Opening Bell

Opening Bell: 01.12.12

JPMorgan May Show Record Profit As Wells Closes Gap (Bloomberg)
JPMorgan is projected to report a record $18.5 billion in 2011 earnings when adjusted for one-time items, a 6 percent increase for the New York-based company, according to a survey of analysts by Bloomberg. Profit at San Francisco-based Wells Fargo is estimated to have jumped more than four times as much, to an all-time high of $15.3 billion. By focusing on the U.S. and eschewing traditional Wall Street businesses such as structured products, Wells Fargo surpassed earnings at Goldman Sachs and Citigroup for six consecutive quarters. Wells Fargo, whose $1.3 trillion in assets make it the fourth-largest U.S. bank, also has higher valuations than its bigger peers.

ECB Holds Rates Steady Amid Crisis Respite (Bloomberg)
ECB policy makers meeting in Frankfurt kept the benchmark interest rate at a record low of 1 percent, as predicted by 47 of 53 economists surveyed by Bloomberg News. ECB President Mario Draghi will explain the decision at a 2:30 p.m. press conference…“The ECB is taking a breather because it needs to see how its measures are feeding through and also keep politicians on their toes,” said Carsten Brzeski, senior economist at ING Group in Brussels. “It’s unlikely to rush into cutting rates below 1 percent, but it’s pragmatic enough to do so if the economy tanks.”

Hedge Funds Try To Profit From Greece (Bloomberg)
Saba Capital Management LP, founded by former Deutsche Bank AG (DBK) credit trader Boaz Weinstein, York Capital Management LP, the $14 billion fund started by Jamie Dinan, and London-based CapeView Capital LLP are among managers that now hold Greek bonds, according to people with knowledge of the transactions. They’ve amassed the stakes as the government lobbies investors to accept a swap that would cause losses of more than 50 percent for bondholders. For the deal to avoid triggering credit-default swaps that could cause losses for more of the region’s banks, the agreement has to be voluntary. Hedge funds may not agree to the deal. “I would expect to see some holdouts,” said Sudeep Singh, a hedge fund manager at Matrix Group Ltd. who doesn’t own Greek debt. “The industry breaks down into guys who want to keep on fighting and into guys who just want to get the best deal and move on. It’s all a question of what price you got in at.”

You can blame Mitt Romney, but not for Bain Capital (Politico)
Steve Rattner says leave Mitt Romney alone! (Re: Bain…everything else is fair game.)

Jobless claims rise sharply to 6-week high (Reuters)
The number of Americans applying for first-time jobless benefits rose on Thursday, reversing a recent decline and suggesting the labor market remains brittle. Unemployment claims jumped to 399,000 in the first week of 2012, the highest in six weeks, from an upwardly revised 375,000 in the prior week. The four-week average of claims also marched higher to 381,750 from 374,000.

Brevan Howard Proves Master Of Hedge Funds (Bloomberg)
Also: “When Alan Howard set off for a business trip to India as a young Salomon Brothers bond trader in the late 1980s, colleagues advised against drinking local water. When he got back, the buzz on his trading desk was about the huge tab Howard had run up buying cases of Evian water, according to a person who worked with him at the time. The London native joked that he not only didn’t drink from the tap, he used the imported bottled water to bathe, shave and wash his hair.”

Polar bears turn cannibalistic as climate change depletes arctic food supply (NYDN)
Dwindling Arctic Sea ice is cutting off polar bears’ food supply, forcing the starving animals to devour their own kind. While cannibalism among polar bears isn’t unheard of, experts say the behavior is becoming increasingly common. “There are increasing numbers of observations of it occurring,” photojournalist Jenny Ross told BBC News. “Particularly on land where polar bears are trapped ashore, completely food-deprived for extended periods of time due to the loss of sea ice as a result of climate change.” Ross explained how the higher temperatures melt ice more quickly, leaving the bears less time to fuel up on ice-dependent seals, the animals’ main source of food.

Banker Pay Heads To Ballot (WSJ)
Wall Street pay is set to be reduced after a dismal year but the cuts won’t spare banking chiefs from potentially bruising encounters with investors during coming shareholders meetings. Investors ranging from charitable foundations to large state pension funds are preparing to challenge large financial firms on their pay practices. As a result, this year’s “proxy season”—the period, usually in the spring, when companies hold annual shareholder meetings—promises to be an eventful one in the financial sector, compensation consultants and corporate-governance experts say.

