Opening Bell: 07.08.09

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Jul 8, 2009

Meriwether Said To Shut JWM Hedge Fund After Losses (Bloomberg)
JWM Partners LLC is closing up shop after its flagship, Relative Value Opportunity II fund, lost 44 percent from September 2007 to February 2009. Obviously this won't be the last we've heard from John, who's currently working on the next flick of this slasher series, LTCM: The Resurrection. Get in while you still can.
Code Theft Could Cost Goldman Millions (NYT)
Aleynikov's lawyer Sabrina Shrofftold told U.S. magistrate judge Kevin Fox that "if Goldman Sachs cannot possibly protect this kind of proprietary information that the government wants you to think is worth the entire United States market, one has to question how they plan to accommodate any other breach. I think the market is at risk no matter what then. It's not necessarily attributable to my client's actions," Shroff said.
In California, Even The IOU's Are Owed (NYT)
Tons of vendors who had been told they would receive the i.o.u.'s instead of actual money said they had not yet received them yesterday. Signed copies of Junior still up for grabs.
L.A. Targets Cannabis Clubs (WSJ)
"They are like a rash," said City Councilman Ed Reyes, who is leading the effort to shut down many of the dispensaries. He said a colleague told him that at one dispensary near a high school, the student crowds outside made the pot store look "like an ice cream shop from the 1950s."
Facebook Backer Struggling With Loser Fund (NYP)
Peter Thiel's Clarium Capital down 4.4 percent for June, 6 percent YTD. Assets under management are down to $1.9 billion from $7.8 billion this time last year. Someone give Pedro a poke today-- he could really use one.
Memorial Spotlights Staples (Boston Herald)
Staples cannot believe its good fortune re: reaching out and touching those who may have never heard of the company before the Michael Jackson extravaganza yesterday. So, thanks for dying, guy.
Explosive Divorce (NYP)
Crazy Connecticut Guy, shockingly not a down on his luck fund manager, holds ex-wife hostage. Here he is chatting it up with a reporter while the situation went down:

