Opening Bell: 06.01.10

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Hedge Funds Post Biggest Monthly Losses Since Lehman Aftershock (Bloomberg)
Paulson’s Advantage fund dropped 6.9 percent through May 21, dragging it to a year-to-date loss of 3.3 percent, according to investors with knowledge of the results, who asked not to be named because the information is private. Halvorsen’s Viking Global fund fell 3.4 percent in the same span and 2.9 percent for the year. Bacon’s Moore Global declined 7.7 percent as of May 20 and 4.8 percent in 2010, investors said.

Spanish Bank Asks for $3 Billion from Rescue Fund (Reuters)
Spain's second-biggest savings bank Caja Madrid has asked for up to 3 billion euros ($3.7 billion) from a government rescue fund set up to promote mergers among the country's network of unlisted savings banks, a source close to the company said on Tuesday. The government has set a June 30 deadline to tap money from the Fund for Orderly Bank Restructuring (FROB).

China Property Risk Is Worse Than In US (FT)
“The housing market problem in China is actually much, much more fundamental, much bigger than the housing market problem in the US and UK before your financial crisis,” Li Daokui, a professor at Tsinghua University and a member of the Chinese central bank’s monetary policy committee said in an interview. “It is more than [just] a bubble problem.”

AIG Rejects New Offer (WSJ)
AIG rejected Prudential PLC's bid to renegotiate the U.K. insurer's $35.5 billion purchase of AIG's main Asian life-insurance unit, dealing the takeover what is likely to be a fatal blow and raising questions about the future of Prudential and its Chief Executive Tidjane Thiam.

Solutions For A Crisis In Its Sovereign Stage (FT)
Nouriel Roubini: "The largest financial crisis in history is spreading from private to sovereign entities. At best, Europe’s recovery will suffer as the collapsing euro subtracts from growth in its key trading partners. At worst, a disintegration of the single currency or a wave of disorderly defaults could unhinge the financial system and precipitate a double-dip recession."

Swiss Report Slams Government Over UBS Crisis (Reuters)
The 360-page report, the result of a 15 month inquiry by two parliamentary committees and 59 closed-door hearings with senior Swiss officials, showed the government waited for five months before decisively stepping in to tackle UBS's credit woes in September 2008.

Michael Lewis: Shorting Reform (NYT)
To: Wall Street chief executives
From: Your man in Washington
Re: Embracing the status quo

Bees Attack Wall Street (Cipriani) (NYP)

House Approves Bill Ending Hedge Funds' Tax Break (NYT)
“If you sell a building, a bond, or a business, you are taxed for capital gains in this country,” said Pam Olson, a former Treasury official who now represents the private equity industry. “This would make us the only business in America denied capital gains treatment, which is discriminatory and unfair.”

Nomura Triples Pay to Top Executives After Bouncing Back From Record Loss (Bloomberg)
Chief Executive Officer Kenichi Watanabe and his executive team received average compensation of 145 million yen ($1.6 million) for the 12 months ended March 31, up from 41.5 million yen a year earlier, according to the report.

