Opening Bell: 01.12.12

Author:
Publish date:

JPMorgan May Show Record Profit As Wells Closes Gap (Bloomberg)
JPMorgan is projected to report a record $18.5 billion in 2011 earnings when adjusted for one-time items, a 6 percent increase for the New York-based company, according to a survey of analysts by Bloomberg. Profit at San Francisco-based Wells Fargo is estimated to have jumped more than four times as much, to an all-time high of $15.3 billion. By focusing on the U.S. and eschewing traditional Wall Street businesses such as structured products, Wells Fargo surpassed earnings at Goldman Sachs and Citigroup for six consecutive quarters. Wells Fargo, whose $1.3 trillion in assets make it the fourth-largest U.S. bank, also has higher valuations than its bigger peers.

ECB Holds Rates Steady Amid Crisis Respite (Bloomberg)
ECB policy makers meeting in Frankfurt kept the benchmark interest rate at a record low of 1 percent, as predicted by 47 of 53 economists surveyed by Bloomberg News. ECB President Mario Draghi will explain the decision at a 2:30 p.m. press conference...“The ECB is taking a breather because it needs to see how its measures are feeding through and also keep politicians on their toes,” said Carsten Brzeski, senior economist at ING Group in Brussels. “It’s unlikely to rush into cutting rates below 1 percent, but it’s pragmatic enough to do so if the economy tanks.”

Hedge Funds Try To Profit From Greece (Bloomberg)
Saba Capital Management LP, founded by former Deutsche Bank AG (DBK) credit trader Boaz Weinstein, York Capital Management LP, the $14 billion fund started by Jamie Dinan, and London-based CapeView Capital LLP are among managers that now hold Greek bonds, according to people with knowledge of the transactions. They’ve amassed the stakes as the government lobbies investors to accept a swap that would cause losses of more than 50 percent for bondholders. For the deal to avoid triggering credit-default swaps that could cause losses for more of the region’s banks, the agreement has to be voluntary. Hedge funds may not agree to the deal. “I would expect to see some holdouts,” said Sudeep Singh, a hedge fund manager at Matrix Group Ltd. who doesn’t own Greek debt. “The industry breaks down into guys who want to keep on fighting and into guys who just want to get the best deal and move on. It’s all a question of what price you got in at.”

You can blame Mitt Romney, but not for Bain Capital (Politico)
Steve Rattner says leave Mitt Romney alone! (Re: Bain...everything else is fair game.)

Jobless claims rise sharply to 6-week high (Reuters)
The number of Americans applying for first-time jobless benefits rose on Thursday, reversing a recent decline and suggesting the labor market remains brittle. Unemployment claims jumped to 399,000 in the first week of 2012, the highest in six weeks, from an upwardly revised 375,000 in the prior week. The four-week average of claims also marched higher to 381,750 from 374,000.

Brevan Howard Proves Master Of Hedge Funds (Bloomberg)
Also: "When Alan Howard set off for a business trip to India as a young Salomon Brothers bond trader in the late 1980s, colleagues advised against drinking local water. When he got back, the buzz on his trading desk was about the huge tab Howard had run up buying cases of Evian water, according to a person who worked with him at the time. The London native joked that he not only didn’t drink from the tap, he used the imported bottled water to bathe, shave and wash his hair."

Polar bears turn cannibalistic as climate change depletes arctic food supply (NYDN)
Dwindling Arctic Sea ice is cutting off polar bears’ food supply, forcing the starving animals to devour their own kind. While cannibalism among polar bears isn’t unheard of, experts say the behavior is becoming increasingly common. “There are increasing numbers of observations of it occurring,” photojournalist Jenny Ross told BBC News. “Particularly on land where polar bears are trapped ashore, completely food-deprived for extended periods of time due to the loss of sea ice as a result of climate change.” Ross explained how the higher temperatures melt ice more quickly, leaving the bears less time to fuel up on ice-dependent seals, the animals’ main source of food.

Banker Pay Heads To Ballot (WSJ)
Wall Street pay is set to be reduced after a dismal year but the cuts won't spare banking chiefs from potentially bruising encounters with investors during coming shareholders meetings. Investors ranging from charitable foundations to large state pension funds are preparing to challenge large financial firms on their pay practices. As a result, this year's "proxy season"—the period, usually in the spring, when companies hold annual shareholder meetings—promises to be an eventful one in the financial sector, compensation consultants and corporate-governance experts say.

