Opening Bell: 01.31.01

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Lonely Analyst Warns Of 2015 Crisis Amid Upbeat Davos (Bloomberg)
“The fundamentals haven’t been addressed at all,” Barrie Wilkinson, a London-based partner at consulting firm Oliver Wyman, said in an interview at the Hotel Morosani Schweizerhof. “The things that caused the previous crisis -- loose monetary policy and trade imbalances -- they’re actually bigger now than they were then.”

Opposition Ramps Up Pressure On Mubarak (WSJ)
A coalition of opposition groups called for a million people to take to Cairo's streets Tuesday to ratchet up pressure on President Hosni Mubarak to leave...In the most significant change, the interior minister—who heads internal security forces—was replaced. A retired police general, Mahmoud Wagdi, was named to replace Habib el-Adly, who is widely despised by protesters for brutality shown by security forces.

Moody's Cuts Egypt's Rating, Warns On Spending (Reuters)
"There is a strong possibility that fiscal policy will be loosened as part of the government's efforts to contain discontent," Moody's said in a statement. "A background of rising inflationary pressures further complicates fiscal policy by threatening to increase the high level of budgetary expenditure on wages and subsidies."

Nouriel Roubini: Egypt's Protests Negative For Growth (CNBC)
"There's already political contagion from Tunisia to Egypt… geopolitical risk is on the rise," Roubini told CNBC in an interview. "It has a negative effect on growth or rising inflation. All this is not good." But he added that the situation wasn't as serious yet as to lead to another recession. "Even if in the past recessions have been associated with oil price shocks caused by geopolitical risk… we're not yet there but rising oil prices, risk aversion, these are all negative for the markets," Roubini said.

Business Operations Halt In Egypt (WSJ)
Dutch brewer Heineken NV, chemicals company Akzo Nobel NV, consumer-products giant Unilever NV, Japanese auto company Nissan Motor Co. and General Motors Co. of the U.S. were among the companies suspending production.

Egypt Spurs Jump In Developing Money-Market Rates (Bloomberg)
The last time short-term borrowing costs in developing nations rose this fast was the second half of 2008, when the global financial crisis and record commodity prices pushed the world economy into a recession.

A Fund Manager Ensnared (WSJ)
The hedge-fund manager—Samir Barai, the 39-year-old founder of New York-based Barai Capital Management—didn't return calls for comment. Prosecutors haven't disclosed any charges of wrongdoing against Mr. Barai in the still-unfolding investigation. FBI agents raided his fund in November, the people familiar with the matter say, but the fund's identity hasn't before been made public.‪ Mr. Barai made his name at Citigroup in a high-profile hedge-fund position and he used that affiliation to help market his own fund, according to people familiar with the firm. His role in the investigation involves conversations and trading that took place after Mr. Barai left Citigroup in 2007, and there is no indication the bank is implicated in the probe.‪

Climber falls 300m down a mountain – and survives (Guardian)
In seconds Adam Potter fell 300m (about 1,000 ft) down the side of Sgurr Choinnich Mor, gathering pace as he fell. He tumbled down a rough scree slope – fortunately cushioned by deep snow - and bounced over three cliffs, each perhaps a hundred feet high, scattering his kit behind him. His body twisted, heels over head. Miraculously, Potter survived. He came to rest 800m above sea level with a skinned and bloodied face, whiplash, back injuries and wrenched shoulders, when his downwards momentum was finally arrested by a boulder. He thinks the rock briefly knocked him out.
Growth Stocks May Fizzle As Rebound In Market Favors Value (Bloomberg)
Growth stocks in the U.S. have “dominated value for well over the last year, hardly a surprise given investors’ preference for emerging markets to domestic exposure,” Graham Bishop and Ian Richards, equity strategists at Royal Bank of Scotland Group Plc in London, wrote in a Jan. 12 report. “But as domestic concerns subside and valuations become stretched, we expect investors to switch into the ‘value’ catch-up candidates and out of the recent ‘growth’ winners.”

United, Delta Profit at Risk From `Silent Killer' in Fuel Hedges (Bloomberg)
U.S. airlines including United Continental Holdings Inc. and Delta Air Lines Inc. may see 2011 profits eroded as an indicator of jet-fuel costs surges to a two-year high. Most carriers try to smooth fuel-price swings with advance purchase contracts linked to the cost of crude or heating oil, a proxy for jet fuel. Those with hedges tied to crude futures have been less protected against rising costs, with the difference versus heating oil jumping more than 50 percent this month. “This is out of control,” said David Cush, chief executive officer of Virgin America Inc., the low-fare carrier partly owned by U.K. billionaire Richard Branson. “This is a kind of silent killer. It has a huge impact on airlines.”

Americans Pick Up Spending (WSJ)
Consumer spending grew by 0.7% in December, the Commerce Department reported Monday. Americans' incomes rose by 0.4% for a second month in a row.

