Opening Bell: 01.07.13

Regulators Give Ground To Banks (WSJ)
Global banking regulators watered down a key element of their plan for creating a safer financial system, giving ground to banks that argued the rules were unworkable and financially risky. The Basel Committee on Banking Supervision, a group of the world’s top regulators and central bankers, said Sunday that it agreed to relax a rule designed to ensure that big banks are able to weather financial crises without running short of cash. Bowing to two years of intense pressure from the banking industry, the regulators made it easier for banks to meet the rule, known as the “liquidity coverage ratio,” and delayed its full implementation until 2019. It is the latest instance of regulators chipping away at their landmark 2010 response to the global financial crisis. The regulators argue that the changes make banking rules much stronger than they were before the crisis.

Herbalifers Stay Resolute (WSJ)
When hedge-fund manager William Ackman unveiled his 334-slide presentation alleging that Herbalife is a pyramid scheme, it did nothing to shake Joanne Clare. The 38-year-old Staten Island mother of three has been selling the company’s weight-loss products and supplements since 2004, when she says they helped her drop from 210 to 160 pounds in four months. She now sells as much as $3,500 a month of Herbalife products to her 30 clients and the two distributors in her “down line.” “People have always said it’s a pyramid scheme, but it’s not,” Ms. Clare said, adding that the bulk of her earnings come from sales to clients, not her cut of her recruits’ take. Mr. Ackman’s declaration that he had bet more than $1 billion against Herbalife caused many investors to flee, sending the stock down 38% in four days in late December. But some of the company’s 3.1-million-strong army of distributors were unmoved.

Eliot Spitzer Ends His Show On Current TV (NYT)
The announcement comes a few days after Al Jazeera said it was acquiring Current TV. Later this year, the Qatar-owned broadcaster plans to turn the channel into an Americanized version of the international news channel Al Jazeera English. Mr. Spitzer said he had a “wonderful time” at Current, but emphasized that his relationship was with Al Gore and Joel Hyatt, Current’s co-founders, not with Al Jazeera. “Moving forward, their mission will be different,” he said — more international newscasts, less liberal talk about the news.

Citi’s Corbat builds bridges (Reuters)
Citigroup Inc’s Michael Corbat has been meeting with bank regulators in his first months as CEO, as he looks to bolster relationships and finalize the bank’s plan to return capital to shareholders, sources familiar with the matter said. Corbat also expects to name his team of top managers within the next week or so, one of the sources said on Sunday. Corbat is expected to play it safe when Citigroup asks the U.S. Federal Reserve for permission for moves such as buying back shares or increasing dividends, analysts and investors said. His predecessor, Vikram Pandit, lost his job in October in part because the bank’s request for returning capital was denied in March. The bank, which is due to submit its plan to the Fed on Monday, has not yet done so, the source said. The third-largest U.S. bank will only seek approval to buy back shares and not raise dividends, the Wall Street Journal reported on Friday. Last year, the bank wanted permission to return more than $8 billion to shareholders over two years, the paper said.

For Newly Minted MBAs, A Small Paycheck (WSJ)
For graduates with minimal experience—three years or less—median pay was $53,900 in 2012, down 4.6% from 2007-08, according to an analysis conducted for The Wall Street Journal by PayScale.com. Pay fell at 62% of the 186 schools examined. Even for more seasoned grads the trend is similar, says Katie Bardaro, lead economist for PayScale.com. “In general, it seems that M.B.A. pay is either stagnant or falling,” she says…It is all a far cry from the late 1980s and early 1990s heyday for M.B.A.s, when some companies would hire 100 or more M.B.A.s. It wasn’t uncommon to recruit first, and fill actual jobs later.

