Opening Bell: 08.29.14

Bank of America seeks to void verdict in $1.27 billion ‘Hustle’ case (Reuters)
Bank of America Corp on Thursday asked a federal judge to throw out a jury verdict finding it liable for fraud over defective mortgages sold by its Countrywide unit that resulted in a $1.27 billion penalty. The bank urged U.S. District Judge Jed Rakoff in Manhattan to rule for it as a matter of law or order a new trial, arguing that the evidence at trial did not support the jury’s October 2013 verdict. Bank of America said prosecutors were required at trial to prove that loans originated by Countrywide Financial Corp in a process called “Hustle” that were then sold to government mortgage finance giants Fannie Mae and Freddie Mac were not as good as the lender represented. “The trial evidence, even viewed in the light most favorable to the government, did not prove fraud under this standard,” the bank’s lawyers wrote.

Russian Recession Risk Seen at Record High Amid Sanctions (Bloomberg)
The chance of Russia’s economy tipping into a recession is rising as the escalating crisis in Ukraine raises the risk of the government in Moscow retaliating with further import bans, according to a survey of analysts. The probability of a recession in the next 12 months rose to 65 percent from 50 percent, the highest since the first such Bloomberg survey in June 2012, according to the median estimate of 26 economists in the poll. Russia will enact additional restrictions in retribution for sanctions imposed by the U.S. and the European Union, according to 15 of 25 economists. Of those, 12 expect Russia to target cars and consumer goods.

Project Funway: Code Names Help Spice Up the Art of the Deal (WSJ)
“Project Swift” sounds like the name of a military invasion or an Olympic marathoner’s training plan. But it is actually the code name for a corporate buyout, inspired by a private-equity associate’s fondness for singer Taylor Swift. Labels like Project Token, the name Apollo Global Management LLC used to mask its purchase of children’s restaurant favorite Chuck E. Cheese, or Project Fusion, the code for Kinder Morgan Inc.’s consolidation of its oil-and-gas holdings into a single company, are designed to keep reporters, traders and even rival companies from sniffing out deal news before formal announcements are made. For the young bankers who get to choose them, code names are an amusing diversion from the financial modeling and PowerPoint presentations that fill their days. But one deal-making powerhouse is putting an end to the name game, opting instead to automate the process to avoid the pitfalls that go with the territory. Goldman Sachs Group Inc. now requires bankers to use name-generating software that offers 10 random options like Project Calculator or Project Daniel. The new system has been phased in across the bank over the past two years, according to people familiar with it.

Angry Birds Chief To Step Down (WSJ)
Finland’s Rovio Entertainment Ltd., maker of the Angry Birds mobile game, said on Friday that Chief Executive Mikael Hed will step down in January—a move that comes amid the company’s recent struggles to refresh its games lineup and revenue model. Mr. Hed will be replaced by former Nokia Corp. executive Pekka Rantala, who joined Rovio’s executive team earlier this year. Rovio and its iconic Angry Birds games franchise has struggled in recent years amid stiff competition from a new breed of mobile games developers, such as Supercell Oy and Anglo-Swedish King Digital Entertainment PLC, the maker of the “Candy Crush Saga.” Mr. Hed, 38, has tried to overhaul the Finnish company’s games revenue model, making downloads free and charging users for purchases made in the games, but recent games haven’t made much of an impact.

Falcone’s tactics in buying steel company draw fire (NYP)
Phil Falcone couldn’t play by the rules on Wall Street — so now he’s playing where there aren’t any rules. That’s the charge from critics as the hedge fund tycoon moves to take over a little known but profitable steel fabricator whose shares are traded in the loosely regulated over-the-counter market. Falcone, who last year agreed to an $18 million settlement with federal regulators for misconduct that got him barred from the securities industry for five years, is using ruthless tactics to acquire the company, Phoenix-based Schuff International, on the cheap, according to rankled investors. Last week, Falcone’s new investment vehicle, HC2, created this spring from a shell company that’s also off the exchanges, floated a tender for Schuff shares to consolidate its ownership in the firm. That’s less than three months after a surprise May 30 announcement that HC2 had acquired a 65 percent stake.

Residents Of Noiva Do Cordeiro, Almost All-Woman Town, Seek Bachelors (HP)
Life is pretty sweet for the women of Noiva Do Cordeiro. According to the Telegraph, they have constructed a society in the southeast part of Brazil that is communal, egalitarian and almost all-female. But some of the women in the town say it would be nice to have a few more dudes in the mix. “I haven’t kissed a man for a long time,” Nelma Fernandes, 23, told the Telegraph. “We all dream of falling in love and getting married. But we like living here and don’t want to have to leave the town to find a husband. We’d like to get to know men who would leave their own lives and come to be a part of ours. But first they need to agree to do what we say and live according to our rules.”

