September 27, 2021

Opening Bell: 06.10.10

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US Faces 'Severe' AIG Losses (WSJ)
In a lengthy report, the bipartisan Congressional Oversight Panel concluded that the U.S. government, which owns nearly 80% of the insurance giant, is likely to "remain a significant shareholder in AIG through 2012" and it is unclear if taxpayers "will ever be repaid in full."

Goldman Sachs $2 Billion Hudson CDO Said to Be Target of Second SEC Probe (Bloomberg)
“The lawsuit is a misguided attempt by Basis, a hedge fund that was one of the world’s most experienced CDO investors, to shift its investment losses to Goldman Sachs,” Goldman Sachs said in a statement.

BP And Officials Block Some Coverage Of The Spill (NYT)
“We were questioned extensively. Who was on the aircraft? Who did they work for?” recalled Rhonda Panepinto, who owns Southern Seaplane with her husband, Lyle. “The minute we mentioned media, the answer was: ‘Not allowed.’ ”

How the United States Became a PR Disaster for Deutsche Bank (Spiegel)
Deutsche Bank's tracks lead through the entire American real estate market. In Chicago, the bank foreclosed upon close to 600 large apartment buildings in 2009, more than any other bank in the city. In Cleveland, almost 5,000 houses foreclosed upon by Deutsche Bank were reported to authorities between 2002 and 2006. In many US cities, the complaints are beginning to pile up from homeowners who lost their properties as a result of a foreclosure action filed by Deutsche Bank. The German bank is berated on the Internet as "America's Foreclosure King."

Buffett Lunch Draws $700, 100 Bid as Pace Quickens (Reuters)
The auction on eBay generated 40 bids as of 4 p.m. EDT, with the highest bid rising from $200,100 on Tuesday and $51,000 on Monday. The names of bidders are being kept confidential by eBay, which began the auction on Sunday night. The auction ends on June 11 at 10:30 p.m. EDT

Bearded Women Challenge French ‘Boys Club’ Boards in Paris (Bloomberg)
“Is it really wise to allow women to define the strategy of a company, a task requiring intelligence, an ability to react and cool-headedness?” an activist of the feminist lobby La Barbe, or “The Beard,” said to the packed hall, taunting the French water utility’s board for having only one woman member out of 17. The activist didn’t want to be identified, in line with the group’s internal policies.

So This Guy's Out There (TRB)
"I'm the guy who has spent the last 20 years of my life training inexperienced bushy-tailed day dreamers to become millionaires."

Taleb: Debt Spreading 'Like Cancer' (CNBC)
"We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base," Taleb said. "Banks balance sheets are just as bad as they were" two years ago when the crisis began and "the quality of the risks hasn't improved," he added.

`Liquidity Seizure' May Drag World Into Recession, Nomura's Schulte Says (Bloomberg)
“As Europe’s problems unwind, liquidity is going to seize up. As liquidity seizes up, multiples are going to contract,” Hong Kong-based Schulte told reporters in Singapore today. “Equities are not necessarily cheap.”

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By Apavlo at English Wikipedia (Transferred from en.wikipedia to Commons.) [Public domain], via Wikimedia Commons
Opening Bell

Opening Bell: 10.7.16

Pound flash crash; Twitter's no good very bad day; Qatari hearts Deutsche Bank; Vanilla Ice vows to ride out Hurricane Matthew; and more.

