Opening Bell: 11.04.09

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BofA's Legal Counsel Had No Legal Authority In Merrill Deal (NYP)
Brian Moynihan was named general counsel on Dec. 10, 2008, but was not technically allowed to offer crucial legal advice until more than a week later, when he re-activated his status with the Massachusetts Bar Association. Oops! "This is another fact that leads me to believe there could be something rotten in the cotton," Representative Edolphus Towns told The Post.
Societe Generale Q3 profit more than doubles (Forbes)
SocGen said in a statement Wednesday that it made a net profit of euro426 million ($627 million) in the July to September period, compared with euro183 million a year earlier.
In Tax Case, 4 Days Saves Robertson $27 Million (WSJ)
Apparently this an important issue for the billionaire, which is troubling: "The stakes were high for Mr. Robertson. If he could prove he spent half of that 366-day year outside of New York City, often at his estate in the wealthy Long Island suburb of Locust Valley, he wouldn't have to pay the tax. And it was an all-or-nothing case, worth $27 million, an amount important enough to the hedge-fund manager that he and his staff spent hours and developed a complicated calendar system to track his whereabouts."

Raj Rajaratnam Said to Keep Personal Investments in Sri Lanka (Bloomberg)
Raj-Raj's direct interests and stakes on the island held through Galleon won't be affected by the liquidation of the hedge-fund firm following criminal and civil probes.
'Osama' Funding Appeals as U.S. Independent Filmmakers Hurt (Bloomberg)
"Look, I mean if Osama bin Laden gave me money to film I'd take it," he said in a phone interview from Singapore. "It's always difficult for a filmmaker and particularly in these economically troubled times."
Hedge Fund Counsel to Lead SEC's New York Examinations Group (WSJ)
Norm Champ ran the compliance office for Chilton Investment Co. for the last decade. Also, he's a professor and a "thinker": "Norm brings to our inspection program an unusual diversity of experience -- as general counsel of a multibillion-dollar hedge fund complex, as a university lecturer, and as a policy thinker," said George S. Canellos, director of the SEC's New York office.

Opening Bell

Spain Vows Reforms As Yields Soar (WSJ) Speaking at a conference, Finance Minister Luis de Guindos defended the need for the €10 billion ($13.11 billion) in cuts his government announced Monday to the country's health and education systems as Madrid struggles to slash its budget deficit to 5.3% of gross domestic product this year from 8.5% of GDP last year. The latest cutbacks come on the heels of the 2012 state budget presented late last month, which calls for €27 billion in spending cuts and tax increases. JPMorgan’s Iksil May Spur Regulators to Dissect Trading (Bloomberg) Market-moving trades by JPMorgan Chase’s chief investment office probably will force regulators to seek more detail on banks’ derivatives positions to help them distinguish risk management from speculation. Bruno Iksil, a London-based trader in the unit, has built derivatives positions linked to corporate credit that are so big he’s moved markets, according to hedge fund managers and dealers. While Joe Evangelisti, a bank spokesman, said yesterday that the trades are part of the firm’s hedging strategy, four market participants said they resemble proprietary bets. China Swings To Trade Surplus (WSJ) China posted a surprising trade surplus in March after a hefty deficit in February, but weak imports were a primary factor in the turnaround, raising fresh concern over the outlook for the world's second-largest economy. State television painted a cautious picture of the trade outlook, quoting Zheng Yuesheng, director of statistics at the General Administration of Customs, as saying that "the current global economic situation is severe," with exports and imports facing "relatively big" downward risk. Obama To Push Millionaire Tax (WSJ) Mr. Obama and congressional Democrats aren't expected to win next week's procedural vote, and a spokesman for House Speaker John Boehner alluded to the minimum tax on millionaires as a "gimmick." But Democrats want to put Senate Republicans on record voting against the tax. A number of recent public polls show support for raising taxes on millionaires running over 60%...Nicknamed the "Buffett Rule" for billionaire investor Warren Buffett, who complained that he paid a lower tax rate than his secretary, the plan would impose a minimum 30% overall federal tax rate on people earning more than $1 million a year. Student, 13, Drives Bus to Safety When Driver Faints (ABCN) A middle school student who jumped into the hot seat when his school bus driver passed out on the way to class this morning is being hailed as a "quick thinker" for leading the bus, and 15 other students, to safety. Seventh grader Jeremy Wuitschick is being praised by the local police chief for his actions when the driver of his school bus started gasping for hair and waving his hands frantically in the air, losing control of the bus. Wuitschick hopped out of his seat and grabbed the steering wheel, pulling the bus over to the side of the road before pulling the keys from the ignition, Milton Police Chief Bill Rhodes said today. "I'll tell you, I'll give the kid credit for fast thinking. He did the right thing and we're going to do something for him. The kid definitely deserves credit," Rhodes Bernanke Calls on Regulators to Curb Shadow Banking Risks (Bloomberg) Federal Reserve Chairman Ben S. Bernanke called for new steps to curb “shadow banking” operating beyond standard oversight while saying the economy has far to go before fully recovering from the credit crisis. “The heavy human and economic costs of the crisis underscore the importance of taking all necessary steps to avoid a repeat of the events of the past few years,” Bernanke said yesterday in a speech in Stone Mountain, Georgia. Bank of Japan Keeps Policy Unchanged as Pressure Builds (Bloomberg) “The BOJ held off on additional easing to show it isn’t willing to be pushed around by politicians,” said Junko Nishioka, a Tokyo-based analyst at RBS Securities Japan Ltd. who has worked for the central bank. “The BOJ will be under pressure to ease policy at its next board meeting because of its close-to-zero percent inflation outlook.” Criticism Over U.S.'s World Bank Pick Swells (WSJ) The front-runner to lead the World Bank, which lends tens of billions of dollars a year around the world, once admitted that he "had no idea what a hedge fund was" until three years ago when he became a university head. Jim Yong Kim, the president of Dartmouth College, got a two-day crash course in finance back then, when the physician and anthropologist was grappling with budget troubles stemming from the 2008 financial crisis. Dennis Gartman: S&P 500 Earnings to Surprise on Upside (CNBC) “Are we going to see 5-10 percent growth in earnings by almost all of the S&P 500? Probably,” Gartman, the author of The Gartman Letter, said. Vancouver's Bagpipe Ban Sparks Outcry (Globe) ...the unusually specific ban, which hit a few bagpiping buskers in Vancouver, has run into opposition from one of the city’s top Scots. That would be Vancouver Mayor Gregor Robertson, who was sworn in for a second term wearing a kilt in reflection of his Scottish heritage. The mayor has been known to play the tuba, but is prepared to go the wall for bagpipers. He’s mindful of noise complaints, but says the ban brought about by the city engineering department will face opposition from city council, dominated by Mr. Robertson’s Vision Vancouver party. The ban is under review. “My first reaction is that a complete ban on bagpipes and percussion instruments across the city is ridiculous and culturally insensitive,” Mr. Robertson said in a statement. “The clans won’t stand for it.”

