Opening Bell: 02.17.12

Lehman Crisis Veterans Warn Europe Leaders Against Provoking Greek Default (Bloomberg)
Neel Kashkari, who was on the policy frontlines when Lehman Brothers Holdings Inc. crumpled in 2008, warns European governments against pushing Greece too far as they impose conditions for aid. “It can be very politically satisfying to be tough, but if an uncontrolled default were to lead to contagion around the euro zone, that could be very damaging for all of Europe and for the global economy,” said Kashkari, who four years ago was an aide to then-U.S. Treasury Secretary Henry Paulson and now is head of global equities at Pacific Investment Management Co.

Analyst Arrested In Insider Probe (WSJ)
Independent research analyst John Kinnucan was arrested Thursday night by federal agents at his home in Portland, Ore., as part of an ongoing insider-trading investigation. Federal Bureau of Investigation agents arrested Mr. Kinnucan without incident, an FBI spokesman said. The government’s charges against Mr. Kinnucan remained sealed. Mr. Kinnucan, who ran a firm called Broadband Research LLC with high-profile hedge-fund firms as his clients, was caught on government wiretaps as part of the insider-trading investigation, prosecutors have said in court. Mr. Kinnucan became well-known after FBI agents visited him in October 2010, trying to “flip” him, or persuade him to cooperate, as part of the broadening probe…Mr. Kinnucan didn’t cooperate with the agents, but sent an email to traders and analysts describing the agents as “fresh faced eager beavers,” as reported in a November 2010 Wall Street Journal article that also disclosed details of the insider-trading investigation.

Most-Hated 2011 Stocks Burn Short Sellers in 2012 (Bloomberg)
The 26 companies in the S&P 500 with the highest so-called short interest relative to shares available for trading rallied 18 percent this year, compared with 8 percent for the full index, data compiled by Bloomberg show. Speculators who borrowed Sears shares and sold them to profit from a drop got hammered as the stock surged 73 percent. Netflix, with short interest of 17 percent at the end of 2011, rose 76 percent.

LightSquared Looks To Lawyers (WSJ)
The lawyers are investigating the merits of a potential suit against the Federal Communications Commission, which this week rejected LightSquared’s plan for a broadband network, and the Global Positioning System industry. GPS companies and Defense Department officials have argued that LightSquared’s signal could interfere with their networks.

Traders Manipulated Key Rate, Bank Says (WSJ)
A group of traders and brokers successfully managed to manipulate an interest rate that affects loans around the world, one of the banks being investigated has told regulators. In a court filing in Ottawa, Canada’s Competition Bureau said a bank it didn’t identify has told the agency’s investigators that people involved in the alleged scheme “were able to move” interest rates. People familiar with the situation said the “cooperating party” is UBS AG. The Swiss bank has said it is assisting regulators in a sprawling interest-rate probe in North America, Europe and Asia, which has led to a score of individuals being fired or suspended by major U.S. and European banks and leading brokers.

Ex-Goldman Sachs Programmer Conviction Reversed (Bloomberg)
Sergey Aleynikov, the former Goldman Sachs computer programmer found guilty of espionage for stealing the firm’s code for high-frequency trading, had his conviction overturned by a federal appeals court in New York. In a one-page order yesterday, the U.S. Circuit Court of Appeals in Manhattan told the lower court to enter a judgment of acquittal, saying an opinion will follow later. Aleynikov was convicted by a Manhattan federal jury in December 2010 of violating the Economic Espionage Act and the Interstate Transportation of Stolen Property Act. He was sentenced to more than eight years in prison last March. On his last day of work at New York-based Goldman Sachs in June 2009, Aleynikov uploaded hundreds of thousands of lines of source code from the firm’s high-frequency trading system, prosecutors said. He circumvented Goldman Sachs’s security, sent the code to a server in Germany, compressed and encrypted it, and took it with him to a meeting with new employers in Chicago, the U.S. said. Prosecutors argued Aleynikov wanted it as a “cheat sheet” to start a trading system at his new job.

Loss of a Wireless Dream Caps a Fast Fall From Grace (Dealbook)
Dealbook writes “Mrs. Falcone’s pet pig, Wilbur, became a feature character in Wall Street blog posts about her husband’s fortune,” oddly chooses not to mention the one place where this actually happened.

