Opening Bell: 04.04.11 - Dealbreaker

Opening Bell: 04.04.11

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Wachovia Faces Civil Charges (WSJ)
The agency has focused on the amounts Wachovia charged investors for collateralized debt obligations, according to people familiar with the matter. SEC officials believe the Charlotte, N.C., bank applied excessive markups that didn't reflect the diminishing value of the underlying loans, according to people familiar with the matter.

Mixed Signals Marked Sokol Meeting (WSJ)
It came as a "shock" to the Citigroup bankers when they learned Mr. Sokol bought roughly $240,000 of shares of Lubrizol Corp. a day after their meeting, sold them, and then purchased $10 million shares about two months before Berkshire's $9 billion deal unveiled March 14 to acquire Lubrizol, according to people familiar with the matter. At that meeting, Mr. Sokol didn't say he was personally interested in buying Lubrizol shares, the people said.

Blankfein Reaps $19 Million As Cash Bonuses Return To Wall Street (Bloomberg)
Blankfein’s pay included $5.4 million in cash, $12.6 million in restricted stock, a $600,000 salary and about $464,000 in other benefits, a proxy statement from the firm showed.

GE's Immelt Defends Nuclear Industry (WSJ)
Immelt insisted Monday that the nuclear industry has had a "safe track record" without directly answering a question from reporters in Tokyo about GE's potential liability as a manufacturer of three of the six reactors at Japan's stricken Fukushima Daiichi power plant.

Wall Street Trading Revenue Seen Falling 4th Straight Quarter (Bloomberg)
A surge in market volatility following Japan’s worst earthquake on record and a jump in oil prices may not be enough to keep investment-banking and trading revenue from falling for a fourth consecutive quarter. Analysts have lowered first-quarter earnings estimates at the biggest U.S. banks, saying trading revenue won’t rebound as much as they had expected from a weak fourth quarter.

Nasdaq’s Greifeld May Inherit NYSE Floor He Sought to Bury (Bloomberg)
While Greifeld promised 74 percent more expense reductions than Deutsche Boerse, he said last week he wouldn’t close NYSE Euronext’s open-outcry auction venue, which has been the image of American capitalism for more than a century. The floor’s value in attracting new stock listings outweighs the cost and Nasdaq OMX would allow it to coexist with its electronic systems that have become a model for markets globally, brokerage executives and investors said. “The floor is an American icon, a global icon,” said Joseph Gawronski, chief operating officer at Rosenblatt Securities Inc., which employs about a dozen traders at the NYSE executing orders for institutions. “It’s a symbol of such importance that Greifeld might not be doing what would come naturally to him, cutting costs by shutting down the floor.

Tepco To Dump Radioactive Water In Sea To Keep Reactors Stable (Bloomberg)
“We didn’t have any other alternatives,” Edano told reporters in Tokyo today. “This is a measure we had to take to secure safety.”

Sheen Ticket Prices 'Torpedoed' After Motor City Show (CNBC)
After Sheen’s disastrous Detroit show, tickets have resold for as low as $9 on the website. Prior to his appearance in the Motor City, tickets were changing hands in the $90 range.

Paris attempts to prise HSBC from London (Telegraph)
Meetings instigated by the French are understood to have taken place in recent weeks with HSBC representatives, as the bank looks at its domicile arrangements as part of a triennial review process. Details of what the French authorities could offer HSBC to entice it to Paris are not known.

Rich Are Targeted In IRS Audit Offensive (WSJ)
According to the agency's latest statistical report for the fiscal year ended Sept. 30, the percentage of taxpayers who were audited increased in every category of adjusted gross income above $500,000, compared with a year earlier. The biggest jumps came at the top of the income ladder. About 18% of Americans earning at least $10 million were audited in fiscal 2010, up from 11% in fiscal 2009, according to the IRS. For those earning $500,000 to $1 million, the audit rate rose to 3.4% from 2.8%.

Decks clear for April launch of Glencore mega-float (Reuters)
Glencore has cleared the decks to launch its much-anticipated $10-billion listing around the middle of the month, receiving the nod from the Hong Kong stock exchange and positive signals from debt markets.

Financial groups seek to avoid 'important' list (FT)
After financial groups built up risk that threatened to bring down the entire financial system, the Obama administration decided to identify future AIGs and Lehman Brothers and subject them to tougher capital and liquidity standards and closer supervision. Bank of America is top of the list. Like all bank holding companies with more than $50bn in assets, it is automatically designated, but the top 10 also includes four insurance companies: MetLife, which is structured as a bank holding company and is therefore expected to be designated; AIG, which is also expected to be designated even though its supporters say it has shed its risky businesses; Prudential; and Hartford Financial Services.

GOP Budget Aim: Cut $4 Trillion (WSJ)
The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. Mr. Ryan and other conservatives say this is necessary because of the program's soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016. At that pace, spending on the program would have doubled between 2002 and 2016.

Crunching Japan's Numbers: Final Bill Will Be Huge (Reuters)
Japan's government expects last month's earthquake and tsunami to cost up to $300 billion in material damage, but the ultimate cost will be far higher...Under a scenario in which Japan's economy shrinks in both the first and second quarters, close to $160 billion in economic activity would be wiped out.

The Coolest Ferrari Ever (WSJ)
"You want my snap verdict on the new FF? Fine. This is absolutely the coolest Ferrari of all time, "cool" insofar as it delivers brain-solvent performance without looking like it gives a damn what you think, cool insofar as its radical Pininfarina styling (a "shooting brake," or three-door hatch GT) waves a contemptuous finger at conventional wisdom. This is a car that despises prettiness and mocks your bourgeois notions of sleek and rakish, which are stylistic sideshows of aerodynamics, anyway. Yes, I agree, the car looks like a toilet brush on wheels, but how monumentally gutsy it is for Ferrari to even think such a thing, much less commit hundreds of millions of euros to its execution. My God. Ferrari? The most self-satisfied car company on earth dares to put its weight on such a limb? It's downright epic."

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