Opening Bell

Opening Bell: 07.10.14

Fed Sets October End for Bond Buying (WSJ)
Federal Reserve officials agreed at June’s policy meeting to end their bond-buying program in October, putting an explicit end date on the experiment for the first time and closing a controversial chapter in central-banking annals with results still the subject of immense debate. The central bank has reduced bond purchases in $10 billion increments this year, to $35 billion a month from a peak of $85 billion. The tentative plan outlined in minutes of June’s meeting, released Wednesday, is to reduce bond purchases in increments at its next three policy meetings, including a $15 billion reduction in October, leaving it to buy no bonds in November. “If the economy progresses about as the [Fed] expects, warranting reductions in the pace of purchases at each upcoming meeting, this final reduction would occur following the October meeting,” the Fed said in the minutes.

Argentina and holdout creditors flood papers in ad war (Reuters)
Argentina published legal notices saying it wouldn’t be responsible for a default because it deposited money with Bank of New York Mellon at its central bank. U.S.-based BNY Mellon, the indentured trustee, is seeking Griesa’s guidance on what it should do with the money. Key holdout creditor Jay Newman, portfolio manager at Elliott Management Corp, had an opinion piece published in the Financial Times reiterating a desire to negotiate. This was followed up by an ad from the American Task Force Argentina, a lobbying group supported by Elliott and others that calls for Argentina to abide by the court ruling and pay its debts. “Argentina has been putting out misinformation in lieu of negotiating,” Robert Shapiro, co-director of American Task For Argentina (ATFA), said from Buenos Aires where he plans to hold a press conference with the local media. “We decided to put out ads that set the record straight in case Argentina says it was forced to default.” ATFA placed a full-page ad in the Financial Times on Tuesday, which was repeated in the Wall Street Journal on Wednesday, titled “The Facts of Argentina’s Debt Dispute.” Argentina fired back at the ATFA with another full-page ad on Wednesday titled: “VULTURE FUNDS: FACTS SHOW THAT IT IS NO MYTH THAT THEY ARE VULTURES.” Attempts to reach Argentina’s embassy in Washington, which e-mailed copies to the media, were unsuccessful.

Bank of America Again Requests 5-Cent Dividend (WSJ)
The Charlotte, N.C., lender is asking regulators to reapprove a five-cent-a-share quarterly dividend, according to people familiar with the matter, a test of its ability to please investors and appease the Federal Reserve at the same time. Bank of America received permission from the Fed in March to boost its quarterly payout from one cent a share to five cents. But the bank had to withdraw the plan, which also included a $4 billion share buyback, a month later, after discovering it had miscalculated capital levels. That was especially disappointing to shareholders, because the Fed had rejected a similar dividend increase in 2011. The bank submitted its new plan in May and said the overall request was smaller than the one put forth in March but didn’t provide any details. According to some of the people familiar with the matter, the bank requested a smaller buyback in its new plan. Its latest dividend request, which would cost the bank an extra $1.7 billion a year, hasn’t previously been reported.

Scottish Banks Brace for Independence Vote (WSJ)
Visitors arriving at Edinburgh airport are greeted with a large Royal Bank of Scotland Group advert stating “This Is Home.” The bank’s management isn’t sure for how long. In September, Scotland will vote whether to become independent from the rest of the U.K. after more than three centuries of union. “Like many other companies we are having to consider the possible business implications of a Yes vote and our response,” says RBS Chairman Philip Hampton, adding, “There is a great deal of uncertainty.” Adding to the complexity: RBS is controlled by the British government following a bailout. Polls suggest the independence campaign may fall short in September’s referendum. But there still remains a large swath of undecided voters and lots of unanswered questions. With only a few weeks to go until the vote, it is unclear whether an independent Scotland would retain European Union membership; what currency it would use; how much of the U.K.’s debt it would assume; and how bond markets would rate its debt. Banks and other lenders may have to revisit credit decisions on millions of customers and rethink pension plans for thousands of staff, for instance.

