Opening Bell: 09.17.10

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Hedge Fund Managers Set Up For Second Acts (NYT)
After shutting his giant fund following a humbling loss, Mr. Pallotta, the money manager who is an owner of the Boston Celtics, is doing what hedge fund types do in tough times: he is opening a new fund. “Will it be easy for him to raise money? Yes,” said Tim Berry, a head of hedge fund investments at Private Advisors, a Richmond, Va., firm that advises large institutions on their investments. “He has a long track record of success.” Others hoping for a comeback include Gabe Nechamkin, a former trader for George Soros, and John W. Meriwether, whose Long-Term Capital Management failed spectacularly in 1998. Mr. Nechamkin is on his second fund, Mr. Meriwether his third.

Judge Clears Countrywide's Mozilo Case For Trial (Reuters)
U.S. District Judge John Walter refused to resolve the case in Mozilo's favor on Thursday, ruling that the SEC had raised enough factual issues for it to be decided by a jury, according to court documents. The SEC presented evidence that Mozilo's stock sales in 2006 and 2007 were "significantly out-of-line with his prior trading plans or practices," Walter wrote. Thus a jury can decide whether Mozilo acted on inside information, Walter ruled, adding that Mozilo netted over $140 million from those transactions.

Obama to Tap Warren to Help Set Up Consumer Agency (WSJ)
Warren will be an assistant to the president and a special adviser to Treasury Secretary Timothy F. Geithner, the statement said. The White House expects her to start immediately setting up the agency, which was established by this year’s Wall Street financial regulatory overhaul, said an administration official who spoke on condition of anonymity.

Push To Hire Bankers Accelerates (Dealbook)
Who wants a job?

JPMorgan Eyes London Lehman Tower In Potential Snub To Government
(Independent)
Property sources say the bank is ready to abandon its stalled £1.5bn project and relocate into the huge building that was occupied by Lehman, until its spectacular demise two years ago. The bank agreed a deal with Canary Wharf Group (CWG) in late 2008 for the development of new purpose-built offices, but has still not committed to the project. Sources close to JP Morgan, which employs Tony Blair, the former prime minister, as an adviser, admit that the delay is largely down to senior officials being furious at the UK Government's portrayal of the financial sector as the villain of the recession. It is understood that JP Morgan is also irritated that the criticism of the banking system has not abated since the Coalition came into office. Last year, sources warned it was considering scrapping the project over tax increases and an orchestrated campaign of "banker-bashing" before the election.

It's Getting Riskier To Be Rich (WSJ)
In the first year of the recession that began in 2007, the top 0.01% of earners in the U.S. saw their pre-tax income plummet by an average of 12.7%, compared to 2.6% for all earners, according to an analysis of data from income-tax returns by economists Jonathan Parker and Annette Vissing-Jorgensen, in a paper being presented today at a Brookings Institution’s Papers on Economic Activity conference. Overall, since 1982, the income of the top 1% of earners has been about 2.4 times as volatile as the average for everyone, the paper’s authors find. That’s a big change from the years 1947 to 1982, when the income of the top 1% fluctuated about 30% less than average.

Manhattan Man Pleads Guilty To Stealing To Feed His Lottery Addiction (NYP)
A compulsive lottery player pleaded guilty today to stealing $2.3 million from condo and co-op buildings he managed in Manhattan to feed his love of randomly drawn ping-pong balls.

Dennis Kneale Set to Exit, Say Sources (DF)
Kneale is likely to leave after his current contract expires sometime in the next several weeks. "There's an outside shot that he could still work out a deal," says one knowledgeable source, but it's exceedingly unlikely as CNBC has made it clear it's unwilling to re-up him at anything close to his current salary, believed to be around $500,000 a year. Kneale did not respond to a message left on his cell phone, and a network spokesman declined to comment, citing a policy against discussing personnel matters.

London Funds Industry Under Threat, Bosses Warn (Reuters)
"The traffic lights ... are flashing red on tax (and) rhetoric around immigration," Dick Saunders, chief executive of funds industry body the Investment Management Association (IMA), told the Financial Services Authority conference. "The risk is not that big firms get up and move, leaving empty offices in Canary Wharf. That's not going to happen. The risk is rather one of attrition, of seepage, that individuals will move and functions will get offshored."

ECB Officials Point to Need to Act on Banking Issues (Reuters)
The financial crisis is not over and governments have more to do to pull banks off state support, although no euro zone country should default on its debt, European Central Bank officials said on Friday. ECB Governing Council member Ewald Nowotny told reporters at a trade union conference that government action was needed to wean banks off the emergency supply of cheap cash the bank has provided since the crisis erupted in late 2008.

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