Opening Bell: 01.13.12

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JPMorgan Profit Falls 23% (WSJ)
J.P. Morgan Chase & Co. reported a 23% drop in fourth-quarter profit on a sharp drop in its investment-banking revenue and further declines in the value of its mortgage business. As the first major bank to report for the fourth quarter, J.P. Morgan's results offer a glimpse into what is largely expected to again be a bleak quarter for the nation's largest financial institutions. Revenue at the bank missed expectations, and shares slipped 2.4% to $35.95 in premarket trading. But while the Wall Street side of the business was slow, as was expected given low demand for mergers and stock offerings, the bank's business-lending operations continued to be in high demand, a more positive sign for U.S. businesses and the economy as a whole. Total profit reported was $3.73 billion, or 90 cents a share, down from year-ago earnings of $4.83 billion, or $1.12 a share, but in line with the analyst estimate of 90 cents a share on Thomson Reuters.

S&P Cuts In Europe Said To Be Imminent (WSJ)
The Standard & Poor's ratings agency could announce the downgrades in the credit ratings of a number of European governments as early as Friday, said two people familiar with the matter.

Pimco’s Gross Says Global Economy, Markets at Risk in 2012 (Bloomberg)
“Banks should be eight-to-one or nine-to-one in terms of leverage,” Gross said in a Bloomberg Television interview with Trish Regan. “Right now, the system is an 18-times to 20-times overleveraged system, and that’s producing the risk in terms of tipping one way or the other.”

Billionaire Paulson Persists With Properties (Bloomberg)
Paulson, who made $15 billion in 2007 betting against U.S. subprime mortgages, is sticking with bullish investments in residential and commercial mortgage securities, helping his Credit Opportunities Ltd. fund gain about 1 percent last quarter to narrow its 2011 decline to 18 percent.

BofA Ponders Retreat (WSJ)
Executives at the Charlotte, N.C., financial giant put the potential move on a list of emergency scenarios submitted to the Federal Reserve last year, these people said. While people close to Bank of America insist that no retreat is imminent, even the possibility of selling branches and losing customers it spent huge sums to lure underscores the depth of its problems.

Fred Durst Documents Juice Fast on Tumblr (RollingStone)
Limp Bizkit frontman Fred Durst is nearly two weeks into blogging a very difficult 60-day juice fast on Tumblr. Though Durst began the project with a great deal of enthusiasm – his first post on January 2nd was an image of his new juicer with the caption "My new best friend!" - he quickly became frustrated and very, very hungry. "This is going slowwwww," Durst wrote on the third day. "Probably because I cheated last night and had some M&M's."

Hedge funds hunker down for Greek debt standoff (Reuters)
edge funds are positioning to profit from a plan to slash Greece's towering debt pile as Athens enters final talks that could sway the country's membership of the euro. York Capital, the $14 billion fund part-owned by Swiss banking giant Credit Suisse (CSGN.VX), New York-listed Och Ziff, and $10 billion-strong Marathon Asset Management are among those who collectively may have built up sufficiently large positions to scupper the bailout deal, several sources close to the debt restructuring told Reuters.

Lloyd's CEO To Waive 2011 Bonus (WSJ)
The chief executive of Lloyds Banking Group, Antonio Horta-Osório, will waive his 2011 bonus, the bank said Friday. His decision comes shortly after he returned from a leave of absence from the 41% government-owned bank due to exhaustion and as the U.K. financial regulator warned banks that it could veto large pay packets if they are seen to be putting the bank's broader capital strength at risk.

Fed to Weigh Further Easing Amid Doubts About Recovery (CNBC)
FYI.

Goldman Bids For Bad Bonds (WSJ)
Goldman recently approached the Federal Reserve Bank of New York and offered to buy a multibillion-dollar bundle of risky mortgage bonds that the Fed acquired in the 2008 bailout of American International Group Inc., according to people familiar with the matter. The New York Fed responded by quietly canvassing a few securities dealers for bids on the bonds Goldman wanted to purchase, seeking competing offers to determine whether Goldman's offer represented the best value for the bonds, the people said. But the effort, intended to be discreet, rattled the market for subprime-mortgage debt on Thursday when some market participants learned the New York Fed was considering additional sales of bonds from the portfolio known as Maiden Lane II. An index that tracks prices of subprime-mortgage bonds fell 2% on Thursday afternoon to about 47 cents on the dollar. The index had risen nearly 10% earlier this month.

RBS Securities Capitulation a Blueprint for Banks in Europe (Bloomberg)
Banks running securities arms that are laggards in their industries may follow RBS in shuttering units because a decline in trading and a jump in the cost of operating under incoming regulation is rendering some businesses not viable, say analysts...“Middle-ranking banks are being squeezed as volumes have collapsed,” said Christopher Wheeler, an analyst at Mediobanca SpA in London. “The banks that are neither betwixt nor between can’t afford the cost base they’re running.”

