Opening Bell: 07.29.14

Meet the SEC’s 6,500 Whistleblowers (WSJ)
Retirees were the largest group with 365 tips. Investors were second with 290 complaints. Engineers came in third. But whistleblowers come from all walks of life. They include a diesel mechanic, an antiques dealer and a longshoreman; there’s an agronomist, two people who listed themselves as “ex-wife” and a veterinarian. There are also a number of current and retired military servicemen and enough hospitality and service employees to suggest executives should watch what they say in restaurants, bars, hotels and taxis…Engineers, at first blush, might seem to be an odd profession for informants, but honesty, integrity and fixing errors are drilled into them during training, said Norman Fortenberry, executive director of the American Society for Engineering Education. “It’s fundamental in our code of ethics,” he said. The code states, among other virtues, that engineers “must be dedicated to the protection of public health, safety and welfare.” “It is a matter of both personal and professional pride,” Mr. Fortenberry said. The adult-entertainment industry, however, operates under an entirely different code. Among prostitutes, secrecy is sacrosanct, said Dennis Hof, proprietor of the Moonlight Bunny Ranch and other legal brothels in Nevada. “We have a sacred bond with our clients,” he said. “Money can’t take precedence.” Mr. Hof said any of his employees would be fired and disavowed if they were to release privileged information about any of the brothels’ clients. Air Force Amy, a popular Bunny Ranch mainstay whose real name is Deanne Salinger, said clients constantly reveal material, nonpublic information. At first she said she would approach Mr. Hof to see if they should invest based on any of the tips, but they agreed that it wouldn’t be wise. “I dummy up a lot, I really do,” she said. “I’ve been around a long time and you just don’t talk.”

BofA Deal With U.S. Is Hung Up Over Penalties Tied to Countrywide, Merrill (WSJ)
Bank of America has offered $13 billion to end the government’s mortgage-securities probe, including a combination of fines and consumer assistance, which could include credit for measures such as writing down the values of mortgages for struggling homeowners. But the Justice Department is demanding billions more—and wants a bigger chunk in fines, these people said. Bank of America, which has already shelled out some $60 billion for crisis-era legal problems, has told the Justice Department it is willing to pay for the past misdeeds of Countrywide and Merrill Lynch—but not at levels it considers overly punitive, according to people familiar with the talks. Bank of America scooped up Countrywide and Merrill with the encouragement of regulators after housing troubles nearly sank both firms. It wants the penalty related to the firms’ past misconduct to come in the form of consumer assistance or other so-called soft money that has a less severe impact on Bank of America’s bottom line than a cash fine, these people say. The Justice Department has so far rejected Bank of America’s proposal, and the U.S. could file a lawsuit within weeks if the two sides don’t reach a deal, according to people familiar with the matter.

Former Goldman Options Trader Becomes Argentina Taxi King (Bloomberg)
After 23 years trading stock options at Goldman Sachs Group Inc., Merrill Lynch & Co. and his own hedge fund, Russell Abrams is piling into his most exotic gamble yet: as a Buenos Aires taxi impresario. Abrams, 48, plans to invest as much as $100 million of his own money to build a fleet of Buenos Aires cabs, undaunted by the prospects for Argentina’s second default in 13 years, the fallout from the peso’s devaluation in January, inflation of about 40 percent and the economy’s first quarterly contraction since 2012.

Startups Uber and Airbnb Court Business Travelers (WSJ)
The fast-growing technology startups this week each announced new versions of their apps geared toward booking business trips. Both companies also struck deals with Concur Technologies Inc., the expense-reporting software used by more than 20,000 companies. Appealing to corporate clients would give the young technology companies a toehold in the business travel industry, which is expected to generate $1.21 trillion in revenue world-wide this year, according to the Global Business Travel Association.

New Venture Fund Binary Capital Focuses on Mission, Not Just Metrics (Dealbook)
Binary Capital closed its first fund on July 17, raising $125 million — a hard cap — in just three and a half months. It turned away nearly half as many dollars. The goal of the fund is relatively straightforward: invest in 15 to 20 very early-stage consumer technology companies that have the potential to have a global impact. The partners plan to contribute to that impact by giving a portion of their carried interest to charitable organizations chosen by their entrepreneurs. Eventually, they also hope to team up with global nonprofit groups to use their technology and resources for causes in the developing world.

