Opening Bell

Opening Bell: 10.29.13

Deutsche Bank Profit Falls 94% on 1.2 Billion Euro Charge (Bloomberg)
Net income in the three months through September dropped to 41 million euros from 747 million euros in the year-earlier period, the Frankfurt-based bank said in a statement on its website today. That missed the 430 million-euro average estimate of 12 analysts surveyed by Bloomberg. Deutsche Bank co-Chief Executive Officers Anshu Jain and Juergen Fitschen have been forced to make provisions to settle legal probes over their firm’s alleged role in rigging interbank lending rates and lawsuits related to the U.S. housing market. The company is among investment banks experiencing a slowdown in fixed-income trading, a key portion of their earnings, as investors wait to see whether the Federal Reserve will begin reducing bond purchases.

Dutch Rabobank fined $1 billion over Libor scandal (Reuters)
Rabobank said on Tuesday it was fined 774 million euros by U.S., British and Dutch regulators after 30 staff were involved in “inappropriate conduct” linked to a scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin – benchmarks for more than $300 trillion of financial products. Rabobank’s Chief Executive Piet Moerland resigned, saying he was shocked by the language his staff had used in the scam between 2005 and 2011 and understood the sense of indignation this would cause internally and externally.

France must beat U.S. at economic intelligence: trade minister (Reuters)
France must get better than the United States at economic intelligence rather than whining about U.S. phone tapping, which is no reason to suspend EU trade talks with Washington, its trade minister told Reuters on Tuesday. Reports that the U.S. National Security Agency extensively intercepted its European allies’ phone calls and emails including France and Germany have caused a diplomatic uproar. Asked about the scandal, Trade Minister Nicole Bricq said the lesson was for Paris to improve its own economic intelligence gathering. “Economic intelligence exists. There’s no point in whining. I think we should be doing better, be better organized,” Bricq told a Reuters Newsmaker briefing on Tuesday.

Man Accused Of Throwing Cat At Girlfriend (Sun Sentinel)
Stuart was arrested Thursday following an argument with his girlfriend. During the dispute, Broward Judge John “Jay” Hurley noted that Stuart allegedly injured the woman with her own pet. “She was lying on the bed and you entered the bedroom holding something in your hand, head high, and she said you were yelling at her, ‘Look it’s going to die. It’s got no air,’ and at that point you threw the cat in her face,” the judge read from the arrest report. The cat scratched the left side of her face near her left eye [and] her face was bleeding. He pushed her over, knocking the television and computer to the floor, the report stated. “When the police got there you said, ‘Just take me to jail. I’m tired of this,’” the judge read. “Later on, it says you changed your mind and allegedly said, ‘Ok, I’m sorry, I’m calm, can you let me go?’” Citing two previous convictions for battery, the judge set Stuart’s bond at $16,500 with orders to stay away from his girlfriend and her pet. Read more »

Opening Bell: 10.28.13

Man Making Ireland Tax Avoidance Hub Proves Local Hero (Bloomberg)
Google Inc., Facebook Inc. and LinkedIn Corp. wound up in Ireland because they could reduce their tax bills. Their success is leading European and U.S. politicians to label the country a tax haven that must change its ways. The grand architect of much of that success: Feargal O’Rourke, the scion of a political dynasty who heads the tax practice at PricewaterhouseCoopers in Ireland. He advises both multinational companies and the government on tax policy and has emerged as his country’s leading defender. “Under no circumstances is Ireland a tax haven,” O’Rourke said recently at his corner office on the River Liffey in Dublin, a ritual stop for many tech companies in their Irish quest. “I’m a player in this game and we play by the rules.”

JP Morgan’s Subprime Troubles Ran Deep (WSJ)
J.P. Morgan sidestepped many of the subprime-mortgage problems that bedeviled rivals during the financial crisis, and avoided much of the postcrisis scrutiny that dragged down others on Wall Street. But now its own behavior during the housing boom is coming under close examination as investigators work through a backlog of cases. The bank dealt with some of the biggest subprime lenders of the time, including Countrywide Financial Corp., Fremont Investment & Loan and WMC Mortgage Corp., a former unit of General Electric, according to the Federal Housing Finance Agency complaint. J.P. Morgan’s relationship with New Century, a subprime lender that went bankrupt in 2007 and later faced a Securities and Exchange Commission investigation and shareholder suits, shows that the New York bank was part of the frenzied push to package mortgages for investors at the end of the housing boom.

