Holiday Bell: 12.28.11

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Internal BNY Mellon Documents Show Panic (WSJ)
An informant in a state fraud case against Bank of New York Mellon Corp. has provided prosecutors a rare inside peek into how the bank allegedly scrambled to contain the fallout from a fast-growing government investigation, according to hundreds of pages of confidential documents. As investigators sought to determine whether the bank overcharged clients to execute their currency trades, a senior BNY Mellon executive nicknamed "Rambo" urged traders not to tell clients how much money they made on trading, according to the informant. Bank officials worried clients would switch to negotiating their own foreign-exchange trades, where the bank's profit margin was far lower, an internal bank memo states. The bank also altered its website, changing the wording of its trading practices. And when a veteran bank official heard about the government investigation, she said: "It's over, it's all over," according to the informant.

Hedge-fund executive Steven Cohen is bidding for the Dodgers (LA Times)
Cohen...has engaged one of America's notable sports architecture firms to propose renovations to Dodger Stadium, allied himself with one of baseball's power brokers, secured the support of at least two prominent Angelenos and met with several major league owners. He was joined in those meetings by Arn Tellem, an influential sports agent who could run the Dodgers if Cohen were to buy the team. The developments were confirmed by several people familiar with the Dodgers sale process, each of whom said he could not comment publicly. Jonathan Gasthalter, a spokesman for Cohen, declined to comment. Cohen is among the first bidders submitted to Major League Baseball for approval, according to a person familiar with the process but not authorized to discuss it. Initial bids for the Dodgers are due Jan. 13.

Facebook to Lead Biggest U.S. Internet IPO Year Since 1999 (Bloomberg)
Facebook Inc. and Yelp Inc. are set to lead the biggest year for U.S. initial public offerings by Internet companies since 1999, testing demand for IPOs after investors lost money on Zynga Inc. and Pandora Media Inc. With Facebook considering the largest Internet IPO on record and regulatory filings showing that at least 14 other Web-related companies are planning sales, the industry may raise $11 billion next year, according to data compiled by Bloomberg. That would be the most since $18.5 billion of IPOs in 1999, just before the dot-com bubble burst.

Woes Weigh On Sears, Eddie Lampert (WSJ)
The 49-year-old Mr. Lampert has struggled to retain qualified executives: Under his watch, the company c-suite has become a revolving door. Stores have been criticized for showing their age. Its once highflying shares—which peaked at $191.93 in April 2007 amid speculation that Sears would be an investment vehicle for Mr. Lampert akin to Warren Buffett's Berkshire Hathaway Inc.—plunged 27% to $33.38 Tuesday. They have lost more than half their value this year and are down 73% since the merger closed in March 2005. The market capitalization of Sears by the end of Tuesday had dropped to $3.6 billion. That is far from what Mr. Lampert envisioned when he launched an $11 billion purchase of venerable Sears, using money from Kmart, a company he had steered out of bankruptcy earlier in the decade. He predicted the merger would create a "powerful leader in the retail industry."

Japan Renews Pledge To Act Over Yen (WSJ)
In its semiannual report on foreign exchange, the Treasury also repeated its assertion that China's yuan is undervalued but again stopped short of declaring China to be a currency manipulator. But it was the harsh language toward Japan that came as a surprise to the foreign-exchange market. It also appeared to put Japanese officials on the defensive. "There is no change in our thinking regarding Japan's foreign-exchange policy, and there is no change in our stance that we will respond to excessive rises in the yen," a senior Japanese government official told reporters. "We have informed [Japan's foreign counterparts, including the U.S.] of that point through various channels, and we will explain it whenever that becomes necessary."

Get set for DSK: the movie (NYP)
Director Abel Ferrara is working on a film inspired by Dominique Strauss-Kahn, with French actor Gerard Depardieu playing the former International Monetary Fund chief who was embroiled in a sex scandal, Deadline.com reports.

Chile daily must pay readers for exploding churros (AP)
Chile's Supreme Court has ordered a daily newspaper to pay $125,000 to 13 people who suffered burns while trying out a published recipe for churros, a popular Latin American snack of dough fried in hot oil. The publisher of La Tercera must pay individual damages ranging from as little as $279 to $48,000 for one woman whose burns were particularly severe. The high court's ruling was announced Monday, seven years after the readers burned themselves while trying out the recipe. Judges determined that the newspaper failed to fully test it before publication, and that if readers followed the recipe exactly, the churros had a good chance of exploding.