Opening Bell

RBS Braces Itself For Libor Deal (WSJ) RBS stands apart from the other banks caught up in a trans-Atlantic probe of the rate misdeeds because of the U.K. government's 83% stake in the lender. That has put U.K. authorities in an awkward position: They are under intense pressure to get tough on wayward banks but also are eager to protect the value of a taxpayer asset. Defendant in Insider Case: I Was Just Doing My Job (WSJ) Doug Whitman, a former hedge-fund manager, doesn't deny that he probed public companies for nonpublic information. But his criminal-defense team plans to argue that its client was doing exactly what he was supposed to do when he persuaded employees of public companies to give him information that those companies' top brass didn't want getting out. Mr. Whitman "was doing what every diligent, competent fund manager and analyst should do—checking up on companies' management to make sure they are being forthright with their investors," said David Anderson, Mr. Whitman's lead defense attorney, in an email. Tiger Management Helps Next Generation Funds (NYT) In a relatively young industry where stars can quickly fade, Tiger Management — and its myriad affiliates like Falcon Edge — is the closest thing to a hedge fund dynasty. After a brief career in finance, Mr. Robertson started Tiger in 1980 with seed money from friends and family. He regularly racked up double-digit returns by taking big positions in companies with good long-term growth prospects and aggressively betting against those stocks poised to fall. Mr. Robertson trained his young protégés — the so-called Tiger cubs — in the same tradition, creating the next generation of hedge funds stars. After leaving Tiger in 1993, Lee Ainslie started Maverick Capital, which currently manages roughly $10 billion. Stephen F. Mandel Jr. began Lone Pine Capital in 1997. Two years later, Andreas Halvorsen opened Viking Global. “We really gravitated to young people, and that was a great deal of our success,” said Mr. Robertson, 80, who often hired people in their 20s. “I was just an old goat with all these young geniuses around.” As the first wave of Tiger cubs age, they are breeding new funds, too. Blue Ridge Capital, where Mr. Gerson honed his skills, has been a particularly good incubator for talent. While Blue Ridge has subscribed to the long-term strategy of Tiger, the founder, Mr. Griffin, has infused the firm with his own philosophy. As a proponent of behavioral finance, he trained analysts like Mr. Gerson to identify how ego and emotion can affect the market and stock performance. Biggest Chapter Yet For A Poison Pen (WSJ) Daniel Loeb isn't one given to half-measures. The hedge-fund manager competes in triathlons, never, ever drinks from a plastic water bottle and is unsparing at times in his criticism of corporate executives. That is exactly how his investors like him. "I didn't give him the money to have a mellow Dan Loeb," said Hugh F. Culverhouse, a Miami investor whose family once owned the Tampa Bay Buccaneers football team. "If I want a mellow Dan Loeb, let me redeem."...The Yahoo campaign signals a new phase in Mr. Loeb's career. Until now, he was perhaps best-known for his poison-pen letters, in which he has scolded executives for everything from keeping relatives on the payroll to socializing at the U.S. Open tennis tournament. Armed with a much bigger war chest—Third Point managed just $1.7 billion as of April 2009—Mr. Loeb can now aim for bigger targets. Mr. Loeb and his investors have a lot riding on a Yahoo revival. "If he makes money on his position, it will be good," said David Tepper, a fellow hedge-fund manager who has known Mr. Loeb for years. "If he doesn't make money, what is the point?" British man rescued off French Atlantic coast after being overcome with Olympic mania and trying to swim to America (DM) The unnamed 34 year old holidaymaker told his friends on the beach at Biarritz that he was off to New York to carry the Olympic spirit across the Atlantic. They thought he was joking but knowing that he was a strong swimmer decided to let him go telling him that a boat would come to rescue him if he got into difficulty. The man swam well beyond buoys 300 yards out to sea marking legal limits for bathing. Then, watched by lifeguards on the shore, he continued swimming until he was out of sight on his 3,594-mile journey. The lifeguards called out a helicopter and a diver dropped into the sea and explained to the man that it was not a good idea to swim across the