Opening Bell

Opening Bell: 01.09.13

UBS Says Cleaning Up Its Act After Libor ‘Shocker’ (Reuters)
UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday. The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States. “We are very focused on recovering the honor and standing the organisation had in the past,” Andrea Orcel told Britain’s Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal. “I am convinced that we have made a lot of progress. I am also convinced that we still need to do more.” […] Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around. “I feel I have a high level of integrity,” the banker said. Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal. The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform. Tyrie on Wednesday described the Libor rigging as “a shocker of enormous proportions”.

Button-Down Central Bank Bets It All (WSJ)
Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation’s central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland’s total national output, and, in the process, turning from button-down conservative to the globe’s biggest risk-taker.

JPMorgan Overhaul Widens (WSJ)
The shift of Mr. Maclin and the departure of Mr. Staley, who once was seen as a top candidate to succeed James Dimon as chief executive, are the latest steps in a drastic reshaping of J.P. Morgan’s executive suite. Many of the new leaders—a group that includes corporate and investment-bank co-heads Mike Cavanagh and Daniel Pinto, co-chief operating officer Matthew Zames and Chief Financial Officer Marianne Lake—are in their 40s. Mr. Cavanagh and Mr. Zames, who were asked last May to unwind a series of botched bets placed by a trader in the bank’s Chief Investment Office known as the “London whale,” are viewed as front runners for the top job, said people close to the bank.

Ackman Braces for Legal Battle Over Herbalife (FBN)
If filed, the lawsuit could involve alleged “tortuous interference,” implying Ackman intentionally damaged Herbalife’s business relationships, people close to Ackman said. On Tuesday, a large Herbalife distributor said he was leaving the company and called on other distributors to join him amid the controversy. In a sign of the importance of its distribution channels, Herbalife says in regulatory filings its relationship with and ability to influence distributors are items that can “materially” affect its financial condition. As of late Tuesday, people with knowledge of the matter said no decision on timing or even if a lawsuit will actually be filed had been made. The company has told FOX Business it is weighing legal action against Ackman. Ackman declined to comment on the matter. Herbalife has hired famed attorney David Boies to launch possible litigation against Ackman as well as the investment bank Moelis & Co., as its financial adviser.

Goldman Will Report Fund Values Each Day (WSJ)
In a reversal of industry practice, Goldman Sachs Group will begin disclosing the values of its money-market mutual funds daily rather than monthly, according to people familiar with the company’s plans. Some of the changes will take effect as early as Wednesday…According to people familiar with Goldman’s thinking, the company is beefing up its disclosures to satisfy investors’ calls for greater transparency on fluctuations in the price of their investments.

Brazil prostitutes to learn English ahead of World Cup (AP)
Prostitutes in one of Brazil’s biggest cities are beginning to sign up for free English classes ahead of this year’s Confederations Cup and the 2014 World Cup. The president of the Association of Prostitutes of the city of Belo Horizonte says by telephone that 20 have already signed up for the courses and she expects at least 300 of the group’s 4,000 members to follow suit. The association is organizing the classes and seeking volunteer teachers. Prostitution is legal in Brazil. Belo Horizonte will host six World Cup matches and Vieira said Tuesday “it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on.”

AIG Cites Duty to Weigh Suing U.S. as Lawmaker Criticism Mounts (Bloomberg, related)
American International Group said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement. The board is scheduled to meet today to hear arguments from representatives of Greenberg and the U.S. Lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Peter Welch said New York-based AIG shouldn’t join the suit. “Taxpayers are still furious that they rescued a company whose own conduct brought it down,” Welch said in a letter to AIG Chairman Steve Miller. “Don’t rub salt in the wounds with yet another reckless decision.”

Vow of New Light For ‘Dark’ Trades (WSJ)
Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are “trying to move prices or encourage sellers that may advance their trading in the dark market.” The regulator also is boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. “You’re going to see more [focus] in those areas in 2013,” Mr. Ketchum said.

