Opening Bell: 07.07.14

A Mad Scramble for Young Bankers (NYT)
This summer, dozens of junior bankers in their early to mid-20s will start jobs in private equity after spending their first two years out of college working at investment banks. Private-equity firms use billions of dollars of cash and plenty of debt to buy entire companies. They are seen by many young strivers as the next rung on an elite career ladder, promising higher status and more pay — around $300,000 a year, including salary and bonus, roughly double what a second-year banker might earn at Goldman. But for junior bankers, who are known as analysts, securing such a job means stepping into the middle of a Wall Street struggle that has intensified since the financial crisis. The whirlwind process of interviews, which this year started in February, far earlier than many in private equity had expected, requires analysts to sneak around and often miss work. It bears little resemblance to the orderly on-campus career fairs they attended in college. “It is not a normal search process — that, certifiably, everyone would agree with,” said Adam Zoia, the chief executive of Glocap Search, one of the recruiting companies involved.

Lion Capital Said to Want Return of American Apparel CEO (Bloomberg)
Lion Capital LLP is threatening to call in a $10 million loan to American Apparel Inc. unless the retailer reinstates ousted Chief Executive Officer Dov Charney, according to a person familiar with the situation. Barring an investigation that finds illegal or immoral activities by Charney, the hedge fund believes his return would be best for American Apparel because it would stabilize the chain in the short term, said the person, who asked not to be named because the matter isn’t public.

IEX Pricing Aims to Drain ‘Dark Pools’ (WSJ)
The upstart firm will allow broker-dealers, including most Wall Street banks, to trade for free when their buy and sell orders match up on the exchange, Chief Executive Brad Katsuyama said in an interview. The desire to avoid trading fees is a primary reason many banks established dark pools in the first place. All other trades at IEX would be charged the same flat fee—nine cents per 100 shares for each buyer and seller—rather than be subject to the complex system of rebates in place at existing exchanges. As part of its “broker priority” pricing system, IEX will let broker-dealers jump to the front of the trading queue. This would put other groups, including retail investors, mutual-fund firms and high-frequency traders, at a disadvantage as it means there will be a greater chance their orders would go unfilled. IEX, which currently operates as a relatively small dark pool, is looking to make a bigger splash in the markets by becoming a stock exchange registered with the Securities and Exchange Commission. Mr. Katsuyama said IEX intends to “imminently” submit its application. With the pricing plan, Mr. Katsuyama—a protagonist of Michael Lewis’s best-selling book “Flash Boys” and a prominent critic of the current U.S. market structure—said he is trying to give the operators of dark pools an incentive to shut those trading venues down. If that happens, he said, most investors would benefit more from the reduced fragmentation in the market than they would lose by ceding the first spot in line to broker-dealers. It isn’t clear if the SEC will approve the company’s pricing structure, or if big banks will abandon their dark pools. The SEC declined to comment.

DoJ vows financial sector crackdown (FT)
The US Department of Justice will be “appropriately aggressive” and seek to bring “timely” cases, including against financial institutions, the chief of its criminal division told the Financial Times. Leslie Caldwell, who was confirmed as chief of the DoJ’s criminal division in May, is returning after a decade spent helping defend corporations against civil and criminal investigations. She said it is no accident that financial institutions are facing inquiries across their business units. “The government has gotten more sophisticated and more willing to investigate complicated fraud. We’ve learned a lot from cases that we’ve done. We have more knowledge in how to do these cases in a more timely way,” Ms Caldwell said. “We’ve seen evidence of criminal activity at a lot of financial institutions. We don’t decide which types of things we investigate. We follow the evidence where it leads.”

France not worried about U.S. probe of other banks: minister (Reuters)
France’s finance minister said on Sunday he was not worried about French banks being investigated by U.S. authorities after a record fine was imposed on BNP Paribas for violating U.S. sanctions against several countries. On Tuesday, BNP pleaded guilty in the United States to two criminal charges and agreed to pay almost $9 billion to settle accusations it violated U.S. sanctions against Sudan, Cuba and Iran. According to U.S. sources, French banks Societe Generale and Credit Agricole and Germany’s Deutsche Bank are being investigated for having potentially violated U.S. economic sanctions. Asked if he was worried about the French banks being probed, Finance Minister Michel Sapin said: “No.”

Finnish Couple Wins Wife-Carrying Race (AP)
A Finnish couple has narrowly won the 19th World Wife Carrying Championships – a quirky competition in which men race to be the fastest while carrying a female teammate. Ville Parviainen and Janette Oksman cleared the grueling 253.5 meter (278-yard) obstacle course in 63.75 seconds on Saturday, less than a second ahead of Britain’s Rich Blake Smith and Anna Marguerite Smith. Thirty-six couples from a dozen countries including Australia, Japan, and the United States took part in the race, which was held in the central Finnish municipality of Sonkajarvi, north of the capital, Helsinki. The rules stipulate that the woman must be over 17 years of age and weigh at least 49 kilograms (108 lb). Despite the event’s name couples don’t have to be married, and organizers say male contestants could “borrow a neighbor’s wife” if they didn’t have a female companion. The men can carry their teammate in various ways, though a popular method is for the woman to hang upside-down with her legs around the male contestant’s shoulders.

Lagarde Hints at Global Forecast Cut Even as U.S. Rebounds (Bloomberg)
International Monetary Fund Managing Director Christine Lagarde signaled a cut in the institution’s global growth forecasts, saying investment is still weak and that risks remain in the U.S. even as its rebound accelerates. “The global economy is gathering speed, though the pace may be a bit less than we previously predicted because the growth potential is lower and investment” spending remains lackluster, Lagarde told the Cercle des Economistes conference in Aix-en-Provence, France.

