Opening Bell

Holiday Bell: 12.26.13

Bond Downgrades Escalate With Leverage Highest Since 2007 (Bloomberg)
Credit quality for U.S. companies is showing signs of weakening as issuers from Verizon Communications Inc. (VZ) to Apple Inc. borrow unprecedented amounts of money to expand and reward shareholders. A total of 223 companies had their bond ratings cut by Moody’s Investors Service in the six months ended November, compared with 172 increases, the highest proportion of downgrades since April. Issuers took advantage of borrowing costs that averaged a record-low 3.83 percent this year to sell an unprecedented amount of bonds, with 15 percent of offerings funding shareholder payouts, the most in five years. As the U.S. economy enters its fifth year of expansion after the worst recession in seven decades, Moody’s predicts that companies will be emboldened to seek out acquisitions and increase spending to enrich their owners. That may prompt borrowers to boost leverage, which has risen to the highest level since 2007.

PE firms may pay more than $1B in collusion case (NYP)
It’s going to cost the world’s largest private-equity firms — including KKR and Blackstone — more than $1 billion to settle the bombshell collusion case slowly winding its way through a Boston federal court, The Post has learned. While no deal has been offered, shareholders in eight companies have indicated any future settlement would have to be north of $1 billion, a source close to the situation said. “I think there was a time the plaintiffs would have settled for $1 billion, but that time has passed,” a source said. The value of the eight buyouts is $170 billion. Defendants are not ready to settle, sources said. The shareholders in 2007 sued KKR, Bain Capital, Silver Lake Partners, Blackstone Group, Carlyle Group, TPG Capital and Goldman Sachs Capital Partners and accused them of defrauding shareholders out of billions of dollars by colluding to keep prices artificially low when buying their companies.

Economy Entering New Year on a Roll (WSJ)
A pickup in business investment and robust new-home sales point to an economy on stronger footing heading into the new year. “It’s a holly, jolly data Christmas for the economy as all signs point to an accelerating economy,” said Joel Naroff, chief economist at Naroff Economic Advisors. Orders for U.S. durable goods—big-ticket items such as cars and aircraft designed to last more than three years—rose 3.5% last month, reversing a decline in October, the Commerce Department said Tuesday. Excluding the volatile transportation category, manufactured-goods orders rose 1.2%, the strongest gain since May.

Jobless Claims in U.S. Fell More Than Forecast Last Week (Bloomberg)
Jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21, a Labor Department report showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Continuing claims rose.

Bug Bites Cut Florida Orange Crop to Lowest in 2 Decades (Bloomberg)
A gnat-sized insect, the Asian citrus psyllid, forced Dean Mixon to replace about 1,000 orange trees in the past two years on the 50-acre Florida farm his grandfather started in the 1930s. The bug spreads a disease called citrus greening, causing fruit to shrink and drop early. “This is the worst we ever had to deal with,” said Mixon, 62. “Young trees can’t develop strong roots, and the quality of the fruit is also affected. We have been able to slow the spread of the disease, but not eradicate it.”

Deputies: Elderly couple’s argument over husband’s use of dating website puts her in hospital, him in jail (Sentinel)
Edward Aronson, 76, was arrested on battery charges and booked into jail after the scuffle at the couple’s Lake Worth home, according to a Palm Beach County Sheriff’s Office arrest report. Aronson’s 77-year-old wife caught him looking at an unidentified dating site on Saturday night. The two argued about it, and she became upset enough that she slapped him across the face, the report said. Aronson shoved her to the floor. He called 911 about 45 minutes later, and paramedics came to the house in the 8200 block of Abalone Point Boulevard. The woman was taken to Bethesda Hospital West, where a doctor confirmed her right hip was broken, according to the report. A nurse at the West Boynton hospital called the Sheriff’s Office when she overheard Aronson on the phone talking about pushing his wife. Read more »

Holiday Bell: 12.24.13

Big Rally to Pump Up Wall Street Bonuses (WSJ)
A strong rally in financial markets over the past two months is expected to add a last-minute boost to bonus packages for Wall Street’s traders and investment bankers, partially offsetting an otherwise grim year. The winners in financial firms this year are likely to be equity traders, who have reaped gains from soaring stock markets, and investment bankers, who have benefited from a pickup in initial public offerings and other deals. But the recent rally is unlikely to provide much help to bond traders, who have endured one of their toughest years since the financial crisis.