Corrupt Politicians Sent Each Other Sexy Valentine’s Day Texts (About Money) (Daily Intel)
We already knew former Queens city councilman Dan Halloran had a lot of love to spread around — he had sexual relationships with at least two young staffers — but testimony in White Plains federal court yesterday revealed he didn’t reserve his romance for the young women working beneath him. “Tell me you love me,” read the text message he sent to former Bronx County Republican Party Chairman Joseph Savino after helping him secure a $15,000 bribe on Valentine’s Day in 2013. Read more »

Opening Bell: 07.09.14

UBS Says Brazil’s 7-1 Trouncing Is Bearish for Stocks (Bloomberg)
Conventional wisdom has been that a Brazil loss at home in the World Cup would be a positive for the country’s financial markets. A defeat, the argument went, would sour the national mood and prompt voters to oust President Dilma Rousseff, who has sunk the economy into stagflation. Yesterday’s 7-1 loss to Germany, though, was so crushing that it upends that theory, according to Geoffrey Dennis, the head of emerging-market strategy at UBS AG, who’s been covering Brazil since the early 1990s. Yes, the defeat will hurt Rousseff’s chances at re-election in October, but the lopsided outcome at the same time could deal a blow to investor and consumer confidence in a country that obsesses about its national pastime, he said. “It is such a humiliating defeat that you wonder whether it will have a negative impact on Brazilians’ psyche,” Dennis said in a telephone interview from Boston yesterday. “It’s going to confirm to the people that ‘Look, our economy is struggling, we cannot get any growth, now we don’t even have a decent football team either.’”

Citigroup Nears Deal to Resolve Mortgage Probe (WSJ)
The Justice Department and Citigroup Inc are close to a deal for the bank to pay about $7 billion to settle allegations it sold shoddy mortgages in the run-up to the financial crisis, according to people familiar with the matter. The two sides, which had been far apart just weeks ago, are ironing out details of an agreement that would avert a federal lawsuit over the mortgages, these people said. A settlement could be announced as early as next week. The potential settlement marks a reversal from mid-June, when the Justice Department had warned that it planned to file a lawsuit unless Citigroup significantly raised its settlement offer.

The Magic Fades for Gowex’s Jenaro García (WSJ)
When Jenaro García’s tech company Let’s Gowex SA won the top prize from Spain’s marketing association in May, the presenter hailed him as an innovator who was making wireless Internet ubiquitous, “a magician who converted Wi-Fi into water.” Mr. García, outfitted in an Indiana Jones-style jacket, appeared before the appreciative crowd alongside Wi-Fi Man, a masked, caped superhero figure. The cheering for Mr. García stopped this month as Gowex’s success story abruptly unraveled. U.S. investment firmGotham City Research LLC on July 1 posted a takedown of the company, asserting that its stellar financial results were largely fabricated and its highflying stock worthless. With investors jumping ship, Mr. García gave one last defiant performance on Friday. At a meeting of employees, the 46-year-old chairman and chief executive vowed to bring “Wi-Fi to Gotham.” To demonstrate his resilience, he brandished metal pins that he said had been used to set 24 broken bones he had suffered in an accident years before. The next day, though, he told Gowex’s board that the financial results had been fabricated for at least four years. Gowex filed for bankruptcy, and Mr. García sent a tweet asking forgiveness from those he had harmed.

Emerging Markets’ Chocolate Lovers Boost Cocoa Prices (WSJ)
More than a decade ago, Anupama Amarnath learned how to make chocolate candy for her husband, who had a hard time finding enough of the rare treat in Bangalore to satisfy his cravings. But demand for her chocolate, which is tempered and molded into various shapes, grew far beyond her household. Fifty-year-old Ms. Amarnath now operates a chain of 11 retail outlets under the Chocolate Junction brand in and around the Indian city and owns a 10,000-square-foot chocolate factory. Years of rapid growth in chocolate consumption have given India and other developing markets unprecedented sway in the global market for cocoa. These countries’ share of global chocolate sales is pegged at 45% this year, according to data from market-research firm Euromonitor International. That is up from 33% a decade ago.

Uber agrees to cap NY pricing during emergencies (AP)
Uber, which uses a mobile application to connect riders with vehicles for hire, has its rates rise and fall with demand, but it has been criticized for “surge pricing” that’s sometimes exponentially higher than base fares. Prices usually increase weekdays during rush hour in New York City, on Saturday nights, special occasions like New Year’s Eve and during bad weather. Under the agreement signed Tuesday, Uber will set a cap during “abnormal disruptions of the market,” limited to the range of prices charged in the preceding 60 days and excluding the three highest prices. Attorney General Eric Schneiderman said the agreement between his office and Uber Technologies Inc. and Uber NYC will apply to UberX, Uber Black and Uber SUV statewide.

