Opening Bell: 11.12.10

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G-20 Delays Imbalance Deal (WSJ)
The U.S. and G-20 host South Korea ran into strong opposition from such exporting powers as China and Germany to a proposal to quantify limits on current-account surpluses and deficits. At the heart of the controversy are fundamental issues of how countries would need to restructure their economies. "These are not going to be easy issues to resolve," said Canadian Prime Minister Stephen Harper. "But I think we've got everyone talking the same language, everyone understanding longer-term what has to be done."

Morgan Stanley May Shed Quantitative Trading Unit (NYT)
For nearly two decades, the mathematical whiz Peter Muller and his secretive band of traders have helped power Morgan Stanley to bigger profits. But now Morgan Stanley and Mr.Muller are in advanced talks about splitting up. Under the plan being discussed, Morgan Stanley would spin off Mr. Muller’s unit, called Process Driven Trading, and keep a minority stake. The Process Driven Trading unit generated an estimated $4 billion in profits in the 10 years through 2006, according to Scott Patterson’s book, “The Quants." [Since 1992] Mr.Muller stocked the group with Ph.D.’s and housed them on their own floor, away from the hurly-burly excitement of Morgan Stanley’s mammoth stock trading floor. To stimulate productivity and cerebral thinking, he had ceiling lights installed that changed color every 15 seconds.

Even though he and his unit were minting money, Mr.Muller quit working full-time for Morgan Stanley in 2001, saying, according to a short biography on his Web site, that he realized he “can no longer find happiness in the corporate world.” Over the next several years, he traveled to Bhutan, New Zealand and Hawaii, hiking and kayaking, with his five-pound keyboard in tow. He took up yoga and began writing crossword puzzles, many of which appeared in The New York Times and other newspapers. He indulged his love of music, writing songs, releasing two albums under his own label and playing his guitar on the streets of Barcelona and in New York City subways. He also pursued his passion for poker, a favorite pastime of quantitative traders. He played in a few tournaments on the World Poker Tour. In his first tournament he came in fourth and took home nearly $100,000. In late 2006, Muller returned full time to Morgan Stanley.

Obama Assails China on Trade, Monetary Policy (AP)
"It wasn't any easier to talk about currency when I was first elected and my poll numbers were at 65 percent," Obama argued at the close of the G20 summit, after bluntly accusing Beijing of undervaluing its currency.

Exotic Cars Go 'Green' At $100,000 And Up (WSJ)
Next year, Volkswagen AG's Bentley will sell its Continental GT Coupe with an optional V8 engine it says will emit up to 40% less carbon dioxide than the coupe's standard 12-cylinder motor. Bentley already is in the midst of making all of its new models able to use ethanol fuel by 2012. Porsche AG plans to sell a plug-in hybrid car called the 918 Spyder that it says will yield up to 78 miles per gallon. Expected to arrive as early as 2013, it could carry a price tag close to €500,000 ($682,260), executives at the German car maker estimate. Porsche said it has already received roughly 2,300 informal order pledges from would-be customers.

Mizuho To Buy $500 Million BlackRock Stake (WSJ)
Mizuho Financial Group Inc. said Friday it will pay $500 million for a 2% stake in BlackRock, a deal designed to help Japan's second-largest bank by assets ramp up its asset-management operations.

Private banks keep hiring as rich get richer (Reuters)
Hiring sprees this year have taken some firms beyond their pre-crisis staffing levels, as banks believe growth in Asia, and robust revenues elsewhere, will support the expansion. Citi for instance plans to add between 100 and 200 senior staff to its private bank over the next few years, Dena Brumpton, chief operating officer at its private bank, told Reuters.

Seeking Guidance on Dodd-Frank’s Diversity Clause (Dealbook)
As Wall Street scrambles to comply with the regulations of the Dodd-Frank financial overhaul, one little-noticed provision has executives scratching their heads. The statute, included in Section 342 of the bill, creates 20 Offices of Minority and Women Inclusion at the various regulatory agencies, including the Treasury, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the 12 Federal Reserve banks and the newly created Consumer Financial Protection Bureau. Once established, the offices are charged with monitoring the diversity at the agencies as well as at any contractors or subcontractors, including law firms, accounting firms and investment banks. These contracts, totaling in the billions a year, are typically awarded to private firms for services like debt issuances and sales of government assets, as well as more general advisory services. Section 342 was proposed by Representative Maxine Waters.

