Opening Bell: 12.21.10

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SEC Probe Examines Hurd Exit From HP (WSJ)
As part of the probe, the Securities and Exchange Commission is checking whether Mr. Hurd passed information about H-P's $13.9 billion acquisition of technology-consulting company Electronic Data Systems Corp. to a former H-P event hostess in 2008, before the deal was announced, the people said. Mr. Hurd has denied having an inappropriate relationship with the H-P contractor, Jodie Fisher, whose accusation of sexual harassment led to his ouster from atop the technology giant in August. The SEC is also looking at Mr. Hurd's use of corporate expenses in his dealings with Ms. Fisher, these people said.

Blackstone Raises $15 Billion Fund For Buyouts (WSJ)
Though most of Blackstone's longtime investors in the U.S. and Europe are participating, they've committed smaller sums compared with previous funds, these people say. To entice interest, Blackstone gave those willing to write checks of about $500 million better terms than others, according to the people. In the past, a $1 billion commitment was enough to elicit improved terms, they say. Some of the fund-raising challenges stemmed from investor concerns with private equity that have grown since the financial crisis, including the long-term and illiquid nature of the investments. It's also been harder for private-equity firms to return cash to their investors, since the IPO market remains difficult. "It was like a rock fight," said one Blackstone executive who was part of the fund-raising effort. "A long hard fight."

Europe Bankers To Get Salary Hikes Due To Bonus Rules (FT)
Many US and Swiss banks are considering paying higher salaries and lower bonuses to top bankers based in the European Union, mostly in London, to ensure they comply with new instructions from the Committee of European Banking Supervisors (CEBS), the pan-EU regulator, limiting cash pay-outs. Some European politicians had expected that non-EU banks would apply their rules globally on a voluntary basis. But one senior European banker said: “Politicians are naïve if they think we will impose EU rules on a global basis. The ironic effect will be another hike in salaries, which is a fixed cost, which rather makes a nonsense of the idea of pay for performance.”

TD Bank To Buy Chrysler Financial For $6.3 Billion (Reuters)
Toronto-Dominion Bank has agreed to buy Chrysler Financial from private equity firm Cerberus Capital Management for $6.3 billion, making Canada's No. 2 bank one of North America's top five bank-owned auto lenders. TD said Tuesday the purchase consists of net assets of $5.9 billion and about $400 million in goodwill.

African Gold Rush Kills Children As Miners Find Lead Dust (Bloomberg)
Gold fever brought death to Umoru Musa’s nine-family compound in Sunke, a mud-brick village in northern Nigeria. Five of the 25 children, including Musa’s 1-year-old daughter Nafisa, lost their lives in May after villagers ground ore from nearby hills they didn’t know were also loaded with lead. Rising prices for gold promised a windfall. Instead, they helped unleash the deadliest lead-poisoning crisis in modern medical history. As the adults pulverized rocks with their grain grinder, they spewed lead dust across the ground where their children played and poultry grazed. They spread more of the material, lethal to children in high doses, around the communal well where they washed the ore to sift out the gold. “This gold cost us a lot,” Musa, 40, said in the open-air courtyard of his home last month as a clean-up team in white respirator masks cleared away lead-laden dirt. “There is nothing God can give that is better than a human being.”

Investments Boost For Paulson And Co (FT)
Paulson’s flagship $9bn Advantage Plus Fund, which in September was down 11 per cent for the year, has staged the most dramatic recovery. According to an investor, the fund was up 10.2 per cent for the month as of December 10. It is now up 14.3 per cent for the year. The fund is understood to have continued its strong performance this week. The Advantage Plus Fund trades around corporate events, such as mergers and acquisitions or bankruptcies. The firm’s Credit Opportunities Fund is up 4 per cent so far this month, bringing its performance to 16.5 per cent for the year so far. Mr Paulson’s Recovery Fund, which is focused on the US economy and its prospects, also returned 10.2 per cent over the first 10 days of December. The Recovery Fund is now up 19.4 per cent so far this year.

Moody's Warns It May Cut Portugal's Ratings (WSJ)
"In Moody's opinion, Portugal's solvency is not in question," said Anthony Thomas, Moody's vice president and lead analyst for Portugal. "But the likely deterioration in debt affordability over the medium term and ongoing concerns about the economy's ability to withstand fiscal consolidation and private sector deleveraging mean its outlook may no longer be consistent with an A1 rating."

European Banking Fees Shrivel Amid Sovereign Crisis (Bloomberg)
Income from arranging mergers, stock, bond and loan sales in Europe, the Middle East and Africa dropped about 10 percent from 2009 to $21.9 billion, estimates by New York-based research firm Freeman & Co. show. Fees in Asia jumped 18 percent to $17.8 billion, narrowing the gap with Europe to the lowest since at least 1998. At that rate, revenue from Asia may surpass Europe in 2011, according to Freeman.

China Frets About Spreading EU Debt Woes (Reuters)
"We are very concerned about whether the European debt crisis can be controlled," Chinese Commerce Minister Chen Deming said at a trade dialogue between China and the European Union. "We want to see if the EU is able to control sovereign debt risks and whether consensus can be translated into real action to enable Europe to emerge from the financial crisis soon and in a good shape," he said.