Romney Lacks Clear Remedy For US Economy (Reuters)
Mitt Romney, the frontrunner for the 2012 Republican U.S. presidential nomination, is promising Americans deep spending cuts, smaller government, trade penalties on China, a new Federal Reserve chairman and sweeping deregulation. The bold economic strategy Romney has sketched out in his White House bid seems designed to appeal to the radicalized conservative base of the Republican Party enamored of the gold-standard ideas promoted by libertarian congressman Ron Paul and budget slashers in the populist Tea Party movement. Romney needs their backing to eventually win his party's nomination to face Democratic President Barack Obama on Nov.6...Economists and political strategists are skeptical that his economic plan will remain so radical as the campaign evolves. It sits uneasily with his track record as a moderate, could alienate independent voters he would need to defeat Obama, and deep, rapid budget cuts would risk tanking a shaky economy growing at a 2 percent pace.

Goldman Veterans Exit as Trading Struggles in Post-Crisis Order (WSJ)
Messrs. Heller and Eisler weren't nudged out of the company, according to people familiar with the matter. But weaker trading revenue and tighter regulations that are limiting risk-taking at Goldman and other securities firms took their toll on both men, these people said. For example, they expressed disappointment to some colleagues that their highflying businesses had lost some luster. Mr. Heller was responsible for equities sales and trading, while Mr. Eisler led Goldman's fixed-income trading and sales in interest rates, foreign exchange and some derivatives.

Allen Stanford's Attorney Asks To Quit Case (CNBC)
Court-appointed attorneys Ali Fazel and Robert Scardino say in their bombshell motion that rulings by the judge in the case have left them in "an untenable position." U.S. District Judge David Hittner has previously ruled Stanford competent for trial over the defense's objection, denied a defense motion to delay the trial, and just this week ordered that a defense jury consultant no longer be paid.

Related

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.

