Opening Bell

Opening Bell: 05.14.14

Geithner Must Provide S&P With Documents in Fraud Lawsuit (Bloomberg)
Ex-U.S. Treasury Secretary Timothy Geithner must comply with Standard & Poor’s demand that he provide documents related to its claim the U.S. sued the company in retaliation for downgrading government debt. Geithner is the highest former government official the McGraw Hill Financial (MHFI) Inc. unit has pursued for information to support its allegations. S&P, the only credit rating company sued by the Justice Department for allegedly giving fraudulent ratings to mortgage-backed securities, has said it was singled out because of the downgrade.

For BNP Paribas, Credit Suisse, Too Big to Jail Gets Lost in Translation (BusinessWeek)
While Lawsky has indicated he plans to pursue individuals at the companies who were involved in the alleged wrongdoing, possibly requiring that they lose their jobs and return back compensation, the Justice Department is seeking settlements with the banks rather than charges against individuals—so those eye-popping fines will be paid by the corporation, but no one is threatened with jail. Remarkably, the two banks faced with pleading guilty to an actual crime are both non-U.S. institutions. This can’t be a coincidence: Not only is it less painful politically to extract a guilty plea from a European company, but the effects on the rest of the U.S. financial system would be far less than they would be for an American bank of similar size.

Tech Firms’ Cash Piles Cool Fears of a Meltdown (WSJ)
The two-month swoon in technology stocks has given investors flashbacks to the dot-com meltdown. But at least one harbinger of trouble is absent today: tech firms in danger of collapse. A Wall Street Journal analysis of 148 U.S. tech companies with recent or pending initial public offerings found none on a path to burn through their cash within a year, based on their pace of spending in 2013. Those findings are in contrast to the health of young tech companies during the last run-up of U.S. technology stocks, which peaked in March 2000. A cover story that month in the financial magazine Barron’s spotlighted how one-quarter of 207 Internet companies were on track to run out of cash within a year. And many did.

Fed Warns Of Crackdown On Takeover Deals (WSJ)
The statements by a Fed official in remarks prepared for a regulatory conference were the latest warning that U.S. regulators want banks to end practices they see as risky in so-called leveraged lending markets. The Fed and the Office of the Comptroller of the Currency told banks in March 2013 to avoid funding takeover deals that would leave companies with high levels of debt. “Judging from aggregate market data, it appears that many banks have not fully implemented standards set forth” in the March 2013 guidance, said Todd Vermilyea, senior associate director in the Fed’s Division of Banking Supervision and Regulation, at a Charlotte, N.C., event hosted by the Federal Reserve Bank of Richmond.

Alec Baldwin arrested for disorderly conduct after flare-up with New York cops (NYDN)
Alec Baldwin…went on a New York City-dissing Twitter tear — after he was busted Tuesday for flipping out on two cops who were just doing their jobs. “New York City is a mismanaged carnival of stupidity that is desperate for revenue and anxious to criminalize behavior once thought benign,” Baldwin wrote. Then, in a subsequent tweet, Baldwin gave up the name and badge number of the female officer who ended his foul-mouthed tirade by cuffing him. And finally, incredibly, Baldwin boo-hooed that “the police did nothing” about the photographers who were drawn by his bad behavior to his East Village building. “Meanwhile, photographers outside my home ONCE AGAIN terrified my daughter and nearly hit her with a camera,” he tweeted…Baldwin’s latest blow-up came after he was stopped at 10:15 a.m. for riding his bicycle against traffic on Fifth Ave. near 16th St. in the Flatiron District. When the cops asked him for identification, Baldwin lost it on them, sources told The Daily News. “He became belligerent, yelling and screaming at the officers, ‘I don’t have ID. Just give me the f—–g summonses,'” one police source said…Baldwin was still seething when he arrived at Manhattan’s 13th Precinct and was charged with disorderly conduct.
“How old are these officers?” Baldwin groused. “They don’t even know who I am.” Read more »

Opening Bell: 05.12.14

Boom times for bank trading have gone, and may never come back (Reuters)
Even though it’s taken Western economies several years to regain pre-crisis national output levels, many doubt banks will ever revisit the pre-crisis high watermark of their trading activities. Revenues from fixed income, currencies and commodities – the so-called ‘FICC’ universe – continued to tumble for most major U.S. and European banks during the first quarter of 2014, increasing the pressure on them to rethink business models…FICC income at Goldman Sachs last year was 72 percent of the bank’s overall revenue, compared with 82 percent in 2010. Morgan Stanley’s FICC revenue was 70 percent of its total, well down from 82 percent in 2003.