Hedge Fund Chief Set On Selling NY-Based Satellite Company (NYP)
Rachesky, who is Loral’s chairman and biggest shareholder with a 38 percent stake, is putting the New York satellite company on the block, sources told The Post. The 55-year-old investor has recently put out feelers to potential suitors, a source close to the situation said. While Rachesky, a medical doctor and a former protégé of Carl Icahn, is set on selling Loral, a holding company whose biggest asset is a 62.8 percent stake in Telesat, a Canadian satellite company, he has not yet hired a sell-side banker, a source said. Some investors are hoping Rachesky’s tough negotiating tactics don’t foil any potential sale. In 2011, the investor rejected a $6 billion offer for Telesat, calling it too low. The auction was then canceled, sources said. Private equity firms Carlyle, KKR and Providence Equity Partners each has bid for Telesat. The Ottawa-based company owns a fleet of 13 in-orbit satellites that offer telecommunication services to the private sector and government from perches 22,000 miles above Earth.

At Fed, Some Want A Rule For When To Act (WSJ)
The Federal Reserve has struggled to communicate clearly about its plans for winding down its $85 billion-a-month bond-buying program. Some Fed officials think they’d have an easier time if they established a rule to determine when and how to trim the purchases. With the Fed unlikely to change the program at its policy meeting Tuesday and Wednesday, discussion is likely to focus on issues such as this. Some members of the Fed’s policy-making committee want to clearly define when they will start scaling back the program—also known as quantitative easing, or QE—perhaps when the unemployment rate reaches a certain point. But others worry that firm rules could limit their options as they navigate unknown territory or be hard to follow when circumstances change.

Georgia Man Runs Into Burning Home To Save Beer (ABC)
The flames broke out while six adults and two young children were watching TV. Everyone quickly made it outside safely. But then Walter Serpit, who walks with a cane, rushed back into the burning building to save something near and dear to him. “I told them to get the kids out and everything, and me myself, being an alcoholic, I was trying to get my beer out,” he said. “You feel me?” Serpit managed to rescue several cans of beer from the fire without getting burned. Firefighters say you should never go back into a building that’s on fire. Read more »

Opening Bell: 10.25.13

Abe Says Japan Ready To Counter China’s Power (WSJ)
Japanese Prime Minister Shinzo Abe said he envisions a resurgent Japan taking a more assertive leadership role in Asia to counter China’s power, making Tokyo a representative in the region for countries nervous about Beijing’s military buildup and a possible U.S. pullback. “I’ve realized that Japan is expected to exert leadership not just on the economic front, but also in the field of security in the Asia-Pacific,” Mr. Abe told The Wall Street Journal, referring to his meetings with the region’s leaders at a series of summits earlier this month.

Norway’s Sovereign Wealth Fund Shuns Stocks (Bloomberg)
Norway’s sovereign wealth fund, the world’s largest, warned that stock market gains may reverse as Europe’s biggest equity investor said it won’t use new inflows to buy more shares. “Our share in the stock market has been stable or falling even though markets are rising, and that means in practice that we’re not using inflows to buy stocks,” Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, said at a press conference today in Oslo. The fund is preparing for a “correction” in stock prices, he said.

Twitter IPO Pegs Valuation At Modest $11 Billion (Reuters)
Seeking to avoid a repeat of Facebook Inc’s much-maligned public debut, Twitter Inc revealed more modest ambitions, saying its initial offering would raise up to $1.6 billion and value the company at up to about $11 billion. The valuation was more conservative than the $15 billion some analysts had expected for the social media phenomenon, potentially attracting investors who might consider the money-losing company’s listing price a better deal, with room to rise.

Consumer Sentiment in U.S. Fell to 10-Month Low in October (Bloomberg)
The Thomson Reuters/University of Michigan final consumer sentiment index decreased to 73.2, the weakest this year, from 77.5 in September. The median estimate in a Bloomberg survey called for a decline to 75 compared with a preliminary reading of 75.2.

