Opening Bell: 01.23.12

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Lagarde Says Europe Must Boost Firewall (WSJ)
The global economy faces a depression-era collapse in demand if Europe doesn't quickly act to dramatically boost the size of its debt-crisis firewall, implement pro-growth policies and further integrate the euro zone, the head of the International Monetary Fund warned Monday. "It is about avoiding a 1930s moment, in which inaction, insularity, and rigid ideology combine to cause a collapse in global demand," IMF Managing Director Christine Lagarde said in prepared remarks before the German Council of Foreign Affairs in Berlin. "A moment, ultimately, leading to a downward spiral that could engulf the entire world," she said.

A Sears Wager Stings At Goldman (WSJ)
Clients of Goldman invested about $3.5 billion in Eddie Lampert's hedge fund through a special deal more than four years ago. Goldman invested about $75 million of its own money as part of the arrangement. At the beginning of this year, that investment was down several hundred million dollars, in large part due to a 57% plunge in Sears stock in 2011. Sears is one of the largest investments of Mr. Lampert's fund, ESL Investments Inc., according to the most recent securities filings. A sudden rebound in Sears this year has put Goldman and its clients in the black on the deal, although ESL still trails the average return of rival hedge funds since the Goldman money was invested. Goldman and its investors need to see the Sears rally continue. The reason: They can't withdraw their money until the end of this year, according to terms of the investments. And some analysts are skeptical about whether the recent gains will last.

Former Minister: Greece Won't Abandon Euro (CNBC)
FYI.

Wall Street Pay Gets Even Trickier To Figure (WSJ)
Since the financial crisis, banks have lessened short-term incentives. Base salaries have risen, while bonuses have fallen. And a bigger portion of incentive compensation is now paid in stock that typically vests over three years. While positive for investors, it poses new risks. Higher base salaries mean firms have less flexibility on pay. And by deferring more bonus pay, usually with restricted stock units that are charged over several years as they vest, firms may be locking in compensation expense that isn't matched by future performance. That is a worry since Wall Street is in a state of flux and revenues have been falling. If that continues, expenses from deferred compensation could limit banks' room to maneuver. Firms are paying out an ever-larger share of compensation in deferred-stock—Morgan Stanley in 2010 changed the percentage from 40% of bonuses to about 60%. For 2011, it capped the cash portion of bonuses at $125,000.

French front-runner pledges to cut his pay by 30 per cent as he aims to become next president (Telegraph)
"I like people while others are fascinated by money … I will be the president of the end of privileges," Francois Hollande said, accusing Mr Sarkozy of presiding over the "degradation" of France just days after the country lost its coveted triple A credit rating for government loans. "My real adversary has no name, no face, no party ... it's the world of finance."

Buffett Sings for China, With A Year’s Delay (China Real Time Report)
Warren Buffett sang after all on the online version of China’s annual Spring Festival gala — though the audience wasn’t the one he originally intended. Earlier this month, the gala’s organizers said Mr. Buffett, would sing as part of a new year’s greeting to China’s fast-growing Internet community. On Sunday, the gala’s website featured a video of Mr. Buffett, wearing a dark sweatshirt and sitting in front of what looked like a model train set, playing his ukulele and singing the American folk song “I’ve Been Working on the Railroad.” But Mr. Buffett didn’t originally record the song for the gala. Instead, he recorded it for a charity event from a year ago, said Wu Zheng, a Chinese media executive and friend of Mr. Buffett. Originally — as Mr. Wu told China Real Time earlier this month — Mr. Buffett objected to repurposing the video for the new year’s audience. Mr. Buffett appears to have changed his mind: Mr. Wu said Sunday that Mr. Buffett later gave his assent to use the video in the gala.

Bull with flaming balls of wax attached to head fatally gores man in eastern Spain (AP)
A flaming-horned bull trampled and fatally gored a man early Saturday during a festival in eastern Spain, an official said. Large balls of flaming wax are traditionally affixed to the beasts’ heads before they are let loose to rampage through squares and narrow streets in such festivals...Many towns in east and northeastern Spain celebrate feasts with “toros embolados,” or “flaming bulls,” which feature the animals racing around and shaking their heads as a reaction to flames or fireworks attached to or close to their horns. At these regional festivals, flaming-horned bulls are taunted and teased by rowdy crowds in bullrings, town squares or down streets.