Tracking Brain Waves to Boost Investment Returns (BusinessWeek)
In a quest to improve its trading methods, hedge fund Sang Lucci Partners Capital sent a crew of traders from New York to Los Angeles last month to have their brains tested. As the traders bought and sold options and stocks on a simulated system, computers recorded their brains’ electrical activity. “These guys, their whole profit and loss statement is being determined by their mind, and yet they have no way to analyze it,” says Charlie Bathgate, a Sang Lucci partner who organized the test. “There’s this big gap there. So we’re trying to fill that a little bit.”

Tech Stocks Are Still ‘Too Silly’ for Some (WSJ)
Tesla trades at 89 times next year’s earnings, according to FactSet. That is down from a price-to-earnings multiple of 117 in March, but still about six times more expensive than the S&P 500. Daily-deals site Groupon trades at 35 times next year’s earnings. “We’ve gone from three times silly to two times silly,” said Mitch Rubin, chief investment officer at RiverPark Funds, which has $3.1 billion under management. As investors start focusing more on the fundamentals of these stocks, they could easily fall further, he said. “When the facts start to matter for these stocks, the bottom is a long way off.”

Race for AIG’s Top Job Has Two Favorites (WSJ)
In their search for the next chief executive at AIG, the insurer’s directors have narrowed the field of internal candidates to two executives, Peter Hancock and Jay Wintrob, who work on opposite ends of the U.S. and have different specialties, according to people familiar with the matter. The board hopes to make a selection as soon as September, according to one person with knowledge of the company.

Atherton mansion madness: Homes of the rich and (tech) famous (CNBC)
High-end homes in Atherton are selling like hotcakes, and often over the asking price, and frequently for all cash. That’s saying something when you are talking about $10 million-plus estates… Location is a big reason why Atherton is the perfect place for the super-rich. The town is 45 minutes south of San Francisco, and less than 20 minutes to the headquarters of Facebook, Google and most of the major tech companies in Silicon Valley…investors from China will often pay for a mansion sight unseen.

Brits do enough cocaine to contaminate their water (NYP)
Experts from the Drinking Water Inspectorate experts found traces of the party drug, in a form that has been passed through the body, in treated tap water — despite intensive water purification treatments. Steve Rolles, from the drug policy think tank Transform, told The Sunday Times that the findings reveal how widely used cocaine is. “We have the near highest level of cocaine use in western Europe,” he said. “It has also been getting cheaper and cheaper at the same time as its use has been going up.” [...] health officials stressed that the traces of drugs found in the water supply were very low and unlikely to represent a danger to the public. “Estimated exposures for most of the detected compounds are at least thousands of times below doses seen to produce adverse effects in animals and hundreds of thousands below human therapeutic doses,” the report said. Read more »

Opening Bell: 05.09.14

As One-Time Gains Fade, Fannie and Freddie Face a Less-Profitable Future (WSJ)
Fannie Mae and Freddie Mac had another blockbuster quarter and will deliver $10.2 billion in dividends to the U.S. Treasury next month, but earnings reports Thursday hinted that their recent run of profitability could soon moderate as a string of one-time gains fades. The mortgage-finance firms, which the government seized in 2008 to prevent a broader market meltdown, notched combined first-quarter net income of $9.3 billion, driven by legal settlements with big banks on lawsuits that were filed by the companies’ regulator. Fannie and Freddie reported $4.1 billion and $4.9 billion, respectively, from those settlements…The companies—which don’t make mortgages but instead buy them from lenders and package them for issuance as securities—warned that profits aren’t likely to remain at such lofty levels, in large part because many of the unusual benefits will run their course. That will leave the firms heavily dependent on the fees they charge banks to guarantee mortgages, especially as they wind down the large mortgage portfolios that have historically been a larger source of core earnings.

