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Opening Bell: 01.30.12

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Ex-UBS Trader Adoboli Pleads Not Guilty To $2.3 Billion Loss (Bloomberg)
Adoboli, dressed in a grey suit and blue tie, pleaded not guilty to all charges at a hearing in London today. A trial that may last as long as eight weeks was scheduled to start in early September.
Adoboli, 31, has been in custody since Sept. 15 when UBS asked London police to arrest him for causing a $2.3 billion loss. The case led to the departures of Chief Executive Officer Oswald Gruebel and the co-heads of the Swiss bank’s global equities business. The trial could be “really awful” for UBS, said Steven Francis, a regulatory lawyer in London.

Greek Debt Talks Risk Derailing EU Summit (Bloomberg)
EU chiefs arrived in Brussels today to put the finishing touches on a German-led deficit-control treaty and to endorse the statutes of a 500 billion-euro ($656 billion) rescue fund to be set up this year. European finance officials yesterday discussed a deal that Greece and its private creditors expect to complete in the coming days after bondholders signaled they would accept government demands for a bigger cut in their debt holdings...“The fact we’re still at the beginning of 2012 talking about Greece is a sign this problem hasn’t been dealt with,” U.K. Chancellor of the Exchequer George Osborne said at the World Economic Forum in Davos, Switzerland.

Germany Warns Greece On Aid Funds (WSJ)
"Greece needs to decide," Wolfgang Schäuble said in an interview with The Wall Street Journal, when asked whether the euro zone would grant or withhold the second bailout package for the country since 2010, expected to be in excess of €130 billion ($172 billion). Europe is "prepared to support Greece" with the new loan package, Mr. Schäuble said, but he warned: "Unless Greece implements the necessary decisions and doesn't just announce them…there's no amount of money that can solve the problem."

Gingrich Label Romney "Wall Street Elite" (Bloomberg)
Newt Gingrich, accusing Republican presidential primary opponent Mitt Romney of being a “fundamentally dishonest” tool of Wall Street, pledged to stop big banking firms such as Goldman Sachs from “rigging the game.” Pressing his underdog campaign into the last full day before Florida’s primary election tomorrow, Gingrich spoke of running a White House that would “challenge the system head- on” and disrupt the “Wall Street elite.” “To the degree they survive by rigging the game,” Gingrich said in an interview with Bloomberg News, “they have a lot more to fear. To the degree that they’re willing to be in a very investment-oriented, high-tempo, entrepreneurial world, they have more to gain.”

Facebook COO: IPO Will Produce Jobs, World Change (Reuters)
The most important aspects of social networking site Facebook becoming a public company are the jobs growth and social change it represents, Sheryl Sandberg, chief operating officer of the company, told CNBC Sunday. “If this is seen as an opportunity for jobs and for people to use their work to change the world that’s what we want to be a part of,” Sandberg said at a CNBC debate at the World Economic Forum in Davos.

Jim Rogers: "I Would Not Buy Facebook" (CNBC)
FYI: “No, that kind of stock I don’t buy. They are usually very, very expensive. A lot of people like to buy expensive stocks like that, but I do not,” said Rogers.

Citigroup Chairman Weighs Exit (WSJ)
The 63-year-old Mr. Parsons is expected to decide by early March, these people said.

eBay Auction Alert: President Obama's Chrysler Saloon For $1 Million (BuzzFeed)
Obama leased the car for three years from 2004 until 2007 before trading it in for a hybrid model. Now for a cool mil you can have POTUS’s old ride.

Missing MF Global Funds Feared Gone (WSJ)
As the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vaporized" as a result of chaotic trading at MF Global during the week before the company's Oct. 31 bankruptcy filing, said a person close to the investigation.

Hedge-Fund Bulls Add to Commodity Bets (Bloomberg)
Money managers raised combined bullish positions across 18 U.S. futures and options by 13 percent to 742,902 contracts in the week ended Jan. 24, Commodity Futures Trading Commission data show. The so-called net-long position in copper jumped 53 percent to the highest since August and in silver by 22 percent to the most since September. Speculators also expanded bullish bets in sugar, soybeans, cotton, gold, gasoline and crude oil.

