Opening Bell: 08.04.10


HSBC In Money Laundering Probe (WSJ)
A spokesman for HSBC in the U.K. said the investigations relate primarily to HSBC's "global banknotes" business, whereby HSBC ships banknotes around the world on behalf of clients, mainly from central banks to major commercial and investment banks. It also concerns what HSBC describes as its "foreign correspondent" business, which allows businesses to transmit funds to countries where they don't have a banking presence.

RBS Fined Over Sanctions Slip (FT)
The bank has been fined £5.6m – one of the largest penalties ever imposed by the financial regulator – for failing to ensure that funds were not transferred to terrorist groups or other people facing Treasury sanctions. RBS was punished for having insufficient checks in place to identify payment transactions that could potentially have involved those on the Treasury’s sanctions list. This resulted in an “un­acceptable risk” that RBS could have facilitated payments to terrorist organis­ations.

Geithner: Bush Policies 'Misguided,' Should Be Ended (Reuters)
"We are living today with the damage that misguided policy caused,'' Geithner said, adding that country needed to choose a new course. "Rather than recreating a false prosperity fueled by debt and passing the bills on to the next generation, we need to restore America to a pro-growth tax and fiscal policy,'' he said.

Dual Role In Housing Deals Puts Spotlight On Deutsche Bank (WSJ)
Deutsche says that helping investors bet either way—either for or against an asset—is part of doing business for a securities firm. "Some clients sought more exposure to the housing market, while others sought less," a spokesman for Deutsche said. "We served clients whatever their investment objective, but only after being satisfied that they had arrived at their view after thorough consideration."

Forget Doom, Old-Fashioned Rally Coming (CNBC)
"Risk aversion is the new black and the professors and black swans are falling over themselves to predict the collapse of a debt-laden economy," Michael Browne told CNBC. But results from the banks indicate that things are getting better, he said. "Almost all come up with the same pattern…they are lending again to small and mid-sized corporations and would like to lend more but there is no demand, especially from large corporations who are funding themselves from a very cheap market," according to Browne. "Individual lending is also showing signs of life. So if on top of this you get the consistent pattern of falling provisions then they are telling me that the economy is recovering. Rather faster than we should have expected," he added.

Hedgers On Ledge (NYP)
The proposed tax was yanked from the state budget, which finally passed last nightt...but hedge-fund pros fear the tax may rise from the dead. "States will be under financial pressure for years to come," said Orin Kramer, a New Jersey resident who runs a Manhattan hedge fund. "So if there are people in office who think it's a good idea today -- assuming they're still in office next year -- there's no reason to believe they would think otherwise."

Beijing Billionaire Who Grew Up With Mao Sees No Housing Bubble (Bloomberg)
Zhang says she’s well aware of the chorus of investors and economists who predict that China’s property boom is about to go bust, taking the global economy down with it. The doomsday scenarios don’t intimidate Zhang, a onetime penniless sweatshop worker who ascended to Wall Street by defying the odds. She hopes to prove skeptics wrong again this year by betting hundreds of millions of dollars on new buildings in Beijing and Shanghai. “I don’t see any bubbles,” says Zhang, dressed in a white V-neck zippered top, black slacks and red heels. “The next few months will be a fantastic time to buy.”