Apollo to Pay Some Deal Makers Stock for Cut of Profit (WSJ)
The New York investment firm’s executives have said in recent months that Apollo was changing its compensation structure for top executives in an effort to focus people on success of the firm’s overall business, as opposed to rewarding employees based on gains in their specific business lines or deals. In a securities filing late Thursday, Apollo confirmed that it had formalized changes to its top deal makers’ pay plans and provided a few details about the mechanics of how shares awarded as compensation would be vested, but the firm didn’t say what portion of pay would consist of stock rather than cash.

Leon Black sends invites for birthday at $45M estate (NYP)
The former Drexel chief is turning 63 and has an estate on Meadow Lane, known as billionaire’s row, where he calls David Koch and Calvin Klein neighbor.

If Convicted, Rengan Rajaratnam Faces Light Insider Trading Sentence (Dealbook)
Now that a federal judge has dismissed the two most serious charges against Rengan Rajaratnam, a 43-year-old former trader, legal experts said that he could get as little as just a few months in prison if he is convicted on the conspiracy count. The legal experts, who did not want to be identified because they have some familiarity with the criminal case, said the problem facing prosecutors is that the bulk of the conspiracy charge rests on an attempt to get inside information for a stock trade in 2008 that ultimately lost money for Rengan Rajaratnam and his older brother’s hedge fund, the Galleon Group.

A once-sunk industry floats again (CNBC)
The boat business sank during the recession, but it is starting to float again as new boat sales eclipse sales of more cost-conscious, pre-owned ones. “I think the boating industry is seeing the light at the end of the tunnel,” said Ryan Kloppe, a national marine sales manager at market researcher Statistical Surveys. But the industry is not out of the hole just yet. In 2005, the year Fountain Powerboats CEO John Walker refers to as “the golden days,” there were 404,000 new boat registrations, according to Statistical Surveys. By 2010, registrations dropped to 184,766. Since that low, the registrations climbed each year, reaching 205,000 in 2013. Registrations are used as a proxy number for sales since all new boats must be legally registered.

Nathan’s hot dog eating contest: Joey Chestnut wins, proposes (AP)
High-ranking chowhound Joey “Jaws” Chestnut dropped to one knee and proposed to his longtime girlfriend before Friday’s annual Nathan’s hot dog eating contest, then packed away 61 franks and buns to hold onto his coveted mustard yellow winner’s belt. The San Jose, Calif., man fell far short of his record last year of 69 dogs and buns, but he still easily beat second-place finisher Matt Stonie, also of San Jose, who downed just 56. Chestnut, 30, took a quick timeout before the annual Nathan’s Famous Fourth of July Hot Dog Eating Contest at Coney Island to make it official with his longtime girlfriend, Neslie Ricasa, who is also a competitive eater.

16 comments (hidden to protect delicate sensibilities)
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Comments (16)

  1. Posted by ThatsWacc | July 7, 2014 at 8:19 AM

    In regards to the Chestnut proposal, will this be the first marriage in history where the husband has swallowed more wieners than the wife?

  2. Posted by InfiniteGuest | July 7, 2014 at 8:29 AM

    What happens in Sonkajarvi stays in Sonkajarvi.

  3. Posted by guest | July 7, 2014 at 8:44 AM

    "organizers say male contestants could “borrow a neighbor’s wife” if they didn’t have a female companion."

    sounds about right.

  4. Posted by nobankevar | July 7, 2014 at 8:47 AM

    Here's an idea: you know that thing we spend $20mm developing and supporting over the years that's a net positive for us and our customers and gives us control over order flow? Let's toss that in the trash and give all of our business to some schmuck canadian who called us all theives and morons.

  5. Posted by guest | July 7, 2014 at 8:53 AM

    The men can carry their teammate in various ways, though a popular method is for the woman to hang upside-down with her legs around the male contestant’s shoulders.

    go on.

  6. Posted by Quant me maybe... | July 7, 2014 at 8:55 AM

    No, Liza Minnelli's husband holds that record.

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

    That is the standard Estonian position, no big deal.

    -J Gundlach

  8. Posted by Huntelaar | July 7, 2014 at 9:54 AM

    Remember your training
    Remember your opsex

  9. Posted by Wendy | July 7, 2014 at 10:27 AM

    no such thing as a free lunch. they've got to make their money somehow. plus, why doesn't the sec just ban dark pools and push biz and transparency back to the exchanges.

  10. Posted by Guest | July 7, 2014 at 10:28 AM

    Mad Scramble for Young Psychopaths.

  11. Posted by Guest | July 7, 2014 at 10:42 AM

    Yeah I'm sure the big banks would be totally cool with banning dark pools because one Canadian guy says he can do it better and more transparently.

  12. Posted by nobankevar | July 7, 2014 at 10:44 AM

    If the exchanges did their jobs in the first place these things would never exist.

    "If Woody had gone straight to the police, this would never have happened…"

  13. Posted by Guest | July 7, 2014 at 10:45 AM

    IEX is a dark pool as of now, FYI

  14. Posted by Narcissus Bellicose | July 7, 2014 at 10:51 AM

    Our new 'virtual worker' app will let you shop for jobs while our customer service team will blow critical deals, sexually harass your co-workers, get drunk at lunch, and generally maintain your veneer of professionalism.

  15. Posted by Guest | July 7, 2014 at 11:45 AM

    Take my wife. Please.

    – The one Jew in Finland

  16. Posted by Borf | July 7, 2014 at 12:08 PM

    Settle down Chongo.