DOJ pledges to respect Swiss law in tax probe (Reuters)
Swiss chief finance diplomat Michael Ambuehl was given a verbal pledge from the U.S. Department of Justice to respect Swiss law when asking for bank client data of potential tax dodgers, a newspaper reported on Sunday. Switzerland is in negotiations with U.S. authorities to find a deal that would end tax probes into at least ten Swiss banks suspected of helping clients dodge taxes, including Credit Suisse and Julius Baer. The Alpine country is trying to preserve what is left of its cherished banking secrecy that suffered a severe blow in 2009 when UBS, the first Swiss bank that came under scrutiny in the U.S., was required to disclose client data.

Brazilian prison gaurds catch cat that slipped through the gate with escape tools taped to its body (NYDN)
Guards at a Brazilian prison nabbed a white cat that slipped through the gate with a cell phone, drills, small saws and other contraband taped to its body. Alagoas prison spokeswoman Cinthya Moreno says the cat was caught New Year’s Eve at the medium-security prison in the city of Arapiraca. The O Estado de S. Paulo newspaper reported Saturday that all of the prison’s 263 inmates are suspects in the smuggling attempt, though a spokesperson said, “It will be hard to discover who is responsible since the cat does not speak.”

Loeb, Cooperman Stand Out in Horrid Year for Hedge Funds (CNBC)
Third Point was the clear hedge fund standout in a horrible year for the industry as almost nine out of 10 managers underperformed the S&P 500. Omega Advisors’ Leon Cooperman also scored big. Loeb — once better known for his acerbic letters to CEOs — used an activist position in Yahoo and the contrarian buying of Greek bonds to drive the firm’s flagship fund to a 21 percent gain in 2012. The firm’s more-leveraged Ultra fund posted an even bigger 34 percent return…Cooperman’s fund had a net return of 26 percent in 2012.

Banks Zero In On Foreclosure Pact (WSJ)
Banks were closing in on a $10 billion foreclosure-abuse settlement with regulators that could be announced as soon as Monday, according to people familiar with the talks. The settlement was nearly complete Sunday afternoon, the people said, after the Federal Reserve backed down on a demand for more compensation for consumers and other changes to the pact. Bankers threatened to walk away from the deal if the Fed’s demand for an additional $300 million was included, a person briefed on the talks said.

Junk Bonds’ Fire Is Poised to Fade (WSJ)
Junk bonds started 2013 much like they finished 2012—on fire. In just three trading days this year, bonds of low-rated companies delivered returns of almost three-quarters of a percent, even as most other types of bonds lost value. And junk bonds continued to clock new milestones: Average prices soared to their highest since 2004 and average yields, which decline as prices rise, dropped below 6% for the first time ever, according to Barclays. But the rapid march is making fund managers and analysts wary. Prices are now so high—averaging more than 105 cents on the dollar—that there is little room for them to climb much further, some investors say. These are lofty prices for bonds that usually trade below 100 cents, reflecting the higher default risk for such companies. At the very least, returns will pale in comparison with the 15% achieved in 2012, analysts and investors say.

NHL, Players Settle Labor Dispute (AP)
On the 113th day of a management lockout and five days before the league’s deadline for a deal, the bleary-eyed sides held a 6 a.m. news conference to announce there will be a season, after all. NHL Commissioner Gary Bettman and union head Donald Fehr both appeared drained, wearing sweaters and not neckties, when they stood side by side at the hotel and announced labor peace. “We have reached an agreement on the framework of a new collective bargaining agreement, the details of which need to be put to paper,” Bettman said. “We’ve got to dot a lot of Is, cross a lot of Ts. There’s still a lot of work to be done, but the basic framework of the deal has been agreed upon.”

Hostess in Talks to Sell Off Bread Brands (WSJ)
Hostess could disclose Flowers, Grupo Bimbo or others as opening bidders in a looming bankruptcy-court auction for the assets as soon as this week, said people familiar with the matter. Hostess, whose bread brands include Wonder Bread, Nature’s Pride, Home Pride, Merita and Butternut, is still determining how to split up assets and package them for buyers, one of the people said.