New Jersey Weddings May Go Vegas Style (WSJ)
Get drunk and get married: New Jersey is hoping to bring a little Las Vegas razzle-dazzle to Atlantic City with a law making it easier to get married on a whim. And for those with morning regrets, the legislation now on Gov. Chris Christie's desk would also expedite the process of getting divorced. Passed by both houses of the New Jersey Legislature on Monday, the bill would eliminate a mandatory 72-hour waiting period for a marriage or civil-union license, and increase the fee to $60 from $28. Currently, 29 states have no waiting period for a marriage license, but only two—Connecticut and Rhode Island—are in the Northeast.

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Opening Bell: 03.19.13

BlackRock To Layoff Nearly 300 Employees (Reuters) BlackRock President Rob Kapito told employees on Monday that despite the layoffs the firm, which oversees almost $4 trillion, would continue hiring and expected to end 2013 with more employees than it currently had. "These moves will give high potential employees greater responsibility and additional career opportunities, and will make us a more agile organization better positioned to respond to changing client and market needs," Kapito said in the memo. Blackstone Said to Mull Outbidding Silver Lake for Dell LBO (Bloomberg) Blackstone is weighing a bid for Dell, the computer maker seeking offers to rival the proposed $24.4 billion buyout by its founder and Silver Lake Management LLC, said people with knowledge of the matter. Blackstone may bid as part of a group including other investors, said one of the people, who asked not to be named because the process is confidential. The New York-based private- equity firm hasn’t made a decision, another person said. Under the go-shop provision of the Silver Lake merger agreement, Dell’s board has through March 22 to seek superior proposals, and can negotiate beyond that date if it receives an offer it deems serious. Fannie Sees A Way To Repay Billions (WSJ) The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to do the once unthinkable: repay as much as $61.5 billion in rescue funds to the U.S. Treasury. The potential payment would be the upshot of an accounting move that Fannie Mae's senior executives are looking to make whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said it would delay the release of its annual report, due by Monday, as it tries to reach resolution with its accountants and regulator over the timing of the accounting move. UBS becomes latest bank to quit Euribor rates panel (Reuters) UBS said it would pull out of money market rate Euribor, one of the most prominent banks to do so after a global benchmark rate-setting scandal, in a move that renews questions about the rate's future. "We have decided to withdraw from the Euribor panel and to focus on our core funding markets Swiss franc and U.S. dollar," a UBS spokesman said, adding the decision was linked to an October decision to shut down vast parts of its investment bank. Lululemon Pulls Yoga Pants From Stores (WSJ) The yoga-apparel retailer's shares tumbled late Monday after saying it has pulled some of its popular pants from stores, after a mistake by a supplier left the pants too see-through. Lululemon Athletica said the glitch involved pants using its signature fabric, known as Luon, that arrived in stores March 1. The retailer is offering refunds to customers. Citigroup to Pay $730 Million in Bond-Lawsuit Settlement (Bloomberg) The deal would resolve a lawsuit by investors who bought Citigroup bonds and preferred stock from May 2006 through November 2008, the New York-based lender said yesterday in a statement. The accord requires court approval and would be covered by existing litigation reserves, the bank said. Ex-Calpers CEO Buenrostro Indicted Over Apollo Investment (Bloomberg) Federico Buenrostro, former chief executive officer of the California Public Employees’ Retirement System, was charged with conspiring to trick the pension fund into paying millions of dollars in fees for a $3 billion investment into funds managed by Apollo Global Management. Buenrostro, 64, who led the state’s public pension fund from 2002 to 2008, was accused along with Alfred Villalobos, 69, of conspiracy to defraud the U.S., engaging in a false scheme against the U.S. and conspiracy to commit mail fraud and wire fraud in a grand jury indictment announced yesterday by U.S. Attorney Melinda Haag in San Francisco. Bernanke Tightens Hold on Fed Message Against Hawks (Bloomberg) The Fed chairman, starting tomorrow, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent. In recent presentations, he has pledged to sustain easing, defending $85 billion in monthly bond purchases during congressional testimony last month and warning that “premature removal of accommodation” may weaken the expansion. Deli Workers Have Some Choice Words for Mayor Bloomberg’s New Cigarette Proposal (Daily Intel) "It's stupid. He needs to f*ck off," Fernando, the manager at M&M Market Deli on Broome Street, said. "You want to smoke, you're going to smoke no matter what. And especially at that young age, you're curious about everything." It was the principle of the thing that so irritated Fernando more than any potential loss of business. "You don't make money on cigarettes," he said. "I mean, our profit on cigarettes is 75 cents, a dollar? The whole purpose of cigarettes is to get people in — you want to buy cigarettes, then you also pick up a sandwich."