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Opening Bell: 08.09.11

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Tumult In Global Market Continues (NYT)
Jean-Claude Trichet urged Spain and Italy to quickly shore up their credibility with the markets, and called on European leaders to move quickly to implement measures agreed on July 21 to bolster the euro-zone’s bailout fund. “Taken together, and particularly since Lehman Brothers, this is the most grave crisis we have faced since World War II,” he said in an interview with Europe 1 radio in Paris, citing the “financial turbulence” that started in August 2007. “And I believe that it would be the worst since World War I if the authorities had not taken the important decisions they have.”

Disaster Movie Gets A Sequel, With Subtitles (NYT)
“While the players in Washington certainly haven’t performed at AAA level, I would certainly take U.S. Treasuries over other AAA sovereigns any day,” Hank Paulson said.

Why This Crisis Differs From The 2008 Version (WSJ)
The reality is that, unlike 2008, governments' money is no good in today's stressed environment.

Europe's Leaders Play Tennis While Markets Implode (CNBC)
British Prime Minister David Cameron had to return from his vacation on Monday night as parts of London erupted in rioting (a report on Sunday saying that Cameron had flown out a tennis instructor from the UK for the second week of his family holiday in a plush Tuscan estate, was not well-received). His Finance Minister George Osborne has been snapped on a rollercoaster in California. German Chancellor Angela Merkel is off on her usual summer break of a two-week hiking holiday in the Tirol Alps ...French President Nicolas Sarkozy headed off to the French Riviera with his pregnant wife Carla Bruni. José Manuel Barroso is taking some sun in his native Portugal, although his spokeswoman insists that he is working from his vacation. In contrast, Spanish Prime Minister José Luis Rodríguez Zapatero canceled a planned trip to a nature reserve in southern Spain as yields on the country's debt shot up. His Italian equivalent Silvio Berlusconi has abandoned his usual trip to his Sardinian holiday villa, allegedly the scene of "bunga bunga" parties.

$2,500 Bullion? (NYP)
JPMorgan analyst Colin Fenton came out with a strong buy on the relic yesterday, saying bullion could hit $2,500 an ounce by Dec. 31 -- a whopping 45 percent above yesterday's close.

Manager: Market A Spoiled Baby Crying To "Daddy Bernanke" (CNBC)
Following huge losses for the Dow on Monday and further selling in Asia overnight, the markets are watching what the Fed and Ben Bernanke will do at their July Meeting today. Speculation is mounting that the Fed will attempt to restore calm but one fund manager thinks that policy action is unnecessary. “The markets have become like a spoiled baby who expects daddy Bernanke to rush for help whenever they feel a little bit of pain” Pedro Noronha, a fund manager at Noster Capital in London, told CNBC...“This correction was long overdue and it is healthy, as it allows assets to pass from weak into stronger hands and to be more fairly priced” said Noronha.

For Some Asian Hedge Funds, Market Rout Is Sweet (Reuters)
Asian hedge funds Vulpes, started by industry veteran Stephen Diggle, and Tantallon Capital are emerging as winners in a volatile August that has wiped out more than $3.8 trillion from global stock markets. Diggle, who made a fortune during the financial crisis, said his long Asian volatility and arbitrage hedge fund LAVA gained about 4 percent in the first six trading days of the month. Tantallon gained 4.15 percent in its flagship fund last week, according to a letter to investors.

Marc Faber: Markets Oversold, Set for Short-Term Rebound (CNBC)
"I think that near-term stock markets around the world are very, very oversold and most oversold since February, March 2009 and 1987," Faber said. "(It) doesn't mean that they can't go lower, but I think they will rebound." Faber, however, changed his bearish view. He still expects the S&P 500 to drop to 1100 by October, but he says the selloff came even earlier than he had expected. "The strategists in the US, mostly brainless people, who are predicting S&P between 1400 and 1500 by year end, I think they will have to re-adjust their views and I think the markets may actually go lower.

