Opening Bell: 03.24.14

Ackman’s Pershing Near Break Even on Losing Herbalife Bet (Bloomberg)
Bill Ackman is close to breaking even on his wager against Herbalife Ltd. (HLF), a trade by his Pershing Square Capital Management LP that he last month called its biggest loser, after the stock plunged following disclosure of a U.S. Federal Trade Commission investigation. Herbalife fell to a eight-month low of $49.54 on March 21, approaching the level when Ackman first put on his trade. The hedge-fund manager started what would become a $1 billion bet against the stock in May 2012, he has said, before disclosing it on Dec. 19 of that year. During that period the stock was trading at an average price of $48.58. Ackman has since restructured his Herbalife wager using long-term put options, making an exact determination of his break-even point difficult.

Tremors in the Palace of the Bond-Fund King (NYT)
William Powers, a senior executive at Pimco until 2010 and now a private equity investor, said Mr. Gross was “an autocrat” who brooked little dissent. “Those who disagree do so at their peril,” Mr. Powers said on Bloomberg TV. He added that Mr. El-Erian had improved the atmosphere at the company by establishing a more collaborative management structure, so there is reason to hope that “this sets up a very healthy future.” Laird R. Landmann, co-director of fixed-income at TCW, has worked at Pimco and has many friends there. “Bill Gross is a genius, the best there is at bond trading,” Mr. Landmann said. He added, however, that anyone who has ever worked at Pimco “will tell you that Bill is authoritarian, that there are times when you just know that you can’t talk to him.”

Macquarie Sees 2014 Net Income Climbing to Six-Year High (Bloomberg)
Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, expects its full-year earnings to rise as much as 45 percent to the highest since 2008 as the outlook for its fixed-income, currencies and commodities unit improved.

Top J.P. Morgan Executive in China Expected to Resign (WSJ)
One of J.P. Morgan Chase JPM & Co.’s top China executives is expected to resign amid a continuing probe of the U.S. bank’s Asian hiring practices, according to people familiar with the situation. It isn’t known why Fang Fang, who is chief executive for China investment banking and vice chairman of investment banking in Asia, decided to leave the largest U.S. bank after more than a decade of deal-making. He recently told the bank he wanted to retire, one of these people said.

Report: Germans seize cocaine on its way to Vatican (AP)
The drug haul was unremarkable, but the destination raised eyebrows. German weekly Bild am Sonntag reported Sunday that customs officials intercepted a cocaine shipment destined for the Vatican in January. Officers at Leipzig airport found 12 ounces of the drug packed into 14 condoms inside a shipment of cushions coming from South America. The paper says the package was simply addressed to the Vatican postal office, meaning any of the Catholic mini-state’s 800 residents could have picked it up…Neither German customs nor the Vatican could be immediately reached for comment.

Inside Fed Statement Lurks Hint on Rates (WSJ)
As Ms. Yellen put it: “The general assessment is that even after we’ve had an accommodative monetary policy for long enough to get the economy back on track in the sense of meeting our objectives, the stance of policy that will be appropriate to accomplish that will be easier or involve somewhat lower than would be normal short-term interest rates.” Put another way, the economy can’t bear a level of interest rates that looked normal in the past because it has been so deeply scarred by the financial crisis.

Venezuela Loosens Currency Regulations (WSJ)
Officials say a new currency market will launch Monday with a flexible exchange rate determined by supply and demand—a rare move out of free-market textbooks. It marks the first time in four years that businesses and individuals will have a legal channel to acquire dollars outside of government agencies. Since 2010, only the government decided who got dollars at a big discount in a cumbersome foreign-exchange system that analysts say was marred by fraud and draining state finances. Officials that year shut down a bond-swap market that was used to access hard currency after accusing it of being a haven for capitalist speculation. The move dried up the dollar supply and led the bolívar to at one point lose 90% of its value in illegal street transactions.

Ergen tries ‘email trick’ in LightSquared case (NYP)
Several weeks after wrapping up their $850 million civil trial over Ergen’s stake in the LightSquared restructuring, Ergen has introduced fresh evidence intended to bolster his position that he never schemed to mess up the company’s restructuring in a bid to gain control of LightSquared. Lawyers for Falcone and LightSquared claim Ergen has “tried to pull a rabbit out of a hat” by suddenly producing e-mails — which have been filed under seal — relating to his purchases of LightSquared debt long after the trial and discovery phase have passed. The latest evidence, which first came to light in a letter to Chapman on Tuesday, centers on “hung trades,” or the delays from when Ergen agreed to buy LightSquared’s debt from third-parties and when he would close the trades. Falcone has argued that Ergen, who was buying the debt through another entity to conceal his identity, “hung” the trades to create confusion and muddle the company’s restructuring efforts. Ergen has argued that the delays were due to other problems.

Woman Torches Car After Man Refuses To Buy Her McFlurry (HP)
Witnesses say a Florida woman gave a man’s car the ol’ gasoline-plus-fire-combo after he refused to purchase a McFlurry dessert for her at McDonald’s. Bystanders watched the unnamed pair as their argument over frozen treats escalated (something tells us there was more going on here) around 12:30 a.m. Sunday at the McDonald’s near St. Johns Bluff, WFTV reports. “Next thing you know, she says ‘I’m going to blow it up,’ and we were wondering what are you going to blow up?” witness Sabryna Maré told Action News Jax. Answer: The dude’s car. “She got something out of the car that happened to be a bottle and then she got gasoline from who knows where,” Maré explained. “Then she poured everything all over it and next thing you know there was a match and it was up in flames.” The Jacksonville Fire and Rescue arrived to put out the flaming 1994 El Dorado, but by then the suspect was gone. An investigation into the incident is ongoing.

