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Opening Bell: 01.20.12

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Greece Begins Talks With Troika (WSJ)
Greece on Friday began meeting with a visiting delegation of international auditors for a new bailout loan, coinciding with parallel negotiations with private creditors to restructure the country's debt. The talks with the auditors from the European Commission, the International Monetary Fund and the European Central Bank—known locally as the "troika"—are expected to focus on structural changes Greece must make to secure a new financial-rescue package. "Most of the emphasis will be on structural reforms," said a Greek government official. The specific focus will be on steps needed to boost Greece's hidebound economy, now in its fifth year of recession, by liberalizing industries and cutting bureaucratic red tape.

Greek Default Won't Lessen Contagion Risk, Says Strategist (CNBC)
"An orderly default in the short term is the most likely scenario but this situation is not going to go away. We might get a hard default in 3 to 6 months time," Ostwald added.

Schwarzman: None of Your Business (WSJ)
Blackstone Group LP is changing the structure of its investment in a Florida bank after Mr. Schwarzman, founder and chief executive of the private-equity firm, balked at providing information about his personal finances to the Federal Reserve, according to people familiar with the situation. Blackstone is converting part of its 14.1% stake in BankUnited Inc. to nonvoting preferred stock, these people said. The deal will shrink its voting stake to less than 10%, pushing the New York firm below the level at which the Fed requires personal financial data from the Florida bank's owners. It isn't clear why Mr. Schwarzman is sensitive about providing such information. The longstanding Fed rule is in place to allow the regulator to gauge the safety of banks by evaluating the financial resources of their owners. The financial information gathered about a bank's owners isn't available to the public, even if requested under the Freedom of Information Act, according to people familiar with Fed policies.

PETA asks Jamie Dimon for O.J.'s house (CNN Money)
In a letter addressed to Jamie Dimon, JPMorgan Chase's CEO, People for the Ethical Treatment of Animals asked if the bank would either donate or sell the house to the animal rights group for a "nominal sum" once the bank completes the foreclosure it's pursuing on Simpson's home. Ingrid Newkirk, PETA's president, assured Dimon in the letter that if the organization is able to acquire the five-bedroom Kendall, Fla. home, it would put it to good use by turning it into a "Meat Is Murder" museum that would teach visitors that "nonviolence begins on our plates." PETA said it chose Simpson's home because the former football star actively endorsed the consumption of meat. Simpson, they said, was a spokesman for a chicken restaurant chain, owned two restaurants himself and held an ownership stake in several HoneyBaked Ham stores.

Credit Scoops Up AIG Bonds (WSJ)
The bonds were part of a portfolio that the New York Fed took on as part of the 2008 bailout of American International Group Inc. The deal came after the regional Fed bank quietly solicited bids from four large securities dealers, and could set a precedent for how it disposes of other assets in the coming months, market participants said. The New York Fed didn't disclose how much Credit Suisse paid for the bonds, which had an unpaid principal balance of $7 billion, but the amount is likely to be more than $3 billion based on prices of comparable debt. The Swiss bank's U.S. securities arm is expected to resell most of the securities to investors.

Man arrested over importation of Saddam Hussein statue's buttock (Guardian)
A 66-year-old man has been arrested by detectives investigating claims that a buttock from a statue of Saddam Hussein was illegally brought back to the UK after the invasion of Iraq. Derbyshire police said the man was detained on suspicion of breaching the 2003 Iraq Sanctions Order, which governs the importation of "Iraqi cultural property" – including items of archaeological, historical or religious importance. The buttock – a 2ft lump of bronze – was saved from being melted down for scrap metal by 52-year-old former SAS soldier Nigel "Spud" Ely after he witnessed the statue being toppled by US marines in Baghdad in 2003.

New Normal on Wall Street: Smaller and Restrained (NYT)
“No matter how you cut it, the Goldman Sachs of tomorrow is not going to be the Goldman Sachs of 1999, when it did its I.P.O., or the Goldman Sachs of 2006, when it was at the high point of the cycle,” said Brad Hintz, a senior analyst with Sanford C. Bernstein & Company. As profits fall way short of internal targets, the executives who run Wall Street may have to cut back hard, to stop profits from falling even further. When asked by an analyst on Wednesday whether Goldman Sachs was thinking of downsizing to deal with the difficult business conditions, David A. Viniar, the bank’s chief financial officer, said, “That is one of the most critical questions and a very difficult one to answer.”