Just how bad for you were those cupcakes? (NYDN)
Cupcakes from the now-shuttered bakery chain ranked notoriously high in calorie counts, as their massive desserts were about the size of softballs. According to New Jersey nutritionist Erin Palinski-Wade, calories for one Crumbs cupcake ran anywhere from the high 400s to a whopping 780 calories…Crumbs’ delights were also serious sugar bombs, containing about 50-100 grams of sugar each.

Office Team-Building Exercises Gone Bad (NPR)
Several years ago Ben Johnson worked at a health foods store in Iowa. He remembers store management stringing up a donkey piñata to pump up the workers. “Pinned to its chest was a name tag for a rival store,” Johnson says. “They explained to everyone that this was, in fact, an effigy and that we were going to work together to figuratively, literally destroy the competition.” In lieu of candy, the piñata was filled with dollar coins. An overzealous middle manager with a baseball bat was first up, and he obliterated it. “So when this thing explodes, dozens of the dollar gold Sacagawea coins fly through the air everywhere,” Johnson says. “Someone in the front row takes one in the face and goes down. They ricochet off the walls. And when the coins finally stop, I emerge from underneath the table, there’s just a stunned silence.” The coins are like blood money, and no one picks them up. Johnson thinks of the whole fiasco as an omen since the store eventually fell to the competition…Several years ago, things didn’t go well for Peter Brooks when his former employer bused his division to a suburban Washington, D.C., field. They were divided into teams for a round of paintball. “We were issued safety goggles and paintball guns, one of which immediately misfired. It hit a district manager in the crotch,” Brooks says. He remembers that the game quickly devolved into screaming, pleading and retaliatory rage — the paintballs left large welts. “A lot of people pointed their guns right at their supervisors, me included,” Brooks says. “I shot mine right in the middle of the back, and then when he spun around with revenge in his eyes, I surrendered.” The bus ride home, he says, was dead silent. Read more »

Opening Bell: 07.08.14

At Goldman, Board Samples New Guard (WSJ)
Goldman Sachs Group Inc. has stepped up its efforts to groom a new generation of leaders, as it broadens the list of executives who could eventually run the Wall Street firm. As part of those plans, Lloyd Blankfein, Goldman’s chairman and chief executive, has been arranging private dinner meetings between younger managers and the firm’s directors, according to people familiar with the matter. The gatherings, which began last year, are designed to showcase the executives’ expertise on a variety of topics that fall outside formal reviews of their businesses and share the firm’s views on important issues, the people said…The push comes as Mr. Blankfein, who took over in 2006 when Henry Paulson became Treasury secretary, has shown no interest in stepping down soon. “A job like this is hard to come by,” Mr. Blankfein, 59 years old, said in November at an industry conference. “I’ll be slow to get out of it.” Were Mr. Blankfein to retire suddenly, Gary Cohn, the firm’s 53-year-old president, remains the board’s choice for the top job, people familiar with the matter said. But the open-ended nature of Mr. Blankfein’s commitment increases the chance that Mr. Cohn’s window to run the firm will close before a successor is needed, current and former Goldman executives said…The board dinners thus far have featured leaders of the firm’s major divisions, including Pablo Salame, co-head of Goldman’s securities arm, as well as others such as Paul Russo, co-COO of equities, and Anthony Noto, a technology banker who left the firm in June and was recently named finance chief at Twitter Inc., a former client, the people said.

Returns From Activist Hedge Funds Are Causing a Stir (WSJ)
Activists are once again at the top of the hedge-fund heap, after a profitable stretch of clashes with companies around the world. Activist managers gained 6.5% in the first half of the year, almost double the total for the average hedge fund, according to data to be released this week by research firm eVestment. Activist investing, in which managers buy stakes in companies and then agitate for changes in the form of buybacks, divestitures or management shakeups, was also the top-performing strategy among hedge funds in 2013. The fund managers could earn millions for themselves—and billions for their investors—if the gains stick through the end of the year.