London Police Running Out Of Space As City Licks Wounds (CNBC)
The number of people people in custody numbered 450 Tuesday, after riots spread from Tottenham in North London to engulf Croydon, Brixton and Lavender Hill in the south and Hackney in the east. In London 44 police officers were injured, several seriously, as rioters and looters lashed out with bottles, bricks, firebombs and vehicles. Fourteen members of the public were also hurt, the Metropolitan Police Service (MPS) said, as violence hit "disturbing" levels. One man was shot in Croydon.

Blackberry Messages Probed Amid London Riot (Bloomberg)
Research In Motion said it is assisting London police investigating claims the company’s messaging service was being used by rioters to plan disturbances. After a third night of violence and looting, police will also review the role of messages sent using other popular networking systems, including Twitter. “It is clear that technology is being used, including in demonstrations, to direct people and undermine the police,” deputy assistant commissioner Stephen Kavanagh said yesterday. “It is not for us to moan about this, but to adapt policing style and deal with it.”

G-20 Members Turn Up Intervention Volume (WSJ)
In Brazil, Luiz Pereira, director of international affairs at the Brazilian Central Bank, said after conference calls with other G-20 officials "there's a willingness to think about coordinated measures."

Freddie Mac Seeks $1.5 Billion From Tax Payers (Reuters)
The company reported a comprehensive loss in the second quarter of $1.1 billion. Despite income of $1 billion, the company registered a net worth deficit of $1.5 billion. That is in part because it was required to pay dividends worth $1.6 billion to the Treasury. As a result, the cost to taxpayers of its rescue declined by $100 million this quarter.

Einhorn In Scoring Position For 17% Stake In Mets (NYP)
The new deal will buy Einhorn a 17 percent stake in the team, sources said. He will also become a limited partner, one source said. If he is repaid in full, he will retain that 17 percent stake -- in exchange for the cost of using the money for five years. While the newly structured deal gives Wilpon and Katz more breathing room to repay Einhorn and a greater chance of attracting more cash by selling another minority stake in the team down the road, it also includes a sweetener for Einhorn, sources said. The hedge-fund executive still retains the right to buy, for a token amount, a majority stake in the team if Wilpon and Katz fail to repay the investment.

