Opening Bell

Opening Bell: 01.16.13

Goldman Profit Soars (WSJ)
“While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders,” Chief Executive Lloyd C. Blankfein said. Overall, the investment-banking arm recorded revenue of $1.41 billion for the quarter, up from $857 million a year ago and $1.16 billion in the third quarter. Financial advisory revenue rose 8.1% from year ago. Debt underwriting revenue surged to $593 million from $196 million in the year ago and the $466 million reported in the third quarter. Equity underwriting revenue popped 59% from the year ago and 61% from the prior quarter to $304 million. Revenue from fixed income, currency and commodity trading totaled $2.04 billion, versus $1.36 billion a year earlier and $2.22 billion in the third quarter. Revenue from equities execution rose 45% from a year ago to $764 million but fell 10% from the third quarter. Overall profit for the fourth quarter totaled $2.89 billion, compared with a year-earlier profit of $1.01 billion. Earnings per share, reflecting the payment of preferred dividends, jumped to $5.60 from $1.84. Net revenue, including net interest income, surged 53% to $9.24 billion.

JPMorgan Profit Tops Estimates (WSJ)
JPMorgan’s fourth-quarter earnings surged 53% on strong revenue and better credit, as the bank further detailed the fallout from more than $6 billion in trading losses last year. The outsized, complex trades on credit default swaps tied to corporate bonds became known as the “London Whale.” On Wednesday, the bank made public an internal report outlining mistakes and oversights by executives who played a role in the matter, including Chief Investment Officer Ina Drew, who has since left the bank, and Douglas Braunstein, who was chief financial officer during the episode and has since become a vice chairman. It also said its Treasury and Chief Investment Office, where the “Whale” trades were made, recorded a loss of $157 million on the fourth quarter, compared to net income of $417 million in the year ago. J.P. Morgan also said it halved the 2012 compensation of Chief Executive James Dimon to $11.5 million. Additionally, he will have to wait up to another 18 months before he can start exercising two million options that were awarded to him five years ago. Overall, J.P. Morgan reported a profit of $5.69 billion, or $1.39 a share, for the fourth quarter, up from $3.73 billion, or 90 cents a share, a year ago.

Bankers Get IOUs Instead Of Bonus Cash (WSJ)
Several thousand Morgan Stanley traders, investment bankers and other employees will get IOUs instead of cash when bonus day arrives Thursday, a fundamental change in Wall Street pay triggered by the financial crisis. The New York company will pay its bonuses in four equal installments, according to people briefed on the plan, with the first chunk coming in May and the last in January 2016. Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company. “I don’t think there will be a lot of cheers on the trading floors of Morgan Stanley,” said Mark Williams, a former Federal Reserve bank examiner who now teaches at Boston University. “Bonuses were used to buy houses and cars. They were savings vehicles.”

AIG Seeks Approval To File More Bank Suits (NYT)
Since the summer of 2011, the insurance giant American International Group has been battling Bank of America over claims that the bank packaged and sold it defective mortgages that dealt A.I.G. billions of dollars in losses. Now A.I.G. wants to be able to sue other banks that sold it mortgage-backed securities that plunged in value during the financial crisis. It has not said which banks, but possibilities include Deutsche Bank, Goldman Sachs and JPMorgan Chase. But to sue, A.I.G. first must win a court fight with an entity controlled by the Federal Reserve Bank of New York, which the insurer says is blocking its efforts to pursue the banks that caused it financial harm.

Hungary Attacks Roubini Over Currency ‘Advice’ (CNBC)
Hungary’s Ministry for National Economy said in a statement that the forint began to depreciate after economist Nouriel Roubini – dubbed Dr Doom for his pessimistic forecasts – said in a newsletter that failure to secure a deal with the International Monetary Fund was bad news for the currency. The forint has been in decline since last week hitting seven-month lows earlier this week but has since gained some ground. Hungarian officials rounded on Roubini saying; “On Thursday speculators seem to have taken Roubini’s advice and attacked the forint.”