Could take 5-8 years to shrink Fed portfolio: Yellen (Reuters)
The U.S. Federal Reserve is in no rush to decide the appropriate size of its balance sheet, but if it ultimately shrinks it to a pre-crisis size, the process could take the better part of a decade, Fed Chair Janet Yellen said on Thursday. Yellen, in testimony to a Senate panel, said no decision had yet been made on the central bank’s portfolio of assets, which has swollen to $4.5 trillion from about $800 billion in 2007. Three rounds of asset purchases meant to stimulate the economy in the wake of the 2007-2009 financial crisis have boosted the balance sheet to this record level. Unsatisfied with the U.S. recovery, the Fed is still adding $45 billion in bonds each month, though the purchases should end later this year. Yellen said the portfolio should start to shrink once the Fed decides to raise near-zero interest rates.

Geithner in Book Says U.S. Considered Nationalizing Banks (Bloomberg)
Geithner disagreed when Lawrence Summers, then head of the White House’s National Economic Council, suggested to President Barack Obama that the administration “pre-emptively nationalize” banks including Citigroup and Bank of America Corp., or try to embarrass them into changing their pay structures, according to the Times. The article includes quotes from the book, “Stress Test: Reflections on Financial Crises,” and interviews with Geithner. Geithner feared “fueling unrealistic expectations about our ability to eradicate extravagance in the financial industry,” he wrote in the book, to be published May 12. “I did not view Wall Street as a cabal of idiots or crooks,” Geithner wrote. “My jobs mostly exposed me to talented senior bankers, and selection bias probably gave me an impression that the U.S. financial sector was more capable and ethical than it really was.”

Bankers risk reprisals if they skip Russian summit (MarketWatch)
Those who decide to attend the May 22-24 St. Petersburg International Economic Forum probably won’t risk much pushback from the Obama administration, which according to media reports is pressuring executives not to participate in the annual event held to showcase the Russian economy, says John C. Coffee Jr., a law professor at Columbia University. But Russia and its president, Vladimir Putin, who faces increasing economic sanctions for the Ukraine crisis, could be a different matter, Coffee says. “Russia has no hesitation about retaliating, because that is way they operate,” he explained. The risks depend on the companies’ stakes in Russia, experts say. JP Morgan recently revealed its exposure to Russia was $4.7 billion at the end of the first-quarter and it is closely monitoring the Ukraine situation. “There is all [kinds of] injuries that could occur from this,” said Coffee. “The most serious is if you had a serious business negotiations going on right now.”

Ex-NFL pro warns rookies: Watch your millions (CNBC)
“Let’s just hope that this year’s rookie class understands the reality behind the numbers and takes measures to save and invest their earnings, keeping in mind that, on average, their career will only last shortly over three years,” said Jack Brewer, a former NFL player who now runs The Brewer Group, an investment company that caters to athletes.

Happy birthday, Cronut! A look back at the pastry’s first year (NYP)
May 10, 2013: Pastry chef Dominique Ansel debuts the Cronut, a doughnut-croissant hybrid, at his eponymous Soho bakery. Mid-May, 2013: Cronut mania strikes the city full-on. People line up for hours before the bakery opens. Ansel reports customers crying and insulting staff when they run out of Cronuts, which they are only making a few hundred of each day. June 2013: Ansel institutes a two-Cronut-per-customer limit in an attempt to crack down on scalpers, who are reselling the $5 pastry for as much as $100 a pop. “Waiting in line for two Cronuts isn’t a very profitable business,” Ansel says of his scalper crackdown. April 4, 2014: The NYC Health Department shuts down Dominique Ansel Bakery over a “severe” mice infestation. “The pastries are delicious, so I can’t blame the mice,” quips a customer. April 8, 2014: The bakery reopens after passing a 2 ¹/₂ hour health department inspection. Read more »