Ackman Takes Another Swipe At Herbalife (NYP)
The dicey recruiting methods used by Herbalife distributors, which the company said would be banned as of June 30, are still happening, hedge-fund titan Bill Ackman claimed in a letter sent Monday to his investors. Herbalife, fighting claims by Ackman that it is a pyramid scheme, said it would ban distributors from selling leads through related companies that troll the Internet for new recruits. The Herbalife distributors would then sell the recruit names for about $50 to $100 a piece to newer distributors. The practice, considered indicative of a pyramid because it focuses solely on recruitment, is believed to have become even more lucrative than selling Herbalife products. Despite the ban, the practice “continues to this day,” Ackman wrote in the letter to investors in his Pershing Square hedge funds.

Swiss Banks Employ Army of Advisers for U.S. Amnesty Plan (Bloomberg)
Switzerland’s 300 banks have enlisted an army of auditors, lawyers and in-house workers as they race to meet a Dec. 31 deadline on whether to seek U.S. amnesty for helping American clients evade taxes. Banks in Switzerland, the largest cross-border financial center with $2.2 trillion of assets, are closely examining accounts before joining a disclosure program that’s the broadest assault in a five-year U.S. crackdown on offshore tax evasion.

NYSE proposes ‘kill switch’ to help catch trading errors (Reuters)
Intercontinental Exchange Group’s NYSE Euronext unit has filed a plan with regulators to offer firms that trade on the New York Stock Exchange a “kill switch” that could cut off trading if preset levels were breached…Under the NYSE proposal, the exchange’s member firms will have the option of pre-setting certain trading thresholds that when hit would block the firms’ orders.

My ‘Orgy’ With Leonardo DiCaprio (NYP)
I’m playing a high-end hooker, one of about 20 hired by rogue financier Jordan Belfort [played by Leonardo DiCaprio] to accompany him and his broker friends on a debauched flight from New York to his bachelor party in Las Vegas. “Oh my gosh,” jokes P.J. “You’re gorgeous! What am I gonna tell my wife? I’m so happily married, I can’t even look at you!” It feels surreal to be on a set in Brooklyn, made up as the interior of a luxury jet, and about to shoot an R-rated sequence showing simulated sex, binge drinking and a huge amount of drug-taking. But this is what I’ve signed up for. Dressed in red silk lingerie, red leather jacket, red fishnet stockings and red Manolo Blahniks, I slip off my robe and take a deep breath. It’s not every day you get a call from a casting director inviting you to audition for a Martin Scorsese film. But that’s what happened to me this spring. “It will involve some nudity,” the casting agent warned. “Martin has asked for you, personally, at least eight or nine times.” My first reaction was: “I can’t do it! I’m not taking my clothes off! I’ve never even cursed on camera!” But then I thought about it: “This is Martin Scorsese. How can you say no?” [...] I stayed pretty much fully clothed in my red leather jacket and lingerie, which is more than I can say for P.J., who plays Nicky Koskoff in the film. He was the most naked of all the people in the scene, wearing a thong made out of candy Smarties with a sock over everything underneath. Needless to say, I think he felt very uncomfortable…Meanwhile, the girl who was on top of Jonah Hill — she really got spanked. She can’t have been Method acting, because she was complaining so much. “I’ve got broken blood vessels all over my a$$,” she said. But she wanted to be with the principal, so she got what she wanted. Read more »

Opening Bell: 12.23.13

Goldman Real-Estate Play Skirts Volcker Ban (WSJ)
The Volcker rule prohibits banks from owning more than 3% of a hedge fund or private-equity portfolio. So why did Goldman Sachs Group Inc. tell would-be investors that it would contribute up to 20% in a new fund that makes loans backed by office buildings, hotels, shopping centers and other properties? Because regulators excluded many real-estate loans from the tough restrictions on investment funds, allowing Wall Street firms to continue making concentrated bets—sometimes risky ones—with their own capital. Goldman has raised more than $1 billion for the new fund, according to people briefed on the matter. The fund aims to boost that total to $2 billion, and Goldman expects to invest “up to 20% of total equity commitments,” according to September marketing documents reviewed by The Wall Street Journal.

