Opening Bell: 12.05.12

Global Banking Under Siege as Nations Tighten Local Rules (Bloomberg)
Regulators want to curtail risks exposed after global banks such as New York-based Citigroup, Edinburgh-based Royal Bank of Scotland and Zurich-based UBS took bailouts in the biggest financial crisis since the Great Depression. Forcing lenders to dedicate capital and liquidity to multiple local subsidiaries, rather than a single parent, may undermine the business logic of a multinational structure. “Being big and spread out all over the world isn’t what it used to be,” said Mayra Rodriguez Valladares, managing principal at New York-based MRV Associates, which trains bank examiners and executives at financial firms. “You’ll see global banks jettison divisions abroad and at home.”

Paulson Said to Blame Bet Against Europe for Most of Loss (Bloomberg)
John Paulson, manager of $20 billion in hedge funds, told investors that the bulk of his losses this year came on bets that the European sovereign-debt crisis would worsen, according to a person familiar with the matter. Paulson, speaking to clients at his firm’s annual meeting yesterday in New York, said he has reduced those positions following European Central Bank President Mario Draghi’s comments in July that the ECB was committed to preserving the euro, said the person, who asked not to be identified because the meeting was private. Paulson said in a February letter to investors that the euro was “structurally flawed” and would eventually fall apart. In April, the founder of New York-based Paulson & Co. told clients he was wagering against European sovereign bonds and buying credit-default swaps on European debt, or protection against the chance of default.

No Payback For Singer This Year (NYP)
Paul Singer’s last-ditch attempt to get cash from Argentina this year has failed. A motion by Singer’s hedge fund, Elliott Management, requesting that the South American country put up a security deposit of $250 million by Dec. 10 was denied by a federal appeals court yesterday. “Since we will not have a big payment for ages (if ever), this looks like a huge blow to [Elliott’s] strategy,” said sovereign-debt expert Anna Gelpern.

In Tax Fight, G.O.P. Seeks a Position to Fall Back On (NYT)
Senator Olympia J. Snowe of Maine, who is retiring, joined a handful of other Republicans on Tuesday suggesting that Congress should pass the middle-class tax cut extensions now, then leave the fight over taxes and spending until later. Americans, she said, “should not even be questioning that we will ultimately raise taxes on low- to middle-income people.” Congress could take that off the table “while you’re grappling with tax cuts for the wealthy,” she said. But any move toward compromise with Democrats on fiscal issues quickly comes under attack from conservatives as a surrender and unsettles the rank-and-file. It is a dynamic that has haunted Speaker John A. Boehner throughout the 112th Congress, as he has repeatedly been caught between the imperative to govern and the need to satisfy the restive right. Mr. Boehner, of Ohio, has drawn fire this week for removing a handful of House Republicans who have defied the leadership from their preferred committee seats, a step he took to enforce party discipline.

Fed to launch fresh bond buying to help economy (Reuters)
The Federal Reserve is set to announce a fresh round of Treasury bond purchases when it meets next week, avoiding monetary policy tightening to maintain support for the weak U.S. economy amid uncertainty over the looming year-end “fiscal cliff.” Many economists think the U.S. central bank will announce monthly bond purchases of $45 billion after its policy gathering on December 11-12, signaling it will continue to pump money into the U.S. economy during 2013 in a bid to bring down unemployment.

Merkel Wins Party Reelection, Eyes Third Term (Reuters)
Merkel, at the height of her popularity, was returned unopposed as CDU chairwoman with 97.9 percent of votes from delegates who stood and applauded her for nearly eight minutes after she lauded Germany’s economic resilience in the euro crisis and promised to fight for jobs and prosperity.

McAfee Emerges From Hiding in Guatemala (FT)
John McAfee, the antivirus software entrepreneur, has revealed that he has fled to Guatemala from Belize where he is wanted for questioning in relation to a murder. Posting on his website on Tuesday, the US citizen and multimillionaire said: “I apologize for all of the misdirections over the past few days . . . I am in Guatemala.” His emergence closes one chapter in a bizarre chain of events that started last month when police in Belize, where Mr McAfee has lived for the past four years, discovered the dead body of Gregory Faull, the owner of a house close to Mr McAfee’s main property on the island of Ambergris Caye. Mr McAfee – who Belize considers “a person of interest” in the murder investigation – fled, going into hiding and insisting on his innocence. He said he ran from the police because he believed that the Belize authorities were out to kill him. In response, Dean Barrow, the prime minister, said: “I don’t want to be unkind to the gentleman, but I believe he is extremely paranoid”. Mr McAfee revealed his location on Tuesday after a hacker called Simple Nomad disclosed his whereabouts by analyzing a mobile-phone photograph taken of McAfee on Monday that was posted on the internet. In a second blog post late Tuesday titled “the new fight”, Mr McAfee said he had asked Telsforo Guerra, a former attorney-general of Guatemala, to help uncover what he claims is deep-rooted corruption in Belize. Separately, he told Reuters that Mr Guerra was trying to help him obtain political asylum in Guatemala, even though Belizean authorities have not charged him.

