Opening Bell: 03.08.11

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Galleon Judge Speaks Softly, Carries A Big Rep (WSJ)
"He has good control over the courtroom—not because he's loud or aggressive, but because he has this quiet quality," says Gerald Shargel, a friend and defense lawyer who has represented mob figures. "Holwell won't be bullied." The 64-year-old Judge Holwell—a former White & Case LLP litigator with a thick white mustache—won't let Mr. Rajaratnam's high profile, or the attention his case has drawn, influence a trial that is expected to last at least six weeks, according to a dozen lawyers who have tried cases before him or know him socially.

Berkowitz Victory Becomes Challenge as St. Joe ’Under Attack’ (Bloomberg)
“The company’s basically under attack,” said Berkowitz, who was named chairman of the Watersound, Florida-based company on March 4 and whose Fairholme Capital Management LLC is its largest shareholder. “There are plenty of people out there who’d like to see the company go down the tubes. That’s sort of by definition anybody who’s shorting the stock.”

Morgan Stanley Moves To Say Bye To Smith Barney (WSJ)
Morgan Stanley is considering dropping the 73-year-old Smith Barney name from its roughly 18,000-member brokerage force, according to people familiar with the situation.

Barclays Reveals Executive Pay Deals (FT)
Some 231 senior employees – known as “code staff” – took home £554 million between them, an average of about £2.4 million per executive.

S&P Warns On Asian Inflation (WSJ)
"China is getting embroiled in such a tussle, and the implications for the rest of Asia have been a major worry for some time," it said, noting that high U.S. unemployment and the approaching mid-term congressional elections sharpen this risk. Any action seriously affecting trade between the world's two largest economies could have important implications elsewhere, although China's recent steps to allow the yuan to gradually appreciate could reduce that possibility, it added.

Woman Caught With $170,000 In Underwear At JFK (NYDN)
A Queens woman nabbed at Kennedy Airport with nearly $170,000 hidden in her underwear was trying to avoid paying taxes on the sale of property in Sudan, the feds said Monday. Claire Abdeldaim's real estate booty consisted of 1,699 $100 bills, U.S. Customs and Border Protection Officer George Wolynski testified Monday in Brooklyn Federal Court. "We got a big one," Wolynski told his supervisor after seizing the cash last June. Abdeldaim, 64, had sewn the bills into her bloomers to get the money out of Sudan, where she had sold a tract of land owned by her late husband.

Martin Scorsese slapped with $2.85M back-tax bill (NYP)
The Oscar-winning director was slapped with the whopping past-due notice on Feb. 14, The Post has learned. The St. Valentine's Day back-tax massacre, recorded by the city Finance Department on Feb. 25, states what the IRS believes the "GoodFellas" helmer owed in taxes and related interest and penalties and gives the Internal Revenue Service dibs on any sales of his real estate. Sources said the "Taxi Driver" director's latest tussle with the taxman -- he's had a series of big liens since 2002 -- might stem from his prior business relationship with convicted fraudster Kenneth Starr, a financial adviser who mismanaged and stole money from a slew of celebrity clients.

Top Hedge Funds Bet On Plastics (Reuters)
A wave of managers snapped up shares of LyondellBasell Industries, which makes chemicals like propylene and polyethylene, the stuff that goes into plastics. The popularity of plastics and raw materials signals that hedge funds are diversifying commodity bets beyond gold, the darling of 2010 returning 30 percent, as inflationary pressures seep into food and energy.

Goldman's Pariah Status Fades as Broadbent Joins BOE MPC (Bloomberg)
The Bank of England’s appointment of Goldman Sachs Senior European Economist Ben Broadbent to its Monetary Policy Committee shows governments are again looking to the firm for top decision makers, less than a year after it settled U.S. fraud claims.

