Opening Bell: 01.25.12

Author:
Publish date:
Updated on

Facebook Trades Said To Be Halted For Three Days (Bloomberg)
Shareholders of Facebook Inc., the Internet site preparing an initial public offering, are facing a three-day suspension of trading on secondary markets this week, people with knowledge of the matter said. While buy and sell orders can be made, transactions won’t be processed by Facebook’s attorneys at Fenwick & West LLC from Jan. 25 to Jan. 27, said the people, who declined to be named because details on secondary transactions are kept private. The halt pertains to trading of Facebook shares only, one of the people said. Facebook, the largest social-networking site, is considering raising about $10 billion in an IPO that would value the company at more than $100 billion, a person with knowledge of the situation said in November.

Morgan Stanley Sets Sights On Facebook IPO (WSJ)
For the past year, Morgan Stanley and rival Goldman Sachs Group Inc. have been viewed as leading contenders for the coveted "lead left" spot in Facebook's IPO prospectus, which goes to the bank with the most responsibility for the offering. Goldman was presumed to have an upper hand after arranging a private offering of Facebook shares last year, though its odds were seen as declining amid a flub in that process that led the bank to limit the deal to non-U.S. investors. After that, executives at the social-networking company became less enamored with the bank, according to people familiar with the matter...Clients say one plus for Morgan Stanley's team, based in Menlo Park, Calif., is that it has been largely unchanged since the mid-1990s, after veteran deal-maker Frank Quattrone left for a rival shop in 1996, taking with him a team of bankers. The 45-year-old Mr. Grimes, who had joined a year earlier, helped rebuild Morgan Stanley's tech team through the dotcom boom and bust. In 2005, Mr. Grimes was appointed a co-head of global tech banking, along with Paul Chamberlain, 48, another veteran of the bank. "They've been in the same jobs, not leaving for other firms, not moving to New York, they've decades of experience and seen every tech cycle… that carries a lot of weight with clients," said Egon Durban, a managing partner at private equity firm Silver Lake Partners.

Obama Speech Makes Pitch for Economic Fairness (NYT)
“We will not go back to an economy weakened by outsourcing, bad debt and phony financial profits,” Mr. Obama said. Though his advisers have vowed a campaign against Congress, he expressed a willingness to “work with anyone in this chamber” and said he would “oppose any effort to return to the very same policies that brought on this economic crisis in the first place.”

Obama Calls For Higher Taxes On Wealthy (Bloomberg)
Invoking a tax idea named for billionaire Warren Buffett, Obama said the law should make sure million-dollar earners pay at least 30 percent in taxes. “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” Obama said in his televised address to a joint session of Congress. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules...You can call this class warfare all you want,” Obama said, referring to Republican criticism of his proposals. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.” He also called for incentives for companies to return jobs to the U.S., development of domestic natural gas reserves and alternative energy sources, and providing American workers with better training.

Romney Rethinks Key Income-Tax Break (WSJ)
If elected president, Mitt Romney might consider ending a tax break that helped the former Massachusetts governor accumulate his fortune, an aide suggested Tuesday. The comments came as the Romney campaign made available more than 500 pages of tax-return data for 2010 and 2011 amid signs the issue was hurting him with some voters. Later in the day, in a signal of how the tax issue is roiling the GOP campaign, the Romney camp tried to step back from the aide's remarks, underscoring that the former Massachusetts governor didn't want to raise anyone's taxes. The back-and-forth Tuesday about Mr. Romney's approach to one particular tax break began when Lanhee Chen, the candidate's policy director, indicated in a call with reporters the candidate might be willing to reconsider a tax break known as "carried interest" as part of a comprehensive tax overhaul. The break gives private-equity and venture-capital executives a relatively low 15% tax rate on much of their income.

IMF: Europe Poses Global Recession Threat (Reuters)
You heard it here first.

