Opening Bell: 11.15.10

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UBS Recovery Fizzles as Gruebel Sees Less Profit on Lower Risk (Bloomberg)
The firm made more from trading stocks and bonds than the average of its competitors in 2005, before more than $57 billion of writedowns and losses from the credit crisis forced it to shrink the investment bank’s risk-weighted assets 44 percent. A lack of client business, combined with the lowest value-at-risk, meant UBS barely made enough in the third quarter to pay the 17,000 bankers in the unit. “They have to start taking risk again or to pay less,” said JPMorgan Chase & Co. analyst Kian Abouhossein, whose recommendations on UBS produced the second-highest total returns over the past year, according to data compiled by Bloomberg. “The question is do you really need the best people in the market if you’re just running a very flow-oriented business? That’s the dilemma that they need to decide.”

Goldman's Plan To Repay Berkshire Is Delayed (WSJ)
Buffett to be paid $15/second for a bit longer.

Ireland Talks With EU as Germany Pushes It to Take Bailout (Bloomberg)
“Ongoing contacts continue at official level with international colleagues in light of current market conditions,” a Finance Ministry spokesman said in an email late yesterday. “Ireland has made no application for external support” and the government is “fully funded till well into 2011,” the spokesman said.

Harbinger Being Probed By Authorities (Reuters)
The Securities and Exchange Commission and U.S. Attorney's office in Manhattan are investigating whether Harbinger misled investors by not disclosing soon enough a $113 million personal loan for founder Philip Falcone from the firm's funds.

Fed's Bond Plan Faces Fresh Attack (WSJ)
A group of prominent Republican-leaning economists, coordinating with Republican lawmakers and political strategists, is launching a campaign this week calling on Fed Chairman Ben Bernanke to drop his plan to buy $600 billion in additional U.S. Treasury bonds. "The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment," they say in an open letter to be published as ads this week in The Wall Street Journal and the New York Times.

Options Showing Quantitative Easing Working Before It Begins (Bloomberg)
As the central bank starts a second round of purchases of Treasuries through its so-called quantitative-easing policy, investors are paying eight times more than in April for options on interest-rate swaps that protect against rising yields relative to those that bet on them falling, according to Barclays Plc data. Bonds that compensate for higher consumer prices also show heightened inflation expectations.

Benmosche: 'This Isn't Pie In The Sky'
(WSJ)
If you're a customer, you want to know whether this company is going to make it or not. Many people were saying we're a ward of the state, that there's no way we could pay back the taxpayers. But if you do an analysis, this is at least a $70 billion company and we will have about 1.8 billion shares. Our recent quarterly earnings [for core insurance operations] show we can earn $8 billion to $9 billion pretax income annually if other charges and write-downs stop occurring. All the numbers come together and say the government will be able to sell its shares at some price in the future. It's math; it really isn't about pie in the sky.

Greenspan: High Deficits Could Spark Bond Crisis (ABC)
"We've got to resolve this issue before it gets forced upon us," Greenspan said of the ballooning U.S. debt levels.

Royal Bank of Scotland Sells Project Book for $6 Billion (Reuters)
Mitsubishi UFJ Financial Group said it will acquire project finance loans and assets from RBS for 3.8 billion pounds ($6.1 billion), expanding its overseas reach as loan demand remains tepid in Japan.

Troubled California begins $14bn bond sale (FT)
Orders begin on Monday for a $10bn, two-part sale of revenue anticipation notes (Rans), an annual event that allows California to bridge the gap to its tax season in the spring. The notes, due in May and June, are targeted mostly at individual investors who benefit from tax breaks on munis.

The Year's 10 Highest Paid CEO's (WSJ)
Liberty Media CEO Greg Maffei is number one at $87.1 million.

Bill Clinton Joins The Cast Of Hangover 2 (People)
Clinton, who'll play himself in the comedy, shot his brief appearance on Saturday in Bangkok, where part of the production takes place.

Related

Opening Bell: 02.22.12

Fitch Downgrades Greece (WSJ) Fitch Ratings downgraded Greece's credit rating to C from triple-C Wednesday after confirmation of the country's second bailout package, which includes a debt exchange that will force bondholders to take a loss on their holdings of Greek debt. "The rating action is in line with Fitch's statement on 6 June 2011, which outlined its rating approach to a sovereign-debt exchange," the ratings company said. Fitch said it will lower its rating on the country's sovereign bonds to "restricted default" upon the completion of the debt exchange aimed at reducing the country's debt burden.

Opening Bell: 02.29.12

David Loeb, a Goldman managing director who acts as a middleman between the Wall Street firm and some of its most important hedge-fund clients, is the latest Goldman official to be investigated in the insider-trading probe. As a senior Goldman salesman, Mr. Loeb deals with many technology hedge-fund employees...Known at Goldman and among clients as self-deprecating and colorful, Mr. Loeb sometimes signs his emails "cbf," for "chunky but funky."