Opening Bell: 05.07.14

Fat-Destroying Machine Doubted by Stock Traders (Bloomberg)
The way Shimon Eckhouse sees it, his company’s fat-busting technology gives him a direct line into what he calls one of the holy grails of beauty treatment. Everyone, he says, is worried about being overweight. So when Syneron Medical Ltd. (ELOS), the Israeli company Eckhouse co-founded in 2000, failed to rally in the stock market after the U.S. approved the ultrasound device on April 14, he was surprised. “I expected to see much more of a jump in the stock,” Eckhouse, Syneron’s chairman, said in a May 2 phone interview. There is “huge potential” in the business, he said…Now that the Food and Drug Administration has approved the device, Syneron will begin selling UltraShape machines to a limited group of doctors in the second quarter of 2014 to test its model of revenue sharing, Eckhouse said. The company plans to apply the model to Syneron’s other products, which include devices for skin whitening, wrinkle treatment, and hair-removal. The UltraShape machine painlessly destroys fat cells by heating them with ultrasound waves that penetrate 1.5 centimeters (0.6 inch) below the skin, according to a company presentation.

Regulators Step Up Probe Into Bank Hiring Overseas (WSJ)
The Securities and Exchange Commission in early March sent letters to a group of companies including Credit Suisse Group AG , Goldman Sachs, Morgan Stanley, Citigroup, and UBS AG seeking more information about their hiring in Asia, according to the people. It is examining whether the banks or their employees violated antibribery laws by hiring relatives of well-connected officials.

UBS, Barclays Contrast Shows How Slimmed-Down Investment Banking Bolsters Bottom Line (WSJ)
At Zurich-based UBS, which significantly curbed its trading operations after the financial crisis, first-quarter earnings beat analysts’ expectations. The bank’s shares gained 1.2% By contrast, Barclays, which is still to shrink its securities unit, missed forecasts amid a collapse in operating profit at its investment bank. London-based Barclays’s shares fell 5.2%. Since the start of the year, investors have sent UBS stock up by about 9% while Barclays’s has fallen by a similar amount. The contrast reflects different approaches at the two banks since the financial crisis. UBS, laid low by the crisis in 2008, bit the bullet of a major revamp. The bank has undergone years of restructuring that curbed its presence in investment banking, particularly in the costly and relatively high-risk debt-trading business, and refocused its efforts on wealth management and private banking.

As Lockup Expires, Twitter Holders Fly the Coop (WSJ)
The expiration of the six-month “lockup” imposed by the securities firms that sold the Twitter initial public offering freed holders of 83% of shares outstanding to sell for the first time. Tuesday’s decline, Twitter’s second-biggest one-day percentage drop, marked the worst performance for a technology stock on its lockup-expiration day since at least the start of 2013, according to data provider Dealogic.

Insight: Pimco’s bad bets on emerging markets add to firm’s troubles (Reuters)
In particular, it has made made some ill-timed bets in the Brazilian, Mexican and Russian debt markets. It made substantial investments in some companies that have gone belly-up, such as Brazilian oil company OGX Petróleo e Gás Participações SA, which was controlled by Eike Batista, who only two years ago was estimated to be the world’s seventh-richest man but whose business empire has now largely crumbled.

World’s largest legal pot facility to open (NYP)
CEN Biotech — a nutrition company best known for an amino acid supplement — is working on opening the “largest and most advanced” legal marijuana production facility in the world. The Ontario site will be able to grow 1.3 million pounds of pot from 50,000 plants — an operation that could produce $5 billion in sales per year when it starts producing in a few weeks after it passes government inspections. No more hiding grow lamps in closets: This $20 million facility will churn out pot like other factories churn out aspirin. And it has plans to expand to the US. Read more »

Opening Bell: 05.06.14

Credit Suisse Said Near U.S. Tax Deal for Over $1 Billion (Bloomberg)
Credit Suisse Group AG (CSGN), facing a U.S. criminal probe of whether it helped Americans evade taxes, is close to resolving the case with an agreement that may include a penalty of more than $1 billion and a guilty plea, according to a person familiar with the matter. The person, who asked not to be named because the negotiations are confidential, didn’t specify whether the plea would be entered by the entire firm or a subsidiary. Credit Suisse, the largest of 14 Swiss banks facing criminal tax probes by the U.S., was told in 2011 that it was a target of prosecutors.