26 comments (hidden to protect delicate sensibilities)
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Comments (26)

  1. Posted by London Banker | March 24, 2014 at 7:56 AM

    I wonder if the Vatican was more embarrassed by the attempted deliver of 12 ounces of cocaine or 14 condoms

  2. Posted by Chris Christie | March 24, 2014 at 8:29 AM

    McFlurries are declicious, but I suggest instead of blowing up cars, you create a highly orchestrated traffic jam.

  3. Posted by guest | March 24, 2014 at 8:58 AM

    That joke was funny last week.

  4. Posted by Timmy the Alter Boy | March 24, 2014 at 9:21 AM

    A shift to heavy drug use would be a welcome change from Catholic priests' previous vices

  5. Posted by investorcluzo | March 24, 2014 at 9:41 AM

    Burning a car…please, that's amateur hour. Now a house…
    -The Ghost of Left Eye

  6. Posted by Guest | March 24, 2014 at 9:43 AM

    Poor Billy Boy. Articles still flowing about his management despite his new leash on life. Worse, they dare to attack his salary.

    Bill and his Grossly 'indefensible' salary http://www.ft.com/cms/s/0/d5cd9200-b0ed-11e3-9f6f

  7. Posted by Shaz's beard | March 24, 2014 at 9:47 AM

    "SHAZZY TORCHES CTRL BUTTON AFTER COPY/PASTE FUNCTION AGAIN FAILS TO WORK BEFORE 1PM"

  8. Posted by Guest | March 24, 2014 at 9:53 AM

    Close but no cigar. Blast that Carl Icahn.

    Icahn to get three more seats on Herbalife board, shares soar http://www.reuters.com/article/2014/03/24/us-herb

  9. Posted by Guest | March 24, 2014 at 10:00 AM

    340 grams of best "Bogotan Nose Bag" in the Vatican?

  10. Posted by Guest | March 24, 2014 at 10:01 AM

    Is that holy coke story for real? If it was shipped with a package of cushions, why does it need to be packed in a condom? Why not ziplock bags? Condoms that weren't ingested or stored up the butt make the story sound like an urban myth.

  11. Posted by Ted E. | March 24, 2014 at 10:27 AM

    Great story, but bankers is not a race.

  12. Posted by J. Shazar | March 24, 2014 at 10:30 AM

    It's Sha Z.

  13. Posted by New tatt | March 24, 2014 at 10:30 AM

    Herb Life

  14. Posted by Vatican | March 24, 2014 at 11:01 AM

    Condoms? Everyone knows boys cannot get pregnant. What are they taking us for.

  15. Posted by Holy Bible | March 24, 2014 at 11:03 AM

    What, what in the butt.

  16. Posted by GeezerOilTrader | March 24, 2014 at 11:13 AM

    Hedge fund SHITBIRDS are ruining the trading vernacular again. Back in the 80s, when we were groovin to "Ass in the Pocket" by the Pretenders, you just did "a trade" …. and a "hung trade" back then was when you negotiated a deal for some table dance relief at Baby-Os with the tittie dancer with bolt ons just in from Kentucky and needing some rent money at her Greenspoint place and she was the amenable friend of the skanky waitress you were over-tipping on the company dime in order to hopefully get a clam helmet on your purple headed drill bit! I heard tell that while I was out drinking and partying at Baby-Os with the Charter and Champlin crude buyers and the PO Falco boys, their wives had a "girls night out at Winston's on North Belt. After a bunch of free liquor provided by some Aldine High School football coaches, the women began to talk about their trader husbands. One began, "My husband works for Charter and I call him the "refinery" because he has a big, hot "cat cracker". The wives giggled. "Well," said the next wife, "My husband works for PO Falco and I call him "the Barge" because he can deliver a huge load!" The wives giggled again as the Aldine football coaches listened. Finally, the last wife stated, "I call my husband "the Postman"…..he can ultimately deliver but it's usually late and in the wrong box!"

  17. Posted by Guest | March 24, 2014 at 11:29 AM

    Leather-clad S&M parties don't fuel themselves.

  18. Posted by Guest | March 24, 2014 at 11:48 AM

    Our thoughts exactly.

    -Customs

  19. Posted by Guest | March 24, 2014 at 11:53 AM

    invest in food?
    Shiller Metric Carries Warning for Stocks http://online.wsj.com/news/articles/SB10001424052

  20. Posted by KingCo | March 24, 2014 at 11:59 AM

    So a highly skilled bond trader is mercurial, authoritarian and generally crap at managing people.

    This is news?

  21. Posted by Guest | March 24, 2014 at 12:38 PM

    Ackman should demand a mf UN resolution.

  22. Posted by Battered Guest | March 24, 2014 at 12:47 PM

    Although I regret reading your comment, I think you mean "lease".

  23. Posted by Just sayin | March 24, 2014 at 1:15 PM

    Yay, Billy!

    Love,

    S&P500, +40% since you put on the HLF short

  24. Posted by Guest | March 24, 2014 at 1:22 PM

    It's all Bush's fault.

  25. Posted by Giest | March 24, 2014 at 2:56 PM

    Thanks Bonobos!

  26. Posted by Puck It | March 24, 2014 at 2:57 PM

    Shoulda waited until the Gators win the NCAAs to torch the dude's car. Then no one would think anything of it.

    —guy who loves a car-fire/weenie roast on championship night