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Mayo suggests Goldman buy E*TRADE; Milken attendees join in on hedge fund fee negativity


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Mayo suggests Goldman buy E*TRADE; Milken attendees join in on hedge fund fee negativity

You know whatwould help Goldman Sachs GroupInc. in its foray into traditional banking — buying ,suggests Mike Mayo. But an op-ed piece in TheWall Street Journal begs to differ,saying (1) E*TRADE under Goldman isn't going to be the cheap funding sourceMayo predicts; and (2) odds are slim it'd get regulatory approval. In any case,Goldman opened an online-only bank for a reason and would probably prefer toacquire a freshfintech startup, the WSJ argues. In the meantime, the bank is mulling partnershipswith small brokerages and wealth management firms, in a push to lend to morethan its own clients, say sources for Reuters.

FromCitigroup Inc.'s : another investor lawsuitover pre-crisis RMBS, a Banamex-related case, and a class action suit againstJPMorgan Chase &Co., et al., in connection with claims of forex manipulation.

Hedge fund feeswere under attack at the Milken conference. California State Teachers' Retirement System' ChrisAilman told Bloomberg Television the 2-and-20 compensation model was "offthe table" for large investors, and Hutchin Hill Capital LP's Neil Chriss warned"investors are going to vote with their feet."

Steven Cohenwas also at the conference, and he spoke of the danger of having too manycompetitors. When rivals apply the same strategies, failure tends to becontagious. His "worstfears were realized" when the firm was down 8% in February. There'salso the difficulty of hiring new blood for Point72 Asset Management LP, and Business Insider quoteshim as saying he is "blown away by the lack of talent."

Meanwhile,Hennessy AdvisorsInc. struck a deal for assets related to the management of The Westport Funds,bringing its AUM to more than $7 billion.

Online lender SoFi is raising fundsagain — but this timeit is turning to pension funds, insurers and European and Asian sovereignwealth funds and offering them equity in exchange, the Financial Times reports.

Want to try an open-source blockchain protocol? Chain Inc. has been working on one withCapital One FinancialCorp., CitigroupInc., First DataCorp., FiservInc., NasdaqInc., State StreetCorp., VisaInc., MUFG and Fidelity, and it is now being releasedto a wider audience.

On the regulatory front, the Automated Clearing andSettlement System was designated a prominentpayment system, and therefore under the Bank of Canada's jurisdiction.

The FederalReserve Board approved a joint agency notice of proposed rulemaking toimplement the incentivecompensation provisions. It will be issued jointly with the OCC, the FDIC,the NCUA, the SEC and the FHFA. Each agency is expected to finish its reviewearly this month, and the comment period will close July 22.

Worried abouteasing lendingstandards? The Fed's April senior loan officer survey shows U.S.banks generally got tighter when it came to CRE, as well as commercial andindustrial loans. They did relax somewhat for home mortgages and credit cards.Auto loan standards remained the same.

And PresidentBarack Obama appointed RickMetsger as Debbie Matz's successor at the NCUA.         

In other parts of the world

Australianentrepreneur Craig Wright said that he inventedcontroversial digital currency bitcoin and gave technical proof, Reutersreports. The claim has been met with some skepticism. 

The day ahead

Earlymorning futures indicators pointed to a lower opening for the U.S. market.

In Asia, theHang Seng was down 1.85% to 20,676.94.

In Europe,around midday, the Euronext 100 was down 1.65% to 858.24 and the FTSE 100 was down1.24% to 6,164.47. 

On the macro front

TheMotor Vehicle Sales report, the Gallup US ECI and the Redbook are due outtoday. 

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