UBS First-Quarter Profit Up (WSJ)
Swiss bank UBS AG said Tuesday that first-quarter net profit was 1.1 billion Swiss francs ($1.25 billion) compared with 988 million francs reported a year earlier and against analyst forecasts of 838 million francs.

Einhorn Plays Athenahealth for Laughs and Decimates Its Shares (BusinessWeek)
As he dismantled the bull case for Athenahealth and then mounted a lengthy bear case, Einhorn repeatedly turned for help to none other than Athenahealth Chief Executive Jonathan Bush when he played embarrassing video clips of the high-strung CEO. Bush was shown spouting techo-verbiage at various interviewers and acknowledging that his company was not worth its valuation. The snappily cut footage, complete with freeze frames of Bush looking foolish with his mouth open, lent the presentation a Daily Show-esque vibe. It’s a new way for Einhorn and his $10 billion Greenlight Capital hedge fund to publicize short sales.

Three Bankers Bolster Blankfein as Goldman Trading Sinks (Bloomberg)
Led by David M. Solomon, Richard J. Gnodde and John S. Weinberg, the investment-banking division last year generated the second-highest revenue and profit since the firm went public in 1999, trailing only 2007, when the volume of global mergers was almost twice as high. The unit boosted revenue and market share in each of its three businesses: underwriting equity, advising on mergers and acquisitions and underwriting debt. Its share of fees from debt underwriting was the greatest since 1999, and it made about $2 billion from advisory work, 50 percent more than its closest competitor, JPMorgan Chase & Co. — a $660 million gap, according to data compiled by Bloomberg. The dominance was even more pronounced in the first quarter of 2014, when Goldman Sachs almost doubled the advisory revenue of every other bank and led in total investment-banking fees for the first time since the financial crisis.

Calstrs to Vote Against BofA Directors in Proxy Campaign (WSJ)
The California State Teachers’ Retirement System pension fund voted against four members of Bank of America Corp.’s board in response to the bank’s announcement last week that it had miscalculated capital levels. The move is largely symbolic, because many big shareholders have expressed support for Bank of America’s management and are expected to vote for the current board.

Grilled cheese set to parachute into New York City (USAT)
The Australian pop-up restaurant Jafflechutes has announced plans to bring its parachute-delivered grilled cheese sandwiches to New York City. The Melbourne group raised funds to bring its whimsical sandwich delivery system to North America — possibly this month, according to a Facebook post — but they say they aren’t in it for the money. “We do this purely for fun,” Adam Grant, one of Jafflechutes’ founders, told Fast Company in April. If you’d like to catch an airborne jaffle (that’s an Australian word for grilled cheese), Jafflechutes says they will announce the next drop one day in advance on Twitter and Facebook. Interested parties can then order via Paypal, $5 for cheese and tomato and $6 for cheese and ham. At a predetermined time the following day, stand on an “x” marked on the street at a secret location and look to the sky. Jafflechutes will drop the sandwich, complete with its own tiny parachute, into waiting hands below. Read more »

Opening Bell: 05.05.14

BofA Forgiven as Buffett Says ‘You Do the Best You Can’ (Bloomberg)
Warren Buffett, who invested $5 billion in Bank of America Corp., said he’s confident the lender will overcome an accounting mistake that forced the firm to suspend an increased payout to shareholders. “That error they made does not bother me,” Buffett said on May 3 at Berkshire’s annual meeting in Omaha, Nebraska. “You do the best you can.” Bank of America halted $4 billion of share repurchases and a boost to its common-stock dividend on April 28 after finding the mistake in a stress-test submission to the Federal Reserve. The Charlotte, North Carolina-based bank’s error, which had gone undetected since 2009, didn’t affect earnings. “It doesn’t change my feeling about Bank of America or its management,” said Buffett, 83.

Borrowing Cash to Buy Complex Assets Is In Vogue Again (WSJ)
Banks again are doling out money to hedge funds and other investors to finance purchases of complex debt securities, returning to a practice that helped fuel the debt boom ahead of the financial crisis. RBC Capital Markets, Société Générale and Wells Fargo & Co. are among the banks offering to let investors borrow money, also known as providing leverage, to buy collateralized loan obligations, say investors and bankers. CLOs are bonds typically backed by pools of low-rated corporate loans. Borrowing programs for such esoteric securities have been only selectively available in the years since the crisis. While banks have lent to a handful of investors, the practice picked up late last year when funding costs began to fall. Even now, the use of leverage is relatively nascent for these securities.