Gérard Depardieu gives up French citizenship after bitter tax fight (GM)
In a fit of pique, French movie star Gérard Depardieu announced during the weekend that he would give up his citizenship after politicians and the media took him to task for moving to Belgium and avoiding an impending tax hike for the rich. Mr. Depardieu is not France’s first fiscal refugee but his high-profile door-slamming so monopolized public debate that Prime Minister Jean-Marc Ayrault had on Monday to parse whether or not he had insulted the actor. “I did not call Mr. Depardieu a loser, I said that it was loser-like [to move to Belgium to avoid taxes],” Mr. Ayrault told reporters…The “loser” comment seemed to have been the jab that stung Mr. Depardieu the most. “Loser, did you say loser?” the 63-year–old actor began an open letter to Mr. Ayrault that appeared Sunday in Le Journal du dimanche. Mr. Depardieu wrote that he had paid a total of €145-million in income tax in the last four decades and kept 80 people employed. He added that he had been taxed at a marginal rate of 85 per cent this year. “I am giving you back my passport and my social insurance, which I had never used. We no longer have the same fatherland. I am a true European, a citizen of the world.”

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Comments (60)

  1. Posted by Bejujular | January 7, 2013 at 7:42 AM

    Well there goes any hope of the Leafs placing first in their division.

  2. Posted by E. Texas Gas Trader | January 7, 2013 at 7:57 AM

    "…Hostess, whose bread brands include Wonder Bread, ……."

    Some traders here call the head of our midstream operations "Wonder Bread" because he is an "8-hour loaf"

  3. Posted by Guest | January 7, 2013 at 8:04 AM

    Matt, can you at least try and restrain yourself from posting your opening bells at 7am? It really ruins the fun of guessing who did it.

    Shazar… take a lap

  4. Posted by Shecky Gretsky | January 7, 2013 at 8:37 AM

    A Kindergarten teacher tells her class she's a BIG Islanders fan. She's really excited about it and asks the kids if they're Islanders fans too. Everyone wants to impress the teacher and say they are too, except ONE kid named Dougie.. the teacher looks at Dougie and says, "Doug, you're not an Islanders fan?" He says, "Nope, I'm a Bruin fan!" She says, "Well why are you a Bruin fan and not an Islanders fan?" to which Dougie replies, "Well, my mom is a Bruin fan, and my dad is a Bruin fan, so I'm a Bruin fan." The teacher's not real happy. She says, "Well, if your moms an idiot, and your dads a moron, then what would you be?!" Dougie says, "Then I'd be a Islanders fan!"

  5. Posted by Joe Webb sucks | January 7, 2013 at 9:16 AM

    I love GB getting 3 in the nite game on Sat.

  6. Posted by Guest | January 7, 2013 at 9:18 AM

    Not bad; still would've preferred to hear from Paulina Gretzky.

  7. Posted by guest | January 7, 2013 at 9:19 AM

    Recycled!

  8. Posted by VonSloneker | January 7, 2013 at 9:23 AM

    I thought everyone stopped caring about hockey in the 90s

    - M. Lemieux

  9. Posted by Laxbro | January 7, 2013 at 9:43 AM

    As someone who slammed a few elementary ed retards in college, Dougie's response would have been funnier and much more accurate had he said, "Then I'd be a kindergarten teacher!"

  10. Posted by Guest | January 7, 2013 at 9:50 AM

    In Soviet Russia, the fart smells you.

  11. Posted by Guest | January 7, 2013 at 9:58 AM

    In Soviet Russia, buffet eats all of French actors.

  12. Posted by Cinthya Moreno | January 7, 2013 at 10:03 AM

    Our top guy is on teaching the cat to speak. Our intern is tracking down the owner of the cell phone. Interns think they know everything.

  13. Posted by Guest | January 7, 2013 at 10:18 AM

    If there was ever a man that should never have to wear pants, that man would have to be Gerard Depardieu.

