Opening Bell: 12.16.10

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Jobless Claims In US Unexpectedly Fell To 420,000 Last Week (Bloomberg)
Applications for jobless insurance payments decreased by 3,000 to 420,000, the lowest in three weeks, Labor Department figures showed today...Fewer firings signal employers may be gearing up to add to their payrolls and help reduce a jobless rate hovering near a 26-year high. While the economy is gaining momentum heading into 2011, Federal Reserve policy makers said this week it isn’t strong enough to reduce unemployment.

Goldman’s Sze raises money for hedge fund (FT)
Morgan Sze, the global head of Goldman Sachs’ biggest proprietary trading desk and one of the bank’s most highly paid employees, has begun raising money for what is expected to be the largest hedge fund launch since the financial crisis began. Mr Sze’s new hedge fund – eagerly anticipated by many in the industry – is to be called Azentus Capital and will based in Hong Kong. Marketers for the flagship fund expect it to start trading with between $1bn and $1.5bn, people familiar with the launch told the Financial Times.

NYT reporter says U.S. also faces 'lost decade' (JT)
There is likely to be another financial crisis like the Lehman shock in the future, Andrew Ross Sorkin said. "I don't want to write a sequel, but I think there will be one. "The saddest reality of doing all these interviews was that I don't think there was remorse," Sorkin said. "A lot of them now call themselves survivors, like cancer survivors or something. But it's such a misplaced idea."

Obama ‘Optimistic’ CEO Talk Will Foster Cooperation (Bloomberg)
“Things were said on both sides that shouldn’t have been and did not further the opportunity to work together,” Cote said as he arrived at Blair House this morning. “This is our chance to do that. I give the president a lot of credit for being the man big enough to say, ‘Let’s restart, let’s work on how do we create a more vibrant economy.’”

Julian Assange Freed On Bail (Guardian)
Justice Duncan Ouseley agreed with a decision by the City of Westminister earlier in the week to release Assange on strict conditions: £200,000 cash deposit, with a further £40,000 guaranteed in two sureties of £20,000 and strict conditions on his movement.

Facebook 2010 Sales Likely To Reach $2 Billion (Bloomberg)
Sales will more than double from 2009, said the people, who declined to be identified because the privately held company doesn’t disclose revenue. Facebook had $700 million to $800 million in sales last year, and the 2010 figure was previously expected to be closer to $1.5 billion, according to two other people familiar with the matter earlier this year.

UAE hotel boasts 'most expensive Christmas tree ever' (BBC)
While the tree alone is worth a mere $10,000, the jewellery adds more than $11m to the value, said the hotel's general manager Hans Olbertz.

Goldman Sachs Won't Face Negligence Suit By Madoff Investor (Bloomberg)
Jerome Goodman, who invested in Madoff’s fund through a company that Goldman bought, can’t pursue a claim that the bank owed him a duty to give reasonable financial advice and failed to warn that he put too much money in the scheme, U.S. District Judge Freda Wolfson ruled Dec. 14 in Trenton, New Jersey.

Foreclosures Show Biggest 5-Year Drop As Process Slows (CNBC)
Foreclosures fell 21 percent in November from the previous month and 14.4 percent from the year before, according to foreclosure tracking web site RealtyTrac.

Banks Falling Short Of Basel Requirements (WSJ)
In a survey published alongside the official texts of its new rules on capital and liquidity standards, the BIS concluded that "Group 1" banks across the world—that is those with over €3 billion in capital—would need a total of €177 billion in additional common equity just to meet the new absolute minimum ratio of 4.5% of risk-weighted assets. This figure rises to €577 billion when the need for a "capital conservation buffer" of another 2.5%—another mandatory part of the new rules—is taken into account.

Spain Pays High Yield To Sell Bonds (WSJ)
The debt agency offered a lower-than-usual €2 billion to €3 billion of the two bonds, 4.85% October 2020 and 4.65% July 2025, a move aimed at limiting the negative impact stemming from higher funding costs and adjusting to lower liquidity towards the year-end. Spain will have one more auction next Tuesday, offering three- and six-month Treasury bills—debt representing the shortest end of the yield curve.

Wall Street Blame Rift May Blunt Impact of U.S. Crisis Panel (Bloomberg)
Democrats and Republicans on the Financial Crisis Inquiry Commission, struggling for months to find consensus behind the scenes, haven’t even been able to agree on whether to include the phrases “Wall Street” and “shadow banking” in the final report. The report is now scheduled to be published in January and is likely to include dissents, FCIC members said yesterday.

