Opening Bell: 11.30.09

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Nov 30, 2009

Bernanke Starts Fed Debate Early (WSJ)
Ben Bernanke would prefer the Federal Reserve not be stripped of its power. Senator Bernie Sanders would prefer the Beard be stripped of his job: "If he's the smartest guy in the world, why didn't he do anything to prevent us from sinking into this disaster that Wall Street caused and which he was a part of?" Mr. Sanders said on ABC's "This Week with George Stephanopoulos." Mr. Sanders was referring to Foreign Policy Magazine's list of the "Top 100 Global Thinkers," which ranked Mr. Bernanke as No. 1. While Mr. Bernanke is expected to win confirmation, Sen. Bernie Sanders, a Vermont independent, said Sunday that he would oppose him.
UBS Threatens To Move HQ From Switzerland (Reuters)
If Switzerland dares to lay too many regulations on the tax evaders' asses, they are so out of there, CEO Oswald Gruebel apparently threatened over the weekend.
U.A.E. Central Bank Says It `Stands Behind' Lenders, Offers Loan Facility (Bloomberg)
"This is a timely pre-emptive move from the central bank," Ahmet Akarli, an economist at Goldman Sachs Group Inc. in London, said in a note. The central bank is "ensuring that local markets are operational" and banks "have access to ample liquidity."
Bank of America Trims Salary for 2 Top Executives (WSJ)
Bank of America said in a filing with the Securities and Exchange Commission that it has cut the salaries of Chief Financial Officer Joe Price, along with it mortgage unit president Barbara Desoer, from $800,000 per year to $500,000.
Ari Kiev, a Psychiatrist, Dies at 75 (NYT)
The former SAC Capital shrink in-residence-- he left SAC in January to start Kiev Consulting-- passed away on November 18 due to complications related to cancer.
U.A.E. Blocks Sunday Times Over Coverage of Dubai Debt Crisis (Bloomberg)
The Sunday Times is awaiting further instructions from the authorities, the office said in a statement. Meanwhile, Vikram would like to know if he can arrange to block the sale of any New York-based papers talking smack about Citi.
Forget Fleece? Wool Makes A Comeback (WSJ)
Sacrilege.
Thirty financial groups on systemic risk list (FT)
Thirty global financial institutions make up a list that regulators are earmarking for "cross-border supervision exercises." They are:
* Bank of America Merrill Lynch
* Citigroup
* Goldman Sachs
* JPMorgan Chase
* Morgan Stanley
* Royal Bank of Canada
* Barclays
* HSBC
* Royal Bank of Scotland

* Standard Chartered
* Credit Suisse
* UBS
* BNP Paribas
* Société Générale
* BBVA
* Santander
* Mitsubishi UFJ
* Mizuho
* Nomura
* Sumitomo Mitsui
* Banca Intesa
* UniCredit
* Deutsche Bank
* ING
* Aegon
* Allianz
* Aviva
* Axa
* Swiss Re
* Zurich