Barclays to Reimburse Gay Workers for Taxes on U.S. Benefits (Bloomberg)
The aim is to offset the tax on benefits for same-sex partners that doesn’t apply to spouses in heterosexual marriages because same-sex partnerships aren’t recognized as marriages under U.S. law, the London-based bank said today in a statement.

Moscow vows revenge on top double agent (FT)
A Russian official said: “We know who he is and where he is. Do not doubt that a Mercader has been sent after him already.” The comment was an apparent reference to Ramón Mercader, the Soviet-picked assassin who in 1940 murdered Leon Trotsky, the exiled communist leader, with an ice pick in Mexico. Vladimir Putin, Russia’s prime minister, had alluded to the existence of a mole within the SVR espionage agency after a meeting with the 10 returned spies, who were traded in July for four accused US and British agents in Russia. “This was the result of treason and traitors always meet a bad end,” Mr Putin said. “The special services live by their own laws and everyone knows what these laws are.”

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Opening Bell: 2.2.15

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Opening Bell: 09.07.12

Bondholders Put On Speed Dial (WSJ) At Wall Street giants Morgan Stanley and Goldman Sachs, the quarterly earnings calls for stock analysts tend to get most of the attention. But another kind of call, this one for bondholders, is moving to the fore. The New York securities firms this summer for the first time held conference calls targeting fixed-income investors. Morgan Stanley and Goldman are seeking out new buyers for their debt in an effort to lower interest rates that are now higher than what industrial companies pay. Investors Expect Libor To Be Replaced Within Five Years (Bloomberg) Forty-four percent of those responding to a quarterly Bloomberg Global Poll said the London interbank offered rate, known as Libor, will be supplanted by a more regulated model within five years. Thirty-four percent predicted the rate will continue to be set by banks in the current fashion, while 22 percent said they didn’t know. Greek Decline Sharper Than Expected (WSJ) So that's not good. Jobless Greeks Resolved to Work Clean Toilets in Sweden (Bloomberg) As a pharmaceutical salesman in Greece for 17 years, Tilemachos Karachalios wore a suit, drove a company car and had an expense account. He now mops schools in Sweden, forced from his home by Greece’s economic crisis. “It was a very good job,” said Karachalios, 40, of his former life. “Now I clean Swedish s---.” Karachalios, who left behind his six-year-old daughter to be raised by his parents, is one of thousands fleeing Greece’s record 24 percent unemployment and austerity measures that threaten to undermine growth. The number of Greeks seeking permission to settle in Sweden, where there are more jobs and a stable economy, almost doubled to 1,093 last year from 2010, and is on pace to increase again this year. “I’m trying to survive,” Karachalios said in an interview in Stockholm. “It’s difficult here, very difficult. I would prefer to stay in Greece. But we don’t have jobs.” Private Equity Tests Pension Funds Patience (WSJ) A new report by a consultant to the California State Teachers' Retirement System, or Calstrs, shows that returns from large U.S. buyout funds are lagging behind many of the pension's internal benchmarks. Vladimir Putin Muses On The Benefits Of Group Sex (Telegraph) President Vladimir Putin of Russia has mused that group sex is better than one-on-one intercourse because participants can take a break. Mr. Putin made the observation on Thursday in his first interview since his inauguration in May, with the Kremlin-controlled, English-language RT television channel. “Some fans of group sex say that it’s better than one-on-one because, as with any collective work, you can skive off,” he said. The comment came after the Russian leader had spoken about an orgy that was staged in Moscow’s state biology museum in 2008 which involved Nadezhda Tolokonnikova, 22, one of three feminist activists of the P*ssy Riot group who were jailed for two years for hooliganism last month after a politically charged trial. Falcone Facing Double Trouble (Bloomberg) A group of LightSquared Inc.’s lenders said they oppose extending Philip Falcone’s control of the wireless broadband venture because his strategy to revive the bankrupt company is too risky. LightSquared, which filed for bankruptcy in May, has asked US Bankruptcy Judge Shelley Chapman for a 150-day extension of its exclusive right to control the bankruptcy case. The lenders, who say they own about $1.1 billion of the $1.7 billion in secured debt of the company’s LP unit, objected in a filing yesterday. “Having nothing to lose, Mr. Falcone wants to pursue a high-risk, high-return strategy” of trying to get regulators to reverse their stance on LightSquared’s technology, the lenders said. Nasdaq-100 to Facebook’s rescue (NYP) Facebook founder Mark Zuckerberg, who has seen his company’s shares get beaten down to less than half their IPO value, may soon get some relief. And ironically, that help will be coming from Nasdaq, the exchange that botched Facebook’s initial public offering back in May. Nasdaq is expected to add Facebook shares to the Nasdaq-100 index, which includes its biggest non-financial companies. The move, which could happen as early as late December after Nasdaq in October re-calibrates the index, should add some stability to Facebook shares. “It’s fair to say that there will be an additional level of liquidity in [Facebook] because of its inclusion in the [Nasdaq-100],” said Adam Sussman, partner at The Tabb Group. UBS, Goldman Join Chorus Of Gloom On China (WSJ) One after the other, many of the largest global banks are cutting their growth forecasts for the world’s second-biggest economy. The downgrades are likely to intensify investors’ concerns about fallout in the rest of Asia, whose exports have taken a kicking from the euro-zone debt crisis and anemic U.S. recovery, while domestic growth also slows. Munich May Not Have Enough Beer for Oktoberfest (CNBC) Beer brewers in Munich may not be able to supply enough beer for the annual Oktoberfest beer festival, local newspaper Munich TZ reported, but the problem is not a lack of the alcoholic beverage. nstead, Heiner Müller, manager at the Paulaner and Hacker-Pschorr brewery told TZ, brewers do not have enough bottles to supply the festival. He called on drinkers to return their empties. "Dear Munichers — bring back your crates. We need our empties,” Müller said...Every summer brewers deal with a shortage of bottles, but it never has been as bad as this year, a spokesman for Hofbräu brewery, which is also suffering from a shortage of bottles, said. He claimed the brewer was short of “tens of thousands” of bottles.