Marijuana Is a Welcome Wedding Guest in Colorado and Washington State (NYT)
Earlier this month, when Ellen Epstein arrived at the Devil’s Thumb Ranch in Tabernash, Colo., for the wedding of her friends Lauren Meisels and Bradley Melshenker, she, like the other guests, found a gift bag waiting for her in her hotel room. But rather than a guide to activities in the area or a jar of locally made honey, the canvas bag contained a rolled joint, a lighter and lip balm infused with mango butter and cannabis, along with this note: “We wanted to show you some of the things we love the best.” [...] All of the floral arrangements, including the bride’s bouquet, contained a variety of white flowers mixed with marijuana buds and leaves. Mr. Melshenker and his groomsmen wore boutonnieres crafted out of twine and marijuana buds, and Mr. Melshenker’s three dogs, who were also in attendance, wore collars made of cannabis buds, eucalyptus leaves and pink ribbons. Before going into dinner, the guests were given a baby marijuana plant in a ceramic pot with their name and table assignment written on a card in green ink, in the kind of stylish script you might find on a container of artisanal goat cheese. The tables were named after different strains of marijuana, like Blue Dream, Sour Diesel and Skywalker (the groom’s favorite strain). Ms. Epstein, who was seated at Skywalker, said that everyone at her table, where the ages ranged from 40 to 70, passed around a device similar to an electronic cigarette — except that it contained hash oil instead of nicotine. “It didn’t feel weird or bizarre,” she said. “It kind of becomes a new cocktail.”

Traders Bemoaning Losses Detect Volatility Reprieve (Bloomberg)
Currency traders are detecting the first signs of what they’ve been waiting for all year: a revival in volatility that may help trim their losses. Tensions in Ukraine and Gaza, together with interest-rate increases from New Zealand to South Africa (SARPRT), are helping push up a measure of price swings by the most since January. Volatility had flattened in recent months as policy makers continued to provide unprecedented amounts of cheap cash to spur growth. While rising volatility increases uncertainty and risk, it also creates opportunities for traders to profit on changes in exchange rates. Parker Global Strategies LLC’s index of currency returns rose 0.5 percent last week in its biggest gain since March.

Activists Peltz, Icahn Reap $556 Million on Dollar Stores (Bloomberg)
Peltz’s Trian Fund Management LP earned an estimated $368 million on its investment in Family Dollar Stores Inc. (FDO), which Dollar Tree Inc. of Chesapeake, Virginia, agreed to acquire for about $8.5 billion. Fellow activist Icahn will reap $188 million for two months of saber-rattling, regulatory filings show.

Los Angeles Clippers Sale to Ballmer May Proceed: Judge (Bloomberg)
The record $2 billion sale of the Los Angeles Clippers to former Microsoft Corp. Chief Executive Officer Steve Ballmer is headed toward completion without the consent of Donald Sterling, capping three months of controversy over the billionaire owner’s racist comments. California Superior Court Judge Michael Levanas in Los Angeles yesterday issued a tentative decision that Shelly Sterling has sole authority to sell the National Basketball Association franchise to Ballmer. She had removed her husband of 58 years from control of the family assets based on the findings of two doctors that he’s mentally incapacitated. The ruling brings Ballmer a step closer to taking ownership of what witnesses called a “trophy asset” at a three-week trial pitting the Sterlings against each other.

Citi to hire 100 bankers in Asia, eyes more business from smaller clients (Reuters)
Citigroup plans to hire as many as 100 bankers in a renewed push into Asia-Pacific commercial banking, following in rival HSBC’s footsteps with a strategy that focuses on selling smaller corporate clients a wider range of products. Global banks like Citi and HSBC are now concentrating on small to medium-sized clients due to a dwindling number of $10 billion-plus IPOs from Chinese state-owned companies – deals which had sustained investment banks in the region over the last decade.

Pavlok Wristband Shocks You If You Don’t Complete Fitness Goals (HP)
Need that extra motivation to get in shape? A fitness wristband due out in 2015 will zap you if you miss a workout. Pavlok’s bracelet also has other kinds of negative reinforcement to get you off your duff, but it’s the electric shock that’s getting the buzz. “Sometimes crazy works,” Pavlok CEO Maneesh Sethi says in a promotional video. For some, the gizmo might provide sticker shock as well. An alpha prototype , available now, costs $249.99. A unit on preorder for early 2015 costs $149.99.

20 comments (hidden to protect delicate sensibilities)
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Comments (20)

  1. Posted by Family Dollar Tree | July 29, 2014 at 8:53 AM

    Glad Icahn is still able get out and do some "saber-rattling" despite his old age…

  2. Posted by Guest | July 29, 2014 at 9:01 AM

    Moynihan grows a pair. Well done to him.

  3. Posted by guest | July 29, 2014 at 9:03 AM

    "Many pot enthusiasts think of alcohol as an old-fashioned, old-school toxin whose overuse can inflame family tensions and cause people to say horrible things, especially at weddings. In comparison, marijuana, they contend, is more like a tonic that calms people down and makes them like each other more rather than less — perfect for a wedding, they say. "

    Q.E.D

  4. Posted by jahtrustafari | July 29, 2014 at 9:16 AM

    "Mr. Melshenker, who runs a back country fly fishing and skiing outfitter when he feels like it, is counting on his parents not asking what he is doing with his trust fund…"

  5. Posted by Guy who took CFA L1 | July 29, 2014 at 9:19 AM

    Where is the CFA thread?

  6. Posted by Ackman | July 29, 2014 at 9:30 AM

    Yes but his saber isn't that sharp anymore

  7. Posted by VonSloneker | July 29, 2014 at 9:36 AM

    Deleted. The MBA>CFA debate has finally been resolved. "The Institute" has their concession posted on their front page.

