Opening Bell: 03.14.13

US Probes Gold Pricing (WSJ)
The Commodity Futures Trading Commission is examining the setting of prices in London, in which a handful of banks meet twice daily and set the spot price for a troy ounce of physical gold, the people said. The CFTC is looking at issues including whether the setting of prices for gold—and the smaller silver market—is transparent. No formal investigation has been opened, the people said.

US And UK Tussle Over Trader (WSJ)
Officials in the U.S. Justice Department and the U.K. Serious Fraud Office clashed late last year in their mutual pursuit of Tom Hayes, the former UBS trader who is viewed by prosecutors in both countries as a ringleader of banks’ attempts to rig the London interbank offered rate, or Libor, these people said. While jurisdictional disputes among law enforcement agencies aren’t unusual, some U.S. officials worry that the friction on this case will jeopardize trans-Atlantic cooperation on future financial-fraud investigations. The spat revolves around a sequence of events that played out in rapid succession last December. The trouble began, the people said, when the U.K. government unexpectedly blocked a Justice Department request to interview Mr. Hayes, who is British and lives outside London. Then, without notifying the U.S., British fraud prosecutors on Dec. 11 arrested Mr. Hayes and two others in connection with their own probe—infuriating American officials, according to people familiar with the U.S. investigation. The U.S. prosecutors punched back the next day by filing sealed criminal fraud charges against Mr. Hayes.

Banks Bow To New York On Clawbacks (WSJ)
Three more top banks, including Citigroup, will broaden their clawback policies to cover more executives, increase disclosures or add potential triggers. The moves increase to six the number of leading financial companies that have bowed to pressure from the New York City’s Comptroller’s Office.

Lehman Judge Allows ‘London Whale’ Subpoena in JP Morgan Fight (Dow Jones)
A judge on Wednesday said Lehman Brothers Holdings Inc. creditors can subpoena Bruno Iksil in its lawsuit against J.P. Morgan, ensuring the phrase “London Whale” will stay in the lexicon for at least a bit longer. Judge James Peck of U.S. Bankruptcy Court in Manhattan said Mr. Iksil, who is in France, can be questioned over the alleged mismarking of $273.3 million in derivatives when he worked at J.P. Morgan in the days leading up to Lehman’s bankruptcy. “I consider it inappropriate except for in a clear case of abuse to cut off discovery of a witness that has fingerprints all over a transaction,” Judge Peck said. “And in this case, Mr. Iksil’s fingerprints are on the $273.3 million transaction that took on some significance in the case.”

Lehman U.K. Wins $1 Billion Appeal on Hedging Contracts (Bloomberg)
The ruling may result in London-based Lehman Brothers International Europe and its administrators PricewaterhouseCoopers LLP receiving an extra $1 billion, according to a written decision handed down this morning by Judge Mary Arden in the U.K. Court of Appeals.

Jobless Claims Unexpectedly Fall as Labor Market Improves (Bloomberg)
First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five- year low.

JPMorgan exec sued over ‘bullying’ behavior (NYP)
Plaintiff Walter Suarez, a former financial adviser, was banished to the company’s Delancey Street outpost when he complained about colleague Michael Quach, and the move cost Suarez an $80 million client list, $20 million of which was taken by JPMorgan, his lawyers claim. According to Suarez, Quach was a bully who resorted to physical violence to intimidate colleagues. Suarez, who is Hispanic, says Quach, an Asian-American, got away with the behavior because bosses preferred Asian employees. “Eventually, it got to the point of being ridiculous. This isn’t the corner bodega,” Suarez told The Post. “We’re investment people. This is a professional setting. That’s when I spoke up. “He just wasn’t a very professional person from the get-go, and I don’t think that I was the only person who felt that way.” Suarez told superiors that Quach had manhandled several staffers, including one woman who was “physically assaulted during working hours on the banking floor,” according to the lawsuit filed in Manhattan Supreme Court by attorneys Matthew Blit and Amanda Gudis. Suarez said Quach even threatened to punch him out in front of clients.