Opening Bell: 09.14.12

Trial to Begin for Former UBS Trader Accused of Hiding Huge Loss (Dealbook) UBS will face the harsh glare of the spotlight again on Friday, as opening arguments begin in the trial of a former trader accused of hiding a multibillion-dollar loss at the investment bank. Kweku M. Adoboli, 32, the former trader, faces charges of false accounting and fraud in connection with a $2.3 billion loss at the bank. He has pleaded not guilty. “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,” the bank’s chief executive, Sergio P. Ermotti, said in an internal memo made public by the firm. JPMorgan Erases Stock Drop Fueled by London Trading Loss (Bloomberg) JPMorgan, the lender that plunged as much as 24 percent in the month after disclosing a multibillion-dollar trading loss, has erased that decline. The bank’s stock climbed 3.7 percent to $41.40 yesterday in New York, eclipsing the $40.74 closing price of May 10, when Chief Executive Officer Jamie Dimon announced what was then a trading loss of about $2 billion at the chief investment office in London. The loss this year now stands at $5.8 billion. Dutch and Germans Give European Union Reasons to Cheer (NYT) On Wednesday, the German Constitutional Court found a way to declare that the permanent bailout fund, the European Stability Mechanism, is legal, clearing the way to use it in time to recapitalize troubled banks as well as governments. And the Dutch voted for mainstream parties in a parliamentary election, choosing not to be enticed by parties wanting to leave the euro. Combined with the European Central Bank’s decision to restart its bond-buying program in return for more budget discipline, immediately lowering interest rates on Italian and Spanish bonds, European leaders could begin to feel that perhaps the worst is over in the euro crisis, at least for now. “With the Dutch shying away from anti-European parties the same day the German Constitutional Court rules in favor of the E.S.M., Sept. 12 seems to have been a good day for the euro,” Dimitry Fleming of ING Groep NV said in an analysis via e-mail. Not all is well, of course. Greece remains a mess, and will probably need even more money. A decision keeps being postponed about when, and whether, to grant Athens another big portion of loan money it needs to stay afloat. Deutsche Bank urges rivals to share IT (FT) Deutsche Bank is seeking to convince rival investment banks to share markets and trading software in an effort collectively to lower costs for the financial industry. Sharing software would be an unusual step for investment banks, which have historically closely guarded their technology, much of which is still built in-house at great expense. But Deutsche Bank’s efforts underscore the intense pressure banks are under to cut costs as lower markets activity and new rules eat into their profit margins...Sharing market software, Deutsche says, will save it and other big global banks some of the billions of dollars and euros that they would otherwise have spent building or improving on individual technology systems. Woman Tells Police She 'Accidentally' Stabbed Boyfriend (AZC) Margarita H. Zaragoza told police she and her boyfriend were arguing over alcohol that he poured down the sink when she "accidentally" stabbed him with a steak knife, according to the document. Zaragoza said her boyfriend came up behind her to talk to her while she was washing a knife in the sink, according to police, and that she accidentally stabbed him in the arm when she turned to talked to him. The victim told police his girlfriend became angry after he poured her alcohol down the sink because she is pregnant and isn't supposed to be drinking, the document said. The victim said Zaragoza grabbed a knife while he was getting rid of the alcohol and stabbed him twice in the arm, according to the document. Roger Altman: The US Economy May Surprise (CNBC) Looking out a few years, the Evercore founder said, “We’re going to have a bigger snap-back in housing than people think. The U.S. has undergone a breathtaking revolution in oil and gas production and the growth impact of that is underrated.” Altman also pointed to a bounce-back in lending and strong industrial competitiveness as reasons to be optimistic about the economy longer term. Fed Acts To Fix Job Market (WSJ) "If the outlook for the labor market does not improve substantially, the [Fed] will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ other policy tools as appropriate until such improvement is achieved in a context of price stability," the Fed said in its postmeeting statement. Berkshire Climbs To Four-Year High On Fed's Action (Bloomberg) So that's nice. Mets fan who rushed Citi Field after Johan Santana's no-hitter slapped with $5,000 fine and 100 hours of community service (NYDN) Rafael Diaz, 32, was hit with the penalties after he pleaded guilty Thursday to interfering with a sporting event. “The defendant’s antics have resulted in a criminal record, the paying of thousands of dollars in fines and civil penalties, and – perhaps the worse punishment for any true Mets fan – precludes him from ever again visiting Citi Field,” Queens District Attorney Richard Brown said. Diaz, of Massapequa, L.I., who joined the celebration on the pitcher's mound June 1, was ordered to hand over $4,000 in civil penalties to the Mets and $1,000 to the city.