Opening Bell

Opening Bell: 12.04.12

Banks Rediscover Money Management Again As Trading Declines (Bloomberg) Global banks, forced by regulators to reduce their dependence on profits from high-risk trading, have rediscovered the appeal of the mundane business of managing money for clients. Deutsche Bank is now counting on the fund unit it failed to sell to help boost return on equity, a measure of profitability. UBS is paring investment banking as it focuses on overseeing assets for wealthy clients. Goldman Sachs, JPMorgan Chase and Wells Fargo, three of the five biggest U.S. banks, are considering expanding asset- management divisions as they seek to grab market share from fund companies such as Fidelity Investments. “Asset management is a terrific business,” said Ralph Schlosstein, chief executive officer of Evercore Partners Inc., a New York-based boutique investment bank that last month agreed to buy wealth manager Mt. Eden Investment Advisors LLC. “Asset managers earn fees consistently without risking capital. Compare that to other businesses in the financial services.” Hedge Funds Win as Europe Will Pay More for Greek Bonds (Bloomberg) Hedge funds drove up prices for Greek sovereign debt last week after determining that European finance ministers would back off a pledge to pay no more than about 28 percent of face value to retire the nation’s bonds. Money managers correctly wagered that not enough bondholders would participate at that level to get the deal done. That would put at risk bailout funds that Greece needs to stave off economic collapse. Transactions involving Greek bonds “increased by the day” after it became clear that the buyback was going to happen, with hedge funds accounting for most of the purchases, said Zoeb Sachee, the London-based head of European government bond trading at Citigroup Inc. “If all goes according to plan, everybody wins,” Sachee said. “Hedge funds must have bought lower than here. If it isn’t successful, Greece risks default and everybody loses.” GE's Swiss lending unit for sale, UBS to bid (Reuters) General Electric Co wants to sell its Swiss consumer lending business, two sources familiar with the matter said, with UBS one of the parties interested in a deal that could be worth up to 1.5 billion Swiss francs ($1.62 billion). The sources told Reuters that UBS was one of at least two parties who plan to submit bids in an auction process. "GE wants to finalize the sale of GE Money Bank by the end of the first quarter," said one of the sources. Brian Moynihan: 'Fiscal Cliff' Repercussions Could Stretch in 2014 (CNBC) "I'm more concerned about business behavior slowing down than I am about consumer behavior," Moynihan told "Squawk Box." "I think we're in danger if this thing strings out into 2013 that you could start to have problems of what 2014 would look like." Icahn Fails In Oshkosh Tender Offer (WSJ) The activist investor was tendered only a meek 22% of shares in an offer he used essentially as a proxy for whether shareholders would support his board nominees. Icahn, who had pledged to drop the offer and his proxy fight if he didn’t receive at least 25% of shares tendered, says he is indeed dropping the tender offer. Ex-baseball star Lenny Dykstra sentenced in bankruptcy fraud case (Reuters) Lenny Dykstra, the 1980s World Series hero who pleaded guilty earlier this year to bankruptcy fraud, was sentenced on Monday to six months in federal prison and ordered to perform 500 hours of community service. The 49-year-old former ballplayer - who is already serving time in state prison for grand theft auto, lewd conduct and assault with a deadly weapon - was also ordered to pay $200,000 in restitution. In the federal case, Dykstra pleaded guilty in July to bankruptcy fraud and other charges. According to the written plea agreement, he admitted defrauding his creditors by declaring bankruptcy in 2009, then stealing or destroying furnishings, baseball memorabilia and other property from his $18.5 million mansion. Teacher disciplined for receiving foot massages from students (SLT) A Taylorsville Elementary School teacher has returned to his third-grade classroom after being disciplined for violating professional standards after students reported they scratched his back, rubbed his feet and had other inappropriate contact while at school. Granite School District officials found no criminal conduct by elementary teacher Bryan Watts, 53, who has worked at the school since 2004, but the district claims to have taken "appropriate disciplinary action" following complaints about Watts...Granite District police Detective Randall Porter started an investigation into Watts’ conduct Oct. 9 after a mother expressed concern to the district after her daughter reported odd classroom behavior by Watts. "She complained that her daughter [name redacted] told her that Watts asks students to rub his feet and back during ‘movie time,’ that Watts told the class that they should not tell their parents about activities that happen in the classroom, and that Watts scared a student by hitting a hammer on the student’s desk," Porter wrote in his 19-page report...officials also said there were student statements about odd activities, including playing dodgeball in Watts’ classroom. Knight Capital May Go It Alone (NYP) Knight Capital’s board emerged from another meeting yesterday to review dueling takeover offers without making a decision. Both Getco and Virtu Financial have made bids for the Jersey City, NJ-based Knight, which had to be bailed out several months ago after a $460 million trading glitch nearly tanked the firm. “[Knight] can still decide to remain independent. That’s a real possibility,” said one source familiar with the bidding process. Top US Firms Are Cash-Rich Abroad, Cash-Poor At Home (WSJ) With billions of dollars overseas that may never come back, the Securities and Exchange Commission is concerned that companies haven't been presenting investors with an honest appraisal of their liquidity. As a result, regulators are pressing companies to more clearly lay out how much of their cash is in the U.S. and how much is overseas and potentially encumbered by U.S. taxes. UBS Near Libor Deal (Reuters) UBS is nearing a deal to settle claims some of its staff manipulated interest rates, and could reach agreement with US and British authorities by the end of the year, a source said yesterday. Britain’s Barclays was fined $453 million in June for manipulating Libor benchmark interest rates, and remains the only bank to settle in the investigation, which led to the resignation of the bank’s chairman and CEO. Calpers Crusader Takes Aim At Fees (WSJ) Mr. Desrochers, a 65-year-old native of Canada who last year became head of private-equity investing for the California Public Employees' Retirement System, has told buyout funds to reduce fees if they want cash from the $241 billion pension goliath, one of the nation's largest private-equity investors. He has pushed for Calpers to pay management fees below the industry's standard of 1% or more and asked for performance fees below the usual 15% to 20% of gains, according to people who have dealt with him. Mike Tyson: Brad Pitt Had Sex With My Wife (NYP) Mike Tyson claims that he caught Pitt having sex with his ex-wife, Robin Givens, while they were in the middle of their divorce in the late eighties. Tyson, who was shortly married to Givens from 1988 to 1989, said he and the actress were still sleeping with each other during their separation. "I was getting a divorce, but... every day, before I would go to my lawyer's office to say 'she's a pig and stealing,' I would go to her house to have sex with her," Tyson said on the Yahoo! Sports show “In Depth with Graham Bensinger.” "This particular day, someone beat me to the punch. And I guess Brad got there earlier than I did." How did the heavyweight boxer react? "I was mad as hell...You should have saw his face when he saw me," Tyson said.

