Holiday Bell: 12.29.11

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Dithering at the Top Turned EU Crisis to Global Threat (WSJ)
In April, after a year of drama and bailouts, the euro zone seemed to have contained the immediate crisis to Greece and other small countries. Crucially, euro-zone economies such as Spain and Italy had avoided the panicked flight of capital. They were still able to borrow money at affordable rates in the bond market. But by July, the rift among euro-zone leaders over who should bear the burden of Greece's debt had prompted investors to shun all financially fragile euro nations. Like a wildfire, the spreading uncertainty threatened to engulf the whole of Europe's indebted south, to outstrip the resources of its richer north and to burn down the symbol of Europe's dream of unity, its single currency.

US jobless claims rise to 381,000 (FT)
New claims for jobless benefits rose by 15,000 to 381,000 in the week ending December 24, the labour department said on Thursday, higher than the 375,000 economists had forecast. Analysts said volatility tends to be higher over the holidays as some employers, such as retailers, bring on temporary staff to help with the Christmas rush. But the four-week moving average of claims continued to decline, dropping to 375,000, the lowest level since June 2008. Analysts say that a trend below 400,000 is consistent with a growing labour market, and the four-week average has remained below that level for nearly two months. “The unemployment claims data continue to signal that the pace of improvement in the labour market may be gaining momentum,” said John Ryding and Conrad DeQuadros of RDQ Economics.

Alibaba hires U.S. lobbying firm as it eyes Yahoo (Reuters)
Alibaba Group's founder, Jack Ma, said in September he was keen to buy all of Yahoo if the opportunity presented itself. Hiring a Washington lobbying firm could help Alibaba address any U.S. political opposition to a complete takeover of Yahoo by a company from a country that controls and censors the Internet. Chinese companies, such as telecoms giant Huawei Technologies Co, have run into opposition when they have tried to buy U.S. assets over the years. "The national security concern is sometimes just an excuse for commercial concerns for any country, but certainly for the United States," said Mark Natkin, managing director of Beijing-based consultancy Marbridge Consulting. "I don't think there should be a big concern (for Alibaba buying Yahoo). Users may share or keep as much data as they like. If they subscribe to Yahoo and (they know) Yahoo is owned by a Chinese company, they are going to have to make the decision themselves," Natkin added.

Italian bond sale fails to spark markets (FT)
The Treasury in Rome sold €2.5bn of bonds due in 2014 at a yield of 5.62 per cent on Thursday, down from 7.89 per cent at the previous sale on November 29, and priced €2.5bn of 2022 bonds to yield 6.98 per cent, compared with 7.56 per cent on November 29. Italy also sold €2bn worth of bonds due in 2021 and a floating-rate security due in 2018. However, the auction of both the 2014 and 2021 maturity notes fell short of the Treasury’s target, clouding what would otherwise have been a relatively successful follow-up to the six-month bill auction. “Whilst the main focus of the auction was on the 10-year issuance, it was also a chance for people to see the effect the LTRO would have. Overall the results were less than encouraging,” said Nikhil Talwar, a strategist at RBC Capital Markets.

Q: What Does It Take to Get to the Oracle? Buffett Plans Fix After Fidelity Staffers 'Game the System' (WSJ)
Among investors, there are few prizes more coveted than the opportunity to ask Warren Buffett a question at Berkshire Hathaway's annual shareholders meeting. But this year, Fidelity Investments mysteriously claimed more than its fair share. ... "There's no question they figured out how to game the system," Mr. Buffett says. He said he didn't like Fidelity's ploy because "it's not in the spirit of the meeting." ... Other regular pilgrims to Omaha say the meeting's dirty little secret is that, with a little planning, it is not that hard to get microphone time. Whitney Tilson and Glenn Tongue, managing partners of New York investment firm T2 Partners LLC, both asked questions this year after taking part in a drawing held in an "overflow room," a ballroom with a video link that accommodates hundreds of attendees who arrive late or can't find seats in the main auditorium. Mr. Tilson, who has also asked questions in previous years, says he noticed some time back that few people in the overflow room signed up for the opportunity. He says he has long watched the meeting from that location simply "because it's less chaotic and more comfortable." ("He figured out the weak link," observes Mr. Buffett.)

The Houses of the Hopefuls (NYT)
[Newt Gingrich's] 5,206-square-foot stone mansionette, built in 1987, sits on a cul-de-sac in McLean, Va.. The photo of the Gingriches’ master bathroom on the Web site of their designer, Ann Kenkel, indicates that the couple’s style tends toward the ornate. The floors are marble, the long lacquered vanity is topped with dark granite, with gold fixtures. The room is lighted by brass sconces and a chandelier, the windows are dressed in brown fringed swag valances. And, of course, there are all the mirrors, which make simply emerging from the shower an act of supreme self-confidence.