Cop: Circumcision proves I didn't flash woman (NYP)
A cop says he got the shaft when he was booted from the NYPD for exposing himself to a female prisoner in a holding cell, because the penis she described couldn't have been his. The woman told cops and testified at an administrative NYPD hearing that "she unequivocally and clearly saw petitioner's penis and that it was uncircumcised." Owen Hopper says he definitely is circumcised, but the NYPD hearing officer ignored his smoking gun evidence and found him guilty anyway. Hopper "submitted uncontested medical evidence and proof that his penis was circumcised and had been so since petitioner's childhood," his court papers complain. He was canned this past September, and is now suing to get his job back.

Merkel Masters Markets With Austerity (Bloomberg)
Delivering the opening speech today at the World Economic Forum’s annual meeting in Davos, Switzerland, she’ll be addressing critics who say her conversion may be too late to stop woes from splintering the 17-nation euro. “She’s starting a little bit to employ and massage markets, as a politician should do,” Holger Schmieding, chief economist at Joh. Berenberg Gossler & Co in London, said in an interview. “You cannot control markets, but you can work with the markets and harness the power of markets your way if you do it well.”

Billionaires Occupy Davos as 0.01% Bemoan Economic Inequalities (BusinessWeek)
“Many who will be in Davos are the people being blamed for economic inequalities,” Oberoi, 42, chairman of Oberoi Realty Ltd., India’s second-biggest real estate developer by market value, said in an interview earlier this month by mobile phone from his car in Mumbai. “I hope it’s not just about glamour and people having a big party.”

Apple Sets New Bar For Industry (WSJ)
The Cupertino, Calif., technology maker posted one of the most profitable quarters for a U.S. corporation, pulling in $13.1 billion on sales of $46.3 billion. Apple's profit is more than three times what General Electric Co. earned in its most recent quarter. ExxonMobil Corp. had a profit of $14.8 billion in the third quarter of 2008 but it needed nearly $140 billion in revenue to generate that income. Apple's executives said the numbers could have been even higher if the company had been able to manufacture enough iPhones to meet demand. Sales rose 73% during the quarter ended in December, up from $26.7 billion a year earlier. Profits more than doubled to $13.87 per share, up from $6.43 a share a year ago. The figures blew away analysts' projections, which estimated quarterly profits to hit around $9.6 billion.

Asian Bosses See Europe Crisis as Opportunity (Reuters)
Over three-quarters of Asian executives said they saw potential to invest in European businesses and 45 percent were making plans to do so in 2012, the survey of 800 business leaders in North America, Asia and the Middle East showed. North American executives are less optimistic about Europe's future and only 7 percent have made such plans. In the Middle East, 14 percent of executives had fixed investment plans for Europe.

Senator Corker Not So Sure About The Volcker Rule (Bloomberg)
U.S. Senator Bob Corker said he has “serious doubts” about whether the Dodd-Frank Act’s ban on proprietary trading by banks will work.

Dartmouth Student Who Gave Bridgewater A Piece Of His Mind Returns With Slightly Darker Op-Ed (DartBlog, related)
"Among my many experiences as a fraternity pledge, I was: forced to swim in a kiddie pool full of vomit, urine, fecal matter, semen, and rotten food products; forced to eat an omelet made of vomit; forced to chug cups of vinegar until I was afraid that I would vomit blood like one of my fellow pledges did; forced to inhale nitrous oxide; degraded psychologically on a daily basis; forced to drink beers poured down a fellow pledge’s ass crack; vomited on regularly, and encouraged to vomit on others...The administration is fully aware of what goes in in our basements; I know this because I have had frank conversations with several high-level administrators."

