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bill grossMay 2014: “…during a meeting of about 20 Pimco executives at the firm’s investment committee, Mr. Gross halted Jeremie Banet, a French-born executive vice president and portfolio manager, while he was sharing his views. “I never understand what you’re saying,” Mr. Gross said, according to people in the room. “Ever.” A day after the exchange, Mr. Banet announced his resignation and said he planned to operate a food truck selling croque-monsieur sandwiches in Los Angeles. In an email, Mr. Banet said there was no connection between the meeting and his departure from Pimco. He said he has “enormous respect and admiration for Bill Gross.” September 2014: “Bill Gross is joining Janus Capital Group, effective September 29.” October 2014: “PIMCO has hired Jeremie Banet, who previously worked for the firm and will return as an Executive Vice President and Portfolio Manager for real return strategies, including Treasury Inflation Protected Securities (TIPS).” [WSJ, CNBC, Pimco via Matt]

Get Cliff Asness A Job On Madison Avenue

What you should look for in your hedge fund managers.The AQR chief sure knows how to sell his industry, and is now continuing his somewhat less-than-full-throated “Hedge Funds: They’re Alright, I Guess” campaign on his own website. To sum up his masterpiece, “Hedge Funds: The (Somewhat Tepid) Defense”: Most hedge funds are crap and you should probably just invest in an index fund. But if you can find yourself a non-crap hedge fund manager—one C. Asness comes to mind—you’re probably better off with him or her. Either way, the most common criticisms of the industry are pretty off-base, and as such, can be added to the Asness Menagerie of Peeves. Read more »

Opening Bell: 10.29.14

Mark Zuckerberg & CoFacebook Vows Aggressive Spending (WSJ)
On a conference call with analysts, finance chief David Wehner said he expects Facebook to incur higher expenses than normal in the quarters to come, in the wake of big investments in both engineering talent and acquisitions. He expects costs to rise as much as 75% for the year. Mr. Wehner and other Facebook executives urged analysts and investors to look further into the future, and not just at the financial results before them. Mr. Zuckerberg kicked off the call by stressing the company’s long-term goals stretch more than a decade into the future and require “investing aggressively.”

Deutsche Bank Swings to Third-Quarter Loss (WSJ)
Deutsche Bank AG swung to a net loss in the third quarter after the lender boosted its reserves to cover fines from pending litigation. Germany’s largest bank on Wednesday reported a net loss of €94 million ($119.7 million) for the quarter, compared with a net profit of €41 million in the same period last year. The loss was expected after the bank said last week that it would book €894 million in additional litigation reserves in the quarter, which was more than analysts had expected. The lender has now set aside €3 billion to cover fines from pending investigations.

Pimco Replaced by BlackRock at $6 Billion Prudential Fund (Bloomberg)
Pacific Investment Management Co., seeking to stem redemptions after its co-founder Bill Gross left unexpectedly, was dropped as manager of a $6.16 billion strategy offered by a unit of Prudential Financial Inc. Pimco, based in Newport Beach, California, will be replaced as subadviser of the AST Pimco Total Return Bond Portfolio by BlackRock Inc. and Loomis Sayles & Co., according to a filing with the U.S. Securities and Exchange Commission yesterday. Pimco will also be dropped as manager of the U.S. fixed-income portion of the AST Advanced Strategies Portfolio, which had $8.75 billion in assets as of Sept. 30.

Translation Adds Complexity to European Central Bank’s Supervisory Role (WSJ)
The European Central Bank’s impending role as supervisor of the eurozone’s largest banks is reviving an issue that has long complicated its activities: the language in which it does business. About a quarter of the 120 banks the ECB will start supervising in November have chosen their national language, rather than English, for written correspondence with their new regulators. The ECB’s draft framework text for supervision made it clear it wanted banks to use English, its working language since its creation in 1998. But the ECB can’t insist on that provision because European law allows citizens to contact European institutions in any of the European Union’s 24 official languages. After negative feedback from banks, the final version of the regulation lost the reference to seeking an explicit agreement to use English.

Split MSG business would be a garden of delight for investors (NYP)
MSG, which is exploring a possible separation into two publicly traded entities — one for its Knicks, Rangers and MSG Network and the other for the venues — could be worth as much at $9.7 billion after the separation, the Wall Street pros said.

