MORNING YAPS

Goldman Sachs earnings easily surpass expectations
By STEPHEN BERNARD
(AP:NEW YORK) Goldman Sachs says its second-quarter profit easily surpassed expectations as profit was buoyed by strength in its trading and underwriting businesses. The New York-based banking giant, long considered the strongest in the sector, says it earned $2.72 billion, or $4.93 per share, after preferred stock dividends, up from $1.66 billion, or $3.39 per share, a year earlier. Analysts forecast earnings of $3.54 per share for the quarter. Goldman also recorded a charge of 78 cents per share as it repaid the government's $10 billion investment in the bank as part of the Troubled Asset Relief Program.

Wholesale prices rise more than expected in June
Wholesale prices took a bigger-than-expected leap in June, rising the most since November 2007, led by more expensive energy products. Economists expected a gain of 0.9 percent last month.

Retail sales rise better-than-expected 0.6 percent
The government says retail sales advanced in June by the largest amount in five months, led by a surge in gasoline prices and a slight rebound in the battered auto sector. While much of the strength came from a price-driven surge at gasoline stations, there was also strength in a number of other areas, including the best showing at auto dealerships since January. INO.com

U.S. officials considering aid for CIT, sources say
Although no final deal is imminent, U.S. officials are discussing providing aid to CIT Group, sources said. Despite heavy losses at the lender, regulators have not deemed the challenges threatening to the financial system or broader economy. But if CIT collapses, there could be unforeseen consequences, officials said. In addition to government aid, officials are looking into alternative measures to help the financial institution stabilize its position. The Wall Street Journal (14 Jul.)

Lehman takeover creates additional challenges for Nomura
After taking over Lehman Brothers in Asia and Europe last year, Nomura has done what it can to transition away from the collapsed bank and develop loyalty among the thousands of former Lehman employees acquired in the transaction. The Japanese investment bank is striving to retain the most talented employees, a challenge that will intensify when the guaranteed compensation packages disappear. Ex-Lehman staffers said success is what really counts, and Nomura, they acknowledged, has been successful. The Economist (09 Jul.)

Sovereign CDS trading increasingly popular, bankers say
Trading volumes in sovereign credit default swaps have jumped fivefold since the collapse of Lehman Brothers in mid-September, bankers said. "The Lehman event was a big turning point for sovereign CDS. Bank risk started to be transferred to governments, and investors wanted protection on sovereigns," said Francois Puget of BNP Paribas. "For the first time, people were thinking the unthinkable -- that a triple-A country could actually default -- and that brought a lot of investors into the sovereign CDS market." Financial Times (tiered subscription model) (13 Jul.)

Chinese economy possibly grew 7.8% in Q2, experts say
The government's economic stimulus, combined with a dramatic increase in lending, may have driven the Chinese economy to 7.8% growth in the second quarter, according to a survey of economists. "China will be the first among major economies to confirm an economic recovery," said Tao Dong, chief Asia economist at Credit Suisse in Hong Kong. Bloomberg (13 Jul.)

*Bernie went to NC federal prison. Maybe Mark can join him.
New York lawyer sentenced to 20 years in $700M fraud
New York lawyer Marc Dreier was sentenced to 20 years in prison by U.S. District Judge Jed Rakoff in Manhattan. Dreier confessed that he tried to sell $700 million in fake promissory notes and that he stole money from his clients. In addition to the prison term, Dreier was ordered to pay $387.7 million in restitution. The Wall Street Journal (14 Jul.)