Opening Bell

Opening Bell: 01.04.13

SEC Drops Case Against Ex-Berkshire Exec Sokol (Reuters)
The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett’s Berkshire Hathaway, Sokol’s lawyer told Reuters. In 2011, Buffett said Sokol violated the company’s insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company. The U.S. Securities and Exchange Commission began investigating Sokol’s investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway. Sokol’s lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol. “SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol,” said Levine, a lawyer at legal firm Dickstein Shapiro. Sokol has been “completely cleared” as there was no evidence against his client, Levine said.

Cohen’s SAC Tops Most Profitable List Amid Insider Probes (Bloomberg)
SAC Capital International, Cohen’s flagship fund, was the world’s most-profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds…SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors.

Geithner’s Planned Departure Puts Obama In A Tough Spot (Reuters)
The Treasury Department said Geithner would stick to his previously announced schedule to stay until sometime around the Jan. 21 inauguration. Obama chose Geithner to lead the just-ended negotiations with Congress to avert the Dec. 31 fiscal cliff of spending cuts and tax hikes that threatened to push the economy back into recession. But the deal, which preserved most of the Bush-era tax breaks for Americans, sets up a series of crucial fiscal deadlines by delaying automatic spending cuts until March 1 and not increasing the government’s borrowing limit. That puts Obama in the tough spot of nominating another Treasury secretary and asking the Senate to approve his choice when lawmakers are in the middle of another budget battle.

Egan Jones Says Further US Downgrades Unlikely (CNBC)
“This latest round (of negotiations) indicates a sign of health. You have a major ideological clash going on in Congress and many people uncomfortable with it, but it is part of democracy. The more positive light is that we actually have a deal and can move forward,” Sean Egan, managing director of Egan-Jones told CNBC on Friday. “We’ve gotten a lot more comfortable about the U.S. and we probably won’t take additional negative actions for the foreseeable future,” he added.

Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg)
From John Paulson’s call for a collapse in Europe to Morgan Stanley’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. The ill-timed advice shows that even the largest banks and most-successful investors failed to anticipate how government actions would influence markets. Unprecedented central bank stimulus in the U.S. and Europe sparked a 16 percent gain in the S&P 500 including dividends, led to a 23 percent drop in the Chicago Board Options Exchange Volatility Index, paid investors in Greek debt 78 percent and gave Treasuries a 2.2 percent return even after Warren Buffett called bonds “dangerous.”

Fed Divided Over Bond Buys (WSJ)
A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth. Minutes released Thursday of the Fed’s Dec. 11-12 policy meeting showed that officials were divided. Some wanted to continue the programs through the end of 2013, others wanted to end them well before then and a minority wanted to halt the programs right away.

Swiss Bank Pleads Guilty In Probe (WSJ)
In the latest blow to Switzerland’s centuries-old banking practices, the country’s oldest bank pleaded guilty to a criminal conspiracy charge in the U.S. on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad. Wegelin & Co., founded in 1741, is the latest Swiss bank to reach a deal with U.S. prosecutors as they crack down on Americans who kept their money in secret accounts overseas and the entities which helped them. Three Wegelin bankers also were charged criminally in the U.S. last year.

Subway worker tells customer to ‘fight me like a man,’ during confrontation over ketchup (WFTV)
Luis Martinez said he stopped by a Subway shop in a Walmart on South Semoran Boulevard late Tuesday night to get something to eat. He said he ordered a Philly cheese steak the way he always does. “American cheese, onions and ketchup,” said Martinez. Lawrence Ordone was working behind the counter. “He wants ketchup on the Philly cheese steak and I have never put — we don’t even have ketchup at Subway — I’ve never put ketchup on anybody’s sandwich,” said Ordone. Martinez said he didn’t want the sandwich without the ketchup and that a man next to him in line offered to buy the sandwich. Ordone said that Martinez mouthed off at the man. Martinez denied saying anything, but neither he or Ordone disputed what they said happened next. “That’s when I flew off the handle,” said Ordone. “He shoved a chair to the side, like knocked it down to come at me, and I said, ‘This is going to be serious,'” said Martinez. “I said, ‘Let’s go, fight me like a man,'” said Ordone. “I was scared. Next thing, I’m thinking a gun’s going to come out,” said Martinez. Ordone said he blocked the customer so he couldn’t get out. “He threatened to kill me in front of my wife,” said Martinez. Martinez called 911, but by the time police got there the Subway worker had already left. Ordone said he was fired from his job Wednesday, and that he is baffled the confrontation started over something as simple as ketchup. “There’s ketchup three aisles down. You can go buy your own ketchup, and I promise to God, you can put as much as you want on it and nobody’s going to say nothing,” said Ordone.

Economy Adds 155,000 Jobs (WSJ)
Rebuilding following superstorm Sandy, which struck the Northeast in late October, likely added to job growth last month. Nationally, employment in the construction sector advanced by 30,000 jobs. Meanwhile, manufacturing payrolls increased by 25,000 and health-care jobs grew by 45,000.

JPMorgan Faces Sanction for Refusing to Provide Madoff Documents (Bloomberg)
The Treasury Department’s inspector general has threatened to punish JPMorgan Chase for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme. Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege.

Rich Catch a Break With Budget Deal Providing Deductions (Bloomberg)
“The increases in taxes and limits to deductions are more favorable than expected,” said Christopher Zander, partner and head of wealth planning at Evercore Partners Inc. (EVR)’s wealth management unit. “They could have been worse for high net-worth taxpayers.”

