Opening Bell: 03.29.11

Author:
Updated:
Original:

Brother In Alleged Galleon Coverup (WSJ)
In the hours after the 2009 arrest of the Galleon Group founder, Rengan Rajaratnam participated in an alleged coverup by removing notebooks with handwritten notes about stocks from Raj Rajaratnam's office, according to filings in a Manhattan federal court.

BP Managers Said to Face U.S. Manslaughter Charges Review (Bloomberg)
Federal prosecutors are considering whether to pursue manslaughter charges against BP Plc managers for decisions made before the Gulf of Mexico oil well explosion last year that killed 11 workers and caused the biggest offshore spill in U.S. history, according to three people familiar with the matter.

Warren Faces Dimon, Hostile Chamber Agency (NYP)
Warren says regulation will bring clarity to financial services. Although she won't be speaking at the same time as Bachus or Dimon, the US Chamber of Commerce's fifth annual summit, entitled "Ensuring Competitiveness in a Post-Regulatory Reform Environment," will give Warren a chance to make her strongest case yet in support of the new agency that she helped birth.

Not 'joking' with Rajaratnam says Rajiv Goel, former Intel exec (ET)
Former Intel executive and key government witness Rajiv Goel has said that he was not joking with Galleon Group founder Raj Rajaratnam when telling him about the dealings of his company. The defence previously asked Goel whether he thought Rajaratnam was kidding about giving BMW cars to two women in Intel's sales department who leaked information to him. The prosecution today went over several parts of secretly recorded phone. "Were you joking... was this idle chit chat?" asked Reed Brodsky, citing the line, "But yesterday, our board approved this deal." "No", said Goel, who has already pleaded guilty to telling Rajaratnam that Intel was planning to make a USD 1 billion investment in a new joint venture with Clearwire and Sprint to develop an ultra-fast wireless Internet service.

Cash-Paying Vultures Feast on U.S. Housing as Mortgages Dry Up (Bloomberg)
Delavaco Properties LP plans to spend as much as $30 million this year and $40 million in 2012 to buy bank-owned houses and condominiums in foreclosure-ridden South Florida. The private-equity fund will pay cash. “If there weren’t vultures out there, you’d have a city of dead carcasses,” Robert Theocles, an independent consultant for Fort Lauderdale, Florida-based Delavaco, said in a telephone interview. “It’s like the circle of life.”

Private Exchange Wants To Challenge NYSE, Nasdaq (Reuters)
BATS Global Markets plans to list U.S. public stocks by year end, opening the door for companies to float shares somewhere other than the Big Board or Nasdaq for the first time in years.

Man Group Doubles Managed Funds (WSJ)
The firm said it continued to refocus itself as a more-diversified business following its acquisition of GLG Partners and the sale of its stake in BlueCrest as it reported that funds under management of $69 billion, almost double the level last year. Man Group also announced Tuesday the acquisition of the remaining 50% stake in Ore Hill that it didn't already own, which it would integrate into GLG. Ore Hill manages a series of hedge funds with total assets under management of $800 million and focused on U.S. credit markets.

Time for a Sequel to AOL-Time Warner? (WSJ)
This isn't a joke.

'Spiderman' Alain Robert scales Burj Khalifa in Dubai (BBC)
It took him six hours to ascend the 828-m (2,717-ft) tower in the United Arab Emirates city, including the tapered spire above the top floors. Unusually, he used a rope and harness, to comply with safety requirements.

GE: Pay Anything (CC)

Japan Finds Plutonium at Stricken Nuclear Plant (Reuters)
TEPCO said the radioactive material — a by-product of atomic reactions and also used in nuclear bombs — had been found in soil in five places at the plant, hit by an earthquake and tsunami on March 11.

Worries Grow Over Supplies Of Japanese Cars (WSJ)
The deep impact of the March 11 earthquake and tsunami on the supply of made-in-Japan vehicles is just starting to become clear on the lots of Main Street car dealers and on Wall Street earnings outlooks for the big auto makers. Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. all have U.S. plants still churning out vehicles, but rely on Japanese production for about a quarter to a third of the new cars they sell in America. On Monday, Deutsche Bank cut its estimate of Toyota's profit in the fiscal year beginning April 1 by 84%. It also cut its forecast for Honda's fiscal 2012 profit by 50%, and Nissan's by 79%.

Dying Banks Kept Alive Among Secrets Fed Data Will Reveal (Bloomberg)
U.S. regulators closed Chicago- based Park National Bank in October 2009 when it owed $345 million to one of the lowest-cost lenders in town: the Federal Reserve’s discount window. Park National had been a constant customer at the window for more than 18 months before it failed, records show. Without identifying them as of yet, Fed officials say all the discount window loans made during the worst financial crisis since the 1930s have been repaid with interest.

