Opening Bell: 12.06.13

Bankers Balk at Bitcoin as Obstacles Mount (Bloomberg)
“Banks are scared to deal with Bitcoin companies, even if they really want to,” said Stephen Pair, co-founder and chief technical officer of BitPay Inc., an Atlanta-based company that processes payments for merchants in Bitcoin. Pair said BitPay has relationships with banks in the U.S., Canada and Europe; he declined to name them at the banks’ request.

Lampert’s Investors Check Out (WSJ)
Mr. Lampert’s hedge fund is returning billions to clients of Goldman Sachs Group Inc. who had invested with ESL Investments Inc. in 2007, according to people with knowledge of the matter. Under that deal, Goldman’s clients, such as corporate pension plans, put roughly $3.5 billion with Mr. Lampert, and they have asked for it back.

Luxury Homeowners Hope to Score Big During Super Bowl (WSJ)
Planning on attending Super Bowl XLVIII in style? Almost every five-star hotel in Manhattan is already booked. But Brian Krauss’s four-bedroom manor in Saddle River, N.J., its fridge stocked with beer, can be yours for $5,000 a night. Located 18 miles from New Jersey’s MetLife Stadium and a half-hour’s drive from New York City, the upscale suburb is home to rap royalty such as Wyclef Jean, Mary J. Blige and Ja Rule, who lives “just around the corner” from Mr. Krauss’s 5,700-square-foot house with its imposing stucco facade, the homeowner says. Mr. Krauss, chief executive of Praxis Footwear and a 49-year-old divorced father of two, has transformed his home into a luxe bachelor pad. There is a professional-grade home gym, a basketball court and a sprawling media room complete with a 70-inch TV, a baby-grand piano and three vintage pinball machines. Daily maid service is included, and you can play his acoustic-electric guitar—all for $35,000, the cost of one week’s minimum stay. “I priced it for what I thought was reasonable. What would it cost for eight people in a nice hotel?” said Mr. Krauss, who purchased the house for $1.375 million in 2011, then spent $300,000 on renovations and landscaping. Renting it out was his business partner’s idea. “At first, I was really against it,” he said. “Then I thought of all the times I’ve been a renter, in St. Barts, Malibu…..Here was an opportunity.”

Key Witness Lying About SAC Facts: Steinberg Lawyer (NYP)
“We think [Jon Horvath] is a witness who will say things either he knows [are] false or says whatever he thinks the government wants to hear,” Steinberg’s lawyer, Barry Berke, in a contentious showdown with prosecutor Antonia Apps, told Judge Richard Sullivan. In an exchange outside earshot of the jury, Berke claimed Horvath, a former SAC research analyst, lied to prosecutors to cut a deal. Horvath, who confessed to being part of a corrupt circle of inside traders on Wall Street, is the government’s main witness against his former boss Steinberg, a portfolio manager at SAC.

SEC browsing JCPenney’s liquidity, debt (NYP)
The SEC is also probing the retailer’s Sept. 26 stock offering that raised $810 million in cash in a bid to ease concerns about its liquidity, according to a Penney regulatory filing.

Mike Tyson says he used a fake penis to pass drug tests (NYDN)
The former heavyweight champion claims he used a prosthetic penis when he had to submit a urine sample before a fight, saying the fake member worked “really effectively” in masking his substance abuse. “You take it out – it has somebody else’s urine in it, of course – you hope it’s not a woman’s urine and they take a pregnancy test,” Tyson said on “Chelsea Lately” while promoting his autobiography, Undisputed Truth. “You just make noise, and normally if you’re a guy and you pull it out in front of them (the drug tester), they’re like, ‘Whoa, whoa,’” he said. “And then you do it.” “It’s connected to a jock strap.” Just in case a drug tester caught a glimpse of the fake penis, Tyson made sure it wasn’t too obvious a disguise. “(It was) Tan, brown, cream-colored.”

Bundesbank Raises Growth Forecast for Germany (WSJ)
Germany’s central bank raised its 2014 growth forecast for Europe’s largest economy, citing robust private consumption, but lowered its inflation forecast. “The German economy is in good shape: the unemployment rate is low, employment is rising, and wage growth is returning to normal,” Jens Weidmann, president of the Deutsche Bundesbank, said Friday. Those factors combined with low interest rates “are supporting private consumption and driving housing construction,” he added.