Cohen Among More Than 10 Bidders For Dodgers (FINalternatives)
Also making a play for the Dodgers are private equity honchos Leo Hindery and Marc Utay, who, like Cohen, were stymied last year in their effort to buy a piece of the New York Mets (Utay and Hindery also tried, and failed, to buy the Chicago Cubs). Members of the Disney family and the head of their hedge fund Shamrock Holdings, Stanley Gold, also submitted a bid. Guggenheim Partners CEO Mark Walter is part of a group headed by former Los Angeles Lakers great Magic Johnson and former baseball executive Stan Kasten. Private equity mogul Ron Burkle is said to be interested, and Colony Capital's Thomas Barrack may join one of the competing groups.

Dentist who used paper clip in patients’ root canals pleads guilty in Mass. court (NYDN)
Is that not standard procedure?

Related

Opening Bell: 07.27.12

Barclays Faces New Scrutiny (WSJ) n what could turn out to be a new black eye for the bank, Barclays said the U.K. financial regulator has started an investigation into four current and former senior employees, including Chris Lucas, Barclays's finance director. The issue centers on the "sufficiency of disclosure" in relation to fees paid when Barclays conducted an emergency £7.3 billion ($11.45 billion) capital increase with Middle Eastern investors in 2008. The cash injection likely saved Barclays from being bailed out by the government and part-nationalized. The Financial Services Authority and Barclays declined to elaborate further the issue. Barclays said in a statement that it was confident it had satisfied disclosure obligations. In a separate debacle, Barclays said it put aside £450 million to cover the misselling of derivatives products to small businesses. Merkel, Hollande Vow to Do Everything to Defend Euro (Reuters) FYI: "Germany and France are deeply committed to the integrity of the euro zone. They are determined to do everything to protect the euro zone," they said in a joint statement. Treasury Eyes Funds Hidden Overseas (WSJ) he Treasury Department released new details Thursday of a plan to ferret out Americans' global tax dodging, though some lawmakers and banks remain concerned about the initiative's scope and regulatory costs. Treasury officials said they hope to finalize the system's basic rules by the fall and expressed confidence it would be on track for implementation by 2014 as scheduled. Congressional experts said the new system would recover $8.7 billion in tax revenues over 10 years. Facebook Growth Slows Again (WSJ) The company swung to a second-quarter loss largely weighed down by expenses from compensating employees with stock upon its initial public offering in May. Revenue in the second quarter was $1.18 billion, up 32% from $895 million a year ago. That revenue growth was the lowest percentage since at least the first quarter of 2011, when Facebook was more than doubling the amount of money it brought in from advertising, and to a lesser extent, the cut of fees it takes from payments on its platform. Facebook Falls After Report Fails To Quell Growth Concerns (Bloomberg) “It took a long time for the TV market and advertising to be truly understood, it took a long time for search, and I think we’re still in that learning curve with a lot of our clients,” COO Sheryl Sandberg said. The Guy In The Clown Nose? He's An Olympian (WSJ) Terry Bartlett is a world-class gymnast who leapt, tumbled and swung for the glory of Great Britain in three Olympic Games. Today, he is also a world-class clown. Ten times a week, he dons a red nose and floppy shoes to elicit chuckles at "O," a Las Vegas water-themed circus run by Cirque du Soleil. "It's better than having a real job," says the 48-year-old Bartlett...A few months after Bartlett's audition, Cirque hired him as an acrobat for a new show in Las Vegas. At first, he says, he had to confront some stigma about joining a circus. "Some people were like, whoa, that's not much of a move from what you've done," he says. But today, he says Cirque is so well-known that he gets few smirks. Spanish Banks Hit By Real Estate Woes (WSJ) Caixabank SA, Spain's third-largest lender by market value, number five bank Banco Popular Español SA, and smaller Banco Español de Credito SA, all said they had set aside most of their profit to bolster their buffers against property sector losses, after the government twice this year raised the minimum required provisioning level for banks. Caixabank said quarterly net profit tumbled 78% to €118 million ($145.1 million) and Popular's profit fell 37% to €75.4 million. Smaller Banesto, which is owned by banking giant Banco Santander SA, said quarterly profit sank 97% to €14.4 million. Goldman PR Guru's Charm School (NYP) Under Siewert, the bank has scheduled weekly roundtable meetings between the media and executives including Goldman President Gary Cohn and CFO David Viniar. In one of those meetings yesterday, rising-star Treasurer Elizabeth “Liz” Beshel Robinson met the press for the first time. Not everyone’s keen on the changes. Goldman’s financial rock star Viniar, sources said, has sworn off appearing on TV. JPMorgan Revamps Business Units (WSJ) The bank said Frank Bisignano, who was tapped in early 2011 to lead J.P. Morgan's transformation of its mortgage banking group, will become co-chief operating officer for the entire company, in addition to continuing as chief administrative officer of the firm. He will transition the mortgage business to Gordon Smith in early 2013. Matt Zames will serve as co-COO, and will remain head of the chief investment office and mortgage capital markets...J.P. Morgan said its investment banks, treasury and securities services and global corporate banks businesses are being combined into the corporate and investment bank unit, to be chaired by Jes Staley, CEO of the investment bank business. Mike Cavanagh, head of treasury and securities, will become co-CEO of the new unit, along with Daniel Pinto, who currently heads EMEA and global fixed income. Romney Riles Londoners With Comments On Olympics Games (Bloomberg) It was supposed to be Mitt Romney’s flawless world stage debut. Instead, the Republican presidential candidate spent the start of his overseas trip fending off a furor over his London Olympics comments and scrutiny of a fundraiser with bankers linked to the Libor rate-fixing scandal. “There’s a guy called Mitt Romney who wants to know whether we’re ready,” London Mayor Boris Johnson told 80,000 cheering people gathered at Hyde Park for the arrival of the Olympic torch last night. “Are we ready? Are we ready? Yes, we are!” Romney worked to put the controversy behind him today, scheduling an interview at Olympic Park to quell the storm of criticism over his comment that the city was unprepared to host the games. “After being here a couple of days, it looks to me like London’s ready,” he told NBC’s “Today” program. “What they’ve done that I find so impressive is they took the venues and put them right in the city.” In the July 25 NBC interview, Romney described reports of difficulties recruiting enough security staff for the games, which begin today, as “disconcerting” and said, “It’s hard to know just how well it will turn out.”

