Opening Bell: 03.03.14

Losses Mobilize The Bitcoin Police (WSJ)
So far, U.S. financial regulators have avoided stepping into the fray. But they are trying to determine whether their oversight extends to bitcoin, according to government officials. Some, like the Federal Reserve, have indicated they can’t oversee bitcoin without legislative action. Fed Chairwoman Janet Yellen said at a Senate hearing last week that the central bank doesn’t have the authority to regulate bitcoin as long as the currency remains separate from the banking system the Fed oversees. Other regulators, including the Federal Trade Commission, appear more inclined to act. “Consumer protections with virtual currencies, to the extent they exist at all, are in no way comparable to the protections” for credit cards or other traditional payment methods, said Lois C. Greisman, associate director of the Federal Trade Commission’s division of marketing practices, in an interview.

Britain to scrap VAT on Bitcoin trades (FT)
Britain’s tax authority plans to ditch value added tax on Bitcoin trading only days after the collapse of Mt Gox, one of the virtual currency’s leading exchanges, losing almost $500m of customer deposits. The UK’s welcoming approach to Bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering as well as its notoriety for wide fluctuations in value.

Mexican Police Question Citigroup Employee Over Alleged Fraud (WSJ)
Mexican police questioned a Citigroup Inc. C -0.12% employee suspected of participating in the alleged theft of $400 million from the bank, according to a person familiar with the matter. The employee, described by the person familiar with the matter as junior at the company, worked for the bank’s Mexico unit, Banco Nacional de Mexico, or Banamex. The employee isn’t currently in police custody, the person added. It wasn’t clear whether the person is still working for Citigroup or when the questioning occurred.

Buffett Sets Fresh Goal as Berkshire Misses Five-Year Target (Bloomberg)
Warren Buffett said his performance at Berkshire Hathaway Inc. should be measured over the course of stock market cycles after missing a five-year target for the first time. Berkshire’s net worth failed to rise as much as the Standard & Poor’s 500 Index from the end of 2008 through 2013, the company’s annual report showed yesterday. It was the only five-year period that happened since Buffett took control in 1965. Still, the billionaire Berkshire chairman and chief executive officer said he can beat the index over equity market cycles, like he did in the six-year period that ended Dec. 31. “Through full cycles in future years, we expect to do that again,” Buffett wrote in the report. “If we fail to do so, we will not have earned our pay.”

Warren Buffett admits to $873 million mistake (CNBC)
Unlike the contents of its stock portfolio that must be filed with the SEC four times a year, Berkshire doesn’t have to publicly disclose its debt holdings. In his letter to shareholders released Saturday, however, Buffett admitted to a money-losing bond buy involving Energy Future Holdings. “Most of you have never heard” of the company, he wrote. “Consider yourselves lucky; I certainly wish I hadn’t.” Buffett said he decided to buy about $2 billion of EFH’s debt when it was created in 2007 as part of a leveraged buyout of Texas electric utility assets. He made that decision “without consulting with (business partner) Charlie (Munger). That was a big mistake.” Buffett wrote that unless there’s a big increase in natural gas prices, the company will “almost certainly” file for bankruptcy protection this year. Last year, Berkshire sold the bonds for $259 million. Adding back the $837 million received in cash interest, Buffett’s decision produced a pre-tax loss of $873 million. “Next time,” Buffett promised, “I’ll call Charlie.”

‘Flushable’ wipes clogging up drains citywide (NYP)
Sales of wipes have soared to $6 billion a year, with advertisers claiming the products are the best way to get clean — and safe to toss in the toilet. But the messy truth, say consumers like Dr. Joseph Kurtz of Flatbush, who is suing the makers of Cottonelle and Costco-brand wipes in Brooklyn federal court, is that “flushable” wipes aren’t really flushable. “They do not break down as manufacturers advertise,” according to the class-action suit filed by Kurtz. The 35-year-old, who used the products in his Brooklyn and New Jersey homes last summer, was forced to spend $600 on plumbers to clear his backed-up pipes, lawyer Mark Reich said.

Schwarzman of Blackstone Made $375 Million in 2013 (Dealbook)
Mr. Schwarzman, 67, earned a salary of $350,000 and did not take a bonus, the filing showed. He earned carried interest — his share of Blackstone’s investment profits — of $21.6 million. But he made most of his money from his partnership units, collecting $352.5 million. Separately from that compensation, Mr. Schwarzman received $78.2 million from his personal investments in Blackstone’s funds. Including that would bring his total earnings to $452.7 million. The second in command at Blackstone, Hamilton E. James, who is known as Tony, made $99 million, the filing shows. That includes dividends on his partnership units and common units, as well as his salary, bonus and share of carried interest. Mr. James got $15.7 million from his investments in Blackstone’s funds.