News

Falcone Agrees To Step Aside (WSJ) Hedge-fund manager Philip Falcone agreed to step aside eventually as the public face of his LightSquared Inc. venture, a concession that may keep the wireless-telecommunications company from defaulting on its debt, people familiar with the negotiations said. Mr. Falcone's compromise is expected to prompt LightSquared's lenders to approve a one-week extension on a debt-term violations waiver that expires Monday morning, the people said. If a deal is finalized, Mr. Falcone and LightSquared's lenders plan to continue negotiations for a longer extension of somewhere between 18 months and two years, the people said...Mr. Falcone has said he viewed bankruptcy as the "best way" for him to keep control of the company and keep it from creditors he believes want to "take control and flip" the firm. Occupy Wall Street Plans Global Disruption of Status Quo May 1 (Bloomberg) In New York, Occupy Wall Street will join scores of labor organizations observing May 1, traditionally recognized as International Workers’ Day. They plan marches from Union Square to Lower Manhattan and a “pop-up occupation” of Bryant Park on Sixth Avenue, across the street from Bank of America’s Corp.’s 55-story tower. “We call upon people to refrain from shopping, walk out of class, take the day off of work and other creative forms of resistance disrupting the status quo,” organizers said in an April 26 e-mail...Tomorrow, beginning at 8 a.m. in Bryant Park, scheduled events include teach-ins, art performances and a staging area for “direct action and civil disobedience,” such as bank blockades. RBS M&A Bankers Plan Boutique Spin-Off (Reuters) The bank, 82-percent owned by the British government, is exiting mergers and acquisitions as part of a restructuring announced in January aimed at reducing costs and exposure to areas of investment banking deemed risky by the authorities. Sources told Reuters last week that the M&A business would be spun off, with around 45 bankers from RBS joining the new firm led by John McIntyre, currently head of corporate finance for EMEA at the bank. Romney Holds Fund Raiser At John Paulson's House (TDB) FYI: A neighbor who witnessed the event from across the street described it to as a large crowd of “older white people, mostly men,” who started showing up around 7:30 p.m. Thursday. Around 8 p.m., sirens started blaring as more and more people started to show. Hedge Funds Hurt By Volatility (WSJ) All told, U.S.-based funds that bet on and against stocks had a median return of -0.92% from April 1 through April 13, according to data from Morgan Stanley's MS -1.51% prime brokerage, after having returned 1.16% in March. Returns improved as the markets stabilized. Through April 26, the median return was down 0.03% for the month. City Mulls Happy Hour Ban (NYP) “It’s absolutely been discussed,” confirmed a department source. “It goes to show you the spirit with which they operate. Everyone is a child.” High-level conversations have gone beyond merely “throwing pencils on the ceiling and seeing what sticks,” another Health source revealed. Sources said the happy-hour ban is being pushed by the agency’s marathon-running boss, Commissioner Thomas Farley, and is serious enough for one source to say the alcohol lobby had better find itself a good lawyer. Agency spokesman Sam Miller denied existing “plans to pursue any policy around discount-alcohol sale.” Goldman: US Likely Added Only 125,000 Jobs in April (CNBC) The forecast is far lower than the Reuters estimate of 170,000, and the average 177,250 jobs created every month from December to March. Hedge Funds Bet Against Eurozone (FT) “The deeper balance of payments problems in the eurozone remain unresolved, and cannot be resolved by liquidity assistance alone,” noted Brevan Howard, Europe’s biggest global macro hedge fund in its last letter to investors. Shiller: We Are in Age of ‘Late Great Depression’ (CNBC) “Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller said. Goldman’s O’Neill Reported Among Candidates for BOE Chief (Bloomberg) When asked in September 2007 if he would be interested in the role at a time when the government was considering whether to reappoint King, O’Neill told John Dawson onBloomberg Television that he couldn’t imagine that “anyone would be daft enough to offer it to me.” He added that he very much enjoyed his then job as head of global economic research at Goldman Sachs. Titanic II Planned by Billionaire Palmer in Chinese Yard (Bloomberg) Australian mining billionaire Clive Palmer plans to build a 21st-century replica of the Titanic and sail it from England to New York accompanied by the Chinese navy by the end of 2016. He has signed a first-stage agreement with Nanjing-based CSC Jinling Shipyard to build the ship as part of a planned fleet of luxury liners, the Gold Coast, Queensland-based businessman said in an e-mailed statement today.