Banks Avoid Providing Bitcoin Services (WSJ)
Lenders are leery of dealing with virtual-currency companies because of concerns that the businesses could run afoul of anti-money-laundering laws or be involved in illegal activities, banking executives say. Regulators and central bankers around the world have raised similar concerns in recent months. The problem has grown so acute that some owners of fledgling virtual-currency businesses are trying to elude bank scrutiny by avoiding the words “bitcoin” or “bit” in their names, according to entrepreneurs and investors who actively track the industry. Patrick Murck, general counsel for the Bitcoin Foundation, a trade group, has been raising the issue in meetings with regulators and bank executives. “This is definitely causing a bottleneck in the industry,” he said in an interview. “The ability of companies to get bank accounts is necessary so that they can take the next step in building out the core bitcoin infrastructure.”

For a Hedge Fund Pioneer, a Tiger Fund Burning Bright (Dealbook)
Julian Robertson, the billionaire investor and an early pioneer of the hedge fund industry, is again proving to be a top picker of new talent. His $450 million Tiger Accelerator Fund, which invests in six hedge funds that Mr. Robertson personally has invested in, is up 22.6 percent net of fees as of Dec. 15, according to a person briefed on the matter. By comparison, the broadest hedge fund industry index is up just about 9 percent for the year…The six hedge funds that the Tiger Accelerator Fund’s performance tracks are Tiger Veda Globa, Cascabel, Long Oar Global, Tiger Eye, Tiger Ratan and Teewinot. The Accelerator fund’s $450 million investment is on top of the roughly $230 million Mr. Robertson committed of his own money to those funds.

Kanye Vuitton Jibe Shows Even Rich Balk at Luxury Prices (Bloomberg)
Kim Kardashian might as well be naughty this Christmas, because even if she’s nice her fiancé is unlikely to shell out for a Louis Vuitton handbag…Kanye West, who gave reality TV star Kardashian a diamond ring worth millions to celebrate their engagement, told a U.S. radio show recently that Vuitton’s prices are “just too extreme.” The criticism by West, who has collaborated with the Paris-based label on products including a range of $1,000 sneakers, is a signal some luxury companies may be charging too much, turning off even the wealthiest clients.

Russia Crisis Haunts Deutsche Bank’s Smith Seeing China Bust (Bloomberg)
When the Deutsche Bank AG equity strategist looks at the country, he says he detects some of the same signs of a financial meltdown that led him to predict Russia’s 1998 stock market crash months in advance. China’s expansion is being fueled by soaring corporate borrowing, a high-risk model that needs to be replaced by the kind of free-market measures and budget cuts that fed Russia’s growth in the aftermath of the country’s default and subsequent 44 percent monthly tumble in the Micex Index (INDEXCF), Smith said. “There is potential for a debt trap in industrial companies which can trigger an economy-wide financial crisis as early as next year,” Smith said in an interview from London on Dec. 12, a day after he issued a report predicting China’s slowdown will lead to a 10 percent decline in emerging-market stocks next year. “If I am wrong on China, I am wrong on everything.”

Wife rats out hubby’s illegal $600K Super Bowl pools (NYP)
A wife furious with her football-obsessed husband dropped a dime on a Staten Island gin mill — sparking a rare raid that shut down $600,000 in ­Super Bowl pools last week. “How can the SLA allow a $1 million illegal football pool at Talk of the Town?” the angry spouse wrote the State Liquor Authority on Nov. 13. “My husband spends all his money on these pools and not on our children.” The SLA put a rush investigation on the anonymous complaint. Last Sunday night, two investigators barged into the neighborhood saloon’s annual Christmas party. They flashed badges and snapped photos of pool boards taped to the mirrored bar back, witnesses told The Post. The Talk of the Town Tavern, at 24 Giffords Lane in the Great Kills section, was advised to shut down the gambling. SLA lawyers are now reviewing whether to slap the owner, Larry Burkert, 55, with violations carrying a typical fine of $2,500 for a first offense. The bar has told patrons the pools are dead and bettors will get ­refunds, sources said. Read more »