RBS Chief Waives Bonus (Bloomberg)
Stephen Hester decided to waive his 963,000-pound ($1.5 million) bonus after the U.K.’s opposition Labour Party said it would ask Parliament to vote on the award.

BofA Reshuffles Unit (WSJ)
Bank of America shook up its investment-banking leadership Sunday, naming Christian Meissner as the sole head of that business, said people familiar with the situation. The move, which was announced in an internal memo, is the latest executive shuffle since the bank's 2009 purchase of securities firm Merrill Lynch & Co. Appointing the Austrian-born Mr. Meissner to the top spot dismantles a structure put in place last April when he, Michael Rubinoff and Paul Donofrio were named co-heads of global corporate and investment banking...Putting Mr. Meissner in charge of the investment bank is part of an attempt by co-chief operating officer Thomas Montag to simplify his part of the company amid a wrenching period for Wall Street, these people said. Chief Executive Brian Moynihan gave Mr. Montag responsibility for all corporate and institutional clients last fall.

Woman Dumps Man Because He Has Cancer, Still Wants His Super Bowl Tickets (Deadspin)
Jason Elia, a television writer living in Nashville, went to the trouble of getting Super Bowl tickets for himself and his girlfriend...but life got in the way. He was diagnosed with bladder cancer and upon hearing the news, his girlfriend apparently dumped him on the spot. Now, she still wants the tickets because she claims they were purchased with her in mind. Rather than suffering such an injustice, Jason is auctioning the tickets off on Twitter.