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: 07.16.12

Citigroup Profit Beats Analysts’ Estimates On Investment Bank (Bloomberg) Citi reported a 12 percent drop in second-quarter profit that beat analysts’ estimates on revenue from advising on mergers and underwriting stocks and bonds. Net income declined to $2.95 billion, or 95 cents a share, from $3.34 billion, or $1.09, a year earlier, the New York-based bank said today in a statement. Excluding accounting adjustments and a loss from the sale of a stake in a Turkish bank, earnings were $1 a share, compared with the average estimate of 89 cents in a Bloomberg survey of 18 analysts. HSBC Seeks To Evict Occupiers In Hong Kong (WSJ) HSBC said Monday it is seeking the right to evict an encampment of protesters that has been occupying the ground floor of the bank's Hong Kong headquarters since October, drawing inspiration from the Occupy Wall Street protests in New York last year. Libor Flaws Allowed Banks To Rig Rates Without Conspiracy (Bloomberg) FYI: “It is far easier to manipulate Libor than it may appear,” Andrew Verstein, a lecturer at Yale Law School, said in a paper to be published in the Winter 2013 issue of the Yale Journal on Regulation. “No conspiracy is required.” States Join Libor Probe (WSJ) Prosecutors in New York and Connecticut are investigating whether their states incurred losses as a result of interest-rate manipulation by banks, a probe that could lead to a wider multistate enforcement action, according to New York officials. The joint probe by New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen could lead to civil enforcement action, including possible breaches of antitrust and fraud laws, the officials said. Libor Probe May Yield Criminal Charges By September (Bloomberg) Barclays traders involved in allegedly manipulating Libor rates between 2005 and 2007 may be charged by U.S. prosecutors before the Labor Day holiday on Sept. 3, said a person familiar with the Justice Department investigation in Washington. Zuckerberg’s Loan Gives New Meaning To The 1% (Bloomberg) The Facebook founder refinanced a $5.95 million mortgage on his Palo Alto, California, home with a 30-year adjustable-rate loan starting at 1.05 percent, according to public records for the property. Missteps Doomed Barclays Leaders (WSJ) Mr. Diamond's downfall may have been hastened because the U.S.-born investment banker, who became chief executive at the start of 2011, had never won acceptance by Britain's political and financial establishment. When the rate-fixing scandal erupted, Mr. Diamond had few allies. It wasn't for lack of trying. Mr. Diamond enthusiastically embraced British culture and tried to overcome his reputation as a brash American. Mr. Diamond, a native of Concord, Mass., supported the Chelsea Football Club, handing out trophies himself when the team won England's premier soccer league in 2010. A month before the Libor settlement, Mr. Diamond hosted British aristocrats and Barclays' clients at the annual Chelsea Flower Show, providing Champagne and canapés as his guests inspected elaborate gardens and floral arrangements...But Mr. Diamond, age 60, was criticized for his lofty pay packages, as well as perceived risks in the investment-banking business he built. He sometimes appeared tone deaf in a country still angry about the role of banks in the financial crisis. "There was a period of remorse and apology," he told Parliament last year. "That period needs to be over." Activists Go After Big Game (WSJ) William Ackman's $2 billion bet that he can boost the value of consumer-products giant Procter & Gamble Co. reflects a new era of activist investing, in which no company is too big a target and restless institutional investors are more willing to rock