Opening Bell: 7.9.08

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Auction-Rate Probe Grows Over Clarity From Brokers (WSJ)
It looks like the feds might've found two more fall guys. Federal Prosecutors are honing in on two Credit Suisse brokers that might have mislead their clients on something or other on something related to auction-rate securities. This line from the WSJ is telling: "At issue is the $330 billion market for "auction rate" securities..." Really? Is that the issue? The $330 billion market? Cause typically in a potentially criminal probe, the issue is whether a crime has been committed. Whether the suspects broke the law, not whether some huge, broader market collapsed. Or perhaps that's just an old fashioned view.
Study Finds Flawed Practices at Ratings Firms (NYT)
All this second guessing of ratings agencies is actually a big snooze. It's not really that big of a deal to us whether the SEC or the Financial Times calls them out on their ratings practices. There are really two facts we want to know. How did their ratings perform (poorly it would seem) and how have their shares performed (again, pretty poorly). Beyond that, it all looks like an attempt to snap a complicated story into a bite-sized history lesson.
'He didn't get carried away with fads' (Globe and Mail)
Nice headline on the death of investor John Templeton. He was 95. The business media will be recanting stories on him all day, and maybe for a couplle more days, no doubt. We'll put him in that category of investors we should know more about. Though in fitting with the headline, we liked the story of Templeton sitting on the beach in the Bahamas and deciding to short the entire internet sector back in 2000. His call wasn't just to short these stocks, but to short them and cover them once they hit $0, or somewhere in that vicinity. Some of that may be apocryphal, though we heard it at the time that way.
Crude Oil Rises as Iran Test-Fires Missile, Dollar Declines (Bloomberg)
Irain tested a missile, so that day "surprising" drop in oil turned around last night. Weak.


Headline of the Day (Bayesian Heresy)
Guess there's some G8 summit going on or something. Marshall Jevons picked out two amusing headlines from it: "World leaders enjoy 18-course banquet as they discuss how to solve global food crisis." Cute, but then, it's also a little obvious, no? The other headline is the real killer: "G8 says committed to fulfilling Africa aid pledge." Zing! Actually, we shouldn't be so skeptical about the role of an organization like this to truly bring relief to Africa. Somehow this movie wound up in our Netflix queue recently, and it basically has the blueprint for success at these meetings. (Hint: the hero is an attractive woman who makes a moving plea).
Drivers or bikers: who sucks more? (Megan McArdle)
Getting into a cars-vs-bikes argument is the surest way to lost friends. It's like arguging about music. As such we're not going to wade into this one -- too controversial for the Opening Bell, and arguably too irrelevant.
Why play poker, especially tournaments? (WSOP Blog)
This isn't really a trivial question. For most people, playing tournament poker, like the WSOP Main Event that's going on right now, is not a worthwhile proposition. It's just a big money loser. So why come to the table at all? Surely the Freakonomists have tried to answer this question. Maybe Tyler Cowen has as well. perhaps self-delusion has something to do with it. "Lucky Scum" the hedge fund guy that writes this blog (he's alive in the tournament still) offers four reasons: Escape, Masochism, Addiction and It's the best game in the world. Even though we're big chess fans, we like this line a lot, in support of the last argument: "Sorry, chess players, but a simple alpha-beta pruning algorithm makes your game computationally equivalent to tic-tac-toe while all but the very simplest poker problems are computationally infeasible even before you throw in the most compelling part of poker: adapting your game to the psychological make-up of the players around you and weaving as much larceny as possible into a plausible narrative that takes into account the recent history of the game."
Alberta to capture CO2 with oil sands revenue (FT)
Alberta has waited and waited and waited all these years for some serious revenue from their oil sands. And now what are they doing with the cash? Well they're allocating at least $3.9bn for C02 emissions abatement. Hope it's worth it.