Soros Hedge Fund Sued by Ex-Manager Seeking Back Fees (Bloomberg)
George Soros’s hedge fund was sued by a former portfolio manager who claims the firm wrongfully withheld at least $19.5 million in unpaid fees after firing him without explanation eight months into the job. Aaron Cowen, who joined Soros Fund Management LLC in 2010 after serving as portfolio manager and chief investment officer at SAC Capital Advisors LP, had a “stellar” track record at Soros’s firm before being terminated in November 2011, according to a complaint in Manhattan state Supreme Court. “Shockingly, Cowen’s employment was terminated despite his positive returns, when other Soros portfolio managers were failing,” according to the complaint filed July 3 and made public today. Soros, 83, invited Cowen to his home in South Hampton, New York, days after the termination and told the former employee during a 30-minute conversation that he didn’t know why he’d been fired, according to the complaint.

American Apparel, Charney Sued Over Alleged Misconduct (Bloomberg)
American Apparel Inc. (APP) and ousted Chief Executive Officer Dov Charney were sued by shareholders over claims directors ignored Charney’s misconduct that violated the company’s sexual harassment and discrimination policies. The lawsuit cites a June 18 letter by directors suspending Charney as CEO and describing how he authorized severance packages to former employees, and raises and bonuses for current employees, in exchange for agreements protecting him from personal liability for sexual misconduct. American Apparel, a Los Angeles-based maker of casual clothing, has racked up about $270 million in net losses since 2010 and had to raise capital several times. The removal of Charney, who has grappled with sexual-harassment allegations and drawn flak for suggestive advertising, has added to the turmoil.

The Letters That Warren G. Harding’s Family Didn’t Want You to See (NYT)
in 1964, after the historian Francis Russell gained access to letters from Harding to his longtime mistress, Carrie Fulton Phillips, the Harding family sued to halt their publication. Rumors of the affair were not new, but the letters — written between 1910 and 1920, before Harding assumed the presidency — confirmed the infidelity in startling detail. The Harding family feared that publishing them would further tarnish Harding’s legacy and hurt the entire family…In 106 letters, many written on official Senate stationery, Harding alternates between Victorian declarations of love and unabashedly carnal descriptions. (While Phillips’s notes and some drafts of her letters have been preserved, her actual replies were not.) The president often wrote in code, in case the letters were discovered, referring to his penis as Jerry…Sept. 15, 1913: “Wouldn’t you like to get sopping wet out on Superior — not the lake — for the joy of fevered fondling and melting kisses? Wouldn’t you like to make the suspected occupant of the next room jealous of the joys he could not know, as we did in morning communion at Richmond?…Oh, Carrie mine! You can see I have yielded and written myself into wild desire. I could beg. And Jerry came and will not go, says he loves you, that you are the only, only love worthwhile in all this world, and I must tell you so and a score or more of other fond things he suggests, but I spare you.” Read more »

Opening Bell: 07.03.14

Goldman says Google has blocked email with leaked client data (Bloomberg)
Goldman Sachs Group on Wednesday said Google Inc has blocked access to an email containing confidential client data that a contractor sent to a stranger’s Gmail account by mistake, an error that the bank said threatened a “needless and massive” breach of privacy. The breach occurred on June 23 and included “highly confidential brokerage account information,” Goldman said in a complaint filed on Friday in a New York state court in Manhattan. Goldman did not say how many clients were affected. It has been seeking a court order compelling Google to delete the email, which it said on Wednesday had yet to occur. “Google complied with our request that it block access to the email,” Goldman spokeswoman Andrea Raphael said. “It has also notified us that the email account had not been accessed from the time the email was sent to the time Google blocked access. No client information has been breached.” A Google spokeswoman declined to comment. According to Goldman, the outside contractor had been testing changes to the bank’s internal processes in connection with reporting requirements set forth by the Financial Industry Regulatory Authority. Goldman said the contractor meant to email her report, which contained the client data, to a “gs.com” account, but instead sent it to a similarly named, unrelated “gmail.com” account.