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Nasdaq CEO Lost Touch Amid Facebook Chaos (WSJ) At the end of Facebook's disastrous first day of trading May 18, the phone in Robert Greifeld's New York office rang. It was Mary Schapiro, head of the Securities and Exchange Commission, wanting an explanation from the chief executive of Nasdaq OMX Group for the epidemic of glitches and delays in one of the most anticipated initial public offerings ever. Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast. So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him. Three weeks later, Mr. Greifeld still isn't sure why technology systems failed during the crucial IPO. Nasdaq's failure to see the problem coming is something its engineers are still dissecting. "You wake up, you turn around, and there's a black or dull spot," Mr. Greifeld said in an interview, sucking on Life Savers candy at a conference table in his office. "You can't get away from it." Spain’s Bailout Gives Rajoy Best Chance To Fix Banks (Bloomberg) Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds may provide the country with enough money to shore up its banking system after three failed attempts in as many years. “Now that they have this money, it will hopefully finally be possible to recognize all the hidden losses and clean up the system,” Luis Garicano, a professor at the London School of Economics, said in a phone interview. The amount sought is about 2.7 times the funds deemed necessary for Spanish banks by the International Monetary Fund in a report released June 8 and five times the total requested by the Bankia group, the country’s third-biggest lender, to cleanse its balance sheet. Spain's economic misery will get worse this year despite bailout request, prime minister says (NYP) A day after the country conceded it needed outside help following months of denying it would seek assistance, Rajoy said more Spaniards will lose their jobs in a country where one out of every four are already unemployed. "This year is going to be a bad one," Rajoy said Sunday in his first comments about the rescue since it was announced the previous evening by his economy minister. IPOs Dry Up Post Facebook (WSJ) In the aftermath of Facebook's botched trading debut, the IPO market has gone three weeks without an offering, the longest drought in five months. It is the slowest stretch in initial public offerings since a four-week span at the end of 2011 and the beginning of this year, according to data from Ipreo. Greece Threatens Wall Street Jobs In Third Trading Plunge (Bloomberg) For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months. Nickelback Review Goes Viral (Poynter) Music critic Josh Gross has written hundreds of stories about bands, but none has brought him as much attention as the brief he wrote this week about Nickelback’s upcoming appearance in Idaho, where Gross writes for the Boise Weekly. He summarizes the response: "In the past day, I have been told that I am a genius, a king amongst men and a hack that could be easily outdone by a one-armed cat. I should alternately win the Pulitzer and forcibly insert 45 pickles into my bum. There has been little middle ground. Why? Because I had the audacity to point out that seeing Canadian “rock” band Nickelback at the Idaho Center may not be the best use of one’s $45." Gross wrote of the Nickelback: "You can spend $5 to go see Nickelback this week. Or you could buy 45 hammers from the dollar store, hang them from the ceiling at eye level and spend an evening banging the demons out of your dome...$45 is also enough to see Men In Black III five times, buy a dozen Big Macs, do 10 loads of laundry or so many other experiences as banal and meaningless as seeing Nickelback but come without actually having to hear Nickelback. But if you must, the band is playing The Idaho Center on Wednesday, June 13, at 6PM tickets start at $45." Dimon Faces Washington Grilling Over Trading Debacle (Reuters) The Senate Banking Committee has asked Dimon to come prepared Wednesday to provide "a thorough accounting of the trading losses," a committee aide said. Senators will also ask what he knew about the risks involved in the trading strategy. Fed Colleague Backs Dimon (WSJ) "I do not think he should step down," Lee Bollinger said in an interview with The Wall Street Journal. He said Mr. Dimon appears to have done nothing wrong, that critics attacking the Fed have a "false understanding" of how it works, and that it is "foolish" to say Mr. Dimon's presence on the New York Fed board creates an appearance of a conflict when the law requires bankers to serve on such boards. Private lunch with investor Warren Buffett sells for $3.5 million (WaPo) The previous four winning bids have all exceeded $2 million with records set every year. Last year’s winner, hedge fund manager Ted Weschler, paid $2,626,411. India Could Be First BRIC to Lose Investment Grade: S&P (Reuters) Standard & Poor's said on Monday that India could become the first of the so-called BRIC economies to lose its investment grade status, sending the rupee and stocks lower, less than two months after cutting its rating outlook for the country. "Slowing GDP growth and political roadblocks to economic policymaking are just some of the factors pushing up the risk that India could lose its investment-grade rating," the ratings agency said in a statement issued Monday on a report dated June 8. Town Considers Fines For Cursing (WSJ) Mimi Duphily was hanging baskets of pink geraniums on antique street lamps downtown for the Middleborough Beautification and Activities Group when she noticed something else that needed cleaning up—citizens' mouths. "The cursing has gotten very, very bad. I find it appalling and I won't tolerate it," said Ms. Duphily, a civic leader in the otherwise quiet New England community, which calls itself the Cranberry Capital of the World. "No person should be allowed to talk in that manner." Soon, Middleborough residents who do could risk a $20 fine. Ms. Duphily, 63 years old, tried scolding the cursers—whom she describes as young people shouting the "F word" back and forth—with a stern, "Hey kids, that's enough!" Then she conferred with the Beautification and Activities Group, which informed the Middleborough Business Coalition, which then called a summit with Middleborough Police Chief Bruce Gates, who now, in his sworn role, is trying to stomp out swears.