Goldman, Morgan Stanley to Settle on Foreclosures (Reuters)
Goldman Sachs and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with federal regulators over botched foreclosure claims, two sources familiar with the matter said on Tuesday. The accord would come on the heels of a separate $8.5 billion settlement announced on Monday with 10 bigger mortgage servicers, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo…Goldman and Morgan Stanley’s respective roles in the settlement stems from mortgage-servicing businesses that the two investment banks purchased in the run-up to the subprime mortgage crisis, and have since sold. Goldman had owned Litton Loan Servicing and Morgan Stanley owned Saxon Capital.

Taco Bell responds to teen’s request for a custom Speedo (LI)
The week before Christmas, 15-year-old Ryan Klarner posted on Taco Bell’s Facebook page, introducing himself with a rundown of his swimming and diving achievements before making an offbeat request. “[I]s there any way you guys could make me a customized Speedo that says think outside the buns on the back of it? If you did, that would mean the world to me,” the Illinois teen asked…Klarner said he first came up with the idea a couple of years earlier and decided last month to go ahead and ask, even though he never had asked a company on Facebook for anything before. “I did not expect it to blow up as much as it has. I didn’t really expect to get the Speedo out of it, either,” he said. But last Wednesday, the social media team at Taco Bell wrote back. “What size do you wear? And what’s your address?” “He really wanted something and he went after it,” Tressie Lieberman, director of digital and social engagement, said. When we think people are really extraordinary…then we want to reward them.”

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60 Responses to “Opening Bell: 01.09.13”

  1. Guest says:

    Laxbro looks happy with his new position.

  2. guest says:

    "Button-Down Central Bank Bets It All "

    I’ll see your button and raise you two.

    -DSK

  3. Barney Frankfurter says:

    I have a "think inside the buns" speedo.

  4. Brazilian Prostitute says:

    For $20 I let you give me the shocker.

  5. pmco says:

    I've always pictured Laxbro as a Speedo model.

  6. PermaGuestII says:

    So JPM's next CEO may share a name with a defective 1970's Ford known for crashing and burning.

    How appropriate.

  7. Beth says:

    Macys coupons are a scam. They lure you to the store only to find out a vast majority of the items are excluded in fine print or it is a value item and you cannot use the coupon. Everybody is looking to save a buck these days, but Macys doesnt care. I'm shopping at BonTon from now on.

  8. guest says:

    "Doos dees turn you ohn, papi?"

  9. Edmond_Dantes says:

    Looting Nazi Refugee Bank Accounts > Firing NYC Employees during Sandy > Kweku Abodoli > Laundering 3rd World Dictator Loot > Rigging Libor

    Andrea 'Honor our Past' Orcel

  10. James S. Cramer says:

    WHAT'S UP GUYS?! JIM CRAMER HERE AND I JUST WANTED TO GIVE YOU A NICE BIG GOOD MORNING BOOOOOOO YAAAAAAAAA SKEEEEEEEEEE DADDDDDDDDYYYYYYY!!!! AND THE BALANCE SHEET OF THE SWISS CENTRAL BANK AMOUNTS TO 75% OF GDP!?!?! WTF?!!?! LOL!!!! THAT'S SOOOOOOOO COCKANAMY!!!!! BERNANKE SHOULD DO THAT HERE SO STOCKS CAN GO UP!!! ANYWAY I JUST WANTED TO TELL YOU GUYS…. BUY BUY BUY FB!!!

    –<3 JIMBOOOOOOOOOO

  11. Fire Jon Shazar says:

    I'm stoked that I don't need to learn how to say "how much for a half and half" in Portuguese.

  12. InfiniteGuest says:

    I'm picturing a gigantic foam hand with a Swiss cross on the palm.

  13. Could be interesting says:

    Activist Investor Dan Loeb Takes 8% Stake in Herbalife

    Matt, get on this!

  14. Guest says:

    Take a report, Klarner.
    Dear Burger King:
    Custom Speedo.
    "Home of the Whopper"
    END

  15. Hobbes says:

    “it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on.”

    I prefer the mystery of foreign language hookers.

    – DSK

  16. Guest says:

    If even in Brazil they are training their employees the skills they need to become competitive in the global marketplace, what chance do we have?

  17. sohbet says:

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

  18. sohbet says:

    officers to investigate Blackstone's fishy financial transactions, but they wound up giving them