Chicken Decoy Helps Police Nail 31 Drivers In Lake Elsinore (Patch)
A member of the Lake Elsinore Police Department dressed up as a chicken Thursday as part of a law enforcement crackdown aimed at drivers who don’t yield to pedestrians in crosswalks. The department conducted the crosswalk enforcement operation at five different locations in the city; two spots were located in close proximity to Lake Elsinore schools. There have been numerous complaints from the community about unsafe drivers near local schools. Lake Elsinore motor officers monitored crosswalks as the decoy walked through, explained the department’s Sgt. Peter Giannakakos. In total, officers ended up citing 31 drivers for failing to give way to a pedestrian in a crosswalk as well as one citation for speeding, the sergeant reported. Read more »

Opening Bell: 10.23.13

Draghi Says ECB Won’t Hesitate to Fail Banks in Stress Tests (Bloomberg)
“Banks do need to fail” to prove the credibility of the exercise, Draghi said in a Bloomberg Television interview with Francine Lacqua in Frankfurt, after the ECB published plans for its bank-asset check. “If they do have to fail, they have to fail. There’s no question about that.”

U.S. SEC releases long-awaited ‘crowdfunding’ rule (Reuters)
Entrepreneurs and start-up companies looking for backing will be able to solicit small investments over the Internet from the general public under a new proposal unveiled by U.S. regulators on Wednesday. The Securities and Exchange Commission’s “crowdfunding” plan is a requirement in the Jumpstart Our Business Startups (JOBS) Act, a 2012 law enacted with wide bipartisan support that relaxes federal regulations to help spur small business growth.

Third Point To Return $1.4 Billion To Investors (NYP)
Dan Loeb has joined the ranks of big money managers to scale back their business by returning capital to investors. Loeb plans to return around $1.4 billion to his Third Point investors at the end of the year, he told investors in his third-quarter letter dated Oct. 22. Third Point’s assets have grown to $14 billion since 2009. Loeb is up 24 percent on an annualized basis since then, far outdoing most of his peers, and is up 18 percent this year through September. But Loeb has met resistance with two of this year’s activist plays, Sony and Sotheby’s, which implemented a “poison pill” shareholder plan to thwart his moves. He also announced a new equity position in Nokia, the Finnish cell phone maker, in the investor letter.

Michael Jackson Is Top-Earning Dead Celebrity (NYP)
Jackson surpassed long-time pal Elizabeth Taylor as the top-earning dead celebrity, with his postmortem empire pulling in $160 million in the past year, according to Forbes. Jackson, who died of an overdose in 2009, took the honors thanks to two Las Vegas shows, Cirque du Soleil’s “Immortal” and “One,” that pay tribute to the Gloved One. Jackson’s estate raked in more than any pop star — living or dead — and easily beat Madonna, who ranks as the top earner on the magazine’s annual Celebrity 100 list…Jackson also far outstrips his nearest deceased rival, Elvis Presley, who came in at No. 2 with earnings of $55 million — a figure that’s been relatively static the past few years. Read more »

Opening Bell: 10.22.13

Former JPMorgan executive challenges UK’s London Whale report (Reuters)
A former JPMorgan Chase & Co executive in Europe is appealing findings by Britain’s financial watchdog that criticized his actions in connection with the “London Whale” scandal. Achilles Macris, who is appealing, ran the London division of JPMorgan’s Chief Investment Office, where Bruno Iksil, nicknamed “the London Whale” for the size of the his derivatives trades, stacked up huge losses, more than $6.2 billion at last count. JPMorgan agreed to pay $920 million in penalties last month to the U.S. Federal Reserve, the U.S. Securities and Exchange Commission, the U.S. Comptroller of the Currency and the UK’s Financial Conduct Authority (FCA) over the trading scandal. The FCA notice of its fine, totaling 137.6 million pounds, did not mention Macris by name but said that “by virtue of the conduct of the CIO London management” JPMorgan had deliberately misled the regulator. A spokesman for Macris said he had not been given a proper opportunity by the FCA to respond to the criticisms before they were published.