Opening Bell

Hartford Bows to Paulson Wish to Exit Annuity Business (WSJ, earlier) Bowing to pressure from hedge-fund titan John Paulson, Hartford Financial Services Group said Wednesday it would exit its annuity business and weigh a sale of a large portion of its life-insurance operation. The move will allow Hartford to focus on its property-casualty unit, where the company got its start more than 200 years ago, as well as its group benefits business and its "high return" mutual fund operation, Chief Executive Liam McGee said in a statement. The announcement marks a substantial change of strategy for Hartford, which has long resisted calls to separate its life insurer from its property-casualty arm. Mr. Paulson, whose hedge fund is Hartford's largest shareholder, became the latest to push for such a move when he took to the company's fourth-quarter-earnings call in February to criticize management and urge them to "do something drastic" to boost the share price. Bernanke As Professor Tries To Buff Fed's Image (NYT) Mr. Bernanke, one of the most powerful men in Washington, has agreed to moonlight as a college professor, delivering four lectures on central banking over the next two weeks. He also will read some student papers...“It always surprises you to realize that this guy actually exists and he’s not just on TV,” said Max Sanders, a 19-year-old from New York. “It’s a once-in-a-lifetime opportunity to hear lectures from him,” said Noah Wiviott, 21, of New Jersey. “He clearly knows what he’s talking about.” Not everyone, however, found him convincing. Yuqi Wu, a 20-year-old student from China, said she did not agree with Mr. Bernanke’s criticism of her government’s monetary policy. “I definitely support the Chinese government’s position,” she said. Buffett Seizes Lead in Bet on Stocks Beating Hedge Funds (Bloomberg) Warren Buffett made a friendly bet four years ago that funds that invest in hedge funds for their clients couldn’t beat the stock market over a decade. So far he’s winning. The wager that began on Jan. 1, 2008, pits the Omaha, Nebraska, billionaire against Protégé Partners LLC, a New York fund of hedge funds co-founded by Ted Seides and Jeffrey Tarrant. Protégé built an index of five funds that invest in hedge funds to compete against a Vanguard mutual fund that tracks the Standard & Poor’s 500 Index. The winner’s charity of choice gets $1 million when the bet ends on Dec. 31, 2017. Banks Seek Delay On Volcker Rule (WSJ) The Volcker rule, which restricts banks' ability to trade with their own money, is set to take effect July 21, whether or not regulators have a final rule in place, according to the 2010 Dodd-Frank financial overhaul law. Federal Reserve Chairman Ben Bernanke said last month that regulators likely wouldn't have a rule in time. A group representing banks and others involved in bundling and selling loans is warning that deals worth hundreds of billions of dollars may need to be shut down because of wording in the law requiring compliance with a rule that doesn't yet exist. Cops arrest Occupy Wall Street protesters in Union Square (NYP) Cops shut down Union Square and kicked out a large crowd of Occupy Wall Street protesters last night, arresting nine demonstrators last night and this morning, just days after larger clashes at the group's former encampment downtown. I love lava lamp (Politico) Another amusing exchange as Mitt Romney walked past a Chicago Google employee with a big blue lava lamp (turned off) on his desk: "That's a big lava lamp, congratulations," Romney said. Wilbur Ross: Long-Term Bond Bubble Getting Ready To Burst (CNBC) "I think the greatest bubble that is about to burst is the 10-year and longer Treasury, because the idea that inflation is gone forever and for all time, and therefore these artificially low rates can last, is silly," the president of W.H. Ross & Co. said in an interview. Bernanke: Fed Is Ready To Act If Europe Falters (Reuters) "In the past few months, financial stresses in Europe have lessened, which has contributed to an improved tone of financial markets around the world, including in the United States," Bernanke said in testimony prepared for a House hearing Wednesday. Bernanke stresses, however, that a full resolution of the crisis "will require a further strengthening of the European banking system; a significant expansion of financial backstops, or “firewalls,” to guard against contagion in sovereign debt markets." Greece Names New Finance Minister (WSJ) Greek Deputy Finance Minister Philippos Sachinidis will be the country's new finance minister, replacing Evangelos Venizelos, the prime minister's office said Wednesday.