EU Banks To Repay Cheap Loans (WSJ)
Nearly a year ago, hundreds of European banks borrowed a total of more than €1 trillion ($1.3 trillion) from the European Central Bank as it scrambled to defuse an escalating crisis. Today, in a sign of the industry’s partial healing, some of Europe’s biggest banks are preparing to repay those loans. The push to repay the loans, however, has generated concerns that banks are moving prematurely and could be vulnerable if the euro-zone crisis intensifies again. The ECB activated the emergency loan program—known as the long-term refinancing operation, or LTRO—late last year, doling out two batches of inexpensive loans that are good for three years. Banks are permitted to repay them starting next month.

Euro Crisis Feeds Corruption as Greece Slides in Rankings (Bloomberg)
The European debt crisis has given way to a new wave of corruption as some of the most hard-hit countries in the turmoil have tumbled in an annual graft ranking, watchdog group Transparency International said. Greece, in its fifth year of recession and crippled by rounds of austerity, fell to 94th place from 80th — ranking it below Colombia and Liberia, according to the group’s Corruption Perceptions Index. Ireland, Austria, Malta and Italy were also among member states in the single currency to slide.

Moynihan: No Stress (Bloomberg)
Bank of America CEO Brian T. Moynihan said the firm has plenty of capital and he’s confident it will pass the next US stress tests. “The question will be what to ask for and when, because we’re not going to fail this,” Moynihan said yesterday at a New York investor conference sponsored by Goldman Sachs. Moynihan, 53, is renewing efforts to win approval to raise the company’s dividend or repurchase shares after the Federal Reserve blocked an earlier request.

Fed Filcher Gets Timeout (NYP)
Bo Zhang, a Chinese-citizen computer programmer who worked for a contractor at the New York Fed, was sentenced to six months of home confinement for stealing Treasury Department software.

Snake on a plane forces emergency landing (CNN)
…the incident forced the pilot to make an emergency landing in the Egyptian resort town of Al Ghardaqa on the Red Sea, according to The Jordan Times. An Egypt Air official told the paper an investigation revealed that a 48-year-old passenger, who owns a reptile shop in Kuwait, had hidden the Egyptian cobra in a carry-on bag. The passenger was trying to control the snake after it bit his hand and started slithering under the seats. The Egyptian daily al-Masry al-Youm reported that the man refused medical treatment, claiming his wound was only superficial. The plane resumed its flight to Kuwait after local authorities confiscated the snake. Doctors told the passenger he should spend 24 hours in a hospital for observation, but the man refused, the Egyptian Air official said, according to The Jordan Times.

64 comments (hidden to protect delicate sensibilities)
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Comments (64)

  1. Posted by John Paulson | December 5, 2012 at 8:11 AM

    Welcome Aadvantage partners.

    Basically we blew up.

    Kind Regards

  2. Posted by A Bull | December 5, 2012 at 8:14 AM

    I'm going to be mad all day. Thanks Warby.

  3. Posted by RRRRRobert | December 5, 2012 at 8:32 AM

    If ever I even thought about wearing that coat and tie, I would immediately walk into Minettas and ask the first person there to punch me in the face.

  4. Posted by FKApmco | December 5, 2012 at 8:46 AM

    Dear Warby: your ad is an assault on my vision…good strategy.

  5. Posted by guest | December 5, 2012 at 8:46 AM

    I'd hit it.

  6. Posted by Guest | December 5, 2012 at 8:49 AM

    Sounds like Mistah Kurtz has decided to take his chances with a different set of natives up river. I don't think that's going to change the way this eventually turns out, though.

  7. Posted by Elluot management | December 5, 2012 at 8:51 AM

    Hey !

  8. Posted by UBS Sartorial Guy | December 5, 2012 at 8:52 AM

    These Warby Parkers are great; plus, they match my Swatch!

  9. Posted by Fed | December 5, 2012 at 8:56 AM

    We're too worn out for catchy acronyms at this point, so just show up for money.

