Opening Bell: 01.24.12

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Pandit Pariah No More as U.S. Bankers Hunting Deals in Ascendance at Davos (Bloomberg)
Vikram Pandit, 55, is one of six co-chairs of the World Economic Forum’s annual meeting in the Swiss ski resort this week, the first from a U.S. bank since JPMorgan Chase & Co.’s Jamie Dimon in 2008...Pandit, who refers to the benefits of his bank’s “globality,” will speak on two panels at this year’s annual meeting: a Jan. 25 discussion about the reshaping of the “global financial system” and a televised session on Jan. 29 in which the meeting’s co-chairs describe the “emerging issues for 2012,” according to the program. Last year, Pandit confined his activities to off-the-record events such as a lunch discussion about providing financial services to the poor. James Gorman, 53, chairman and CEO of Morgan Stanley, the sixth-biggest U.S. bank by assets, will attend the annual meeting for the first time, having succeeded Davos regular John Mack in his chairman role. Lloyd C. Blankfein, 57, Goldman Sachs’s chairman and CEO, is skipping the meeting for the fourth consecutive year, sending deputies including President and Chief Operating Officer Gary D. Cohn, 51, and Vice Chairman J. Michael Evans, 54.

EU Ministers Resume Crisis Talks (WSJ)
"Obviously Greece and the banks have to do more in order to reach a sustainable debt level," Dutch Finance Minister Jan Kees de Jager said on arriving for the meeting Tuesday. He said debt restructuring terms that ensure a sustainable debt level is "absolutely a precondition" for a second EU bailout package for Greece.

At BofA, Moynihan Grapples With Past (WSJ)
The 52-year-old chief executive is expected to be deposed in coming months in as many as three civil lawsuits over the bank's handling of its takeover of securities firm Merrill Lynch & Co. on Jan. 1, 2009. The pending appearances are the latest legal distraction for a CEO trying to shed the wreckage he inherited from the financial crisis. The suits accuse the bank, the second-largest U.S. lender by assets behind J.P. Morgan Chase & Co., and its officers of misleading shareholders about ballooning losses at Merrill before the $19.4 billion acquisition was approved. It isn't clear what Mr. Moynihan will be asked, but the inquiries likely will center on disclosure of losses at Merrill and the decision to award Merrill employees billions of dollars in bonuses, said a person familiar with the bank's preparations.

Falcone Faces New LightSquared Questions (Bloomberg)
Senator Charles Grassley said yesterday that Falcone, whose Harbinger Capital Partners hedge fund is LightSquared’s main backer, and a telecommunications executive implied that they wanted the lawmaker to “pull punches” in an investigation. “I won’t be part of that,” Grassley, an Iowa Republican, said in a letter to Falcone that sought details of Falcone’s contacts with the executive.

Romney Paid $3 Million Tax Bill In 2010 (WSJ)
GOP presidential candidate Mitt Romney paid a 13.9% effective income tax rate in 2010 after making $3 million in tax-deductible charitable donations and drawing most of his income from investments, according to a summary of Mr. Romney's 2010 tax form provided by his campaign. Mr. Romney reported $21.7 million in income. He paid $3 million in federal taxes, slightly more than the $2.98 million he made in charitable donations. At least $1.5 million of his charitable donations went to the Mormon Church. Of Mr. Romney's 2010 income, he noted a capital gain of $12.6 million, taxable interest of $3.3 million, ordinary dividends of $4.9 million and smaller sums of gains and losses on business income, refunds and other income. His 2010 return also showed that he had a financial account in Switzerland that was closed in 2010 and that he generated income from overseas investments. He also reported financial accounts in Bermuda and the Cayman Islands.

Man shoots 3 inch nail into his skull (NYDN)
Autullo, who had been using the nail gun to build a shed in his yard, said that he knew something strange had happened. "It really felt like I got punched on the side of the head," he told the Associated Press, adding that he continued working. "I thought it went past my ear." Still, he continued to work around the house and even clear snow from his driveway. He only decided to see a doctor the next day, when he awoke from a nap feeling nauseous. Scans revealed that the nail had indeed pierced his skull and entered his brain. Why no other pain? There are no pain-sensitive nerves in the brain itself, just in the skull, which explained the initial pain.

Hedge Funds Prepare Legal Battle With Greece (Reuters)
Funds forced into losses as part of the bond swap or default have several avenues to bring a case, including the European Court of Human Rights or the International Centre for Settlement of Investment Disputes, Olivares-Caminal said. Hedge fund tactics range widely. Many will be keen for a deal to get done and will not sue, especially if they can profit from the difference between the level of losses imposed and the price they paid for the debt in the secondary market. Others hope to be paid out in full if enough other private creditors - primarily banks and insurers - sign up to the bond swap.

Super-Rich Play Snow Polo Amid Davos Hecklers (Bloomberg)
This wasn’t Davos, where the World Economic Forum will urge presidents and bankers to “rethink capitalism” this week. Neighboring Klosters, a resort favored by the British royal family, held its eighth annual snow polo tournament. While young Swiss socialists protest against the power of political elites in igloos outside Davos, Duran Duran sang “A View to a Kill” to several thousand polo enthusiasts reveling in a bar and nightclub made out of shipping containers and snow. The four-day event, sponsored by menswear company Hackett Ltd. and Swiss watchmaker Parmigiani Fleurier SA, is a chance to forget the global turmoil, according to founder Daniel Waechter, who runs a family business selling luxury lavatories. “Despite the financial crisis, we’ve never had so many team requests,” he said. “Last year we had a lot of trouble getting British teams over. Now, either they’ve recovered or they’re saying, enough of this misery, we want to have fun.” Eight teams of three horses and riders apiece, instead of the usual four, battled it out in a slimmed-down version of summer polo, which was first played in Switzerland by British cavalry officers in St. Moritz in 1899. The horses wear flat shoes with studs to grip the snow and riders, who can use six ponies during four 6 1/2 minute chukkas, wield mallets to hit a ball between goalposts shaped like giant champagne bottles.

