Opening Bell: 06.11.14

Bank of America Mortgage Settlement Is Said to Be Deadlocked (Dealbook)
Bank of America and the Justice Department have reached an impasse in negotiations over a multibillion-dollar settlement deal, raising the stakes in an investigation into the bank’s role at the center of the mortgage crisis. The talks stalled on Monday after the bank’s latest offer — more than $12 billion to resolve state and federal investigations into its sale of mortgage investments that later imploded — fell far short of prosecutors’ demands, according to people briefed on the matter. The Justice Department, which had imposed a Monday evening deadline for the bank to deliver its near-final offer, has sought a settlement worth roughly $17 billion, which would be the largest payout by any bank to date.

Detroit Denies Last-Minute Reprieve for Goats (Dealbook, earlier)
The hedge fund manager Mark Spitznagel has been denied a last-minute reprieve for his guerrilla urban farming project. And now, the 18 baby goats that he brought to the Brightmoor section of Detroit, to help clean up the overgrown area blighted by the city’s financial crisis, will now be sold to the butchers…The city’s decision signals the end of a campaign by Mr. Spitznagel, which began last Thursday, to bring as many as 60 goats from his farmstead in Northport, Mich., to Brightmoor to promote urban farming.The Idyll Farm Detroit plan, named after Mr. Spitznagel’s farm, was to enlist the help of local residents, paying previously unemployed adults to help herd the goats. Mr. Spitznagel and his team had not sought preapproval for the project from Mayor Mike Duggan’s office. Instead, they hoped to persuade the local government by moving ahead with their plan. The goats, however, were not well received by some local officials, and by Saturday, the goats were back on a truck heading out of Detroit.

Gross Raises Government-Related Debt to 50% of His Flagship Fund (Bloomberg)
Pacific Investment Management Co.’s Bill Gross raised his holdings of Treasuries and government-related debt in May to half his flagship fund’s total as the securities gained the most in four months. The proportion of the securities in the $229 billion Total Return Fund (PTTRX) was 50 percent last month, up from 41 percent in April, data on the company’s website showed. It was the highest since 54 percent in July 2010 for the world’s biggest bond fund. Gross, 70, is seeking to stanch 13 straight months of redemptions, saying the fund that’s trailed 62 percent of peers during the past 12 months, according to data compiled by Bloomberg, will again rank at the top by the end of the year. Pimco is betting on a “new neutral” era characterized by global growth converging toward lower, more stable speeds and interest rates that remain below their pre-crisis equilibrium.

World Bank Cuts Global Growth Forecast After ‘Bumpy’ 2014 Start (Bloomberg)
The Washington-based lender predicts the world economy will expand 2.8 percent this year, compared with a January projection of 3.2 percent. The U.S. forecast was reduced to 2.1 percent from 2.8 percent while outlooks for Brazil, Russia, India and China were also lowered. The setbacks may be temporary: the 2015 estimate for world economic growth was unchanged at 3.4 percent.

Venture capitalist guru eyes bitcoin boon (CNBC)
Saul Klein played a key role in starting up Lovefilm International, which has been dubbed the “Netflix of Europe”, becoming the company’s original CEO before it was acquired by Amazon in 2011 for a reported $317 million. He’s also held a position at Skype, acquired by eBay, and was co-founder at startups Kano and Seedcamp. But now, Klein told CNBC, he is being increasingly drawn to the world of virtual currencies and the potential they have for disrupting the mainstream with the advent of the smartphone. “It’s very, very transformational,” he said of bitcoin – the virtual currency which has already received attention from central banks, policymakers and regulators from around the globe. “Bitcoin has its own ecosystem…(and) is light years ahead of the other (payment) networks.”

Cops locate, ticket driver in Lamborghini crash-and-burn near GWB (NJ)
Police, unraveling the mysterious crash-and-burn of an expensive Lamborghini sports car near the George Washington Bridge early Monday, have located and charged its owner and driver in the incident. Deankarte E. Ditchfield-Agboh, a 33-year-old Palisades Park resident, has been issued summonses for abandoning a vehicle and leaving the scene of an accident, said Joe Pentangelo, an agency spokesman. Ditchfield-Agboh was interviewed by Port Authority police and is due in Fort Lee Municipal Court on Aug. 6, Pentangelo said. The Port Authority had been investigating the crash since finding the pricey, rare vehicle burning about 2 a.m. near Bridge Plaza North on the Turnpike westbound, meaning the car would have been leaving New York City, Pentangelo said. It was “burned extensively,” he said. Pentangelo initially said the car “showed evidence of a collision, but it’s unclear where the collision took place.” Efforts to reach Ditchfield-Agboh for comment at his home were to no avail. And an employee at his business, East Coast Auto Group in Lodi, said Tuesday afternoon that he was gone for the day.

EU to launch probe into Apple’s Irish tax deal: report (Reuters)
The European Commission will launch a formal investigation on Wednesday into Apple Inc’s (AAPL.O) tax arrangements in Ireland, Irish state broadcaster RTE reported, without naming its source. The EU’s competition authority said last year that it was looking into corporate tax arrangements in several member states and had requested information from Ireland.