Opening Bell

Opening Bell: 11.13.09

Opening Bell

Opening Bell: 02.28.14

By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons
Opening Bell

Opening Bell: 1.31.17

Deutsche settles mirror mess; Buffet buys stocks, gives wife colander to puke in; Saudi prince fills plane with hawks; and more.

Opening Bell

Opening Bell: 10.25.10

Opening Bell

Opening Bell: 06.24.13

Opening Bell

Opening Bell: 06.25.12

Soros Pushes EU To Start Joint Debt Fund Or Risk Summit Fiasco (Bloomberg) “There is a disagreement on the fiscal side,” Soros, 81, said in an interview with Bloomberg Television’s Francine Lacqua at his home in London. “Unless that is resolved in the next three days, then I am afraid the summit could turn out to be a fiasco. That could actually be fatal.” Greece Seen Blocked From Debt Markets Until 2017 (Bloomberg) “The challenges facing Greece remain extremely large,” said Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. “It will be a long while before they can get back to the market.” Spain Asks For Help (WSJ) The Spanish government has made its formal request for European Union aid to help finance the cleanup of its ailing banking industry, the finance ministry said in a statement Monday. Nasdaq: 'Arrogance' Contributed To IPO Flop (WSJ) Chief Executive Robert Greifeld said Sunday that "arrogance" and "overconfidence" among Nasdaq staffers contributed to problems with Facebook's initial public offering last month. Addressing a conference of corporate directors at Stanford University's Law School, Mr. Greifeld said Nasdaq had tested its systems extensively before the May 18 IPO, simulating higher trading volumes than actually occurred. But he said Nasdaq was unprepared for increasing numbers of canceled orders in the hours leading up to Facebook's debut. S&P's Method's Under SEC's Lens (WSJ) The scrutiny relates to S&P's decision in July 2011 to pull its ratings on a new $1.5 billion commercial-mortgage-backed security, or CMBS, issued by Goldman Sachs and Citigroup The unusual step sent the commercial mortgage securities market into turmoil and scuttled the deal for weeks, angering investors and issuers. The SEC's inquiry is part of its annual review of S&P and other credit-rating firms. But in S&P's case regulators are looking at whether it used more lenient standards to rate new CMBS than it used on outstanding deals, the current and former employees say. JPMorgan Unit Shifts Operations (WSJ) The CIO, which is charged with investing a portfolio valued at $370 billion, equivalent to about 17% of J.P. Morgan's $2.2 trillion in assets, will avoid trying to protect the bank using infrequently traded derivatives, according to people close to the matter. The CIO unit also will avoid private-equity investments. But those changes will be driven by a judgment that certain losing strategies were poorly conceived and hedged, not by a decision to foreclose investment options. CNBC'S Guy Adami Takes On The Ironman Triathlon (NYT) But he says none of those experiences compare with the rush he felt on a sun-dappled Sunday morning in late May in Red Bank, N.J., when he crossed the finish line of his first triathlon. It was at a so-called sprint distance — a half-mile swim, followed by a 13-mile bike ride and then a 3.2-mile run — which Mr. Adami, 48, completed in just under two hours, finishing 116th in a field of 160. Just signing up for that race was no small accomplishment for Mr. Adami, who, not six months earlier, had been leading the sedentary existence of a trader and carrying a flabby 235 pounds on his 6-foot-3 frame. But as a volunteer placed a medal around his neck, Mr. Adami had little time to celebrate. A far more daunting challenge loomed: on Aug. 11, he will join nearly 3,000 other weekendwarriors as they seek to endure, and complete, the first Ironman-distance triathlon to be staged in the New York metropolitan region. To put the magnitude of that 140.6-mile race in perspective, consider