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Opening Bell: 11.21.12

Germany Hints At More Financing (WSJ) Germany on Wednesday signaled its willingness to provide additional financing for the euro zone's bailout fund and accept lower interest on loans to Athens, in order to get the Greek rescue back on track and free the next tranche of about €44 billion ($56.40 billion) in loans for the euro zone's weakest member. Merkel Sees Chance For Greek Deal Monday (Reuters) "I believe there are chances, one doesn't know for sure, but there are chances to get a solution on Monday," Merkel told the Bundestag lower house of parliament in a debate on the German budget. But the longing for one act, one miracle solution, one truth that means all our problems are gone tomorrow...this will not be fulfilled. What was neglected over years, over decades, cannot be taken care of overnight and therefore we will need to continue to move step by step." H-P Says It Was Duped (WSJ) The technology giant said that an internal investigation had revealed "serious accounting improprieties" and "outright misrepresentations" in connection with U.K. software maker Autonomy, which H-P acquired for $11.1 billion in October 2011. "There appears to have been a willful sustained effort" to inflate Autonomy's revenue and profitability, said Chief Executive Meg Whitman. "This was designed to be hidden." Michael Lynch, Autonomy's founder and former CEO, fired back hours later, denying improper accounting and accusing H-P of trying to hide its mismanagement. "We completely reject the allegations," said Mr. Lynch, who left H-P earlier this year. "As soon as there is some flesh put on the bones we will show they are not true." Analysts Had Questioned Autonomy’s Accounting Years Ago (CNBC) Paul Morland, technology research analyst at broking and advisory house Peel Hunt, told CNBC that he had noticed three red flags in Autonomy’s accounts in the years leading up to the HP acquisition: poor cash conversion, an inflated organic growth rate, and the categorizing of hardware sales as software. London Bankers Become Landlords as Rents Hit Record (Bloomberg) Vivek Jeswani became a landlord by accident when Deutsche Bank AG (DBK) transferred him to New York two weeks after he moved into a new home in central London. Now back in the U.K., Jeswani views the apartment in Baker Street, the fictional home of Sherlock Holmes, as one of his best assets and is about to buy another home to expand his rental business. “There are no other investments as attractive and you’ve got some security if you’ve got an asset you can use yourself,” the 36-year-old risk officer at China Construction Bank Corp.’s U.K. unit said. “There’s a good yield over 5 percent and being in central London, you’ve got demand domestically and internationally.” Trading Charges Reach SAC (WSJ) The hedge funds reaped $276 million in profits and losses avoided based on that information, criminal and civil authorities said—far dwarfing that of any previous insider-trading case. The bulk of the trading profits generated by Mr. Martoma was paid to Mr. Cohen, a person close to the hedge fund said. Fed Still Trying To Push Down Rates (WSJ) Fed Chairman Ben Bernanke suggested that the central bank will keep trying to push down long-term interest rates in 2013, as federal tax and spending policies become a more substantial headwind to the U.S. economy. "We will continue to do our best to add monetary-policy support to the recovery," Mr. Bernanke said at the New York Economic Club, answering a question about how the Federal Reserve would respond to impending spending cuts or tax increases that might restrain economic growth. 'Stiletto Surgery' alters pinky toe for better fit (Fox) These days, some women will do just about anything to fit into their favorite pair of high heels – including surgery. A growing number of women are paying thousands of dollars to surgically alter their feet just to make wearing heels a more comfortable experience. Surgical procedures such as shortening toes, receiving foot injections and even completely cutting off pinky toes are on the rise. “Unless you’ve been there, and you can’t find shoes, and you’re in pain, don’t judge,” said Susan Deming, a patient who recently underwent a toe-shortening procedure. Adoboli’s Fate Decided at Wine Bar as UBS Market Bets Unraveled (Bloomberg) On a cool late summer evening last year in London’s financial district, with the euro-zone crisis worsening and Greece tottering on the edge of default, Kweku Adoboli says he asked the three traders who worked with him at UBS AG’s exchange-traded funds desk to join him for a drink. Adoboli said in a post on his Facebook page that he needed “a miracle” as his bets on the market imploded. That night at a wine bar across the street from their office, Adoboli asked John Hughes, the senior trader on the ETF desk, and two junior traders, what to do. The others decided he should take the blame for billions of dollars in losses and an elaborate web of secret trades in what he called an umbrella account that once held $40 million in hidden profits. “I knew I was going to lose my job anyway, I had already resigned myself to that, so fair enough,” the 32-year-old Adoboli testified last month about the meeting, which the other traders deny took place. Jobless Claims in U.S. Decrease (Bloomberg) Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg. Soros Buying Gold as Record Prices Seen on Stimulus (Bloomberg) The metal will rise every quarter next year and average $1,925 an ounce in the final three months, or 11 percent more than now, according to the median of 16 analyst estimates compiled by Bloomberg. Paulson & Co. has a $3.66 billion bet through the SPDR Gold Trust, the biggest gold-backed exchange- traded product, and Soros Fund Management LLC increased its holdings by 49 percent in the third quarter, U.S. Securities and Exchange Commission filings show. 'Cannibal Cop' Gilberto Valle planned to to cook up 'some girl meat' on Thanksgiving (NYDN) The "Cannibal Cop" had his own twist for a Thanksgiving dinner this year — cooking up “some girl meat,” prosecutors revealed Tuesday. Gilberto Valle, 28 — who allegedly kept a database of at least 100 women he plotted to rape, cook and eat — planned the freakish feast with one of his online conspirators earlier this year, prosecutors said. “I’m planning on getting me some girl meat,” he wrote to his pal on Feb. 9. “Really tell me more,” responded the friend. “It’s this November, for Thanksgiving. It’s a long way off but I’m getting the plan in motion now,” Valle wrote.