Opening Bell: 01.07.14

Yellen Confirmed As Fed Chief (WSJ)
Janet Yellen will join the ranks of the most powerful economic policy makers in the world next month, taking the helm of the Federal Reserve at a time when the central bank is assessing its unprecedented steps to buoy the U.S. economy. The 67-year-old Ms. Yellen, currently the vice chairwoman of the Fed’s board of governors, will become the first woman to lead the central bank in its 100-year history after the Senate voted to confirm her Monday night in a 56-26 vote. Eleven Republicans joined 45 Democrats to support her; no Democrats opposed her. Weather-related travel problems caused some lawmakers to miss the vote.

Trial to Begin for Martoma, Ex-SAC Trader Who Cut No Deal (Dealbook)
In at least three meetings since, people briefed on the case said, when prosecutors subtly raised the subject of Mr. Martoma striking a cooperation deal, his lawyers insisted he would not play ball. And finally, when prosecutors set a deadline last year for him to cooperate, the people said, the date came and went without Mr. Martoma budging. Prosecutors had long hoped Mr. Martoma would provide the missing link in their pursuit of Mr. Cohen, an inquiry that has hit one dead end after another. But now Mr. Martoma is heading to trial. On Tuesday, jury selection will begin in Federal District Court in Lower Manhattan, where prosecutors have built an undefeated record in insider trading trials under the United States attorney in Manhattan, Preet Bharara. Mr. Martoma’s resistance, the people briefed on the matter say, has baffled officials at the F.B.I., the United States attorney’s office and the Securities and Exchange Commission. Some authorities have grown suspicious about his motives, the people say, noting that Mr. Cohen is paying for Mr. Martoma’s defense.

Card Conundrum Develops in Colorado Over Marijuana Sales (WSJ)
Buying marijuana for recreational use now is legal in Colorado—and paying for it with plastic is getting easier. The official rules of Visa Inc. and MasterCard Inc. prohibit the use of their debit and credit cards for marijuana purchases, but some Colorado merchants are allowing customers to use them anyway. That is because the card giants, owners of the processing networks that handle electronic payments, have quietly decided not to enforce their rules, according to people familiar with their strategies. Instead, the people said, the companies are following the lead of the federal government, which has said it won’t challenge state laws that decriminalize the drug. Visa said in a statement that it follows federal law and tries to prevent the network from being used unlawfully. But it added that “given the federal government’s position and recognizing this is an evolving legal matter with different standards applicable in different states, our local merchant acquirers are best suited to make any determination about potential illegality.”

Slump in Trading Threatens a Wall Street Profit Engine (WSJ)
Executives have warned that lackluster markets could lead to year-over-year declines in fixed-income, commodities and currency trading revenue when banks begin reporting fourth-quarter results next week. That would mark the fourth consecutive drop and the 11th in the past 16 quarters. Few corners of banks’ trading operations have escaped the slump. A 10-year commodities rally has fizzled, while foreign-exchange trading volume has fallen sharply from its 2008 peak. Since the financial crisis, investors have eschewed exotic fixed-income securities in favor of low-risk government bonds, which are less profitable for banks, and overall trading volumes have dipped. A rash of new regulations, meanwhile, have prompted Wall Street firms to exit from once-lucrative businesses such as energy trading and storing and transporting physical commodities. The slump has gone on so long that some observers are beginning to question whether it is part of an ordinary down cycle or a more permanent shift. “I think it is worrying,” said Oppenheimer analyst Chris Kotowski, who expected trading revenue to have hit bottom and stabilized by now. “You can’t turn around a fundamental trend…if that’s what this is.”

Co-op Bank execs face BoE investigation (Telegraph)
Former senior managers of the Co-op Bank are to be investigated by Britain’s two financial regulators over their role in the near failure of the troubled lender that last year discovered a £1.5bn capital shortfall…The Reverend Paul Flowers, the former chairman of the Co-op Bank, is already the subject of a police investigation into his alleged drug-taking, but will now face a probe into his professional conduct while at the bank, along with other former directors and executives.

Olive oil used to grease up and free naked man hiding in washing machine (ABC)
Emergency workers say they had to use olive oil to grease up and free a naked man who got stuck in a washing machine during a game of hide and seek. Mooroopna police, in northern Victoria, say the man was attempting to hide from his partner when he climbed into the top loader. It took emergency crews about 20 minutes to free him using the oil to lubricate his skin. First Constable Luke Ingram says it was lucky the man was naked. “I guess if he’s going to get into a washing machine it’s best if he has no clothes on to be able to get him out like that,” he said. “I guess the clothes can provide a bit of resistance to try to get him out. My advice would be for people not to climb into appliances.”

Goldman to JPMorgan Say Sell Emerging Markets After Slide (Bloomberg)
Goldman Sachs Group Inc. recommends investors cut allocations in developing nations by a third, forecasting “significant underperformance” for stocks, bonds and currencies over the next 10 years. JPMorgan Chase & Co. expects local-currency bonds to post 10 percent of their average returns since 2004 in the coming year, while Morgan Stanley projects the Brazilian real, Turkish lira and Russian ruble will extend declines after tumbling as much as 17 percent in 2013.

