Opening Bell: 12.17.12

SAC E-Mails Show Steve Cohen Consulted on Key Dell Trade (Bloomberg)
Two days before Dell Inc. was set to report second-quarter 2008 earnings, Jon Horvath, a technology analyst at SAC Capital Advisors LP, e-mailed his boss Michael S. Steinberg and another portfolio manager to warn that the computer maker would miss earnings estimates. “I have a 2nd hand read from someone at the company,” Horvath began the Aug. 26 message, which provided details on gross margins, expenditures and revenue. “Please keep to yourself as obviously not well known.” Steinberg, a 15-year veteran of the hedge fund founded by billionaire Steven A. Cohen, responded: “Yes normally we would never divulge data like this, so please be discreet. Thanks.” The e-mails indicate Steinberg, the longest-serving SAC employee linked to the U.S. insider-trading probe, discussed the Dell trade with Cohen. While neither has been accused of any wrongdoing, the messages were admitted as evidence at the New York insider-trading trial of two hedge-fund managers last week after a judge ruled they supported prosecutor claims that Steinberg should be considered an unindicted co-conspirator.

AIG To Sell Life Insurer Stake (WSJ)
AIG will sell its stake in Asian life insurer AIA Group Ltd., raising as much as $6.5 billion in what could be the second-largest deal in Asia this year. Completion of the sale will mark another step forward for AIG, which is shedding noncore assets, as it seeks to repay its debt to the U.S. government, which took over the company in a $182 billion bailout in 2008.

A Shadow Over Banks As UBS Nears Libor Deal (WSJ)
The Swiss bank is set to agree as soon as this week to pay roughly $1.5 billion to settle allegations of wrongdoing related to benchmarks such as the London interbank offered rate, or Libor, say people close to the talks. So far, UBS has agreed in principle with the U.S. Justice Department that a company unit in Japan will plead guilty to a criminal charge, according to a person familiar with the tentative deal. The Zurich-based parent will pay the fine in return for a deal that lets it avoid criminal prosecution. Criminal charges against individuals are expected to be filed in tandem with the settlement, according to U.S. officials briefed on the matter. The pursuit of criminal charges and the higher-than-expected fine are ominous signs for more than a dozen financial firms still under investigation. “There’s no panic—yet,” says someone close to one of the banks in the sprawling probe.

Moody’s Gets No Respect as Bonds Shun 56% of Country Ratings (Bloomberg)
The global bond market disagreed with Moody’s Investors Service and Standard & Poor’s more often than not this year when the companies told investors that governments were becoming safer or more risky. Yields on sovereign securities moved in the opposite direction from what ratings suggested in 53 percent of the 32 upgrades, downgrades and changes in credit outlook, according to data compiled by Bloomberg. That’s worse than the longer-term average of 47 percent, based on more than 300 changes since 1974. This year, investors ignored 56 percent of Moody’s rating and outlook changes and 50 percent of those by S&P.

Economy Poised To Nudge Ahead In 2013 (WSJ)
So that’s nice.

Boehner Opens the Door to Tax Hikes on the Wealthy (Reuters)
U.S. House of Representatives Speaker John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.” The question now boils down to what President Barack Obama offers in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no spending and tax agreement is imminent. A source familiar with the Obama-Boehner talks confirmed that Boehner proposed extending low tax rates for everyone who has less than $1 million in net annual income, meaning tax rates would rise on all above that line.

Actor Depardieu Hits Back at French PM Over Taxes (CNBC)
Actor Gerard Depardieu, accused by French government leaders of trying to dodge taxes by buying a house over the border in Belgium, retorted that he was leaving because “success” was now being punished in his homeland. A popular and colourful figure in France, the 63-year-old Depardieu is the latest wealthy Frenchman to seek shelter outside his native country after tax increases by Socialist President Francois Hollande. Prime Minister Jean-Marc Ayrault described Depardieu’s behaviour as “pathetic” and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt. “Pathetic, you said pathetic? How pathetic is that?” Depardieu said in a letter distributed to the media. “I am leaving because you believe that success, creation, talent, anything different must be sanctioned,” he said. […] The “Cyrano de Bergerac” star recently bought a house in Nechin, a Belgian village a short walk from the border with France, where 27 percent of residents are French nationals, and put up his sumptuous Parisian home up for sale. Depardieu, who has also inquired about procedures for acquiring Belgian residency, said he was handing in his passport and social security card.

Singapore Establishment Challenged by Carson Block on Olam (Bloomberg)
When Carson Block likened Olam International Ltd. to fraud-ridden Enron Corp., he challenged more than the accounting of the Singapore-based commodities firm. He also took on Temasek Holdings Pte, the government-owned investment company whose money has helped build the city-state into a corporate dynamo known as Singapore Inc. Temasek is Olam’s second-largest shareholder, with a 16 percent stake that has lost more than $100 million in value since Nov. 19, when Block’s Muddy Waters LLC first questioned the validity of the company’s finances and said it was betting against the stock. Temasek is also the biggest shareholder in many of the country’s best-known companies, including DBS Group Holdings Ltd., Southeast Asia’s largest bank, Singapore Telecommunications Ltd. and Singapore Airlines Ltd. “Carson Block is putting his whole reputation on this one,” said Low Chee Keong, associate professor of corporate law at the Chinese University of Hong Kong. “He’s taking on the Singapore government, Singapore Inc. here.”

