Opening Bell: 09.13.10

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Banks Get New Restraints On Capital (WSJ)
The committee punted other big issues. Officials agreed they needed new requirements to force banks to have access to ample liquidity, the funding that banks use to finance their daily operations. But they couldn't reach consensus on the impact these rules might have on financial markets. So they agreed to delay new rules in this area until at least 2015, with other rules set to kick in three years later, and pledged to revisit the issue.

Bob Diamond: The Case For The Defence (Telegraph)
Diamond talks about his history with Barclays since joining in 1996. He talks about the banking commission which will consider whether the UK’s universal banks – joined together in investment and retail operations, such as Barclays – should be split apart. He talks of Basel III and the headwinds of new regulation, and the need to create a better balance at Barclays between the profits made by its investment and retail arms. He talks about pay and the need for caution, about casino banks and the “disappointment” he feels at the level of some of the debate. And when Diamond says “disappointment”, you know he means a whole lot more. As he speaks, a bird thuds straight into his glass-fronted office at North Colonnade, Canary Wharf. “Boy, that’s gotta hurt,” Diamond says.

Deutsche Bank to Raise $12.5 Billion for Postbank, Regulation (Bloomberg)
The bank plans to raise at least 9.8 billion euros ($12.5 billion) in its biggest-ever share sale to take over Deutsche Postbank AG and meet stricter capital rules. Deutsche Bank expects to offer between 24 euros and 25 euros a share in cash to Postbank investors to increase its 29.95 percent stake, the bank said yesterday. Postbank dropped as much as 7.5 percent to 25 euros in Frankfurt trading after Josef Ackermann, Deutsche Bank’s chief executive officer, told reporters in Frankfurt he doesn’t plan to improve the offer.

Deutsche Bank CEO: Basel III 'Very Demanding' (Reuters)
Ackermann told reporters in Frankfurt he was pleased the new rules could be phased in over several years and added they were “overall very good“.

Geithner Urges Action On Economy (WSJ)
"If the government does nothing going forward, then the impact of policy in Washington will shift from supporting economic growth to hurting economic growth," Mr. Geithner said during an interview with The Wall Street Journal in his U.S. Treasury office, citing the example of countries who "shift too quickly to premature restraint" after a crisis, including the U.S. in the 1930s.

Greece moves to reassure investors (FT)
Greece will launch a charm offensive in Europe this week to reassure investors the country is on track with crucial economic reforms to prevent a damaging government bond default that could trigger a deeper crisis in the eurozone. George Papaconstantinou, finance minister, will lead a delegation including European Union, European Central Bank and International Monetary Fund officials to meet investors in London, Paris and Frankfurt. It will be Greece’s first roadshow since last December. That trip came a few weeks before spreads on its bonds hit record levels as investor confidence collapsed, and Athens tried in vain to persuade China, several Gulf states and India to buy Greek debt.

Coffee Rally Peaking As Funds Pare Bets on Surplus Up 500% (Bloomberg)
Supplies of arabica, the world’s most-grown coffee, will exceed demand by 6.67 million 60-kilogram (132-pound) bags in the year ending in September 2011, according to ABN Amro Bank NV and VM Group. That’s the most in nine years and more than six times this season’s expected surplus. Speculators including hedge funds cut their net-long position, or bets on higher prices, by 8.4 percent since Aug. 17, regulatory data show.

Treasury Lawyer Tapped To Replace Feinberg (AP)
The administration says Feinberg will be replaced by Patricia Geoghegan. She will be responsible for setting pay guidelines for top executives at the four companies still getting exceptional assistance from the government's $700 billion bailout fund. Geoghegan spent much of the past year working with Feinberg as he issued a series of compensation reports. She came to Treasury after retiring as a partner from New York law firm Cravath, Swaine and Moore, where she had specialized in tax law and executive compensation.

Anna Chapman's Fan Club (NYP)
“She was an expert at using her femininity to get information,” said model Dennis Hirdt, one of Chapman’s many former playthings, in the new issue of Details magazine. “When I first met her, from the get-go: Little hand touches. Whispers . . . or maybe ‘by accident’ lips running against an earlobe. Stuff like that,” he said. Some of Chapman’s former paramours gathered at a Manhattan bar to commiserate after her bust as a Russian spy earlier this summer, the mag said, and at one point, one of the men finally blurted out, “OK, who f - -ked her?” Several hands shot up, the mag says.

News

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.

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