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Opening Bell: 01.11.12

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Fed to send $76.9 billion in earnings to Treasury (Reuters)
The Federal Reserve said on Tuesday it would send about $76.9 billion of its estimated 2011 net income over to the Treasury. That was down from a record $79.3 billion in 2010, and comes primarily from interest payments on securities held in the central bank's massive multi-trillion-dollar portfolio...Through its conduct of unconventional monetary stimulus, which has been implemented with purchases of government bonds, the Fed has more than tripled its balance sheet since the start of the 2008 financial crisis, to about $2.9 trillion.

Fitch: ECB Must Do More To Prevent 'Cataclysmic' Euro Collapse (Reuters)
The European Central Bank should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro, David Riley, the head of sovereign ratings for Fitch, said on Wednesday. Speaking to investors as part of a European roadshow, Riley said the collapse of the euro would be disastrous for the global economy, and while it is not Fitch's baseline scenario, it could happen if Italy did not find a way of its debt problems.

Carlyle founders reap bumper 2011 profits (Reuters)
Founders of private equity firm Carlyle Group CYL.UL have had a great payday as a result of the firm's record performance in 2011 and are set to gain even more as it prepares for an initial public offering, a regulatory filing on Tuesday showed. The billionaire founders, William Conway, Daniel D'Aniello and David Rubenstein, received $134 million each in cash distributions and $3.8 million in executive compensation, according the filing. On top of this, Conway, D'Aniello and Rubenstein received $70.8 million, $77.6 million and $56.8 million from previous investments. The filing does not state how much of that was their initial investment or what their profit on that was. They also invested big in Carlyle funds in 2011. Conway invested $163.8 million, D'Aniello put in $98.3 million and Rubenstein put in $96.9 million, according to the filing. They also charged Carlyle for business use of their private airplanes and associated services and supplies. Conway received $1.3 million, D'Aniello got $676,014, while Rubenstein got the most, $3.3 million, according to the filing. "As the co-founder primarily responsible for, among other things, maintaining strong relationships with and securing future commitments from Carlyle's investors, particularly outside the United States Mr. Rubenstein has an exceptionally rigorous travel schedule," Carlyle said in the filing.

Orange Juice Futures Surge (WSJ)
The market for orange juice futures received another jolt after the federal government said some Brazilian imports contained a potentially harmful fungicide. The news on Tuesday sent prices of the January contract soaring 9.7% to a record settlement as traders fretted that the appearance of the fungicide could lead to a sharp reduction in Brazilian orange juice imports. Traders already had driven prices higher this year amid worries that a recent cold snap in Florida had damaged crops. In just six trading days, frozen orange juice concentrate futures have soared 26%, settling at $2.1275 a pound on Tuesday on the ICE Futures U.S. exchange.

Gingrich Says Romney Has ‘Very Big Questions’ to Answer About Time at Bain (Bloomberg)
Republican presidential candidate Newt Gingrich said party front-runner Mitt Romney has “some very big questions to answer” about his time at private equity firm Bain Capital LLC and whether he chose profit over jobs. “I don’t have much respect if you rig the game so you end up walking off with all the money,” Gingrich, a former U.S. House speaker, said today on Bloomberg Television.

Attack Film Depicts Romney As "Ruthless" Rich (Bloomberg)
Mitt Romney is depicted as a financier “more ruthless than Wall Street” and a son of privilege responsible for firing thousands of workers in a film bankrolled by Newt Gingrich supporters set to be released today in South Carolina. “Make a profit,” a laughing Romney is shown saying in the 28-minute film, obtained by Bloomberg News. “That’s what it’s all about, right?”

Lindsay Lohan owes $93K to taxman (NYDN)
...documents filed in Los Angeles reveal the “Mean Girls” star owes Uncle Sam $93,701.57 for her failure to pay income taxes in 2009. In the past, the star has talked publicly about her financial troubles, telling a judge last July that she was having difficulty finding a private psychological counselor she could afford. But that, of course, was before she reportedly scored a $1-million payday for a recent Playboy photo spread. “Lindsay’s personal finances are her business and no one else’s,” her spokesman, Steve Honig, told the Daily News after news of LiLo’s fiscal woes broke Monday.