Exclusive: SEC official dissented on BNP Paribas waiver (Reuters)
An official at the U.S. Securities and Exchange Commission (SEC) broke ranks with other commissioners, and voted against granting BNP Paribas a critical waiver to continue operating several investment advisory units in the United States. Kara Stein, a Democratic SEC commissioner who has recently demanded more accountability for big banks who break the law, was the sole dissenting vote on Monday on the temporary waiver, according to a document made public this week. BNP’s application was granted the same day that BNP, France’s largest bank, pleaded guilty to criminal charges it violated U.S. sanctions. The temporary waiver will become permanent, unless an “interested person” in the matter is granted a hearing. The deadline for requesting a hearing is July 25.

Barclays Probe Casts Ugly Light on Dark Pools (BusinessWeek)
The ultimate promise of a dark pool, however, was that no matter who was invited inside, prices weren’t immediately reported—in theory, at least, limiting the impact a large trade can have on the market. In public exchanges, by contrast, bids and offers are displayed (often at varying speeds depending on which feeds you buy) and prices are reported immediately after a trade is executed. This information can create ripples across the market, allowing faster firms to trade ahead of a big order and make a profit. This was the problem that dark pools sought to fix. By keeping orders in the dark, effectively blinding traders to what was happening around them, there were no ripples. Or if there were, they went unnoticed. The picture Schneiderman paints is much worse. There’s still a room filled with blindfolded traders buying and selling to each other. But now there’s a speed trader or two lurking in the corner, secretly watching everything that’s going on.

JPMorgan Investors Show Support for Dimon in Cancer Fight (Bloomberg)
The bank has deep contingency and succession plans, and Dimon’s illness may serve as no more than a valuable “fire drill,” said Michael Farr, president of Farr Miller & Washington LLC, a Washington-based asset manager that oversees more than $1.1 billion, including JPMorgan shares. “The good news is that every indication is that they will never be needed and that Jamie Dimon has many years to work and that he’ll retire on his own schedule as a much older man,” Farr said. “It feels unfair to watch someone who has really been through so much have to suffer through this.”

Owners send dogs to ‘fat farms’ as more pets become obese (AP)
Growing rates of obesity in pets have led to the emergence of fat farms offering ‘‘pawlates,’’ ‘’doga’’ and ‘‘Barko Polo,’’ doggie versions of Pilates, yoga and Marco Polo to help slim down man’s best friend. In the U.S., 53 percent of dogs are overweight or obese, up from 45 percent four years ago. In cats, the figure is almost 58 percent, said Dr. Ernie Ward, a veterinarian and founder of the Association of Pet Obesity Prevention in Calabash, North Carolina. Overweight pets can suffer diabetes, joint problems, heart disease and decreased life expectancy, just like obese people, he said. Most luxury pet hotels and spas nationwide will customize a fitness program for a pudgy dog or cat, but only a few facilities have fat camps for large groups. For golden retriever Ceili, it was easy to fatten up when living with a boy who pushed tasty morsels over the edge of his high chair. The extra weight led Eileen Bowers of Bedminster, New Jersey, to sign up the more than 100-pound pooch for a five-day fitness camp last month at Morris Animal Inn. Besides the ‘‘pawlates,’’ the camp was filled with swimming, nature hikes, treadmill trots, facials, massages and healthy treats like organic granola, string beans and carrots. It was designed to give Ceili and 40 other dogs a head start on a healthier life, said Debora Montgomery, the New Jersey facility’s spokeswoman…the ‘‘Barko Polo’’ pool game varies from its human inspiration: A staffer will shout ‘‘barko’’ and whichever dog-paddling pooch yelps first gets a toy. Read more »

Opening Bell: 07.02.14

JPMorgan CEO Dimon Will Undergo Treatment for Throat Cancer (Bloomberg)
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co. (JPM), told employees and shareholders in a memo that he’s beginning treatment for throat cancer and will continue to run the company “as normal.” “The good news is that the prognosis from my doctors is excellent, the cancer was caught quickly and my condition is curable,” Dimon said, according to a statement today from the company. “The cancer is confined to the original site and the adjacent lymph nodes on the right side of my neck. Importantly, there is no evidence of cancer elsewhere in my body.” [...] Dimon will soon begin radiation and chemotherapy treatment at Memorial Sloan Kettering hospital in New York, he said in the statement. The treatment should take about eight weeks, he said. “While the treatment will curtail my travel during this period, I have been advised that I will be able to continue to be actively involved in our business, and we will continue to run the company as normal,” he wrote. “Our board has been fully briefed and is totally supportive.”