  8. Posted by CFA Institute News | July 29, 2014 at 9:37 AM

    On July 29, 2014, Guy who took CFA L1 used the CFA charterholder brand as a noun. As a result, he was banned for 20 years from the CFA charterholder examinations and was remitted to the TSA for further probing.

  9. Posted by Ted E. | July 29, 2014 at 9:49 AM

    It's 9:48. Do you know where my cfa results are?

  10. Posted by Broke Trader | July 29, 2014 at 9:53 AM

    CFA means "Can't Finance Anything."

  11. Posted by Puck It | July 29, 2014 at 10:23 AM

    I believe there's a pill for that.

    —guy who wonders how the Cialis-promoting couple does the nasty while in different bathtubs

  12. Posted by Gain Sackson | July 29, 2014 at 10:54 AM

    Shit post like these take me back to my youth. Chasing around teen Jewish girls for months just to slide a index finger into their pinky stinky. See Jewish chicks don't wait til marriage to get funky, but they do wait for their guys CFA results.

  13. Posted by Klarissa | July 29, 2014 at 10:57 AM

    She soooooo likes you!!!! You seem like a really sweet guy and shes trying to drop hints and shes not telling who it is because shes nervous that if she says you you will be creeped out and it will ruin ur friendship shes just scared she wants you to ask her out go for it I;m soooo sure thats she likes u hope this helps good luck!!!!

  14. Posted by Trade the Legs | July 29, 2014 at 11:24 AM

    Wake up to 23 text messages waiting to be answered on your phone. Check your email/facebook/twitter and have 295 likes on that new selfie you took of yourself. You want more attention though, so you shower up, put some clothes on, put on the makeup, and snap a quick selfie of yourself that you quickly upload to facebook. Maybe this one will get you even more likes.

    The drive from Montrose is brutal to downtown Houston and when you get to the office your phone is rattling with text messages of several white knight traders, two alpha stud investment bankers, and your best friend who wants to go shopping. You get hit on by a nice guy on the propane desk who is slightly above average looking, but not good enough so you friendzone him before he asks for your number. Get to the workstation on the trading floor, where the managing director gives a lecture on how women traders have it so bad in America and how there is still male privilege out there. You grit your teeth at how unfair women have it. Men are pigs!

    You check your facebook and you have 113 likes for your selfie (don't worry, it's still midday). You accidentally trip on your way to the ladies room and 29 men and several women come over to help you and ask you if you are ok and if they could help you walk to your destination. You refuse, and check on your cell phone. Sally is bitching about Maggie, and although you hate them both, they are your best friends and you love it when they talk **** about each other to you, cause you love the drama.

    After walking past a parade of men at work who tell you how amazing and pretty you are, you meet up in the custodian's closet for a quickie with Travis. He's a natural gas scheduler, but he has a motorcycle and plays drums in a band. Who cares if he still lives with his parents and he's 27? He's hot.

    After work, you meet up with your girlfriends to go clubbing. You are hit on by an uncountable amount of men, and after using several of them for free drinks, you ditch them and start dancing with your girlfriends. Several more average looking guys try to dance with you. Even a manlet oil trader tries to dance, and you laugh him off. Finally, you run into two hot Dodd-Frank guys and they start grinding up against you and your girlfriend. You leave the dance floor and go make out with one of them for awhile. Your fat girlfriend comes over to cock block you (after all, the night is still young) and you leave him to go find other hotter studs.

    You notice in the bathroom that you've gained some weight. Who cares though, you're an indepdent woman, and men should learn to love women with curves. You gossip and take some more selfies with your girlfriends in the bathroom, then you head back out to the dance floor.

    As you dance some more, some fat of yours rubs up on another woman from a midstream group, and she gets pissed. You throw your drink on her, and thousands of white knights come to aid both sides. The bouncer would kick you out, but you are unaccountable for your actions, since, after all, you are a hot woman.

    A 2 oil trader who looks like Brad Pitt comes over to talk to you. Sure, he's alright, but he's probably only 5'10 and not that cute. You make out with a few men, until you find that guy who just transferred in from the Omaha office who looks like Thor who you bring home. You ditch your friends and get worked over by alpha cock."

    In the morning you wake up to 38 text messages…and your selfie you uploaded yesterday had 374 likes! Today is going to be a good day!

  15. Posted by Hobbes | July 29, 2014 at 11:28 AM

    Well duh, unless you're investing in primary issues.

  16. Posted by Cockmeat | July 29, 2014 at 11:48 AM

    One would think that with all the spare time you have, being unemployed, that you'd be funnier.

  17. Posted by totesobvs | July 29, 2014 at 12:07 PM

    she's 200lbs+ if she's a she-

  18. Posted by Guest | July 29, 2014 at 12:58 PM

    Wish I would've seen Cockmeat's comment before reading that…

  19. Posted by Thor | July 29, 2014 at 1:36 PM

    Let's see your "funny" credentials first, please.

  20. Posted by Guest | July 29, 2014 at 2:06 PM

    She ain't a lady unless she's over 280.

    – SMU Secure