  10. Posted by Guest | December 5, 2012 at 9:19 AM

    I don't know what I'm more upset about, the Warby add … or how many times I heard the term "Bieber fever" last night watching the Victoria’s Secret fashion show

  11. Posted by Guest | December 5, 2012 at 9:28 AM

    Is that a nun wearing Warby glasses?

  12. Posted by @hey | December 5, 2012 at 9:32 AM


  13. Posted by PermaGuestII | December 5, 2012 at 9:34 AM

    Are you referring to Moynihan or Paulson?


  14. Posted by Guest | December 5, 2012 at 9:40 AM

    Is Merkel talking to Dominic Strauss-Kahn in the picture?

  15. Posted by Bear | December 5, 2012 at 9:41 AM

    I assume that's exactly how laxbro/n'08 dresses on th fri and sat nights

  16. Posted by Evil David Letterman | December 5, 2012 at 9:42 AM

    Hey, if I could just say one thing. We all know and love glory holes so how about this for a creative new idea –now picture it with me –face sitting windows. Pardon me if this idea is already on kickstarter, but this whole face sitting craze is showing no signs of going away anytime soon. I’m thinking we could charge $9.99 a minute. So who wants to invest?

  17. Posted by VonSloneker | December 5, 2012 at 9:43 AM

    Questioning my style choices…I kinda like the Warby ad.

    – Guy with a drawer full of madras and seersucker

  18. Posted by Minnetas doorman | December 5, 2012 at 9:46 AM

    We can't let you in like that. Go back to NYMEX

  19. Posted by He Said It not me | December 5, 2012 at 9:49 AM

    Jim Maui > Warby

  20. Posted by icewaterdouche | December 5, 2012 at 9:50 AM

    “The question will be what to ask for and when, because we’re not going to fail this,” – B. Moynihan

    "I like eggs." – E. Holyfield

    "Sounds good, I'll just take the physical pipe." – R. Kinder

  21. Posted by Minettas on DB | December 5, 2012 at 10:01 AM

    Tuesday nights wear that coat and tie, and enjoy a free punch in the face with 1/2 off small plates.

    – Minettas on DB

  22. Posted by ad rock | December 5, 2012 at 10:04 AM

    I asked him, "Please?" he said, "You may"
    Her pants were tight and that's ok
    If she would dance, I would DJ
    We took a walk down to the bay

    I hope she'll say
    "Hey me and you should hit the hay"
    I aksed her out she said, "No way!"
    I shoulda probably guessed her gay

    So I broke North with no delay
    I heard she moved real far away
    That was two years ago this May
    I seen her just the other day
    Jockin' Mike D, to my dismay

  23. Posted by DoubleLine | December 5, 2012 at 10:06 AM

    Could one pay for this service in bonds?

    – Jeff

  24. Posted by Thematic | December 5, 2012 at 10:13 AM

    Would you like some hay ?

  25. Posted by Guest | December 5, 2012 at 10:17 AM

    Having McAfee anti-virus software on my computer makes me feel dirty.

  26. Posted by Guest | December 5, 2012 at 10:17 AM

    Photo Caption: There's too much debt to wade through. We'll have to swim through it like little fishys.

  27. Posted by J. Epstein | December 5, 2012 at 10:18 AM

    I believe the all important question is, "was it egg shaped"

  28. Posted by Guest | December 5, 2012 at 10:19 AM

    Really looking forward to the Layoffs watch post today.

    -Soon to be ex-Citi employee

  29. Posted by No Way! | December 5, 2012 at 10:21 AM


  30. Posted by N'08 | December 5, 2012 at 10:22 AM

    HA. When I go out I dress more like One Direction's Harry Styles. Tonight I'll prob wear a cozy sweater from Barneys, maybe a Balmain button down over it, skinny jeans and a pair of Prada chukkas. If it gets a we bit parky, I'll consider wearing a Margiela coat. More or less a bunch of comfy but overpriced shit thrown together to look like I don't care, but Little Ivy grads and NYU girls recognize. Harry pulled Taylor Swift, I bag well-read 7s and 8s who still use Daddy's Amex

  31. Posted by Guest | December 5, 2012 at 10:26 AM

    Snake in the grass : Turn on headlights :: Sanke on a plane : Turn on runway lights

  32. Posted by guest | December 5, 2012 at 10:26 AM

    Is this your coming out of the closet opening salvo?

  33. Posted by Plugger | December 5, 2012 at 10:29 AM

    McAfee goes to a doctor and says, "My ear hurts…." Doc takes a look and then removes a mysterious suppository from his ear. Doc says, "What the hell is this?" McAfee says, "OK…Now I know where my hearing aid is!"