Opening Bell

Global Finance Chiefs At Odds (WSJ) At the annual meetings here of the International Monetary Fund and World Bank, European officials bickered about the damage caused by austerity; this week they head into a major euro-zone summit with no clear rescue plan for Greece. A territorial row between China and Japan, the world's second- and third-largest economies, bled into the conference with no sign of resolution, highlighting a new risk to growth. And many top finance officials pointed fingers at the U.S. for casting a new cloud over global markets by failing to make progress on the budget mess in the world's largest economy. Thousands March In Spain To Protest Austerity (Reuters) Several thousand anti-austerity protesters in Spain marched down a major street in the capital banging pots and pans Saturday. Many protesters also blew whistles as they blocked part of the Castellana boulevard Saturday carrying placards saying "We don't owe, we won't pay." "None of us pushed the banks to lend huge sums of money to greedy property speculators, yet we are being asked to pay for other's mistakes," 34-year-old civil servant Maria Costa, who was banging an old pot along with her two children, said. Bernanke Defends Fed From Claims It Is Being Selfish (NYT) Critics say the Fed’s unorthodox policies weaken the dollar and bolster the currencies of developing countries, hurting their ability to export. “It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies,” Mr. Bernanke said at an event sponsored by the Bank of Japan and the International Monetary Fund. The Fed last month announced a program of open-ended bond purchases that will be continued until there is substantial improvement in labor market conditions, barring a sustained and unexpected spike in inflation. To start off, the central bank will buy $40 billion in mortgage-backed securities each month. “This policy not only helps strengthen the U.S. economic recovery, but by boosting U.S. spending and growth, it has the effect of helping support the global economy as well,” Mr. Bernanke said. Fischer Backs Fed QE3 as World ‘Awfully Close’ to Recession (Bloomberg) While there has been “a lot of progress made” to improve the global economy, its impact hasn’t materialized, Fischer said in an interview in Tokyo with Bloomberg Television airing Sunday. He signaled that by deciding not to set an end date or total amount to its third program of bond buying, the Fed is easing worries it will run out of ammunition before achieving its goals. Can Morgan Stanley's Gorman Save Wall Street? (BV) Gorman’s strategic moves are enough to convince one natural born skeptic, Mike Mayo, a financial-industry research analyst at Credit Agricole SA (ACA), to recommend Morgan Stanley’s stock for the first time in years. “The stock is valued as if it is a Greek or Spanish bank but its risk is far less,” he wrote in an e-mail to me. For Morgan Stanley to return to its glory days, he said, margins need to be improved in asset management, fixed-income trading needs to be further slimmed down and the core investment-banking franchise needs to be maintained and reinvigorated. Good advice. A firm built around lower risk-taking and lower overall pay while still providing clients with the advice and capital they need to innovate and expand is what we need on Wall Street. It’s the vision of one man taking seriously his responsibility to make the capital markets safe and productive for economies all over the world, instead of just some casino gone haywire where the house absorbs the losses and the profits go to the gamblers. The question is whether other leaders on Wall Street will follow Gorman’s example. Sex Life Was ‘Out of Step,’ Strauss-Kahn Says, but Not Illegal (NYT) More than a year after resigning in disgrace as the managing director of the International Monetary Fund, Dominique Strauss-Kahn is seeking redemption with a new consulting company, the lecture circuit and a uniquely French legal defense to settle a criminal inquiry that exposed his hidden life as a libertine...In France, “Libertinage” has a long history in the culture, dating from a 16th-century religious sect of libertines. But the most perplexing question in the Strauss-Kahn affair is how a career politician with ambition to lead one of Europe’s most powerful nations was blinded to the possibility that his zest for sex parties could present a liability, or risk blackmail. The exclusive orgies called “parties fines” — lavish Champagne affairs costing around $13,000 each — were organized as a roving international circuit from Paris to Washington by businessmen seeking to ingratiate themselves with Mr. Strauss-Kahn. Some of that money, according to a lawyer for the main host, ultimately paid for prostitutes because of a shortage of women at the mixed soirees orchestrated largely for the benefit of Mr. Strauss-Kahn, who sometimes sought sex with three or four women. German finance chief Wolfgang Schaeuble says Greece won't default or exit (Telegraph) "Greece has to take a lot of very serious reforms" and "everyone is trusting that the Greek government is doing what is necessary", he said at a meeting with business leaders in Singapore on Sunday. Mr Schaeuble said an increasing majority of Greeks understand that being in the euro "is in the best interest of Greece" and said did not think there would be a ‘staatsbankrott’ - or state bankruptcy. He said he did not see “any sense to speculate on Greece leaving the euro” because it would be very damaging for both the country and the region. High-Speed Trading No Longer Hurtling Forward (NYT) Profits from high-speed trading in American stocks are on track to be, at most, $1.25 billion this year, down 35 percent from last year and 74 percent lower than the peak of about $4.9 billion in 2009, according to estimates from the brokerage firm Rosenblatt Securities. By comparison, Wells Fargo and JPMorgan Chase each earned more in the last quarter than the high-speed trading industry will earn this year. Titanic Tycoon Plans Stake Sale Talks for $8 Billion Gas Project (Bloomberg) Australian mining magnate Clive Palmer, who’s planning to build a modern replica of the Titanic, aims to start talks next year to sell stakes in a potential $8 billion natural gas project in Papua New Guinea. “We’ve had interest from major petrochemical companies who want to joint venture” including Exxon Mobil Corp. and Chinese companies, Palmer said in an interview. “We will talk to them at the appropriate time,” likely mid-2013 when field work is scheduled to be completed, he said. Occupy Supporters Stage Protest in London (AP) Several supporters of the anti-corporate Occupy movement chained themselves to the pulpit of St. Paul’s Cathedral during a service on Sunday in an action for the anniversary of its now-dismantled protest camp outside the London landmark. The dean of St. Paul’s, David Ison, said he was conducting an evening prayer service when “four young women dressed in white” chained themselves to the structure. Dutch make massive cocaine bust in fruit shipment headed for zoo, arrest five (AP) A major cocaine seizure in Europe turned out to be good news for the animals at Rotterdam’s zoo. The drugs were hidden among boxes of bananas, and the fruit went to the monkeys and other creatures at the Blijdorp zoo. Dutch prosecutors said Friday more than eight tons of cocaine was hidden among the bananas on a ship from Ecuador. The drugs were seized Monday in the Belgian port of Antwerp, while the bananas were allowed to continue on to Rotterdam – the shipment’s final destination. Dutch police arrested a Belgian truck driver and four Dutch men on Tuesday.

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