Goldman Sachs Head Hunts in Australia to Meet Fixed-Income Surge (Bloomberg)
Goldman Sachs is in hiring talks with about 10 people as it seeks to expand Australian businesses from trading to capital markets with global banking regulation forcing some competitors to dial back. Australian fixed-income trading is the firm’s biggest growth area after moving its rates and credit derivatives businesses to Sydney from Hong Kong, said Simon Rothery, chief executive officer for Australia and New Zealand at Goldman. Rothery sees opportunities to arrange debt offerings as competition eases, and also wants to gain the top spot in Australian equity capital markets after naming Sean Walsh to head the unit and adding UBS AG’s Sarah Rennie and Bank of America Merrill Lynch’s Belinda Sara in the past 1 1/2 years.

GrubHub’s Official IPO Filing Suggests a Company With an Appetite (BusinessWeek)
GrubHub, which operates the online delivery software for restaurants, is by far the largest in its cohort of delivery middlemen. The company works with about 29,000 restaurants and brought in $137 million in revenue on $1.3 billion in gross food sales last year. But as it’s grown, GrubHub has become less profitable. In 2013 its profit was less than half what it was two years earlier, and its technology and operational costs are growing faster than its revenue.

Artists create ice cream that plays a melody when licked (NYDN)
The brainchild of food designer Emilie Baltz and smart object designer Carla Diana, the interactive food is placed in a cup that sits inside a plastic cone featuring capacitive sensors embedded within it. The sensors can perceive when ice cream in the cup is touched. When a tongue makes contact with the ice cream, a signal is sent to an electronic board and then to a computer with stored sound loops of melodies and beats. Licking the ice cream in different ways produces different sounds.

47 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (47)

  1. Posted by Quant me maybe ... | March 3, 2014 at 8:26 AM

    RE: Artists create ice cream that plays a melody when licked

    >I can think of something else that should play a melody when it's licked.

    >> And I bet there's a lot more money in that application.

  2. Posted by SAC Back Office | March 3, 2014 at 9:30 AM

    Shaz quoted by Icahn.

    Take a bow, sonny. You are moving….up?

  3. Posted by Ted E. | March 3, 2014 at 9:34 AM

    If giving kids more incentive to eat ice cream is the answer, what was the question?

  4. Posted by Swisshedge | March 3, 2014 at 9:50 AM

    cunnilingus training ….

  5. Posted by Guest | March 3, 2014 at 9:55 AM

    Icahn's use of "eloquently" definitely sent him to the dictionary though.

  6. Posted by he's old | March 3, 2014 at 9:59 AM

    Icahn strikes me as the type of guy who would quote an Onion article in support of his argument

  7. Posted by guest | March 3, 2014 at 10:02 AM

    So all I have to do now when the Mr Softee tune is played is run to the kitchen table?

  8. Posted by Guest | March 3, 2014 at 10:04 AM

    Time to start my bidet installation company.

  9. Posted by HotKarl | March 3, 2014 at 10:07 AM

    How about wiping my ass with Dick Bove and Meredith Whitney paper research reports? Do those clog the pipes?

  10. Posted by guest | March 3, 2014 at 10:08 AM

    at least buffett has outperforms gross

  11. Posted by guest | March 3, 2014 at 10:14 AM

    so the Ukrainian coup d'état was put on to help Energy Future Holdings?

  12. Posted by VonSloneker | March 3, 2014 at 10:15 AM

    "Furiously [and maniaically]…"


    – Ed.

  13. Posted by guest | March 3, 2014 at 10:41 AM

    12 years and dallas buyers are both great films. but why do black movie stars get stronger (and or standing) applause than white peers? why is there a condescending (white-guilt) false assumption that black people winning awards went through some deep struggles? the black actress is the daughter of a wealthy, uchicago educated african guy — herself a yale grad. mcqueen fabricated early childhood struggle, when he actually attended fantastic schools his entire life, both in england and the u.s. (nyu).

    taking your mom to the oscars is lame. it doesn't make you a nice guy, mr dicaprio and mr leto. we know your best acting of the year took place after the show, when you did your best tony montana impression as you dove face first into a harvey weinstein supplied mountain of el chapo's choicest.

    matthew mcconaughey is awesome.

    ellen has morphed into ryan seacrest. unfunny, filthy rich and completely full of herself.

    anne hathaway you are gross. please go be a weird and creepy teach for america art teacher from vassar who gets too involved in the family life of the 8-year olds she teaches to finger paint. also, drive a saab and stalk the married principal.

  14. Posted by Homelife | March 3, 2014 at 10:44 AM

    Or tell your GF it happens to everybody again..

  15. Posted by Guest | March 3, 2014 at 10:44 AM

    Um. What?

  16. Posted by guest | March 3, 2014 at 10:57 AM

    I don't believe anne hathaway has ever had an orgasm that wasn't self administered.

  17. Posted by Guest | March 3, 2014 at 10:58 AM

    A quick google search in 86 years of Oscar's :

    "Lupita Nyong'o's for Best Supporting Actress…sixth black actress to have won in that category"

    "there have only been four black Oscar lead actor winners (Sidney Poitier, 1963, Denzel Washington, 2001, Jamie Foxx, 2004, and Forest Whitaker, 2006),"

    & of course

    "Steve McQueen became the first black director to win an Oscar"

    That's why

  18. Posted by Pussy Melody Fund GP | March 3, 2014 at 11:18 AM

    In related news, we're proud to announce the formation of DoubleLine Venture Partners…

  19. Posted by Facts | March 3, 2014 at 11:19 AM

    Hey, being compared to an Onion article is still pretty absurdly high praise for the Shazman

  20. Posted by Guest | March 3, 2014 at 11:26 AM

    Considering how much they complain we might as well put them back into slavery. They can get free healthcare now.