  34. Posted by Observer | December 5, 2012 at 10:30 AM

    Aside from her money, Taylor Swift is not hot. She is a walking stick with no tata's or ass.

  35. Posted by Shark Tank | December 5, 2012 at 10:31 AM

    Mr. Letterman do have any patents for this face sitting window?

  36. Posted by Doorman | December 5, 2012 at 10:33 AM

    Welcome to Minnetas

  37. Posted by Horse | December 5, 2012 at 10:34 AM


  38. Posted by N'08 | December 5, 2012 at 10:38 AM

    It's 2012 dressing like half a fag and banging cute chicks is cool. Note I have no problem with gay people, I laugh at the fat gay guy on Modern Family every week and my shoe guy at Barneys, Sebastian, has my number to text me when my Balenciaga sneakers come in

  39. Posted by HFpartner | December 5, 2012 at 10:40 AM

    But were still long AAPl and gold right ?

  40. Posted by N'08 | December 5, 2012 at 10:40 AM

    Riiiight. Come to the DB open mic thing with someone hotter and I'll let you drink on my tab

  41. Posted by Glue maker | December 5, 2012 at 10:42 AM

    You are very loud.

  42. Posted by Incitatus | December 5, 2012 at 10:43 AM

    So no CNN editor thought to ask for possible reasons why the (completely insane) passenger survived a bite from his Egyptian cobra girlfriend?

    I weep for you, Wolf Blitzer.

  43. Posted by Fixed | December 5, 2012 at 10:48 AM

    …let you drink my Tab.

  44. Posted by Guest | December 5, 2012 at 10:51 AM

    Any thoughts on Maxwell House on a plane?

  45. Posted by Guest1.2 | December 5, 2012 at 10:53 AM

    Tab as in six pack in the trunk of your Mazada 3

  46. Posted by Fashionista | December 5, 2012 at 10:56 AM

    I used to face sit to make ends meet while working my way through FIT. Now I work for Fashionista.

  47. Posted by Gilmore, Happy | December 5, 2012 at 11:02 AM

    We can lay by the bay, make things out of clay, I just may, what do you say?

  48. Posted by Hobbes | December 5, 2012 at 11:06 AM

    Enough is ENOUGH! I have had it with these motherfuckin' snakes on this motherfuckin' plane!

    – Egypt Air flight crew

  49. Posted by Whit Tils | December 5, 2012 at 11:07 AM

    no, it's a gay euphemism

  50. Posted by Fun Night Quant | December 5, 2012 at 11:13 AM

    Vineyard Vines @ Penn Station Taco Bell > all the dumb ass shit you just described

  51. Posted by BPM | December 5, 2012 at 11:16 AM


    – West Village

  52. Posted by Anonymous | December 5, 2012 at 11:35 AM

    I rather face sit then write for this blog.

    – Anonymous

  53. Posted by Bart Simpson | December 5, 2012 at 11:49 AM

    Kiss me or I crush you!

  54. Posted by Texashedge | December 5, 2012 at 11:59 AM

    Since it's confession time: I actually own a pair of Bonobos. Three in fact.

  55. Posted by Guest | December 5, 2012 at 12:06 PM

    Wow……..Is it just me or is John McAfee guilty as fuck

  56. Posted by PermaGuestII | December 5, 2012 at 12:08 PM

    Today is Wednesday.

  57. Posted by Belize PM | December 5, 2012 at 12:14 PM

    and yet all he has to do is cash adjust us and this all goes away ?

  58. Posted by guest | December 5, 2012 at 12:16 PM

    Paranoia is also a standard side effect of too much yayo up the nasal.

  59. Posted by Rerun | December 5, 2012 at 12:30 PM

    Hey, hey, hey

  60. Posted by Flo | December 5, 2012 at 12:34 PM

    You know how I know you're gay? You have a rainbow bumper sticker on your car that says, "I love it when balls are in my face."

  61. Posted by Chick with no face | December 5, 2012 at 12:49 PM

    Aren't they dangerous ?

  62. Posted by Gen O'Neil | December 5, 2012 at 12:51 PM

    We had to destroy destroy Citi to save it.

  63. Posted by Snake McRae | December 5, 2012 at 12:52 PM

    Pot kettle muslims, pot kettle.

  64. Posted by Guest | December 5, 2012 at 12:59 PM

    They should have a deathmatch between you and Fnancial Samauri as the opening act at this shindig. Throw in a fat kid outta nowhere in Round 3 to keep everyone on their toes.