Foreclosure Deal By February (NYP)
State AGs are expected to meet in Washington on Monday to nail down terms of the settlement, which could hit mortgage servicers with as much as $25 billion in fines and penalties. The Obama administration has been pressing participants to reach a pact before his State of the Union address on Jan. 24. Sources said while it’s unlikely that a deal will be reached by that time, some are hopeful that one could be reached by the end of the month.

Fed Holds Off For Now On Bond Buys (WSJ)
Some Fed officials are open to more bond buying if the economy doesn't continue to improve, or if inflation falls much below their objective of about 2%, but they believe the outlook is too murky to move now, and views vary on the costs and benefits.

Marianne Gingrich on Nightline: Newt Requested Divorce on the Phone (Daily Intel)
Marianne says that he asked for an open marriage after already carrying on an affair with Gingrich's now-wife Callista (his third wife), which Marianne says she refused to accept. Marianne also says that Newt requested a divorce from her by telephone after she had been recently diagnosed with multiple sclerosis. Gingrich divorced his first wife, Jackie, when she was battling cancer.

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Apple To Announce Plans For Cash Hoard (WSJ) Apple will outline what it plans to do with a growing pile of cash by next month, according to Howard Ward, chief investment officer at Gamco Investors Inc. Apple, which has been grappling with investor criticism over the handling of its $137.1 billion in cash and investments, will add $42 billion in earnings to that sum in 2013, Ward said. Greenlight Capital Inc.’s David Einhorn has been urging Cupertino, California-based Apple to issue high-yielding preferred shares to spread the funds among investors. Investors are also urging Apple to consider a higher dividend payout. “We’re going to get an announcement from the company as to how they intend to reallocate some of their cash,” Ward said in an interview today on Bloomberg Radio’s “Surveillance” with Tom Keene. “They will put a floor under their stock at a higher price than it is today.” AIG shareholders win class-action status in lawsuit versus U.S. (Reuters) Two groups of American International Group shareholders won class-action status from a federal judge on Monday in a $25 billion lawsuit by former Chief Executive Maurice "Hank" Greenberg over alleged losses caused by the U.S. government's bailout of the insurer. U.S. Court of Federal Claims Judge Thomas Wheeler also appointed Greenberg's lawyer, David Boies, of Boies, Schiller & Flexner LLP, as lead counsel for the classes. Greenberg's Starr International Co, once AIG's largest shareholder with a 12 percent stake, sued the United States in 2011 over what eventually became a $182.3 billion bailout for the New York-based insurer. It said that by taking a 79.9 percent AIG stake and then conducting a reverse stock split without letting existing shareholders vote, the government conducted an illegal taking that violated the 5th Amendment of the U.S. Constitution. Citing Boies' estimate that "tens of thousands" of shareholders might be affected, Wheeler said "class certification is by far the most efficient method of adjudicating these claims." Both Sides Of SEC Nominee Face Heat (WSJ) In one version, Ms. White is a no-holds-barred crime fighter known for stretching the law to jail mob bosses and international terrorists. In another, Ms. White is a friend of Wall Street who worked for the past decade for the law firm Debevoise & Plimpton LLP, where she represented giant banks such as J.P. Morgan Chase. Blackstone: We're Betting Big On Residential Real Estate (CNBC) "Blackstone is now the largest owner of individual houses in the United States," Schwarzman told CNBC's "Squawk on the Street" Monday, pointing to his company's $3 billion portfolio of residential real estate. But given the nascent recovery in the housing market, they're not buying and selling them quickly but rather renting them out. "It's a good business for us. It's a new thing, but it's also good for America," he said. Icahn Gets Confidential Look At Feds Books (Reuters) Dell Inc has agreed to give Carl Icahn a closer look at its books, less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private...A source with knowledge of the situation said Icahn's and Dell's confidentiality agreement does not have a contractual "standstill" obligation - meaning he is not obligated to stop trading stock in the company. But the activist investor would not be able to trade the stock while he is