Berkshire seeks to boost its Wells Fargo stake above 10 percent

Warren Buffett's Berkshire Hathaway Inc (BRKa.N) is seeking permission from the Federal Reserve to increase its ownership stake in Wells Fargo & Co (WFC.N), after reaching the 10 percent level that could prompt increased regulatory scrutiny.According to papers obtained by Reuters on Friday, Berkshire said it learned in mid-March that its Wells Fargo stake, including 2.01 million shares held by Buffett, had reached 10.01 percent because of buybacks by the San Francisco-based bank, which decreased the number of shares outstanding.Though the stake later dipped to 9.97 percent, Berkshire said it has again risen above 10 percent because of more buybacks by Wells, which is the third-largest U.S. bank by assets. Berkshire said it has bought no Wells Fargo shares since Oct. 21."Berkshire is seeking permission to retain its current ownership position in Wells Fargo and to acquire additional shares of common stock of Wells Fargo for investment purposes," according to the papers, which were dated June 14 and submitted to the Federal Reserve Bank of San Francisco.The Federal Reserve exerts special oversight when investors take large bank stakes.Berkshire said it had no dollar value in mind for purchases, had no plans to make significant changes to Wells Fargo's strategy or corporate structure, and was not contemplating changes to the bank's management or board. Bloomberg News earlier reported the paperwork.Berkshire's investment in Wells Fargo is worth more than $23 billion."We value Berkshire Hathaway as a long-term shareholder and customer, and we appreciate the confidence that Berkshire’s executive team has shown," Wells Fargo spokesman Ancel Martinez said an email. Buffett has long been a supporter of Wells Fargo, calling it "very well run" and a "terrific operation," and saying that Chief Executive John Stumpf has done a "fabulous job."The Federal Reserve exerts special oversight when investors take large bank stakes.In a September 2008 policy statement, the Fed said it often lets investors take double-digit stakes not designed to exert a "controlling influence," but would review any resulting business relationships "case-by-case." The U.S. Treasury Department has said it will not deem a 10 percent stake to result in "control" of a big bank if an investor agrees in writing to limits on its involvement.Berkshire also owns 15.94 percent of American Express Co (AXP.N), the application and Reuters data show.Based in Omaha, Nebraska, Berkshire also operates close to 90 businesses such as auto insurer Geico, the BNSF railroad, Dairy Queen ice cream and various apparel, energy and industrial companies. (Reporting by Jonathan Stempel in New York; Editing by Marguerita Choy and Leslie Adler) Read more

World stocks, sterling try to shake off Brexit blues

HONG KONG Asian stocks rose for the first time in three days on Tuesday while sterling and other currencies advanced as investors scooped up beaten down assets after Britain's vote to exit the European Union stunned financial markets.European markets looked set to follow Asian stocks higher, according to financial bookmakers, and U.S. stock futures ESc1 rose 0.8 percent, suggesting a stronger opening on Wall Street after a brutal two-day slide. [.N]MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent but the tiny gain belied an impressive turnaround which saw the Japanese stocks .N225 rally more than 3 percent from the day's lows, pulling other Asian markets higher. The Nikkei was up 0.6 percent by early afternoon.But in a sign that investors remained extremely nervous, trading volumes were light and price action was choppy across markets."Short-covering in the currency market and U.S. futures market is limiting selling," said Yutaka Miura, senior technical analyst at Mizuho Securities. "But overall sentiment remains fragile.""Friday's Brexit jump scare has faded, but markets are still worried" about its possible effect on global demand, SLW brokerage trader João Paulo de Gracia Corrêa said.Policymakers from Japan to China vowed to protect their economies and markets from the destabilizing impact of Brexit. "It's hard to avoid short-term volatility in China's capital markets, but we won't allow roller-coaster rides and drastic changes in the capital markets," Premier Li Keqiang said at the World Economic Forum (WEF) in the city of Tianjin. In currency markets, sterling GBP=D4 was changing hands at $1.3291, after falling to a three-decade low of $1.3122 on Monday, its weakest since 1985.Against the yen, sterling rose 1 percent to 135.54 GBPJPY=R, not far from Friday's 3-1/2 year low of 133.18. The euro stood at 82.93 pence EURGBP=R after scaling a two-year peak of 83.79 pence on Monday. The euro edged down slightly to $1.1060 EUR=, not far above Friday's three-month low of $1.0912 after the British vote."In the near term, risk aversion and market uncertainty makes the euro less attractive to investors," Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a note to clients."In the long run, Brexit also raises questions about the Eurozone's viability because if major countries like Britain start dropping out the EU, nationalism could drive smaller Eurozone nations to exit out of the euro," she said, adding that she expects the euro to "make another run" for the $1.0900 level. Early signs of a cautious return in demand for riskier assets were evident in the high-yielding Aussie AUD=D3 and the New Zealand dollar NZD=, which helped put a floor under other emerging market currencies in Asia. Anticipating yet another round of global policy easing by major central banks, government bond yields pushed deeper into negative territory. Yields on ten-year and 20-year Japanese debt plunged to fresh record lows. Gold XAU=, one of the rare outliers in global financial markets in the last few days, came in for a bit of profit taking with the precious metal down 0.7 percent. Silver XAG= fell 0.3 percent.Crude oil prices regained some of their overnight losses after tumbling nearly 3 percent on Monday. [O/R]U.S. crude CLc1 added 1.7 percent to $47.11 a barrel after shedding 2.8 percent on Monday, while Brent LCOc1 rose 1.6 percent to $47.89 after skidding 2.6 percent and touching seven-week lows overnight. (Additional reporting by Lisa Twaronite in TOKYO; Editing by Shri Navaratnam and Kim Coghill) Read more

