Opening Bell: 03.09.11

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US Jury to Hear Gripping Opening of Rajaratnam Trial (Reuters)
A jury of New Yorkers on Wednesday will hear U.S. prosecutors outlining how they believe Sri Lankan-born Rajaratnam broke the law by designing a complex web of stock tippers who helped him reap $45 million in illicit profit between 2003 and March 2009. For the first time, the jury and observers of the high-profile case will be given an insight into the defense trial strategy, which faces seemingly overwhelming evidence of leaked corporate secrets, tapped telephones and friends-turned-government witnesses.

Arrests Made Over Icelandic Bank Collapse (WSJ)
The U.K.'s Serious Fraud Office, or SFO, said Wednesday that it has arrested seven individuals as part of its ongoing investigation into the collapse of the Icelandic Kaupthing Banking Group. The arrests were made after searches at two business properties and eight residential addresses in London. They follow extensive searches in London and Reykjavik, which the SFO has carried out in tandem with the City of London and Essex Police and with the assistance of Icelandic investigators.

RBS's Hester Earns Half A Diamond (Guardian)
A pay package of £7.7m, including a £4.5m bonus, for Stephen Hester at Royal Bank of Scotland can hardly be described as modest. But one way to view this sum is as a half-Diamond: it's a little more than half the package awarded last year to Barclays' chief executive, Bob Diamond.

Buffett Takes $2.25 Billion in Burlington Dividends Since Biggest Takeover (Bloomberg)
Berkshire Hathaway took $2.25 billion in dividends from Burlington Northern Santa Fe in less than 13 months of ownership, almost triple the railroad’s payout rate prior to the February 2010 acquisition.

Man Group Hopes German Mandate Will Stem Outflows (Reuters)
The firm has won a mandate to run 1.2 billion euros (1.0 billion pounds) for German pension fund BVK, as the world's biggest listed hedge fund firm tries to woo clients after bleeding assets during the crisis.

The Most Expensive Town In America (WSJ)
The average home price in Aspen has increased over the past four years, to $6 million in 2010 from $5.4 million in 2006, according to multiple-listings data. The median price for single-family homes is now the highest in the country at $4.6 million, says San Francisco-based Altos Research, surpassing the Hamptons, Beverly Hills and Palm Beach.

Demand Grows for 'Synthetic' Junk Bonds (FT)
Hedge funds are buying the riskiest parts of instruments linked to bonds. This demand reflects more bullish views on the US economy, which investors believe will translate into lower corporate defaults. "We see much interest in synthetic high yield, more than we would have predicted just a few months ago," said Sivan Mahadevan, managing director at Morgan Stanley.

Jon Cryer "A Turncoat, A Traitor, A Troll," Sheen Says (CBS)
Charlie Sheen has already lashed out at his "Two and a Half Men" bosses, and now he has some harsh words for costar Jon Cryer. "Jon has not called me," Sheen said Tuesday. "He's a turncoat, a traitor, a troll... Is it gonna take me calling him a 'traitor, juvenile and scared' for him to get it?" "Like I said: You're with me, or you're with the trolls," he added of Cryer. "Obviously he's with the trolls."

UBS Says Asia Profit Margins May Shrink as Banker Pay Rises (Bloomberg)
Staff expenses are increasing faster in Asia than in any other region, Alex Wilmot-Sitwell, co-head of UBS’s Asia-Pacific operations, said in an interview in Sydney yesterday. China, India and Indonesia are among “hot markets” where employee costs are climbing, he said. “Unless your revenues are running at significantly higher levels than that, this may lead to a risk of margin compression,” said Wilmot-Sitwell, 49. “If history is any guide, it will likely persist for a year or two.”

Americans Oppose Government Shutdown, Fault Cuts in Poll (Bloomberg)
Almost 8 in 10 people say Republicans and Democrats should reach a compromise on a plan to reduce the federal budget deficit to keep the government running, a Bloomberg National Poll shows. At the same time, lopsided margins oppose cuts to Medicare, education, environmental protection, medical research and community-renewal programs.

Europe Blinks On Bank Test (WSJ)
The new European Banking Authority, which is running the tests on 88 of Europe's biggest banks, has told regulators and bankers that the exams are likely to rely on each country's definition of an important capital ratio known as Tier 1, according to people familiar with the matter. If the plan goes through, some skeptical bankers and regulators worry, it could undermine the effort to end the European financial crisis. They fear a rerun of one of the key weaknesses in last year's stress tests by the European Union. Those results were widely panned for giving passing grades to almost all banks, including some that subsequently required taxpayer bailouts.

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