214 Arrested For Urinating In Rio's Carnival Streets (AP)
More than 200 people have been arrested during Rio's Carnival that is under way for relieving themselves in the street, underlining authorities' determination to clean up the city that will be host to the 2016 Olympic Games. "Two hundred and fourteen people have been arrested over the weekend.... We are going to constantly fight those urinating in the street. Such a lack of respect for the city and its citizens in unacceptable," the municipal official in charge public order, Alex Costa, told the G1 news website Monday. In tandem with their "Zero Tolerance for Pissing," as the campaign is called, they have established portable toilets in many of the most popular areas.

Related

Opening Bell: 04.09.12

JPMorgan Trader Iksil Fuels Prop-Trading Debate With Bets (Bloomberg) Iksil’s influence in the market has spurred some counterparts to dub him Voldemort, after the Harry Potter villain. He works in London in the bank’s chief investment office, which has assembled traders from across Wall Street to its staff of 400 who help oversee $350 billion in investments. While the firm describes the unit’s main task as hedging risks and investing excess cash, four hedge-fund managers and dealers say the trades are big enough to move indexes and resemble proprietary bets...The trades, first reported by Bloomberg News April 5, stirred debate among U.S. policy makers over the Easter-holiday weekend as they wrangle over this year’s implementation of the so-called Volcker rule, the portion of the Dodd-Frank Act that sets limits on risk-taking by banks with government backing. Taking Measure Of Citigroup And Bank Of America (NYT) Bank of America shares are up 66 percent this year, while Citigroup has risen 33 percent, amid the broader rebound in financial stocks. After staying out of the spotlight and earning $21 billion over the last two years, Citigroup’s potential problems are gaining attention again...At Barclays, the analyst Jason Goldberg said he was shocked when Citigroup did not get the go-ahead from the Fed, adding, “We had run mock stress tests with Citi passing by a fair amount.” Just as surprising, he added, has been Bank of America’s surge this year. Its performance has been a far cry from last year, when Bank of America’s stock, which closed at $9.23 on Thursday, was flirting with $5, and questions about whether it had enough capital were mounting. “If you asked me in January whether this thing would be up 66 percent, I’d have said you’re crazy,” Mr. Goldberg said, referring to Bank of America’s stock performance this year. A 'Fat Cat' With The President's Ear (WSJ) When President Barack Obama attacked "fat-cat bankers on Wall Street" in 2009, Robert Wolf had a ready response. "I said 'Mr. President, I know you think I'm overweight, but I can think of better names to call me,'" Mr. Wolf recalls. "He laughed." Humor and self-deprecation have served Mr. Wolf well in his often conflicting roles as presidential pal and Wall Street power broker. The 50-year-old president of UBS's UBS investment bank has remained a leading voice in the industry while also serving as Mr. Obama's chief Wall Street fundraiser and his current BFF (best friend in finance)...Mr. Wolf plays golf and basketball with the president and he is a frequent visitor to the White House. On vacation in Martha's Vineyard or at fundraising events, the two often bond over sports and their families, since they each have two school-age kids. As if to prove the president wrong about "fat cats," Mr. Wolf says he has lost 20 pounds in the past three months. Willing Banks Find Profits in Legal Trade With Iran (WSJ) As Western sanctions on Iran have grown tighter, some small banks have found a lucrative niche financing what remains of the legal trade with the Islamic Republic. Top-tier financial institutions including Société Générale SA GLE.FR -0.74% and Rabobank Group have stepped back from business with Iran in recent months, citing increased political risk and logistical hassles that attend even legal trade with the country. As a result, the remaining players are commanding higher fees and offering increasingly complicated services. Like Russia's First Czech-Russian Bank LLC and China's Bank of Kunlun Co. Ltd, they are typically small, obscure financial institutions often based in countries historically friendly to Iran. The firms and other intermediaries still brokering these trades are charging more than 6% per transaction for legitimate trade deals with Iran, on top of traditional