Opening Bell: 09.06.12

Draghi Says Officials Agree On ECB Unlimited Bond-Buying (Bloomberg) The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt after the ECB held its benchmark rate at a record low of 0.75 percent. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.” Positive Signs Emerge For Job Market (WSJ) Private-sector jobs in the U.S. increased by 201,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The August number was well above the 145,000 expected by economists. The July estimate was revised to 173,000 from the 163,000 reported last month. AIG To Sell $2 Billion Of AIA Shares (WSJ) AIG is seeking to raise around US$2 billion by selling more shares in AIA Group Ltd, its former pan-Asian life insurance unit, as it continues to repay the U.S. government bailout it received during the 2008 financial crisis. The U.S. insurer also said in a statement it plans to buy back another $5 billion in stock from the U.S. Treasury. AIG has been aggressively buying back shares this year and is expected to buy more from the Treasury this fall, as part of a push that could make the U.S. government a minority shareholder before the November elections and enable the company to fully repay its bailout sooner than expected. The Treasury Department sold $5 billion worth of shares in AIG last month, its fourth sale so far, reducing the government's stake to 55% and bringing down the amount the government needs to recoup from the bailout to $25 billion. Summer Rally Puts The Hurt On Fund Managers (WSJ) "The gap we are looking at is going to be very hard…for hedge funds to make up," said Anurag Bhardwaj, head of hedge-fund consulting at Barclays PLC. "At this late stage in the year, when the rally has been around for a bit, do you decide to get into the game now?" Alec Baldwin's daughter discusses ‘pig’ call (NYP) Alec Baldwin’s daughter Ireland has talked for the first time about his infamous 2007 voice mail in which he called her, then 12, “a rude, thoughtless, little pig” — saying he often speaks like that “because he’s frustrated.” Ireland, the 16-year-old daughter of Baldwin and Kim Basinger, thinks the incident — which created a viral scandal and prompted Baldwin to temporarily lose visitation rights — was blown wildly out of proportion. “The only problem with that voice mail was that people made it out to be a way bigger deal than it was,” she tells Page Six Magazine, out today. “He’s said stuff like that before just because he’s frustrated. “For me it was like, ‘OK, whatever.’ I called him back I was like, ‘Sorry Dad, I didn’t have my phone.’ That was it.” DE Shaw Is Back On Top (DJ) This year, Shaw has had the biggest asset growth among the top 20 hedge fund firms in Absolute Return’s Billion Dollar Club, which tracks the biggest hedgies twice a year. Shaw added $2.4 billion to its hedge-fund coffers this year, a 14 percent gain, bringing its assets to $19.4 billion as of July 1, according to the ranking out today. Clinton Nominates Obama, Rebuts Romney Criticism On Jobs (Bloomberg) Bill Clinton said President Barack Obama deserves re-election because he contained the economic crisis and put the nation on a path to recovery, casting the 2012 election as a choice between “shared opportunities and shared responsibility” and a “winner-take-all, you’re-on-your- own society.” Clinton, 66, praised Obama’s commitment to “constructive cooperation” and described him as a man who is “cool on the outside, but who burns for America on the inside.” The former president used a 48-minute address before the Democratic National Convention in Charlotte, North Carolina, last night to deliver a rebuttal of criticisms leveled at Obama by challenger Mitt Romney and his running mate during last week’s Republican National Convention in Tampa, Florida -- at one point saying it “takes some brass” for Obama’s partisan adversaries to lob some of their attacks. “Nobody’s right all the time and a broken clock is right twice a day,” Clinton said. “We’re compelled to spend our fleeting lives between those two extremes.” Most Of Nomura's Cuts To Come In Europe, US (WSJ) The brokerage house said Thursday 45% of the cuts would be in Europe and 21% in the U.S. Nomura said 45% of the total cuts would be in the form of labor costs. Love Triangle Leads To Million-Dollar Return Battle At Neiman Marcus (FDL) The meeting was awkward. Malcolm Reuben, the buttoned-up vice president and general manager of Neiman Marcus’ NorthPark Center store, stood inside the multimillion-dollar Addison home of one of his top customers, Patricia Walker. Beside him were two colleagues: a Neiman Marcus attorney and his store’s loss-prevention manager. Walker was joined by her own attorney and her personal assistant. It was a summer day in 2010. Glancing around the sleek Max Levy–designed house, the only things more dazzling than the sculptural masonry columns or the steel-and-glass staircase were the piles of designer goods: handbags, shoes, furs, clothing, crystal figurines, fine jewelry. It represented the bulk of $1.4 million in merchandise charged to Walker over a period of years. “There was a variety of merchandise laying all over the house,” Reuben testified in a March video deposition. “She wanted to return all of the merchandise because of the affair.” Oh, yes. The affair. Walker had learned that Favi Lo, her longtime Neiman Marcus sales associate at NorthPark, was sleeping with her husband. And Walker saw that her charges had soared in recent years while she recovered from a horrific head-on auto collision. She came to believe that her husband was responsible for many of the purchases and had used them to pump up commissions for his mistress.