News

Germany Hints At More Financing (WSJ) Germany on Wednesday signaled its willingness to provide additional financing for the euro zone's bailout fund and accept lower interest on loans to Athens, in order to get the Greek rescue back on track and free the next tranche of about €44 billion ($56.40 billion) in loans for the euro zone's weakest member. Merkel Sees Chance For Greek Deal Monday (Reuters) "I believe there are chances, one doesn't know for sure, but there are chances to get a solution on Monday," Merkel told the Bundestag lower house of parliament in a debate on the German budget. But the longing for one act, one miracle solution, one truth that means all our problems are gone tomorrow...this will not be fulfilled. What was neglected over years, over decades, cannot be taken care of overnight and therefore we will need to continue to move step by step." H-P Says It Was Duped (WSJ) The technology giant said that an internal investigation had revealed "serious accounting improprieties" and "outright misrepresentations" in connection with U.K. software maker Autonomy, which H-P acquired for $11.1 billion in October 2011. "There appears to have been a willful sustained effort" to inflate Autonomy's revenue and profitability, said Chief Executive Meg Whitman. "This was designed to be hidden." Michael Lynch, Autonomy's founder and former CEO, fired back hours later, denying improper accounting and accusing H-P of trying to hide its mismanagement. "We completely reject the allegations," said Mr. Lynch, who left H-P earlier this year. "As soon as there is some flesh put on the bones we will show they are not true." Analysts Had Questioned Autonomy’s Accounting Years Ago (CNBC) Paul Morland, technology research analyst at broking and advisory house Peel Hunt, told CNBC that he had noticed three red flags in Autonomy’s accounts in the years leading up to the HP acquisition: poor cash conversion, an inflated organic growth rate, and the categorizing of hardware sales as software. London Bankers Become Landlords as Rents Hit Record (Bloomberg) Vivek Jeswani became a landlord by accident when Deutsche Bank AG (DBK) transferred him to New York two weeks after he moved into a new home in central London. Now back in the U.K., Jeswani views the apartment in Baker Street, the fictional home of Sherlock Holmes, as one of his best assets and is about to buy another home to expand his rental business. “There are no other investments as attractive and you’ve got some security if you’ve got an asset you can use yourself,” the 36-year-old risk officer at China Construction Bank Corp.’s U.K. unit said. “There’s a good yield over 5 percent and being in central London, you’ve got demand domestically and internationally.” Trading Charges Reach SAC (WSJ) The hedge funds reaped $276 million in profits and losses avoided based on that information, criminal and civil authorities said—far dwarfing that of any previous insider-trading case. The bulk of the trading profits generated by Mr. Martoma was paid to Mr. Cohen, a person close to the hedge fund said. Fed Still Trying To Push Down Rates (WSJ) Fed Chairman Ben Bernanke suggested that the central bank will keep trying to push down long-term interest rates in 2013, as federal tax and spending policies become a more substantial headwind to the U.S. economy. "We will continue to do our best to add monetary-policy support to the recovery," Mr. Bernanke said at the New York Economic Club, answering a question about how the Federal Reserve would respond to impending spending cuts or tax increases that might restrain economic growth. 'Stiletto Surgery' alters pinky toe for better fit (Fox) These days, some women will do just about anything to fit into their favorite pair of high heels – including surgery. A growing number of women are paying thousands of dollars to surgically alter their feet just to make wearing heels a more comfortable experience. Surgical procedures such as shortening toes, receiving foot injections and even completely cutting off pinky toes are on the rise. “Unless you’ve been there, and you can’t find shoes, and you’re in pain, don’t judge,” said Susan Deming, a patient who recently underwent a toe-shortening procedure. Adoboli’s Fate Decided at Wine Bar as UBS Market Bets Unraveled (Bloomberg) On a cool late summer evening last year in London’s financial district, with the euro-zone crisis worsening and Greece tottering on the edge of default, Kweku Adoboli says he asked the three traders who worked with him at UBS AG’s exchange-traded funds desk to join him for a drink. Adoboli said in a post on his Facebook page that he needed “a miracle” as his bets on the market imploded. That night at a wine bar across the street from their office, Adoboli asked John Hughes, the senior trader on the ETF desk, and two junior traders, what to do. The others decided he should take the blame for billions of dollars in losses and an elaborate web of secret trades in what he called an umbrella account that once held $40 million in hidden profits. “I knew I was going to lose my job anyway, I had already resigned myself to that, so fair enough,” the 32-year-old Adoboli testified last month about the meeting, which the other traders deny took place. Jobless Claims in U.S. Decrease (Bloomberg) Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg. Soros Buying Gold as Record Prices Seen on Stimulus (Bloomberg) The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show. 'Cannibal Cop' Gilberto Valle planned to to cook up 'some girl meat' on Thanksgiving (NYDN) The "Cannibal Cop" had his own twist for a Thanksgiving dinner this year — cooking up “some girl meat,” prosecutors revealed Tuesday. Gilberto Valle, 28 — who allegedly kept a database of at least 100 women he plotted to rape, cook and eat — planned the freakish feast with one of his online conspirators earlier this year, prosecutors said. “I’m planning on getting me some girl meat,” he wrote to his pal on Feb. 9. “Really tell me more,” responded the friend. “It’s this November, for Thanksgiving. It’s a long way off but I’m getting the plan in motion now,” Valle wrote.

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