Opening Bell: 09.29.09

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Updated:: Jan 14, 2019
Original:: Sep 29, 2009

Banker-Pay Guidelines May Put Citigroup, Bank of America at Disadvantage (Bloomberg)
Not so says BAC! "We are focused on paying competitively in a way that aligns associate, shareholder and taxpayer interests," said Scott Silvestri, a spokesman for Charlotte, North Carolina- based Bank of America.
Allen Stanford Granted Transfer After Jail Fight (NYT)
Federal District Judge David Hittner signed the order transferring Mr. Stanford to the federal jail in Houston without "the incident," saying only that the big man needed to be moved ASAP or someone's gonna get punched in the mouth: "Because of the unique circumstances present in this case, it is appropriate to order Stanford" be moved "no later than Thursday, Oct. 1," the judge said in the order.
Paulson's Plan (NYP)
JP is mulling over the idea of saving CIT Group through a merger with IndyMac.
FDIC Is Expected To Ask Banks To Pre-Pay $36 Bilion In Fees (NYT)
Sheila Bair's gonna need that money now, thanks. Make it out to "SheBair."
Cassano Is Back In US (NYP)
Joe and the wife have been staying at their home in Westport, which is more convenient than London for when he has to appear for questioning re: some shit that went down at his old job, and will provide the former AIGFP head with new bike routes.
JPMorgan Chase Announces Management Changes (JPM)
Bill Winters out, Steve Black named Executive Chairman of the Investment Bank, and Jes Staley named CEO of the Investment Bank, reporting to Steve.
SEC Weighs New Rules for Lending of Securities (WSJ)
Mary Schapiro said she wants to shine a light on the "opaque market" and will do so by holding a public round table discussion on the matter today. Come on down.
UBS Aims to Cut State Ties, Targets Recovery (Reuters)
CEO Oswald Gruebel is guessing the bank will make its triumphant return within the year.

Ex-Goldman Worker Said to Seek Book Deal (NYT) Greg Smith has met with publishers this week, including imprints at several prominent houses. According to several people who were present, Mr. Smith described his book as a coming-of-age story, the tale of someone who came into the business with good intentions and sky-high ideals that were ultimately pierced by Goldman’s obsessive focus on making money. It would also be a story of the history of Goldman Sachs and the perceived change in the culture of the firm that left Mr. Smith, a native of South Africa who lived in London, disillusioned and eager to leave after spending nearly 12 years there. JPMorgan Wins Case Against Trader Over Decimal Point Dispute (Bloomberg) JPMorgan doesn’t have to pay a trader 580,000 pounds ($921,000) after a missing decimal point in an employment contract led him to believe his salary would be 10 times what was offered, a London court ruled. Kai Herbert, a Switzerland-based currency trader, sued JPMorgan for lost earnings claiming he signed a contract to relocate to Johannesburg for a salary of 24 million rand ($3.1 million). JPMorgan said there was a typographical error and the figure should have been 2.4 million rand. “Herbert took the commercial risk of accepting the offer, knowing full well that the figure was an error,” Judge Henry Globe said in today’s judgment. E-Mail to Corzine Said Transfer Was Not Customer Money (Dealbook) But the e-mail, a copy of which was reviewed by The New York Times, did not capture the full story behind the wire, which turned out to contain customer money. MF Global employees in Chicago had first transferred $200 million from a customer account to the firm’s house account, people briefed on the matter said. Once it was in the firm’s coffers, the people said, Chicago employees then promptly transferred $175 million of the money to the MF Global account at JPMorgan in London — the account that was overdrawn...The e-mail suggests that Mr. Corzine, a former governor of New Jersey, was unaware that the money had been transferred from a customer account. Germany Backs Boost To Bailout Fund (WSJ) Germany has been staunchly opposed to raising the planned €500 billion ($664 billion) ceiling on the ESM, but has left the question of the EFSF open until now. It was widely believed that the EFSF would be retired as soon as the ESM is launched and that the EFSF loans already awarded would be assumed by the ESM, reducing its future lending capacity. But now Berlin is suggesting allowing the EFSF to run longer and by doing so ensure that the ESM can use its full lending capacity, effectively boosting the firewall to about €700 billion. "We are saying that the ESM should permanently have €500 billion," Ms. Merkel told a news conference in Berlin on Monday. BATS Faced Revolt Over IPO (WSJ) "The fact that our own stock was out there to be traded for the first time, and we showed systems problems, eroded customer confidence," Joe Ratterman, BATS's chief executive, said Sunday in an interview. "Of course investors are going to say, 'Hey, wait a second.'" Some traders and investors considered the offering pricey. At $16 a share, BATS would have traded at about 10 times analysts' 2013 earnings estimates. That is roughly on par with New York Stock Exchange owner NYSE Euronext and a premium to the Nasdaq OMX Group Inc., which trades at 8.6 times 2013 estimates. Even before the glitches appeared, the offering was off to a rocky start. When trading in BATS shares opened at 10:45 a.m., they were down 75 cents, to $15.25. From there, things only got worse. Hedge Funds Capitulating Buy Most Stocks Since 2010 (Bloomberg) A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010, according to data compiled by the International Strategy & Investment Group. The Bloomberg aggregate hedge fund index gained 1.4 percent last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points. Banks Set to Cut $1 Trillion From Balance Sheets (FT) Investment banks are to shrink their balance sheets by another $1 trillion or up to 7 percent globally within the next two years, says a report that foresees a shake-up of market share in the industry. Higher funding costs and increased regulatory pressure to bolster capital will force wholesale banks also to cut 15 percent, or up to $0.9 trillion, of assets that are weighted by risk, a joint report by Morgan Stanley and consultants Oliver Wyman predicts. In addition, banks are expected take out $10 billion to $12 billion in costs by reducing pay, firing employees and paring back investments in areas that are no longer considered core. Larry Summers: Strong Recovery A "Substantial Possibility" (FT) According to Summers, the biggest risk to the recovery in the next few years is that policy will move away too quickly from its emphasis on boosting demand. "A lurch back this year towards the kind of policies that are appropriate in normal times would be quite premature," he added. Bernanke Notes Labor Market Concerns (WSJ) "Further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies," Mr. Bernanke said in prepared remarks to the annual conference of the National Association for Business Economics. Bad fliers get boot – & bill (NYP) Fed up with disruptive fliers, the Port Authority plans to go after them for the money they cost their airline and the PA. “We’re going to use every lever at our disposal,” said PA chief Pat Foye. “These delays cost thousands of dollars — maybe tens of thousands — each. One Alec Baldwin incident can delay a whole airport for a day with cascading delays.” (Baldwin, the “30 Rock” star, made international headlines in December when he got booted by American Airlines at LAX after refusing to turn off his phone.) The PA is going to “aggressively’’ remind passengers to keep cool and listen to instructions from airline crews — even if they think they’re stupid, Foye said.