Robert Rubin (Getty Images)

Opening Bell: 3.27.17

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Opening Bell: 01.09.13

UBS Says Cleaning Up Its Act After Libor 'Shocker' (Reuters) UBS has yet to fully purge itself of a global interest rate scandal that has cost the Swiss bank its reputation and put it at risk of a wave of costly civil suits, its investment banking chief said on Wednesday. The once-venerable institution was fined a record $1.5 billion last month for manipulating Libor interest rates, the latest in a string of scandals including a $2.3 billion rogue trading loss and a damaging tax avoidance row with the United States. "We are very focused on recovering the honor and standing the organisation had in the past," Andrea Orcel told Britain's Parliamentary Commission on Banking Standards, set up in the aftermath of the Libor scandal. "I am convinced that we have made a lot of progress. I am also convinced that we still need to do more." [...] Committee member Justin Welby, the incoming Archbishop of Canterbury, asked Orcel if he was the right man to turn UBS around. "I feel I have a high level of integrity," the banker said. Orcel said that UBS was working at simplifying the investment banking business to make it less risky and prone to scandal. The committee, a cross-party panel of lawmakers headed by Conservative MP Andrew Tyrie, is switching its focus to standards and culture after spending most of the past three months assessing structural reform. Tyrie on Wednesday described the Libor rigging as "a shocker of enormous proportions". Button-Down Central Bank Bets It All (WSJ) Switzerland, for decades a paragon of safety in finance, is engaged in a high-risk strategy to protect its export-driven economy, literally betting the bank in a fight to contain the prices of Swiss products sold abroad. The nation's central bank is printing and selling as many Swiss francs as needed to keep its currency from climbing against the euro, wagering an amount approaching Switzerland's total national output, and, in the process, turning from button-down conservative to the globe's biggest risk-taker. JPMorgan Overhaul Widens (WSJ) The shift of Mr. Maclin and the departure of Mr. Staley, who once was seen as a top candidate to succeed James Dimon as chief executive, are the latest steps in a drastic reshaping of J.P. Morgan's executive suite. Many of the new leaders—a group that includes corporate and investment-bank co-heads Mike Cavanagh and Daniel Pinto, co-chief operating officer Matthew Zames and Chief Financial Officer Marianne Lake—are in their 40s. Mr. Cavanagh and Mr. Zames, who were asked last May to unwind a series of botched bets placed by a trader in the bank's Chief Investment Office known as the "London whale," are viewed as front runners for the top job, said people close to the bank. Ackman Braces for Legal Battle Over Herbalife (FBN) If filed, the lawsuit could involve alleged “tortuous interference,” implying Ackman intentionally damaged Herbalife’s business relationships, people close to Ackman said. On Tuesday, a large Herbalife distributor said he was leaving the company and called on other distributors to join him amid the controversy. In a sign of the importance of its distribution channels, Herbalife says in regulatory filings its relationship with and ability to influence distributors are items that can “materially” affect its financial condition. As of late Tuesday, people with knowledge of the matter said no decision on timing or even if a lawsuit will actually be filed had been made. The company has told FOX Business it is weighing legal action against Ackman. Ackman declined to comment on the matter. Herbalife has hired famed attorney David Boies to launch possible litigation against Ackman as well as the investment bank Moelis & Co., as its financial adviser. Goldman Will Report Fund Values Each Day (WSJ) In a reversal of industry practice, Goldman Sachs Group will begin disclosing the values of its money-market mutual funds daily rather than monthly, according to people familiar with the company's plans. Some of the changes will take effect as early as Wednesday...According to people familiar