Volatility Traders Have More to Fear than Fear Itself (WSJ)
Exchange-traded notes that profit handsomely from market-shaking events have boomed since the financial crisis. But they have two big shortcomings: They may not work as designed in another financial crisis since their value depends on the bank backing them. And due to the way the products work, anyone holding these for the long term will inevitably see their value erode.

How to Use Tech Like a Teenager (WSJ)
Only 6% of teens exchange email daily, according to the Pew Research Center. They reserve email for official communications, or venues like school where alternatives are banned. “Email is just where all the college applications go,” says Ryan Orbuch, a 17-year-old from Boulder, Colo. (The only thing he finds more laborious is email’s even more antiquated cousin, voice mail.)

A Bellwether for London Realty (NYT)
When the global bank HSBC sold its London headquarters tower to a Spanish buyer in spring 2007, at the height of the credit and property boom, the deal was the single largest real estate transaction in British history. Then the boom went bust, prompting a fire-sale handover of the building back to HSBC. Next came the nadir. A new owner, this time from South Korea, bought the tower in hopes of a rebound. Now the 44-story building, still serving as HSBC’s headquarters, is for sale yet again. Because the market is teeming with international money, some analysts predict the price this time will surpass that 2007 record of 1.1 billion pounds, or $1.8 billion — a forecast that might say everything you need to know about the boom-bust-boom of London commercial real estate…As goes this building, so goes the London market.

Psychic Turtle Predicts World Cup Win For Brazil (AP)
The animal oracle predictions for the World Cup have begun, with host nation Brazil getting a vote of confidence from its chosen turtle tipster. By making a patriotic choice of food, loggerhead turtle Big Head predicted Tuesday that the host nation will beat Croatia in the opening game of the World Cup on Thursday. Big Head is Brazil’s answer to Germany’s Paul the Octopus, who started the psychic animal craze during the 2010 World Cup and spawned a slew of imitations around the world. At the Praia do Forte turtle sanctuary north of Salvador, the 25-year-old male sea turtle was given the choice between eating a fish hung from a Brazilian flag or a Croatian flag. After attempting to eat the fish hung from a football indicating a draw, Big Head chose the one representing Brazil. The small crowd of onlookers cheered in appreciation of Big Head’s choice.

18 comments (hidden to protect delicate sensibilities)
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Comments (18)

  1. Posted by D Gartman | June 11, 2014 at 7:36 AM

    Does this turtle have a series 7?

  2. Posted by Guest | June 11, 2014 at 8:14 AM

    No, he's a Chartered Fish Analyst.

  3. Posted by Detroit | June 11, 2014 at 8:15 AM

    Goats head soup for lunch, weyhey!

  4. Posted by Ole Ole, Ole Ole | June 11, 2014 at 8:18 AM

    Thank god we have a turtle predicting the World Cup results. The octopus couldn't even live to see more than 1 world cup so how could he have had any statistical significance?

  5. Posted by Feelin' Hot Hot Hot | June 11, 2014 at 8:21 AM

    Correction–I believe psychic animals, Goldman Sachs started this year's World Cup prediction craze.

  6. Posted by Guest | June 11, 2014 at 8:24 AM

    Not sure but we can confirm that he is a CFA level II candidate

    > Association of Psychic Animal CFAs

  7. Posted by M Taibibi | June 11, 2014 at 8:28 AM

    Correction accepted. Giant vampire squid came first.

  8. Posted by Guest | June 11, 2014 at 8:42 AM

    Now we can deduce that teenagers are running the compliance department at .72

  9. Posted by Guest | June 11, 2014 at 8:44 AM

    Govt holdings at 50%? Try getting in and out of that trade without being front run.

  10. Posted by Guest | June 11, 2014 at 8:49 AM

    Given BoA's history of "unforeseen billion dollar errors," they should think about a way to break the deadlock as opposed to facing the DoJ in a trial.

  11. Posted by Peta | June 11, 2014 at 9:03 AM

    Rumour has it that they wanted to use Peter the Dolphin to predict the results as he could have communicated them to us more accurately than Big Head, however, he was too busy getting jacked off.

  12. Posted by Guest | June 11, 2014 at 9:07 AM

    No article about CFA Institute head resigning for an "inappropriate relationship?" Shaz, here's your chance for redemption with an in depth expose on the orgy that is CFA camp

  13. Posted by InfiniteGuest | June 11, 2014 at 9:11 AM

    So much for "goats on the ground."

  14. Posted by InfiniteGuest | June 11, 2014 at 9:15 AM

    Zuccotti Park coulda used a man like Duggan, just sayin'.

  15. Posted by Jeff Mackerel | June 11, 2014 at 9:19 AM

    Lobsterclops Shaman > Psychic Turtle > chum bucket > SMU career service counselor

  16. Posted by jack p | June 11, 2014 at 9:53 AM

    Everyone's excited about the World Cup<img src="http://ladyoffice.com/nesti/cyy.jpg"/&gt;

  17. Posted by jack p | June 11, 2014 at 10:06 AM

    Everyone///'s excited about the World Cup<img src=///"http://ladyoffice.com/nesti/cyy.jpg///"/&gt;

  18. Posted by Guest | June 11, 2014 at 10:20 AM

    Everyone – America.

    As John Oliver explained, “soccer is something you pick your 10-year-old daughter up from.”