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Opening Bell: 06.22.12

Citigroup Leads Wall Street Banks In Moody’s Downgrade Dismissal (Bloomberg) Moody’s two-grade cut of Citigroup’s ratings was unwarranted, arbitrary and failed to recognize the lender’s financial strength, the New York-based bank said in a statement. Investors shouldn’t rely on “opaque” credit ratings, it said. “Moody’s approach is backward-looking and fails to recognize Citi’s transformation over the past several years,” said the bank. “Citi believes that investors and clients have become much more sophisticated in their credit analysis over the past few years, and that few rely on ratings alone -- particularly from a single agency -- to make their credit decisions.” Moody's Downgrade of Banks ‘Absurd,’ Says Dick Bove (CNBC) “This is one of the most absurd things that Moody’s has ever done perhaps in the history of the company,” said Dick Bove, Vice President of Equity Research in the Financial Sector at Connecticut-based Rochdale Securities. JPMorgan Trading Loss Drove Three-Level Standalone Cut (Bloomberg) “It illustrates the challenges of monitoring and managing risk in a complex global organization and highlights the opacity of such risks,” Moody’s said. Ratings Downgrade Cuts Deeply At Morgan Stanley (NYT) In an e-mail sent to staff members after the downgrade was announced, Mr. Gorman tried to reassure employees about the bank’s future. “While we do not believe that this outcome reflects all of the transformative changes we have made to the firm, there is an acknowledgment in Moody’s decision today that real progress has been made at Morgan Stanley, in what is an extremely difficult environment for our industry,” he wrote. Hedge Funds Mask Identities (WSJ) It is the latest in-vogue accessory among hedge-fund managers: a "masked fund." Bridgewater Associates has "ZQPGGAV00000," John Paulson has "Paulson Fund 1" while Cliff Asness's AQR Capital Management prefers "805-1355888867." The cryptic monikers, more product barcodes than real handles, enable the hedge-fund managers to shield the identities of their funds from the prying eyes of regulators and outsiders in forms filed with the Securities and Exchange Commission...The practice, allowed under a new SEC instruction that lets firms preserve the anonymity of their clients in certain cases, has irked some investors and their advisers. They argue that hiding funds' identities in regulatory filings undermines Washington's efforts to make the reticent world of hedge funds more transparent and hinders investors' efforts to keep tabs on the firms that manage their assets. Emails Ties Goldman Manager, Rajaratnam (WSJ) A current Goldman managing director exchanged emails with Galleon founder Raj Rajaratnam ahead of a daily "morning meeting" at Galleon, according to previously undisclosed emails and wiretapped phone call transcripts reviewed by The Wall Street Journal. In the emails, the Goldman manager offered what he called "tiddie biddies" about some top technology firms, including Apple and Intel Corp. Anderson Cooper Berates Photo-Snapping Airplane Passenger (LAT) "Normally I would just be like, 'We're not going to win this one,' but I've lately become emboldened," Cooper said in an interview. "I grabbed the guy on the shoulder and I said something to the effect of, 'Bitch, what ... are you doing?'" Pimco’s Gross Warns Of Risk Assets (Bloomberg) Gross, who manages $261 billion for the Pimco Total Return Fund (PTTRX), said in a Twitter post that risk markets are vulnerable as the “monetary bag of tricks empties.” Spanish Plan Is Flawed, Says IMF (WSJ) The euro zone needs to quickly set up a mechanism that allows it to directly recapitalize weak banks, "in order to break the negative feedback loop that we have between banks and sovereigns," IMF Managing Director Christine Lagarde said after a meeting with the bloc's finance ministers in Luxembourg. Ms. Lagarde also called for "creative and inventive" measures from the European Central Bank, suggesting that the bank could restart its bond-buying program to keep struggling countries' funding costs in check or further cut already-low interest rates. Einhorn Enters $1 Million Buy-In Poker Tournament For Charity (Bloomberg) Einhorn, who finished 18th in the World Series of Poker’s main event in 2006, is among at least 42 entrants for the July 1-3 charity event in Las Vegas, known as the Big One for One Drop. Angry Moms Take On Nutella (Bloomberg) Laura Rude-Barbato, a coffee shop owner in Imperial Beach, California, used to feed her children Nutella several times a week [because she for some reason didn't realize that a chocolate spread might be filled with sugar]. It was easy to identify with the advertising that depicted a frenzied mom serving up the chocolate-hazelnut spread with the tagline “breakfast never tasted this good,” said Rude-Barbato. Then she noticed the 10.5 grams of sugar per tablespoon. “I had no idea,” she says. “I might as well have been giving my kids a brownie for breakfast.” Rude-Barbato kicked the Nutella habit, then joined a class action lawsuit in a federal court in California that claimed Ferrero SpA’s U.S. unit misled consumers via labeling and marketing into thinking Nutella was healthy.

Opening Bell: 10.28.15

AB InBev explores sale of US assets; Hillary Clinton is serious about breaking up big banks; Employees don't want your stinking stock; Man turns violent after being asked to sit out Monopoly tournament; and more.