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Libor Probe Expands To Bank Traders (WSJ) One of the sprawling probe's biggest targets: a group of traders whose efforts allegedly were coordinated by Thomas Hayes, who worked for UBS from 2006 to 2009 and then moved to Citigroup, according to a person with knowledge of the investigation. Mr. Hayes was fired by Citigroup in 2010, according to people familiar with the matter. He couldn't be reached for comment. Mr. Hayes allegedly worked with the other traders to push submissions up or down for a benchmark interest rate called yen Libor, according to court filings by Canada's competition regulator, which identified him only as "Trader A." The agency said it was told by UBS that Trader A told another trader at Royal Bank of Scotland Group PLC "who his collusive contacts were and how he had and was going to manipulate yen Libor." Trading Surges Boosted Whale Positions Before Audits (Bloomberg) Trading surges that temporarily boosted the value of credit derivatives held by JPMorgan may provide clues about whether traders at the bank masked losses that have spiraled to $5.8 billion. Spikes in late January and again at the end of February, which more than doubled the volume of trades in an index tied to the creditworthiness of companies, lowered the cost of the index, raising the value of the bank’s holdings. The surges came just before end-of-the-month bank audits to verify prices. Ex-Anglo Irish Bank Chief Charged With Fraud (AP) Sean FitzPatrick was arrested Tuesday at Dublin Airport as he returned from holiday. Two other senior former Anglo executives were arrested in Dublin and charged with 16 fraud-related counts Monday. The 64-year-old Mr. Fitzpatrick presided over Ireland's runaway property boom, which was swiftly followed by the banking collapse at the heart of the country's 2010 international bailout. Anglo's losses on bad loans to property speculators are nearing €30 billion ($36 billion), or more than €6,500 for every person in Ireland. Fed Official Wants Tougher Volcker Rule (WSJ) Fed Governor Sarah Bloom Raskin said that the market-making and hedging exemptions should be extremely narrow "because of the potentially severe dangers of, and costs associated with, proprietary trading by institutions that have access to the federal safety net." She raised the possibility that the financial system would be better off if banks ceased market making and hedging as well, saying it is possible that the combined regulatory, compliance and other costs could "outweigh the benefits we as a society supposedly receive." LI teen crashes car into neighbor's house, cops say don't worry about it (NYP) A 15-year-old Long Island teen lost control of his dad’s car while taking it for a joy ride on Saturday — driving it across two lawns and then into a house — and cops refused to arrest him or even give him a ticket. The resident of the Massapequa home returned from dinner at 6 pm to find a Nissan Altima — driven by Robert Carracher — had wrecked the fence attached to the side of his house along with an air conditioner and sprinkler system. He also learned that Nassau cops were unwilling to charge the teen in the accident. “I’m outraged. A car hits your home and nobody gets arrested?” said Vincent Grande, a criminal attorney. He estimated the damage at more than $5,000. “When I used my phone to take pictures, the kid turned away and his dad gave me the finger.” Police explained that Carracher wasn’t charged because it was accidental and the youth was too young to have a license. Moody’s Ratings Cut Fuels German Resentment (Reuters) The prospect of Europe's biggest economy losing its cherished AAA credit status has unsettled Germans, already angry about footing the bill for bailouts, and triggered calls for an even tougher stance on Greece and other euro zone laggards. While politicians and economists were at pains to argue that Moody's downward revision to Germany's credit rating outlook would have little immediate impact on borrowing costs, ordinary Germans said they were worried. "If things pan out the way Moody's have predicted then we will have problems here with unemployment, if we lose confidence that things will get better, it'll mean big problems for the economy," said Memet Dogan, a 45-year-old transport worker near Berlin's Brandenburg Gate. Citi's New Chairman Takes Hands-On Approach (WSJ) The new chairman's attention to the operational side contrasts with Mr. Parsons, who focused more on the job's diplomatic aspects. Mr. Parsons stepped down in April after three years as chairman and more than 16 years on Citigroup's board. The 65-year-old Mr. O'Neill, who a decade ago turned around Bank of Hawaii Corp. and briefly ran Barclays PLC, is a "nitty-gritty operations guy" who "understands what he doesn't understand," say people close to the company. Worker charged with arsons in Maine sub fire (AP) A civilian employee set a fire that caused $400 million in damage to a Navy submarine because he was suffering from anxiety and wanted to get out of work early, Navy investigators said in a complaint filed Monday. Casey James Fury, 24, of Portsmouth, N.H., faces up to life in prison if convicted on two counts of arson for allegedly setting fire to the USS Miami nuclear-powered attack submarine while it was in dry dock on May 23, and setting a second fire outside the sub on June 16. Fury, who was working on the sub as a painter and sandblaster, initially denied starting the fires, but eventually acknowledged his involvement, the affidavit reads.

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