Opening Bell: 03.09.11

Author:
Updated:
Original:

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.

Related

Opening Bell: 3.29.16

Deutsche Bank is hiring; Casino agent in Philippines says high-rollers brought in heist money; Man pays $500 a month to live in a wooden 'pod' in San Francisco; and more.

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."