Opening Bell: 07.27.10

Author:
Dealbreaker
Updated:
Jan 14, 2019
Original:
Jul 27, 2010

UBS Swings To Profit (WSJ)
The bank swung to a profit of 2.01 billion Swiss francs ($1.92 billion) in the second quarter from a loss of 1.4 billion francs a year earlier. Last fall, UBS set out a medium-term target of 15 billion francs of annual pre-tax profit. In early afternoon trading in Zurich, the shares surged 9%. "The UBS franchise is solid. I believe their numbers will improve further into the year," said Marc Gabelli, president of the Gabelli Group, parent of $29 billion U.S. asset manager GAMCO. "The bleed is over and now they will begin to regain share."

Deutsche Bank raises quarterly profits despite crisis (AP)
Germany's biggest bank, Deutsche Bank, can still hit an important 2011 target despite a slump by its key profit generator, finance director Stefan Krause said on Tuesday. "We believe we are on track to achieve this goal," of pre-tax profit of 10 billion euros (13 billion dollars), Krause told media after the bank released second-quarter results. He did not give an outlook for this year, however. In the first half of 2010, the bank posted operating profit of 4.3 billion euros, of which just 1.5 billion came during the second quarter. "We remain very confident in investment banking for 2011" but also in other sources of profits, Krause said in reference to the group's top money maker.

Top 25 Highest Paid CEOs Of The Decade (WSJ)
Hey hey hey: "Four of the top 25 CEOs worked at financial companies, two on Wall Street: former Lehman Brothers CEO Richard S. Fuld, at No. 11 with $457 million, and former Citigroup Inc. CEO Sandy Weill, who ranked 19th at $361 million. The others were Mr. Fairbank and former Countrywide Financial Corp. CEO Angelo Mozilo."

Jailed Investment Banker Asks For $2 Million Bail (Bloomberg)
Kenneth Starr, 66, would be in the custody of his wife, Diane Passage, and remain at their Manhattan apartment with an electronic monitoring ankle bracelet under curfew from 6 p.m. to 8 a.m., according to a request filed in court Monday by his lawyer, Flora Edwards. Federal prosecutors objected to the request. In detention, Mr. Starr has not been able to help in his defense because he “lacks access to the multitude of files and records as well as the technology necessary to work effectively,” according to the filing.

CIT Reports Second Quarter 2010 Net Income of $142 Million; $0.71 Per Diluted Share (BusinessWire)
“During the second quarter we continued to advance our key corporate initiatives,” said John A. Thain, Chairman and Chief Executive Officer. “We improved our funding flexibility, repaid higher cost debt, streamlined our portfolio and largely completed the build-out of our senior management team. We remain committed to increasing the value of our commercial franchises and supporting the small business and middle market sectors that are vital to the U.S. economy.”

New Chief Pledges BP Will Be 'Good Corporate Citizen' (CNBC)
"It's in the fabric of the company. We want to be a good corporate citizen. We want to restore our reputation. It's going to take time," he said. "We've got to learn from this accident. We're going to change many things in BP."

http://online.wsj.com/video-center?mg=com-wsj">Down Came the Rain and Washed a Porsche Spyder Out (WSJ)
Apparently you don't want to buy this car.

U.S. Small-Business Aid May Create $300 Billion of `Junk' Loans (Bloomberg)
The U.S. Senate may vote this week on a bill to funnel $30 billion of capital to community banks. Banks could leverage the sum to make $300 billion in loans that create jobs, according to a Senate summary. That could more than double the commercial and industrial loans at eligible banks as of the first quarter, according to data compiled by KBW Inc.

Cast Of Jersey Shore Rings Opening Bell (YouTube)

Mark Haines is a huge fan.