privy to non-public information in any case, the source added. Phoenix society gives gator happier life with prosthesis (AZC) The alligator is Mr. Stubbs, who is part science project, part human endeavor, and much more. He’s also half-gator, half-rubber. The 11-year-old crocodilian now sports a 3-foot-long prosthetic tail, attached firmly with nylon straps. It replaces the original, which was bitten off more than eight years ago. As far as anyone at the Phoenix Herpetological Society knows, Mr. Stubbs is the first alligator to tolerate, if not sport, a prosthesis. It will take months, however, before Mr. Stubbs learns how to properly use the tail. For now, handlers are happy with smaller milestones. “The fact he doesn’t try to bite it (the tail) is a good sign,” said Russ Johnson, president of the Phoenix Herpetological Society. “Learning how to use it is going to take a lot of training.” The months-long project was overseen by someone well-versed in anatomy. Marc Jacofsky is executive vice president of research and development at the CORE Institute in Phoenix, which specializes in orthopedic care — for humans. While visiting the Herpetological Society, Jacofsky was asked if it would be possible to make an artificial tail for Mr. Stubbs. “I looked and saw there was enough there that we could probably do something that wouldn’t involve surgery,” Jacofsky said. “I also liked the idea because it would improve his life. Our motto at the CORE Institute is ‘Keep life in motion,’ and this certainly fit in with that. I was on board.” Jacofsky estimated the project has cost the Core Institute about $6,000 in donated labor and materials. Mr. Stubbs had been a project since shortly after arriving at the center in May 2005. The then-3-year-old gator was one of 32 confiscated from the back of a truck pulled over near Casa Grande, Johnson said. Officers called in the Arizona Game and Fish Department as soon as the cargo made its presence known. “Scared the heck out of the officer,” Johnson said. “No one expects to find alligators when you look into the back of a truck.” Greece Faces 150,000 Job-Cut Hurdle to Aid Payment (Bloomberg) Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement. Failed Sale Of Gleacher Is A Warning For Directors (WSJ) The Dell drama is still unfolding, but for a cautionary tale of how boards, even when they may be well-intentioned, can harm investors of a takeover target, take Gleacher. Shares in the small investment bank have lost more than 60% in the past year as the prospects for a deal evaporated, business dwindled and star traders left. Ironically for a firm that bears the name of Eric Gleacher, who made his name advising on big deals in the 1980s, the company failed to sell itself. At least as some critics see it, its independent directors are to blame. SEC Says Illinois Hid Pension Troubles (WSJ) For years, Illinois officials misled investors and shortchanged the state pension system, leaving future generations of taxpayers to foot the bill, U.S. securities regulators allege. The Securities and Exchange Commission on Monday charged Illinois with securities fraud, marking only the second time the agency has filed civil-fraud charges against a state. Bernanke Provokes Mystery Over Fed Stimulus Exit (Bloomberg) When Ben S. Bernanke asserted last month that the Federal Reserve doesn’t ever have to sell assets, he raised questions about how the central bank can withdraw its record monetary stimulus without stoking inflation. The Fed may decide to hold the bonds on its balance sheet to maturity as part of a review of the exit strategy Bernanke expects will be done “sometime soon,” he told lawmakers in Washington on Feb. 27. This would help address concerns that dumping assets on the market will lead to a rapid rise in borrowing costs. It also allows the Fed to avoid realizing losses on its bond holdings as interest rates climb. Man shot in buttocks at Calle Ocho Festival unaware he was wounded (Miami Herald) The shooting occurred around 4:30 p.m. as the man walked along Southwest Eighth Street and 11th Avenue, part of the throng of revelers who gather annually at the street festival in Little Havana. It’s unclear if something sparked the violence between the two men, or if the shooting was unprovoked. At first the victim did not realize he had been shot and kept strolling along the festival route. “He discovered later that he was bleeding and then passed out,” said Miami police spokesman Sgt. Freddie Cruz. The victim, who was hit in the left buttocks, was taken to Jackson Memorial Hospital, where he is in stable condition and expected to recover.