‘Canada’s Warren Buffett’ Interested in Greece’s Top Bank (Reuters)
Greece’s biggest lender, National Bank (NBG), said on Wednesday that Canadian investment fund Fairfax Holdings was interested in acquiring a stake in it by taking part in a planned recapitalization. Under the terms of cash-strapped Greece’s international bailout, its top four lenders must issue new shares by the end of April to replenish their capital after the losses they suffered in the debt crisis from bad loans and bond writedowns. The European Union and the International Monetary Fund have set aside 27.5 billion euros ($37 billion) in bailout funds to invest in the new bank shares. But private investors must buy at least 10 percent of them or the lenders will be nationalized. NBG said in a bourse filing that Fairfax was among other investors who had expressed an interest, without giving details. Fairfax is controlled by investment guru Prem Watsa, known as the “Warren Buffett of Canada.”

SandRidge Gives In, Settling Proxy Fight (WSJ)
SandRidge Energy agreed to fire its chief executive or give control of its board to an activist shareholder, settling a closely watched proxy battle amid an outbreak of investor unrest in the oil patch. SandRidge, an oil-and-gas producer with a stock-market value of about $3 billion, immediately appointed four directors to its board who were nominated by hedge fund TPG-Axon Capital LP, which owns 7.3% of its shares.

Bofa Battles Credit Suisse for 50% Markups on State Loans (Bloomberg)
The firms are among at least five lenders in talks to loan five states at least $6.5 billion this year — more than double last year’s total — as local governments seek to chop debt costs by replacing loans from a 1997 federal bailout that average 14.4 percent in reais. Credit Suisse is lending Mato Grosso, an agricultural state in western Brazil, $1 billion for 15 years. The loan, with a rate equal to 11.2 percent in reais and guaranteed by Brazil if Mato Grosso defaults, compares with 7.35 percent for yields of similar-maturity government debt.

Private Equity Could Trigger Another Crisis: Bank of England (CNBC)
The amount of leverage in the U.K. corporate sector poses a risk to the stability of the financial system and could produce the next big financial crisis over the coming years, the U.K.’s central bank has warned.

White Rock woman holds ‘Lying Cheating Sale’ to sell all her husband’s stuff while he’s ‘gone with his floozie’ (The Province)
A scorned White Rock woman held a yard sale on the weekend to get rid of her husband’s stuff while he was “gone with his floozie,” according to a Craigslist ad. “Husband left us for a piece of trash, selling everything while he is gone this weekend with his floozie,” read the text of the ad, which was posted early Friday afternoon to the free classifieds site. The Province dropped by the yard sale on Saturday and, sure enough, bargain-hunters were sifting through the goods which included office chairs, camping gear and other offerings. The lady in charge of the sale declined to speak on the record. Her colourful Craigslist ad, however, said she was selling everything and moving after 10 years of marriage. The featured items included his favourite red leather reclining theatre-seating sofas, and “lots of tools which he didn’t have a clue how to use.” “I want the house empty on Monday when he returns because that will be a shock for him to see. So come pick out what you would like Saturday and Sunday at 8 a.m. “Don’t come too early (like he did) because I will be thoroughly enjoying some wine with my girlfriends this evening as we clean out all this stuff and likely be nursing hangovers in the morning. So please speak softly to the ladies wearing the sunglasses.” The ad discouraged clothes-buyers, “as we will have already burned those in the driveway,” but it did offer to let visitors see the pile of ashes.

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Comments (45)

  1. Posted by Bejujular | March 14, 2013 at 9:43 AM

    I don't know guys I think that dumb mammal shouldn't bump Shamu.

  2. Posted by VonSloneker | March 14, 2013 at 9:48 AM

    "White Rock man goes shopping for new stuff, confident he's made the right call."

    - Guy who's sure neither party is winning any spouse of the year awards

  3. Posted by Guest | March 14, 2013 at 10:11 AM

    I had a dream last night where I was trying to do something and a critical piece of information was in a Matt Levine footnote that I just couldn't understand.

  4. Posted by Fewdollarsmore | March 14, 2013 at 10:11 AM

    She is lying. How can he go with his floozie if he had tools he didn't know how to use?

  5. Posted by Matt's Ex | March 14, 2013 at 10:18 AM

    Story of our relationship

  6. Posted by Fewdollarsmore | March 14, 2013 at 10:19 AM

    Quach story seems like 'Horrible Bosses II' in the making. I bet JP Morgan's diversity training did not cover the scenario of a Hispanic guy suing an Asian guy for using him as a punch bag.