with Goldman's thinking, the company is beefing up its disclosures to satisfy investors' calls for greater transparency on fluctuations in the price of their investments. Brazil prostitutes to learn English ahead of World Cup (AP) Prostitutes in one of Brazil's biggest cities are beginning to sign up for free English classes ahead of this year's Confederations Cup and the 2014 World Cup. The president of the Association of Prostitutes of the city of Belo Horizonte says by telephone that 20 have already signed up for the courses and she expects at least 300 of the group's 4,000 members to follow suit. The association is organizing the classes and seeking volunteer teachers. Prostitution is legal in Brazil. Belo Horizonte will host six World Cup matches and Vieira said Tuesday "it will be important for the girls will be able to use English to let their clients know what they are charging and learn about what turns them on." AIG Cites Duty to Weigh Suing U.S. as Lawmaker Criticism Mounts (Bloomberg, related) American International Group said it has a duty to weigh joining a suit by former Chief Executive Officer Maurice “Hank” Greenberg that claims the insurer’s 2008 U.S. bailout was unconstitutional. “The board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us,” CEO Robert Benmosche said yesterday in a statement. The board is scheduled to meet today to hear arguments from representatives of Greenberg and the U.S. Lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Peter Welch said New York-based AIG shouldn’t join the suit. “Taxpayers are still furious that they rescued a company whose own conduct brought it down,” Welch said in a letter to AIG Chairman Steve Miller. “Don’t rub salt in the wounds with yet another reckless decision.” Vow of New Light For 'Dark' Trades (WSJ) Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, said in an interview Tuesday that the regulator is expanding its oversight of the dark-trading venues, with an eye on whether orders placed in public exchanges are "trying to move prices or encourage sellers that may advance their trading in the dark market." The regulator also is boosting its surveillance of high-speed trading and is increasingly looking at rapid-fire trading across exchanges, he said. "You're going to see more [focus] in those areas in 2013," Mr. Ketchum said. Goldman, Morgan Stanley to Settle on Foreclosures (Reuters) Goldman Sachs and Morgan Stanley are among a group of banks expected to agree as soon as this week to a $1.5 billion settlement with federal regulators over botched foreclosure claims, two sources familiar with the matter said on Tuesday. The accord would come on the heels of a separate $8.5 billion settlement announced on Monday with 10 bigger mortgage servicers, including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo...Goldman and Morgan Stanley's respective roles in the settlement stems from mortgage-servicing businesses that the two investment banks purchased in the run-up to the subprime mortgage crisis, and have since sold. Goldman had owned Litton Loan Servicing and Morgan Stanley owned Saxon Capital. Taco Bell responds to teen's request for a custom Speedo (LI) The week before Christmas, 15-year-old Ryan Klarner posted on Taco Bell’s Facebook page, introducing himself with a rundown of his swimming and diving achievements before making an offbeat request. “[I]s there any way you guys could make me a customized Speedo that says think outside the buns on the back of it? If you did, that would mean the world to me,” the Illinois teen asked...Klarner said he first came up with the idea a couple of years earlier and decided last month to go ahead and ask, even though he never had asked a company on Facebook for anything before. “I did not expect it to blow up as much as it has. I didn’t really expect to get the Speedo out of it, either,” he said. But last Wednesday, the social media team at Taco Bell wrote back. “What size do you wear? And what’s your address?” “He really wanted something and he went after it,” Tressie Lieberman, director of digital and social engagement, said. When we think people are really extraordinary...then we want to reward them.”