Atlantic and advised him to head back towards France. He replied that he was a strong swimmer and felt up to it. At the same time lifeguards arrived in a rescue dinghy and threw the eccentric a line before towing him back to the beach. Laurent Saintespes, senior officer at Biarritz airbase told Agence France Presse, ‘He was a bit naive. But at a time when the Olympics are taking place in London you have to see the funny side of things’. Billionaire Jeff Greene On Democracy (NYM) Lately—like at a recent lunch with Steve Schwarzman, who has likened Obama to Hitler—Greene’s been trying another tactic. “Now I appeal to them selfishly,” he says. “ ‘Don’t you realize that if you don’t take care of this kid when they are 10 years old, you’ll take care of them when they are 20 and 100 instead? We just have to pay a little more taxes. It’s not going to kill us. You buy car insurance. Why not buy some democracy insurance?’ People think that Obama is this leftist, socialist guy,” he says. “But I don’t think they understand what people can go for when they are at the end of their line.” South Korean Youth Eschew Samsung Jobs For Facebook Dreams (Bloomberg) Not so long ago, South Korean students dreamed of lifetime jobs at Samsung Electronics Co. Now, many are shunning the juggernaut, intent on trying to emulate the likes of Facebook’s Mark Zuckerberg. Sim Cheol Hwan, 27, is typical of the trend. He wants to take a break from college in Seoul to set up a company rather than line up for job interviews at Asia’s biggest electronics company paying an average of 77.6 million won ($68,300) a year. So he’s set himself up in his own business making apps for Samsung and Apple phones. “I don’t want to get a job at a top 10 Korean company,” said the Hanyang University engineering student, who spent two years in the military. “Zuckerberg’s success proves that there is a lot of money to be made” in startups. Regulators Target Day-Trading Firm (WSJ) In the Romanian city of Cluj-Napoca, inside a garret up a narrow wooden staircase, four young men in T-shirts spend the day moving rapidly in and out of stocks, trying to ride their shifting momentum for profits. "It's very stressful," says one, dressed in a green T-shirt, blue shorts and Adidas sneakers. "The market is very hard to figure out." The four traders are part of a world-wide network initially set up by a Toronto-owned firm called Swift Trade Inc. Swift's founder, Peter Beck, turned it into one of the largest day-trading operations in the world over the past decade by aggressively expanding into far-flung locations, from China to Nicaragua to Romania, where he could recruit traders on the cheap. Mr. Beck also took an aggressive stance toward the law, say regulators in several countries where his firm has traded. The Financial Industry Regulatory Authority is expected on Tuesday to announce a settlement with Mr. Beck and an in-house brokerage unit for not establishing a supervisory system to prevent "a pattern of manipulative trading activity," according to a copy of the settlement reviewed by The Wall Street Journal. The Best CFOs: A Wall Street Journal Ranking (WSJ) #16: Ann Marie Petach, BlackRock. Chewbacca costume head from ‘Star Wars’ sold for $172K (NYDN) A Chewbacca headpiece used in the original "Star Wars" trilogy sold for a whopping $172,200 at a movie memorabilia auction this weekend. The loyal and lovable walking carpet swept the competition, which included an "Edward Scissorhands" costume worn by Johnny Depp that sold for $86,100 and an Everlasting Gobstopper used in the 1971 movie "Willy Wonka & The Chocolate Factory" that sold for $49,200. The Chewie mask was described by auctioneer Profiles in History as the "finest full costume headpiece of Chewbacca from the original trilogy in private hands," and "the finest screen-correct Chewbacca costume head from the Star Wars trilogy known to exist." The eyes are actual casts of Chewbacca actor Peter Mayhew's closed eyes, the auctioneer said. The expected price for the well-liked Wookie was between $60,000 and $80,000, plus fees and taxes, according to the auction catalog...Four years ago, someone spent a reported $240,000 to get the lightsaber prop used by actor Mark Hamill in the first two movies.

Opening Bell

Argentina won't meet with Paul Singer; Meredith Whitney still being sued; Seattle investor goes on dates with women who think he's the "real" Christian Grey; Man attempts to pay bar tab with rock; AND MORE.

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