  21. Posted by Guest | March 3, 2014 at 11:39 AM

    in the ass!

  22. Posted by Zeeeeero hudge | March 3, 2014 at 11:47 AM

    “Most of you have never heard” of the company, he wrote. “Consider yourselves lucky; I certainly wish I hadn’t.”

  23. Posted by Tiny wee wee | March 3, 2014 at 11:50 AM

    is this Storm front?

  24. Posted by Reality guy | March 3, 2014 at 11:54 AM

    You wish you could smell hers. No go wank off to your long SPY position

  25. Posted by Wire | March 3, 2014 at 12:12 PM

    I once had a colleague support her argument by citing the Urban Dictionary. On the one hand I respected it. But then I realized she had no idea what the Urban Dictionary was.

  26. Posted by Anne H | March 3, 2014 at 12:15 PM

    Thanks dad! Do you want sushy or chili for dinner tonight?

  27. Posted by VonSloneker | March 3, 2014 at 12:26 PM

    I justify my fee by allowing you to be seen having lunch with a devastatingly handsome man four times a year. You get your money run sure, but the guaranteed seat at the cool kid table four times a year…

    – J. Tripper, Founder & CEO, Regal Beagle – Registered Investment Advisers

  28. Posted by Guest | March 3, 2014 at 12:35 PM

    What we think? That you and your retail broker spam should go fuck themselves. You're trying to sell to us? You, sir, are no Bonobos.

  29. Posted by guest | March 3, 2014 at 12:46 PM

    you strike me as the kind of guy who is panicking about not being able to make shazar jokes anymore.

  30. Posted by Big boi | March 3, 2014 at 12:46 PM

    Harsh, but legitimate.

  31. Posted by guest | March 3, 2014 at 12:47 PM

    you're a fucking idiot

  32. Posted by guest | March 3, 2014 at 12:48 PM

    are you some kind of halfwit?

  33. Posted by La Familia Shaz | March 3, 2014 at 12:54 PM

    You strike me as likely being Shaz's mom and/or dad

  34. Posted by Irene | March 3, 2014 at 1:09 PM

    Too much of the wrong type of cheese, bucko

  35. Posted by Guest | March 3, 2014 at 1:13 PM

    What's the best case scenario for the flushable wipes guy? You sue and get $600 and then have lawyer fees and the time you wasted?

  36. Posted by TheTruth | March 3, 2014 at 1:14 PM

    Hipster hate for Hathaway is probably what the cool kids are doing, but you'll never get anything remotely close to that good without paying for it.

  37. Posted by Laxbro's dad | March 3, 2014 at 1:34 PM

    For some reason you seem to think that 'not paying for it' is better than 'paying for it'.

  38. Posted by Your Mom | March 3, 2014 at 1:52 PM

    Well done, Jon

  39. Posted by Guest | March 3, 2014 at 1:52 PM


    – Shaz's mom

  40. Posted by PlumberRus | March 3, 2014 at 2:09 PM

    $600? Why because he was stupid enough to call a plumber?

    Sulfuric acid:

    "Acid drain cleaners usually contain concentrated sulfuric acid (sulphuric acid).[1] It can dissolve proteins and fats via hydrolysis and since concentrated sulfuric acid also has a strong dehydrating property, it readily dissolves tissue paper inside pipes through dehydration as well." Wikipedia

    Cost: under $30.

    What do you think the plumber used?

  41. Posted by Guest | March 3, 2014 at 2:21 PM


  42. Posted by guest | March 3, 2014 at 2:45 PM

    if hathaway was your barista you not only wouldn't tip her (pretend to only carry plastic) you wouldn't think twice about yelling at her for making a heavy cappuccino. chick is disgusting.

  43. Posted by Ted E. | March 3, 2014 at 3:58 PM

    Well sure, but selling non-disposable toilet paper is a fucking nuisance, and the manufacturers should be shot. Also, if he gets class action he might make a pretty penny.

  44. Posted by trend guy | March 3, 2014 at 4:51 PM

    is that like a new catch phrase !

  45. Posted by Haha what a douche | March 3, 2014 at 6:00 PM

    you tip your barista?

  46. Posted by PlumberRus | March 3, 2014 at 6:08 PM

    So he was charged not only for clearing the sewage pipes, but the plumber's pipes, as well?

  47. Posted by Ede T. | March 3, 2014 at 6:14 PM

    The "flushable wipes" were disposable. That would be weird if they weren't–walk into someone's home with stacks and stacks of used flushable wipes piled up. However, in that case, then this particular consumer, and others like him, would just look stupid for continuing to buy non-disposable "flushable wipes".

    On the other hand, I am not an attorney.