this. It will begin at 7 a.m. with a 2.4-mile swim in the Hudson River — the open-water equivalent of about 170 lengths in a 25-yard swimming pool, or nearly five times the distance Mr. Adami completed in that New Jersey sprint. Those participants who manage to complete that swim in 2 hours 20 minutes or less will move on to the bicycle portion — 112 miles in two loops along the deceptively hilly Palisades Interstate Parkway, or the rough equivalent of pedaling from Manhattan to Hartford. Riders who finish the bike ride before 5:30 p.m. — or 10 ½ hours after their odyssey begins — will embark on a 26.2-mile marathon, which will begin in Palisades Interstate Park on the New Jersey side of the Hudson and continue for several loops before concluding with a brisk run (or perhaps a staggering walk, which the rules permit) across the George Washington Bridge and into Riverside Park on the West Side of Manhattan. IPO Market Gets First Post-Facebook Test (WSJ) In the dry spell since the disappointing May 18 debut of the social-network company, plenty of IPOs have been pulled. And for a time it appeared there would be no attempt to test the waters in June. But a quartet of offerings is lined up for the final week of the month: cloud-based computer-services provider ServiceNow Inc., energy partnership EQT Midstream Partners LP; software firm Exa Corp., and biopharmaceutical firm Tesaro Inc. Judge likens Goldman logic to Orwell’s ‘1984’ (NYP) A federal judge blasted Goldman Sachs for its “Orwellian” defense against a lawsuit accusing it of misleading investors in the sale of risky securities, comparing the firm’s logic to the George Orwell classic “Nineteen Eighty-Four.” “Words such as ‘honesty,’ ‘integrity,’ and ‘fair dealing’ apparently do not mean what they say,” Manhattan federal court Judge Paul Crotty said in a 27-page opinion allowing the shareholder suit to proceed against the bank. The harsh words from Crotty relate to allegations that Goldman concealed conflicts of interest in several CDO transactions that were part of the subprime meltdown. $400M+ Tab For Madoff Swindler Ezra Merkin (NYP) The agreement will allow some of Merkin’s clients to recover as much as 40 percent of what they lost, with investors who had been kept in the dark recovering the most. Basel Bank Official Warns On Stimulus Measures (WSJ) Central banks currently find themselves "caught in the middle," Jaime Caruana said, "forced to be the policy makers of last resort." They are providing monetary stimulus on a "massive scale," supplying liquidity to banks unable to fund themselves in markets and easing government financing burdens by keeping interest rates low, said Mr. Caruana, speaking in Basel, Switzerland, at the annual general meeting of the BIS, a consortium of the world's central banks. "These emergency measures could have undesirable side effects if continued for too long," he said. "A worry is that monetary policy would be pressured to do still more because not enough action has been taken in other areas." Rare giant tortoise Lonesome George dies in Galapagos Islands (NYDN) The giant tortoise named Lonesome George — the last of the Pinta Island subspecies and an enduring icon of the Galapagos — died Sunday, the Galapagos National Park said in a statement. George, who was discovered in 1972 in the islands that inspired Charles Darwin’s ideas of evolution, was about 100 years old. Galapagos tortoises have been known to live for 200 years. “This morning the park ranger in charge of looking after the tortoises found Lonesome George, his body was motionless,” park director Edwin Naula told Reuters. “His life cycle came to an end.” Since 1993, various mates had been provided for Lonesome George in failed attempts to keep his subspecies alive. Two females of a different subspecies managed to lay eggs, but they were infertile. George was actually named after American actor George Gobel, a TV star of the 1950s, who called himself “Lonesome George.”