  7. Posted by Ishmael, CFA | March 14, 2013 at 10:23 AM

    "Avast!" cried Ahab. "Pull, boys, pull, the devil take ye!" he shouted to his desk quants. A gold dubloon to the man who spies the London Whale! The forward rate curve clicked downward, diving as a great maritime beast to the very heart of the world. It could be hours before it resurfaced. Ahab's blood boiled in monomaniacal anticipation.

    Keyboards clicked as the men fiddled furiously with their models. It is a rare man who can pull an oar on a prop desk. Many a man has been tangled in the computer wiring and dragged to the depths, or dashed to pieces against his own desk by the foamy torrents of market volatility. Great gaseous eruptions burst forth from takeout food and bad coffee. Ahab set his face like flint. 5 minutes, nay 10 minutes passed.

    To his left, the lead quant Fedallah, ancient in his Hindoo savagery, black turban like an eclipse against the flourescent light of the dealing room sat impassively, Ahab's own black shadow. His clipped moustache twitched impassively like some ancient totem of blackest sacrifice. He muttered to himself mystical mathematical incantations, a prayer sealing the doom of the desk and all the men on it. His yellow oriental minions sat about him like supplicant worshipers, silent in their eastern mystery.

    "Thar she blows!" erupted a bilious Manx trader. "The London Whale!" The whale erupted white and horrible out of the depths of the trading screens, white and horrible and flashing against the black background. Ahab moved to the front of the desk, drawing his HP-12C , his harpoon, from its case.

    The harpoon gleamed in the dead flourescent light, no ordinary HP-12C, this had been forged in the blood of past trading losses, crafted with the expertise of 30 years in the markets. Not gold was its metal, but blood red. Many late nights he had sat alone in his office, programming it for this moment.

    His missing leg ached now, ached with the same pain of the day last year when the London Whale had cost him his bonus, and he had drunkenly staggered into the street and been run over by a London taxicab. His soul raged with anger, furious against the firm's God, against Dimon himself.

    He faced the screen. Ahab's face was twisted beyond all human recongnition. There he stood not a man, but a fiend.

    "Curse ye, London Whale! With my last breath I spit at thee! From hell's black heart I stab at thee!"

    The price data swirled in a vortex. He heaved his blood-red harpoon at the screen. It shattered and went dark. Silence fell and the trading floor was calm.

    And I alone have remained to tell the tale.

  8. Posted by guest | March 14, 2013 at 10:23 AM

    "Private Equity Could Trigger Another Crisis: Bank of England"

    You know what could trigger another crisis? Puking up your massive GC position at a 20 year low only to watch it quintuple years later. Oh wait – the BOE already did that. These people couldn't hit water if they fell out of a boat.

    -Trader who like to fade stupidity and doesn't put much stock in politicians saying there's a crisis coming when they're currently batting 0 for 1000 in recognizing an actual crisis ahead of time.

  9. Posted by Excel 2013 | March 14, 2013 at 10:23 AM

    Google Docs is such trash. I don't know what he sees in her, anyone can open her up.

  10. Posted by NewSkool | March 14, 2013 at 10:24 AM

    Didn't know they were such wimps at JPM now.

  11. Posted by NewSkool | March 14, 2013 at 10:27 AM

    Don't you think people are just a little too sensitive now?

  12. Posted by Guest | March 14, 2013 at 10:28 AM

    Definitely some DB Dramatic Reading Night material.

  13. Posted by Guest | March 14, 2013 at 10:33 AM

    I have a lot of concerns about that story. What Hispanic guy is going to let himself be pushed around by an Asian? And how many Asians are out there that can even do any pushing around? He was scared of being punched in the face in front of a client? Fine, go for it. That should be good for a pretty hefty lawsuit.

  14. Posted by guest | March 14, 2013 at 10:36 AM

    Dick as dick?

  15. Posted by Regis | March 14, 2013 at 10:42 AM

    A coalition of Blacks, Latinos, Feminists, Gays, Government Workers, Union Members, Environmental Extremists, The Media, Hollywood, uninformed young people, the "forever needy," the chronically unemployed, illegal aliens and other "fellow travelers" have ended Norman Rockwell's America. Yeah, American Dream died on 11/6/12. The Pit Bull is in the back yard.

  16. Posted by Guest | March 14, 2013 at 10:45 AM

    So that dick still wears a rug?

  17. Posted by guest | March 14, 2013 at 10:50 AM

    Up is down
    Left is right
    Asians are beating up beaners
    What the hell….

