Opening Bell: 03.04.13

Euro-Zone Deal Faces Hurdles (WSJ)
Germany’s reluctance to put its taxpayers’ money at risk in other countries’ banks is proving the biggest obstacle to letting the euro zone’s bailout fund, the European Stability Mechanism, invest directly in banks that need more capital. In Ireland, Spain, Greece and Cyprus, bailouts of struggling banks are placing heavy burdens on the state, adding to fast-rising national debts.

Buffett Disappointed With Berkshire’s ‘Subpar’ $24 Billion Gain (CNBC)
Warren Buffett called 2012 “subpar” in his annual letter to shareholders as Berkshire Hathaway’s per-share book value rose 14.4 percent, less than the S&P 500′s 16-percent increase. It’s the ninth time in 48 years this has happened. Buffett notes that the S&P has outpaced Berkshire over the past four years and if the market continues to gain this year the benchmark stock index could have its first five-year win ever. “When the partnership I ran took control of Berkshire in 1965, I could never have dreamed that a year in which we had a gain of $24.1 billion would be subpar … But subpar it was.”

Buffett: Berkshire on hunt for more Heinz-like deals (Reuters)
“If we get a chance to buy another Heinz, we will do that,” Buffett said on CNBC. Berkshire likes the ketchup maker’s business, the price of the $23 billion deal, and its partner in the transaction, private equity firm 3G Capital, Buffett said in an extended interview.

HSBC Reports Declining Profit and Says Costs Are Increasing (Bloomberg)
Pretax profit for 2012 dropped 5.6 percent to $20.65 billion, trailing the $23.49 billion estimate of 26 analysts surveyed by Bloomberg. Revenue fell 5.4 percent to $68.33 billion from $72.28 billion, HSBC said today in a statement. Chief Executive Officer Stuart Gulliver is being thwarted in his plan to reduce costs to 48 percent to 52 percent of revenue as the London-based lender set aside $1.9 billion to settle U.S. money-laundering probes and boosted spending on compliance by $500 million. Expenses as a proportion of revenue climbed to 62.8 percent from 57.5 percent, and wage inflation in markets such as Latin America is increasing, HSBC said today.

Swiss Back Executive-Pay Controls (WSJ)
The plan, dubbed the “rip off” initiative by the country’s media, bans so-called golden-handshake and golden-parachute severance agreements. It also requires greater transparency on loans and retirement packages for senior executives and directors.

Beauty queen took my heart, then she took me for $96,000 ride: hedge-funder’s suit (NYP)
Rishi Bajaj, 33, says he opened his heart, then his wallet, to Miss New Mexico Teen USA 2007 Liz Kranz after she told him she was considering selling her eggs to raise cash for a relative in rehab. The sob story got the beauty a $20,000 loan from Bajaj, he claims in a Manhattan Supreme Court lawsuit. Bajaj, who co-manages the $620 million hedge fund Altai Capital, then told Kranz, 24, to pick out a car for the couple to share — and was “surprised” when she selected a 2012 BMW that came with a $17,070 down payment. They met in July 2012 and dated for “several months,” even vacationing together in Italy, where, Bajaj said in court papers, he let Kranz use his American Express card. Kranz, of the Lower East Side, was also allowed to use Bajaj’s AmEx to buy a dress for a wedding they attended. Bajaj and Kranz, who lived briefly in LA, eventually broke up. There were “disagreements about their remaining obligations to each other,” Bajaj said in court papers. He claims the pageant queen kept her hands on his credit card and racked up tens of thousands in charges…In all, Bajaj claims Kranz spent $58,860 on his credit card over three months last year. In a November letter, his lawyer accused her of “theft, fraud and other egregious misconduct” and demanded she repay the full $58,860 in credit-card purchases.

NYC to be hit hard by sequester: Merrill Lynch economist (NYP)
Two months’ worth of job gains are about to vanish nationwide, warns a Merrill Lynch economist — and New York City, whose unemployment rate is already at an eye-popping 8.8 percent, will be hit exceptionally hard in this employment carnage as Washington begins to enact a series of controversial spending cuts known as the sequester. “It will set the economy back a few months in the job market,” Ethan Harris, co-head of global economics research at Bank of America Merrill Lynch, told The Post. “The national job market recovery has been modest, and it has been weaker locally in New York.” Nationally, Harris calculated a loss of about 300,000 jobs, roughly two months of average job gains, if the sequester is enacted untouched.

