Opening Bell: 02.25.14

Total Haul for KKR Co-Founders Is $327 Million for Banner Year in 2013 (WSJ)
The total haul for Mr. Kravis was about $161.4 million, a sum that includes dividends, payouts from the firm’s funds and compensation such as salary and the use of personal assistants, according to KKR’s full-year financial statement filed publicly Monday. Mr. Roberts came away with about $165.5 million in total for last year, according to the filing. Mr. Roberts owns more KKR stock than Mr. Kravis, who has given some of his stake to a charitable trust, according to securities filings.

@GSElevator Tattletale Exposed (He Was Not in the Goldman Elevator) (Dealbook)
The Twitter account, which has an audience of more than 600,000 followers, has been the subject of an internal inquiry at Goldman to find the rogue employee. The tweets, often laced with insider references to deals in the news, appeal to both Wall Street bankers and outsiders who mock the industry. Late last month, the writer sold a book about Wall Street culture based on the tweets for a six-figure sum. There is a good reason Goldman Sachs has been unable to uncover its Twitter-happy employee: He doesn’t work at the firm. And he never did. The author is a 34-year-old former bond executive who lives in Texas. His name is John Lefevre…Upon being contacted late last week after several weeks of reporting uncovered his identity, he confirmed his alter ego. “Frankly, I’m surprised it has taken this long,” he said by phone. “I knew this day would come.” Mr. Lefevre, who worked for Citigroup for seven years, said the Twitter account started as “a joke to entertain myself.”

Six Bitcoin Exchanges Work to Reassure Customers (WSJ)
“This tragic violation of the trust of users of Mt. Gox was the result of one company’s actions and does not reflect the resilience or value of bitcoin and the digital currency industry,” the statement said. “There are hundreds of trustworthy and responsible companies involved in bitcoin. These companies will continue to build the future of money by making bitcoin more secure and easy to use for consumers and merchants. As with any new industry, there are certain bad actors that need to be weeded out, and that is what we are seeing today.”

JPMorgan Chase to cut thousands more jobs (FT)
JPMorgan Chase is planning more job cuts in its mortgage business on top of the 13,000-15,000 positions already due to be slashed because of plunging demand for home loans. Several thousand more cuts are planned, according to people familiar with the matter, and could be announced at JPMorgan’s annual investor day on Tuesday. They are part of a new efficiency drive at the largest US bank by assets that also encompasses staffing branches with fewer employees.

Second Madoff aide testifies at trial, denies knowledge of fraud (Reuters)
Longtime Bernard Madoff assistant Annette Bongiorno on Monday testified that she had no idea her boss was operating a vast Ponzi scheme, despite the decades she spent helping run the trading business where it originated. Bongiorno said she recorded backdated trades, sometimes months after the fact, but never suspected there was anything illegal about it. “Did anyone ever suggest to you that there was something wrong with that practice?” her lawyer, Roland Riopelle, asked her. “The only person who ever suggested that to me was you,” she replied.

Madoff secretary thought Ponzi boss was a ‘hero’ (NYP)
She said Madoff used to stutter when she first began working for him, and that on her first day at work he couldn’t complete a sentence when he asked her to order him ham-and-cheese sandwich. Madoff, she recalled, got so frustrated that he blurted out, “Just get me a ham sandwich!”

Dennis Rodman North Korea Mission to Become Fox Movie (THR)
20th Century Fox has bought the comedy pitch Diplomats, inspired by Dennis Rodman’s so-called “hoops diplomacy” mission to North Korea, as a directing vehicle for Ride Along’s Tim Story…The ever eccentric Rodman became a lightning rod last year when he visited North Korea and befriended the country’s dictator, Kim Jong Un. In January, he returned to the secretive country, which has an atrocious human rights record, and organized a basketball game in Pyongyang. He even sang “Happy Birthday” to the despot. Diplomats is described as a two-hander that takes its cues from the antics of the 6-foot-7 former NBA player Rodman, known as “The Worm.”

Pension Funds Sue On A Deal Gone Cold (Dealbook)
Sitting around a table in Baton Rouge, La., in February 2008, a handful of board members of the Firefighters’ Retirement System of Louisiana heard an investment pitch that would later come back to haunt them. Their consultant, Joe Meals, said that others had already jumped at the chance to invest with Alphonse Fletcher Jr., a flashy Wall Street financier whom Mr. Meals described as a long-established hedge fund manager, according to video recordings. The fund was offering essentially a 12 percent guaranteed return, according to Mr. Meals, secured by a third-party investor, and the opportunity was so hot the board would have to make a decision that day. “I can tell you, it won’t be on the table this time next month,” Mr. Meals told the group, according to the video recordings. “It won’t take 30 days for somebody else to want it.” The firefighters’ system eventually said yes, and along with two other pension funds — the Municipal Employees’ Retirement System and the New Orleans Firefighters’ Pension and Relief Fund — invested a combined $100 million in one of Mr. Fletcher’s funds, FIA Leveraged. As they understood it, the fund would invest in liquid securities that could be sold in a matter of weeks…Mr. Fletcher’s hedge fund has since been described by a court-appointed bankruptcy trustee as having elements of a Ponzi scheme, and four retirement systems are fighting to recover their money. A federal judge is scheduled to rule in March on a plan to liquidate the fund’s assets, which the trustee deemed “virtually worthless” in a report last November.

