Opening Bell: 09.02.10

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Bernanke Meets Buffett In Role Conceived To Protect Markets (Bloomberg)
Under the Dodd-Frank law, Bernanke’s Fed gains powers never before housed in one regulator. The central bank remains the supervisor of 5,000 U.S. bank holding companies and 830 state banks. “When the dust settled, Congress realized that Bernanke and the Fed knew what they were doing,” says Mark Gertler, a New York University economics professor who did research with Bernanke, a former Princeton University professor, on the causes of the Great Depression. “The power of any Fed chairman is ultimately based on the perception by Congress that he will use it prudently. He has this reputation.”

SEC Charges Wharton Buddies (WSJ)
Mr. Self regularly called Mr. Goldfield from his cellphone while going to and from work at Merck, the SEC said. In one conversation, Mr. Self said that "the weather was in the 50s" or words to that effect, conveying that Mr. Self's company's bid for MedImmune was going to be in the $50s, the complaint said. At the time, MedImmune shares were trading in the $30s.

Goldman Sachs Invests To Get Its Image Right In China (Telegraph)
In what is thought to be a rare move for the bank, Goldman used Brunswick to carry out a reputational study in China shortly after hiring the company to be its retained public relations firm in the country last October. The short-term project, the findings of which are not publicly known and are unlikely to be released, was ordered ahead of the bank’s civil fraud charges from the Securities and Exchange Commission (SEC), and the fallout which followed. Ironically, news of Goldman’s interest in its public perception comes as the latest piece of anti-Goldman literature has become a bestseller in China. Goldman Sachs Conspiracy, by financial journalist Li Delin, is said to have sold more than 100,000 copies since it was released on June 1, making it something of a hit. The content is inflammatory to say the least, with the book branding Goldman as having the “cruel nature of a Manchurian tiger,” and “the IQ of an Israeli Shar Pei dog."

RBS Cutting 3,500 Jobs (UTU)
Rob MacGregor said: "The news that the Royal Bank of Scotland is to cut another 3,500 staff from across the UK is a horror story. It will be a specially bitter pill for staff to swallow as RBS has decided to move some of the jobs abroad to the Far East, India and America."

Romer: US May Need Stimulus II (NYP)
Departing White House economist Christina Romer said the US must find the political will for more action, beating back the bugbear of high deficits in favor of a second stimulus bill that would boost the economy and create jobs. "We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them," Romer said in a speech at the National Press Club. "The United States still faces a substantial shortfall of aggregate demand. GDP by most estimates is still about 6 percent below trend," she said.

Lehman Says Two Units Need Help To Avoid Failing (Reuters)
Aurora Bank FSB, formerly known as Lehman Brothers Bank, has struggled to meet capital requirements as regulators have limited its ability to offer new certificates of deposit. The other banking unit, Woodlands Commercial Bank, faces similar restrictions from the regulator due to capital requirements, complicating efforts to sell the units.

3G Capital To Buy Burger King (WSJ)
The New York-based private investment firm is expected to acquire Burger King Holdings Inc. for $24 a share, people familiar with the matter said. The total deal, including both equity and debt, is around $4 billion. Banks are expected to finance about $2.8 billion of that sum.


SEC Probes Role Of Canceled Trades In Flash Crash
(WSJ)
The SEC is seeking to learn whether orders known as "sub-penny pricing" are used to manipulate the market, a person says, which would be illegal. At issue is whether the practice could artificially torpedo stocks' prices or help make it appear that there is more trading volume in a stock than there really is, allowing sellers to profit when demand for the stock appears elevated. The agency has identified about half a dozen investment firms to question regarding "sub-penny" orders, this person says, and the inquiry is expected to take months to complete. The firms identified aren't necessarily suspected of wrongdoing, and it is unclear whether there will be a formal investigation.

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