  14. Posted by James S. Cramer | January 7, 2013 at 10:26 AM

    HAHAHAHA I KNOW RIGHT SKEE DADDY? HOCKEY IS JUST SUCH A COCKANAMY SPORT!!!

    –JIMBO

  15. Posted by James S. Cramer | January 7, 2013 at 10:28 AM

    SNOOOOORE TODAY IS SUCH A SLOW DAY FOR NEWS SKEE DADDY! WTF!!!! I'M SO BORED!!! WELL WHATEVER BACK TO THIS DCF MODEL…. OH YEAH DON'T FORGET MAKE SURE YOU BUY BUY BUY FB ON THE UPSWING!!!!!!!!

    AND AS ALWAYS, BOOOOOOOOOOOO YAAAAAAA SKEEEEEE DADDDDYYYYY

    –<3 JIMMY C

  16. Posted by PermaGuestII | January 7, 2013 at 10:30 AM

    "I am a true European, a citizen of the world, who longs for a return to the glorious days of authoritarian rulers who ignore popular opinion, oppress the peasantry and rule the bourgoisie with an iron fist. This is why I have become a citizen of Holy Mother Russia."

    -unedited version

  17. Posted by Phanta | January 7, 2013 at 10:34 AM

    Drink bleach.

  18. Posted by Van Beek | January 7, 2013 at 10:34 AM

    In fact, hockey is the second most popular sport in the United States, right behind cricket.

    – UBS fantasy sports quant

  19. Posted by Guest | January 7, 2013 at 10:42 AM

    ……as someone who brings random Murray Hill girls home Th-Sat, "Then I'd be in advertising" also works

  20. Posted by Bejujular | January 7, 2013 at 10:43 AM

    I always thought NHL was a long-running TV show based on the videogame of the same name.

  21. Posted by Hobbes | January 7, 2013 at 11:04 AM

    The best feature of the iPhone 5 is that Leafs fans can see their standing without scrolling down.

  22. Posted by Guest | January 7, 2013 at 11:11 AM

    Oh we can just use shorthand and say "female"

  23. Posted by Guest | January 7, 2013 at 11:12 AM

    In Soviet Russia, we don't tax, we just confiscate your wealth.

  24. Posted by Napoleon | January 7, 2013 at 11:15 AM

    Nothing wrong with that.

  25. Posted by Defdan | January 7, 2013 at 11:16 AM

    Well that sums up latinos

  26. Posted by Khordokovsky | January 7, 2013 at 11:30 AM

    I see nothing funny here

  27. Posted by Guest | January 7, 2013 at 11:32 AM

    Hey!

    -France

  28. Posted by Guest | January 7, 2013 at 11:32 AM

    "then I'd go to a big ten school"

  29. Posted by Guest | January 7, 2013 at 11:47 AM

    If you really want to speed things up, I suggest testing the acceleration of gravity off a tall building.

  30. Posted by Laxbro | January 7, 2013 at 11:49 AM

    "Once known for his cinema work, Mr. Depardieu has in recent years made more headlines because his immoderate lifestyle has led to a quintuple coronary bypass surgery, an arrest for drunken scooter-driving and getting kicked off a passenger plane after he emptied his bladder in the cabin while waiting for takeoff." TFTC.

  31. Posted by Michigan State | January 7, 2013 at 11:52 AM

    A Wharton grad brought me my coffee this morning. Kiss off.

  32. Posted by Mr. Frankenberger | January 7, 2013 at 12:04 PM

    You guys wouldn't make it far in Soviet Russia.

  33. Posted by Guest | January 7, 2013 at 12:07 PM

    that cup of coffee did better than you on the SAT

  34. Posted by Guest | January 7, 2013 at 12:09 PM

    I always wanted to be an architect.

  35. Posted by HomerSimp | January 7, 2013 at 12:15 PM

    Go for it!
    -Art Vandelay

  36. Posted by Guesty | January 7, 2013 at 12:22 PM

    Look on the bright side. You're starting in net vs. Winnipeg in less than two weeks.