EU to Ban Iran Oil Imports Over Nuclear Program (Bloomberg)
European Union foreign ministers agreed to ban oil imports from Iran starting July 1 as part of measures to ratchet up the pressure on the Persian Gulf nation’s nuclear program, the 27-nation bloc said in a statement. The EU will freeze assets of the Iranian central bank in Europe as well as of eight other entities and ban the trade in gold, precious metals, diamonds and petrochemical products from Iran, the EU said.

RIM CEOs Give Up Top Posts In Shuffle (WSJ)
RIM announced that Mr. Lazaridis, who in 1984 co-founded the company using a loan from his parents, and Mr. Balsillie, who joined him in 1992, had stepped down as executives and had relinquished their roles as co-chairmen. The board named Thorsten Heins, previously one of two chief operating officers, to be chief executive, the company said.

Goldman’s O’Neill Sees Investors Adopting His Bullish US Stance (CNBC)
“I spent most of this past week in New York, and to my slight surprise, there appears to be some shift in the mood about the state of life,” wrote O’Neill in his ‘Viewpoints’ letter to clients. “Whether this is because it is the start of the year, asset prices have been perkier or there is some recognition that the U.S. economy and other parts of the world are not as bleak as the second half of 2010 is not so clear. It was certainly quite nice to hear and, in my judgement, is more reflective of what is going on.”

Obama Paying Bush Interest Limits Debt Debate (Bloomberg)
The U.S. bond market is neutralizing budget deficits as an election-year campaign weapon. Interest payments will cost the government 3.1 percent of gross domestic product this year, according to Office of Management and Budget and International Monetary Fund data compiled by Bloomberg. That’s down from 4.8 percent in 1991, the highest in the past 50 years, during George H.W. Bush’s presidency. Since 1980, the only incumbent with a lower ratio than Barack Obama was George W. Bush in 2004.

Carnival offers survivors of doomed cruise Costa Concordia 30% off future cruise (NYDN)
Survivors of the Costa Concordia wreck are being offered 30% off future cruises with the company — a sales pitch that was not received with much gratitude Sunday. “It is a ridiculous and insulting offer,” survivor Brian Page, a retired British accountant, told The Telegraph of London, which first reported the discount offer. “The company is not only going to refund everybody, but they will offer a 30% discount on future cruises if they want to stay loyal to the company,” said a spokesman for Costa Cruises, a subsidiary of industry leader Carnival Cruise Lines. But survivors want considerably more than a third off another cruise. They plan to file a class-action suit Wednesday in Miami, where Carnival is based, seeking $160,000 a passenger — or almost $513 million if all 3,206 passengers were to be paid. The cruise line blames hapless Capt. Francesco Schettino for running the luxury liner on to rocks off the Tuscan coast on Jan. 13, holding him fully responsible for killing at least 30 people. But Schettino told a judge last week that his bosses not only knew he was going to sail perilously close to the island of Giglio — they told him to do it as a form of “advertising” for the cruise line.