Video of Steve Cohen’s deposition set to air (NYP)
A “Frontline” documentary to air Tuesday night about the government’s thus-far elusive efforts to nail SAC Capital Advisors founder Steve Cohen on insider trading charges promises some exclusive video on a deposition given by the billionaire investor that was obtained in a cloak-and-dagger method reminiscent of Watergate. The video was given to Nick Verbitsky, the director of the documentary, by an anonymous tipster who contacted him via text. After some back and forth, a copy of Cohen’s two-day deposition loaded onto a USB drive was left across the street from Frontline’s New York City office, cradled between two bars of scaffolding. Verbitsky told The Post he wasn’t “exactly sure” how the person with the video got wind of his interest, but said he had called the person who shot the video and the transcription company, but “no one had it.” Those people, in addition to the plaintiff and defendants’ lawyers, knew he wanted it.

U.S. judge orders RBS unit in Japan to pay $50 million over Libor (Reuters)
A Japanese investment banking unit of Royal Bank of Scotland Group Plc was ordered on Monday to pay a $50 million criminal fine after pleading guilty to wire fraud over its role in manipulating the benchmark interest rate Libor. RBS Securities Japan Ltd had entered its plea last April 12, as part of its parent’s $612 million settlement to resolve criminal and civil probes by authorities in the United States, the United Kingdom and Japan into rate manipulation.

Action star Steven Seagal considers running for Arizona governor (AP)
The “Marked for Death” actor told KNXV-TV that he is considering a shot at the state’s highest office and has had a talk about the bid with the self-proclaimed toughest sheriff in America. The 61-year-old made the comments while talking about his newly released reality series “Steven Seagal – Lawman: Maricopa County.” Seagal teamed up with Maricopa County Sheriff Joe Arpaio for the show that was shot in Arizona and airs on cable TV’s Reelz Channel. “Joe Arpaio and I were talking about me running for governor of Arizona. I would remotely consider it, but I have a lot of other responsibilities that may be more important to address” he told the station.

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Comments (19)

  1. Posted by Guest | January 7, 2014 at 8:35 AM

    I wonder how many cycles it took for that washing machine to get back to normal after all of that olive oil?

  2. Posted by Guest | January 7, 2014 at 9:05 AM

    "Evolving legal matter"? I wish my good-for-nothing counsel had thought of that.

    - Phil F.

  3. Posted by Guest | January 7, 2014 at 9:30 AM

    Stoners are giving the Feds a nice paper trail by using creditdebit cards for marijuana purchases. It's like paying for an escort service with a credit card.

  4. Posted by Fewdollarsmore | January 7, 2014 at 9:36 AM

    Sounds like they had to unload 'Naked puts on oil'!

  5. Posted by Guest | January 7, 2014 at 9:36 AM

    Kinda looks like a Mike Myers character or something.

  6. Posted by KingCo | January 7, 2014 at 10:04 AM

    “Joe Arpaio and I were talking about me running for governor of Arizona. I would remotely consider it, but I have a lot of other responsibilities that may be more important to address.”

    So churning out crap direct-to-video action movies is more important than running the Great State of Arizona?

    Ok, I can see that.

  7. Posted by Guest | January 7, 2014 at 10:08 AM

    "Yellen in my ear, alright!"

    -Op Ivy

  8. Posted by guesst | January 7, 2014 at 10:17 AM

    Tell me about it! These kids never listen.

    - Mad Max Belfort

  9. Posted by True Dat | January 7, 2014 at 10:32 AM

    I only added homosexual, because my moral upbringing makes me not desire another man to inseminate my rectum

  10. Posted by DB Fact Q | January 7, 2014 at 10:43 AM

    The polar vortex is a hoax perpetuated by the liberal media to further its agenda of climate change and global warming!

    Also, how much money do you need to make say a year for Bess to even consider going steady with you. I mean really, how much is arm candy like her going for?

  11. Posted by guest | January 7, 2014 at 11:13 AM

    Yes!

    - A. Greenspan

  12. Posted by guestimate | January 7, 2014 at 11:14 AM

    "My advice would be for people to not climb into appliances."

    Swear to god if it didn't explicitly say the location, I would've just assumed Florida.

  13. Posted by Nuptse | January 7, 2014 at 11:29 AM

    So should I wear a jacket or can I get away with just a sweater?

  14. Posted by Guest | January 7, 2014 at 11:49 AM

    So was it a game of naked hide and seek or was this guy just really committed to getting into the washing machine? If it was naked hide and seek I'm assuming the partner was a 6 year old boy.

  15. Posted by guestie | January 7, 2014 at 12:57 PM

    He'll pull out, don't worry.

  16. Posted by Guest | January 7, 2014 at 1:04 PM

    He got excited for the rinse cycle.

  17. Posted by Murican Capitalist | January 7, 2014 at 1:40 PM

    Please sir may i have some more??

    - Wall Street to US Treasury

  18. Posted by Guest | January 7, 2014 at 2:03 PM

    Question: Was Janet Yellen sent here from China along with a lifetime supply of bamboo as a gesture of international friendship?

  19. Posted by Rebecca M. | January 7, 2014 at 2:34 PM

    Dafaq?!?