Opening Bell: 08.22.14

Argentina slams U.S. Judge Griesa for ‘imperialist’ attitude (Reuters)
Argentina on Friday accused the U.S. judge who called the country’s new debt restructuring plan illegal of making “imperialist” comments against the South American nation. Latin America’s No. 3 economy tipped into its second default in 12 years in July after U.S. District Judge Thomas Griesa blocked payments to holders of debt issued under U.S. law that was restructured following its record default in 2002. Griesa ruled that measures announced by Argentina’s president this week to make debt payments locally and push bondholders to bring their debt under Argentine law violated past court rulings. But he stopped short of holding the country in contempt. Argentine Cabinet Chief Jorge Capitanich said U.S. District Judge Thomas Griesa’s choice of words were “unfortunate, incorrect and even, I would say, imperialist expressions”. The government has pulled no punches in its stinging criticism of Griesa. It has accused the judge of abusing Argentina’s national sovereignty and of siding with the U.S. investment funds who rejected large writedowns in the wake of 2002 and are suing the country for full payment on their bonds.

RBC Weighs Opening Itself to More Risk (WSJ)
The bank’s capital-markets business, after fighting for years to become a global player, threatens to become a victim of its own success. Earnings from capital markets, which the company on Friday said contributed nearly 27% to its overall profit, are bumping up against a self-imposed limit that is key to the risk control on which Canada’s banks built their recent reputation. When David McKay, the new chief executive of the bank, met with the board of directors for their annual offsite strategy session last month, they spent hours wrestling with the dilemma: how and whether to adhere to a pledge by RBC’s previous CEO to limit capital markets’ contribution to approximately 25% of total earnings, according to two people familiar with the discussions.

Citigroup Faces Curbs on Hedge-Fund Sales (WSJ)
The curbs, which haven’t previously been reported, result from the Aug. 5 approval of a settlement between Citigroup and the Securities and Exchange Commission of claims related to the bank’s earlier sale of certain debt products. The setback for Citigroup is partly due to timing. Other banks with similar settlements have been able to escape the restrictions because they came before a change in the law last year. Over the past two weeks, Citigroup has been sending letters to hedge-fund firms informing them that the bank is no longer able to steer investors to their funds. In the letter, Citigroup said it is working to resolve the issue with the SEC. Under the rules, the SEC has to issue a waiver to allow Citigroup to resume hedge-fund sales to clients.

Ackman gets needed Allergan votes (NYP)
Activist Bill Ackman has the votes to call a special shareholders meeting of Allergan shareholders, and a federal trial isn’t going to stop him, a California federal judge said Thursday. Judge David Carter mentioned the votes in a order denying the botox maker’s motion to expedite its case against Ackman, his Pershing Square hedge fund and Valeant, a Canadian drug company. Allergan claims the trio broke insider trading rules by taking “substantial steps” to engage in a hostile takeover before Ackman revealed Pershing Square owned 9.7 percent of Allergan shares. Allergan requested an expedited trial, saying a verdict was necessary before calling the special shareholders’ meeting Ackman has been organizing to oust six of the company’s directors. The ousters would pave the way for acceptance of Valeant’s $53 billion offer. Allergan has to call a special shareholders’ meeting within 120 days after at least 25 percent of shareholders request the meeting in a Delaware court.

“I Ate Taco Bell’s Entire New Dollar Menu in One Sitting, and Here’s What I Learned” (AW)
They rang me up for the 11 items. I handed over $12.99. And a short drive later, I arrived home with two satisfyingly hefty sacks of warm, damp, processed food. It was time to get started…Beefy Mini Quesadilla: It’s more like a melted beef and cheese soft taco than a quesadilla, but it’s actually pretty good. Surprisingly spicy thanks to its creamy chipotle sauce, it’s one of the few Taco Bell items I can think of in recent memory that didn’t require Fire Sauce. Is it worth $1? Definitely, though without the spicy sauce it would be a 75-center at best…Cheese Roll-Up: This is literally just half-melted cheese on a tortilla. It’s the kind of thing my 2-year-old would order, unroll out of curiosity and then slowly push toward the center of the table. Is it worth $1? No way. This is the toast sandwich of Taco Bell cuisine…Spicy Tostada: I’m officially full, and at any other point in my life, this is where I would stop. But this is legitimate journalism here, so I soldier on to the one item I’ve been most looking forward to: the Spicy Tostada. It’s basically a one-layer Mexican Pizza, which I’ve been a fan of since forever. In true Taco Bell to-go style, the tostada and its toppings have been slammed into the corner of the box, making the whole sloppy mess impossible to pick up with your hands. But I’ve got two whole napkins at the ready, so I do it anway. After getting through the gloppiest portion, I fold the rest into a sort of overstuffed hard taco, which really highlights how much more food you’re getting than with the rest of the menu. It’s earnestly good, but I’m officially in pain. Is it worth $1? Oh, hell yeah. Maybe $2.