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Opening Bell: 08.02.12

Knight Says Glitch Cost It $440 Million (WSJ) Knight, in a press statement Thursday, said the problematic software had been removed from its systems and that the firm would conduct business making markets and trading on behalf of its clients Thursday. Knight's broker-dealer subsidiaries are in compliance with requirements to hold capital, the company said. The estimated $440 million loss disclosed Thursday by Knight follows a $35.4 million hit taken by the company in the problematic stock-market debut of Facebook. Goldman Leads Foreign Banks Accelerating Job Cuts In Japan (Bloomberg) Goldman Sachs led foreign banks in accelerating job cuts at their Japanese brokerages last fiscal year as employees relocated to other Asian financial centers and firms trimmed costs amid a global industry slump. The number of staff at nine global securities firms in Japan fell by 537, or 7.3 percent, to a combined 6,796 as of March 31, more than double the previous year’s 3.2 percent reduction, according to company regulatory filings. Wall Street and European banks have been eliminating jobs and transferring staff from Japan to Hong Kong and Singapore to reduce expenses as the euro region’s debt woes dent global investor confidence. The worst may be over as Japan recovers from last year’s nuclear crisis and some U.S. firms start hiring junior bankers for mergers advice and asset management, said Katsunobu Komizo, a Tokyo-based recruiting consultant. BNP Paribas Second Quarter Net Falls, Hits Capital Goal Early (Reuters) Second-quarter net income fell to 1.85 billion euros ($2.27 billion), beating the average of analyst estimates of 1.74 billion in a Reuters poll. Revenue dropped 8 percent to 10.10 billion, broadly in line with the poll average of 10.13 billion. The bank hit an 8.9 percent core Tier 1 ratio under stricter new Basel III methodology due to come into force from 2013. It is six months ahead of its target to hit 9 percent by end-2013. AIG Pushing Plan For Independence (WSJ) Several analysts who follow the company say the government's stake could be cut below 30% before the November elections, if asset sales expected by AIG in the coming months help the company raise a total of $10 billion to $15 billion in excess capital. The buybacks are likely to accompany one or more public share offerings of AIG stock by the Treasury, which over the past 16 months has reduced its stake from a peak of 92% through a series of at-market sales. Boulder police: Longmont man urinated on woman at bar after she rejected his advances (CD) Boulder police arrested a Longmont man who witnesses said urinated on a woman at a local bar after she rejected his advances Saturday night, according to a report. The woman told police she was standing next to the bar at Shooters Grill and Bar, 1801 13th St., about 11:45 p.m. Saturday when a man -- later identified as Timothy Paez, 22 -- came up behind her and put his arm around her. The woman turned around and said, "Um, really?," and Paez took his arm off her, according to the report. According to police, a few seconds later, the woman said she felt some sort of liquid hitting her leg. She initially thought Paez was spilling his beer on her, but when she turned around she told police she saw Paez with his penis exposed urinating on her leg and the front of the bar. Berkshire Benefits As Buffett Wagers On U.S. Housing (Bloomberg) “I don’t know if he’s lucky, smart or patriotic, but it’s worked out for him,” Cliff Gallant, an analyst at KBW Inc., said in a phone interview. He estimates that Berkshire will post an operating profit of $1,750 a share for the second quarter, a 6.7 percent increase from a year earlier. Bacon To Return $2 Billion (NYP) Louis Moore Bacon plans to give back $2 billion, or 25 percent of his main hedge fund, to investors, saying it may be too big for him to achieve past returns as “liquidity and opportunities have become more constrained.” Bacon, who seeks to exploit macroeconomic trends such as changes in interest rates and currencies, returned a “disappointing” 0.35 percent in the first half and a “tolerable” 6 percent in the past year, according to a letter sent yesterday to clients. He has gained on average more than 18 percent a year since starting the Moore Global Investments fund in 1989. Jobless Claims Increase (WSJ) Initial jobless claims, an indication of layoffs, increased by 8,000 to a seasonally adjusted 365,000 in the week ended July 28, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast 370,000 new applications for jobless benefits last week. Your 119 Billion Google Searches Now A Central Bank Tool (Bloomberg) Margo Sugarman spent months last year searching on Google for the appliances to complete her dream kitchen, scouring the Internet for information on the latest double ovens and low-noise mixers. Not only did those queries guide the Tel Mond, Israel, resident to the best deals for her 70,000-shekel ($17,680) renovation, they also helped the Bank of Israel, which looks to searches like Sugarman’s to assess the state of the nation’s $243 billion economy. The central bank stands at the forefront of the world’s hunt for new economic indicators, analyzing keyword counts for everything from aerobics classes to refrigerators -- reported by Google almost as soon as the queries take place -- to gauge consumer demand before official statistics are released. The Federal Reserve and the central banks of England, Italy, Spain and Chile have followed up with their own studies to see if search volumes track trends in the economies they oversee. For Retiring GE Executive, $89,000/Month Not to Work (WSJ) John Krenicki is giving up his General Electric paycheck. But he's going to be collecting an allowance. As part of a deal to keep the veteran executive from joining a competitor for an usually long three years, the conglomerate has agreed to pay Mr. Krenicki $89,000 a month until 2022. The payment to Mr. Krenicki, who is 50 years old, was dubbed a retirement allowance by GE and is worth $1 million a year.