Samoa and Tokelau to Skip December 30 (AP)
The tiny South Pacific nation of Samoa and its neighbor Tokelau will jump forward in time on Thursday, crossing westward over the international date line to align themselves with their other 21st century trading partners throughout the region. At the stroke of midnight on Dec. 29, time in Samoa and Tokelau will leap forward to Dec. 31 -- New Year's Eve. For Samoa's 186,000 citizens, and the 1,500 in Tokelau, Friday, Dec. 30, 2011, will simply cease to exist. ... Under a government decree, all those scheduled to work on the nonexistent Friday will be given full pay for the missed day of labor.

Jim Rogers: Little Reason for Optimism in Anything but Agriculture (CNBC)
World markets may be riddled with uncertainty, but billionaire investor Jim Rogers anticipates gains in one sector for years to come. “If I were buying anything I’d be buying agricultural commodities,” he says. “Going forward we’re going to have huge shortages of everything – including farmers – I think ag will be a great place for the next 10-20 years,” he says. ... “I’m short emerging markets, short American technology, short European stocks – I don’t see much reason to own equities,” he says. ...If his thesis doesn’t hold and the economies of the world improve, “I’ll make money in commodities because (increased demand will generate) shortages,” he says. “But if the world doesn’t get better, then governments print money and the way to protect against that is to own real assets.”

MF Global Scrutinized on Money Move (DealBook)
In MF Global’s last days, the brokerage house was frantically winding down trades to shore up its balance sheet and stave off bankruptcy. Investigators are examining whether the firm — as part of that effort — began moving client money to the Depository Trust & Clearing Corporation, a financial intermediary responsible for closing out some of MF Global’s transactions, these people say. The new details bolster claims that MF Global was careless with customer money, regardless of the company’s intentions.

Criminal Charges Are Prepared in BP Spill (WSJ)
U.S. prosecutors are preparing what would be the first criminal charges against BP PLC employees stemming from the 2010 Deepwater Horizon accident, which killed 11 workers and caused the worst offshore oil spill in U.S. history, said people familiar with the matter. Prosecutors are focused on several Houston-based engineers and at least one of their supervisors at the British oil company, though the breadth of the investigation isn't known. The prosecutors assert the employees may have provided false information to regulators about the risks associated with the Gulf of Mexico well while its drilling was in progress, these people said.

Wonk Alert: Stocks Closing The Year Not So Tightly Correlated (MarketBeat)
The Chicago Board Options Exchange S&P 500 Implied Correlation Index, one of the market’s leading measures of correlation, has eased about 10% from its highs in September. The move suggests stocks aren’t trading as much in lock step as they were just a few months earlier. ... “Companies are now starting to be judged more by what they’re saying rather than what the euro is doing,” said Frederic Ruffy, an options analyst at Whatstrading.com. To be sure, the CBOE’s correlation index–which uses options prices to measure how stocks on the S&P 500 move together–is still above 80, an extremely elevated level and one that was commonly seen during the financial crisis.

Maintaining Confidence: Understanding and preventing a major financial institution failure mode (Deus Ex Macchiato)
[Investors] are aware that in a crisis: Investors will fail to roll debt if they are not confident in the health of an institution; and if sufficiently many investors fail to roll an institution’s debt, then that institution may fail. This means that the key question for a funder is not Is the institution I am considering funding solvent? but rather Will most other potential funders consider the institution solvent?

Rose Bowl-bound Oregon lineman Asper saves choking fan with Heimlich at Beef Bowl dinner (NYP)
Oregon lineman Mark Asper was in prime position to deliver the Heimlich maneuver on a Duck fan choking on a rib at a team dinner in California ahead of the Rose Bowl .... Asper put his full 325-pound (147-kilogram) weight into the technique to dislodge the meat from fellow diner Paul Diamond's throat Wednesday evening at the traditional Beef Bowl being hosted at Beverly Hills restaurant Lawry's The Prime Rib. ... Asper, 26, said he initially held back for fear of hurting his fellow guest. "The first heave was a test heave, because the guy seemed a little old, and I didn't want to break his ribs or anything," Asper said. "So, test heave, then it seemed like he could handle the full force, so I popped it out." While Diamond was saved, it came at a minor price. Asper explained, "He came up to me afterward and said 'Hey, man, thanks a lot, but you broke my sunglasses.'"

The burger that refused to die (Windsor Star)
Whenever Melanie Hesketh’s kids get a hankering for junk food, all she has to do is point to the kitchen counter. That’s where she keeps an unwrapped cheeseburger that celebrates its birthday Thursday, and it looks pretty much the same as the day it came off a local McDonald’s grill 12 months ago. Mould, maggots, fungi, bacteria — all have avoided the tempting meal that sits in plain view. “Obviously it makes me wonder why we choose to eat food like this when even bacteria won’t eat it,” said Hesketh. The meat patty has shrunk a bit, but it still looks edible and, with a faint but lingering greasy, leathery odour, she said it “still smells slightly like a burger ... it hasn’t changed much.”