News

Germany Hints At More Financing (WSJ) Germany on Wednesday signaled its willingness to provide additional financing for the euro zone's bailout fund and accept lower interest on loans to Athens, in order to get the Greek rescue back on track and free the next tranche of about €44 billion ($56.40 billion) in loans for the euro zone's weakest member. Merkel Sees Chance For Greek Deal Monday (Reuters) "I believe there are chances, one doesn't know for sure, but there are chances to get a solution on Monday," Merkel told the Bundestag lower house of parliament in a debate on the German budget. But the longing for one act, one miracle solution, one truth that means all our problems are gone tomorrow...this will not be fulfilled. What was neglected over years, over decades, cannot be taken care of overnight and therefore we will need to continue to move step by step." H-P Says It Was Duped (WSJ) The technology giant said that an internal investigation had revealed "serious accounting improprieties" and "outright misrepresentations" in connection with U.K. software maker Autonomy, which H-P acquired for $11.1 billion in October 2011. "There appears to have been a willful sustained effort" to inflate Autonomy's revenue and profitability, said Chief Executive Meg Whitman. "This was designed to be hidden." Michael Lynch, Autonomy's founder and former CEO, fired back hours later, denying improper accounting and accusing H-P of trying to hide its mismanagement. "We completely reject the allegations," said Mr. Lynch, who left H-P earlier this year. "As soon as there is some flesh put on the bones we will show they are not true." Analysts Had Questioned Autonomy’s Accounting Years Ago (CNBC) Paul Morland, technology research analyst at broking and advisory house Peel Hunt, told CNBC that he had noticed three red flags in Autonomy’s accounts in the years leading up to the HP acquisition: poor cash conversion, an inflated organic growth rate, and the categorizing of hardware sales as software. London Bankers Become Landlords as Rents Hit Record (Bloomberg) Vivek Jeswani became a landlord by accident when Deutsche Bank AG (DBK) transferred him to New York two weeks after he moved into a new home in central London. Now back in the U.K., Jeswani views the apartment in Baker Street, the fictional home of Sherlock Holmes, as one of his best assets and is about to buy another home to expand his rental business. “There are no other investments as attractive and you’ve got some security if you’ve got an asset you can use yourself,” the 36-year-old risk officer at China Construction Bank Corp.’s U.K. unit said. “There’s a good yield over 5 percent and being in central London, you’ve got demand domestically and internationally.” Trading Charges Reach SAC (WSJ) The hedge funds reaped $276 million in profits and losses avoided based on that information, criminal and civil authorities said—far dwarfing that of any previous insider-trading case. The bulk of the trading profits generated by Mr. Martoma was paid to Mr. Cohen, a person close to the hedge fund said. Fed Still Trying To Push Down Rates (WSJ) Fed Chairman Ben Bernanke suggested that the central bank will keep trying to push down long-term interest rates in 2013, as federal tax and spending policies become a more substantial headwind to the U.S. economy. "We will continue to do our best to add monetary-policy support to the recovery," Mr. Bernanke said at the New York Economic Club, answering a question about how the Federal Reserve would respond to impending spending cuts or tax increases that might restrain economic growth. 'Stiletto Surgery' alters pinky toe for better fit (Fox) These days, some women will do just about anything to fit into their favorite pair of high heels – including surgery. A growing number of women are paying thousands of dollars to surgically alter their feet just to make wearing heels a more comfortable experience. Surgical procedures such as shortening toes, receiving foot injections and even completely cutting off pinky toes are on the rise. “Unless you’ve been there, and you can’t find shoes, and you’re in pain, don’t judge,” said Susan Deming, a patient who recently underwent a toe-shortening procedure. Adoboli’s Fate Decided at Wine Bar as UBS Market Bets Unraveled (Bloomberg) On a cool late summer evening last year in London’s financial district, with the euro-zone crisis worsening and Greece tottering on the edge of default, Kweku Adoboli says he asked the three traders who worked with him at UBS AG’s exchange-traded funds desk to join him for a drink. Adoboli said in a post on his Facebook page that he needed “a miracle” as his bets on the market imploded. That night at a wine bar across the street from their office, Adoboli asked John Hughes, the senior trader on the ETF desk, and two junior traders, what to do. The others decided he should take the blame for billions of dollars in losses and an elaborate web of secret trades in what he called an umbrella account that once held $40 million in hidden profits. “I knew I was going to lose my job anyway, I had already resigned myself to that, so fair enough,” the 32-year-old Adoboli testified last month about the meeting, which the other traders deny took place. Jobless Claims in U.S. Decrease (Bloomberg) Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg. Soros Buying Gold as Record Prices Seen on Stimulus (Bloomberg) The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show. 'Cannibal Cop' Gilberto Valle planned to to cook up 'some girl meat' on Thanksgiving (NYDN) The "Cannibal Cop" had his own twist for a Thanksgiving dinner this year — cooking up “some girl meat,” prosecutors revealed Tuesday. Gilberto Valle, 28 — who allegedly kept a database of at least 100 women he plotted to rape, cook and eat — planned the freakish feast with one of his online conspirators earlier this year, prosecutors said. “I’m planning on getting me some girl meat,” he wrote to his pal on Feb. 9. “Really tell me more,” responded the friend. “It’s this November, for Thanksgiving. It’s a long way off but I’m getting the plan in motion now,” Valle wrote.

News

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