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Goldman No.1 in Investment Bank Fees (Bloomberg Markets) Total investment banking fees for all financial institutions in 2011 were $49.1 billion, matching the $49.1 billion from 2010. Total deal volume also matched 2010, at $6.9 trillion. Goldman took the top spot in the ranking even as its total fees fell in 2011 to $3.46 billion from $3.6 billion in 2010. Goldman is also No. 1 in M&A fees for the eighth consecutive year. JPMorgan dropped to No. 3 from No. 1 in the overall ranking. Morgan Stanley held on to the No. 2 spot, with $3.26 billion in overall fees, down 11 percent from the prior 12 months. Investors With 39.3% of Greek Debt Will Swap (Bloomberg) The thirty members of the private creditor-investor committee for Greece who plan to participate in the swap hold an aggregate 81 billion euros of Greek debt, or 39.3 percent of the Greek debt eligible for the swap, according to the email. Obama pitches CEOs on economic growth (Politico) President Barack Obama pitched his proposals for economic growth to an audience of CEOs Tuesday, including Bank of America chief executive Brian Moynihan and Jamie Dimon of JP Morgan Chase. The president hailed his proposed investments in infrastructure and training and pointed to common ground with the business community, including the signing of free trade agreements and allowing Russia into the World Trade Organization, according to a pool report. Obama said he will go anywhere in the world to secure markets for American goods, and, noting a large order inked by Boeing, quipped, "I expect a gold watch upon my retirement" for all the planes he's helped sell around the world. "Obviously we've got a long way to go," he said. But, he said "the economy is speeding up." The gathering of the Business Roundtable, an association of CEOs, drew roughly 100 chief executives. But while there was polite applause when Obama was introduced, the pool report noted, “the CEOs sat silent for most of his remarks.” Private Sector Adds 216,000 Jobs (WSJ) Private-sector jobs in the U.S. increased 216,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The gain was close to expectations of 215,000 put forth by economists surveyed by Dow Jones Newswires. Alleged accomplice of Manhattan 'madam' indicted, remains on the lam (NYP) Accused millionaire madam Anna Gristina had an alleged partner in crime -- gorgeous strawberry-blonde Jaynie Baker, who three sources told The Post yesterday is Gristina's indicted but unapprehended accomplice. "She was running the operation with Anna," said one source with knowledge of the operation. Asked where Baker, 30, of Brooklyn, is currently, the source answered, "Nobody knows." Baker and Gristina are both charged with felony promoting prostitution for allegedly co-running an Upper East Side-based escort service that offered premium call girls to a millionaire clientele. "This was the gold standard of escort services," said a second source with knowledge of the operation. "These were high-end models who cost $2,000 a visit, and were worth every penny." World’s Richest Lose $11.3B, Mittal Falls Off Index (Bloomberg on Bloomberg) The 20 richest people on Earth lost a combined $11.3 billion yesterday as global markets fell after European economic growth slowed and investors weighed Greece’s chances of getting bondholders to accept a debt swap. Warren Buffett’s fortune fell $407.3 million, dropping his net worth to $43.9 billion. The chairman of Omaha, Nebraska- based Berkshire Hathaway Inc. (BRK/B), his investment holding company, ranks third on the Bloomberg Billionaires Index, a daily ranking of the world’s richest people. Bernanke Seen Accepting Faster Inflation as Fed Seeks Jobs Boost (Bloomberg) The Fed chairman told lawmakers last week that an increase in energy costs will boost inflation “temporarily while reducing consumers’ purchasing power.” He also said the central bank will adopt a “balanced approach” as it pursues its twin goals of price stability and full employment, which it defines as a jobless rate of between 5.2 percent and 6 percent. “The chairman seemed to suggest they will tolerate a misdemeanor on inflation as unemployment continues to fall toward their goal” over several years, said Mark Spindel, chief investment officer at Potomac River Capital, a hedge fund that manages $250 million in Washington. President Presses for Action on the Buffett Rule (WSJ) President Barack Obama took an aggressive tack on taxes at a White House news conference Tuesday, suggesting that Congress adopt his proposal for a so-called Buffett rule this year. It would require very high income earners—those making $1 million a year or more—to pay at least 30% of their income in federal tax. Newt Gingrich: 'I am the tortoise' of the 2012 Republican primary (The Hill) Newt Gingrich heralded himself as the "tortoise" of the 2012 Republican primary after a strong win in Georgia — the state he represented for two decades in Congress — and pledged to fight on for the Republican presidential nomination despite an otherwise poor showing in the Super Tuesday contests. "There are lots of bunny rabbits who run through — I am the tortoise. I just take one step at a time," Gingrich told a crowd of supporters in Atlanta.