the boat. Mr. Ackman's Pershing Square Capital Management LP owns a little more than 1% of P&G's shares. A few years ago, that would have been considered too small a stake in too big a company to exert much influence on management, the board or other investors. Tax Cuts Perpetuate Inequality, Should End: Summers (CNBC) The United States should not extend Bush-era tax cuts for the wealthiest Americans even as the so-called ‘fiscal cliff’ looms because it will perpetuate income inequality, says Larry Summers, former U.S. Treasury Secretary. Instead, these revenues should go towards strengthening public education and ensuring that low-income students are presented with equal opportunities as their wealthy counterparts so that they can participate in the economy. Tax breaks for the wealthy cannot continue to exist because it leads to a “perpetuation of privilege”, Summers said in the editorial in the Financial Times on Sunday. Unless steps were taken to “responsibly” increase the burden on those with high income and redistribute the proceeds, the trend toward inequality will continue, he said. Devils On The (B)rink (NYP) New Jersey Devils owner Jeff Vanderbeek is talking to private-equity firms and hedge funds about buying into his financially strapped team, according to sources close to the situation Vanderbeek is looking to sell a majority stake, but keep operating control, sources said. The talks, coming three weeks after the 55-year old former Wall Street executive seemed close to inking a deal with an investor to save the team, are leading some in the financial world to believe the deal has fallen apart. If that’s so, it would be a terrible break for Vanderbeek, who is facing an Aug. 14 deadline to get the Devils’ financing in order...Creditors are owed $80 million. Downgrade Anniversary Shows Investors Gained Buying U.S. (Bloomberg) When Standard & Poor’s downgraded the U.S. government’s credit rating in August, predictions of serious fallout soon followed. Republican presidential candidate Mitt Romney described it as a “meltdown” reminiscent of the economic crises of Jimmy Carter’s presidency. He warned of higher long-term interest rates and damage to foreign investors’ confidence in the U.S. U.S. House Budget Committee Chairman Paul Ryan said the government’s loss of its AAA rating would raise the cost of mortgages and car loans. Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said over time the standing of the dollar and U.S. financial markets would erode and credit costs rise “for virtually all American borrowers.” They were wrong. Almost a year later, mortgage rates have dropped to record lows, the government’s borrowing costs have eased, the dollar and the benchmark S&P stock index are up, and global investors’ enthusiasm for Treasury debt has strengthened. Woman tells police man sucked her toe at Grovetown Walmart (AC) The 18-year-old said she was shopping when a man, who looked to be in his late 30s or early 40s, walked up and asked if her toenails were painted, according to a Columbia County Sheriff’s Office incident report. After replying yes and questioning why he wanted to know, the woman was asked if she’d watched America’s Funniest Home Videos. The man told her he was with the TV show and if she complied with his requests, everything she purchased that day would be free. She said she reluctantly agreed to let him take a photo of her foot. He asked if he could kiss her foot as part of the prank and she agreed. The man guided her to an area behind a clothing rack, dropped to the floor, grabbed her ankle and told her, “Don’t worry. I don’t bite.” He then started sucking on her big toe. The woman said she screamed at him to stop. Before the man ran from the store, he told her, “It tasted so good, though.”