Regulators to ease up on banks to get credit flowing (Reuters)
Banks will get more time to build up cash buffers to protect against market shocks under a rule change that could help free up credit for struggling economies, a European regulatory source said. The Basel Committee, made up of banking supervisors from nearly 30 countries, is expected to announce the revision on Sunday to its “liquidity coverage” ratio or LCR, part of efforts to make banks less likely to need taxpayer help again in a crisis. The change comes after heavy pressure from banks and some regulators, who feared Basel’s original version would suck up too much liquidity at a time when ailing economies are badly in need of a ready supply of credit to finance growth.

‘Stripper’ arrested after performance art leads to ruckus in Hallandale (SS)
According to police and witnesses, Mena, 25, was first spotted standing and yelling in the middle of A1A outside her condo building along the 1800 block of South Ocean Drive about 10:45 a.m. on Wednesday. Noel von Kauffman, 40, said he was walking along the street when he noticed Mena trying to direct traffic while wearing a tank-top, cut-off jean shorts and tall boots…At some point, Mena picked up a traffic cone and threw it at a car driven by Dieter Heinrich, 49, of Dania Beach, according to an arrest report. The cone broke the car’s side mirror, causing about $300 in damages, the report indicated. When Heinrich got out of his car, Mena allegedly spat in his face. Von Kauffman said he jumped in to help Heinrich, who had children in the back seat of his car. Mena scratched von Kauffman’s wrist as the two men tried to restrain her and move her away from the busy roadway, according to the police report. After pinning her to the ground, von Kauffman said the woman first tried to say the incident was part of a television show and that everything was being caught on camera. Then she claimed she was a federal agent. Then she said she was friends with Hallandale Beach Mayor Joy Cooper and everyone involved would be in trouble, von Kauffman said.

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75 Responses to “Opening Bell: 01.04.13”

  1. IgglesFan2004 says:

    "Let's hire that Subway guy as the next head coach!"

    -Jeffrey Lurie

  2. Carl H. says:

    I like that Florida whack-job stories are becoming a regular Opening Bell feature.

    – Guy with a weed-whacker for an arm

  3. Words to Live By says:

    The link goes to an actual video of the arraignment / bond hearing. Best quote from the judge / magistrate"

    "I suggest not wearing boots and doing artwork in the middle of a roadway," Hurley said. "I would start right there and everything will start looking up for you."

  4. Florida Quant says:

    Candid Camera Producer < FBI Agent < Part of Hallandale Beach Mayor Joy Cooper's inner circle?

  5. VonSloneker says:

    Could you describe the ruckus sir?

    – Brian Johnson

  6. Paulson Mayo says:

    SAC is the Florida of Hedge Funds.

  7. AdMaster says:

    Need to get my wife a stairmaster…

  8. No one ever. says:

    Oh Egan Jones have downgraded the US. How interesting, I'll definately be changing my asset allocation on the back of that.

  9. Mexi_Cant says:

    What is a man in an orange shirt and a tie doing ordering food at a subway in a wal-mart? Affirmative action should at least gotten him a job as a VP in derivative sales at Goldman.

  10. Guest says:

    I never realized Warren was so big!

    -UBS Relative Size Quant

  11. Bejujular says:

    Not Subway! If this was a Detroit Denny's or Minetta's I'd understand but how will I ever confidently grab an affordable cheddar cheese sandwich again?

  12. Swing and a miss says:

    Sounds like Ordone is a kvetch-up…

  13. Lowly Assistant says:

    Rex Ryan is what the subprime is in trouble.

  14. Guest says:

    "Subway worker tells customer to ‘fight me like a man,’ during confrontation over ketchup"

    Punk got lucky, I would have made him feel like a rainbow trout at Nobu.

    -Bryan Jennings

  15. Liter of Cola says:

    Everyone is on fire today! Keep it up, b b boys!

  16. TV in the Trade Room says:

    The two worst ad campaign music offerings right now are in the Sam Adams beer commercial and that perfume ad where Charlize, in a see-through dress, stomps down a runway near a CGI Marilyn and Grace.

  17. Inner Matt Thoughts says:

    Shazar asked if he could bring his dog to work today. I was not keen on the idea, but Bess signed off on it regardless. I’m always the first one in the office, as I follow a very structured morning routine. While I stand waiting for the Tassimo to make my caramel macchiato at the precise time, my attention was drawn to a high pitched yipping noise. I follow the noise only to end up in the lobby. I look down and lay my eyes on a teacup Chihuahua. To my surprise I hear a familiar voice –it’s Shazars –and he is calling for the dog. At that moment I realized that Shazar not only owns one of those chick accessory dogs, but he named it Paris too. I then realize that he carried the dog to work in a purse. Yes, that’s right….he carries a purse.

  18. Hobbes says:

    So insider trading at folksy Nebraska firms is ok, insider trading at a Manhattan based hedge fund bad. Got it.

    – SEC case worker

  19. Guest says:

    Subway's meatball sub is amazing. That is all.

  20. Little Fritz says:

    But who gets a Philly Cheesesteak from a Subway? Only a joker wearing an orange shirt and tie at 2am.

    -guy who grew up in Philly and know the Pat's/Gino's thing is a crock and you can get a decent cheesesteak almost anywhere in Philly as long as you avoid a chain.

  21. James S. Cramer says:

    "Almost All of Wall Street Got 2012 Market Calls Wrong"



    <3 JIMBO

  22. 250$per; avocational says:

    I love the Vikes + 7.5

    I love Texans -4.5

    No action on other two games.

  23. Shocked guy says:

    Almost All of Wall Street Got 2012 Market Calls Wrong

  24. Rap quant says:

    Goldie keeps on making it…..The rest keep on faking it….

  25. Flo says:

    And now for a sement we call "Germany or Florida?"

    – guy that has been to Florida enough times to know it is "Deliverance" with nice beaches

  26. sohbet says:

    telling these little stories, here's a good idea: Have a point. It makes it so much more interesting for the listener.