Job-Hunt Time Shrinks in U.S. From Record High (Bloomberg)
For 13 million out-of-work Americans, record spells of joblessness are abating. The median duration fell to 16 weeks in January from 25 weeks in June 2010, Labor Department data show. Fewer people compete for each opening as hiring expands, and persistent long-term unemployment is starting to mend. The progress supports Federal Reserve Chairman Ben S. Bernanke’s view that America’s labor market remains flexible and isn’t succumbing to hysteresis, or permanently higher joblessness, similar to Europe in the 1980s, said Dale Mortensen, a professor of economics at Northwestern University in Evanston, Illinois, and 2010 Nobel laureate. That suggests continued monetary stimulus can bring about a faster healing.

Slim Risks Losing World’s Richest Person Title as Troubles Mount (Bloomberg)
Slim’s lead over the next-wealthiest man, Bill Gates, narrowed last week to about $4.8 billion — the closest spread in almost a year. The Lebanese immigrant’s son, who acquired Mexico’s phone monopoly and turned it into a pan-Latin American powerhouse, lost almost a 10th of his net worth last month, winnowing his fortune to $71 billion, according to the Bloomberg Billionaires Index.

Dennis Rodman: Kim Jong Un Wants President Obama to ‘Call Him’ (ABC)
In his first interview since returning to the U.S. from an unprecedented visit to North Korea last week, former NBA star Dennis Rodman said he bears a message for President Obama from the country’s oppressive leader, Kim Jong Un. “He wants Obama to do one thing: Call him,” Rodman told ABC’s George Stephanopoulos on “This Week.” “He said, ‘If you can, Dennis – I don’t want [to] do war. I don’t want to do war.’ He said that to me.” The athlete also offered Kim some diplomatic advice for potential future talks with President Obama. “[Kim] loves basketball. And I said the same thing, I said, ‘Obama loves basketball.’ Let’s start there,” Rodman said.

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Comments (46)

  1. Posted by Guest | March 4, 2013 at 9:45 AM

    Wow, I never realized Buffet was so small!

    -UBS Relative Size Quant

  2. Posted by HotKarl | March 4, 2013 at 9:45 AM

    Judging by his picture, Rishi Bajaj = alias for Rams QB Sam Bradford.

  3. Posted by Greg S. | March 4, 2013 at 9:45 AM

    It moved.

  4. Posted by Guest | March 4, 2013 at 9:48 AM

    Kim Jong-un vs Obama, with Rodman refereeing in his wedding dress

    –Guy who thinks Dennis would have made a great Secy of State

  5. Posted by Turnip Truck | March 4, 2013 at 9:49 AM

    If you can't afford to write off $56K spent on banging some hot young girl in Italy, you're in the wrong game. Better start looking for someone who appreciates you for whatever meager personal qualities you may possess.

  6. Posted by Incitatus | March 4, 2013 at 9:51 AM

    I don't know which is more idiotic, Dennis freaking Rodman doing amateur international diplomacy or Kim Jong Un fancying that he could wage a grownup war in any legitimate sense.

  7. Posted by Guesti | March 4, 2013 at 9:51 AM

    I really thought it was a joke at first, but Rodman actually did more for the peace talks in two days than Hilary did in four years. I don't know whether I should laugh, cry, or clap.

  8. Posted by Becky Quick | March 4, 2013 at 9:53 AM

    Me either, until I sat on his lap

  9. Posted by B. Badrinath | March 4, 2013 at 9:59 AM

    That's a frightening paddle.

  10. Posted by Guest | March 4, 2013 at 10:01 AM

    Better parachute a burqa-clad Sarah Palin into Iran to help solve the nuclear weapon problem.

  11. Posted by Deleveraging | March 4, 2013 at 10:05 AM

    An honor killing would have been too messy

  12. Posted by Guest | March 4, 2013 at 10:06 AM

    Banker sucker is bitter the do-nothing airhead met someone in LA with more money, tables at whatever weho club she fabcies and a primo coke plug.

  13. Posted by Im_a_Dude | March 4, 2013 at 10:11 AM

    If this Rishi fellow couldnt get the charges off his Amex or didn't cancel the card then this girl really had hm wound.

  14. Posted by Bberg Headline Dept | March 4, 2013 at 10:21 AM

    Call me.

  15. Posted by BRK.A Pledge | March 4, 2013 at 10:24 AM

    THANK YOU SIR, MAY I HAVE ANOTHER!!

  16. Posted by Allyoucaneatbuffet | March 4, 2013 at 10:25 AM

    I speak softly, but carry a big paddle.