22 Under Investigation In Libor Case In Britain (Dealbook)
British prosecutors have identified 22 individuals at various banks as potential co-conspirators in a wide-ranging inquiry into the manipulation of a global benchmark interest rate. The individuals were notified last week by Britain’s Serious Fraud Office that they were being investigated, prosecutors and lawyers for some of the potential co-conspirators said at a court hearing in London on Monday.

SAC Investors To Keep Big Profits (NYP)
As hedge-fund mogul Steve Cohen prepares to cough up about $1.4 billion to settle criminal insider trading charges against his SAC Capital Advisors, investors who benefited from the crimes will likely be able to hold on to those profits, experts told The Post. From 1999 through 2010 — when SAC was a “magnet for cheaters,” according to Manhattan US Attorney Preet Bharara — investors earned billions of dollars in profits as Cohen’s hedge funds produced 25 percent net annual returns. Investors started pulling assets from SAC in earnest this year as prosecutors put the final touches on their probe of the Cohen juggernaut. “The investors are passive and not involved in any of the things SAC is supposed to have done,” said Simon Lack, a former executive at JPMorgan responsible for investing in hedge funds. “It would be very difficult to penalize the investors.”

Blackstone Opens Singapore Office in Expansion Drive (Bloomberg)
Blackstone, the world’s biggest manager of alternative assets, will seek more investments in Southeast Asia following the opening of an office in Singapore seven years after entering the Asia-Pacific region. Blackstone, led by Chief Executive Officer Stephen Schwarzman, has more than $5 billion of Asian assets, of which more than half are in real estate. Singapore will be the firm’s second office with treasury functions after New York, according to the company, which manages about $248 billion worldwide.

Tommy Hilfiger lists his $80 million penthouse at Plaza (CNBC)
Hilfiger, the 62-year-old fashion tycoon, is listing his duplex at the Plaza Hotel for $80 million, making it one of the most exclusive condo listings in Manhattan. The apartment stretches over 6,000 square feet and includes the iconic dome atop the plaza, along with sweeping terraces overlooking Central Park and Fifth Avenue. If it sells at the asking price, the property would be second-most expensive condo ever to close in New York, according to Jonathan Miller of Miller & Samuel. The most expensive condo to close is believed to be a penthouse at 15 Central Park West sold by former Citigroup CEO Sandy Weill in 2012…Hilfiger said he is selling because he is spending more time in Greenwich, Conn., where he is completing a three-year renovation of a 22-acre estate…He added, however, that it’s a good time to sell in New York. “I think it may be the strongest market in the world right now,” he said. “Everyone in the world, whether they’re from Qatar or China, wants a luxury apartment in New York.”

‘I party with my mom!’ Mother-daughter duos hit NYC clubs (NYP)
When Amanda Paneduro scrolls through photos on her iPhone, she has trouble picking out her favorite mother-daughter pic. Was it the one they took while partying at nightclub LIV in South Beach during a wild girls’ weekend? Dancing onstage together with electro-rap duo LMFAO at club Glo on Long Island? Or maybe the time at the rooftop in the Meatpacking District when a creepy older guy hit on both mom and daughter? “Nobody really knows she’s my mother,” says 19-year-old Amanda with a laugh. Tonight, the two are holding court at the Gansevoort Hotel rooftop bar, clad in black leather jackets, skintight pants and sky-high heels. “We have so much fun together — she’s my best friend,” gushes Amanda, a college student from Jericho, Long Island, of her 49-year-old separated mom, Ilyssa. “We share everything,” she continues, including Ilyssa’s prized collection of Céline and Chanel bags and YSL and Louboutin shoes. But they draw the line at sharing men. “A lot of times the same guy will try to hit on both of us,” says Amanda. “We attract positive attention. If we’re lucky, we’ll be invited to someone’s table. She’s like going out with a friend, very understanding. She’s not super-overprotective.” The pair are known to party till 4 a.m., then hit nearby Artichoke Pizza to refuel. They’ve been socializing together since Amanda was 16, and they’re such regulars on the scene that she doesn’t even get carded anymore. Celebrity culture and reality TV are already awash with mothers and daughters bonding over bottle service…Middle-aged New York moms are following suit — with wild nights of clubbing now supplanting the tame brunches and mani-pedi dates that might have defined parental bonding of yore. Read more »