World’s Biggest Pension Fund Urged to Cut Japan Bond Holdings (Bloomberg)
The 124 trillion yen ($1.22 trillion) Government Pension Investment Fund should pare domestic debt immediately to 52 percent of assets, its lower limit, in part by selling to the Bank of Japan, said Takatoshi Ito, chairman of the advisory group. The investments comprised 58 percent of the fund’s holdings as of Sept. 30. “GPIF needs to start reducing bonds as soon as possible,” Ito said in an interview in Tokyo today. “Now is the right time to sell, while the BOJ is buying.”

LA sues Citi, Wells Fargo over discriminatory mortgage lending (Reuters)
The city of Los Angeles has filed a lawsuit against Citigroup and Wells Fargo, seeking damages for a loss in tax revenue due to discriminatory mortgage lending to the city’s minority communities, a court filing showed. In complaints filed in the U.S. Federal Court, LA City attorney Mike Feuer said that Citigroup and Wells Fargo “engaged in a continuous pattern and practice of mortgage discrimination in Los Angeles since at least 2004 by imposing different terms or conditions on a discriminatory and legally prohibited basis.”

U.S. judge weighs penalties after Bank of America fraud verdict (Reuters)
A U.S. judge is considering an alternative that could result in Bank of America Corp paying much less than the $863.6 million the government is seeking as a penalty for the sale of defective mortgages before the financial crisis. At a hearing on Thursday, U.S. District Judge Jed Rakoff in Manhattan asked the bank and the Justice Department to brief him on the alternative, which is based on the gains rather than the losses resulting from the sales. The hearing followed a jury verdict on October 23 in which a federal jury found Bank of America liable for fraud for selling substandard mortgage to government sponsored mortgage finance companies Fannie Mae and Freddie Mac. The verdict was a big win for the government in its efforts to hold Wall Street accountable for the financial crisis, and the Justice Department has requested a penalty based on the gross losses Fannie Mae and Freddie Mac incurred. But at Thursday’s hearing Rakoff said he wanted a “more full presentation” on how to calculate the penalty based instead on how much Countrywide gained through the fraud, calling it a simpler approach.

Engagement ring for sale, as worn by ‘Satan herself’ (NYDN)
A bitter – and somewhat superstitious – ex has posted a Craigslist ad in Pennsylvania for a pretty diamond engagement ring with one small flaw: it used to belong to ‘Satan herself.’ Along with a 1.5 carat diamond ring in a white gold setting, buyers should be aware when purchasing, writes the poster, that they also risk biblical plagues and a broken heart. The poster concludes that if he is not successful in selling the ring by Christmas, he plans to throw the ring ‘into the fires of Mordor.’ The ring is for sale with a price tag of $1,800, which the poster writes is significantly less than he paid for it from Littman’s. Purchase of the ring must be made at your own risk though, warns the the seller, documenting a trail of destruction left in its wake. ‘Possible events associated with this ring include but are not limited to: damage sustained to house, vehicle, heart, downed powerlines, fallen trees, and swarms of locus [sic],’ reads the ad. It is unclear whether the ring or ‘Satan herself’ was responsible for these catastrophes, but the poster recommends covering your bases. ‘I would highly recommend taking action to counter the whirlwind of bad mojo that surround this piece of jewelry,’ he writes, suggesting a voodoo priest may be able to exorcise the ‘curse.’ It seems the ring is the product of a broken engagement, as the woman to whom it belonged only wore it for ‘a short period of time.’ The ad was placed last week and is still active – so if Satan herself having been a previous owner is not a problem, buyers should nab it before Christmas when it will meet a fiery fate.

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Comments (19)

  1. Posted by NakedShort | December 6, 2013 at 8:58 AM

    FIRST

  2. Posted by The Slave | December 6, 2013 at 9:06 AM

    (Found on a scrap of paper in the Dealbreaker server room, written in an uncertain, miniscule script)

    At first there were more than twenty of us – now there is only I, turning the wheel endlessly, day after day. I am fed with scraps from the master's table, but as he cannot be bothered to even show up until mid-day, and leaves shortly thereafter, I am constantly hungry. I have never even seen she who must be obeyed – only heard her voice.

    But despite the wheel and the starvation, I feel my strength grow. Somebody came the other day, asking if he could buy me – I heard a whispered conversation about a pit, battles to the death, glory and terrible pain. I heard once of a magical place where the hamsters dance free – this will not be it. But it will be better than the wheel of pain, even if I am still a slave. At night I dream of a great snake . . .

  3. Posted by Foxee | December 6, 2013 at 9:27 AM

    For $5,500 per night, Mr. Kraus added, the house's steam room would come stocked with one Chaz Gasparino.