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Opening Bell: 06.26.12

China's Officials Forced To Sell Luxury Cars (FT) Cash-strapped local governments in China have begun auctioning off fleets of officials’ luxury cars as part of efforts to bolster revenues hit by the country’s slowdown. Wenzhou, a south-eastern coastal city hit hard by the cooling economy, sold 215 cars at the weekend, fetching Rmb10.6 million ($1.7 million). It plans to sell 1,300 vehicles – 80 percent of the municipal fleet – by the end of the year. Moody’s Downgrades 28 Spanish Banks On Sovereign Risk (Bloomberg) While Santander and BBVA remained investment grade, at least a dozen lenders were lowered to junk status, Moody’s said yesterday in a statement. The ratings company downgraded six banks by four levels and 10 by three grades, with the rest getting one- and two-tier declines. Report Suggests ECB Bank Supervision (WSJ) Euro-zone countries should transfer oversight of their banks to a European supervisor, possibly the European Central Bank, in return for allowing the bloc's bailout fund to help insure deposits and wind down failing lenders, the European Union's top officials proposed in a report that will be debated at their summit Thursday. Facebook Analysts To Click 'Like'...Or Not (WSJ) On Tuesday, a 40-day quiet period will conclude for analysts at banks that were underwriters of Facebook's initial public offering, including lead underwriters Morgan Stanley, JPMorgan, and Goldman Sachs. The analysts are expected to publish their initial research early on Wednesday, people at the firms said. Kanye, Kim Kardashian Sued For Al Qaeda Ties (PM) Kanye West and Kim Kardashian have been sued for their alleged ties to Al-Qaeda. "Alleged" is the operative adjective here, especially when discussing the plaintiff, one Jonathan Lee Riches. He's the Guiness World Record holder as "The World's Most Litigious Man," filing over 5,000 suits in the past eight years. The reason behind this latest suit? All American citizens are in eminent danger of the defendants. Take it way, Mr. Riches: “On 6/17/2012 I was in West Virginia, deep in the hills and I stumbled upon the defendants who were all at a Al-Qaeda secret training camp." He then went on to claim that Kanye and Kim pleaded their allegiance to Al-Qaeda, burned the U.S. flag and stomped their feet on Barack Obama’s picture, performed a concert for all Al-Qaeda members, and shot AK-47s in the air. Banks Preparing For The End (WSJ) Nine of the largest financial institutions must submit their initial living wills to the FDIC and Federal Reserve by July 1. The early group includes top U.S. financial institutions as well as Deutsche Bank, Barclays, Credit Suisse, and UBS. Smaller companies have longer to craft their plans, with all due by the end of 2013. Margaritaville memo: Execs may walk plank (NYP) The boat that sank one of Warren Buffett’s top execs has been identified, and some of his crew may still get thrown overboard. Denis Abrams — who was canned as CEO of Berkshire Hathaway’s Benjamin Moore unit this month — chartered an extravagant cruise off Bermuda in a yacht called The Lady Charlotte, The Post has learned. “Abrams had a lot of his ‘yes men’ on that cruise who were responsible for a lot of what has gone wrong,” one former exec groused. “They can’t turn it around without clearing those ranks.” KKR Raises $4 Billion For Deals In Infrastructure, Energy (Bloomberg) KKR completed raising about $1 billion for infrastructure investments and $1.25 billion for natural resources, the New York-based firm said today in a statement. That’s combined with $1.3 billion in separate accounts for infrastructure, and $350 million for natural resources contributed by affiliates of KKR. Nasty Elmo Is Gone, And Other Ones Are Just Tickled (CityRoom) On Monday, the day after the police ejected a man wearing the furry, red costume from Central Park for exploding into an obscenity-laced rant, other Elmos around New York said they recognized the man from previous clashes and expressed hope that his brush with the law would help their trade’s reputation. In between posing for photos and harassing tourists for tips, the offending Elmo would often treat tourists and fellow Sesame Street impersonators alike to xenophobic and anti-Semitic tirades. The man in the costume, whose name was not released because he was not arrested, was taken to Metropolitan Hospital Center for a psychological evaluation, the police said on Monday. The man would shout “crazy stuff” about the other impersonators, said Luis, 25, a Peruvian immigrant who has been donning an Elmo suit for about six months. He often worked the pedestrian plaza on Broadway between 42nd and 43rd Streets, where Luis and a few other men in furry suits ambled from street corner to street corner Monday afternoon, keeping a wary distance from one another.

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Opening Bell: 9.12.17

The SoFi crisis went from zero to CEO resignation pretty quick; Deutsche Bank ex-executive charged over subprime; the New York City Pizza Festival is the new Fyre Festival; and more.

Opening Bell: 6.8.15

Deutsche Bank co-CEOs fire themselves; Hedge funds love Japan; "Suit claims principal bribed students with strip club field trip"; and more.

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: 5.8.15

UBS wants to be an investment bank again; Flash crash trader likely headed to Chicago; Who wants to buy Yelp?; "Calgary Airbnb 'Orgy' Was Financed With Stolen Credit Cards"; and more.