Opening Bell: 04.18.13

Morgan Stanley Sees Core Earnings Weaken (WSJ) Morgan Stanley saw core earnings weaken, although the investment bank swung to a first-quarter profit as it benefited from a comparison with a year-earlier period bogged down by a heavy charge. For the quarter, the bank reported a profit of $984 million, compared with a year-earlier loss of $94 million. The per-share profit, which reflects the payment of preferred dividends, was 49 cents compared with a loss of six cents a year earlier. The latest period featured a decline in fixed-income trading revenue, but strong stock trading and continued improvements in Morgan Stanley's wealth-management division, which was buoyed by strong markets. ... Revenue jumped 18% to $8.16 billion. Excluding debt valuation, revenue was $8.48 billion. Analysts polled by Thomson Reuters most recently expected earnings, excluding debt-valuation adjustments, of 57 cents, on revenue of $8.35 billion. Blackstone First-Quarter Profit Rises on Fund Performance (Bloomberg) Blackstone Group LP (BX), the world’s biggest buyout firm, said first-quarter profit rose 28 percent as market gains lifted the carrying value of its holdings. Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, increased to $628.3 million, or 55 cents a share, from $491.2 million, or 44 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 53 cents a share, according to the average of 15 estimates in a Bloomberg survey. Barclays Head of Investment Banking Rich Ricci to Retire in June (Bloomberg) Barclays Plc’s Rich Ricci, the head of investment banking and one of the last members of former Chief Executive Officer Robert Diamond’s management team, will retire at the end of June. Ricci, 49, will be replaced by Eric Bommensath and Tom King, 52, as co-chief executive officers of corporate and investment banking in May, the London-based bank said in a statement today. “The market will see this as an inevitable and appropriate piece of transitioning,” said Ian Gordon, an analyst at Investec Plc (INVP) in London. “Few tears will be shed and the reshuffle will be broadly welcomed.” Special Report: The battle for the Swiss soul (Reuters) A sign on display in UBS's museum, from a bank founded in 1747 in the Italian-speaking part of Switzerland, could almost be Switzerland's mantra: "MASSIMA DISCREZIONE" it promises. Swiss bankers have long adhered to an unwritten code similar to that observed by doctors or priests. Bankers do not acknowledge clients in public for fear of exposing them as account holders; they often carry business cards with just a name, rather than bank or contact details; and, at least until the 1990s, they never advertised abroad. ... Even today, few Swiss like to discuss the fact that much of the country's prosperity was built on bankers helping foreigners evade taxes. Visitors should avoid personal questions, advises Communicaid, a consultancy which advises businesses on cross-cultural awareness. It would also be wise to steer clear of discussing "Swiss banks, money or Switzerland's military role in World War One or Two." Reinhart/Rogoff and Growth in a Time Before Debt (RortyBomb via Felix Salmon) Here is a simple question: does a high debt-to-GDP ratio better predict future growth rates, or past ones? If the former is true, it would be consistent with the argument that higher debt levels cause growth to fall. On the other hand, if higher debt "predicts" past growth, that is a signature of reverse causality. ... As is evident, current period debt-to-GDP is a pretty poor predictor of future GDP growth at debt-to-GDP ratios of 30 or greater—the range where one might expect to find a tipping point dynamic. But it does a great job predicting past growth. Ottawa sets up taxpayer-funded food truck in Mexico to promote Canadian cuisine (National Post) When author Anita Stewart first heard about the Canadian government’s