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Deutsche Profits Big On Libor Bets (WSJ) Deutsche Bank made at least €500 million ($654 million) in profit in 2008 from trades pegged to the interest rates under investigation by regulators world-wide, internal bank documents show. The German bank's trading profits resulted from billions of euros in bets related to the London interbank offered rate, or Libor, and other global benchmark rates. ECB Stands Pat On Rates (WSJ) The ECB's Governing Council decided to keep Europe's most important interest rates at their lowest levels since the single currency was introduced in 1999, encouraged by a clear improvement in financial-market sentiment over the past month and by tentative signs of growing confidence in the euro-zone economy. Rivals Clash As Inquiry Into Herbalife Opens (WSJ) Daniel Loeb's hedge fund disclosed Wednesday it owns an 8.2% stake now valued at $350 million in nutrition-supplements company Herbalife Ltd. Mr. Ackman's Pershing Square Capital Management LP has bet more than $1 billion against the company by shorting its stock…The face-off between two high-profile, media-savvy hedge-fund managers highlights the arrival of a new wave of postcrisis financial stars. They tout their positions during television interviews and at conferences, in letters or securities filings and on customized Web pages, often convincing other investors to follow their lead. Their pronouncements move stocks, at times dramatically, and leave companies scrambling to respond. And when they take the opposite sides of the same trade the ensuing battle can captivate the financial world. "One of them is going to be very wrong," said Gregg Hymowitz, founder of the $8.2 billion EnTrust Capital, a longtime investor with both Mr. Ackman and Mr. Loeb's firms. "Ackman thinks it's a complete and utter fraud, and Dan thinks it's a completely legitimate business." Hedgie's Herbalife Bet Counters Ackman (NYP) [In addition to Loeb], Carl Icahn is also believed to have taken a long position in Herbalife, sources said. The possibility of Loeb and Icahn going up against Ackman’s Herbalife short sent investors into a tizzy. “It’s going to be an Ackman sandwich,” one hedge fund manager wailed. Lew Taking Over at Treasury Puts Perennial Aide at Head (Bloomberg) With his penchant for thinking several steps ahead, his organizational drive and his budget expertise, Lew, 57, has been Obama’s consummate aide. Now, he’s Obama’s choice for Treasury secretary, according to a person familiar with the process. Lew faces the prospect of becoming a leader at a critical juncture for the nation’s economic and fiscal future. “As chief of staff you are staff and as Treasury secretary, you are principal -- Jack has to make that transition,” said Ken Duberstein, a chief of staff to former President Ronald Reagan who first met Lew in the 1980s. “It’s not the invisible hand, it is the visible hand.” If confirmed, Lew may need to play that hand as soon as next month, when the administration squares off with Congress over the U.S. debt ceiling. Lew’s job will be all the more difficult because his relations with House Republicans soured during the 2011 battle over the government’s borrowing limit. Government's worst signature will be on America's dollar bills (NYP) Lew’s signature — which looks like a strand of hair gone though a curler treatment — might even be too peculiar to grace our greenbacks, political insiders said. “Whoa! That’s completely unintelligible,” said a Senate finance aide. “This doesn’t look like anyone’s name at all.” She concluded, “Oh my gosh — I’ve never seen a signature like that.” ome social-media users were also quick to poke fun, saying Lew should clean up his squiggle. “HE GOT A CRIZZAZY SIGNATURE!!!!” one Twitter user wrote. Another tweeter quipped, “Looooooo!” But just because his autograph looks it’s penned by a drunken 3-year-old doesn’t mean it isn’t lovable, others said. Some fans created a petition on the White House’s Web site called “Save the Lewpty-Lew!” “We demand Lew’s doodle on every dollar bill in circulation,” the petition read. It had garnered 10 signatures by late yesterday…Asked yesterday if Lew had been practicing to improve his signature, presidential press secretary Jay Carney, said, “Not that I’m aware of.” Cantor Growth Plan Sputters as 41% of Touted Hires Exit (Bloomberg) Chief Executive Officer Howard Lutnick’s drive to turn one of the largest independent U.S. brokerages into a rival to Wall Street’s investment banks has been pocked with dismissals and defections. Forty-one percent of the 158 traders and bankers whose hirings Cantor announced in news releases since 2009 have left, industry records show. In interviews, 19 current and former employees blamed Cantor’s reluctance to commit money to deals and pressure to turn immediate profits. Norfolk 911 calls for 'baby lion' turn up a coiffed dog (HR) The first caller was fairly calm. “I’d like to report a lion sighting,” he said. “Say that again?” a dispatcher responded. And thus began the drama over baby lion sightings in Norfolk on Tuesday. Police said Wednesday that they actually got three 911 calls about the “lion.” The first came at 10:19 a.m. The animal was running on Granby Street, a male voice said. Then a woman took the phone. She sounded anxious as she described the proximity to the zoo. “There was a lion that ran across the street. A baby lion. It was about the size of a Labrador retriever.” It was near Granby and 38th, she said. “It’s roaming loose in the neighborhood.” A second call came five minutes