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: 11.23.12

FBI Tried To Flip Trader Against Cohen (WSJ) A year before the government charged Mathew Martoma with insider trading, it tried to get him to turn against his former boss, Steven A. Cohen. Federal agents, including Federal Bureau of Investigation case agent Matthew T. Callahan, turned up at the Boca Raton, Fla., home of Mr. Martoma, a former portfolio manager at an affiliate of SAC Capital Advisors L.P. Agents tried and failed to persuade him to be a cooperating witness in the government's effort to build a criminal case against Mr. Cohen, the founder of SAC and one of the biggest names in the hedge-fund world, said people close to the case...The government's attempt to engage Mr. Martoma as a cooperating witness shows the high level of focus placed on Mr. Cohen, whose $14 billion fund has posted some of the best returns on Wall Street. It also demonstrates how the government has been unable so far to implicate Mr. Cohen in Mr. Martoma's alleged wrongdoing...Each of the two securities fraud charges against Mr. Martoma carry a maximum of 20 years in prison; federal sentencing guidelines, based on the amount of the alleged illegal profits, recommend a sentence of 15 to 19 years. By contrast, most people who have pleaded guilty to insider trading and cooperated with the government have been sentenced to little or no jail time. Mr. Martoma is married with children. "Twenty years is a very long time in prison," said Thomas Gorman, a partner at Dorsey & Whitney LLP in Washington, referring to the sentence Mr. Martoma could serve if convicted. "There will be an enormous amount of pressure to earn a cooperation credit to try to mitigate that." Cohen’s ’Elan Guy’ Martoma Dropped Ethics for Hedge Fund (Bloomberg) Martoma got his undergraduate degree at Duke University in Durham, North Carolina, according to the university registrar. During his first year, he was inducted into Phi Eta Sigma, an honors society for freshmen who attain at least a 3.5 grade point average, according to the university registrar. He graduated in December 1995. Less than two years later, he went off to Harvard Law School in Cambridge, Massachusetts. He wrote two medical-ethics papers, one of which identifies him as a member of Harvard Law’s class of 2000 and as the former deputy director of the National Human Genome Research Institute’s Office of Genome Ethics. He left Harvard in December 1998 without attaining a degree, according to the school’s registrar, and attended Stanford Business School, where he joined three alumni groups including MBA Class of 2003, according to university records. In 2001, he changed his name from Ajai Mathew Mariamdani Thomas...Former colleagues, who asked not to be named because the fund is private, said the Martoma, who stood almost six feet tall, had a quiet demeanor and left little impression except for an outsized trade that earned him the name “the Elan guy.” Trading Case Casts a Deeper Shadow on a Hedge Fund Mogul (NYT) Thus far, any potential evidence against Mr. Cohen is entirely circumstantial. The government's complaint includes e-mails about secretly selling the Elan and Wyeth shares through esoteric methods like algorithms and dark pools. But that is common practice among large, sophisticated funds that do not want to alert competitors or move the stock too much. Moreover, while SAC dumped its large positions in the two stocks quickly - raising the question of what prompted it to do so - Mr. Cohen is known for a rapid-fire trading style. He frequently moves aggressively in and out of stocks while processing gobs of information fed to him by his underlings. It would be difficult for a jury to infer anything incriminating just from the way these trades were executed. The government in this case also lacks the powerful wiretap evidence that it has used to convict dozens others, including Raj Rajaratnam, the head of the Galleon Group. Greek Bond Buyback In Doubt (WSJ) The rally in outstanding Greek bonds has made any buyback plan more expensive, eroding the impact it would have on Greece's debt. It raises the challenge for euro-zone finance ministers to seal a deal at their next meeting on Monday that would both plug holes in Greece's €246 billion ($316.95 billion) bailouts and bring the country's debt load to a more manageable level. S&P Confirms France's AA-Plus Rating (WSJ) The decision removes the immediate threat of another downgrade of France, though S&P kept a negative outlook on the country's debt. That indicates a one-in-three chance of a cut in France's credit rating during 2013. Diamond, Dimon’s Early Risks Made Them Better: Adoboli (Bloomberg) Adoboli, who was jailed Nov. 20 for causing the largest unauthorized trading loss in British history, said in an e-mail exchange with Bloomberg News that Jamie Dimon, Bob Diamond and Yassine Bouhara, the former co-head of global equities at UBS, all lost large amounts of money at some point in their careers. The more senior you are the easier it is to avoid getting slammed to the wall,” Adoboli wrote in a Nov. 14 e-mail. “Funny thing is though, losing money seems to make you better at making money. Perhaps that’s why traders who lose money