new food truck parked in Mexico City, she laughed so hard she cried. The new Canada-branded, taxpayer-funded venture, which kicked off its three-week pilot project last week, is serving up a Mexican-ized version of poutine, using Oaxaca cheese instead of curds. Also on the menu are Alberta beef tourtière, and maple-glazed Albacore tuna. China Vows Wider Yuan Movement (WSJ) China's central bank plans to widen the yuan's trading band in the near future, People's Bank of China Vice Governor Yi Gang said Wednesday, suggesting that China's leaders will press ahead with change despite the surprise slowing of the economy. "The exchange rate is going to be more market-oriented," Mr. Yi said on a panel at the International Monetary Fund spring meetings in Washington. "I think in the near future we are going to increase the floating band even further." IMF warns on risks of excessive easing (FT) Extraordinarily loose monetary policy risks sparking credit bubbles that threaten to tip the world back into financial crisis, the International Monetary Fund warned on Wednesday. In its global financial stability report, the fund cautioned that policy reforms were needed urgently to restore long-term health to the financial system before the long-term dangers of monetary stimulus materialised. German Parliament Approves Bailout for Cyprus (WSJ) German Finance Minister Wolfgang Schäuble called the vote a "strong signal" by Germany in favor of the euro and the euro zone. The parliament also voted in favor of a seven-year extension of the maturity on European Financial Stability Facility loans for Ireland and Portugal with a large majority. SEC to Move Past Financial Crisis Cases Under New Chairman White (Bloomberg) Mary Jo White, the first former prosecutor to serve as chairman of the U.S. Securities and Exchange Commission, has pledged to run a “bold and unrelenting” enforcement program at the agency charged with regulating Wall Street. With financial crisis cases mostly done and some of the biggest insider-trading cases in history closed, White will have to chart a course into new areas to keep that pledge. White, who was sworn in last week, has already provided a few signals about what that might be. During her Senate confirmation hearing, she said she intends to focus on high- frequency and automated trading. She has also raised questions about a drop in the number of accounting fraud cases the agency has brought in recent years. Dispute in Hamptons Set Off by Effort to Hold Back Ocean (NYT) Soon after Hurricane Sandy hit last fall, Joshua Harris, a billionaire hedge fund founder and an owner of the Philadelphia 76ers, began to fear that his $25 million home on the water in Southampton might fall victim to the next major storm. So he installed a costly defense against incoming waves: a shield of large metal plates on the beach, camouflaged by sand. His neighbor, Mark Rachesky, another billionaire hedge fund founder, put up similar fortifications between his home and the surf. Chris Shumway, who closed his $8 billion hedge fund two years ago, trucked in boulders the size of Volkswagens. Across a section of this wealthy town, some residents, accustomed to having their way in the business world, are now trying to hold back the ocean. ‘Elvis’ is busted in ricin terror (NYP) The FBI last night busted a troubled Mississippi Elvis impersonator as the poison-wielding man who mailed ricin-laced letters to President Obama and two other officials. ... Despite his rock ’n’ roll hobby, Curtis shows his angry side on Facebook, where he lashes out in a conspiracy-filled rant. “I’m on the hidden front lines of a secret war,” he wrote. “They burned down my home, killed my dogs, my cat, my rabbit, blew up my 1966 Plymouth Valiant . . . and guess what? I am still a thorn in their corrupt anals! I will remain here until Jesus Christ decides it’s time for me to go.”