BofA Takes A Mortgage Mulligan (WSJ)
Less than two years after embarking on a painful retreat from home lending, Bank of America Corp. is girding for a new run at the U.S. mortgage business. Whether that gamble pays off will depend in large measure on how long the mortgage market’s run of record profits continues. The Charlotte, N.C., company aims to sell more mortgages through its 5,000-plus branches, executives said. The fourth-biggest U.S. mortgage lender, after Wells Fargo & Co., J.P. Morgan Chase & Co. and U.S. Bancorp, is intent on “growing that business,” Chief Executive Brian Moynihan said at a December investor conference.

Eurozone Plan May Be Watered Down (WSJ)
One of the euro zone’s most significant commitments last year aimed at containing its financial crisis—a plan to allow the bloc’s bailout fund to directly boost the capital of banks in countries facing debt troubles—could be undermined by technical complications and second thoughts by some governments.

Germany Repatriates Gold Reserves (WSJ)
Germany’s central bank said it would remove nearly a fifth of its total gold reserves from deposits at the New York Federal Reserve Bank and the Bank of France and bring them back to Germany, amid a debate in the country over the transparency of its global gold holdings.

Inside Trader Sent To Kinnu-can (NYP)
John Kinnucan, the former head of Portland, Ore.-based firm Broadband Research, was sentenced to four years and three months in prison after admitting to feeding illegal stock tips to his well-heeled hedge fund clients.

Reporter fired for secret stripping job gets new journalism gig with same (NYDN)
Tressler, 30, is now a reporter for the San Antonio Express-News, covering “cops, crime and general mayhem,” according to her Twitter account. In April, the gorgeous Tressler was fired from her job as a society reporter for the Houston Chronicle for failing to tell the newspaper about her after-hours gig as a stripper, which she chronicled in her blog, “Diary of an Angry Stripper.” Tressler then sued her former employer’s parent company, the Hearst Corp., which also owns the Express-News, alleging that the firing was unfair. She hired celebrity lawyer Gloria Allred and filed a complaint with the U.S. Equal Employment Opportunity Commission, saying the paper’s reason for firing her — failing to write on her application that she had been working part-time as a stripper — was ridiculous. “I’ve worked at KB Toys. I’ve worked at a surf shop. I’ve worked at multiple coffee shops. I’ve worked at Taco Bell. I’ve worked as a line cook at a restaurant,” Tressler told the Las Vegas Review-Journal in June. “Do you really want me to put every single one of those on my job application?” Over the summer, Tressler embarked on a national stripping tour and pushed a book, which shared the same title as her blog. She also picked up some freelance assignments for “Good Morning America.” After the suit and the tour, it seemed unlikely Tressler would re-enter Texas journalism, let alone for a newspaper owned by the same parent company that fired her. Some have suspected that her new job was part of a settlement she reached with the company.

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66 Responses to “Opening Bell: 01.16.13”

  1. Seasons says:

    Dodge Chargers are for minorities

  2. Irvine says:

    It drove them into underground tunnels. The only thing which was truly effective against the tunnel systems were the heavy B52 bombing strikes, which some Viet-Cong said might have turned the conflict against them if they had continued. I bet your little draft dodging hippy parent never told you such stories I reckon.

  3. Alt_EST says:

    Failing to secure a deal with the IMF is bad news for the forint?

    Penetrating insight from Roubs…definitely going to subscribe to RGE soon.

    -UBS Forex MD

  4. Frustrated Comedian says:

    Not a lot to work with today. No Florida stories, stripper story is sort of mild. To quote a famous chartist / journalist: "Meh".

  5. Guest says:

    As I told you,with our cost of funds near zero for us not to make a profit would be absolutely, totally, and in all other ways inconceivable!

    -Lloyd "Vizzini" Blankfein

  6. PM #1 says:

    In soviet russia, the site shazars you !

  7. Hypocrite watch says:

    Insurance companies need to go back to their old ways.