Russell Stover’s Slow, Candy Bar-Free Rise to a Billion-Dollar Asking Price (BusinessWeek)
Russell Stover is the third-largest chocolate company in the U.S., behind Hershey (HSY) and Mars—very far behind, in fact. Hershey had more than $7 billion in revenue last year, while Russell Stover pulled in about $600 million. But Russell Stover doesn’t really compete directly with these chocolate titans. It avoids the cut-throat candy bar market and focuses almost exclusively on boxed chocolates and other gift items that people buy for holidays. “Sure, [Chief Executive Officer] Tom [Ward] would love for us to come up with our version of Snickers,” Mark Sesler, Russell Stover’s chief marketing officer, told me during interviews for my article on how the chocolate maker won the Valentine’s Day war. “But our factories aren’t really equipped for that. We’re better at boxed chocolate.” Russell Stover has a lock on that boxed chocolate market, selling an estimated 35 million Valentine’s Day hearts this year. “They’re one of the largest premium boxed chocolate suppliers in the U.S.,” says Paul Minger, Walgreen’s (WAG) category manager for confections. And now Russell Stover is up for sale, with an initial asking price of $1 billion…So no, Russell Stover may not make your favorite candy bar. But it doesn’t need to. Come Christmas or Valentine’s Day, you’re going to find yourself browsing the candy aisle at Target (TGT) or Walgreens, looking for an attractive and affordable gift. And let’s be honest: How many times have you given a Snickers to someone as a gift?

Deutsche Bank to pay $20 million to settle Brazil charges (Reuters)
Deutsche Bank AG agreed on Monday to pay $20 million to settle charges in Brazil that Europe’s largest investment bank by revenue helped manage funds embezzled by former city of São Paulo officials in the 1990s, a prosecutor said on Monday.

Easy Currency Bet Gets Harder as the Chinese Yuan Tumbles (WSJ)
Since China resumed efforts to move the yuan higher in 2010, traders have piled into bets that profited as the currency has staged a seemingly relentless advance. But after hitting a record against the dollar in mid-January, the currency has dropped over 1%, reaching a six-month low on Tuesday. The size of the recent declines has prompted some to speculate China may be tapping on the brakes, at least for now. “Last week’s move has been enough to change attitudes about whether or not we have a one-way [bullish] bet here in the yuan,” said Edmund Harriss, a London-based portfolio manager at Guinness Atkinson Asset Management, which oversees $700 million. “China’s central bank is reminding us all that the stronger currency is not a given in the short term.”

Store Drops Charges Against Kayla Finley, Woman Jailed For Not Returning J-Lo Movie (AP)
Finley rented the movie “Monster-in-Law” from Dalton Videos in 2005. The owner took out a warrant against Finley, and she was arrested last week when she was at the sheriff’s office for something else and the warrant was found. Finley spent the night in jail before she was released.

43 comments (hidden to protect delicate sensibilities)
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Comments (43)

  1. Posted by Wire | February 25, 2014 at 7:25 AM

    Maybe he's just holding his jacket, but I suspect Kravis is grabbing his balls in that photo. Which goes well with his "screw you" expression.

  2. Posted by Guest | February 25, 2014 at 7:30 AM


  3. Posted by TMZ | February 25, 2014 at 7:38 AM

    SMUSecure EXPOSED!!

  4. Posted by Quant me maybe ... | February 25, 2014 at 8:18 AM

    At his age he'd have to reach down to his knees to do that.

    >Hard truth @KKRElevator

  5. Posted by UBS HR | February 25, 2014 at 8:28 AM

    Wait, so you can /claim/ to work somewhere and not actually work there?

    This explains why that last VP we stole from Goldman kept asking for change…

  6. Posted by Guest | February 25, 2014 at 8:39 AM

    He says he never claimed to work there.

  7. Posted by Guest | February 25, 2014 at 8:41 AM

    And he is probably not going to work at any bulge in the future either.

  8. Posted by Guest | February 25, 2014 at 8:44 AM

    750,000 bitcoins gone missing at Mt Gox? Surprise, surprise…..

    Just imagine if they went missing at $1000 a pop? $750mm lost?

  9. Posted by Gen. MacArthur | February 25, 2014 at 8:52 AM

    There is no security.

  10. Posted by Guest | February 25, 2014 at 9:09 AM

    Yeah, I mean, it's like, shit… if only nature had its own Bitcoin.

  11. Posted by Guest | February 25, 2014 at 9:11 AM

    A 12 percent guaranteed return, but it's only available today? Better move fast, sounds like a fantastic opportunity to me!

    – Fairfield Greenwich Due Diligence Quant

  12. Posted by Slippery Pete | February 25, 2014 at 9:23 AM

    Kravis, why can't I quit you?