Untangling the Mess of Austrian Bank Hypo (WSJ)
Here, in the headquarters of Hypo Alpe-Adria-Bank International Group AG, former detective Christian Böhler and his team are untangling a web of suspected collusion among bankers, politicians and Balkan power brokers that has tarnished the reputations of two of Europe’s richest nations. The small bank’s downfall has cost the governments of Austria and Germany €9.05 billion ($11.93 billion). Investigations by Austrian prosecutors and Hypo’s forensics unit have resulted in criminal convictions of six of the bank’s former bosses. Now, Austria’s plan to wind down the nationalized bank has set Vienna up for a new struggle involving former investors—among which are a Bavarian bank that bought it in 2007 and one of the hedge funds that recently pushed Argentina to default.

Facebook Hires 18-Year-Old Intern for Full-Time Engineering Gig (Bloomberg)
“This summer internship at Facebook has been amazing, but it’s not over,” Sayman said in a post on his Facebook page. “Facebook has offered me a full-time job as an engineer. The adventure is just beginning.”

Businesses Are Winning Cat-and-Mouse Tax Game (Dealbook)
Business taxes now make up less than 10 percent of federal revenue, and in some years as little as 6.6 percent. That is sharply down from the years after World War II, when about 30 percent of federal revenue came from corporate taxes. The decline is the result of the rise of untraditional business structures, the effects of a more globalized economy and a labyrinth of subsidies and tax credits. And though the erosion has happened gradually over decades, the surging popularity of inversions — acquisitions of overseas companies that allow American corporations to reincorporate abroad — is raising concerns that an already precarious situation is growing untenable.

Morgan Stanley plans natural gas export plant in new commodities foray (Bloomberg)
Morgan Stanley has quietly filed plans to build and run one of the first U.S. compressed natural gas export facilities, the first sign the bank is plunging back into physical commodity markets even as it sells its physical oil business. In a 23-page application to the U.S. Department of Energy’s Office of Fossil Energy submitted in May, the Wall Street bank outlined a proposal to build, own and operate a compression and container loading facility near Freeport, Texas, which will have capacity to ship 60 billion cubic feet a year of compressed natural gas.

BoNY still holding on to $539M in Argentine bond payments (NYP)
Bank of New York Mellon, whose Argentine banking license was yanked earlier this week, is still holding onto the $539 million in Argentine bond payments that a US court won’t allow it to disperse, The Post has learned. The bank has found itself in the middle of the dispute between Argentina and Paul Singer that sent the country into its second default in little more than a decade. As trustee for Argentine bondholders, BoNY held onto the quarterly payments, as required by Manhattan federal Judge Thomas Griesa. Griesa said BoNY can’t release those payments unless Argentina also pays Singer and other holdouts, which the country refused to do. BoNY’s cooperation with the court has angered both bondholders and Argentina. BoNY says Argentina’s move to revoke its license is “without merit” and is considering appealing the decision.

Cambridge University Selwyn master keeps ‘banned’ dog as ‘very large cat’ (BBC)
The master of a Cambridge University college that banned dogs from accommodation has been allowed to keep his canine companion after persuading officials it was “a very large cat”. YoYo the bassett hound lives at Selwyn College with Roger Mosey. Mr Mosey said cats were allowed but dogs were “technically” banned. However, after a past master set a “dog-owning precedent” decades ago, the college “tongue-in-cheek agreed YoYo could stay as a large cat”, he said. Mr Mosey, former editorial director of the BBC, became master of Selwyn College in October. After settling in he asked permission from the college council to have a dog, despite the rules. “Many former masters have kept cats but the greatest master, Professor Owen Chadwick, did keep dogs during the 1950s, 60s and 70s,” he said. Permission was granted by the council, and duly noted in the minutes: “i. College Animal – Noting precedent under the mastership of Professor Chadwick, Council approved the Master’s request to adopt a Very Large Cat in the Master’s Lodge.” For a while, Mr Mosey said, when he left the lodge with YoYo, he was greeted with calls of “hey, I love your big cat”. YoYo, a rescue dog, has now featured in publicity material for a veterinary course and other college material.

6 comments (hidden to protect delicate sensibilities)
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Comments (6)

  1. Posted by D Kneale | August 29, 2014 at 11:59 AM

    Waaaaaaaaay out of my league.

  2. Posted by allsanepeople | August 29, 2014 at 12:01 PM

    Cats are the worst.

  3. Posted by MD Downer | August 29, 2014 at 12:11 PM

    The redness in the eye suggests he may have gonorrhea. You see it most commonly in sheep and at Brother Jimmy's, but it is not unheard of in dogs either.

  4. Posted by Knuckles the Idiot | August 29, 2014 at 12:18 PM

    Fuck you Johnny Cakes!

  5. Posted by Silver Belles | August 29, 2014 at 12:23 PM

    Surprised it long so long for Goldman to create an automatic deal name generator. I guess the feds got wise to Project Rob the Taxpayer.

  6. Posted by Puck It | August 29, 2014 at 1:06 PM

    Why create? Surely the "Ron Mexico" and "Wu Tang Clan" name generator sites are available to be used.