Bankers Expect 13 Percent Bonus Deferral (Reuters)
Investment bankers working in Britain expect, on average, 13 percent of their bonuses will be deferred, according to a survey published on Monday by financial services recruitment firm Astbury Marsden. The survey's findings showed most bankers were fighting recommendations made by European Union regulators for at least 40-60 percent of top bankers' bonuses to be deferred over 3-5 years. "Below vice-president level, most staff are not ready for the idea that they have to accept another year of deferred bonuses," Astbury chief operating officer Mark Cameron said.

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Opening Bell: 09.14.12

Trial to Begin for Former UBS Trader Accused of Hiding Huge Loss (Dealbook) UBS will face the harsh glare of the spotlight again on Friday, as opening arguments begin in the trial of a former trader accused of hiding a multibillion-dollar loss at the investment bank. Kweku M. Adoboli, 32, the former trader, faces charges of false accounting and fraud in connection with a $2.3 billion loss at the bank. He has pleaded not guilty. “As uncomfortable as the entire trial will be for UBS, it will show us what the consequences are when misconduct occurs or when individuals do not take their responsibilities seriously,” the bank’s chief executive, Sergio P. Ermotti, said in an internal memo made public by the firm. JPMorgan Erases Stock Drop Fueled by London Trading Loss (Bloomberg) JPMorgan, the lender that plunged as much as 24 percent in the month after disclosing a multibillion-dollar trading loss, has erased that decline. The bank’s stock climbed 3.7 percent to $41.40 yesterday in New York, eclipsing the $40.74 closing price of May 10, when Chief Executive Officer Jamie Dimon announced what was then a trading loss of about $2 billion at the chief investment office in London. The loss this year now stands at $5.8 billion. Dutch and Germans Give European Union Reasons to Cheer (NYT) On Wednesday, the German Constitutional Court found a way to declare that the permanent bailout fund, the European Stability Mechanism, is legal, clearing the way to use it in time to recapitalize troubled banks as well as governments. And the Dutch voted for mainstream parties in a parliamentary election, choosing not to be enticed by parties wanting to leave the euro. Combined with the European Central Bank’s decision to restart its bond-buying program in return for more budget discipline, immediately lowering interest rates on Italian and Spanish bonds, European leaders could begin to feel that perhaps the worst is over in the euro crisis, at least for now. “With the Dutch shying away from anti-European parties the same day the German Constitutional Court rules in favor of the E.S.M., Sept. 12 seems to have been a good day for the euro,” Dimitry Fleming of ING Groep NV said in an analysis via e-mail. Not all is well, of course. Greece remains a mess, and will probably need even more money. A decision keeps being postponed about when, and whether, to grant Athens another big portion of loan money it needs to stay afloat. Deutsche Bank urges rivals to share IT (FT) Deutsche Bank is seeking to convince rival investment banks to share markets and trading software in an effort collectively to lower costs for the financial industry. Sharing software would be an unusual step for investment banks, which have historically closely guarded their technology, much of which is still built in-house at great expense. But Deutsche Bank’s efforts underscore the intense pressure banks are under to cut costs as lower markets activity and new rules eat into their profit margins...Sharing market software, Deutsche says, will save it and other big global banks some of the billions of dollars and euros that they would otherwise have spent building or improving on individual technology systems. Woman Tells Police She 'Accidentally' Stabbed Boyfriend (AZC) Margarita H. Zaragoza told police she and her boyfriend were arguing over alcohol that he poured down the sink when she "accidentally" stabbed him with a steak knife, according to the document. Zaragoza said her boyfriend came up behind her to talk to her while she was washing a knife in the sink, according to police, and that she accidentally stabbed him in the arm when she turned to talked to him. The victim told police his girlfriend became angry after he poured her alcohol down the sink because she is pregnant and isn't supposed to be drinking, the document said. The victim said Zaragoza grabbed a knife while he was getting rid of the alcohol and stabbed him twice in the arm, according to the document. Roger Altman: The US Economy May Surprise (CNBC) Looking out a few years, the Evercore founder said, “We’re going to have a bigger snap-back in housing than people think. The U.S. has undergone a breathtaking revolution in oil and gas production and the growth impact of that is underrated.” Altman also pointed to a bounce-back in lending and strong industrial competitiveness as reasons to be optimistic about the economy longer term. Fed Acts To Fix Job Market (WSJ) "If the outlook for the labor market does not improve substantially, the [Fed] will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ other policy tools as appropriate until such improvement is achieved in a context of price stability," the Fed said in its postmeeting statement. Berkshire Climbs To Four-Year High On Fed's Action (Bloomberg) So that's nice. Mets fan who rushed Citi Field after Johan Santana's no-hitter slapped with $5,000 fine and 100 hours of community service (NYDN) Rafael Diaz, 32, was hit with the penalties after he pleaded guilty Thursday to interfering with a sporting event. “The defendant’s antics have resulted in a criminal record, the paying of thousands of dollars in fines and civil penalties, and – perhaps the worse punishment for any true Mets fan – precludes him from ever again visiting Citi Field,” Queens District Attorney Richard Brown said. Diaz, of Massapequa, L.I., who joined the celebration on the pitcher's mound June 1, was ordered to hand over $4,000 in civil penalties to the Mets and $1,000 to the city.