    That kid who's like 4 feet tall

  8. Laxbro says:

    So I read the smoke show from Girls, Allison Williams, is auctioning off a lunch date for charity. It's sitting at two grand right now, you figure it doesn't end north of three. I'm thinking I'd pay three grand to bang Brian Williams' hella acceptable daughter. But the problem is how do you not look like a creep that spent three racks to talk to her? The language on the site says the date time is "to be scheduled at a mutually agreed upon date." So perhaps that means you and her exchange emails. I'm thinking the play is to flake on her. Yes, pay three grand to stand this celebrity slam up. You know after she gets your name and email she's going to google you to make sure you're normal. She'll find your employment and college and maybe even she stalks you a little harder and sees your instagram photos of you shredding and having fun in Vail over Christmas with mad decent looking people. Suddenly she's intrigued. She seems humble enough to let you reschedule. And that's when your schedule can't accommodate a lunch date, you suggest a low key party your friend is having in Flatiron. Just thinking out loud…

    P.S. I wish HBO would force the fat one to stop getting naked. She really is an obnoxious camera hogging troll. Disappointing that Stern apologized for saying what everyone is thinking. He's gotten delicate.

  9. Guest says:

    If they lay off an employee, MS doesn't have to pay out his deferred bonus either?

    It's easier for the Greeks to get money from the Germans than it is MS employees getting their bonuses from MS.

  10. Guest says:

    Cohen: We're rich bitch!
    Blankfein: I'm richer bitch!

  11. Guest says:

    Greek 'model' > Honda dealer > UBS MD > MS MD >

  12. Guest says:

    Note to self: Avoid threatening or taunting Feds when they come knocking at the door, investigating insider trading.

  13. Plasma Selling FICC says:

    Tuesday at the plasma center was boring as usual. They only give us $20.00 on Tuesdays and $40.00 if we come back in 3 days. They try to get 2 donations a week from donors. They call us "donors" even though we sell our plasma. I need a flu shot and with the spare $10.00 I have left over from last week I'll be able to get one at a nearby grocery store. Had to wait 2 and a half hours before getting back into the donation room. There are 36 donating stations back in that room and 4 flat screen TVs to watch. You get FX channel or ESPN. I still think of my old employers' currency trading desk whenever I see "FX". I sit and visit with a black guy named Ed while waiting to get "stuck". He's a pro at the donation game and tells me who among the 8 or so "stickers" is the best to get. A young black guy interrupts us to ask Ed a question and Ed answers him. When that fellow walks away Ed gets angry and says, "In my day you didn't interrupt an elder when they's talking. They'd fix a punk real fast for that." He goes back to telling me about his work for a major airline in Tulsa and the trips he used to take for free as an employee. He asks me about what I use to do and I tell him I used to work for a "finance" company (but not the kind he's thinking about). He nods when I tell it like that and stares off at a young black woman about a quarter of the way through her donation. She has huge tears running down her face and looks away real fast if you glance in her direction. After my donation I go to the pay window. There is a barcode stuck to my left hand put there by my sticker when he un-stuck and bandaged me to go. The lady in the pay window takes the barcode stuck to my wrist and has me sign a paper on a clip board and gives me two crisp $10.00 bills. I leave and walk to the grocery store about 2 miles away to get my flu shot. I sign up and they ask me how I'm going to pay. "Cash" I say. "You don't have insurance?" they ask. I tell them no. For some reason I then say "I'm sorry." They take my cash and a lady tells me, "Since you're paying cash and I don't have to check your insurance, you can go right in." She points to the small flu shot room. About 15 people — with insurance I guess — who were waiting ahead of me– look on in disbelief. I get my shot, walk out and get a few "Hey I was ahead of him" stares. I've still got a dollar left but I walk home because the fare is $1.50. I still can't figure out what made me say, "I'm sorry…"

  14. Guest says:

    Hey, does anyone here run a money market fund? I'd be more than happy to cut you a piece of the action if you'd be willing to put me into a repo at 1% so I can buy up corporates that return 5%.

    – Aspiring TBTF Banker

  15. Movie Buff says:

    "That's as good as money sir, those are IOUs. Go ahead and add it up every cents accounted for. Look, see this, that's a car, 275 thou might want to hang on to that one."