Big Banks Face Inquiry Over Home Insurance (NYT)
A New York State financial services agency is investigating several large banks to see whether they fraudulently steered homeowners into overpriced insurance policies. The investigation centers on so-called force-placed insurance that has become increasingly common since the downturn of the housing market began and homeowners had trouble keeping up with payments on their home insurance. JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are among the major companies involved in the inquiry by the office of Benjamin M. Lawsky, the superintendent of New York State’s Department of Financial Services, according to a person briefed on the investigation who asked to remain unidentified because the matter was private. Mr. Lawsky’s office issued 31 subpoenas or other legal notices related to the case in early October, just as the state’s insurance and banking departments were merged under his new agency. His office has already turned up instances where mortgage servicing units at large banks steered distressed homeowners into insurance policies up to 10 times as costly as the homeowners’ original plans.

Geithner Presses China On Currency, Iran (Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner will urge Asia’s two biggest economies to cut Iranian oil imports and seek to narrow differences with China on trade and currency disputes on a visit to Beijing and Tokyo this week.

Insider Trading Mole Praised By Prosecutors (WSJ)
The cooperation of a single Wall Street trader in the government's broad insider-trading investigation directly led to the prosecution of 10 individuals, making him one of the most productive informants in U.S. financial history, lawyers say. The disclosure of the specific role played by the trader, David Slaine, came in a court filing by prosecutors. In a letter to a judge, the U.S. credited Mr. Slaine with being the most important cog in an unprecedented wave of insider-trading cases, which have resulted in guilty pleas or convictions of 53 out of a total of 56 individuals charged by the government since late 2009. "Slaine's cooperation has been nothing short of extraordinary," the government said in the filing. "It is difficult to overstate the significance."

Nomura Banker Quits Over Cuts (WSJ)
The ex-Lehman Brothers Inc. banker who was to salvage Nomura Holdings Inc.'s ambitious global expansion resigned after he was unable to garner support for a more radical overhaul of the global wholesale-banking operations, people familiar with the matter said. The resignation of Jasjit "Jesse" Bhattal, Nomura's highest-ranking foreign executive and joint deputy president, is a major blow to Nomura's bid to become a global investment-banking powerhouse. The Japanese bank is suffering from the same problems facing investment banks globally: volatile stock and bond prices, soft merger activity and tighter regulation. That is even hitting Asia, a region that has been a key area of growth and investment for banks. Now firms are cutting staff and granting smaller bonuses. Nomura announced $1.2 billion in cuts to annual costs in November, but analysts said that might not be enough to stabilize profitability.

Average Binge Drinker Knocks Back 8 At A Time (WSJ)
Heavy boozers are imbibing more frequently and knocking back more alcohol per binge than previously thought, according to new government data that looked, for the first time, at the detailed habits of binge drinkers. One in six U.S. adults reported binge drinking at least once in 2010, a slight increase from the previous year, according to a Centers for Disease Control and Prevention report released today. Binge drinking is defined as a one-occasion consumption of at least four drinks for women or five or more with men. Public health officials were surprised both by how often binge drinking occurred, and, when it did happen, how many drinks were consumed. Binge drinkers reported 4.4 episodes per month — more than once a week. Each binge, on average, was 7.9 drinks.


By Remy Steinegger, World Economic Forum from Cologny, Switzerland (World Economic Forum Annual Meeting Davos 2008) [CC BY-SA 2.0], via Wikimedia Commons Copyright by World Economic Forum by Remy Steinegger +++No resale, no archive+++

Opening Bell: 10.25.17

Carlyle shakes up leadership; Trump wants to decide Fed chair by show of hands; Overstock is launching an ICO do to buybacks; oldest living creature gay; and more.

Opening Bell: 11.08.12

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.