Ousted American Apparel CEO Charney reports 43 percent stake (Reuters)
Dov Charney, ousted as American Apparel Inc’s chairman and chief executive two weeks ago, said he has increased his stake in the apparel retailer to 43 percent, as he fights to regain control of the company he founded. Charney, fired for alleged misuse of corporate funds and his role in disseminating nude photos of an ex-employee, also called for a special meeting of stockholders on Sept. 25. The former CEO and founder, already the biggest shareholder in American Apparel with a previously reported 27.2 percent stake, said he increased his holding last week. The additional shares could enable Charney to gain control of the company if he won the support of shareholders holding 7 percent of the stock.

Goldman ‘Boys Club’ Accused of Mocking Women as ‘Bimbos’ and ‘Party Girls’ (Bloomberg)
Goldman Sachs was accused of widespread gender discrimination and a “boy’s club” atmosphere that included bouts of binge drinking and trips to strip clubs, as two former female employees seek to expand their lawsuit against the firm with new evidence. The women asked a federal judge in Manhattan today to let them sue on behalf of current and former female associates and vice presidents. Support for their claims includes statements of former Goldman Sachs employees, expert statistical analyses and evidence on earnings and promotions from the firm’s own records, they said in a court filing. “Women report a ‘boy’s club’ atmosphere, where binge drinking is common and women are either sexualized or ignored,” according to the filing. The two women, H. Cristina Chen-Oster and Shanna Orlich, sued in 2010 and are seeking to broaden the case to include more than a decade of claimed discrimination at Goldman Sachs. A decision by U.S. District Judge Analisa Torres to allow the women to sue as a class would increase the risk to Goldman Sachs.

Tinder Is Target of Sexual Harassment Lawsuit (NYT)
Whitney Wolfe, a former executive at the popular dating start-up Tinder, has filed a lawsuit against the company, along with its majority owner, IAC/InterActiveCorp, on sexual harassment and discrimination claims. The lawsuit, filed on Monday in state court in Los Angeles, says that Tinder’s chief executive and chief marketing officer subjected Ms. Wolfe to “a barrage of horrendously sexist, racist and otherwise inappropriate comments, emails and text messages.” Ms. Wolfe’s suit also said that complaints about the harassment to high-level executives at IAC were ignored and that she was forced to resign as a result. Ms. Wolfe said in the lawsuit that even though she was instrumental in the establishment of the dating app, her colleagues did not call her a founder because of her age and gender. When she would ask why only her name among the five founders was absent from some new coverage, the lawsuit said, the other founders would tell her “you’re a girl” and that a 24-year-old “girl founder” would devalue the company.

Bitcoin Auction Ends, Single Bidder Wins Entire Cache (Bloomberg)
The auction attracted 45 bidders, including New York brokerage SecondMarket Inc., and 63 bids were submitted during the 12 hours of the auction on June 27, according to the U.S. Marshals Service. The agency, which notified the bidder and transferred the money, isn’t disclosing the winner’s identity. The auction of 29,656 bitcoins, part of more than 144,000 the FBI transferred to U.S. Marshals after shutting down the Silk Road marketplace and arresting its operator last year, represented a rare opportunity to secure a large cache of the virtual currency. While the actual price of the winning bid isn’t known, the cache sold yesterday was worth about $19 million at current exchange prices.

Shia LaBeouf voluntarily receiving treatment for alcohol addiction (NYDN)
According to X17Online, the 27-year-old star is getting help at a “celebrity-frequented” treatment facility in Hollywood. LaBeouf was seen heading to the private center Monday afternoon, and greeted at the gate by a nurse and security guard, X17 reports. “Shia was nervous; he didn’t look good all morning,” a photographer told the website. “He was looking down and wasn’t even talking to his driver. It looked like he didn’t want to do it, but he knew he had to.” Earlier in the day the “Fury” actor was seen toting a book, reportedly the Alcoholics Anonymous “Big Book,” outside of his Hollywood Hills home. LaBeouf arrived back in Los Angeles over the weekend, after a tumultuous few days in New York City, which included him getting arrested Thursday for disrupting a “Cabaret” performance on Broadway with an apparently drunken display. He was also seen in Times Square earlier that day engaging with a homeless man. Read more »

