Opening Bell: 02.29.12

Insider Probe Targets A Top Goldman Manager (WSJ)
David Loeb, a Goldman managing director who acts as a middleman between the Wall Street firm and some of its most important hedge-fund clients, is the latest Goldman official to be investigated in the insider-trading probe…Known at Goldman and among clients as self-deprecating and colorful, Mr. Loeb sometimes signs his emails “cbf,” for “chunky but funky.”

Dalio Earned Clients $13.8 Billion to Lead Hedge Funds as Paulson Slumped (Bloomberg)
Ray Dalio’s Pure Alpha hedge fund made $13.8 billion for its investors last year, while John Paulson lost clients almost $10 billion after an unsuccessful wager that the U.S. economy would recover, according to a report by LCH Investments NV. Pure Alpha, part of Dalio’s Bridgewater Associates LP, has earned $35.8 billion for investors since its inception in 1975, said LCH, a firm overseen by the Edmond de Rothschild Group. Losses for New York-based Paulson & Co. last year cut gains the firm has made for clients since its 1994 founding to $22.6 billion, LCH estimated..Paulson, who made billions of dollars betting against the U.S. housing market in 2007, remains the third-most profitable hedge fund manager ever after rivals at Bridgewater and Quantum, according to LCH. “Our performance in 2011 was clearly unacceptable,” Paulson, 56, wrote in a letter sent this month to clients…New to LCH’s list of the most profitable hedge funds through 2011 is Steve Cohen’s SAC Capital Advisors, which has made $12.2 billion for clients since inception in 1994, according to LCH. SAC, based in Stamford, Connecticut, replaced Edward Lampert’s ESL Investments Inc. of Greenwich, Connecticut.

Wells Fargo, Goldman May Face Charges Over Mortgage Bonds (Reuters)
Goldman received its Wells notice on Feb. 24, relating to a $1.3 billion subprime mortgage-backed securities deal in late 2006 that the bank underwrote. Goldman said it will be making a submission to the SEC related to the case and communicating with SEC staff to address their concerns. The bank has also received inquiries from governmental, regulatory bodies and self-regulatory entities concerning certain transactions Goldman entered with MF Global prior to the brokerage firm’s bankruptcy filing. Goldman said it is cooperating with all such inquiries.

Facebook Has More Growth Ahead, Says Co-Founder (CNBC)
Facebook has much more growth still left and will tap its existing users as well as secure growth by increasing the total number of users, Eduardo Saverin, one of the four co-founders of Facebook who retains a 5 percent stake in the social media giant, told CNBC Wednesday. The company is still “in the very early beginnings,” Saverin said, despite some analysts saying the social network had peaked. “There are a lot of things to get done. What Facebook has done today is it’s allowed us to have an identity on the web, but there is a lot more to do,” he said.

Ex-Bear CEO: We Wouldn’t Have Done Anything Differently (CNBC)
“You can go back and say, should we have done some things differently leading up to the environment we got in?” Alan Schwartz said today. “You know, you can always say that. Hindsight is 20/20. “Once the markets froze there was really very little we could do. The liquidity environment was what pushed us over the cliff. In retrospect, I didn’t think there was a lot that any one player could have done about that.”

JPMorgan’s Dimon Assails Newspaper Pay Levels in Bank’s Defense (Bloomberg)
“Obviously our business, in investment banking in particular, all of our businesses, we have high capital and high human capital,” Dimon said yesterday at a presentation in New York. “Newspapers — I went and got this one day just for fun — 42 percent payout ratio, which I just think is just damned outrageous…Worse than that, you don’t even make any money!” Dimon said, directing his comments to those in the media covering the company’s investor day and drawing laughter from his audience. “We pay 35 percent. We make a lot of money.”

US Conducting Criminal Libor Probe: Source (Reuters)
The U.S. Justice Department is conducting a criminal probe into whether the world’s biggest banks manipulated a global benchmark rate that is at the heart of a wide range of loans and derivatives, from trillions of dollars of mortgages and bonds to interest rate swaps , a person familiar with the matter said…Several major global banks, including Citigroup, HSBC, Royal Bank of Scotland and UBS, have disclosed that they have been approached by authorities investigating how Libor is set.

Pandit Fast Money With Hedge Funds Proves Dead End (Bloomberg Markets Magazine)
When Pandit, 55, was promoted in December 2007, Citi Capital Advisors or CCA managed $59 billion in hedge funds, private- equity pools and real estate. In 2007, it earned net income — from fees charged to clients and gains on its own money — of $672 million. After the financial crisis, Citigroup closed some funds — it won’t say how many — and investors fled others. As of mid- February, it managed $18.6 billion. The last time Citi told shareholders how CCA performed was the first quarter of 2008, when the unit lost $509 million. Four of Citi’s seven biggest hedge funds have underperformed their indexes since they started, according to investors. Five of the seven lost money in 2011.

Wall Street Bonus Pool Shrank 14% (WSJ)
Wall Street cash bonuses for 2011 are expected to have tumbled 14% from a year earlier and will likely hit their lowest level since the financial crisis of 2008, according to a report released by New York State Comptroller Thomas DiNapoli. New York securities firms will pay employees $19.7 billion in cash bonuses, down sharply from $22.8 billion in 2010…In a statement, Mr. DiNapoli said the cash bonus decline reflects a “difficult year on Wall Street,” adding the securities industry “faces continued challenges as it works through the fallout from the financial crisis and adjusts to regulatory reforms.”