Opening Bell: 12.19.13

Traders Seek Edge With High-Tech Snooping (WSJ)
A helicopter lifted off recently from an airfield in this remote oil town, scudded low across the flat industrial landscape and trained a heat-sensitive camera at the huge storage tanks below. Its mission: Gather intelligence for Wall Street. The grainy, infrared reconnaissance images betrayed how much oil was in each tank. That gave Genscape Inc., the company that conducts the flights, a remarkably accurate preview of a market-moving U.S. government report on oil supplies. Traders, hungry to get a jump on the official data, are willing to pay a hefty price for that intelligence. Genscape is at the vanguard of a growing industry that employs sophisticated surveillance and data-crunching technology to supply traders with nonpublic information about topics including oil supplies, electric-power production, retail traffic and crop yields. The techniques, which are perfectly legal, represent the latest advance in the longtime Wall Street practice of searching for every possible trading advantage. But the high cost of much of the new information—Genscape’s oil-supply report costs $90,000 a year—means that some forms of trading are becoming even more the province of firms with substantial resources.

Warren Buffett made $37M a day this year (NYP)
Billionaire investor Warren Buffett saw his net worth soar by an eye-popping $37 million a day this year, according to a survey out Wednesday. The Berkshire Hathaway boss benefitted from a bull market that saw shares of his conglomerate jump by more than 25 percent in 2013, boosting his net worth by $12.7 billion to $59.1 billion, according to the survey by Wealth-X. That works out to a $37 million-a-day bump in Buffett’s wealth — or an eye-popping $1.5 million an hour. While Buffet had an outstanding year, the jump in his net worth only got him to second place on the list of the world’s Top 10 richest people. Microsoft founder and Buffett bridge partner Bill Gates retained the title of world’s wealthiest person with a total net worth of $72.6 billion, up from $61.1 billion last year.

Yellen’s To-Do List Shortens at Fed (WSJ)
Now that the Fed has begun to wind down its bond-buying program, it will fall to Ms. Yellen to decide if economic conditions warrant continuing to pare the purchases or not. She will also have to decide whether and how to tweak the Fed’s promises to keep interest rates near zero for a long time if the economy fails to recover as the Fed now forecasts. And she will also have to decide how to respond if inflation remains stubbornly below the Fed’s 2% target.

Facebook, Zuckerberg, banks must face IPO lawsuit: judge (Reuters)
Facebook Inc, Chief Executive Mark Zuckerberg and dozens of banks must face a lawsuit accusing the social media company of misleading investors about its health before its $16 billion initial public offering, a federal judge said. In a decision made public on Wednesday, U.S. District Judge Robert Sweet in Manhattan said investors could pursue claims that Facebook should have prior to its May 2012 IPO disclosed internal projections on how increased mobile usage and product decisions might reduce future revenue. “The company’s purported risk warnings misleadingly represented that this revenue cut was merely possible when, in fact, it had already materialized,” Sweet wrote in his 83-page decision. “Plaintiffs have sufficiently pleaded material misrepresentation(s) that could have and did mislead investors regarding the company’s future and current revenues.”

Steinberg conviction may ease Preet Bharara’s way to more (NYP)
Bharara has been circling Cohen and SAC for years, persuading six former SAC employees to plead guilty and wresting a plea from the firm. But Steinberg’s was the first SAC case to go to trial, and the jury conviction could help the government as it moves forward. First, Steinberg’s conviction could put pressure on another SAC money manager, Mathew Martoma, who has so far declined to cooperate with the government. The feds claim Martoma placed a 20-minute call to Cohen after receiving inside information that resulted in a $276 million profit at SAC. Martoma’s case goes to trial in less than three weeks, and the facts are widely believed to be more straightforward than the confusing circumstances surrounding Steinberg’s crimes. Unlike Martoma, who is alleged to have received illicit information from a doctor with knowledge of drug trials, Steinberg had five degrees of separation from the source of the illegal information he was convicted on.