Opening Bell: 11.12.12

Leucadia Agrees to Buy Jefferies for About $2.76 Billion (Bloomberg) Leucadia National Corp agreed to buy the the portion of Jefferies Group it doesn’t already own for about $2.76 billion. Investors will receive 0.81 Leucadia share for each Jefferies share they own, the companies said today in a statement. The deal values the entire company at about $3.59 billion, based on data from the company’s most recent 10-Q regulatory filing. Jefferies management will run the firm, according to the report. Leucadia already holds about 28.6 percent of New York-based Jefferies. Jefferies Chief Executive Officer Richard Handler will become CEO of New York-based Leucadia after the transaction is completed, which the companies said they expected in the first quarter. Handler will remain CEO of Jefferies as well. “This transaction represents the realization of a personal dream for me,” Handler, 51, said in the statement. Greece Passes 2013 Austerity Budget (WSJ) Greece passed on Monday a 2013 austerity budget needed to unlock further funding for the cash-strapped country, although international creditors have indicated the disbursement may be weeks away as they squabble over how to resolve the nation's debt problems. Euro-zone finance ministers will meet Monday in Brussels, where they had been expected to approve Greece's next aid payment of €31.5 billion ($40 billion), but no decision is now expected until they are assured the country's overhauls are on track. The budget, approved by a 167-128 vote, foresees Greece taking €9.4 billion of budget cuts next year, dealing a fresh blow to an economy seen contracting 4.5% next year, its sixth year of recession. Spain Needs A Bailout Urgently: Former ECB Member (CNBC) Bini Smaghi told CNBC that Spain must not waste any more time and that it needed to apply for help from Europe's bailout fund. "They need to revitalize the economy and they need lower interest rates [and] the only way to do that [is] to request a program," he said, adding that Spain should have done so "yesterday." White House Plans Public Appeal On Deficit (WSJ) Mr. Obama has planned the meetings as policy makers start work to craft a package of deficit-reduction measures that could come in place of the so-called fiscal cliff, the mandatory spending cuts and tax increases scheduled to begin in January. His meetings with labor and business leaders come before he meets with congressional leaders Friday, evidence the White House believes Mr. Obama can use momentum from his re-election to marshal outside support and heighten pressure on Republicans to agree to tax increases on upper-income earners. The strategy comes as many Republicans appear to have softened their antitax rhetoric in the wake of the election, with many openly acknowledging that higher taxes will likely be part of any plan to reduce the deficit. Boehner Tells House GOP to Fall in Line (NYT) On a conference call with House Republicans a day after the party’s electoral battering last week, Speaker John A. Boehner dished out some bitter medicine, and for the first time in the 112th Congress, most members took their dose. Their party lost, badly, Mr. Boehner said, and while Republicans would still control the House and would continue to staunchly oppose tax rate increases as Congress grapples with the impending fiscal battle, they had to avoid the nasty showdowns that marked so much of the last two years. Members on the call, subdued and dark, murmured words of support — even a few who had been a thorn in the speaker’s side for much of this Congress. It was a striking contrast to a similar call last year, when Mr. Boehner tried to persuade members to compromise with Democrats on a deal to extend a temporary cut in payroll taxes, only to have them loudly revolt. No Increase Of Banker Bonuses This Year (NYP) That’s the dour view of executive-compensation firm Johnson Associates, which says investment-banking business is so slow that after the sector’s workers bore the brunt of most of the 7,000 job losses on the