Opening Bell: 06.21.10

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BP Chief Draws Outrage for Attending Yacht Race (NYT)
BP officials on Saturday scrambled yet again to respond to another public relations challenge when their embattled chief executive, Tony Hayward, spent the day off the coast of England watching his yacht compete in one of the world’s largest races. “He is having some rare private time with his son,” a BP spokeswoman, Sheila Williams, said in a telephone interview on Saturday. On Saturday, Senator Richard Shelby, Republican of Alabama, called Mr. Hayward’s yacht outing the “height of arrogance,” in an interview with Fox News. “I can tell you that yacht ought to be here skimming and cleaning up a lot of the oil,” Mr. Shelby said. “He ought to be down here seeing what is really going on. Not in a cocoon somewhere.”

London's City Buys BP While Wall Street Flees Risk in U.S. (Bloomberg)
“There’s a feeling in the U.K. that BP has been singled out unfairly and that there’s long-term value in the stock,” said Iain Armstrong, an analyst at Brewin Dolphin Ltd., which oversees more than $31 billion in London and increased its BP holdings in May. “In the U.S., it’s a very emotive issue, and politicians are making it much more personal and vindictive. If you’re a U.S. fund manager and BP doesn’t manage to stop the leak, you’ve got a lot to answer for.”

BP Says Gulf Oil Spill Response Costs Up To $2 Billion (WSJ)
"It is too early to quantify other potential costs and liabilities associated with the incident," the company said in a statement.

Germany And France Examine 'Two-Tier' Euro (Telegraph)
The creation of a "super-euro" zone would initially include France, Germany, Holland, Austria, Denmark and Finland. The likes of Greece, Spain, Italy, Portugal and even Ireland would be left in a larger rump mostly Mediterranean grouping. The official said French and German officials had first spent months examining how to exclude poor-performing states from the euro but decided it was not feasible.

To Help Prevent Crises, Delay Some Executive Pay (NYT)
Robert Shiller: "If our holdback measure had been in place before the last crisis, executives might have had serious second thoughts about giving a green light to mortgage-backed securities that would later go bust."

Gold at new record high after Saudi reserves double (FT)
The changes in Riyadh’s reserves were revealed by the World Gold Council, the industry-backed body which regularly tracks official bullion holdings. According to the WGC, the Saudi Arabian Monetary Agency, the central bank, has gold reserves of 322.9 tonnes, more than double the 143 tonnes it had previously reported.

New Mexico v. Val Kilmer: Payback Time (WSJ)
When actor Val Kilmer recently applied for permits to turn his 6,000-acre ranch outside Santa Fe into an upscale bed-and-breakfast, several of his neighbors protested. They weren't worried about traffic or noise or the prospect of intruding tourists. They were incensed about comments attributed to Mr. Kilmer in magazine articles dating to 2003 and 2005. And they didn't want him to get his way on the ranch unless he apologized. "That's all he has to do, come and apologize," said Jose Garcia, who runs horses on a 50-acre ranch next to Mr. Kilmer's. "We're not intimidated by him." Mr. Kilmer was quoted—misquoted, he says—describing his rugged corner of New Mexico as "the homicide capital of the Southwest." He went on to avow that "80% of the people in my county are drunk," requiring him to carry a gun for protection. That was in a 2003 interview with Rolling Stone.

Pershing Square backs Landry’s Restaurants buyout (FT)
According to people close to the matter, Pershing has agreed to vote in favour of a deal at or above $24.50 a share, after a seven-month battle with Tilman Fertitta, Landry’s founder. The agreement could be made public as soon as today, those people added.

The Tremors From A Coding Error (NYT)
AXA Rosenberg told its clients — which include mutual funds, pension funds and holders of separately managed accounts — that it had made a “coding error” that affected returns in its various portfolios in ways that had yet to be determined. The letter didn’t explain the specific nature of the error or when it was made. It said the problem “was first discovered in late June 2009” but that the company did not correct it until somewhere “between September and mid-November.” AXA Rosenberg did not notify clients until the mid-April letter.

Worries Emerge on Boeing Cockpit-Oxygen Systems (WSJ)
Nothing to freak out about, just know the pilots may not be able to put out a fire in time to save the plane.

Barclays Bosses To Take Stand In Legal Row (NYT)
Barclays top executives will tell a New York court the British bank did not get an unfair windfall from a deal for parts of Lehman Brothers in a case that shows the need for banks to draw up "living wills." Barclays President Bob Diamond is due to appear on Monday, followed a day later by Chief Executive John Varley. Lehman Brothers creditors charge them with taking advantage of the investment bank's collapse to get an $11 billion windfall from its takeover of the U.S. operations.

A Hedge-Fund King Philosophizes on Truth and Weasels (WSJ)
The euro was plummeting. The stock market was gyrating. And Ray Dalio, president of one of the world's largest hedge funds, took a moment to talk about mosquitoes. "Man will never be able to build a flying device like a mosquito," mused Mr. Dalio, the 60-year-old founder of Bridgewater Associates. "I look at nature's complexity and think, man has the intelligence of mold growing on an apple."