Father films young son as he’s forced to run alongside car for ‘football training’ (NYDN)
A controversial video has surfaced showing a father forcing his young son to run alongside his car for “football training” while using expletives to encourage him go faster. The tiny tot, appearing only 5-years old, does his best to stay up to the vehicle’s speed while running in Crocks, but as the video shows, it’s not good enough. “We’re going eight miles per hour. Come on. Pick that s–t up,” the unidentified father calls. “This is how we train for football,” he says. “Daddy drives while you run. Get your little a– in shape.” Once outside their destination the boy momentarily stops and complains about his hip hurting. “I don’t want to hear about no excuses,” the father replies. Following his father’s orders, the boy starts running again as the man’s honking vehicle trails him up a driveway from just feet behind. Read more »

Opening Bell: 12.18.13

Goldman Dances to the New Street Beat (WSJ)
The Wall Street company, which clung to its trading roots even after a regulatory overhaul drove rivals to change course, is now reining in riskier activities, shrinking its balance sheet and steering clear of trades that don’t produce the double-digit-percentage returns its shareholders crave, Goldman executives and people familiar with the company’s plans said…Goldman, which derives about half its revenue trading stocks, bonds and other securities, has begun moving away from trades that require it to set aside more capital. The company is demanding to be paid more from clients for the money it does commit. At the same time, it is shrinking the inventory of securities it holds for clients, a step that frees up capital and boosts its returns. The goal is to eke out more profit from its trading unit, which in recent quarters has struggled amid tepid client activity. The changes have been gradual, as Goldman waited for the regulations to take shape, and the company’s overarching strategy remains intact.

Jury Still Out On SAC’s Steinberg (NYP)
Jurors in the federal insider-trading trial of SAC Capital moneyman Michael Steinberg ended their first day of deliberations without a verdict. They will resume Wednesday at Manhattan federal court. Steinberg is the first of eight employees of Steve Cohen’s SAC Capital caught in the feds insider-trading probe to go to trial. Six others have pled guilty while the eighth, Mathew Martoma, is scheduled to go on trial in January.

Ex-SAC manager Martoma fails to end part of insider case (Reuters)
A federal judge on Tuesday rejected former SAC Capital Advisors LP portfolio manager Mathew Martoma’s request to dismiss some insider trading charges because they were based on transactions not covered under U.S. securities laws. U.S. District Judge Paul Gardephe in Manhattan said Martoma’s alleged trades in American depository receipts of Irish drugmaker Elan Corp (ELN.I) qualified as domestic transactions covered by U.S. securities laws. As a result, the judge rejected Martoma’s request to dismiss one of two securities fraud charges, as well as related allegations in a conspiracy count. The defendant has pleaded not guilty to the three counts, and faces a January 6 trial.

UBS, Credit Suisse Payout Hopes Ebb as Regulators Tighten Leash (Bloomberg)
Prospects for fatter dividend payouts from Switzerland’s biggest banks are receding as Swiss authorities ratchet up capital demands. UBS AG (UBSN), the nation’s largest bank, was told to hold more capital for legal risks this quarter, while the finance minister said last month leverage rules might be tightened. Credit Suisse Group AG (CSGN), the No. 2 bank, is in talks with the regulator that may also lead to a demand for more capital, though it would be much smaller in scope than for UBS, a person with knowledge of the matter who asked not to be identified said this month.The tighter requirements, on top of stricter rules implemented over the past five years, arrived as the banks were preparing to start paying higher dividends. UBS Chief Executive Officer Sergio Ermotti, 53, pledged to pay out more than half of profits to shareholders once the company reaches a common equity ratio of 13 percent — a level that probably would have been achieved this year without the fresh demands. “The message from regulators is very clear: ‘if you think you can pay dividends, forget it,’” Oswald Gruebel, who served as CEO of both Zurich-based UBS and Credit Suisse, said by phone. “They don’t want to let banks pay any dividend. It’s totally open how long this will last.”

Duck penis studies, lifecoaches for Senate staff: $30B in government spending questioned (NYP)
While the White House and Congress griped this year about the pain of automatic budget cuts, the federal government still managed to spend billions of dollars on seemingly frivolous projects – from a $384,989 grant for Yale University to study the duck penis to $1.9 million for “lifestyle” lessons for Senate staffers. Nearly $30 billion in questionable federal spending is detailed in the “Wastebook” that was released Tuesday by the Sen. Tom Coburn (R-Okla.), who annually compiles the report…Taxpayers also got stuck with the bills for: $17.5 million for special tax exemptions for Nevada brothels, including tax deductions for groceries, wages for prostitutes, rent and utilities…$630,000 spent by the State Department to buy followers on its Facebook and Twitter accounts…$325,525 for a National Institutes of Health study that found wives would be happier if they could calm down faster during arguments with their husbands…$150,000 to support the Puppets Take Long Island festival in Sag Harbor. Read more »