UN court orders immediate release of Argentine ship seized by hedge funder Paul Singer over unpaid debt (AP)
A United Nations court ordered the immediate release Saturday of an Argentine navy training ship held in Ghana two months ago at the request of an American hedge fund. The ARA Libertad was held Oct. 2 in the port of Tema as collateral for unpaid bonds dating from Argentina’s economic crisis a decade ago. Argentina appealed to the UN’s International Tribunal for the Law of the Sea for the ship’s release, arguing that as a warship the Libertad is immune from being seized. In an expedited ruling, the court ordered that Ghana “forthwith and unconditionally release the frigate ARA Libertad” and ensure the ship and its crew can leave Ghanaian waters. It also ordered that the vessel should be resupplied as needed. Detaining the ship was “a source of conflict that may endanger friendly relations among states,” the court said. The ruling leaves untouched the parties’ rights to seek further international arbitration on the matter.

Debt Loads Climb In Buyout Deals (WSJ)
Private-equity firms are using almost as much debt to fund acquisitions as they did before the financial crisis, as return-hungry investors rush to buy bonds and loans backing those takeovers. The rise in borrowed money, or leverage, heralds the possibility of juicy returns for buyout groups. Ominously, the surge also brings back memories of the last credit binge around six years ago, which saddled dozens of companies with huge levels of debt.

Berlusconi’s Love Life Lost in Translation (CNBC)
Global media reports that the former Italian prime minister Silvio Berlusconi announced his engagement to his 28-year-old girlfriend on one of his TV Channels on Sunday, have been dismissed by native Italians who say Berlusconi has been mis-translated. Various newspapers have reported that Berlusconi is to get married for the third time, when in fact he announced that he is in love and in a relationship…Professor of Modern Italian History at University College London (UCL), John Foot, told CNBC that Pascale is a”girlfriend, nothing more.” “In Italy the phrase ‘Mi sono fidanzato’ usually means ‘I have a girlfriend or boyfriend’ and not ‘I am engaged to be married’. This can cause confusion abroad but is pretty clear in the Italian context,” he told CNBC.

Twinkies again by spring? It could happen (NBC)
It’s not even Christmas, but Twinkies fans may be able to start looking forward to an Easter present. Bankrupt Hostess Brands has received a number of bids from companies interested in buying the maker of Twinkies, Ho Hos, and Wonder bread, including retail heavyweights such as Wal-Mart Stores Inc. and Kroger Co, Bloomberg News reported Friday, quoting an unnamed person familiar with the matter…Anthony Michael Sabino, a bankruptcy attorney and a professor at St. John’s University, said bankruptcy judge Robert Drain was motivated to move quickly. Bidding will likely take place by early January, since the assets — if not the treats themselves — could become stale. “I think this will move a at a fairly decent pace. He knows what’s at stake here.

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

  1. Posted by Guest | December 17, 2012 at 9:05 AM

    In Belgium, Gerard eats you..

  2. Posted by Guest | December 17, 2012 at 9:15 AM

    Bloomberg Gets No Respect as Readers Shun 75% of Headlines (WSJ)
    Bloomberg readers frequently throw up their hands and walk away rather than try to figure out what the fuck the headline is about, according to a new study.

  3. Posted by Road Runner | December 17, 2012 at 9:18 AM

    Slow loading time too. Just move on…

  4. Posted by Hunchback Realty | December 17, 2012 at 9:19 AM

    Notre Dame? Penthouse? I figure about $3,000/sf, depending on the view.

  5. Posted by VonSloneker | December 17, 2012 at 9:22 AM

    Bang

  6. Posted by Guest | December 17, 2012 at 9:23 AM

    Comes with reinforced floors, extra wide doors, crane..

  7. Posted by Somali Pirates | December 17, 2012 at 9:36 AM

    Paul Singer.

    Call us.

  8. Posted by Guest | December 17, 2012 at 9:36 AM

    Can they just hire a real lawyer and get this whole game of grab-ass with Cohen over already?

    -Tired of reading the same old headlines about this guy.

  9. Posted by DB IT | December 17, 2012 at 9:37 AM

    Hey !

  10. Posted by St. Copious | December 17, 2012 at 9:45 AM

    Re: SAC, who THE F*CK writes an email like that? it's one thing when I read about 23 year old idiots on the fringes of the securities business IMing about how they should trade on inside information, but PMs at one of the biggest (and most closely watched by regulators) funds in the world? Seriously?

    If someone sent me an email like that I'd strangle him.