Gun control efforts fizzle out in Congress, Democrat sit-in ends

WASHINGTON Supporters of U.S. gun control suffered another setback on Thursday when they failed to win enough backing in the Senate for a plan to ban firearms sales to people being monitored for links to terrorism in the wake of the Orlando massacre.A few hours after Democrats in the House concluded a daylong sit-in in their chamber over guns, Senate Republican leaders ended a protracted debate over gun control, at least for the time being. It became clear that Senate proponents of gun restrictions did not have the 60 votes needed to advance a bill, according to lawmakers and aides.That ended hopes that a compromise effort spearheaded by Susan Collins, a Republican from Maine, could progress soon. Her plan forbids gun sales to anyone on the U.S. government's "No Fly List" of terrorism suspects or the "Selectee List" of people who receive extra screening at airports.Collins' plan did clear one procedural hurdle in voting on Thursday by collecting a slim majority of the Senate - 52 votes - against an attempt to outright kill it. Senator John Cornyn, the No. 2 Republican in the Senate, told reporters he did not expect any more votes on gun control in the Senate in the near future. "(Senate Majority Leader Mitch McConnell) says we’re done with that, for now,” Cornyn said.That decision marked a major victory for the National Rifle Association in its campaign to fend off new restrictions on gun purchases. The Senate now will begin debating bills to combat the spreading Zika virus and helping Puerto Rico navigate a debt crisis, before starting a short July 4 recess next week.Earlier on Thursday, Democratic lawmakers ended a daylong sit-in occupation of the floor of the House to protest the lack of action on gun control after the shooting at a gay nightclub in Orlando, Florida, this month that killed 40 people.Democratic members had taken control of the House chamber on Wednesday and dozens of them stayed all night, at times bursting into the civil rights anthem "We Shall Overcome." Fueled by Chinese food and pizzas, the Democrats took turns occupying the chamber after raucous scenes that nearly erupted into a fistfight with the majority Republicans.After the House television cameras were turned off, the Democrats switched to social media to stream their protest via Facebook Live and Periscope.Dramatic protests by legislators are rare in the U.S. Capitol and the sit-in underscored how sensitive the gun control issue has become after a gunman pledging allegiance to Islamic State shot dead 49 people in Orlando. (Additional reporting by Richard Cowan, Timothy Ahmann, Timothy Gardner and Eric Walsh, Doina Chiacu; Writing by Alistair Bell; Editing by Bill Trott) Read more