Opening Bell: 03.06.12

Goldman Secret Greece Loan Reveals Sinners (Bloomberg) On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said. Papanicolaou and his predecessor, Christoforos Sardelis, revealing details for the first time of a contract that helped Greece mask its growing sovereign debt to meet European Union requirements, said the country didn’t understand what it was buying and was ill-equipped to judge the risks or costs...“Like the municipalities, Greece is just another example of a poorly governed client that got taken apart,” Satyajit Das, a risk consultant and author of “Extreme Money: Masters of the Universe and the Cult of Risk,” said in a phone interview. “These trades are structured not to be unwound, and Goldman is ruthless about ensuring that its interests aren’t compromised -- it’s part of the DNA of that organization. Greece Pushes For Aid Tranche (WSJ) Greece's international creditors are considering whether to grant the country a small, tranche of the €130 billion ($171.8 billion) bailout agreed earlier this month in the weeks ahead as part of efforts to pump liquidity into the country's moribund economy. Speaking to the privately owned Mega television channel Tuesday, Deputy Finance Minister Philippos Sachinidis said the money would go to paying off some of the €6 billion in accumulated arrears that the Greek government owes private contractors. He added that the disbursement could come before Greece goes to elections that are widely expected to be held in late April. "There is a discussion that, likely before the elections, we will get a tranche that will allow us to pay some of, not the total, of the arrears," Mr. Sachinidis said. Bondholder Group Sees 1 Trillion Euro Greek Default Risk (Reuters) A disorderly Greek default would probably leave Italy and Spain needing outside help to stop contagion spreading and cause more than 1 trillion euros ($1.3 trillion) of damage to the euro zone, the group representing Athens' bondholders warned. Greek private creditors have until Thursday night to say whether they will take part in a bond swap that is part of a 130 billion euros bailout deal to put the country on a more stable footing and cut its debt by more than 100 billion euros. Paulson’s Advantage Plus Declines in February (Bloomberg) John Paulson lost 1.5 percent in February in one of his largest hedge funds, according to an investor update, paring this year’s gain and setting back efforts by the New York-based manager to recoup record losses in 2011. Paulson’s Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, gained 3.5 percent in the first two months of 2012, according to the update IBM’s Watson Gets Wall Street Job After ‘Jeopardy’ Win (Bloomberg) International Business Machines Corp’s Watson computer, which beat champions of the quiz show “Jeopardy!” a year ago, will soon be advising Wall Street on risks, portfolios and clients. Citigroup, the third-largest U.S. lender, is Watson’s first financial services client, IBM said yesterday. It will help analyze customer needs and process financial, economic and client data to advance and personalize digital banking. Ann Romney: ‘I Don’t Even Consider Myself Wealthy’ (ABC) Mitt Romney may have more money than any other presidential candidate in the race, but his wife said today that she does not consider herself wealthy. “We can be poor in spirit, and I don’t even consider myself wealthy, which is an interesting thing,” Ann Romney said in an interview on Fox News. “It can be here today and gone tomorrow.” Swiss Pass Proposal to Help Nab US Tax Evaders (Reuters) Specifically, the plan would allow Switzerland to hand over data on suspected tax evaders, even if U.S. tax authorities cannot identify alleged offenders by name or bank account. The big-spending businessman who ran up £203,948 bar bill was 23-year-old City whizkid (Mirror) The businessman who blew £203,948 on bubbly in a single night in Liverpool was 23-year-old Alex Hope...His biography reads: “Despite his tender years, Alex is a name to watch out for in the city. An expert in the UK economy, he works the currency markets, regularly trading millions.” Describing his rapid career rise from humble beginnings to working for trading company Zone Invest Group, it adds: “A talented, charismatic and thoroughly likeable man, Alex Hope exudes knowledge and you can’t help but respect and admire this self-taught and self-made young trader.” Banker Bonus Limits Sought by EU Lawmakers (Bloomberg) Members of the European Parliament’s Socialist and Green parties have proposed that a draft EU law to bolster bank capital should include new pay rules, as well as stricter curbs on risk taking, according to two members of the institution’s financial affairs committee. “Wrong incentives were part of the banking culture that caused the crisis,” said Udo Bullmann, a German lawmaker following the proposed law for the parliament’s Socialist group. “I expect there will be quite a lot of sympathy among different party groups” for further rules on pay. Judge throws heat at Picard’s claim vs. Mets (NYP) Picard’s best evidence may be from Noreen Harrington, a former chief investment officer for a hedge fund partially owned by the Mets’ owners, who is expected to say that she told Katz and another Sterling Equities executive that she thought Madoff’s reported returns were “fiction” and not “worth the paper they’re written on.” The Mets will argue they were bamboozled by Madoff, along with the nation’s top regulators and major banks. Bill Clinton Said to Agree to Join Obama at Campaign Fundraisers (Bloomberg) While Obama raised $5 million on his last fundraising trip to New York, including $2 million from a March 1 event with members of the financial services industry, he is collecting less money from Wall Street this year compared with four years ago, according to the Center for Responsive Politics. When Gaming Is Good For You (WSJ) People who played action-based video and computer games made decisions 25% faster than others without sacrificing accuracy, according to a study. Indeed, the most adept gamers can make choices and act on them up to six times a second—four times faster than most people, other researchers found. Moreover, practiced game players can pay attention to more than six things at once without getting confused, compared with the four that someone can normally keep in mind, said University of Rochester researchers. The studies were conducted independently of the companies that sell video and computer games.