SAC at risk of seeing its Banks cut them off with looming criminal charges against the Firm itself...... ECB credit creation ( M3) misses expectations while ECBB lending to private sector shrank for 14th consecutive month ( new record low 1.6 off in June ) .....

http://www.bloomberg.com/news/2013-07-25/banks-said-to-weigh-suspending-dealings-with-sac-as-charges-loom.html

Wall Street banks are debating whether to suspend doing business with SAC Capital Advisors LP if the hedge fund is charged by U.S. prosecutors, according to two people briefed on the matter.

Deutsche Bank AG (DBK) and Goldman Sachs Group Inc. (GS) are among firms weighing the reputational and financial consequences of continuing to provide trading, lending and prime brokerage services to SAC, one of Wall Street’s largest trading clients, said the people, who asked for anonymity because the talks aren’t public. Prosecutors plan to charge SAC, the hedge fund founded by Steven A. Cohen, as soon as today as part of a probe of insider trading, a person familiar with the matter said.

  “Each bank has their own risk parameters,” said Ron Geffner, a partner at Sadis & Goldberg LLP in New Yorkwho represents hedge funds. “Some firms, depending on the nature of allegations, may elect to terminate a relationship based on the allegations themselves, while others may conduct business up through prosecution.”

A criminal case against the Stamford, Connecticut-based hedge fund, as well as U.S. regulatory claims targeting Cohen, threaten to cripple the firm. The Securities and Exchange Commission filed an administrative complaint against Cohen last week, seeking to ban him from overseeing investor funds for allegedly failing to supervise employees and prevent them from engaging in insider trading.

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 SAC Capital said in a regulatory filing this week that it managed $13.9 billion of net assets as of July 1. The firm, which has been receiving withdrawal requests from investors, oversaw $9 billion for Cohen and his employees and $6 billion for clients earlier this year. That mix has helped it maintain a stable capital base.

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 The hedge fund has been among the largest trading clients for New York-based Morgan Stanley (MS) and Goldman Sachs, according to people with knowledge of the relationships. SAC has used those firms, along withJPMorgan Chase & Co. (JPM), Credit Suisse Group AG and Barclays Plc (BARC), as prime brokers, Reuters reported in 2011. Spokesmen for the banks declined to comment.

Some of the world’s biggest banks have been emphasizing their efforts to behave ethically, put clients first, cooperate with regulators and temper risk-taking after reputations were damaged during the credit crisis, government-funded bailouts and a variety of scandals throughout the financial industry.

Goldman Sachs wrote in a May report on its principles that it seeks to “be as focused on reputational risk as we are on financial risk.” Frankfurt-based Deutsche Bank yesterday published its new values and beliefs as part of a strategy overhaul, including the pledge, “We will do what is right –- not just what is allowed.”

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http://www.zerohedge.com/news/2013-07-25/ugly-start-sentiment-crunched-cracked-credit-creation-europe

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Ugly Start As Sentiment Crunched On Cracked Credit Creation In Europe

Submitted by Tyler Durden on 07/25/2013 07:01 -0400

• Bank of England
 
• Barclays
 
• BOE
 
• Boeing
 
• Borrowing Costs
 
• British Pound
 
• CDS
 
• China
 
• Copper
 
• Credit Suisse
• Creditors
 
• Crude
 
• Detroit
 
• European Central Bank
• Eurozone
 
• fixed
 
• Ford
 
• France
 
• General Motors
• Germany
 
• Gross Domestic Product
 
• Initial Jobless Claims
• Ireland
 
• Italy
 
• Janet Yellen
 
• M3
 
• Markit
 
• Mexico
 
• Natural Gas
 
• New Home Sales
 
• Nikkei
 
• non-performing loans
• Obama Administration
 
• Precious Metals
 
• Price Action
• RANSquawk
 
• ratings
 
• Recession
 
• recovery
 
• SAC
 
• United Kingdom

At precisely 4 am Eastern two opposite things happened: the German IFO Business Climate for July printed at a better than expected 106.2 vs 105.9 in June and higher than the 106.1 consensus: news which would have been EURUSD positive. And yet the EUR tumbled. Why? Because at the same time the ECB provided an update to the chart that "keeps Mario Draghi up at night" as we reminded readers yesterday - the ECB's all important credit creation update in the form of the M3, which not only missed expectations (of +3%) but declined from 2.9% to 2.8%. But more importantly, ECB lending to private sector shrank for the 14th consecutive month in June,and slid to a new record low 1.6% in June,down from a 1.1% in May.

In other words, the European monetary plumbing is broken now more than ever and this puts the onus on the ECB for even more monetary stimulus (even though the data specifically confirms this won't help one bit aside from creating another stock market bubble). The news promptly crushed the fragile European confidence that things are getting better despite better PMIs and assorted Spanish "adjusted" data that will promptly roll over once the ongoing lack of credit creation washes ashore on the Iberian peninsula.

General risk off sentiment has ensured that commodities and the broader energy complex remained under pressure even though the USD is seen little changed amid safe-haven flows which also saw USDJPY trend lower.

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