Opening Bell: 09.10.12

US To Slash Stake In AIG (WSJ) The U.S. Treasury Department said it will sell $18 billion of American International Group Inc., slashing its stake in the New York company by more than half and making the government a minority shareholder for the first time since the financial crisis was roaring in September 2008. Banks Rethinking Executive Compensation (WSJ) At J.P. Morgan, the biggest U.S. bank by assets, directors are considering lower 2012 bonuses for Chief Executive James Dimon and other top executives in the wake of a multibillion-dollar trading disaster, said people close to the discussions. But they also are grappling with the question of how to do that without drastically reducing the executives' take-home pay, the people said. More than 93% of Mr. Dimon's $23 million in compensation last year came from either stock- or cash-based bonuses. Citigroup's board, meanwhile, is expected to decide this fall how to fine-tune next year's compensation plan to win broader support among investors, people familiar with the situation said. Former UBS trader faces trial over $2.3 billion losses (Reuters) Investment banker Kweku Adoboli, who was arrested a year ago when the huge losses came to light, has pleaded not guilty to two charges of fraud and two of false accounting related to disastrous trades that UBS says were unauthorized. "Given how serious the consequences of the incident were, we must assume that UBS's culture and practices will be examined during the course of the trial," UBS chief executive Sergio Ermotti told the bank's staff last week. "As uncomfortable as the entire trial will be for UBS, it will show us what the consequences are when misconduct occurs or when individuals do not take their responsibilities seriously," he wrote in an internal message published on its website. Alligators, Bearded Dragons Among Wild Animals Seized in Brooklyn Raid (DNAI) Police seized 13 exotic animals, including alligators, bearded dragons, and a tarantula in the raid of a public housing unit Friday, police said. On Friday afternoon at 1:30 p.m., Animal Care and Control officers removed five pythons and a boa constrictor, as well as two alligators, two bearded dragons, a gecko, a scorpion, and a tarantula, from the fifth-floor apartment of a Crown Heights public housing complex called the Weeksville Houses, police said, as part of an ongoing investigation. ‘Lead or Leave Euro’, Soros Tells Germany (FT) “Lead or leave: this is a legitimate decision for Germany to make,” the billionaire financier and philanthropist said in an interview with the Financial Times. “Either throw in your fate with the rest of Europe, take the risk of sinking or swimming together, or leave the euro, because if you have left, the problems of the eurozone would get better.” Few Hedgies Kicking Butt (NYP) There are some bright spots in hedge fund land, however, thanks in large part to Apple, which has long been a favored holding of the funds seeded by or spun out of Julian Robertson’s Tiger Management. Chase Coleman’s Tiger Global, which he co-manages with Feroz Dewan, gained 21 percent through August, and the flagship of Lee Ainslee’s Maverick Capital, one of the original Tiger cubs, rose 20 percent. Deutsche Bank Chiefs To Unveil Plans (WSJ) A major question is whether Deutsche Bank will need to raise capital. Tougher regulatory capital requirements are being phased in starting next year, and the bank will need as much as €10 billion to meet the new targets, analysts say. Nomura CEO Sees Overseas Units Posting Profit by June 2014 (Bloomberg) Nomura Holdings’s Koji Nagai, who took over as chief executive officer last month, said he plans to make overseas operations profitable by June 2014 at Japan’s largest brokerage. “We are not going to lower the flag as a global bank,” Nagai, 53, said in an interview in Tokyo on Sept. 7. “We want be an Asia-based global investment bank.” Schumer: Newfangled detergent 'pods' look too much like candy (NYDN) The Consumer Product Safety Commission should crack down on detergent companies whose superconcentrated cleanser “pods” look so much like candy that even a sitting senator wanted to gobble one. Since April, 40 local children in the city have mistakenly downed the colorful laundry packs such as Tide Pods, leading to numerous hospitalizations, some emergency intestinal surgery, and pangs of hunger of Sen. Charles Schumer. “The incidents are skyrocketing,” Schumer said Sunday joined by several medical professionals. “These pods were supposed to make household chores easier, not tempt our children to swallow harmful chemicals. I saw one on my staffer's desk and I wanted to eat it.”