Euro Seen Having Another Bumpy Ride in 2012 (CNBC)
“The problems with the euro will express themselves most clearly against the dollar,” Simon Derrick, chief currency strategist, BNY Mellon, said. “I thought we would bottom out towards the end of this year, but that looks optimistic now.” He believes the euro will finish 2012 in the low 1.20 range against the dollar.

Hedge-Fund Millionaire Diggle Bets on Farms, Life Sciences (Bloomberg)
Stephen Diggle, who co-founded a hedge fund that made $2.7 billion in 2007 and 2008, plans to open his personal farmland portfolio to investors and start a fund that will trade life-sciences companies. Diggle will transfer the farm assets from his family office to Singapore-based Vulpes Investment Management, which he set up in April after liquidating his previous firm’s volatility funds. Diggle’s family also holds “significant stakes” in life sciences, including biotechnology companies, which will be moved to a fund he plans to set up next year, the 47-year-old said. “Everything that we are investing in personally is available to investors,” Diggle said in an interview. “We have got capital committed, we are focused on a number of things where we think there’s a compelling opportunity to make money.” Diggle is widening his new firm’s investments after starting a volatility fund in May and taking over the Russian Opportunities Fund and Testudo Fund from Artradis Fund Management Pte, which he and co-founder Richard Magides closed in March. Once Singapore’s biggest hedge-fund manager, Artradis’s funds, which sought to profit from price swings, lost $700 million as volatility declined in 2009 and 2010. “The one thing I didn’t want to do was to spend the rest of my life talking about how great 2008 was,” Diggle said. “You have to move on and find new challenges. That’s what gets you up in the morning.”

BofA, Debt Collector Harassed Widow (WSJ)
Bank of America Corp. and a debt collector it hired to go after deceased customers' debts violated state law by repeatedly calling a Florida woman about paying the credit-card bill of her late husband, a Florida state-court judge ruled this month. Judge Keith R. Kyle in Lee County, Fla., found that collection attempts by West Asset Management, an Omaha, Neb., firm working on behalf of Bank of America, amounted to harassment.

Obama Picks Bipartisan Pair For Fed Board (WSJ)
The nominees are Jeremy Stein, 51 years old, a Ph.D. economist who did a five-month stint in the Treasury and White House early in the Obama administration, and Jerome Powell, 58, who was undersecretary of the Treasury for domestic finance under President George H.W. Bush. If confirmed by the Senate, Mr. Stein would bolster the Fed's academic expertise in both monetary policy and financial regulation. Mr. Powell, who has worked in investment banking in New York and private equity in Washington, D.C., would fill a different niche; the Fed board has been without a Wall Street veteran since Kevin Warsh, a Morgan Stanley alumnus, left in April.

N. Korea Has Huge Funeral for Kim; World Watches Anxiously (Reuters)
Bleak pictures from state television showed a funeral cortege led by a limousine carrying a huge picture of the 69-year old, who died on Dec. 17, passing serried ranks of olive green-clad soldiers whose bare heads were bowed in homage in the main square of the snow-covered capital. A hearse carrying the coffin was led by a weeping Kim Jong un, the son and heir, accompanied by Jang Song-thaek, his uncle and a key power-broker in the transition, and Ri Yong-ho, the army chief of staff. "Seeing this white snow fall has made me think of the general's efforts and this brings tears to my eyes," Seo Ju-rim, a red-cheeked, weeping female soldier, told North Korean television, referring to Kim. One of the myths surrounding Kim Jong-il was that he could control the weather and state media has reported unusually cold and wild weather accompanying his death.

Wendy’s Adds Foie Gras Burger in Japan Return (Bloomberg)
Wendy’s Co., the third-biggest U.S. fast-food chain, added goose-liver pate and truffles to burgers as it invests as much as $200 million on a return to Japan two years after leaving the country. The Japan Premium sandwich sells for 1,280 yen ($16) at Wendy’s in Tokyo’s Omotesando luxury shopping district, the first of a targeted 100 shops. “We think the fast-food market here is ready for something different,” Ernest Higa, chief executive officer of Wendy’s Japan LLC, said in an interview at the restaurant’s opening yesterday.

