Opening Bell: 10.07.10

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El-Erian: More Fed Action Coming, But it May Not Help (CNBC)
"The rocket has to achieve escape velocity," he said. "It's not enough for it to go up—it has to go up sharply to achieve escape velocity. The question is: What's the fuel for that escape velocity? There's good fuel, which is private-sector 'animal spirits.' That is what we all should be looking for. There's bad fuel, which is continuous policy injections, because that has consequences—the dollar, gold, etc.—and the judgment becomes whether that characterization is correct. Do we really need escape velocity or not?"

Man Group Jumps On Speculation Of Takeover By US Bank (Bloomberg)
Apparently there as been “vague talk a U.S. bank's possible interest in bidding for them."

Roubini: 40% chance of double-dip recession (MarketWatch)
There is a 40% probability of a double-dip recession, but you don't need one for the global economy to feel like it is in a deep, continuing recession, Nouriel Roubini said Wednesday. He said external shocks, such as another Greek credit crisis, perhaps with problems in Spain, Portugal or Ireland, could trigger the shock needed for a double-dip recession. "You don't need another Lehman story, you don't need a major loss," said Roubini at an American Enterprise Institute event. "You can have death by a thousand cuts."

French Pave Way For EU Hedge Fund Deal (FT)
French officials now say that they are prepared to accept the principle of a passport for third-country funds, subject to strict conditions. In particular, Paris insists that it should be the new European Securities and Markets Authority which issues a passport to a third-country fund and then supervises that fund.

Payment To End Wells Fargo Inquiry (AP)
The bank is paying $24 million to end an investigation by eight states into whether lenders acquired by the bank made risky mortgages to consumers without disclosing their perils.

Ex-Hedge Fund Boss Convicted in NYC in Stock Scam (AP)
A jury in Manhattan federal court on Wednesday found 46-year-old Joseph Contorinis guilty of one count of securities fraud conspiracy and seven counts of securities fraud. Prosecutors said he executed illegal trades from 2004 through June 2006 when he acted on information he received from a close friend who was an investment banker. At the time, he managed a hedge fund at an investment advisory firm. Contorinis could face up to 20 years in prison on the most serious charge and millions of dollars in fines when he is sentenced Feb. 4.

Taxpayers Likely To Turn A Profit On Bailout (CNBC)
So that's exciting.

Citadel Fixed-Income Trading 'Positive' - Source (Dow Jones)
Citadel LLC's securities unit has had positive fixed-income trading revenue this year, and has no massive layoff plans in store for its investment-banking unit, a person familiar with the situation said Wednesday. "There is no plan for mass layoffs," the person said. "Citadel is not shutting down Citadel Securities or its fixed-income operations." But the person said there could be staffing changes as the firm is undertaking its annual business review. Such reviews, which take place in the fourth quarter of each year, will decide what adjustments the firm has to make in preparation for the new year.

Economist: Austerity Will Push Euro to $1.50 By The End Of The Year (CNBC)
Warren Mosler, who predicted that the euro would bounce back towards $1.60 in June, when the single European currency was trading at around $1.19, said there was nothing to stop the euro's appreciation versus the dollar, short of a policy response from the European Central Bank. "If it (the euro) keeps going at the rate it's going, it could go to $1.45-$1.50 by the end of the year," he said.

Men Are Rewarded Financially For Being Overweight (WSJ)
Very thin men, on the other hand, tend to get paid less than male workers of average weight. Men earn more as they pack on the pounds – all the way to the point where they become obese, when the pay trend reverses.

Fink says investing now in fixed income is a mistake (Dow Jones via HNM)
"I think over the next five years, moving money into fixed income will be considered a mistake," Fink said. "Interest rates may go down another 30 basis points, but we have achieved most of the decline in interest rates. You could earn a much better return owning large-cap companies paying reasonably large dividend." Fink said he was disappointed at how slow the momentum of economic recovery has been, and that the modest recovery will continue for another two years before economic growth will pick up..."Housing is going to be a drag for three more years," he said.

Geithner Calls for Currency Cooperation Amid Rush to Weaken (Bloomberg)
“More and more countries face stronger pressure to lean against the market forces pushing up the value of their currencies,” Geithner said in a speech yesterday in Washington. Currencies are “inherently a multilateral issue” that is “much easier to solve if countries come together.”