Pimco plans to cut about 3 percent of global workforce: memo

NEW YORK Pacific Investment Management Co plans to cut about 3 percent of its workforce in the wake of a drop in assets under management since the 2014 departure of co-founder Bill Gross, according to an internal document obtained by Reuters Thursday.“Like any responsible business, Pimco constantly adjusts its resources to capitalize on changing markets and investment opportunities for clients,” Pimco spokesman Michael Reid said in an email statement. “Our current business plans will reduce expenses in some areas while, of course, ensuring investment and hiring in others.”The memo said headcount will be reduced by 68 people at the Newport Beach, California-based company, which had about 2,300 employees at the end of the first quarter. That was down from 2,400 a year earlier.The memo also said Pimco is eliminating six dividend-income strategy funds, which are led by a team including money manager Brad Kinkelaar and have about $260 million in assets. Pimco's assets stood at $1.5 trillion as of March 31, down from a peak of about $2 trillion in the first quarter of 2013. Gross, who co-founded the firm in 1971, left abruptly in 2014. Pimco built its reputation largely through its management of fixed-income assets, but in recent years it has tried to diversify its investor base to include those buying equity products.It even tapped former Goldman Sachs banker Neel Kashkari, who ran the U.S. government's $700 billion Troubled Asset Relief Program and is now president of the Minneapolis Federal Reserve Bank, to direct an expansion into new markets, including stocks.In 2015, Pimco's then-global equities chief investment officer, Virginie Maisonneuve, left after less than a year and a half in the position, as the company began narrowing its equities investing focus. Pimco is now converting its equity exposure to Research Affiliates Equity Income Fund, which falls under the Research Affiliates umbrella, Pimco's only sub-adviser.Todd Rosenbluth, director of ETF and Mutual Fund Research at S&P Global Market Intelligence, said asset managers with a significant base of business from active funds are facing challenges from the trend toward passive exchange traded funds. "While, collectively, fixed-income mutual funds continue to gather new money, Pimco's funds have experienced significant outflows in 2015 and the redemptions have continued in 2016," Rosenbluth said. According to Thomson Reuters Lipper data, Pimco had $11.5 billion of outflows in the first five months of this year across a variety of strategies, he noted. The firm's Total Return, Low Duration, All Asset All Authority, Unconstrained, Real Return Asset and Emerging Local Bond portfolios were among those with 2016 outflows, Rosenbluth added.Fox Business reported the job reductions earlier on Thursday. (Reporting by Jennifer Ablan; Editing by Tom Brown, Cynthia Osterman and Paul Simao) Read more

U.S. reviewing suspension complaints in Tesla Model S cars

WASHINGTON U.S. auto safety investigators are reviewing reports of suspension problems in Tesla Motors Inc's (TSLA.O) Model S cars, a government spokesman said on Thursday.Bryan Thomas, a spokesman for the National Highway Traffic Safety Administration, said the agency is "examining the potential suspension issue on the Tesla Model S, and is seeking additional information from vehicle owners and the company."A review is a step before the agency decides whether to open a formal investigation leading to a potential safety recall.The NHTSA also said it had learned that Tesla had entered into what it called a "troublesome nondisclosure agreement" with a Tesla Model S owner who had suspension problems.A Tesla spokeswoman said she was looking into NHTSA's statement, declining to immediately elaborate. A website that writes about auto issues, dailykanban.com, reported on owner complaints earlier this week that focus on a possible defect in Tesla Model S vehicles that may cause suspension control arms to break, which could cause the driver to lose control of the car.The site linked to a Model S owner who wrote on a Tesla fan website that said he had suspension problems and had received an email from an NHTSA investigator.The owner said Tesla agreed to pay 50 percent of a $3,100 repair bill if the owner agreed to keep confidential the arrangement. NHTSA said Thursday it "learned of Tesla’s troublesome nondisclosure agreement last month. The agency immediately informed Tesla that any language implying that consumers should not contact the agency regarding safety concerns is unacceptable, and NHTSA expects Tesla to eliminate any such language."The agency said Tesla "told NHTSA that it was not their intention to dissuade consumers from contacting the agency. NHTSA always encourages vehicle owners concerned about potential safety defects to contact the agency." Shares of Tesla closed down 2.6 percent at $229.36 on the Nasdaq. (Reporting by David Shepardson; Editing by Leslie Adler) Read more

Older PostNewer Post