New York Leads In Pursuit Of Lehman (WSJ)
In 2001, the regulator of the nation's biggest banks told its examiners to be on the lookout for firms whose regulatory filings made them look healthier than they really were. That followed guidelines issued in 1990 that said banks could face disciplinary action if their filings "have significant inaccuracies or are 'window dressed.' " But as early as this week, it is the New York attorney general—not the Office of the Comptroller of the Currency, the bank regulator—who is expected to file a lawsuit alleging accounting firm Ernst & Young LLP allowed Wall Street broker Lehman Brothers Holdings to fake its books so it could appear financially healthier.

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Opening Bell: 04.13.12

JPMorgan Profit Slips (WSJ) J.P. Morgan reported a profit of $5.38 billion, down from $5.56 billion a year earlier. On a per-share basis, earnings were $1.31, up from $1.28 as the share count outstanding declined. The latest quarter included a net 8-cent per-share loss tied to litigation expenses and changes in the value of the bank's debt. Analysts polled by Thomson Reuters expected a per-share profit of $1.18, excluding debt-related charges. Revenue rose 6.3% to $27.42 billion. Analysts were looking for $24.68 billion. Wells Fargo reports higher first-quarter profit (Reuters) Wells Fargo, the nation's fourth-biggest U.S. bank, said net income was $4.25 billion, or 75 cents a share, in the quarter, compared with $3.76 billion, or 67 cents, a share in the same period a year earlier. The average estimate from analysts was 73 cents per share. JPMorgan Said to Transform Treasury to Prop Trading (Bloomberg) Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said. Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms. Bank Bonus That Tops Salary May Be Banned by EU Lawmakers (Bloomberg) Governments and lawmakers in the 27-nation EU are considering rules for lenders that would go far beyond international agreements approved by the Basel Committee on Banking Supervision. Denmark, which holds the rotating presidency of the EU, has proposed empowering nations to set surcharges of up to 3 percent across their banking systems. Karas yesterday suggested adding language to the legislation that would ban banker bonuses that exceed fixed pay, following calls from other lawmakers to rein in excessive compensation. IMF Lifts Growth Forecast, Cautiously (WSJ) Christine Lagarde, managing director of the International Monetary Fund, said the world economy is marked by "a high degree of instability" even though prospects for global growth are better than they were a few months ago. In an interview with The Wall Street Journal, Ms. Lagarde said the IMF, which marked down its 2012 forecast for global growth in January to 3.3%, has now marked it up to reflect improving conditions in the world economy. But she said the new forecast, to be released next week, remains more pessimistic than the one it made last September, which predicted 4% growth. Europe remains the biggest single risk to the global economy, the former French finance minister said. Hedge Fund Driver Guns DownArmed Robber (NYP) A retired NYPD lieutenant blew away a drugstore bandit yesterday as the suspect tried to gun down three police officers during a foot pursuit, sources said. Thomas Barnes, Barnes — a driver for hedge fund manager Philippe Laffont, was filling his tank at the BP station on East 119th Street and First Avenue at around 11 a.m. when he saw gunman Rudolph Wyatt running from the store, and sprang into action. He crouched behind his hedge-fund boss’ Mercedes SUV and squeezed off three shots, killing Wyatt, 23. The trigger-happy thug — wanted on warrants for two other shootings — lay dead in a pool of blood on the sidewalk wearing a black stocking mask with a wad of stolen cash spilling out of his pocket, witnesses said. “Part of the back of his head was missing. He had a large head wound and there was tons of blood,” said witness John Brecevich, 59, owner of the Original Patsy’s restaurant nearby. “It was a scene straight out of NYPD Blue.” Trustees Aim For MF Execs (NYP) The trustee tasked with clawing back money for burned customers of MF Global is training his sights on the brokerage firm’s executives — a list that likely includes former CEO Jon Corzine. In a statement yesterday, trustee James Giddens said he is considering pursuing claims against “certain responsible individuals” who worked for MF at the time customers’ trading accounts were improperly tapped. Kent Jarrell, a spokesman for Giddens, declined to name names but said the trustee is considering civil suits against “officers, directors or other employees” of both the brokerage firm and the holding company. Fed Officials Differ on Need to Keep Rates Low to 2014 (Bloomberg) William C. Dudley, president of the New York Fed, and Vice Chairman Janet Yellen said the 2014 time-frame is needed to lower unemployment from 8.2 percent. Minneapolis Fed President Narayana Kocherlakota said rising inflation may prompt an interest-rate increase as early as this year, while Philadelphia’s Charles Plosser said policy should hinge on economic performance, not a calendar commitment. Newark Mayor Cory Booker: Race into home fire was a "come to Jesus moment" (CBS) Booker arrived home last night to discover his next-door neighbor's house on fire, and rescued a young woman trapped upstairs by carrying here through the flames, suffering second-degree burns in the process. The mayor's security team discovered the fire and pounded on the door to alert residents, when an elderly woman said that her daughter was trapped upstairs. At first, Newark Police Detective Alex Rodriguez would not let Booker into the burning house. "He basically told me, 'This woman is going to die if we don't help her,' and what can I say to that?," Rodriguez said. "I let him go and without thinking twice, he just ran into the flames and rescued this young lady." Booker said that as he jumped through the kitchen on the second floor, "I actually wasn't thinking. When I got there and couldn't find her in all the smoke, looked behind me and saw the kitchen really erupting with flames all over the ceiling, that's when I had very clear thoughts that I'm not going to get out of this place alive and got ... very religious. He admitted he was "not gentle" with her - "I just sort of threw her over my shoulder and dragged her through the kitchen."