Opening Bell: 12.17.13

Volcker Rule Shows Its Wide Reach (WSJ)
Unforeseen consequences of the Volcker rule already are rippling into the furthest corners of the economy and financial markets. Financial institutions and investors are scrambling to line up a new way to finance municipal-bond investments, with the week-old rule set to curtail banks’ dealings in so-called tender-option bonds—a $75 billion niche of the market for debt issued by cities, states and local governments. Meanwhile, more than a dozen small and midsize banks likely will need to sell collateralized debt obligations under a Volcker rule provision limiting certain risky bank investments, according to analysts.

SEC seeks $1.1 million-plus from ex-Goldman VP Tourre (Reuters)
The U.S. Securities and Exchange Commission asked a federal judge to order former Goldman Sachs Group Inc vice president Fabrice Tourre to pay more than $1.1 million for his role in a failed 2007 mortgage deal, according to a court document filed Monday in Manhattan federal court…The agency asked that Tourre pay a civil monetary penalty of $910,000. It also asked that he pay $175,463 in ill-gotten gains, plus interest of $62,858.03, according to the document. The SEC also said Tourre should be prohibited from accepting reimbursement for the penalty from Goldman

More Asia Hedge-Fund Managers Expect Rising Bonuses, Survey Says (Bloomberg)
More Asia hedge-fund industry employees are expecting increases in bonuses this year as they delivered returns, a survey by executive recruitment firm Heidrick & Struggles International Inc. showed. The share of respondents anticipating their bonuses to increase climbed to 48 percent in a survey carried out in September by the Chicago-based executive recruitment firm, up from 45 percent in last year’s poll. By contrast, those anticipating a decline in their bonuses shrank to 11 percent from about 25 percent last year.

Insider-Trading Case May Hinge on Phone Call (WSJ)
The phone call was between Mr. Steinberg and former SAC analyst Jon Horvath, who worked under Mr. Steinberg and, according to court documents, is the only witness who can connect his former boss to the alleged insider-trading conspiracy. n his closing arguments Monday, Assistant U.S. Attorney Harry Chernoff said Mr. Steinberg received the phone call one minute before making a huge bet against Dell Inc. on Aug. 18, 2008. On the call, Mr. Steinberg received an inside tip from Mr. Horvath that Dell’s gross margins would disappoint ahead of the company’s earnings announcement, Mr. Chernoff told jurors. Jurors could begin deliberating as soon as Tuesday to decide the fate of Michael Steinberg, right. “They didn’t need more than two minutes for that call, because Michael Steinberg already knew the score,” Mr. Chernoff said. Barry Berke, an attorney for Mr. Steinberg, painted a completely different picture. The call was “rushed,” Mr. Berke said, because Mr. Horvath was calling from an airport before leaving for Mexico. The former analyst passed “perfectly proper” information to his boss ahead of the Dell announcement, said Mr. Berke.

Steinberg wife to pals: No wearing bling near jury (NYP)
Liz Steinberg, who has been noticeably dressed down during her husband’s four-week trial in Manhattan federal court, sent an email to supporters days before the trial started to instruct them to leave the bling at home if they plan to attend the trial. “Dress conservatively,” the email instructed, adding that women would be wise to check their furs, jewels and designer handbags at the door. “We request that women wear no jewelry or furs, and no designer scarves, handbags, etc.,” said the Nov. 15 email, a copy of which was obtained by The Post.

Capitals fan takes a puck to the head, refuses to get stitched up until after the game (NIS)
Tricia Drummond, a Capitals fan and hockey player herself, took a puck off the head late in the third period of yesterday’s Caps-Flyers game in Washington, opening up a pretty nasty cut on her forehead that would require stitches to repair. Those stitches would have to wait though, as Drummond refused repairs until the game was over despite leaking quite heavily from her skull. The Caps trailed by one goal with just over three minutes left to play in regulation when Drummond suffered the injury, but they managed to tie the game up and force OT before winning 5-4 in a shootout…Drummond wound up getting five stitches following the game but said it was worth it to see her team pull out the victory. Read more »