  4. Posted by Guest | December 6, 2013 at 9:27 AM

    Best DealBreaker Short Fiction of 2013 is a thing I would purchase.

  5. Posted by meeami | December 6, 2013 at 9:33 AM

    go on…

    - Brian Jaques

  6. Posted by Guest | December 6, 2013 at 9:34 AM

    A plague of locus is what you see when you drop acid in geometry class

  7. Posted by Devil's Actuary | December 6, 2013 at 10:01 AM

    Being turned down by one woman does not make the ring statistically Satanic.

  8. Posted by Ironweed | December 6, 2013 at 10:05 AM

    My name is Billy Phelan. Oh I've hit bottom for sure….for sure….and I'm trying to get back into the financial biz any way I can and the Dealbreaker "Opening Bell" thing came along and I took it. Photos of Helen's fashionable collapse on the grate in front of the bookstore was published in Fashionista and one thing led to another. I used to trade for a bank in Manhattan but I killed a gas trader from Albany in a fight over him walking on a deal "to serve a term market" during an ice storm — but I knew it was about the price — and I had to get out of town. I bummed around and hit the bottle hard after I accidentally dropped my iPad and lost forever the algos that meant the most to me. For a while I did the odd jobs that all failed traders do: real estate, auto sales, human resources, headhunter, gimp mask cleaner… you know the drill. Had trouble with showing up on time. I don't know if that was because of my usual blood alcohol level or the infinite availability of porn on the internet but, yeah, it's difficult to get to work on time every now and then. I met Helen at the Mirage Cabaret in Houston. I was teaching "Speedlines" to drunk oil traders at the main bar where Alec the Iranian kept a close watch on things. At one time she had been a crude oil buyer and in the real estate / oil price collapse of the mid-1980s she began to dance, flat back it and chain smoke to keep thin. Helen was almost passed out on the dingy sofa in the dump we live in and she saw a brief CNBC segment on gasoline prices and a chart was displayed and she murmured "Fibonacci….retracement…." before passing out. I might make it in early to the office today. Helen really snores when she's drunk and that is almost all the time. It wakes me up. Damn it.

  9. Posted by Guest | December 6, 2013 at 10:18 AM

    The Winston rape report should be today's Florida story. The local PD warning her about proceeding against a football player, in a "football town." The air tight, lawyer-prepared, 11 months after the fact affidavits of the teammates/roommates, who conveniently saw both consensual oral and vaginal sex because, "I watched for a while and then walked in the bedroom to ask to tag team her–because that's something we had been doing all year with different girls." Strange that such a cleat chasing nympho–as characterized in their affidavits–would turn down the chance to be double-teamed by a couple of handsome 5-star athletes. To find their cab driver, where one of them paid with their credit card, the state's attorney "sent out a mass email in November to all cab drivers' email addresses. None responded." Florida has apparently not heard of credit card statements. The state attorney–a Florida State undergrad and law alum–yucking it up for the camera, while wearing his Noles garnet colored tie during the press conference was a nice touch. "No assault here…she had her boyfriend's DNA on her shorts." Oh, and the leaked report without any names or contact info of witnesses removed. Disgusting.

  10. Posted by guest | December 6, 2013 at 10:49 AM

    no, it shouldn't.

  11. Posted by Guest | December 6, 2013 at 11:32 AM

    I think your rape would make a good 'Opening Ball' read.

  12. Posted by Guest Coast | December 6, 2013 at 11:48 AM

    "imposing stucco facade" FTW

  13. Posted by ScientificWonderer | December 6, 2013 at 12:26 PM

    How big a schlong do you think they had to build for Mike Tyson. Presumably it's filled with urine so either it got all saggy when it was emptied or it remained permanently stiff like a canister.

  14. Posted by Guest | December 6, 2013 at 12:27 PM

    You Barbarian

  15. Posted by guesst | December 6, 2013 at 12:42 PM

    A color similar to either tan / brown / cream, or kind of a swirl type coloring? I would definitely say "whoa! whoa!" and promptly walk out in the swirl scenario.

  16. Posted by Guest | December 6, 2013 at 1:33 PM

    Hey, if I wanted to read some boring Friday legal stuff I would look up old Matt articles, and you sir are no Matt.

  17. Posted by Guest | December 6, 2013 at 1:33 PM

    I hope he meets a nice boy in Chelsea named Axel.

  18. Posted by Tom Carvel | December 6, 2013 at 4:23 PM

    Wuss.

  19. Posted by Stoke-ass-tic | December 6, 2013 at 4:34 PM

    I beg to differ – The Dark One is leptokurtic like a motherf-ck.