How a $1,000-an-hour escort rose to the top 1% of her field by playing the ‘perfect woman’ for Wall Street (DM)
Svetlana Z, as she refers to herself, moved to New York from Chelyabinsk, Russia, when she was 19 years old and had $300 to her name. Lured by the promise of quick money, she entered the escort industry and made a small fortune by catering to investment bankers, 90per cent of them married. ‘Mostly, I offered understanding,’ she wrote for Medium. ‘The truth is, even for guys who hire me for three or four hours, the sex usually only takes about 15 minutes.’ Not bad for $1,000 an hour. Svetlana – who describes herself as 5ft 7in, 119lbs, with long legs, hazel eyes, full lips and a slender figure – remarks that when it did come to sex, however short-lived, massaging her client’s ego was key.
Around 98per cent of men wanted to go down on her, and 80per cent of them would ask if she had come, or insist she had multiple orgasms before they did. This wasn’t about her pleasure, of course, it was their need to ‘prove themselves.’
Svetlana faked orgasms with relative ease and presumably on nearly every occasion. Her mind, she says, was always in business mode. She refers to one instance in which a client asked to pour honey all over her before they had sex. She agreed – but only after he agreed to pay triple her hourly rate – and she spent the whole rampant session mulling over cleaning the sheets and re-doing her hair and make-up…Svetlana was highly tactful when it came to demanding the best. Rather than appear spoiled in her requests to fly first class while travelling with clients, she would weave silky allusions into the conversation. For example, she would claim that her ‘really long legs’ would get cramped in coach, which would hinder her ‘flexibility’ and thus affect her ‘d***y-style’ performance…And perhaps in part to her dogged attention to detail and her carefully considered approach, she managed to avoid any dangerous or traumatic experiences.When she once caught a client attempting to videotape them having sex on the sly, she simply grabbed his phone, erased the footage, and told him to ‘get the hell out’ of her apartment. Another threatened to call the cops on her if she didn’t give him free sex, so she threatened to post his phone number to a gay escort listing…Then there was the client who had sex with her for a full hour straight, all the while making ‘woo woo woo’ train noises. Aside from these mentions, life as a high-class escort appears to have suited Svetlana. Couples were her favorite sorts of clients, and she got to charge double the fee for the same amount – often less – of work. ‘That’s the cool thing about capitalism,’ she points out.
Read more »

Write-Offs: 10.28.14

$$$ Facebook CFO Says Fourth Quarter Will Be ‘More Difficult’ [Bloomberg]

$$$ WhatsApp Gets a Warm Welcome Into Facebook [BV/Matt Levine]

$$$ Insider-Trading Probe Focuses on Medicare Agency [WSJ]

$$$ Short-seller Chanos says China seeing faster capital flight [Reuters]

$$$ Cops: Teletubby Broke Into Pal’s House, Stole Food [TSG] Read more »

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kim kardashianThe 34-year-old reality television star shared her love for the Canadian gadget at a conference Monday night hosted by technology website Re/code. “A BlackBerry, it’s my heart and soul. I love it. I’ll never get rid of it,” Kardashian said. “I do have an iPhone – I use that for photos – but if you have to handle an e-mail and you have to type fast I need to feel that board,” she said, referring to BlackBerry’s trademark keyboard…Kardashian said she stocks three BlackBerry Bolds at all times, just in case one breaks. “I have anxiety that I will run out and I won’t have a BlackBerry. “I’m afraid it’ll go extinct,” she said. “I’m on a mission to make that not happen.” [Globe And Mail]

deutsche-bankDeutsche Bank AG , which has struggled to overcome investor concerns about its financial strength, is replacing its longtime finance chief with a Goldman Sachs Group Inc. partner, according to people familiar with the matter. Stefan Krause , who has faced criticism from investors over his financial leadership of the giant German bank, will take a newly created position within Deutsche Bank, with responsibilities including strategy, cost-cutting and other issues, the people said. His replacement, Marcus Schenck, was the finance chief of German utility E.ON AG from 2006 through 2013. He joined Goldman Sachs last year. [WSJ]

Sage KellyHis estranged wife also claims in a court filing that he held a one-man scavenger hunt for said shrooms. Read more »

October Not The Best Of Times For Hedge Funds

Unless their managers enjoyed being kneed in the balls and kicked in the face until they’re coughing up blood in which case, this month’s been great. Read more »