Street this year, they will find the bonus pie smaller as well. “It’s a tremendous drop from five years ago. If you were getting an average bonus of $400,000 back in 2007, then this year it will probably be around $200,000 or $250,000,” says Alan Johnson, managing director of Johnson Associates...However, fixed-income executives, who sell bonds, should see bonuses rise this year by something between 10 percent and 20 percent. Deputies: Man impersonated federal officer to get into Epcot for free (Orlando Sentinel) A 74-year-old Miami man who was trying to avoid paying nearly $100 to get into Epcot, was arrested after he impersonated a Federal officer. Emerito Pujol flashed a fake badge at an Epcot employee as he passed through the turnstiles at the park around noon on Saturday. The employee challenged him and asked to see the badge again. He claimed he was an undercover officer who was looking for someone, according to an arrest report. When a security guard approached him, Pujol again claimed he was "in service" and was "guarding someone important," the report states...Pujol was arrested and charged with unlawful use of a police badge, falsely impersonating an officer and petty theft. No Individual Charges In Probe Of JPMorgan (WSJ) The top U.S. securities regulator doesn't intend to charge any individuals in its planned enforcement action against J.P. Morgan for the allegedly fraudulent sale of mortgage bonds, according to people close to the investigation. The largest U.S. bank by assets will pay a significant financial penalty under the proposed deal, which has been approved by Securities and Exchange Commission staff but not by the agency's five commissioners, said the people close to the probe. Nomura Launches Private Equity Index (FT) The Japanese bank will look to match the returns of private equity funds – which take over companies, restructure them, and then seek to sell them at a profit – by investing in publicly traded companies in sectors that are attracting attention from buy-out groups. Morgan Stanley Sues Ex-FrontPoint Manager Over Insider Trading (Reuters) In a complaint filed in Manhattan federal court on October 31, Morgan Stanley sued ex-FrontPoint Partners hedge fund manager Joseph "Chip" Skowron over the funds the bank paid to the U.S. Securities and Exchange Commission. The lawsuit also called for unspecified compensatory and punitive damages. Doctor-turned-stock picker Skowron pleaded guilty in August to trading stock of Human Genome Sciences Inc in 2008 based on non-public information he admitted to having received from a consultant for the biotech company, who also pleaded guilty to insider trading charges. Skowron was sentenced to five years in prison and ordered to forfeit $5 million. "Beyond the harm attendant to having one of its managing directors plead guilty to serious criminal conduct, the firm expended its own reputational capital by defending Skowron during the years it believed, based entirely on his misrepresentation, that he had not violated the law," the complaint said. So, maybe that Romney face tattoo wasn’t such a good idea... (Politico) With the election over, supporters of Mitt Romney have to pack up their campaign signs and paraphernalia and get on with their lives. But what if you can’t get rid of that stuff? Literally. Eric Hartsburg caught some attention in the weeks leading up to the election for having the Romney campaign’s logo tattooed on his face. Suffice to say, he’s not happy with Tuesday’s results. “Totally disappointed, man,” Hartsburg told POLITICO. “I’m the guy who has egg all over his face, but instead of egg, it’s a big Romney/Ryan tattoo. It’s there for life.” Hartsburg’s tattoo covers a 5-by-2 inch space on the side of his face, and he did it after raising $5,000 on eBay for the effort. He didn’t even tell his wife he planned to get the tattoo until about an hour before. “Right away, she was taken aback,” Hartsburg said, adding that his wife is also a Romney/Ryan supporter. “My 15-year-old son, however, he was all about it.”