  18. Posted by Questioner | March 14, 2013 at 11:02 AM

    Wouldn't that be a merkin?

  19. Posted by Fewdollarsmore | March 14, 2013 at 11:02 AM

    The story goes that the Asian guy didn't know what a 'Corner Bodega' is and when the Hispanic guy explained it he questioned what will one fight there for – a hot dog?

  20. Posted by Guest | March 14, 2013 at 11:02 AM

    http://www.bloomberg.com/news/2013-03-14/only-wal

    Who would have thought that a deal sold to Detroit by UBS could possibly have gone wrong? $350M of that is actually what Detroit owes on a bad swap trade, so good reporting on that "fee" Bloomberg. I am most shocked that UBS actually generated some fees.

  21. Posted by PermaGuestII | March 14, 2013 at 11:11 AM

    Depends on the kind of Asian we're talking about here.

    -guy who has known some seriously scary Korean dudes

  22. Posted by Hobbes | March 14, 2013 at 11:15 AM

    Canadians buying Greek banks, selling spouses stuff on Craigslist.

    - Bloomberg Canada Headline Quant

  23. Posted by Rock Man | March 14, 2013 at 11:23 AM

    I carry my tools on me.

  24. Posted by freakshow | March 14, 2013 at 11:25 AM

    ahhh the splendors of "diversity"

  25. Posted by Hugh Culverhouse Jr. | March 14, 2013 at 11:28 AM

    Maybe he was a Sas quach

  26. Posted by Alpha_Bets | March 14, 2013 at 11:30 AM

    Lest we forget the dude who played Random Task in the first Austin Powers movie. Sent to the big house for gang raping a teenager, then killed his cellmate just to drive home the point. I mean honestly!

  27. Posted by VonSloneker | March 14, 2013 at 11:35 AM

    People's Republic of Canukistan = The new Florida?

  28. Posted by Brussels Muscles | March 14, 2013 at 11:42 AM

    The bad guy from Blood Sport was a pretty scary asian if my memory serves correctly.

  29. Posted by Bravo | March 14, 2013 at 11:53 AM

    < slow clap >

  30. Posted by el guesto | March 14, 2013 at 11:54 AM

    I don't think the brilliance of this post can be understated

  31. Posted by el guesto | March 14, 2013 at 11:54 AM

    Fuck. Overstated. Clearly I just ruined it.

  32. Posted by NakedShort | March 14, 2013 at 11:56 AM

    up up down down left right left right b a select start

  33. Posted by Im_a_Dude | March 14, 2013 at 11:57 AM

    what about the guy from the james bond movie who threw his top hat to kill people?

  34. Posted by PermaGuestII | March 14, 2013 at 12:10 PM

    Oddjob– who is, in fact, supposed to be Korean.

  35. Posted by Curious Guest | March 14, 2013 at 12:26 PM

    Bravo

    I'm not sure what is funnier: the piece, or the amount of time you spent writing it and saving it for just the right day to post on DB.

  36. Posted by Ho Chi Guest | March 14, 2013 at 12:35 PM

    If you ain't Viet, you ain't shit, foo

  37. Posted by Guest | March 14, 2013 at 12:38 PM

    Worst comment since the last one.

  38. Posted by Mervyn King | March 14, 2013 at 12:43 PM

    Other than confusing the BOE with Chancellor of the Exchequer I have no concerns

  39. Posted by PermaGuestII | March 14, 2013 at 12:53 PM

    Yeah? I blow a hole in your face and then I go in the house… and I sleep like a baby. You can count on that. We used to stack fucks like you five feet high in Korea… use ya for sandbags.

    -W.K.

  40. Posted by Ishmael, CFA | March 14, 2013 at 1:38 PM

    Not long, mostly I just replaced the words "White Whale" with "London Whale"

  41. Posted by RugbyBro | March 14, 2013 at 1:38 PM

    Don't forget Samoan rugby players.

  42. Posted by Ctrl+H | March 14, 2013 at 2:04 PM

    You replaced "Whale" with "Whale"??

  43. Posted by Commander Bond | March 14, 2013 at 2:17 PM

    He came to a shocking ending.

  44. Posted by Guest | March 14, 2013 at 4:14 PM

    I'm from white rock! #canadianpride

  45. Posted by funnyman | March 15, 2013 at 7:37 AM

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