    Warren

  17. Posted by Guest | March 4, 2013 at 10:28 AM

    A new bimmer, trips across the pond and free reign with your Chase debit card can pull a first class gold digger, ie 19-22 yo model with an accent. 24 yo New Mexico white trash might get shake shack and cab fare.

  18. Posted by Guest | March 4, 2013 at 10:35 AM

    neither*

    -UBS Grammer Qwant

  19. Posted by Lynn Tilton | March 4, 2013 at 10:36 AM

    Where did you get that paddle, Mr. Buffet? The things that I could do with that around our office………..

  20. Posted by PermaGuestII | March 4, 2013 at 10:40 AM

    I sincerely hope Bajaj is less gullible in his professional life than he is in his personal life.

    -Every Altai investor

  21. Posted by VonSloneker | March 4, 2013 at 10:42 AM

    Something, something, ping pong bronze medal at the Maccabiah Games.

    - Lazy Monday Hangover Greg Smith

  22. Posted by Bill Gross Jr. | March 4, 2013 at 10:47 AM

    Think you're overpaying their champ.

    -Guy who would give her Grey's Papaya and subway fare.

  23. Posted by Guest | March 4, 2013 at 10:48 AM

    Already done above, and the poor guy is getting no credit.

  24. Posted by Greg Smith | March 4, 2013 at 10:49 AM

    That paddle is way beyond regulation size. Maybe I should include some tips on paddle selection with my market commentary in the next cold email I send to Berkshire.

  25. Posted by Abe_Froman_ | March 4, 2013 at 10:49 AM

    It’s ok Rishi, at least that stripper is still really into you

  26. Posted by Rishi | March 4, 2013 at 10:50 AM

    Huh. Lightsquared? Thanks for the call, Phil!

  27. Posted by Bejujular | March 4, 2013 at 10:51 AM

    I lost to Buffett once, but just to make him feel better.

    - G. Smith

  28. Posted by Guest | March 4, 2013 at 10:56 AM

    When I go to Old Country Buffet, I never lose.

  29. Posted by ProV1 | March 4, 2013 at 11:04 AM

    Warren is the hack in your country club member member tourney with a 7 and 9 wood in his bag and those illegal long distance balls from Japan with weird dimples.

  30. Posted by Mr. Pimp | March 4, 2013 at 11:08 AM

    Hey Rishi Bajaj it's bad form to sue after you've been rolled by a hooker.

  31. Posted by guest | March 4, 2013 at 11:15 AM

    Why publicly humiliate yourself over $96k? Just eat the loss and preserve your rep.

    -

  32. Posted by Puck It | March 4, 2013 at 11:48 AM

    Even it doesn't solve the nuke problem, it would be a serious civic improvement to America to be rid of her.

  33. Posted by guest | March 4, 2013 at 11:49 AM

    another poor indian nerd being exploited by white trash.

  34. Posted by Guest | March 4, 2013 at 12:26 PM

    Photo Caption – Now to some spin on the next hit and follow through with the Maria Bartiromo mating call.

  35. Posted by LA Banker | March 4, 2013 at 12:31 PM

    I'd like to read what you post after your blood alcohol level drops a couple of points

  36. Posted by Groupon Investor | March 4, 2013 at 12:33 PM

    No shit!

  37. Posted by Guest | March 4, 2013 at 12:42 PM

    Underappreciated comment of the day

  38. Posted by Guest | March 4, 2013 at 12:43 PM

    Just when you though these were done with…

  39. Posted by Guest | March 4, 2013 at 12:43 PM

    thought*

    fuck

  40. Posted by 2 cubes over | March 4, 2013 at 12:56 PM

    … the fuck?

  41. Posted by B. Favre | March 4, 2013 at 2:01 PM

    Also include a picture of your junk. Works every time.

  42. Posted by Flo | March 4, 2013 at 4:00 PM

    She's in Northern Canada. Let's not upset the apple cart.

  43. Posted by Flo | March 4, 2013 at 4:01 PM

    Underappreciated comment of a comment of the day.

  44. Posted by DB compliance | March 4, 2013 at 4:21 PM

    Only a plus one after 4pm makes me believe someone liked their own post

  45. Posted by Mr. SmartyPants | March 5, 2013 at 8:52 AM

    When did you "comment forensics" degree?

  46. Posted by Jep Hardee | March 5, 2013 at 2:22 PM

    I'll take "missing verbs" for $500, Alex.