Programming Note: We’re on an abbreviated vacation-esque schedule this week (opening/closing wraps and limited updates whenever the urge to reach out and touch you moves us). We still want to hear from you, though, so if anything happens that you think might tickle our fancy, do not hesitate to let us know.

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By Gage Skidmore from Peoria, AZ, United States of America (Make America Great Again hat) [CC BY-SA 2.0], via Wikimedia Commons

Holiday Bell: 9.1.17

Introducing the MAGA ETF; subprime is back, baby; Steve Cohen is once again raising eyebrows; floating masses of fire ants are stalking the waters around Houston; millennials are killing language as we know it; and more.

Holiday Bell: 12.26.12

Budget Talks Cloud Outlook (WSJ) Lawmakers returning to town this week will see whether they can agree on a plan to avoid the full brunt of the fiscal cliff, the combined $500 billion in tax increases and spending cuts set to begin next week. Little if any progress was made in the talks before Congress and President Barack Obama left town last Friday for Christmas. The president plans to leave his vacation in Hawaii late Wednesday night, returning to Washington on Thursday, the White House said. Aides in both parties say they expect a potential solution to start taking shape by the end of the week. But with so little time, hopes are dimming for anything other than a partial agreement, which would prolong the uncertainty and leave in place some tax or spending measures that act as a serious drag on the weak recovery. This could even trigger another recession, exacerbating the global economic slowdown. Grand Bargain Shrinks as Congress Nears U.S. Budget Deadline (Bloomberg) “At this point there’s zero percent chance of a big deal and maybe a 10 percent chance of a small deal before Jan. 1,” said Stan Collender, a former staff member of the House Ways and Means Committee and the House and Senate Budget committees who is now at Qorvis Communications in Washington. He has predicted a no-deal scenario since before Memorial Day, and said the past two weeks of inaction reinforced his projection. At this point, Collender said, whether the Senate moves first won’t matter. “Nothing will move House Republicans if they don’t feel like getting moved,” he said. “They’ve never been swayed by the Senate before.” The remaining option for averting the cliff, he said, would be if Boehner risks his House speakership to put to the floor a tax deal that would get a majority of Democrats to support it and few -- perhaps less than 50 -- Republicans. “The Republican caucus would never forgive him,” he said. “The statesmanlike thing to do would be to say I’m the speaker of the House, not the head of the Republican party. That is the equivalent of never running for speaker again.” Some 'Cliff' With Your Coffee? Starbucks Urges Unity (Reuters) Chief Executive Howard Schultz is urging workers in Starbucks' roughly 120 Washington-area shops to write "come together'' on customers' cups on Thursday and Friday, as U.S. President Barack Obama and lawmakers return to work and attempt to revive fiscal cliff negotiations that collapsed before the Christmas holiday. Herbalife Goes On Offensive (WSJ) Herbalife Ltd. said it has hired a strategic adviser and will hold an analyst and investor meeting next month in an effort to thwart a wave of criticism reignited by investor William Ackman. In addition, Herbalife is working with law firm Boies, Schiller & Flexner LLP in connection with the dispute, according to people familiar with the matter. It wasn't immediately clear what kind of counsel Boies Schiller might provide...The company's moves, announced Monday, come after Mr. Ackman last week revealed that his firm has been betting against Herbalife shares for months in a negative wager that he characterized as "enormous." He also said the nutritional-supplement maker operates as a "pyramid scheme." He said distributors, or salespeople, for the Los Angeles-based company make more money by recruiting other distributors than by selling the company's diet and nutritional products. Herbalife last week called Mr. Ackman's stance "a malicious attack on Herbalife's business model based largely on outdated, distorted and inaccurate information." NJ Pension Fund Sues NYSE-Euronext on ICE Deal (Reuters) The New Jersey Carpenters Pension Fund on Friday filed a complaint in New York State Supreme Court in Manhattan contending that NYSE-Euronext breached its duty to maximize returns for shareholders. The lawsuit seeks class-action status on behalf of other NYSE-Euronext shareholders and aims to block the sale. Titan to Withdraw Money From SAC (WSJ) Titan Advisors LLC recently told clients that it had decided to withdraw its entire investment from SAC, said clients who received phone calls from Titan. "They've told us they still think SAC is a good firm but Titan doesn't need the headline risk, and we sure don't," said Tom Taneyhill, executive director of the Fire & Police Employees' Retirement System of the City of Baltimore, on