  37. Posted by local reporter | January 7, 2013 at 12:32 PM

    you mean la theen o

  38. Posted by Joe Webb sucks | January 7, 2013 at 12:33 PM

    should of used Guestky

  39. Posted by Marketing Ho | January 7, 2013 at 12:34 PM

    Hey !

  40. Posted by Hoosier | January 7, 2013 at 12:35 PM

    I fucked up the SAT, did okay at IU, and still ended up in FO IBD… What do you do?

  41. Posted by Howard Schulz | January 7, 2013 at 12:36 PM

    I went to Northern Michigan.

  42. Posted by Ug chicks there | January 7, 2013 at 12:37 PM

    Are you doin er ?

  43. Posted by Escalated Fast | January 7, 2013 at 12:43 PM

    I'd like to remove its eyes with a dessert spoon.

  44. Posted by Guest | January 7, 2013 at 1:03 PM

    what do I do? well for starters I don't have a terminal chip on my shoulder because I went to a shitty college. and when I meet a new girl she's not immediately repulsed when alma maters are shared. but hey, congrats on storming through that pot addiction and public school upbringing

  45. Posted by nachocheese | January 7, 2013 at 1:09 PM

    MOTHER certainly comes to mind from this comment

  46. Posted by Guest | January 7, 2013 at 1:19 PM

    I'm pretty sure he asked what you do. Are you too embarrassed that you blew 200k, stayed a virgin 'til you were 23, and studied countless hours, so you could deliver a Seamless order to a B10 grad?

  47. Posted by Mr. Ed, CFA | January 7, 2013 at 1:20 PM

    Hay!

    -Stoned horse with munchies that graduated summa cum laude from a Big 10 school

  48. Posted by Guest | January 7, 2013 at 1:21 PM

    Your mom

  49. Posted by RIP You Know Who | January 7, 2013 at 1:23 PM

    Amateur.

    -Citi/TCW LatAm Airline Passenger Etiquette Quant

  50. Posted by Gozer | January 7, 2013 at 1:38 PM

    Should be titled "Frenchman Continues Great Tradition of Surrender"

  51. Posted by give up mcquarrie | January 7, 2013 at 1:52 PM

    Ya. The order was buy 10 H SP MOC

  52. Posted by Michigan State | January 7, 2013 at 1:58 PM

    I am indeed a midwesterner with a "public school upbringing" happy and grateful to have landed a seat in this business… …no chip here, just annoyance in the presence of people like you. P&L is what matters.

    As for the girls, if you're using your degree as a credential for that sort of thing, you're doing it wrong.

  53. Posted by Muff Diving Quant | January 7, 2013 at 2:18 PM

    Gonna need to hear Muffy Benson Perella chime in on that last point.

  54. Posted by Flo | January 7, 2013 at 2:20 PM

    I hate you.

    D. Lama

  55. Posted by Pot:kettle | January 7, 2013 at 2:25 PM

    Doppelganger alert: Fat Steve Liesman may want to mix in a salad

  56. Posted by Guest | January 7, 2013 at 3:04 PM

    Evidence the Glow Puck.

  57. Posted by Herbie | January 7, 2013 at 3:05 PM

    I always wanted to be a dentist.

  58. Posted by Got my answer | January 7, 2013 at 3:12 PM

    Alright. –<3 is definitely not a heart. Maybe you should dip it into a cup of tea. It's better if it's scalding.

  59. Posted by Magi More | January 7, 2013 at 10:39 PM

    <img src="http://www.ladyoffice.com/new/images/yue.jpg"/&gt; so that's the name of that french guy, only recognized his face.<img src="http://www.ladyoffice.com/new/images/lyue.jpg"/&gt;

  60. Posted by sohbet | May 12, 2013 at 6:48 PM

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