Bird flu, pig flu, now bat flu? Human risk unclear (AP)
RUN FOR YOUR LIVES: For the first time, scientists have found evidence of flu in bats, reporting a never-before-seen virus whose risk to humans is unclear. The surprising discovery of genetic fragments of a flu virus is the first well-documented report of it in the winged mammals. So far, scientists haven’t been able to grow it, and it’s not clear if — or how well — it spreads. Flu bugs are common in humans, birds and pigs and have even been seen in dogs, horses, seals and whales, among others. About five years ago, Russian virologists claimed finding flu in bats, but they never offered evidence. “Most people are fairly convinced we had already discovered flu in all the possible” animals, said Ruben Donis, a Centers for Disease Control and Prevention scientist who co-authored the new study. Scientists suspect that some bats caught flu centuries ago and that the virus mutated within the bat population into this new variety. Scientists haven’t even been able to grow the new virus in chicken eggs or in human cell culture, as they do with more conventional flu strains. But it still could pose a threat to humans. For example, if it mingled with more common forms of influenza, it could swap genes and mutate into something more dangerous, a scenario at the heart of the global flu epidemic movie “Contagion.”

24 comments (hidden to protect delicate sensibilities)
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Comments (24)

  1. Posted by Guest | February 29, 2012 at 9:44 AM

    Wasn't the batman guy in China?

  2. Posted by Guest | February 29, 2012 at 9:49 AM

    When I step out of non-heated pool, usually the shrinkage >14%

  3. Posted by Meatball Sandwich | February 29, 2012 at 9:52 AM

    CCA's margins are skinnier than Angelina Jolie.

  4. Posted by Culverhouse | February 29, 2012 at 9:54 AM

    Allright I've had enuff of this BS.

    What are the minimums at Bridgewater ?

    I'll be at the beach.

  5. Posted by Cut Me | February 29, 2012 at 9:54 AM

    Vick: What are you drawing?
    Jamie Dynamite: A liger.
    Vick: What's a liger?
    Jamie Dynamite: It's pretty much my favorite animal. It's like a lion and a tiger mixed… bred for its skills in magical returns

  6. Posted by Guest | February 29, 2012 at 9:57 AM

    The oikos is strong in that one. Really strong.

  7. Posted by CNBC | February 29, 2012 at 9:57 AM

    Schwartz continued, "You know, on the other hand, one thing I might have done differently is that I would have liked to have sold all of my stock to Joe Lewis at $107.50. But, other than that, no…I can't think of anything else I'd change."

  8. Posted by pazzo83 | February 29, 2012 at 10:03 AM

    I wouldn't have done anything different either, Alan.

    – King Louis XVI

  9. Posted by Guest | February 29, 2012 at 10:06 AM

    Hey Hanrahan, your wife's a dyke!

  10. Posted by guestosaurus | February 29, 2012 at 10:25 AM

    ex Bear CEO: the record shows i took the blows and did it my way.

  11. Posted by Bwater Candidate | February 29, 2012 at 10:27 AM

    Only $13.8 billion? Ray, I'd like to challenge you on that performance. Let's talk about what you could have achieved and what held you back. I'll pay you $100.00.

  12. Posted by guest | February 29, 2012 at 10:30 AM

    Short the Schwartz

  13. Posted by knower of things | February 29, 2012 at 10:41 AM

    I just realized, this is Matt! http://www.nytimes.com/2012/02/28/science/young-w

  14. Posted by The fuel | February 29, 2012 at 10:47 AM

    words, just words…

  15. Posted by Wall St. Dude | February 29, 2012 at 10:48 AM

    May the Schwartz be with you

  16. Posted by Angelina Jolie's Leg | February 29, 2012 at 10:52 AM

    I have partnered with J-Lo’s nipple to create CelExNet, a service that allows celebrity body parts that can’t type access to online social networking, so we feel that growth at sites like Facebook should be robust as a result.

  17. Posted by Honore | February 29, 2012 at 10:58 AM

    How is that Matt. There are no charts and the article is under 5000 words?!

  18. Posted by Jack_Brown | February 29, 2012 at 11:01 AM

    Well, yes it comes from bats, but it's not actually a "flu", per se.

    -Count Dracula

  19. Posted by Guest on Food Stamps | February 29, 2012 at 11:09 AM

    You thin you got it rough, Jamie. How would you like to be Andrew Schiff?

    Bonus Drop Means Trading Aspen for Discount Cereal http://www.bloomberg.com/news/2012-02-29/wall-str

  20. Posted by Matt LeBlanc | February 29, 2012 at 11:10 AM

    Awww, its okay Jamie, here's a little skeet skeet skeet!

  21. Posted by Naive Hopeful | February 29, 2012 at 11:12 AM

    For once I agree with Jamie Dimon, it IS outrageous, people responsible for informing the general public about the facts (newspapers), are somehow less profitable than the guys, who when asked why they are paid so much, respond, "It's complicated." Sad part is the OWS idiots chanting outside my window in midtown have no idea this is the problem.

  22. Posted by whowhawhen | February 29, 2012 at 12:42 PM

    So you say, my young friend

    Jayson Blair
    Stephen Glass

  23. Posted by (GuestnFoodStamps)/3 | February 29, 2012 at 1:21 PM

    Does a double posting truly warrant a double downgrade? I was thinking harmonic rather than arithmetic.

  24. Posted by Guest | February 29, 2012 at 7:24 PM

    If someone called my old lady a dyke, I'd go fucking bananas!