always get rehired, as long as they still have their risk appetite.” Canada Police Arrest Man Who Told Kids Santa Isn't Real (Star) As Christmas-themed floats slowly rolled down Princess St. during Kingston’s annual Santa Claus parade, an intoxicated man shouted blasphemous lies to shocked children: Santa doesn’t exist. The man, whose gelled hair “looked like a set of devil horns protruding from his head,” was reported to Kingston police, Const. Steve Koopman said. Police arrested a 24-year-old man around 6 p.m. “It was pretty despicable that someone, during this time of the year, would tell kids Santa isn’t real — which of course we would argue,” Koopman said. Higher Gas-Tax Idea Joins Fiscal-Cliff Talks (WSJ) Other industries also are moving to have initiatives attached to a budget deal—as part of either a short-term agreement this year or a longer-term plan reached next year to overhaul spending and taxes. Casinos are pushing a measure to legalize Internet poker games nationally. Small banks are pressing to extend a program that gives unlimited federal guarantees to certain bank deposits. Governors want additional aid to cover destruction wrought by Hurricane Sandy. The financial industry is pushing to loosen regulations on complex financial derivatives. "Basically, you've got a bunch of people waiting in the wings to stick the collection plate out and grab whatever they can grab," said Dan Kish, senior vice president for policy at the Institute for Energy Research, which advocates for free-market energy policies. Jain Gets Silent Treatment as Bankers Eat Humble Pie (Bloomberg) Deutsche Bank co-Chief Executive Anshu Jain says telling people he works in banking is a conversation-killer at parties, as the industry fails to convince the general public that it’s changing. “If you go to a party these days, you’re asked what you do and you say you’re a banker, people go all quiet,” Jain said before a conference on Europe’s finance industry began in Frankfurt. “We’re still the subject of anger.” Judge Rules For Singer (Reuters) A federal judge has ordered Argentina to pay holders of defaulted bonds, including Paul Singer’s Elliott Management, immediately, a blow to the country’s efforts to overcome a 2002 debt crisis that has raised fears of another default. In a ruling Wednesday, Judge Thomas Griesa lifted a previous order stalling payments to so-called holdout investors who refused to take part in two swaps of defaulted debt. Argentina’s president, Cristina Fernandez, has said her government will not pay “one dollar,” and Griesa’s ruling cited threats by Argentina’s leaders to defy his rulings in the decade-old dispute. Germany Halts Swiss Tax Deal (WSJ) The bilateral treaty was vetoed by the left-leaning Social Democrat and Green opposition parties in the Bundesrat, which represents Germany's 16 states. The treaty's opponents argue that it is too lenient on tax evaders. We want a treaty that is "more painful to Swiss banks and German tax evaders," Norbert Walter-Borjans, the Social Democrat finance minister of the German state North Rhine-Westphalia said in a debate in the upper house preceding the vote Friday. A ‘Whale’ of a Chase is on (NYP) JPMorgan Chase turned its chief investment office into a proprietary-trading unit that caused more than $6.2 billion in losses, pension funds said in a revised complaint in their suit against the bank. JPMorgan contended the unit’s primary role was managing risk when in fact it was engaging in trades to generate profit for the bank, the funds said in an amended complaint filed in Manhattan federal court. CEO Jamie Dimon “secretly transformed the CIO from a risk management unit into a proprietary-trading desk,” the plaintiffs said. The pension funds allege they incurred losses in their holdings because of trades by the chief investment office and Bruno Iksil, known as “the London Whale.” Porn star vows night of passion if Barcelona wins (NYDN) Colombian-born Janeira Ventura said she would give "any Barca fan who dares" the "night of their lives" if Lionel Messi, Andres Iniesta and co. fire them to the top of La Liga by the end of the season. The adult actress told Mundo Deportivo, "If we win the league this year, I pledge publicly to spend a night of passion with any Barcelona member or supporter who dares. "How can they prove they support the team? It's easy, by showing me the membership card or photos and tickets to a game. They just have to contact me on my website." The 27-year-old was born in Barranquilla, moved to Spain when she was a baby and now lives in Toronto. She added, "I've been a Barcelona fan since I was little, I love the team, the way they play, and above all I love the players. The most sexy ones? Messi, Xavi and Puyol." Her obsession extends to having two cats, who are called Leo and Messi, and plans to tattoo the Argentine striker's name "in a secret place" when she returns to Spain in 2013. She also wants to convince Barcelona bosses to let her be their "official club porn star."

Holiday Bell: 3.25.16

Microsoft might finance Yahoo bid; Investors says Valeant is overcharging for female viagra; Cruz calls Trump a 'sniveling coward' re: wife; Suspected komodo dragon found wandering in New York; and more.