Opening Bell: 10.21.13

J.P. Morgan Pact on Table But Other Probe Looms (WSJ)
JP Morgan Chase reached a tentative deal this weekend to pay $13 billion to end a number of civil investigations into its sale of mortgage securities before the 2008 financial crisis, but a separate and potentially more serious criminal probe into the bank and its executives will continue. The Justice Department, convinced it has strong evidence related to the bank’s conduct and eager to send a message to Wall Street, rebuffed repeated attempts by J.P. Morgan to settle the criminal investigation without admitting wrongdoing and agreed only to resolve the civil investigations. It also threatened last Thursday to file its civil case this coming Wednesday if the two sides can’t reach a final deal, said people close to the talks.

Former UBS Official Arrested (WSJ)
Raoul Weill, the former No. 3 official at UBS, has been arrested in Italy based on an Interpol notice requested by U.S. authorities, according to a U.S. official. The U.S. plans to seek his extradition from Italy to face charges of helping conceal billions of dollars from US tax authorities.

Dallas Mavericks owner blasts tactics of SEC’s White (NYP)
“It wasn’t about the money,” said Cuban, who emerged victorious Wednesday in Dallas federal court. “For me, it was about doing the right thing.” Indeed, Cuban has steadily denied the SEC’s key argument, that Mamma.com CEO Guy Fauré told Cuban he couldn’t sell his $7.9 million stake after discussing the company’s plans to raise money in a private stock offering that Cuban passed up. And now he’s fired up about the SEC and is considering “taking steps in Washington” to make his concerns known. “They’re not looking for justice, they’re looking to win,” he said of the watchdog. Cuban also slammed the SEC’s new policy of cracking down on small violations to send a message to the wider culture. The so-called “broken windows” policy, popularized by former mayor Rudy Giuliani to describe his cleanup of New York City, will just lead to lawsuits against “a lot of little guys,” he said.

The Tie Is Dead. (Long Live the Tie) (WSJ)
Anecdotal evidence from the corporate world varies. John Fraser, 51, managing partner of a real-estate investment firm in New York, often wears a tie with his suit, but not always. He has also noticed fewer tie-wearers among his colleagues and associates. “It seems like more of a personal choice, as opposed to several years ago when it was mandatory,” said Mr. Fraser. “Now there’s broader bandwidth of what represents acceptable business clothing.” Patrick Sweeney, 36, however, wears a tie—Hermès, Etro or Salvatore Ferragamo—every day to his real estate job in midtown Manhattan. “I would get fired if I didn’t,” said Mr. Sweeney. “The head of the company wears a tie, so everyone else does as well.” When not obliged to knot up, however, Mr. Sweeney doesn’t wear one. “Generally, I find them uncomfortable and overly formal,” he said.

Twitter Quitters Dog IPO (Reuters)
People who have given up on Twitter cite a variety of reasons, from lack of friends on the service to difficulty understanding how to use it. Twitter declined to comment for this story, saying it is in a quiet period ahead of its IPO. Twitter’s attrition rate highlights a challenge that has dogged the online messaging site over the years: while it has managed to enlist many high-profile and avid users, from the Pope to President Barack Obama, Twitter has yet to go truly mainstream in the way Facebook has. Convincing ordinary people to think of Twitter as an indispensable part of their lives is key to the company’s ability to attract advertisers and generate a profit. Twitter reported it had 232 million “active” users – people who access the service at least once a month – at the end of September, up 6.1 percent from the end of June. Twitter’s quarter-over-quarter growth in active users has not exceeded 11 percent since June 2012. When Facebook was a similar size, its active users were increasing by more than 20 percent every quarter, and it was not until the social network neared the half-a-billion member mark that its user growth decelerated to 12 percent. “Twitter is a great service, it’s still got growth in front of it. But in my opinion, I would say the opportunities are less than that of Facebook, and it has to be valued appropriately,” said Dan Niles, chief investment officer of tech-focused hedge fund firm AlphaOne Capital Partners.