Opening Bell: 04.12.12

Buffett Feasts On Goldman Scraps (WSJ) Details of one trade in particular have recently caused a stir in the market. In November, Goldman sold about $85 million of loans in troubled newspaper publisher Lee Enterprises Goldman sold the debt at about 65 cents on the dollar, having bought it months before at around 80 cents, resulting in a loss of at least $13 million. The buyer: a unit of Warren Buffett's Berkshire Hathaway Inc., according to several people familiar with the matter. Mr. Buffett has since made a tidy paper profit on the loans, which are now worth about 82 cents on the dollar, the people said. Jim Chanos: Chinese Banks ‘Great Shorts,’ Won’t Be Broken Up (CNBC) Chanos, the head of Kynikos Associates, has been betting against China — despite its role as a global economic leader — primarily because he believes the country is overbuilt and does not have the internal demand to support its ambitious growth plans. Nowhere has that trend been more apparent than in the banking system. "If you looked at the performance of the banks over the last two years...they have been great shorts," Chanos said. "They have been going down — they're down 30 percent over the last two years." George Soros: Exceptional Measures Needed to Save EU (FT) "Other countries have gone through similar experiences. Latin American countries suffered a lost decade after 1982, and Japan has been stagnating for a quarter of a century; both have survived. But the European Union is not a country and it is unlikely to survive. The deflationary debt trap threatens to destroy a still-incomplete political union," he wrote. Blackstone President To Raise For Obama (Morning Money) "Tony James, the president of Blackstone Group LP, has agreed to hold a fundraiser for... Obama’s re-election campaign, according to two people familiar...By agreeing to raise money for Obama, James has diversified Blackstone’s political bets for the November election. Blackstone Chairman Stephen Schwarzman has been raising money for former Massachusetts governor Mitt Romney, the likely Republican nominee." SEC, Goldman to Settle Research Case (Reuters) U.S. securities regulators are preparing to announce that Goldman Sachs will pay $22 million to settle allegations the bank did not have adequate policies to prevent research from being passed inappropriately to preferred clients, people familiar with the matter said on Wednesday. BlackRock's Street Shortcut (WSJ) BlackRock is planning to launch a trading platform this year that would let the world's largest money manager and its peers bypass Wall Street and trade bonds directly with one another. The electronic trading hub has the potential to reduce a lucrative revenue stream for investment banks at a time when their businesses are being squeezed by lackluster markets and new regulations put in place to curb risk in the aftermath of the financial crisis. The trading platform would be run by the New York-based company's BlackRock Solutions arm and offer 46 clients—including sovereign-wealth funds, insurance companies and other money managers—the ability to trade in corporate bonds, mortgage securities and other assets, company executives say. Under the plan, the platform would seek to match buyers and sellers of the same securities, in a process known as "crossing trades." BlackRock Solutions would charge a small fee for the service that would be much lower than Wall Street's trading commissions. New Yorker breaks up subway scuffle, snacks in hand (NYDN) Sonder, 24, played the role of hungry hero “two or three Thursdays ago” after hopping on an uptown 6 train at Spring St. The calm inside the subway car was shattered a minute later when a tussle broke out between a man and a woman. “I turned around and I saw these two kicking each other pretty viciously,” said the sturdy Sonder, who stands six-feet tall and weighs 200 pounds. “I stepped over and tried to see if I could help.” Mid Pringle, Sonder thrust himself between the pugilists. More chips were eaten, but no other punches or kicks were thrown. “I just got caught up in the moment,” said Sonder, who was also holding a bag of gummy bears during the incident. Dimon Vows Fight Moynihan Lost Over Claims From Mortgages (Bloomberg) “We are going to fight repurchase claims that pretend the steep decline in home prices and unprecedented market conditions had no impact on loan performance,” Dimon, chief executive officer of the New York-based lender, wrote in the April 4 letter. He’ll also oppose “securities claims brought by sophisticated investors who understood and accepted the risks.” Jobless Claims Post Jump; PPI Up, Trade Deficit Down (Reuters) Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday. The prior week's figure was revised up to 367,000 from the previously reported 357,000. Fur Flies in High-Stakes Airlifts of Animals by Lufthansa (Bloomberg) An African white rhinoceros peers through the bars of its Frankfurt compound, while across the floor a Madagascan chameleon inches around its vivarium and an Andean alpaca plucks hay from a bale. It’s not a scene from the city’s zoo but from Deutsche Lufthansa AG’s Animal Lounge, a state-of-the-art complex that’s at the center of the German carrier’s plans to dominate the most specialized part of the $66 billion air-cargo industry. Lufthansa, Air France-KLM Group and Dubai-based Emirates, which transports thoroughbreds for Sheikh Mohammed bin Rashid Al Maktoum, horseracing’s leading owner, are competing in a high- stakes market. Premium profit margins come with the risk of an in-flight death involving a beloved family pet, top-ranked stallion or priceless panda. “It’s not like pharmaceuticals, where your main concern is the temperature,” said Animal Lounge Director Axel Heitmann. “If a bag of fish leaks it needs replacing with the right kind of water and the right oxygen. And if something goes wrong you can’t just hand a customer $1,000 and tell him to buy another pet. He wants the dog or cat he’s had for 10 years.” KKR Invests in China Cord Blood (WSJ) Kohlberg Kravis Roberts & Co. L.P. will invest $65 million into China Cord Blood Corp., the country's largest operator of services for umbilical cord blood that is rich in stem cells, to capitalize on China's fast growing healthcare services industry. Police: Dealer tied 89 bags to penis, peed at the station (Philly) Police Corporal Christopher Eiserman said another officer was on routine patrol Friday when he pulled Ray Woods over for a broken rear light and found marijuana in his car. When the officer searched Woods before placing him in the police cruiser, he discovered "a large bulge" in the front of his pants, Eiserman said. Police say Woods actually had the balls to deny that there was any contraband down there. “He stopped him for the traffic violation and one thing led to another," Eiserman said. Back at the station, Eiserman said, police discovered that Woods had tied a large plastic bag around his penis that contained a whopping 89 small bags of suspected heroin and cocaine. Then things got messy. “I tried to remove it. Unfortunately, and I don't know if it was nervousness or not, but he started urinating all over," Eiserman said. While it wasn't exactly what Eiserman had in mind when he started his shift Friday, he couldn't help but chuckle at the ingenuity, or lack thereof, of street-level drug dealers. “In 14 years, I’ve seen it down their pants, in their a--, but I've never seen it tied to their penis," he said.