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"Christ, Janet!" Photo: Steve Jurvetson, via Wikimedia Commons

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Opening Bell: 04.03.12

CFTC Deals Out Royal Pain (WSJ) In a federal-court lawsuit filed Monday in New York, the Commodity Futures Trading Commission alleged a "wash trading scheme of massive proportion" by RBC, Canada's largest bank. From 2007 to 2010, officials at RBC coordinated with two subsidiaries on the purchase and sale of futures contracts that gave the right to sell stock later at certain prices, the CFTC alleged. The alleged scheme eliminated the possibility that RBC would suffer any losses on the investments, while locking in "lucrative" Canadian tax breaks on dividend payments, according to the lawsuit. U.S. Economy Enters Sweet Spot as China Slows (Bloomberg) An improving job market, rising stock prices and easier credit are combining to lift U.S. consumer confidence and spending, with optimism measured by the Bloomberg Comfort Index near a four-year high. Personal-consumption expenditures increased by the most in seven months in February, rising 0.8 percent, the Commerce Department said last week. “We’re entering a sweet spot for the economy,” said Allen Sinai, president of Decision Economics Inc. in New York. “We’re in a self-reinforcing cycle,” where faster employment growth leads to higher household income and increased consumer spending. China's Central Banker Sees Risk of Global Recession (WSJ) China's central bank Gov. Zhou Xiaochuan warned that the global economy hasn't yet escaped the financial crisis, while cautioning the U.S. to take "more responsibility" for its monetary easing. There are "new elements that could bring the global economy back into recession," the central bank chief said in a panel discussion Tuesday at the Boao Forum in the southern island province of Hainan, without elaborating on what the elements are. ‘Apple Fever’ to Push Stock to $1,001, Topeka Capital Says (Bloomberg) Apple, already the world’s most valuable company, will see its stock price reach $1,001 within 12 months, lifted by growth in China and the debut of a new television product, according to Topeka Capital Markets. The new target, issued yesterday by Topeka’s Brian White, is the highest among the 45 analysts tracked by Bloomberg and represents a 62 percent increase over the current price. The gains will be fueled by demand for the next iPhone, in addition to the expansion into China and the TV market, he said. SEC Probes Groupon (WSJ) The regulator's probe into the popular online-coupon company is at a preliminary stage and the SEC hasn't yet decided whether to launch a formal investigation into the matter, the person said. The SEC decision to examine the circumstances surrounding Groupon's surprise revision is the start-up's latest run-in with the regulator. Groupon twice revised its finances before its November IPO. An SEC spokesperson declined to comment, as did a spokesman for Groupon. JOBS Act Jeopardizes Safety Net for Investors (Dealbook) Andrew Ross Sorkin: "Maybe President Obama should have bought shares in Groupon’s I.P.O. If he had, he would understand what some Groupon investors may be feeling as he prepares this week to sign a new piece of legislation to help start-ups get financing. Had he purchased $10,000 worth of shares on the open market on the first day of public trading for Groupon, the online coupon company based in his hometown Chicago, he would have lost a good chunk of his investment, putting him in the red by almost $4,100 today. That means he would have lost about 41 percent of his investment in Groupon in just five months, while the Nasdaq rose some 16 percent." James Cameron Changes Stars In Titanic (CM) The director unveiled a 3D version of his multi-Oscar winning classic last month (Mar12) and he resisted the temptation to use its reworking as an excuse to cut scenes he's no longer happy with. But there was one shot Cameron felt obliged to alter, because a top stargazer informed him the astral pattern onscreen was incorrect for the night the liner sank in 1912. The scene involves Kate Winslet's character, Rose DeWitt Bukater, drifting on a piece of wood and gazing at the night sky as the disaster unfolds. Cameron tells British magazine Culture, "Oh, there is one shot that I fixed. It's because Neil deGrasse Tyson, who is one of the U.S.' leading astronomers, sent me quite a snarky email saying that, at that time of year, in that position in the Atlantic in 1912, when Rose is lying on the piece of driftwood and staring up at the stars, that is not the star field she would have seen, and with my reputation as a perfectionist, I should have known that and I should have put the right star field in. "So I said, 'All right, you son of a bitch, send me the right stars for the exact time, 4.20am on April 15, 1912, and I'll put it in the movie.' So that's the one shot that has been changed." JPMorgan’s Hannam Resigns After Market Abuse Fine (Reuters) JPMorgan Chase’s Ian Hannam, one of its most senior London-based bankers, has decided to resign after being fined by Britain's financial watchdog for market abuse, according to an internal memo the bank sent to staff. In a separate statement, Hannam said he would appeal the 450,000 pounds ($720,700) fine by the FSA. Judge OKs MF sale (Dow Jones) A judge approved a Jefferies Group affiliate’s purchase of MF Global Holdings Ltd.’s liquidating brokerage’s remaining gold, silver and other precious-metal assets. Judge Martin Glenn of the US Bankruptcy Court in Manhattan approved the sale, but much of yesterday’s time was taken up by issues regarding insurance meant to pay for former MF Global executives’ legal defenses. Jefferies is buying the remaining 106 warehouse certificates — not the actual gold and silver bars — of MF Global’s former commodities customers. Ann Romney Says Campaign Will ‘Unzip’ the Real Mitt (The Note) Ann Romney defended her husband’s sense of humor today during a radio interview, explaining that if people think the candidate seems too stiff at times as the host suggested, she thinks “we better unzip him and let the real Mitt Romney out.”