Related

Opening Bell: 05.04.12

BofA Sees $5 Billion Collateral Need in Credit Downgrade (Bloomberg) A two-level downgrade of long-term senior debt ratings would have prompted the bank to post about $5.1 billion of collateral tied to derivatives contracts and other trading agreements as of March 31, the Charlotte, North Carolina-based firm said yesterday in a regulatory filing. It would have had to post an additional $1.1 billion of collateral if trading partners opted to tear up contracts in a two-level cut. RBS claims 'pleasing progress' though loss triples (AP) RBS, 82-percent owned by the British government after a massive bailout in the global the financial crisis, posted a 2011 first quarter net loss of £528 million. The lender said losses soared owing to an increase in the value of its outstanding debt to £2.46 billion. "As RBS's credit spreads tightened during the quarter, a charge of £2,456 million was booked for (our) own credit adjustments," RBS said in a statement. But the bank's underlying performance was brighter, with RBS posting a first quarter operating profit of £1.18 billion. RBS also confirmed that it would repay the last of emergency state loans totalling £163 billion but the British government will still own almost all of the bank after a £45.5 billion bailout following the 2008 financial crisis. "The start of 2012 has shown pleasing progress at RBS within the context of a flat economic environment," chief executive Stephen Hester said in the statement. Employers in U.S. Added Fewer Jobs Than Forecast in April (Bloomberg) Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated. Facebook Targets $96 Billion Value (WSJ) With the pricing, Facebook is anticipated to raise as much as $13.6 billion, above earlier expectations of $10 billion. In a regulatory filing, Facebook said the company would seek to sell 337.4 million shares, with about half of those being sold by founders, employees and investors. The only U.S. issuers that have raised more money in an IPO were Visa Inc. at $19.7 billion in 2008 and General Motors Co. at $18.1 billion in 2010. Zuckerberg Facebook IPO to Make Him Richer Than Ballmer (Bloomberg) So that's exciting. Warren Buffett Has 'No Plans To Invest In Facebook IPO' (CNBC) When asked whether the current attention surrounding Internet IPOs reminded him of the tech stock bubble of the late 1990s, the Oracle of Omaha said, “It is not a bubble ... this is not what we were seeing in late 1999 all the way into 2001. We aren’t in any bubble phase of anything.” Inmates Dance, Deputy Fired (OBJ) Some inmates did the worm, others chose the old school robot. Each dance was performed to the beat of hip-hop artist Usher on command from a now-fired Summit County deputy. The inmate prize: use of a jail microwave. The charges are revealed in an internal affairs report released Wednesday. Deputy Dominic Martucci, 35, was fired for violating the department’s policies, including a mandate that inmates be treated humanely. Martucci is accused of ordering five inmates dance to Usher’s Yeah! song and then inviting other deputies to watch during an early evening shift on April 11. The inmates danced their way to regaining use of a microwave that they had lost earlier that day. Fitch CEO: US Downgrade Not Likely Before Election (CNBC) "We currently have the U.S. on a negative outlook, which actually suggests we think there is the potential for a downgrade," Taylor said in an interview. "It's too early to tell whether that will turn into an actual downgrade or not,” he said. “We think we still need to see what's going to happen through the elections and what actions are put in place subsequent to the elections. I think it's very clear that the U.S. does need to do something to deal with the debt problems built up since the financial crisis," he added. New Ripples For Gupta Case (WSJ) Mr. Gupta's criminal trial for securities fraud and conspiracy is scheduled to begin May 21 and expected to last about three weeks. Mr. Gupta has pleaded not guilty. His lawyer, Gary Naftalis, declined to comment for this article but previously has called the accusations "totally baseless." The Manhattan U.S. attorney's office also declined to comment. Federal prosecutors in Manhattan have taken note of the spike in trading in Goldman, which began as the firm's board concluded a special meeting to approve the deal that afternoon, according to people familiar with the matter. Galleon traders also noticed the climbing stock, conversations recorded on government wiretaps show. "Someone had this before us, someone, whatever went on, something happened," Galleon trader Ian Horowitz told Mr. Rajaratnam in a phone call the next morning, caught on tape by the Federal Bureau of Investigation. Goldman Readies Low-Cost Bond PLatform (WSJ) Goldman is preparing to roll out a bond-trading platform on which it will charge lower fees than on typical bond trades, according to people familiar with the matter, a move that could help retain customers tempted by rival trading venues being set up by BlackRock Inc. and others. AIG Invests $7.4 Billion at 5.3% to Boost Returns, Adds RMBS (Bloomberg) “We continue to be opportunistic with our investments in structured securities in order to improve yields, increase net investment income and offset the impact of a lower interest rate environment,” Wintrob said. BofA Talks Deal On Ex-Broker Pay (WSJ) The former Merrill brokers left the firm after the 2009 takeover by Bank of America and claim they are owed deferred compensation as a result of the deal. They were emboldened last month by an arbitration ruling ordering the Charlotte, N.C., company to pay more than $11 million to two former brokers with related complaints.