Opening Bell: 07.01.14

Argentine Debt Team to Meet With Mediator (WSJ)
Argentina said Monday night that it will send a delegation to meet with a court-appointed lawyer on July 7 as it tries to resolve a dispute with a small group of creditors that could see the South American country default for a second time in 13 years. Argentina’s long-running battle with hedge funds in U.S. courts entered a critical phase after U.S. District Judge Thomas Griesa on June 27 blocked the country from making $539 million in interest payments that were due on some of its bonds Monday. Argentina will likely default if it can’t get that money to bondholders before a 30-day grace period expires in July. The judge has ruled that Argentina must pay the hedge funds that are suing to collect on defaulted bonds at the same time it pays investors who own bonds the country issued after its 2001 default.

Peltz’s Trian Plants Its Flag in BNY Mellon (WSJ)
The sleepy world of back-office banking is about to get a bit of action following Trian Fund Management LP’s purchase of a large stake in Bank of New York Mellon Corp. Trian, led by Nelson Peltz, said Monday that it has bought a position valued at $1.05 billion in BNY Mellon, representing a 2.5% stake. The move is rare in the world of activist investors, who typically avoid regulated businesses such as banks.Mr. Peltz, 72 years old, and Trian haven’t had any discussions with the bank’s leaders, according to a person familiar with the matter, but plans to reach out to management to discuss ideas for creating more shareholder value.

Economy could accelerate substantially: Summers (CNBC)
There’s a prospect that the economy could accelerate “quite substantially” over the next couple of quarters, former Treasury Secretary Larry Summers told CNBC’s “Closing Bell.” “That would be an important and obviously positive development,” he said Monday. “[There's] no assurance that will be the case, but I think that could be a surprise.” However, while he is concerned that rapid economic growth could lead to a market bubble, he doesn’t think the U.S. is in one yet despite the narrower credit spreads and certain asset prices that are inflated.

Not looking at pot as ‘windfall’ for economy: Colorado Gov. (CNBC)
Colorado’s increased tax revenue from the sale of marijuana isn’t necessarily a windfall, Gov. John Hickenlooper said Monday. Instead, he’s looking to use that money to maintain the state’s high quality of life.

I’m Sorry, I Think I’m Allergic to You (WSJ)
As with a lot of allergies, it’s the repetition that gets to us. “The first time you are seated next to a co-worker who is loudly snapping bubble gum, you don’t care,” says Michael Cunningham, a psychologist and professor of communication at the University of Louisville. “After three weeks, you are praying they’ll choke on it.” According to Dr. Cunningham, who has studied the phenomenon for more than 15 years, social allergens can be grouped into four main types, depending on whether the behavior is intentional or not, and whether directed personally at an individual or not. The first grouping is uncouth habits. They are unintentional and they aren’t directed personally. They include noisily chewing gum or talking loudly into a phone in a crowded public space. “The person isn’t really thinking of you, even though the behavior has implications for you,” Dr. Cunningham says. The second category is egocentric actions, he says. These behaviors aren’t necessarily intentional, but they are directed personally at you. There’s the friend who keeps you on the phone for 45 minutes after you said you can only talk for five, or the family member who never orders dessert at a restaurant but eats all of yours (you know who you are). This person still isn’t thinking about you, but the behavior affects you specifically. The third category, norm violations, encompasses offensive behaviors that are intentional but impersonal. Examples include smoking right outside the front door, talking in a theater during the show or texting while driving. The fourth, and most irritating, social-allergen group includes actions that are both intentional and directed personally, Dr. Cunningham says. It may be an imperious command (“Bring me some coffee, will you?”) instead of a request for a favor. Often, it is a backhanded complaint or criticism: “Are you really going to eat that?” or “You bought a car? I thought you were saving for college.”