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Opening Bell: 03.22.13

Clock Ticks On Cyprus (WSJ) Cyprus, in an 11th-hour bid to unlock international aid, reopen the nation's banking system and preserve membership in the euro, readied a plan that would restructure its second-largest lender and enforce unprecedented restrictions on financial transactions. The proposals, if they take effect, would allow authorities to restrict noncash transactions, curtail check cashing, limit withdrawals and even convert checking accounts into fixed-term deposits when banks reopen. They have been closed since March 16. Parliament is set to debate the measures on Friday. If Cyprus can't pass them, it could find itself with little choice but to leave the euro zone—opening a Pandora's box that could threaten Spain and Italy. Time is short: The European Central Bank on Thursday threatened to cut off a financial lifeline if Cyprus's banks aren't stabilized by Monday. Credit Suisse Chief Gets 34% Raise (WSJ) Credit Suisse rewarded Chief Executive Brady Dougan for repositioning the bank in 2012 with a 34% pay rise, despite a fall in net profit for the year and a backdrop of growing criticism of executive remuneration. Mr. Dougan earned 7.77 million Swiss francs ($8.21 million), up from 5.8 million francs in 2011, when he took a pay cut as Switzerland's No. 2 bank by assets slogged through a difficult year in which its stock price fell 41%. Europe’s Bonus Clampdown Hits Two-Thirds of Fund Managers (Bloomberg) The European Parliament’s vote to cap bonuses in the asset-management industry could affect two- thirds of senior fund managers in the U.K., U.S. funds in Europe and hedge funds open to small investors. Bonuses should not exceed base salaries for managers of mutual funds regulated by the European Union, known as UCITS, European lawmakers in the economic and monetary affairs committee voted yesterday. The rules would cover 5 trillion euros ($6.5 trillion) of assets in UCITS, which include funds managed outside Europe and some linked to hedge-fund strategies such as John Paulson’s New York-based Paulson & Co. and Och-Ziff Capital Management Group. “If the final rules are even close to what has been agreed today, then this will fundamentally change the way asset managers are paid,” said Jon Terry, a partner at PricewaterhouseCoopers LLC. Asset managers “are now facing the toughest pay rules across the whole of the financial-services sector.” Boaz Says Dimon Should Have Known (NYP) The buck stops with Jamie Dimon. That’s the view of Boaz Weinstein, the hedge-fund manager who first speared the “London Whale” that led to $6.2 billion in trading losses for Dimon’s JPMorgan. Despite making a bundle by taking the other side of the bank’s bad bet, Boaz says that requiring bank CEOs to sign off on such trades is the only way to prevent debacles. As the “ultimate boss” of JPMorgan, Dimon should have had to approve the complicated trade, he said. “If you had a rule that anytime, anyone wants to make an investment in any one thing greater than $10 billion or $20 billion, the boss has to sign off on it,” then those types of disasters wouldn’t happen, Boaz said yesterday at the Absolute Return Symposium in Manhattan. Long Island Man Accepts Plea Deal in Fake Drowning (AP) The man, Raymond Roth, 48, of Massapequa, pleaded guilty to fourth-degree conspiracy. “The restitution Mr. Roth is ordered to pay ensures that the taxpayers won’t foot the bill for this scam,” said Kathleen M. Rice, the Nassau County district attorney. Prosecutors said Mr. Roth and his son, Jonathan Roth, 22, had plotted to collect about $400,000 in life insurance. The younger man’s case is pending. On July 28, Jonathan Roth told the authorities that his father had gone for a swim at Jones Beach and never came back. Responders searched for Raymond Roth for several days, while he was actually on his way to Orlando, Fla., prosecutors said. Raymond Roth’s wife found e-mails discussing the plot, and the authorities were alerted. Raymond Roth’s lawyer, Brian Davis, said on Thursday that he believed the plea bargain was fair, adding, “At this point, he wants to put it behind him.” Mood Sours In Northern Europe (WSJ) A worsening mood among businesses largely predated fraught negotiations over a Cypriot bailout, which economists say could stoke tensions surrounding the euro zone's debt crisis. Poorer sentiment among businesses lessens the chances of a rise in corporate investment, crucial for an economic recovery in the bloc at a time when most of its member states are cutting spending to control their debts. Economists See No Crisis With U.S. Debt as Economy Gains (Bloomberg) Three years after a government spending surge in response to the recession drove the U.S. past that red line -- the nation’s $16.7 trillion total debt is now 106 percent of the $15.8 trillion economy -- key indicators reflect gathering strength. Businesses have increased spending by 27 percent since the end of 2009. The annual rate of new home construction jumped about 60 percent. Employers have created almost 6 million jobs. And with borrowing costs near record lows, the cost of paying off the debt is lower now than in the year Ronald Reagan left the White House, as a percentage of the economy. BP to return $8 billion to shareholders from TNK-BP sale (Reuters) BP, which completed the sale of the half-owned TNK-BP to Russian state oil firm Rosneft on Thursday, said the move, designed to increase the value of remaining shares, was an amount equivalent to the value of the company's original investment in TNK-BP in 2003. Man finds knife blade in his back three years after stabbing (TS) A Northwest Territories man was just scratching what he thought was an annoying old itch earlier this week when it turned out to be a knife blade that had been buried in his flesh for almost three years. “I jumped in a cab and went straight to emergency,” said Billy McNeely, 32. The story goes back to an April 2010 birthday party in McNeely’s home town of Fort Good Hope, N.W.T. McNeely said a fight broke out between himself and another man over an arm-wrestling contest that ended up with McNeely being stabbed five times. “They stitched me up and bandaged me up,” said McNeely. “They never took X-rays.” Ever since, McNeely has had a lump in his back where the knife went in. Doctors and nurses told him nerves had been damaged in the stabbing. But the old wound never stopped nagging. “I always had back pains. There was always a burning feeling with it.” The injury was constantly itchy and irritated. It set off metal detectors. That was explained away as a metal fragment that had lodged in his bone. On Monday, while McNeely and his girlfriend were asleep in bed, the pain came back. “I sat up, I tried to rub it and scratch it the way I always did, and then the tip of my nail caught a piece of something solid, something sharp. “My girlfriend got up and she started playing around with it and she manoeuvred my back in a certain way and the tip of a blade poked out of my skin.” Doctors dug out a blade measuring about seven centimetres long.