Romney Lacks Clear Remedy For US Economy (Reuters)
Mitt Romney, the frontrunner for the 2012 Republican U.S. presidential nomination, is promising Americans deep spending cuts, smaller government, trade penalties on China, a new Federal Reserve chairman and sweeping deregulation. The bold economic strategy Romney has sketched out in his White House bid seems designed to appeal to the radicalized conservative base of the Republican Party enamored of the gold-standard ideas promoted by libertarian congressman Ron Paul and budget slashers in the populist Tea Party movement. Romney needs their backing to eventually win his party’s nomination to face Democratic President Barack Obama on Nov.6…Economists and political strategists are skeptical that his economic plan will remain so radical as the campaign evolves. It sits uneasily with his track record as a moderate, could alienate independent voters he would need to defeat Obama, and deep, rapid budget cuts would risk tanking a shaky economy growing at a 2 percent pace.

Goldman Veterans Exit as Trading Struggles in Post-Crisis Order (WSJ)
Messrs. Heller and Eisler weren’t nudged out of the company, according to people familiar with the matter. But weaker trading revenue and tighter regulations that are limiting risk-taking at Goldman and other securities firms took their toll on both men, these people said. For example, they expressed disappointment to some colleagues that their highflying businesses had lost some luster. Mr. Heller was responsible for equities sales and trading, while Mr. Eisler led Goldman’s fixed-income trading and sales in interest rates, foreign exchange and some derivatives.

Allen Stanford’s Attorney Asks To Quit Case (CNBC)
Court-appointed attorneys Ali Fazel and Robert Scardino say in their bombshell motion that rulings by the judge in the case have left them in “an untenable position.” U.S. District Judge David Hittner has previously ruled Stanford competent for trial over the defense’s objection, denied a defense motion to delay the trial, and just this week ordered that a defense jury consultant no longer be paid.

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37 Responses to “Opening Bell: 01.12.12”

  1. thomas malthus says:

    You were able to catch a few seals and eat them, so now I'm eating you. Too bad you were successful.

    I see the polar bears are watching the obama administration's philosophy closely.

  2. AIG Quant via LEH says:

    JD's putting on weight.

  3. BrotherLehman says:

    Stanford's innocent, or so his lawyers say. Stanford Financial Group still has all those billions in assets or so they say. Surely his lawyers would accept an IOU from such a solid company founded by an innocent man, to be paid once they exonerate their client from all these frivolous charges? Oh.

  4. Guest says:

    Having your Lawyers quit on you two weeks before trial is the NKI.

  5. Guest says:

    "Polar bears turn cannibalistic"

    Serves them right.

    – International Brotherhood of Fur Seals Local #709

  6. Dr_Zaius says:

    Oh, this is your grandson, nice boy, wonderful boy. Good boy. I tell ya, now I know why polar bears eat their young.

  7. Fifth Grader says:

    To catch a polar bear simply cut a hole in the ice and sprinkle a can green peas around the hole. Then, when the polar bear comes to take a pea, you kick him in the ice hole!!!

  8. Dalio says:

    For example, is a polar bear good or evil? It may seem cruel, but the outcome would be worse if we changed anything. So, be the Polar Bear!

    Umm, but be sure to be the polar bear doing the eating, rather than the other one.

    • Dalio #2 says:

      Pay attention: I'll set my pant leg on fire because no one thought I would. Markets are like that and we have to respond and discuss our actions in a market environment. This experiment will tell us a lot about ourselves.

      So, watch….as I set my pant leg on fire…ooh….wow! kinda hot, huh, there….as I set my pants leg on fire we have to ask….SHIT…..wow….kinda spreads fast doesn't it?….So , we have to ask if the pant leg is FUCK!!! Goddammit!!! AAARGH!! Fuck! Where's some water????? Soyouseeafireisatrageytosomebutacomedytoothers OW OW OW

  9. PermaGuestII says:

    Short polar bears, long seals.

    • You remain my power, my pleasure, my pain. Baby.

    • VonSloneker says:

      Levered long Polar Bears, outs on seals. You have your supply curves shifting in the wrong direction :)

      • Got It Figured out says:

        Sell polar bear calls to dumbass investors. Then sell short the physical polar bear and go long seals. Sell a costless polar bear/seal collar to the native peoples in the region and demand the business without any other counterparties involved because you lease them their snow mobiles and finance their liquor stores. Hire former Enron traders to do polar bear counts on foot armed with a knife.

        • Guest says:

          Keep it simple. Lever the fuck out of your fund. Blow up. Tell your investors how you are too smart to make the same mistake. Raise a new fund. Rinse and repeat.

          -J Meriwether

    • trojan_ says:

      short Sigourney Weaver / long David Attenborough

  10. E. Texas Gas trader says:

    There is a new sheriff in "natural gas trading town." http://uk.reuters.com/article/2012/01/10/us-hedge

  11. Manbearpig says:

    I used to be a polar bear like you, until I was eaten by a polar bear.

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