Opening Bell: 12.16.11


Corzine Knew Of Fund Transfer (WSJ)
Former MF Global Holdings Ltd. Chief Executive Jon S. Corzine testified Thursday that he knew about an overseas transfer of funds that has come into focus in recent days as regulators and Congress seek to find out what became of an estimated $1.2 billion in missing customer cash. Mr. Corzine testified, however, that he received assurances that the transfer of millions of dollars to a J.P. Morgan Chase & Co. account in London on Oct. 28, the last business day before MF Global filed for bankruptcy, was approved by at least one official in MF's back office. "The back office in Chicago explicitly confirmed to me that the funds were properly transferred, and I understood that J.P. Morgan Chase was satisfied," Mr. Corzine said, adding that he believed some of the confirmations were in writing.

BofA, Goldman, Barclays Have Fitch Ratings Cut (Bloomberg)
The lenders’ long-term issuer default ratings were cut one level to A from A+, Fitch said yesterday in a statement. Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG and BNP Paribas SA also had their grades lowered...“It’s hard to take anything positive from this; it speaks to the sentiment overall on global financial firms right now,” said Michael Nix, who helps manage about $925 million at Greenwood, South Carolina-based Greenwood Capital Inc., including Morgan Stanley (MS) shares. “It also validates what the other raters have already done, and to an extent was expected.”

Italy Government Wins Confidence Vote on Austerity (Reuters)
Italy's government easily won a confidence vote on its tough austerity package on Friday, the first step in parliamentary approval for sweeping measures aimed at saving the euro zone's third-largest economy from financial disaster. The Chamber of Deputies approved the 33-billion euro ($43 billion) package, which affects everything from pensions to home ownership taxes, by 495 votes to 88. The plan, contested by Italy's unions and the opposition Northern League, has been in effect since Monti's government approved it on December 4. But it needed full parliamentary approval within 60 days to remain in force.

Europe’s Crisis May Hold Seeds of Dealmaking (Bloomberg)
“There are well-positioned acquirers globally looking for bargains,” even if economic pressure has slowed recent European dealmaking, said Gregg Lemkau, head of mergers and acquisitions for Europe, the Middle East, Africa and Asia-Pacific at Goldman Sachs Group Inc. (GS) “One of the drivers in Europe has been historically low valuations and a relatively soft currency.”

Congress Blinks On Shutdown (WSJ)
Congressional leaders—fearful of voters' wrath over Washington's bickering and brinkmanship—stepped back Thursday from a possible government shutdown, clearing the way for at least a short-term extension of a payroll tax cut that is set to expire at year's end.

Regulators Sanction Citi Japan (WSJ)
In a sign of increasing frustration with Citi Japan—which has been sanctioned three times for a range of improper activities since 2004—Japan's Financial Services Agency slammed the bank's repeated lack of compliance and its business model, demanding that Citi Japan submit a business improvement plan by Jan. 31.

SEC Sues Former Freddie Mac Chief Executive Richard Syron in New York (Bloomberg)
The U.S. Securities and Exchange Commission sued former Freddie Mac Chief Executive Officer Richard Syron in New York.

Christian Bale Attacked by Chinese Guards (NYT)
The actor Christian Bale was assaulted by government-backed guards on Thursday when he tried to visit a blind lawyer who has been illegally confined to his home in eastern Shandong Province. The lawyer, Chen Guangcheng, has emerged as a cause célèbre among the country’s rights advocates, dozens of whom have been similarly roughed up when they tried to break through the cordon that local officials have placed around Mr. Chen’s village...The footage of Mr. Bale’s attempted visit is dramatic. In it, he is seen pleading with the men who guard Dongshigu’s entry points and then retreating as they push and punch him. “Why can I not visit this free man?” he asks repeatedly. The men, dressed in thick green winter coats respond with shouts of “Go away.” Even after they have retreated into their car, the group, which included a translator, was chased for 40 minutes by men in a gray van.

Crédit Agricole Sells Private Equity Unit (WSJ)
French bank Crédit Agricole SA said Friday it is selling its private-equity business to investment fund Coller Capital as part of its plan to boost its capital ratios. It didn't give financial details but said the sale will reduce its risk-weighted assets by about €900 million ($1.17 billion). The move comes days after the bank warned that it would post a loss for 2011 and announced plans to refocus on retail banking to bolster itself against the continuing sovereign-debt crisis.

Decking the Halls, Carlyle Style (Dealbook)
“I wonder what life would be like for all of us if we hadn’t started Carlyle some 24 years ago?” Mr. Rubenstein says in the video’s opening scene. In a bit of billionaire role-reversal, the film imagines Mr. Rubenstein, a former senior White House official, as the owner of a lemonade stand, which he runs using the principles of private equity. “It’s 50 cents per cup, or you could become an L.P.,” Mr. Rubenstein says to two young would-be customers, as he pitches them “a guaranteed way to make money.” It also imagines Mr. Conway, who in real life worked as the chief financial officer of the telecommunications company MCI, if he had instead become an operator at one of the company’s call centers. Mr. D’Aniello, who helped secure Carlyle’s 2006 acquisition of Dunkin’ Brands, is imagined working behind the counter at a Dunkin’ Donuts store.

Europe Rescue Fund to Remove Clause on Euro Breakup (Reuters)
Europe's EFSF temporary rescue fund will remove a provision providing for the break up of the euro from initial drafts of its latest bond prospectus, a source at the fund said on Friday, a move that underlines the growing sensitivity of the issue for EU officials.

Allen Stanford ‘Not Credible’ on Amnesia Claim (Bloomberg)
Stanford’s scores on medical and neuropsychological tests “were sufficiently low as to evidence that he either was not trying or was faking,” Assistant U.S. Attorney Gregg Costa said, citing a doctor’s report. The prosecutor, in the proposed court order filed yesterday, asked U.S. District Judge David Hittner in Houston to find Stanford competent to stand trial.


Opening Bell: 04.23.12

IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. Buffett Joined by 12 Families Pledging Wealth to Charity (Bloomberg) Twelve families promised to donate most of their wealth to philanthropy, joining the Giving Pledge initiative started by Warren Buffett and Bill and Melinda Gates. The families include hedge-fund manager Bill Ackman and his wife Karen, Tesla Motors Inc.’s billionaire owner Elon Musk and film producer Steve Bing, according to an e-mailed statement from the initiative. Arthur M. Blank, Edgar M. Bronfman, Glenn and Eva Dubin, Red and Charline McCombs, Michael Moritz and Harriet Heyman, John and Ginger Sall, Henry and Susan Samueli, John A. and Susan Sobrato, John Michael Sobrato, and Ted and Vada Stanley also signed the pledge. Aiming for Clarity, Fed Still Falls Short in Some Eyes (NYT) But as Mr. Bernanke prepares to meet the press for the fifth time Wednesday afternoon, after a scheduled meeting of the Fed’s policy-making committee on Tuesday and Wednesday, there are reasons to doubt that the efforts are increasing public understanding of monetary policy. Experts and investors have continued to disagree about the plain meaning of the Fed’s recent policy statements. Some say the increased volume of communication is creating cacophony rather than clarity. Political criticism of the Fed has continued unabated. Man's nightmare since NYPD labeled him ‘Gentleman Groper’ (NYP) A citywide manhunt ensued after four Manhattan women were fondled in tony neighborhoods in a 35-day stretch. On April 13, authorities paraded their main suspect past snapping cameras. He defied the conventional image of a creepy perv. He was young, handsome, well-dressed, affluent, educated, a churchgoer. A gentleman groper. That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"