Opening Bell: 09.29.11

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Euro Rises as German Lawmakers Vote to Approve Expansion of Bailout Fund (Bloomberg)
The vote in Berlin on changes to the EFSF allows the fund to buy the bonds of distressed member states and offer emergency loans to governments, raising Germany’s guarantees to 211 billion euros from 123 billion euros.

Bernanke says Fed would act if inflation falls (Reuters)
In his first public remarks since the Fed launched a fresh measure aimed at keeping down long-term borrowing costs, Bernanke indicated a willingness to push deeper into the realm of unconventional policy if economic growth remains anemic. ... "If inflation falls too low or inflation expectations fall too low, that would be something we have to respond to because we do not want deflation," Bernanke said.

Greek debt holders object to new deal threat (FT)
A person intimately involved in the deal accuses officials in countries such as Germany and the Netherlands who want to increase the haircuts of engaging in activity that is “pretty close to market manipulation”. He argues that prices have collapsed because politicians have increasingly talked of default and bigger losses.

An Investment Banker’s Fortunes Rise With Brazil’s (NYT)
Yet possibly no one embodies the financial ascent of Brazil better than Mr. Esteves. At 43, he has built BTG Pactual into Brazil’s largest independent investment bank and has amassed a fortune estimated at $3 billion by Forbes magazine. Still, he has driven the same Mercedes pickup for four years and takes only two weeks of vacation a year. ... The BTG in BTG Pactual stands for banking and trading group. But Mr. Esteves says it also stands for “back to the game,” because he bought the company back from UBS. When someone suggested that it could mean “better than Goldman,” he just laughed.

Crook busted after robbing same bank for third day in row (NYP)
After the second heist, the suspect’s security-camera photo was put up in police stations and published in yesterday’s Post. Still, he couldn’t resist taking a third shot at the bank yesterday. Just after 9 a.m. he passed a demand note that said, “I have a gun put all the money in the bag.” “It was the same dumbass who hit us yesterday,” said one worker. “He was huge.”

Business attacks transaction tax plan (FT)
The British government said a financial transaction tax could only work if it were implemented globally. The UK CBI employers’ group attacked the tax plan as a “crude instrument” that would divert trading activity to New York and Hong Kong. “The Commission’s decision to press ahead with a financial transaction tax is completely misguided at a time when it’s clear that Europe needs a relentless focus on growth,” said Neil Bentley, the CBI’s deputy director-general.

H-P Hires Banker In Defense Move (WSJ)
Goldman was recently brought on board to help H-P formulate defenses in case it becomes the target of shareholders seeking change, the people added. Typically, companies with such a concern put in "poison pills" – shareholder rights' plans that make takeovers more difficult for activist investors. ... Analysts have said H-P's seeming lack of direction, the management-related instability, as well as the potential for restructuring its portfolio of hardware and software assets, make the company an attractive target for investor activism.

Pepper-spray videos spark furor as NYPD launches probe of Wall Street protest incidents (NYDN)
NYPD Commissioner Raymond Kelly said Internal Affairs and the Civilian Complaint Review Board will investigate. He was skeptical the video snippets show the whole story. "In my experience, proponents of a certain position would show you just what they want to show you," Kelly said. "Hopefully, [probers] will look at the totality of the information that they will gather."

Fund Goes Down Blind Alley (WSJ)
Real-estate developer Stephen Ross and his partners spent more than a year digging into U.S. banks, including more than 100 with loans to local bakeries, gas stations and amusement parks. They hoped to spend about $1.1 billion buying or investing in lenders. But the deeper they went, the worse things looked. As a result, Related Cos., the New York firm in which Mr. Ross is chief executive, gave back the money it raised from roughly 150 investors, including hedge-fund manager David Einhorn.

Interns, Unpaid by a Studio, File Suit (NYT)
One plaintiff, Alex Footman, a 2009 Wesleyan graduate who majored in film studies, said he had worked as a production intern on “Black Swan” in New York from October 2009 to February 2010. He said his responsibilities included preparing coffee for the production office, ensuring that the coffee pot was full, taking and distributing lunch orders for the production staff, taking out the trash and cleaning the office. “The only thing I learned on this internship was to be more picky in choosing employment opportunities,” Mr. Footman, 24, said in an interview. “ ‘Black Swan’ had more than $300 million in revenues. If they paid us, it wouldn’t make a big difference to them, but it would make a huge difference to us.”

Wrong Button Sends ANA Jet Upside Down (WSJ)
All Nippon Airways Co. narrowly escaped a catastrophe earlier this month when its plane almost flipped over after a co-pilot hit the wrong button while trying to open the cockpit door for the plane’s captain, returning from the restroom.

Chris Christie: Is New Jersey Governor Too Overweight to Become President? (ABC)
Political scientists and strategists said they could not recall a truly heavy American politician finding great national success in the television age. "Our candidates tend to be tall, they tend to have great hair," said Russell Riley, a presidential scholar at the University of Virginia's Center of Public Affairs. "This doesn't seem to be a business that, at the presidential level, willingly accepts people who are demonstrably overweight.