Quinn puts pressure on MSG and Time Warner Cable (NYP)
City Council Speaker Christine Quinn fired off letters yesterday to the two top executives of Time Warner Cable and Madison Square Garden, warning they’ll face a public grilling if Knicks and Rangers games aren’t restored to more than 2 million blacked-out cable subscribers. “It has been reported that discussions between the two sides have recently taken place for the first time in nearly two months,” Quinn wrote MSG Chairman James Dolan and Time Warner CEO Glenn Britt. “If these discussions cannot produce a resolution within two weeks, the City Council will hold hearings and request that both parties explain themselves to the public . . . At a time when all New Yorkers are getting together behind Jeremy Lin and the New York Knicks, now is the time to resolve this dispute once and for all.”

Citigroup Managers to Own Part of Hedge Unit (Bloomberg)
Citi will let managers of its hedge funds own part of the business ahead of rules that limit shareholders’ cash in the unit, Chief Operating Officer John Havens said. Employees in the Citi Capital Advisors division, or CCA, will get a “significant” stake in managing the funds, Havens said in an interview. This will increase, he said, as New York- based Citigroup withdraws its own money and attracts outside investors to comply with the Volcker rule, which restricts deposit-taking banks from making bets with their own capital.

German president resigns in setback for Merkel (Reuters)
Angela Merkel’s hand-picked choice for the ceremonial post of president resigned on Friday in a scandal over political favors, dealing a blow to the German chancellor in the midst of the euro zone debt crisis.

Options To Ease ‘Stress’ At BofA (WSJ)
The bank would consider selling its retail-branch network in Texas and its U.S. Trust wealth-management unit if the giant bank is forced to raise capital in a market shock or severe economic downturn, according to a document provided to U.S. regulators. The Charlotte, N.C., company submitted the hypothetical scenarios as part of a list requested last year by the Federal Reserve, said people familiar with the situation. The list is part of an emergency-planning exercise requested by regulators, who are conducting “stress tests” at 31 large U.S. banks early this year. It isn’t clear if other large banks were asked last year to prepare similar plans.

Record $6 Trillion of Fake U.S. Bonds Seized (Bloomberg)
Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt. The bonds were found hidden in makeshift compartments of three safety deposit boxes in Zurich, the prosecutors from the southern city of Potenza said in an e-mailed statement. The Italian authorities arrested eight people in connection with the probe, dubbed “Operation Vulcanica,” the prosecutors said.

Rick Santorum backer suggests Bayer aspirin as a birth control method for women (NYDN)
Foster Friess, the primary supporter of a pro-Santorum super political action committee, suggested on MSNBC that women use Bayer aspirin as a contraceptive. “This contraceptive thing, my gosh, it’s so expensive,” he told host Andrea Mitchell. “Back in my days, they used Bayer aspirin for contraceptives. The gals put it between their knees and it wasn’t that costly.”

48 comments (hidden to protect delicate sensibilities)
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Comments (48)

  1. Posted by Inquisitive Soul | February 17, 2012 at 9:42 AM

    Thank you Quinn

  2. Posted by guest | February 17, 2012 at 9:56 AM

    It's Linsanity Baby!

    -Dick V.

  3. Posted by Guest | February 17, 2012 at 10:06 AM

    The $6 Trillion is going to look peanuts after another four years of this President

  4. Posted by A Sorkin | February 17, 2012 at 10:11 AM

    Bess, I take it you're just a little peeved about DealBook not citing you?

  5. Posted by Abe_Froman_ | February 17, 2012 at 10:14 AM

    I told you not to F- with Craftsman
    -Eddie

  6. Posted by guest | February 17, 2012 at 10:17 AM

    It was pretty sleazy, don't you think?

  7. Posted by guestapo | February 17, 2012 at 10:19 AM

    It looks like they went out of their way to make it seem like Wilbur had become "a feature" all over the internet rather than just, um, here.

  8. Posted by Dr_Rosenrose | February 17, 2012 at 10:19 AM

    They are sports enthusiasts?

  9. Posted by Guest | February 17, 2012 at 10:15 AM

    What do Knicks fans and Broncos fans have in common?

  10. Posted by Guest | February 17, 2012 at 10:20 AM

    DeallBook sucks.

    -UBS hotdog vendor

  11. Posted by Inquisitive Soul | February 17, 2012 at 10:23 AM

    Quinn?

  12. Posted by guest | February 17, 2012 at 10:24 AM

    What is citing?

    -Z. Kouwe

  13. Posted by Guest | February 17, 2012 at 10:26 AM

    Lev-insanity.