Friday...Titan's departure is significant given SAC's long-standing relationship with one of Titan's founders. Titan co-founder George Fox began investing in SAC in the mid-90s, several years after Mr. Cohen started what became the firm in 1992. Madoff, in Christmas Eve Letter, Says Insider Trading Has Gone on 'Forever' (CNBC) In a Christmas Eve letter from the medium security federal prison in North Carolina where he is serving a 150-year sentence for running a massive Ponzi scheme, Madoff tells CNBC that insider trading has been around "forever." He also rails against what he calls a lack of transparency in the financial markets, and says the growth of hedge funds is forcing market players to take outsized risks in order to earn decent returns. [...] "(O)ne would be led to believe that with the recent spate of insider trading prosecution that insider trading is a new development," Madoff writes. "This is false. It has been present in the market forever, but rarely prosecuted. The same can be said of front running of orders." Venture Capital to Suppress Its Appetite for Risk in 2013 (WSJ) Internet entrepreneurs have had the upper hand over venture capitalists in recent years but that balance of power is now showing some signs of shifting, a trend that could accelerate in 2013. Spurring the change is a dramatically lower appetite for risk from venture capitalists. Many investors rushed to get into Web startup deals in 2010, 2011 and in the early part of this year, often acceding to entrepreneurs' demands for rising valuations in order to snag a stake in their companies. But following the disappointing stock market performances of recently public Web companies Facebook, Zynga, and Groupon venture capitalists are reining in their spending in areas like the consumer Internet. Israel Hedge Funds Defy Iran Threat Multiplying in Tech Center (Bloomberg) Tal Keinan, an Israeli fund manager, was ready for the question he’s always asked when he met with investors in New York in October: Why put your money with a manager whose country Iran has threatened to obliterate. “We tell them ‘if the Iranians attack, the worst thing that can happen is you lose your money manager not your money’,” Keinan, chief executive officer of Tel Aviv-based KCPS & Company, which oversees $1 billion in assets, said in an interview on Oct. 14. “The notion is trade global markets with global assets and clients, but just do it from Israel because of the concentration of talent here.” The country is becoming a magnet for hedge fund managers as lower operating costs, the world’s highest number of Ph.D.s and hi-tech startups per capita overshadow concern that Israel may be attacked by missiles from Tehran. The number of funds has grown to 60 overseeing about $2 billion from 13 in 2006, according to a survey of the local industry published in July by Tzur Management. Israel may be on track to replicate the growth that propelled Singapore’s industry from fewer than 20 managers in 2001 to 320 overseeing $48 billion in 2009, Yitz Raab, founder and managing partner of the Tel Aviv-based fund administration company, said in an interview on Nov. 11. Even Cupid Wants To Know Your Credit Score (NYT) The credit score, once a little-known metric derived from a complex formula that incorporates outstanding debt and payment histories, has become an increasingly important number used to bestow credit, determine housing and even distinguish between job candidates. It’s so widely used that it has also become a bigger factor in dating decisions, sometimes eclipsing more traditional priorities like a good job, shared interests and physical chemistry. That’s according to interviews with more than 50 daters across the country, all under the age of 40. Report: Hedgies prime for comeback (NYP) Banking giant UBS says so-called active investing could be making a comeback after several years of lagging performance, according to a recent report sent to clients. “Although the recent market environment has been difficult for active managers, conditions appear to be improving,” according to the report by UBS’s wealth-management group, which advises clients on their investment strategies. “We expect this to lead to better manager performance.” London VC Spared Jail After ‘Groin Thrusting’ Sexual Assault On Tube During Olympics (TechCrunch) Stefan Glaenzer, a partner in London VC firm Passion Capital has been spared jail after pleading guilty to, and being convicted of, sexual assault on the London underground during the Olympics period...In November, the former chairman of Last.fm admitted sexually assaulting an American tourist on a packed Central Line train by thrusting his groin into her back, Westminster Magistrates’ Court heard. His defence was that he was under the influence of cannabis. Programming Note: We’re on an abbreviated, vacation-esque schedule this week (opening news roundups and limited updates whenever the urge to reach out and touch you moves us). We still want to hear from you, though, so if anything happens that you think might tickle our fancy, do not hesitate to let us know.