Opening Bell: 06.20.12

Dimon Receives Tougher Treatment (WSJ) The lectures appeared to rankle Mr. Dimon. Certain questions received sharp, defiant retorts. "We lost $2 billion to Chrysler. I assume you'd want us to continue to lend to Chrysler," Mr. Dimon shot back when Rep. Gary Ackerman suggested the bank's hedging amounted to gambling. "We don't gamble," Mr. Dimon said curtly. "We do make mistakes." Dimon gets grief from pols — and cleaning lady (NYP) After taking his lumps during his second grilling on Capitol Hill over the bank’s $2 billion trading blunder, he was confronted by Adriana Vasquez, a 38-year-old janitor who says she earns $10,000 a year cleaning JPMorgan’s tower in Houston. “Despite making billions last year, why do you deny the people cleaning your buildings a living wage?” Vasquez asked the bank chieftain at the end of his two-hour grilling before the House Financial Services Committee. As a member of the Service Employees International Union, Vasquez, who says she cleans 24 bathrooms on 11 floors of the bank building, is putting pressure on JPMorgan. The union put out a press release in advance of the hearing, announcing that it would send Vasquez to confront Dimon over the issue of janitorial pay. A JPMorgan spokeswoman told The Post that the bank is a tenant of the tower but doesn’t set pay for the janitors, who are hired by the building’s management. Dimon, who was expecting to hear from the union, told Vasquez to call his office. BOE Seen Likely To Increase Stimulus (WSJ) The Bank of England looks set to pump more stimulus into the U.K. economy after minutes of its June policy meeting revealed that Governor Mervyn King was narrowly defeated in a knife-edge vote on a fresh bout of bond purchases. Moody's Upgrades Turkey (WSJ) Moody's said the move, which raised Turkey's sovereign-debt rating by one notch to Ba1—just below investment grade—was driven by the fast-growing economy's improvements in its public finances and the shock-absorption capacity of the government's balance sheet. UK Reveals New 'Say On Pay' Laws (WSJ) The British government unveiled legislation Wednesday to give investors more say on the pay packages of senior corporate executives, a key milestone in a shareholder rebellion that has been rippling through the U.K. in recent months. The measures include giving shareholders a binding vote on how much directors are paid and increasing transparency by requiring companies to annually publish a simple figure totaling how much directors received. Falcone’s Harbinger Capital Turns To Dell’s MSD For Loan (Bloomberg) Philip Falcone’s hedge fund, having taken out a loan earlier this year at an effective annual interest rate of 24 percent, has found a new source of financing: the money-management arm of billionaire Michael Dell. Harbinger Capital Partners Master Fund I Ltd. entered into a note purchase agreement on June 14 with a credit fund run by MSDC Management LP, according to a June 18 regulatory filing. MSDC Management is an investment adviser backed by MSD Capital LP, the private investment firm for Dell and his family. Under the financing agreement, the MSD credit fund can swap as much as $50 million of loans extended to Falcone’s Harbinger Capital for part of its stake in Harbinger Group, his publicly traded investment vehicle. Honeybee Swarms Increase In NYC After Mild Spring (NYT) When Happy Miller, the Seaport restaurant manager, saw tourists flailing their arms in a cloud of airborne black specks late last month, he closed the glass door and quietly panicked. “Oh my God, what do I do?” he thought before calling 311, security guards and local news outfits. The television trucks, he said, were first to arrive. It took several hours before Officer Anthony Planakis, the New York Police Department’s unofficial beekeeper in residence, arrived with a metal swarm box and a vacuum to collect the 17,500 or so homeless creatures. Officer Planakis, who has been responding to swarm calls since 1995, said this had been New York’s busiest year of swarming he had ever experienced. Since mid-March, he said, he has tended to 31 jobs in the five boroughs, more than twice the number he handled last season, which is normally mid-April through July. “It’s been pretty hectic,” he said, adding that this week’s warmer temperatures could encourage more bees to take off. Fed Seen Extending Operation Twist And Avoiding Bond Buys (Bloomberg) The Federal Reserve will probably decide today to expand Operation Twist beyond $400 billion to spur growth and buy protection against a deeper crisis in Europe, according to a Bloomberg News survey of economists. Fifty-eight percent of respondents in a June 18 poll said the Fed will prolong the program, which seeks to lower borrowing costs by extending the average maturity of the securities in the central bank’s portfolio. The current program ends this month. US Watchdog Hits At 'Risky' London (FT) US lawmakers and regulators have attacked London as a source of financial crises and promised tougher crossborder rules in the wake of $2 billion of trading losses at the UK unit of JPMorgan Chase. Gary Gensler, chairman of the Commodity Futures Trading Commission, said on Tuesday at a congressional hearing into JPMorgan’s trading losses that the US was vulnerable to risky activity in London. He said AIG had been hit by its financial products unit in London while Citigroup had been harmed by special purpose investment vehicles set up in the UK capital. “So often it comes right back here, crashing to our shores...if the American taxpayer bails out JPMorgan, they’d be bailing out that London entity as well,” he told the House financial services committee. Hedge Funds Hurt In May Commodity Rout As Brevan Drops (Bloomberg) Funds tracked by the Newedge Commodity Trading Index lost an average 3 percent last month, the most since September. Taylor Woods Master Fund Ltd., managing more than $1 billion, retreated 4.2 percent, according to a monthly report obtained by Bloomberg News. Galena Asset Management Ltd.’s metals fund dropped 2.6 percent in May, according to the company, and Brevan Howard Commodities Strategies Master Fund Ltd. fell 2 percent, according to a monthly report to investors obtained by Bloomberg. Ken Starr's pole dancing ex shops book (NYP) ...Passage also describes how another A-list actor and his wife took her and a “massage girl” into a room at Scores. But the couple ignored the hot ladies and started “having sex right in front of us.” After an hour of the sex show, Passage says she “reached into [the star’s] pants pocket...and told him I was taking an extra $200 as a tip...He was clearly too busy to negotiate, so he just waved me off and said, ‘ Thanks.’ ”