  14. Posted by The Truth | February 17, 2012 at 10:28 AM

    That's how we roll

    - Z. Kouwe

  15. Posted by Guest | February 17, 2012 at 10:41 AM

    Dude. The Knicks and Broncos both have orange/blue uniforms and Carmelo Anthony used to play in Denver, where the Bronco's play. That's freaky enough, right? But here's an extra layer of freak for you, Carmelo went to Syracuse, and guess what they're called? The Orangemen.

  16. Posted by Guest | February 17, 2012 at 10:45 AM

    You know how I know you're gay?

  17. Posted by Tseug | February 17, 2012 at 10:47 AM

    CNBC bringing on Gallagher? Is this a sign that the network as a whole has jumped the shark?

  18. Posted by Fapper | February 17, 2012 at 10:47 AM

    duke fan?

  19. Posted by Lin's catchphrase | February 17, 2012 at 10:52 AM

    Can you smell what the WOK is cooking?

  20. Posted by Guest | February 17, 2012 at 10:52 AM

    Kouwe is covered in Santorum.

    -Santorum

  21. Posted by Random Quote Guy | February 17, 2012 at 10:54 AM

    And then he said Jabroni?

  22. Posted by Guest | February 17, 2012 at 10:57 AM

    Short interest in Netflix at the end of 2011 after a 75% drop? Serves you right, followers.

  23. Posted by Guest | February 17, 2012 at 11:15 AM

    Their star players have never tenderized the meat curtains before?

  24. Posted by Jeremiah Johnson | February 17, 2012 at 11:21 AM

    "Why are they yellin' at us?"

    "When they yell at you, it's because they fear you."

  25. Posted by Guy Who Gets It | February 17, 2012 at 11:22 AM

    I got it!

  26. Posted by Guest | February 17, 2012 at 11:28 AM

    When you caught him with your Dad?

  27. Posted by Tomaski | February 17, 2012 at 11:32 AM

    He likes Matt?

  28. Posted by Fan of the Site | February 17, 2012 at 11:32 AM

    Lev-incredible!

  29. Posted by Bible Scholar | February 17, 2012 at 11:33 AM

    Lev-iticus

  30. Posted by Disgruntled Customer | February 17, 2012 at 11:34 AM

    The must have hired someone from AOL to run CNBC+ subscriptions.

  31. Posted by PermaGuestII | February 17, 2012 at 11:43 AM

    Think CNBC jumped the shark about 5 years ago.

  32. Posted by Foster Friess | February 17, 2012 at 12:22 PM

    "Back in my day we used Seran Wrap as a prophylactic. We would stop by the kitchen on our way out to a date and put some in our pocket."

  33. Posted by Lin's Nickname | February 17, 2012 at 12:52 PM

    Wang Hang Long

  34. Posted by RBS Forever | February 17, 2012 at 1:10 PM

    Manipulating Libor? It's amazing that some of these banks still managed to lose money after cheating the market.

    It's like taking a fat kid to a fat camp, and he still manages to gain weight.

  35. Posted by Guest | February 17, 2012 at 1:12 PM

    Let my heat seeking beef dart penetrate your quivering oasis of love muscle

  36. Posted by CCCP | February 17, 2012 at 1:21 PM

    In Soviet Russia, code compress you!

  37. Posted by trojan_ | February 17, 2012 at 1:55 PM

    I'm not saying Lin and Tebow are ancient aliens, but on the other hand I'm not saying they AREN'T…

  38. Posted by KungFu grip | February 17, 2012 at 2:13 PM

    Time for Falcone to change the name – "The Square Root of Light Squared" somehow works-

  39. Posted by Curious | February 17, 2012 at 3:15 PM

    i wonder how many daily working hours are spent trolling db on average instead of doing actual work. any guesses? i'll take the over on 3 hours a day.

  40. Posted by gu_st | February 17, 2012 at 4:15 PM

    Isn't it more like putting a buffett in front of a fat kid so he can go on the Biggest Loser and have a chance to win money, but ends up losing weight instead?

  41. Posted by Tester of Men | February 17, 2012 at 4:55 PM

    Mr. Gartman? Mr. Falcone? You're wanted in the ladies room.

  42. Posted by Guest | February 18, 2012 at 1:41 AM

    Can't wait for the next Kinnucan cant! Do you think he's learned his lesson to not engage with a public battle against the men in raybans and suits?

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