Opening Bell: 04.15.11

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Bank Of America Earnings Miss Expectations, Profit Drops (BAC)
The bank reported net income of $2.0 billion, or $0.17 per diluted share, for the first quarter of 2011, compared with $3.2 billion, or $0.28 per diluted share, in the year-ago period and a net loss of $1.2 billion, or $0.16 per diluted share, in the fourth quarter of 2010.

Banks Near Deal With SEC (WSJ)
U.S. securities regulators are in talks with several major Wall Street banks to settle fraud allegations related to mortgage-bond deals that helped unleash the financial crisis, according to people familiar with the matter. The expected settlements, some of which could be reached as soon as next week, collectively mark the biggest attempt by enforcement agencies to hold Wall Street accountable for its role in the subprime mortgage bust. The settlements are expected to vary significantly among banks—but few, if any, are expected to surpass the $550 million penalty that Goldman Sachs paid last year to settle allegations that it misled investors in a mortgage-bond investment called Abacus 2007-AC1.

True Scale Of Glencore's Trading Empire Unveiled (FT)
Glencore disclosed that it controls 45 percent of the third-party lead market, 38 percent in alumina, and between 30 and 20 percent for aluminium, cobalt and thermal coal. It has a smaller market share for nickel, ferrochrome, oil and grains. The sheer dominance of raw materials trading is set to play into Glencore’s favor as it pushes for a 15-20 percent stake sale worth $9 - $11 billion in London and Hong Kong.

Moody's Cuts Ireland By Two Notches (Reuters)
Moody's cut Ireland's sovereign rating by two notches, to BAA3 from BAA1, to the verge of junk status on Friday and kept its outlook on negative.

Greece To Unveil Austerity Measures To Meet Deficit Goals (Bloomberg)
The government’s medium term-fiscal policy plan will detail more than 22 billion euros ($31.9 billion) of deficit-reduction measures through 2014, most of them in spending cuts, according to Finance Minister George Papaconstantinou. The government is also expected to unveil plans to raise 15 billion euros by 2013 through state-asset sales.

Deutsche Expands Nordic Focus as Bank Lands Biggest Merger Deal (Bloomberg)
Deutsche Bank which won 2011’s biggest Scandinavian corporate-finance deal when it led DuPont Co.’s bid for Danisco A/S, is boosting its Nordic unit as the pace of mergers in the region tops that of Europe and the U.S. “The Nordic market is playing a more important role relative to the rest of Europe,” said Jan Olsson, head of Deutsche Bank’s Nordic investment banking division, in an interview in Stockholm. Deutsche Bank set up a four-person currency team in Stockholm last year. The company also started offering corporate finance services at its Oslo branch, which until 2010 only provided banking to the country’s shipping industry.

JPMorgan Bankers Who Doubted Madoff In 2007 Are Named (NYT)
Those executives are John J. Hogan, the bank’s chief risk officer for investment banking; Matthew E. Zames, who oversees several important bank trading operations; and Carlos M. Hernandez, the head of global equities at the bank’s investment banking unit.

Mexican Economy Shrugs Off Narco War (CNBC)
“The buzz that has surrounded the BRICs (Brazil, Russia, India, China) and other fast-growing emerging economies in recent years has largely passed Mexico by, and arguably for good reason” said Rafael De La Fuente, an economist at UBS in a research note. Despite the drug war, Mexico’s economy took off last year with growth of 5.5 percent and UBS is predicting 2011 growth will hit 4.8 percent.

JPMorgan Pushes Microchip Card In Race With Wells Fargo (Bloomberg)
JPMorgan will first offer the card exclusively to affluent customers. Clients with a JPMorgan Palladium credit card, which has a $595 annual fee, will receive a chip card by June, the company said. “Initially, we are targeting the technology to our highest-spend clients,” Porter said. “Months after that we will issue the card to Chase-branded products.”

Adidas Debuts World’s Lightest Basketball Shoe to Tackle Nike (Bloomberg)
Adidas introduced the AdiZero Crazy Light shoe in New York yesterday. It has a weight of 9.8 ounces and is more than 15 percent lighter than any competing model, including Nike’s LeBron Air Max 8 V/2.

Luxury Spending By Rich To Rise; Value Sought (Reuters)
Spending by rich Americans on luxury goods is set to grow by $26.6 billion in 2011, with the number of affluent families planning to spend more almost doubling in the past three years, a poll found on Friday.

Firms Tip Scales Back In Favor Of Stocks (WSJ)
Companies such as Expedia are increasingly resorting to spinoffs, share buybacks and other financial engineering to boost market value, often to the detriment of bondholders. And in a switch, holders of investment-grade bonds are more at risk than those holding high-yield securities, because the safer bonds typically provide fewer protections against such shareholder-friendly actions.

Raj's High Wires (NYP)
Just weeks before his trial on insider-trading charges, Galleon Group founder Raj Rajaratnam wired a whopping $15 million to a hedge fund launched by a former employee and key defense witness, prosecutors told the jury yesterday. Rajaratnam's investments account for $25 million of a total $35 million in Spottail's assets under management, prosecutors showed. Rajaratnam, who faces a maximum sentence of 25 years, first invested in Spottail in September, giving Schutte $10 million. Then, on Jan. 4, two months before Rajaratnam was scheduled to go on trial in Manhattan federal court, his family wired an additional $15 million to Spottail, prosecutors said.

World's Oldest Man Dies In Montana (Reuters)
A 114-year-old retired railroad worker reputed to be the world's oldest living man died of natural causes on Thursday in the farming community of Great Falls, Montana. Walter Breuning, who had lived in a local nursing home since 1980, was declared oldest man on July 18, 2009, by the Guinness Book of World Records. He retired from the railroad at age 66 and attributed his longevity to restricting daily meals to breakfast and lunch and to downing an aspirin a day.

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