Opening Bell: 11.06.12

Europe, Central Bank Spar Over Athens Aid (WSJ) Greece faces a key Treasury-bill repayment in less than two weeks, and the money isn't there unless governments provide additional aid or the ECB agrees to lend Greek banks the money to roll over the debt. It is a particularly sensitive issue for the ECB, which is trying to create a credible financial backstop to hold the euro together while governments overhaul their economies and finances. But with each step the ECB takes to help Greece and others, it inches ever closer to rules that prevent it from printing money to help governments out of their debt problems. The bank is already facing accusations in Germany that it is straying from its primary mandate to keep inflation low. Iceland Sees Mortgage Bubble Threat From Foreign Cash (Bloomberg) Iceland’s lawmakers are searching for ways to keep their economy from lurching into another asset bubble as offshore investors forced to keep their money in the country channel it into the housing market. Apartment prices have soared 17 percent since April 2010 and are now just 1.7 percent below the pre-crisis peak in March 2008, Statistics Iceland estimates. The boom stems from currency restrictions imposed in 2008 to prevent the collapse of the Krona after the country’s biggest banks defaulted on $85 billion of debt. While those controls helped cauterize a capital exodus and propel a recovery, it left about $8 billion in offshore kronur that can only flow into Icelandic assets, inflating demand for housing and mortgage bonds. The government is now seeking to correct the imbalances, which risk plunging the island into yet another boom-bust cycle just four years after the banking industry dragged the economy through its worst recession since World War II. FBI Probes Rochdale Securities (NYP) The Stamford, Conn., broker dealer is teetering on the brink of extinction, the result of an unauthorized $1 billion purchase of Apple shares on Oct. 25, sources said. The trade of 1.6 million Apple shares was made — instead of a client’s order of one-tenth that amount, or 160,000 shares — to perpetuate the alleged stock manipulation scam, people familiar with the matter said...The alleged stock manipulation scam was being worked with at least one other unidentified trader not affiliated with Rochdale, sources said. Multiple sources said the alleged scam had already pocketed the traders roughly $20 million, sources said. Drop In Financial Deals Spurs One (WSJ) New York investment bank KBW made it through the Sept. 11, 2001, terrorist attacks, but it couldn't outlast a drought in financial-services deal making. KBW, which struggled in recent years at the hands of a sharp slowdown in its core business—financial-industry merger advice—agreed be acquired by larger rival Stifel Financial for $575 million. Berkshire Cash Nears Record as Buffett Extends Deal Hunt (Bloomberg) Cash surged 17 percent to $47.8 billion in the three months ended Sept. 30, Omaha, Nebraska-based Berkshire said in its quarterly regulatory filing Nov. 2. That’s $115 million less than the record at the end of June 2011. “He’s elephant hunting,” said Jeff Matthews, author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett” and a Berkshire shareholder. “And there aren’t a lot of elephants around.” Did Wall Street Just Give Up On Romney? (NetNet) John Carney says yes: "On the eve of the election, many financial professionals on Wall Street believe that Mitt Romney has lost the election. In phone conversations, email and instant messaging exchanges, and text messages with over 20 people in different jobs on Wall Street today the message I picked up was almost universal: The president will be re-elected." Christie: Hug From Springsteen Made Me Weep (WaPo) New Jersey Gov. Chris Christie told reporters Monday that he had an unexpected — and moving — conversation earlier with his hero, Bruce Springsteen. He also got a hug from the rock legend on Friday, at a benefit concert for victims of Superstorm Sandy. He later cried, calling the moment a highlight in a tough week. “Bruce and I had an opportunity to chat for a while Friday night… we hugged and he told me, ‘it’s official, we’re friends,” Christie said at a news briefing. President Obama was on the phone with the Republican governor Monday, discussing storm damage, when he briefly handed the line over to Springsteen. The rock legend is traveling on Air Force One as he campaigns for the president. Before the storm Springsteen refused to acknowledge Christie, whose budget cuts he has criticized. But in the wake of the disaster, which hit the Jersey Shore particularly hard, he has started to embrace his ardent fan. HSBC Dirty Laundry Costs (Bloomberg) HSBC Holdings said it’s likely to face criminal charges from US anti-money-laundering probes, and the cost of a settlement may “significantly” exceed the $1.5 billion the bank has set aside. The lender has made an additional $800 million provision to cover a potential settlement, adding to the $700 million it had earmarked. A Senate committee said in July that failures in HSBC money-laundering controls allowed terrorists and drug cartels access to the US financial system. Bharara insider streak on line (NYP) With a 6-0 record in trial convictions against defendants caught in his insider-trading probe, Wall Street’s top cop Wednesday will kick off his final trial emanating from that investigation. Already the insider-trading probe has resulted in 68 convictions — including guilty pleas, the biggest Wall Street crackdown since the 1980s. Squaring off against Bharara in Manhattan federal court are two well-heeled hedge-fund defendants: Anthony Chiasson, founder of the $4 billion hedge fund Level Global, and Todd Newman, a former money manager with Diamondback Global. The beginning of jury selection was delayed more than a week because of Hurricane Sandy. Chiasson and Newman stand accused of reaping more than $60 million in profits from trading confidential tips about computer maker Dell and graphics firm Nvidia. 13 People Trying To Trade Gas For Sex On Craiglist (BuzzFeed) It was probably inevitable that the gas shortages in New York and New Jersey would lead to ads like "I've got gas from Hess and looking for any sexy woman who may not want to wait in those long lines for hours and hours only to find the station empty when it's their turn. So let me know, I'm sure we could work something out to get your tank filled and empty mine. Call or text."