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Opening Bell: 09.04.12

Moody's Gives EU Warning (WSJ) Moody's Investors Service has put the European Union's triple-A credit rating on a negative outlook in a move that reflects actions the ratings firm has taken on some of the euro-zone's largest members, including Germany and the Netherlands. "Moody's believes that it is reasonable to assume that the EU's credit-worthiness should move in line with the credit-worthiness of its strongest key member states considering the significant linkages between member states and the EU," Moody's said in a release. Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain (NYT) After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Julio Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks. “The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.” In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system. According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier. Europe Bank Chief Hints At Bond Purchases (WSJ) The comments by Mario Draghi in a closed hearing at the European Parliament on Monday came ahead of the ECB's monthly policy meeting Thursday. That meeting has been keenly awaited in the financial markets for further details of how the bank could help bring down the funding costs of countries such as Spain and Italy to prevent them from having to seek full euro-zone bailouts like Greece, Ireland and Portugal. Switzerland Flirts With Recession (WSJ) "Three months ago, the Swiss economy looked charmingly strong against the backdrop of the euro zone and now it is looking on the brink of recession," said Janwillem Acket, chief economist at Julius Bär in Zurich. Nigeria Uncovers Cocaine-Stuffed Roasted Chicken (AP) The roasted chickens had an unusual stuffing — $150,000 worth of cocaine, according to Nigerian police. A Nigerian mechanic who struggled in Brazil for more than six years had hoped the drugs would buy him a life of luxury in his native land, Nigerian authorities said Monday. "This was like a retirement plan for him," said Mitchell Ofoyeju, spokesman for the National Drug Law Enforcement Agency. The accused was arrested over the weekend at the airport in Lagos after he came in from Sao Paulo with 2.6 kilograms (5.7 pounds) of cocaine, Ofoyeju said. Photos from the agency showed egg-shaped packages wrapped in gold aluminum foil and tucked into the browned chickens. Citibank Hid Firm’s Financial Troubles, Ex-Partner at Dewey & LeBoeuf Says (NYT) In a recent court filing, the former partner, Steven P. Otillar, says Citibank conspired with Dewey's management to hide the law firm's true financial condition in the months before its collapse. Mr. Otillar made the claim in response to a lawsuit brought against him by Citibank seeking repayment of a $210,000 loan. The bank lent Mr. Otillar the money to pay for his capital contribution to Dewey when he joined the partnership in August 2011. (New partners typically must make a financial contribution to a law firm when they join.) The filing said that Citibank had extended Mr. Otillar the loan as part of a fraudulent scheme intended to benefit Citibank and Dewey's management. By recruiting him and other partners to join the financially troubled firm in the months leading up to its demise—and collecting millions of dollars from them—Dewey's partners enriched themselves and kept the firm afloat. Credit Suisse Exec Facing Arrest Order (Reuters) A judge in Argentina has ordered the arrest of Credit Suisse executive and former US Treasury Undersecretary David Mulford because he failed to testify over a 2001 Argentine debt swap, the state news agency reported today. Federal Judge Marcelo Martinez de Giorgi will ask Interpol to issue an international arrest warrant seeking Mulford’s extradition for questioning over the bond exchange carried out by the government in an unsuccessful bid to avoid default. Bernanke Channeling Hatzius Dismissing Gross New Normal (Bloomberg) Federal Reserve Chairman Ben S. Bernanke is betting the new U.S. economy is the same as the old one as he lays out arguments for more stimulus to revive it. He made that diagnosis last week in a rebuttal to those who blame an 8.3 percent unemployment rate on structural shifts in the economy wrought by the financial crisis and who contend joblessness is permanently elevated. “I see little evidence of substantial structural change in recent years,” Bernanke told fellow central bankers and economists at the annual monetary-policy symposium in Jackson Hole, Wyoming. “Following every previous U.S. recession since World War II, the unemployment rate has returned close to its pre-recession level.” Ice Picks Are Still Used As Weapons (NYT) Mann Rosa, 32, who lives on Perry Avenue about a block from the scene of the recent attack, said ice picks were back in vogue among street gangs all across the city. “The ice pick, from what I know, is the new thing,” Mr. Rosa said, noting how easy it was to buy and conceal. “It’s definitely the new wave.” Toward the end of the conversation, almost as if he had an afterthought, Mr. Rosa said he had been stabbed repeatedly with an ice pick about two years ago during a street fight. He rolled up the sleeve of his T-shirt to reveal two dime-size wounds, not unlike scars from a smallpox vaccination, on his shoulder and upper arm. “I was stabbed once in the chest, once in the back and twice in the arm,” Mr. Rosa said; it took 12 stitches to close the wounds. Asked if the police ever caught the perpetrator, Mr. Rosa laughed and shook his head. “We got this thing called street justice. We don’t go to the cops over something like that.”