Opening Bell: 12.16.13

Germany Appears To Backtrack On EU Banking Deal (WSJ)
EU finance ministers have promised to agree on a so-called single-resolution mechanism—consisting of more centralized decision-making and financing for the shuttering or downsizing of failing banks—before the end of the year. But a letter sent by Wolfgang Schäuble to some of his counterparts sets clear limits on how far Europe’s biggest economy is willing to go. Mr. Schäuble’s letter, dated Dec. 12 and seen by The Wall Street Journal, was described by German officials as reiterating Berlin’s concerns expressed in recent talks. But several other European officials see it as backtracking on earlier German concessions that had made possible an agreement last Tuesday on broad principles among the finance ministers of the euro zone’s biggest countries. That preliminary agreement was meant to lead to a more-specific and detailed deal among 28 EU countries this week.

UBS Wins End to Suit Over Adoboli’s $2.3 Billion Losses (Bloomberg)
UBS won dismissal of a suit claiming the bank lied to investors about its risk-management practices before its disclosure of a $2.3 billion trading loss by “rogue trader” Kweku Adoboli. Adoboli, who worked in UBS’s London office, was convicted of fraud and sentenced to seven years in prison last year. The unauthorized trading loss was the biggest in British history. “That a ‘rogue trader’ was able to cause such a significant loss to UBS is more akin to a claim of mismanagement than of fraud,” U.S. District Judge Katherine Forrest in Manhattan said yesterday in a ruling dismissing the suit.

Fed could set off year-end fireworks (Reuters)
Though the odds still point to no major policy change when U.S. central bankers meet December 17-18, most of the recent domestic economic data suggest the beginning of the end of their massive bond-buying program is coming sooner than later. If it acts it may reflect as much a growth in confidence in the global economy, for whom the withdrawal of the flow of cheap dollars will be a shock, as in the recovery in the United States alone. Growth in jobs, retail sales, services and overall output in the world’s biggest economy – combined with last week’s breakthrough budget deal in Washington – has convinced some economists that the Fed will announce a reduction to its $85-billion a month in purchases on Wednesday.

Gold Funds See Unprecedented 31% Slump as World Loses Faith (Bloomberg)
Holdings in the 14 biggest ETPs plunged 31 percent to 1,813.7 metric tons since the start of January, the first annual decrease since the funds started trading in 2003, data compiled by Bloomberg show. The removals erased $69.5 billion in the value of the assets as prices fell by the most since 1981. A further 311 tons will be withdrawn next year, according to the median of 11 analyst estimates compiled by Bloomberg. ETP investments reached a record $148 billion last year, helping sustain the bull market that drove a more than sixfold increase in prices since 2001 by offering a way to own bullion without needing to store it. The slump shows some investors losing faith in gold as a preserver of wealth after inflation failed to accelerate and the Federal Reserve signaled it may curb stimulus. John Paulson, the biggest investor in the largest ETP, said last month he doesn’t plan to buy more.

A Cold Meal (NYP)
Billionaire businessman Steve Schwarzman likes cold hard cash. But a meat-locker-cold steakhouse? Not so much. With temperatures already dipping into the teens on Thursday night, a shivering Schwarzman groused multiple times at a private dinner hosted by the private-equity tycoon’s Blackstone Group at Smith & Wollensky. “Can we get some heat in here?” Schwarzman griped during the event at one point.

Wal-Mart Employee Arrested For Shooting Co-Worker’s Car Over Award (CBS)
According to a Broward Sheriff’s Office arrest report last month’s employee of the month at a Deerfield Beach Wal-Mart store on South Military Trail had her car shot up by a co-worker who was angry after she won the award. Willie Mitchell is charged with discharging a firearm from a vehicle. The Broward Sheriff’s Office said surveillance video from a Wal-Mart parking lot shows Mitchell parking next to a co-worker’s earlier in December. A few minutes later, investigators said Mitchell rolls down a back window, fires a shot into his co-worker’s car then drives off. The co-worker was not in her vehicle at the time. BSO Spokesperson Veda Coleman-Wright said the shooting stemmed from some bad feelings after the victim won an Employee of the Month Award. “She was announced as the employee of the month which you would think that would be something good, people would be happy for her,” Coleman-Wright said. “But there was one employee who wasn’t happy.” Read more »