Fed’s Fisher Says Economy Strengthening as Payrolls Rise (Bloomberg)
“The private sector is beginning to hire,” said Fisher, a voting member of the central bank’s policy committee, said today on the Fox News program ’’Sunday Morning Futures.’’ “We’d like to see that continue and, in fact, increase.” Employers added 288,000 jobs in April, the biggest monthly gain in two years, the Labor Department reported May 2. At the same time, more than 800,000 people abandoned the labor force and the share of working-age Americans in a job or looking for one fell to a 36-year low.

Former Microsoft CEO Being Urged To Buy Clippers (NYP)
…former Microsoft CEO Steve Ballmer is being urged by associates to move from software to the hardcourt if the NBA is able to extricate the team from Sterling’s hands. Ballmer — now the No. 1 shareholder in Microsoft after founder Bill Gates sold shares — was spotted at a game last week during the barrage of media coverage about Sterling’s racist remarks to gal pal V. Stiviano, sparking suggestions he’s interested in forming a bid. It wouldn’t be out of the ordinary. Ballmer made a run at the Sacramento Kings last year and has long hoped to bring an NBA team back to Seattle (though reports suggest the NBA wouldn’t look favorably on a move).

Tax-Free Bonuses Disappoint as Middle East Bankers Plan Job Hunt (Bloomberg)
Banking and finance professionals in the Middle East plan to seek new jobs this year after bonuses failed to meet expectations, according to eFinancial Careers. Almost 60 percent of the region’s financial services employees plan to change position, with 45 percent saying they were disappointed with their bonus, eFinancial said in an e-mailed report. Bonuses rose for half of Middle East finance professionals, compared with 49 percent in the U.K., 47 percent in the U.S. and Hong Kong and 42 percent in Singapore.

Hedge fund manager buys most expensive house in U.S. (CNBC)
Barry Rosenstein, fund manager at Jana Partners, is set to pay $147 million for an 18-acre beachfront home in the Hamptons on New York’s Long Island…The previous record for a home sale was set just two weeks ago, when a house in Greenwich, Conn., sold for $120 million.

PayPal executive launches angry poorly-spelled late night Twitter rant against his colleagues after night in New Orleans (DM)
Rocky’s first victim was Christina Smedley, PayPal’s vice president of global communications. ‘Duck you Smedley you useless middle. manager,’ he tweeted. ‘Christina Smedley is a useless. Piece of s**t.’ He then incoherently called for the head of a previously unknown employee. ‘People who should be fire from paypal Don Christmas a pool a kick.’ The tech industry veteran then claimed he could make Foursquare a $50billion company. ‘I can turn foursquare into a $50 bill OK n company let’s chat,’ he tweeted…The outspoken executive then woke up in the morning and claimed to be thirsty. ‘Hydrate.’ He then quickly deleted the offending tweets and publicly apologized to PayPal president David Marcus and vice president of growth and global strategy Stan Chudnovsky. His mea culpa was followed by the following tweet. ‘Day one of my next adventure? I am so ducking tired.’ Rocky then claimed the messages were meant for a colleague and that he did not realize were tweets instead of direct messages – DMs are private. He also blamed his new Android phone, saying he did not know how to use it. ‘The twitter interface on android and gs5 is shockingly different from iPhone, said the first explanatory tweet. ‘Last night I was using a new phone that I bought because I wanted to test experiences on android. Those messages were meant for a colleague,’ said the second. Read more »

Opening Bell: 05.02.14

Criminal Charges Against Banks Risk Sparking Crisis (Bloomberg)
Stung by lawmakers’ criticism that multibillion-dollar settlements have done too little to punish Wall Street in the wake of the financial crisis, prosecutors are considering indictments in probes of Credit Suisse Group AG and BNP Paribas SA, a person familiar with the matter said. Even after talking with financial regulators about ways to mitigate damage — such as ensuring banks keep charters — prosecutors might not fully understand consequences for the market, according to industry lawyers and bankers who are following the case. Bank clients — including trustees, fiduciaries and pension funds — could be forced to cut ties with a financial institution labeled a criminal enterprise, the lawyers and bankers said, asking not to be named because they weren’t authorized to talk publicly. Counterparties also might think twice before entering into billion-dollar transactions with such firms. Damaging a bank’s business could lead to broader fallout across the financial industry, just as Lehman Brothers Holdings Inc.’s collapse in 2008 prompted investors to withdraw from other firms on concern its exit would set off a wave of losses.