End Of Era For Japanese Exports (WSJ)
The Japanese government is expected to announce Wednesday that the country recorded its first annual trade deficit since 1980. If the yen remains strong and global demand weak, economists warn that Japan could run trade deficits for years to come.

Cameras May Open Up the Board Room to Hackers (NYT)
Mr. Moore has found it easy to get into several top venture capital and law firms, pharmaceutical and oil companies and courtrooms across the country. He even found a path into the Goldman Sachs boardroom. “The entry bar has fallen to the floor,” said Mike Tuchen, chief executive of Rapid7. “These are literally some of the world’s most important boardrooms — this is where their most critical meetings take place — and there could be silent attendees in all of them.”

A Deal On Foreclosures Inches Forward (NYT)
About one million homeowners facing foreclosure could have their mortgage burden cut by about $20,000 each as part of a long-awaited deal taking shape among state attorneys general, federal officials and the nation’s largest mortgage servicers...The agreement could be worth about $25 billion, state and federal officials with knowledge of the negotiations said, with up to $17 billion of that used to reduce principal for homeowners facing foreclosure. Another portion would be set aside for homeowners who have been the victim of improper foreclosure practices, with about 750,000 families receiving about $1,800 each. But bank officials said Monday that the total amount of principal reduction and reimbursement would depend on how many states eventually sign on.

Halo Painted Over Paterno on PSU Mural (NBC)
Michael Bilato, the artist who removed the image of Jerry Sandusky in November after the former assistant coach was accused of child sex abuse, added the angelic sign atop Paterno on Monday.

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Opening Bell: 2.20.15

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Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Opening Bell: 08.17.12

Facebook Investors Cash Out (WSJ) Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be "painful" to watch as investors continue to retreat from Facebook's stock, according to people familiar with the meeting. Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg) Facebook's 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011. Wall Street Bonus Estimates Cut By Pay Consultant Johnson (Bloomberg) Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. The biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed. “They had a terrible 2011, so it’s off of a low base,” Johnson said. “We hoped that that business would have recovered more dramatically, but it hasn’t, so I guess you’d say it’s gone from terrible to so-so.” Executives Say Obama Better For World Economy (Reuters) Twice as many business executives around the world say the global economy will prosper better with President Barack Obama than with Mitt Romney, according to a poll out Friday. Democrat Obama was chosen by 42.7 percent in the 1,700-respondent poll, compared with 20.5 percent for Romney. The rest said "neither." 'Broken' Fund Shifts Blame (WSJ) Nearly four years after the collapse of Lehman Brothers Holdings Inc. "broke the buck" at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008. The Securities and Exchange Commission alleges that the two men falsely claimed they would prop up the fund's $1 net asset value even though they "secretly harbored" doubts. The two Bents have denied the allegations in the SEC's civil lawsuit ever since it was filed in U.S. District Court for the Southern District of New York in 2009. Former Spitzer call girl Ashley Dupre is engaged and pregnant (NYP) “On the record, yes, I can confirm I’m almost seven months,” Dupre, 27, enthused when contacted yesterday. “I can’t tell you when the wedding date is just yet.” In four short years, Dupre’s gone from Client No. 9 to Husband No. 1, and now owns Femme by Ashley, a lingerie and swimwear shop in Red Bank, NJ, which she her husband to be, New Jersey asphalt scion Thomas “TJ” Earle, helped her open in May. Ex-MS Banker In China Bribery Case (CNBC) Garth Peterson joined Morgan Stanley in Asia in 2002, just as the Chinese real estate market was taking off. His job would be making real estate deals for the firm, and Peterson seemed the ideal person for the position. A blonde, blue-eyed American raised in Singapore, Peterson — then in his early 30s — was fluent in Mandarin, and in the local culture. “The language is, you know, essential, I would say, being able to speak Mandarin well,” Peterson said. “But beyond that, I worked in the Chinese real estate industry since 1993.” In 2006 alone, according to news reports at the time, Morgan Stanley invested $3 billion in Chinese real estate. Peterson, by then a vice president, was at the forefront. “I was given more and more support, and the business just grew exponentially,” he said. Today, his fortunes have drastically changed. On Thursday, Peterson was sentenced to 9 months in prison and 3 years supervised release after pleading guilty to evading Morgan Stanley’s internal controls — a federal offense. Prosecutors said he engineered a deal that transferred Morgan Stanley’s interest in a multi-million dollar Shanghai real estate development to a shell company secretly controlled by Peterson and a Chinese government official. The official, who was not identified, made an instant paper profit of $2.5 million. Treasury To Amend Terms Of Fannie, Freddie Bailout (WSJ) Under the new arrangement between Treasury and the companies' federal regulator, all the firms' quarterly profits would be turned over to the government as a dividend payment; the government wouldn't require such payments in periods when the firms are unprofitable. Backstop For Futures Trades (WSJ) Support is growing for an insurance fund that would protect customers of futures brokerages that collapse. While numerous hurdles remain, the process took an important step Thursday when futures-exchange operator CME Group met with other industry officials and a customer-advocacy group in Chicago to discuss how to set up a customer-protection fund. It could take months or even longer for a specific plan to emerge, but participants in the meeting said it is increasingly likely that the government, futures industry or both will propose such an insurance fund. "Restoring customer confidence is very important," and "we're looking at all potential solutions, including an insurance fund," said Walt Lukken, president of the Futures Industry Association, a trade group.