Ackman Tries Safer Herbalife Mix (NYP)
The investor titan converted 40 percent of his $1 billion equity short on Herbalife to less-risky long-term put options, according to a letter his Pershing Square hedge fund sent late Wednesday to investors, The Post has learned. “The restructuring of the position preserves our opportunity for profit,” wrote Ackman in the letter, a copy of which was obtained by The Post. “If [Herbalife] fails within a reasonable time frame we will make a similar amount of profit as if we had maintained the entire initial short position — while mitigating the risk of further substantial mark-to-market losses because our exposure on the put options is limited to the total premium paid.” The move reduces the equity short to 12 percent from 16 percent of his $10.8 billion hedge-fund portfolio.
Frustrated Republicans Pressure Boehner to End Shutdown (Bloomberg)
or the past few weeks, Boehner’s hand has been guided by a group of Tea Party-aligned Republican House members who’ve urged little compromise in their three-year drive to undo the 2010 Affordable Care Act, also known as Obamacare. Now, the agitation is coming from the other side of the caucus. A bipartisan group of about 40 House lawmakers are holding private talks to find a compromise to end the shutdown, said Representative Reid Ribble, a Wisconsin Republican. At least 15 Republicans, including Representatives Charlie Dent of Pennsylvania and Peter King of New York, are pressing Boehner to call a vote on a Senate-passed spending bill free of Obamacare-related measures.
Hank Paulson: Tea party ‘hijacked the debate’ (CNBC)
Paulson said he hopes it doesn’t take another financial crisis to solve these budget problems—a solution that should include an overhaul of the tax code and entitlement reform. He said he hates the whole concept of the debit limit—calling it a “flaw” in the system. “Congress has already approved the spending. And then say ‘you have to then come back and agree to allow us to meet our obligations,’ that’s ridiculous.”
Buffett speaks out against DC’s ‘extreme idiocy’ (CNBC)
“If [Republicans] can’t get their way on another issue, they’ll use the threat of, in effect, defaulting on the government’s credit to get their way,” Buffett said. “That won’t work long-term.” “The public will turn on them, and they’ll all of a sudden have a counter revelation,” he predicted—adding that Washington “will go right up to the point of extreme idiocy” but won’t cross it.
Beanie Babies Creator Cries, Pleads Guilty To Tax Evasion (NYP)
The billionaire who created Beanie Babies broke down crying in court Wednesday as he pleaded guilty to one count of tax evasion for hiding $25 million in income in secret Swiss bank accounts. H. Ty Warner, 69, also apologized as he stood before a federal judge in Chicago, removing his designer tortoise-shell glasses and wiping away tears as he struggled to regain his composure. “I have so much to be thankful for,” said the suburban Chicago businessman, his voice breaking as he cited his Illinois-based stuffed-toy company, TY Inc. “There is no excuse for my actions.” As an emotional Warner continued to apologize during Wednesday’s hearing, his head bowed over a courtroom podium, before Kocoras finally stopped him, telling him he could elaborate at his Jan. 15 sentencing.
“There will be time for you to bare your soul (later),” the judge said.
Policing Of Exchanges Questioned (WSJ)
The SEC chairman said the self-regulatory function of stock and options exchanges “has encountered challenges” in recent years as the trading venues have evolved into for-profit enterprises that compete more directly with brokerages. She added that “the current nature of exchange competition and the self-regulatory model should be fully evaluated in light of the evolving market structure and trading practices.”
Witness: Cuban Knew He Couldn’t Trade On Inside Info (NYP)
Mark Cuban is expected to testify Thursday in the government’s insider trading lawsuit against him, which could come down to whether jurors believe the billionaire and Dallas Mavericks owner’s account of a 2004 phone call. Cuban is likely to say that he never promised to refrain from selling his shares in an Internet company after learning news that would cause their value to fall. The CEO of the Canadian search-engine company, Guy Faure, says Cuban agreed at the start of the phone call that he would be learning confidential information. When Cuban learned about Mamma.com Inc.’s plan to issue more stock — lowering the value of Cuban’s 6 percent stake — he got angry. “Now I’m screwed. I can’t sell,” Cuban said, according to Faure, whose testimony was recorded in late 2011 and played Wednesday for the jury in U.S. district court in Dallas.
Emails in Spotlight at Bank of America Trial (WSJ)
In the summer of 2007, executives at Countrywide Financial Corp. were desperate to move away from the slumping market for subprime mortgages and into higher quality loans. Their solution was to create a program called the “High Speed Swim Lane”—HSSL, or “hustle”—that pared back checks on loan quality so mortgages could be approved more quickly. That prompted concerns from some employees. Ed O’Donnell, the former head of underwriting at Countrywide, sent an email that summer with a long list of questions from employees, including, “Does this mean we no longer care about quality?” The unit’s chief operating officer, Rebecca Mairone, simply responded: “So it sounds like it may work. Is that what I’m hearing?” Email exchanges like this are at the heart of the federal government’s civil lawsuit against Bank of America, which bought Countrywide in 2008, and Ms. Mairone.
Cake thieving leads to scuffle at justice building (KATU)
It all started Tuesday afternoon when a woman brought her 9-year-old daughter’s birthday cake to the Cowlitz County Hall of Justice. “She said she didn’t want to leave the cake in the car because the dog would get into it and eat it,” said Cowlitz County Sheriff’s Deputy Joe Connor. “So she brought it in to protect it.” Even with three sheriff’s deputies at the metal detector, the cake wasn’t safe from the hands of Robert Eric Fredrickson. He just dug right in – no knife, no fork, no plate. Deputy Connor confronted Fredrick son at a drinking fountain as the man tried to wash the cake off his hands. “I said ‘stand right there, don’t move.’ I went to get some towels to clean him up before I dealt with him and no sooner had I turned my back on him and he was back on the cake again. And then all hell broke loose,” Connor said. Another deputy grabbed Fredrickson’s cake-covered hand and he resisted. The table went down, the cake went flying…The man who helped himself to the cake was arrested on charges of third-degree theft and resisting arrest.