BofA Credited in U.S. Deal for Other Firms’ Consumer Aid (Bloomberg)
Bank of America Corp. (BAC) can get credit toward its record $16.7 billion settlement of U.S. mortgage probes without doing a thing. The lender, which jumped the most in 15 months in New York trading yesterday after agreeing to resolve government claims, pledged $7 billion in consumer relief in the deal. Some of that may be satisfied as borrowers get mortgage help from firms that bought their loans or servicing rights from the bank, according to terms on the Justice Department’s website. That can even apply to assets the bank already sold.

Buffett’s Lapses Highlight Growing Pains With Compliance (Bloomberg)
In the past two weeks, Warren Buffett’s Berkshire Hathaway Inc. said it missed filing deadlines for investments in Dow Chemical Co. and wallboard maker USG Corp. The latter resulted in an $896,000 penalty. Buffett, 83, has boasted for years about running Berkshire with a shoestring staff and delegating responsibilities to the heads of operating units like Geico and railroad BNSF. Yet the mistakes raise questions about whether his management approach is suited to an era of increased reporting requirements. “These are some of the growing pains that come from having a trust-based culture in a world that requires compliance procedures,” Brian Tayan, a researcher at Stanford Graduate School of Business who has studied Berkshire’s governance, wrote in an e-mail. “Shareholders have to make the assessment of whether these filing violations matter to them.”

Yellen Still Sees ‘Significant’ Under-Use of Labor Resources (Bloomberg)
“The economy has made considerable progress in recovering from the largest and most sustained loss of employment” since the Great Depression, Yellen said today in a speech at the Kansas City Fed’s annual economics conference in Jackson Hole, Wyoming. Even so, she underscored the Federal Open Market Committee statement last month that “underutilization of labor resources still remains significant.”

Lexington Deputy Coroner Arrested For DUI, Open Container (WLTX)
In questioning on the scene, Wright allegedly told Officers he had one beer, and purchased the Icehouse 24oz container on his way home, but “didn’t know how it was opened.” Wright was asked to take a field sobriety test, which he declined after a short discussion with the Officers, who then placed him under arrest for Driving Under The Influence. When Officers placed him in one of the Police vehicles, Wright allegedly stated that the Icehouse beer(s) did not need to be thrown away because they were “from a death scene yesterday.” However, following a search of Wright’s vehicle he consented to, Officers located two receipts for two Icehouse beers each, both dated Tuesday, August 19th, one from 2:13PM and one from 3:55PM. West Columbia Police subsequently acquired video allegedly of Wright making those purchases. Wright was transported to the Lexington County Detention Center, where he was released on Wednesday after posting bail totaling $1,259. He has since resigned from the coroner’s office.

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Comments (7)

  1. Posted by guest | August 22, 2014 at 11:22 AM

    the taco bell gorge is even better if you pretend it was bill ackman doing it.

  2. Posted by Alt_EST | August 22, 2014 at 11:57 AM

    "I'm not proud of what I've done, but I hope the sacrifices I've made will help you live a more bountiful and frugal existence."

    Like taking it upon yourself to live near Penn Station and figuring out that its really the Shep Shirt that seals the deal.

  3. Posted by Janet | August 22, 2014 at 12:15 PM

    All I hear is Jackson's hole this, Jackson's hole that… Why is no one paying attention to my holes?

  4. Posted by Narcissus Bellicose | August 22, 2014 at 12:55 PM

    Let's hope Ackman brings Kleenex!

  5. Posted by guest | August 22, 2014 at 1:21 PM

    Glad I get to read this on a full stomach

  6. Posted by Guest | August 22, 2014 at 2:45 PM

    I like the honesty of the time stamp.

  7. Posted by Guest | August 22, 2014 at 2:48 PM

    My bad. Voted you up without checking the time stamp first. May you get 1000 down votes in your next life.