After extremely tight Jets victory over Patriots, male Jets fan punches female Pats fan in face (NYDN, Deadspin)
An unidentified Gang Green fan punched a woman at Met Life stadium during a post-game skirmish on Sunday, according to an video posted on Deadspin.com. The wild fight erupted near one of the exit gates following the intense overtime victory. The punk, wearing a Wayne Chrebet jersey and camouflage pants, clocked a slender blond woman square in the face and was quickly separated from the fracas. The 35-second clip shows no sign of security intervening. For the non-violent majority of Jets fans, the historic penalty that sealed Sunday’s victory was better than sex, capping a week in which coach Rex Ryan implored his players to refrain from hanky panky. Read more »

Opening Bell: 10.18.13

HSBC Is Fined $2.46 Billion in Securities Fraud Case (Reuters)
A unit of the British bank HSBC was hit on Thursday with a record $2.46 billion final judgment in a securities class-action lawsuit in Chicago against a lender formerly known as Household International. The judgment, by Judge Ronald Guzman of Federal District Court, was the largest in a securities fraud class-action suit that went to a trial, according to a statement from the Robbins Geller Rudman & Dowd law firm, which represented investors.

Morgan Stanley to Face Class Suit by Singapore Investors (Bloomberg)
A group of Singapore investors who lost money on $154.7 million in credit-linked notes may pursue their suit against Morgan Stanley as a class, a federal judge in Manhattan ruled. U.S. District Judge Jesse Furman said today the investors may represent a class of all persons who bought any of seven series of Pinnacle Notes issued in 2006 and 2007. The investors sued in 2010, claiming the notes were a “bait and switch” scheme designed to benefit Morgan Stanley at the expense of customers.

Lenovo Approaches BlackBerry (WSJ)
Lenovo Group Ltd. is actively considering a bid for all of struggling Canadian smartphone maker BlackBerry Ltd., according to people familiar with the matter, the latest sign of the voracious appetite of Chinese companies for foreign acquisitions. The Chinese personal-computer maker has signed a “nondisclosure” agreement that allows it to look at BlackBerry’s books, one of the people said, joining a list of potential bidders for the company, which has put itself up for sale.

GOP Civil War Erupts: Business Groups v. Tea Party (Bloomberg)
A battle for control of the Republican Party erupted Thursday as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement. “We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending. Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today that they’re supporting efforts to defeat Mississippi Senator Thad Cochran, a 35-year veteran who voted for the deal ending the 16-day shutdown and avoiding a government debt default.

Former Primary Global employee avoids jail in insider case (Reuters)
A former technology analyst at expert networking firm Primary Global Research LLC avoided jail time on Thursday after a judge praised his “very substantial assistance” in cooperating with a government insider-trading investigation. Bob Nguyen, 34, who pleaded guilty in January 2011 to leaking confidential corporate information to hedge funds, received two years of probation from U.S. District Judge Jed Rakoff in federal court in New York…Rakoff said Nguyen’s sentence should not be seen as a suggestion that insider trading is a minor issue. Instead, he said, it was a reflection of the fact that such prosecutions frequently require cooperation to succeed.

Rex Ryan tells NY Jets players no messing around before Patriots game (NYDN)
Ryan, in a team meeting Wednesday, told the Jets they need to be well-rested when Tom Brady and Co. hit MetLife Stadium on Sunday, and, according to Josh Cribbs, added “Don’t do nothing for your wife.” To defensive lineman Sheldon Richardson, that not only meant avoiding things like taking out the garbage, it also included any activities in the bedroom. “Most definitely,” Richardson told the Daily News with an ear-to-ear grin, when asked if Rex’s message included hanky panky. Richardson’s comments sparked Jet mayhem reminiscent of the good old days, forcing Ryan to come into the press room and tell the gathered media that sex is not part of his no-no list for the weekend. It was good for a few laughs, but the message was clear: focus on the Patriots and nothing else. “He was like … rest your legs, you go home, don’t do nothing for your wife,” Cribbs said. “Say baby, next week. You’ll take out the trash next week. I’ll take the kids to practice next week but I’ve got to rest for this game. I’m going to tell him to put it on paper so when I give it to my wife, I can be like, ‘Rex said that I don’t got to take out the trash.’ So he might get a call.” Read more »