U.S. Looks Into Wagers, Pro and Con, on Herbalife (Dealbook)
Three federal agencies and one billionaire hedge fund manager have placed Herbalife under the microscope, scrutinizing whether the diet-supplements company is a pyramid scheme. But Herbalife is not the only one under investigation. Some federal authorities are pursuing other inquiries that might expand the regulatory gaze from Herbalife to the traders who traffic in the company’s stock. The authorities have trained their focus on traders with contrasting views of Herbalife, according to people briefed on the matter who spoke only on condition of anonymity. As one group wagered that Herbalife was a pyramid scheme — William A. Ackman, the billionaire hedge fund manager, has staked a $1 billion bet on that belief — other investors expected the company to emerge unscathed. Neither side has been accused of wrongdoing. Still, a number of well-timed bets for and against Herbalife caught the eye of the Securities and Exchange Commission and the F.B.I., the people briefed on the matter said, raising questions about possible insider trading, disclosure violations and market manipulation.

Yellen’s Fed Resigned to Diminished Growth Expectations (Bloomberg)
Federal Reserve Chair Janet Yellen and her colleagues have lowered their sights on how fast the economy needs to expand to meet their goal of cutting unemployment. No longer are they saying growth must accelerate from the 2 percent to 2.5 percent pace it has generally averaged since the recession ended. Instead, they are stressing the importance of preventing the expansion from faltering. Exhibit number one: the Fed chief herself. Yellen said on April 16 that a key question facing the central bank is what “may be pushing the recovery off track.” Contrast that with her comments on March 4, 2013, of the importance of seeing “a convincing pickup in growth.”

EBay Settles No-Poaching Antitrust Case (NYT)
The deal, announced by the Justice Department on Thursday, follows the pattern of the department’s 2010 settlement against Google, Apple, Intuit and other Silicon Valley companies over similar accusations. Like those companies, eBay is prevented from entering into anticompetitive hiring agreements for five years. A related case against eBay filed by the California attorney general’s office was also settled. EBay agreed to pay $3.75 million to the state, a sum it said would cover civil penalties, lawyers’ fees, administration of the settlement and compensation to those who worked at eBay and Intuit. Secret deals not to hire a competitor’s employees were common in Silicon Valley in the latter part of the last decade, and Steve Jobs of Apple was a major instigator and enforcer of the agreements. EBay is not a competitor of Intuit, which develops tax preparation software, but both embraced a hands-off relationship.

Macquarie Group Profit Jumps 49% as Trading Revenue Climbs (Bloomberg)
Profit for the year ended March 31 rose to A$1.27 billion ($1.17 billion), the Sydney-based firm said in a statement today. That beat the gain of as much as 45 percent the firm forecast on March 24 and compared with profit of A$851 million a year earlier. The bank’s shares fell the most in two weeks as it forecast similar earnings for the year to March 2015.

T0pless Woman Dances With 12,000 Bees (HP)
The Portland, Oregon-based beekeeper describes her bee dances as “a duet among many.” “These 12,000 bees push with their powerful wings from each side of my body, I resist and then I let go and flow and move with them,” she writes on her website.” It is a deep meditation and I feel the hive mind surround me, hold me, and expand my body on a cellular level.” In order to attract the bees to her topless body, Mapelli anoints her body with a special pheromone oil that is equivalent to the scent of 100 queen bees. The bees usually stay on her body for about two hours at a time. Mapelli says she’s been stung more than 100 times since her first bee dance in 2001, but that doesn’t bother her. “I just want people to understand that they don’t need to fear nature,” she said. Read more »