  13. Posted by guest | February 25, 2014 at 9:40 AM

    Hey! That guy broke all my branches!

    -Ugly Tree

  14. Posted by Guest | February 25, 2014 at 9:53 AM

    Maybe offer a reward for the bitcoins. I once dropped $500 in the trading floor, which was my monthly paycheck after my Honda payments, and offered a $1000 reward to whoever found it. Turns out a GS trader who had never even been to the Stamford campus, had it.

    – UBS Global Head of Trading Quant

  15. Posted by Guest | February 25, 2014 at 9:58 AM

    Here's a hint for you: He moved to Texas. He does not give a fcuk.

  16. Posted by George S | February 25, 2014 at 10:01 AM

    Long Yuan, Short Dong

  17. Posted by Walter Noel | February 25, 2014 at 10:01 AM

    Hey, stop wasting your time with all that and figure out what the hell Bill Gross is talking about regarding him being secretariat!

    -Guy starting to worry his daughters are not actually his

  18. Posted by KingCo | February 25, 2014 at 10:03 AM

    Madoff, she recalled, got so frustrated that he blurted out, “Just get me a ham sandwich!”

    And that, she recalled, was the moment she knew something wasn't kosher.

  19. Posted by Longpoke | February 25, 2014 at 10:11 AM

    Stop farting in Kravis's elevator!

  20. Posted by Angry Investor | February 25, 2014 at 10:26 AM

    Hey that guy took all the tranches!

  21. Posted by Guest | February 25, 2014 at 10:40 AM

    Not a doubt in my mind gselevator guy is geezer oil trader.

  22. Posted by Texashedge | February 25, 2014 at 10:47 AM

    The scowl says "screw you"
    The tie says "this photo is 15 years old"

  23. Posted by swisshedge | February 25, 2014 at 10:49 AM

    Confirmed when he asked the next day for a "ker ker ker Crab and mayo baguette".

  24. Posted by rice and beans | February 25, 2014 at 11:04 AM

    He is stoked because with that kind of dough he can hire someone to make his Chipotle burrito runs.

  25. Posted by GS Geography Quant | February 25, 2014 at 11:15 AM

    Yep, the Texas thing kind of seals it.

  26. Posted by Kravis | February 25, 2014 at 11:17 AM

    …I'll buy you some new ones…

  27. Posted by Guest | February 25, 2014 at 11:21 AM

    I knew that bastard was not from GS. We have implanted chips in all Goldmanites, if they deviate from a set standard based on Dante's Inferno eight (fraud) & ninth (treachery) layer of hell, our NSA backed computers will let us know right away to fire the sucker. Plus he has guns. We don't need no stinking guns for our success, we just take it. <Lloyd Blankfein's evil toupe>

  28. Posted by Guest | February 25, 2014 at 11:33 AM

    There are seals in Texas? They must be huge!

  29. Posted by Guert | February 25, 2014 at 11:35 AM

    Dead giveaway. A guy from Goldman wouldn't have been that introspective.

  30. Posted by Mr E-E | February 25, 2014 at 11:42 AM

    I'm tired of cleaning up your shit

  31. Posted by Guest | February 25, 2014 at 11:45 AM

    Bess, do tell.

    Inside the Showdown Atop Pimco

  32. Posted by Guest | February 25, 2014 at 11:48 AM

    Bill Gross, Pimco =Bill Gross Idealab

  33. Posted by Guest | February 25, 2014 at 11:52 AM

    We'll mail you your set of steak knives

  34. Posted by Guest | February 25, 2014 at 11:54 AM

    Question now is… Who is @Pimcoelevator?

  35. Posted by Quant me maybe ... | February 25, 2014 at 12:23 PM

    The walrus

    > boo boo pe do.

  36. Posted by Quant me maybe ... | February 25, 2014 at 12:25 PM

    Wrong. He'd have done it in powerpoint.

  37. Posted by Guest | February 25, 2014 at 12:27 PM

    At least he didn't order a cheddar salad.

  38. Posted by Matt Levine | February 25, 2014 at 12:37 PM

    Who leaked a copy of my draft of a children's fable about repeat players in derivatives markets?

  39. Posted by Guest | February 25, 2014 at 12:43 PM

    You sound like an idiot when you add "Quant" to the end of everything.

    – UBS M&A MD Quant, CFA

  40. Posted by Paradise | February 25, 2014 at 12:46 PM

    It's Newport Beach goon.

  41. Posted by Guest | February 25, 2014 at 12:56 PM

    "He said he was also struck by some of the lines, comical to him, he heard from people at Goldman when he first received a job offer. “Even socializing with them — going to bars and having guys buy girls drinks and then throw out a line like, ‘Don’t worry ladies, these drinks are on Goldman Sachs.’ ”

    Are Goldmanites really this socially awkward? I thought at the very least they all read The Game.

  42. Posted by Guest | February 25, 2014 at 1:09 PM

    You sure it's hard?

  43. Posted by guest | February 25, 2014 at 2:42 PM

    uh, no. GOT is actually funny.