Opening Bell: 07.26.12

Jobless Claims In U.S. Decrease (Bloomberg) Applications for jobless benefits decreased by 35,000 in the week ended July 21 to 353,000, Labor Department figures showed today. Economists forecast 380,000 claims, according to the median estimate in a Bloomberg News survey. Big Bank Pioneer Now Seeks Breakup (WSJ) "I am suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won't be at risk," Sandy Weill said in a TV interview on CNBC yesterday. "Mistakes were made," he added a few seconds later. Chris Dodd: Sandy Weill Wrong, ‘Simplistic’ to Break Up Banks (CNBC) The author of the historic and controversial Dodd-Frank financial legislation staked out different territory from Weill, arguing that “it’s not just the size of an institution,” but the amount of risk carried on its books. Dodd said that forcing all large banks to downsize was “too simplistic,” saying that Weill was wrong to call for an end to financial supermarkets. “Just breaking up the banks is not the solution,” he said. Nomura CEO To Resign Over Insider Trading Scandal (WSJ) Kenichi Watanabe, Nomura's chief executive, and Takumi Shibata, its chief operating officer, are planning to relinquish their posts following admissions that Nomura salespeople allegedly gave information on share offerings to customers before it was public, a person familiar with their thinking said Thursday. Billionaires’ Superyachts Anchor In Thames For Olympics (Bloomberg) Octopus, the yacht owned by Microsoft co-founder Paul Allen, is moored at West India Dock, where the towers housing Barclays Plc and HSBC Holdings Plc reflect in its gleaming blue hull. Next to it is Westfield Group Chairman Frank Lowy’s white ship Ilona, with a red carpet leading to the gangplank and an Australian flag billowing from the stern. “We’ve seen some big boats here, but nothing of this magnitude,” said Derek Newell, an analyst at Lehman Brothers International, the remnants of the U.S. investment bank that’s in administration, as he pointed up to Allen’s vessel. “It’s like a small ferry.” Central Banks Search Toolbox For Ideas As Growth Slows (Bloomberg) Among the options up for consideration by the monetary authorities in addition to potentially doubling-down on previous policies: taking some of the credit risk of new lending onto their own balance sheets and forcing commercial banks to pay for parking cash in central banks’ coffers. Fidelity Joins BlackRock In Weighing Libor Action Against Banks (Bloomberg) Libor-related litigation “has the potential to be the biggest single set of cases coming out of the financial crisis because Libor is built into so many transactions and Libor is so central to so many contracts,” said John Coates, a professor of law and economics at Harvard Law School in Cambridge, Massachusetts. Draghi Says ECB Will Do What’s Needed To Preserve Euro (Bloomberg) FYI. Perella To Settle Citigroup-Morgan Stanley Valuation Spat (NYP) Citigroup and Morgan Stanley hired Perella Weinberg Partners to settle a dispute over how much their Morgan Stanley Smith Barney joint venture is worth. The two New York-based banks are asking Perella Weinberg to value a 14 percent stake that Citigroup plans to sell to Morgan Stanley. Morgan Stanley already controls 51 percent of the unit, with Citigroup holding the rest. 11 year-old boy jets from England to Italy without passport, boarding pass (NYDN) Liam Corcoran snuck through five security checks at Manchester Airport Tuesday afternoon by pretending to travel with other families, the Manchester Evening News reported. Corcoran's adventure began earlier Tuesday when he ran away from his mother during a shopping trip. He went straight to an airport about three miles away where he passed through security checks unnoticed and boarded a Jet2.com flight headed toward the Eternal City. Corcoran reportedly wasn't asked to show a ticket stub to get on the Jet2 plane and the crew failed to take a headcount of the passengers, letting the boy slip through the cracks once again. The plane captain only became aware of the boy when other travelers became suspicious during the flight. Corcoran remained on the plane until it landed at Rome Fiumicino Airport, but the plane turned right back around to Manchester where the boy was reunited with his family Tuesday evening. "He was very talkative and seemed quite un-fazed by it all. He was just sat there chatting away about how he'd been trying to run away from home," said passenger Sarah Swayne, who was on the returning flight, according to the Manchester Evening News.

By EdJF [CC BY-SA 4.0 ], from Wikimedia Commons

Opening Bell: 10.24.18

Oil slumping; Trump feuding; Mike Mayo horny; Man seeking puppy in China buys rat by mistake; and more!