Formerly Tubby Police Horse Turns Life Around, Chases Down First Suspect (AP)
Murphy, carrying Officer Cassandra Wells, chased down a man suspected of breaking into a building last week and kept him trapped next to a building until officers could cuff him. The Oregonian reports Murphy galloped about six blocks. Murphy was added to the mounted patrol last year, but when he arrived at the barn he weighed 1,900 pounds. The unit didn’t have a saddle big enough for him. After losing 200 pounds he went through training and is now on Portland streets. Read more »

Opening Bell: 06.30.14

Blackstone Readies Big-Bet Hedge Fund (WSJ)
Blackstone LP LP is quietly laying plans to start a hedge fund that will make big, bold bets, an effort it hopes will eventually rival some of the largest firms in the business, according to people familiar with the plans. The private-equity firm will fund several teams of traders with hundreds of millions of dollars to place a relatively small number of large, highly concentrated wagers, the people said. The strategy is notable now as many hedge funds are shying away from making such outsize bets. Combined, the teams’ investments will form a multistrategy hedge fund to be pitched to wealthy clients. New York-based Blackstone is confident the firm can hedge the overall risks, according to people familiar with the firm’s plans.

BNP Paribas board approves record $8.9B settlement (FT)
BNP Paribas has secured a partial concession on the eve of a record $8.9 billion settlement over alleged sanction violations that US authorities are expected to announce on Monday. The board of France’s biggest bank by market capitalisation met over the weekend to give final approval to the settlement, people familiar with the matter said. On top of the fine for allegedly concealing about $30 billion of transactions for clients in Sudan, Iran and Cuba to dodge Washington’s economic sanctions, the bank is due to submit a guilty plea. However, the people said BNP had negotiated a concession with US authorities who plan to impose a rare suspension for as much as a year on its ability to clear US dollar transactions, which is crucial for its international wholesale banking activity.

Ex-SAC Capital COO Kumin to Start Hedge-Fund Firm (WSJ)
A former senior executive of SAC Capital Advisors LP is planning to start a new stock-trading hedge-fund firm, potentially with a big chunk of funding from Leucadia National Corp., according to people familiar with deal discussions. Solomon “Sol” Kumin, who was SAC’s chief operating officer, is in advanced talks over a deal with Leucadia that would make the company Mr. Kumin’s biggest investor and owner of a substantial portion of his firm, the people said. In total, Mr. Kumin plans to start with between $800 million and $1 billion, which would make it one of the largest hedge funds to launch this year. “I’ve enjoyed the past five months spending time with my family,” Mr. Kumin said when reached by telephone Friday. “I’m looking forward to getting back into the hedge-fund business in September.”

Ergen Sidelined in Battle With Falcone Over LightSquared (Dealbook)
The bitter battle between the billionaires Charles W. Ergen and Philip A. Falcone over LightSquared, the bankrupt wireless broadband company, appears to be nearing an end. The twist is that Mr. Ergen is no longer involved. LightSquared has devised a plan to emerge from bankruptcy with the participation of all of its creditors except Mr. Ergen, the satellite television mogul and chairman of Dish Network and EchoStar, according to a court-appointed mediator, Judge Robert D. Drain. Mr. Ergen, who left one of the three mediation sessions with creditors without Judge Drain’s permission, had not “participated in the mediation in good faith” and “wasted the parties and the mediator’s time and resources,” the judge wrote in a memorandum filed on Friday afternoon.

Beer Makers Pray for a Fruitful Summer (WSJ)
Roughly a third of beer sales in the U.S. take place between Memorial Day and Labor Day, often making or breaking the year. The most critical week is that of July Fourth, when sales traditionally are 30% to 40% higher than the average week, according to industry estimates. High temperatures are a bigger deal for brewers than distillers, which have been converting beer drinkers to cocktails for more than a decade, and are partly responsible for the decline in American beer consumption in four of the past five years.

Drugs not a factor in Shia LaBeouf’s ‘Cabaret’ meltdown (NYP)
Shia LaBeouf’s highly publicized meltdown last Thursday was not influenced by drugs. While drugs didn’t play a part in the awkward showdown, alcohol certainly did, according to E! News. “Drinking and Shia do not mix well,” said a source about the 28-year-old. “But he definitely wasn’t on any kind of drugs.” Before heading to a performance of “Cabaret,” LaBeouf was spotted drinking at least four strawberry margaritas at New York’s Iguana Club. Shortly after, LaBeouf began taunting a homeless man in Times Square for his McDonald’s food. He soon headed to “Cabaret” where he was escorted out in handcuffs after being arrested for disorderly conduct. He allegedly told a cop, “I’ll f—k you up,” and called another officer a “f-g.” According to sources, the famous child actor was muzzled with a face mask for spitting. Read more »