later. “I just saw an animal that looked like a small lion.” It had “the mange and everything,” a man said. He had seen it on Delaware Avenue near Llewellyn Avenue. “I don’t know if it got away from the zoo, or what,” he said. The dispatcher said they already had received a report. “I’m not sure if it actually is a lion or not, but I’ll update the information.” A third call came at 1:19 p.m. “I just saw a baby lion at Colley Avenue and 50th Street,” a man reported. “What kind of animal?” the dispatcher later asked him. “A lion. A baby lion, maybe.” The lion was going to nearby houses. “I don’t think it has caused any problem so far,” said the caller. “OK. You think it’s looking for food?” the dispatcher asked. “I don’t know.” By now, most folks know that the “baby lion” was actually Charles the Monarch, a Labrador-poodle mix owned by Daniel Painter, who lives in Riveriew and has a garden center on Colley Avenue. He has the dog groomed to look like the Old Dominion University mascot. Many people say they see Charles out a lot, especially on Colley. But to someone who hasn’t seen him, he sure doesn’t look like a dog at first. PE King Black Is Hungry For Hostess (NYP) Black’s Apollo Global Management has teamed with veteran food executive C. Dean Metropoulos on a potential bid for bankrupt Hostess Brands’ snacks business, which includes Twinkies, Ding Dongs and Ho Hos…Hostess is in the process of selling off its iconic brands and liquidating the company after a crippling strike by its bakers union forced it to shut down in November. The Irving, Texas-based company plans to hold separate auctions for its bread and snack businesses. Hostess is just a few days away from choosing a so-called stalking horse bidder for its bread brands, including Wonder Bread, Nature’s Pride and Butternut. The snack business will follow suit later. 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Obama’s 81% New York City Support is Best in 114 Years (Bloomberg) President Barack Obama won more support from New York City in November’s election than any White House candidate in more than 100 years, according to a final tally of votes. Obama beat Republican challenger Mitt Romney by 81 percent to 18 percent in the nation’s largest city, according to a certified vote count released Dec. 31 by the state board of elections. Some New York ballots were counted late in part because of complications caused by Hurricane Sandy. Yum Brands Apologizes For Chicken Probe (WSJ) Yum Brands's China chief executive apologized to consumers after negative publicity surrounding an official probe into chicken purchased from local suppliers caused sales to tumble at the company's KFC chain. Yum failed to address problems quickly and had poor internal communications, Sam Su said in a statement posted on the company's official account on Sina Corp.'s Twitter-like Weibo microblog service. He said the company would strengthen its management and oversight of suppliers. "We feel regretful for all the problems," Mr. Su said in the statement. "I sincerely apologize to the public on behalf of the company." Swiss Banks Welcome Rejection of Germany Tax Accord, Study Shows (Bloomberg) Swiss banks welcome the collapse of an accord with Germany that would have imposed new taxes on German clients in a bid to end a dispute over tax evasion, Ernst & Young said. About 72 percent of 120 Swiss banks surveyed see the demise of the agreement as positive, Ernst & Young said in a report today. How Jawboning Works (WSJ) The clearest example comes from Europe. In July, Mario Draghi, president of the European Central Bank, defused an intensifying crisis of confidence in the euro with two sentences scribbled in the margins of an otherwise routine speech. "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," he said. "And believe me, it will be enough." That may prove to be the most successful central-bank verbal intervention in history. A few weeks later, the ECB pledged to buy bonds of governments shunned by markets if those governments made belt-tightening commitments accepted by fellow euro-zone countries. No government has sought that help so the ECB hasn't spent a single euro. Yet global anxiety about an imminent euro crisis has abated. Beautiful Existence, Seattle Woman, Plans To Eat Only Starbucks For One Year (HP) A Seattle woman, legally named Beautiful Existence, will eat only food from Starbucks this year. She'll also be only drinking beverages from Starbucks as well, but will include drinks from Tazo Tea and Evolution Fresh since both fall under the Starbucks brand. Beautiful Existence cites several reasons for this endeavor. She explains them on her blog: "So how can eating only one company’s products impact me, anybody? Well Mr. McDonald’s already proved that question years ago with his documentary and Mr. Subway did his take on the loosing weight portion of the food challenges too. But when I watched those guys doing their thing I asked myself “where are the WOMEN challenging themselves in the world?” “Where are the effects being shown on a woman’s culture? A woman’s family & children? A woman’s diet, weight, fashion, checkbook, community and world through challenges?” “Where is HER VOICE on how an international company is directly or indirectly impacting everything from her waistline to her bottom line and every other woman’s, man’s, child’s, societies and planets world with their presence?” So far, Existence has really liked the Turkey Rustico Panini and is trying hard not to eat any of the baked items.

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