banking fees, according to traders and bankers knowledgeable with the process. That is as much as triple the fees typically charged by Arab Gulf banks two years ago, before the United States and European Union significantly stiffened sanctions, according to Iranian businessmen. Easter Bunny Arrested (KTLA) An Easter Bunny was arrested this week after police found he was carrying around more than Easter eggs and candy. Joshua Lee Bolling, 24, was arrested and charged on Thursday with illegally possessing prescription narcotics. Police arrested Bolling after businesses at the Piedmont Mall in Danville, Virginia complained that the Easter Bunny was acting suspicious. "His suspicious behavior took place while he was on breaks and not during his contact with children," a police release said. UBS Faces Billionaire Olenicoff in Lawsuit Over His Tax Felony (Bloomberg) and billionaire Igor Olenicoff are scheduled to clash in court today over his claim that the bank bears blame for his failure to declare $200 million in offshore accounts on U.S. tax returns. Olenicoff, 69, a real-estate developer, pleaded guilty in 2007 to filing a false tax return, admitting he didn’t tell the Internal Revenue Service about his offshore accounts for seven years. He was sentenced to two years’ probation and ordered to pay $52 million in back taxes, fines and penalties. In 2008, he sued Zurich-based UBS, the largest Swiss bank, claiming it traded excessively in his accounts, engaged in racketeering and committed fraud by not telling him he owed U.S. taxes. He seeks as much as $1.7 billion in damages. Arguments on the bank’s motion to dismiss the case are set for today before U.S. District Judge Andrew Guilford in Santa Ana, California. Markets at the Start of a More Significant Downturn Says Marc Faber (CNBC) “The technical underpinnings of the market have been a disaster in the last couple of weeks,” Faber said on the sidelines of the Maybank Invest Asia conference. “The number of new highs have declined, the volume has been poor, insider sales just hit a record.” Faber said the weakness in economically sensitive stocks such as mining and industrial goods was particularly “disturbing.” Agencies At Odds Over New Ratings (FT) The latest example came this month when a near-$800 million bond deal backed by U.S. prime mortgages was sold to investors with triple-A ratings — provided by Standard & Poor’s and DBRS, a smaller competitor based in Canada — on some tranches. Fitch Ratings issued a statement saying it would not have rated the bonds triple A. It said it provided “feedback” on the transaction to the arranger, Credit Suisse, and “was ultimately not asked to rate the deal due to the agency’s more conservative credit stance”. Steven Vames, a Credit Suisse spokesman, said it was common for an issuer to engage multiple rating agencies to look at a deal and ultimately choose a subset of those agencies to rate it. In March, Moody’s said: “Some recent cases have come to market for which we believe increased risk has not been adequately mitigated for the level of ratings assigned by another agency.” In particular, Moody’s faulted ratings issued by S&P, Fitch and DBRS on asset-backed deals. For Big Companies, Life Is Good (WSJ) An analysis by The Wall Street Journal of corporate financial reports finds that cumulative sales, profits and employment last year among members of the Standard & Poor's 500-stock index exceeded the totals of 2007, before the recession and financial crisis. UK Cruise Retraces Titanic's Ill-Fated Voyage (Reuters) Descendants of some of the 1,500 people killed when the Titanic sank a century ago were among the passengers on a cruise ship that set off from Britain on Sunday to retrace the route of the liner's ill-fated voyage. Some donned period costume, including furs and feathered hats for women and suits and bowler hats for men, to board the MS Balmoral at Southampton on the southern English coast. The world's most famous maritime disaster has fascinated people ever since, explaining why passengers from 28 countries were prepared to pay up to 8,000 pounds ($13,000) each to be a passenger on the memorial cruise organized by a British travel firm. The Balmoral will follow in the wake of the Titanic, sailing near Cherbourg in France and then calling at Cobh inIreland before arriving at the spot where the Titanic went down...Passenger Jane Allen, whose great-uncle died on his honeymoon trip on the Titanic while her great-aunt survived, said she did not think it was "ghoulish or macabre" to go on the voyage.