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Barclays Cheaper Than Peers Fuels Breakup Talk (Bloomberg) The break-up discussion will be one of the first issues facing new chairman David Walker, who will succeed Marcus Agius as chairman of Barclays on Nov. 1. Walker said in an interview with the Telegraph newspaper that “my view is that this should continue to be a universal bank,” according to the Aug. 11 article. Agius has also defended the so-called universal banking model, which combines consumer lending with corporate and investment banking. Paul Ryan And What Wall Street Should Know (Dealbook) While Mr. Ryan may appear to be a friend of business, he doesn’t agree with the industry’s biggest talking point these days, the Simpson-Bowles deficit reduction plan. He was a member of the commission and voted it down, arguing that it did not go far enough in overhauling health care entitlements. He later criticized President Obama for not supporting it. That prompted Gene Sperling, director of the National Economic Council under President Obama, to retort on CNN: “Paul Ryan, talking about walking away from a balanced plan like Bowles-Simpson is, I don’t know, somewhere between laughable and a new definition for chutzpah.” Greece Completes Largest Debt Sale In Two Years (WSJ) Give it up for Greece, everyone: "The Greek Public Debt Management Agency said it sold €4.063 billion ($5.01 billion) of 13-week treasury bills at an auction, which included a 30% noncompetitive tranche. The uniform yield was 4.43%. Most of the funds will go to repay €3.1 billion in bonds held by the ECB that mature Aug. 20. That will ensure that the country avoids a default that would make it impossible for Greek banks to continue borrowing from the ECB, on which they currently depend for their survival." Wilbur Ross: Just Let Greece Go, It's Fine (CNBC) "I've been in favor of Greece going out, frankly both from the Greek point of view and the EU point of view," Ross said. "I think there are enough firewalls being built up, particularly now that (European Central Bank chief) Mario Draghi is acting like the lender of last resort, that I don't think it would be that traumatic anymore. Most of the indebtedness of Greece is official debt, no longer private debt, so you don't have the domino problem." Crocs co-founder George Boedecker blames 'girlfriend' Taylor Swift following arrest for drunk driving in Colorado (NYDN) A witness called Boulder authorities early Saturday evening after seeing Crocs co-founder George Boedecker passed out at the wheel of a Porsche with the engine running, according to the Denver Post. Boedecker was busted on suspicion of driving under the influence and is free on $500 bond. When confronted by cops, the 51-year-old Boedecker said that it was actually the 22-year-old Swift who was driving the car, according to a police report obtained by The Smoking Gun and the Denver Post. According to the report, Boedecker said that his "girlfriend" left the vehicle after they got into a fight. When asked who his girlfriend was, Boedecker told the officer she was a "really (expletive) famous" singer, then asked the officer if he knew who Taylor Swift was. When the officer asked Boedecker where Swift was, Boedecker gestured toward a nearby yard, and “said she was in Nashville,” according to the police report. He also described his girlfriend as “bats--- crazy.” Authorities could not find anyone in the area, and Swift is currently dating Robert F. Kennedy Jr.'s 18-year-old son, Conor. Boedecker reeked of booze and was uncooperative with cops, saying “I’m not doing your f------ maneuvers" when asked to take a sobriety test. When asked for his address, Boedecker replied, "I have 17 (expletive) homes," and also told the cops he would have their badges, according to the police report. Knight $440 Million Loss Sealed By New Rules On Canceling Trades (Bloomberg) Knight, whose market-making unit executes 10 percent of U.S. equity volume, lost $440 million on Aug. 1 and its stock has plunged 73 percent after a computer malfunction bombarded the market with unintended orders that exchanges declined to cancel. A decade ago, the firm suffered almost no consequences in a similar breakdown when officials agreed to void trades after Knight mistakenly sold 1 million of its own shares. Peregrine CEO Is Indicted (WSJ) The chief executive of Peregrine Financial Group Inc. was indicted Monday on 31 charges of lying to government regulators regarding the failed brokerage's operations. Russell Wasendorf Sr. faces a maximum sentence of 155 years' imprisonment on the charges and fines of about $7.75 million, according to a statement from the U.S. Attorney's Office for the Northern District of Iowa. Hedge Funds Have $74 Billion As Europe Fire Sale Delayed (Bloomberg) Apollo Global Management, Oaktree Capital Group, Avenue Capital Group, and Davidson Kempner Capital Management are among U.S. firms that have flocked to Europe, setting up offices and raising funds to benefit from the most severe period of distress in the region. The money raised for distressed-debt funds gives the firms about 100 billion euros to spend on deals including leverage, according to PricewaterhouseCoopers LLP. Facebook Shares Unlocking (WSJ) An avalanche of privately held Facebook shares could begin hitting the market this week—potentially putting further pressure on the company's stock—as rules expire that have kept some early investors from cashing out. Record 17-foot python caught in Everglades (Herald Tribune) Scientists say they've caught the biggest Burmese python ever recorded in Florida. The python weighed in at 164½ pounds and measured 17 feet, 7 inches long. It was pregnant with 87 eggs. The snakes are native to Southeast Asia but have established a population of tens of thousands in the Everglades, where the latest find was recorded Friday. It was euthanized and is being studied at the Florida Museum of Natural History.

Opening Bell

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Pimco tops Gross; PF Changs tainted by alleged insider trading; Deutsche says Fed might sit tight 'til 2017; Guy robs banks dressed as Rick James; "Oklahoma man discovers he was shot twice after celebrating birthday"; and more.