. Gogolak writes on the Bits blog: “Seeking to curb a nationwide increase in smartphone thefts, New York’s attorney general and San Francisco’s district attorney on Thursday announced an initiative to push the industry to develop technologies that will discourage theft and dry up the market for stolen devices.”
NEW YORK TIMES BITS

LEGAL/REGULATORY »

Bank of England Official to Leave  |  Paul Tucker, once a leading candidate to take the top job at the central bank, plans to resign as deputy governor of the Bank of England.
DEALBOOK

S.E.C. Charges and Fines Revlon for Misleading Shareholders  |  The Securities and Exchange Commission announced that Revlon hid crucial information from its independent board members related to a complex corporate finance transaction.
DealBook »

Currency Rates May Face New Regulation  |  Bloomberg News reports: “Global regulators may start overseeing currency rates in a widening response to benchmark-rate setting scandals that began with revelations on the manipulation of Libor, according to two people familiar with the matter.”
BLOOMBERG NEWS

In Fight Over Bank Rules, Regulator Calls for Compromise  |  Bart Chilton, a Democratic member of the Commodity Futures Trading Commission, called on his agency to strike a compromise over plans to rein in risky trading overseas.
DealBook »

In E-Book Trial, Apple Negotiator Defends His Tactics  |  Eddy Cue, a top executive at Apple who was a close associate of Steve Jobs, said he had thrown himself into negotiations with major publishers as Apple entered the e-book market because “Steve was near the end of his life,” Julie Bosman reports in The New York Times.
NEW YORK TIMES