  11. Posted by Snowballs | December 17, 2012 at 9:46 AM

    Hopefully the zombie apocolypse holds off til after spring.

    -Tallahassee

  12. Posted by Govtworker | December 17, 2012 at 9:52 AM

    I wouldn't worry. The SEC doesn't have the mental capacity to understand what that email means. Anything short of "Dear SEC, I am insider trading on company X" is safe and sound.

  13. Posted by Lynn TIilton | December 17, 2012 at 9:52 AM

    Email address?

  14. Posted by Guest | December 17, 2012 at 9:54 AM

    What are you talking about? Fastest loading time I've ever seen.

    -DB IT

  15. Posted by FSU Endowment PM | December 17, 2012 at 9:54 AM

    Huh?

  16. Posted by B. Frank | December 17, 2012 at 9:55 AM

    I knew I should've joined the SEC

  17. Posted by nick saban | December 17, 2012 at 9:59 AM

    Yur not black enuff

  18. Posted by maya smith | December 17, 2012 at 10:01 AM

    He mesnt the mayan one.

  19. Posted by Puck It | December 17, 2012 at 10:01 AM

    It won't matter.

    —The Mayans

  20. Posted by OMG this thing suxs | December 17, 2012 at 10:13 AM

    The iPod Shuffle is NOT a good gift and will NEVER be a good gift.

  21. Posted by DB Gift Guide MD | December 17, 2012 at 10:16 AM

    Should have gone with a gift card to Warby Parker

  22. Posted by Bloomers Rotter | December 17, 2012 at 10:16 AM

    "Dealbreaker Commentariat Exasperation as Re-reads and Reacts Glacialize Fomented Angst"

  23. Posted by A Literal | December 17, 2012 at 10:18 AM

    So sic SEC on the SAC suck?

  24. Posted by Guest | December 17, 2012 at 10:22 AM

    It moved.

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

    i don't like mayo on my sandwiches.

  26. Posted by Texashedge | December 17, 2012 at 10:25 AM

    Maybe Gerard could think of a way to get a greencard and move over here.

  27. Posted by SEC Worker | December 17, 2012 at 10:28 AM

    Just to clarify, we're not disregarding those emails. We just don't know who should be opening them. There isn't anyone here named SEC, and opening other people's mail is a federal offense!

  28. Posted by Flake Shelton | December 17, 2012 at 10:30 AM

    Stevie, Big Gubment coming for you!

  29. Posted by Matt's Margs | December 17, 2012 at 10:44 AM

    Needs more charts.

  30. Posted by el guesto | December 17, 2012 at 10:45 AM

    Am I the only one amused that he became famous playing Cyrano de Bergerac? That face, I think, says it all…

  31. Posted by VonSloneker | December 17, 2012 at 10:50 AM

    Gerard, whatever you do, don't say "Qu'ils mangent de la brioche." I can attest to the fact that the French people are very sensitive about their pastries…

    – The Ghost of M. Antoinette

  32. Posted by Guest | December 17, 2012 at 10:52 AM

    Depardieu could serve as a double for Christie's chin.

  33. Posted by Guest | December 17, 2012 at 10:52 AM

    Snails. I bet he really loves snails.

  34. Posted by Guest | December 17, 2012 at 10:54 AM

    Amazing! The guy literately has the anatomy of a frog.
    -BNP Paribas Amphibian Species Quant

  35. Posted by Guest | December 17, 2012 at 11:03 AM

    UBS = Under Big Shadow

  36. Posted by Bob | December 17, 2012 at 11:11 AM

    Looking good, Phil Falcone!

  37. Posted by Guest | December 17, 2012 at 11:12 AM

    Hunchback needed for one of the largest and most well-known Churches in the world. Must work well with Gargoyles.
    – Notre Dame de Paris

  38. Posted by Austin P | December 17, 2012 at 11:26 AM

    Get in my BELLY !

  39. Posted by @brandnetcom | December 17, 2012 at 11:47 AM

    Think Woody Allen turning Canadian.

  40. Posted by Stamford barrista | December 17, 2012 at 12:02 PM

    And we always say no

  41. Posted by Dan Brown | December 17, 2012 at 12:02 PM

    Actor DEPARts, bids country aDIEU.

  42. Posted by Guest | December 17, 2012 at 1:10 PM

    Go back to 1995

  43. Posted by Guest | December 17, 2012 at 1:10 PM

    weak

  44. Posted by Subway | December 17, 2012 at 1:34 PM

    its usually jizz

  45. Posted by Nasdaq 100 | December 17, 2012 at 1:34 PM

    Hey !

  46. Posted by Raj Gupta | December 17, 2012 at 1:36 PM

    I know right.

    Just pick up a phone.

  47. Posted by Guest | December 17, 2012 at 2:41 PM

    Cleva girl!

    -JP employee

  48. Posted by guest | December 17, 2012 at 3:06 PM

    Formerly of Jurassic Capital LLP?