Opening Bell: 02.15.12

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LightSquared to Be Blocked by FCC Over GPS (Bloomberg)
The U.S. Federal Communications Commission vowed to block LightSquared Inc. after the Obama administration found the wireless venture backed by hedge-fund billionaire Philip Falcone would disrupt navigation gear. Federal agencies determined that LightSquared’s signals interfere with global-positioning system devices, Tammy Sun, an FCC spokeswoman, said yesterday in an e-mailed statement. The FCC is preparing to withdraw the preliminary approval it granted last year for the company to build a high-speed network serving as many as 260 million people, Sun said. “The commission clearly stated from the outset that harmful interference to GPS would not be permitted,” Sun said. “The commission will not lift the prohibition on LightSquared.” The FCC’s action marks a blow to LightSquared and a setback for Falcone’s Harbinger Capital Partners hedge fund, which has invested $3 billion in the venture. It follows a yearlong lobbying fight between LightSquared and opposing GPS companies that featured a series of government tests denounced by LightSquared as flawed.
LightSquared in a release issued yesterday before the FCC’s statement said it is “committed to finding a resolution with the federal government and the GPS industry.” The company said it “fully expects” the FCC “to recognize LightSquared’s legal rights to build its $14 billion, privately financed network.”

Greece Struggles to Win Second Financial Bailout as Europe’s Doubts Mount (Bloomberg)
Finance ministers canceled a Brussels meeting slated for today and will hold a teleconference instead to prod Greece to do more to clinch an aid package worth 130 billion euros ($171 billion) along with about 100 billion euros of debt relief from private bondholders. Greece needs the money to make a 14.5 billion-euro bond payment on March 20. The decision to cancel the meeting is “very worrying,” and “reflects a growing concern amongst some euro-area countries that Greece will not abide by the conditions of the second bailout package,” said Nicola Mai, an economist at JPMorgan Chase Bank in London. “It appears that some euro-area countries are willing to let Greece default.”

Hanks Paulson: Europe Crisis Will Take Years To Sort Out (CNBC)
"There is similarity [with the financial crisis in the U.S.] in certain regards. This has been going on for a long time and I think it will take years to play out," Paulson told CNBC. Paulson, who served as Treasury Secretary when the subprime mortgages credit crunch erupted, sparking the world's worst economic crisis since the Great Depression, said that at the time the U.S. was faced with a "collision of political forces and market forces". "That's really what you're seeing in Europe," Paulson said. "The structural issues around the EU are very difficult issues."

Goldman Analyst Draws Scrutiny (WSJ)
Federal criminal authorities are investigating whether a Goldman Sachs Group Inc. technology analyst leaked inside information to hedge funds, adding a new angle to a broadening insider-trading probe, people close to the situation say. The development takes the insider-trading investigation inside the research operation of a major Wall Street firm for the first time. It involves Henry King, a high-profile analyst well-known among technology investors for prescient calls on tech firms...Goldman clients were told in recent weeks that Mr. King, head of Taiwan research, took a leave from his Goldman post in Asia after making a trip to the U.S. earlier in the year, people close to the situation say.

BNP Paribas Profit Hit By Greece (WSJ)
The Paris-based lender, France's largest bank by market value, reported a 51% drop in fourth-quarter net profit to €765 million ($1 billion) from €1.55 billion a year earlier. BNP Paribas took a €567 million write-down on its Greek sovereign bonds and booked a €148 million charge as part of its plan to limit the impact of the European debt crisis by slashing its balance sheet. It expects to book an additional €850 million in charges to cover its downsizing plans in 2012 earnings but said it is "well-positioned to take on the challenges associated to today's new environment and continue to finance its clients." Revenue fell 6.1% to €9.69 billion, as continuing growth of the bank's retail operations partially offset a sharp drop in corporate and investment banking revenue.

Shark Devours Another Shark Whole (AP)
National Geographic has released this soon-to-be classic photograph of one shark eating another shark whole. The photo comes from Daniela Ceccarelli, of Australia's Research Council Center of Excellence for Coral Reef Studies. Ceccarelli was working with fellow researcher David Williamson on conducting a "fish census" off Great Keppel Island, part of the country's Great Barrier Reef. That's when Ceccarelli thought she spotted a brown-banded bamboo shark hanging out near the ocean's floor. "The first thing that caught my eye was the almost translucent white of the bamboo shark," Ceccarelli told National Geographic in an email. Instead, as Ceccarelli moved in for a closer look she noticed a camouflaged wobbegong shark emerging from seclusion with the same bamboo shark partially wedged inside its jaws. "It became clear that the head of the bamboo shark was hidden in its mouth," she said. "The bamboo shark was motionless and definitely dead."

Obama to stress "insourcing" as China counterweight (Reuters)
President Barack Obama takes his election-year economic message to the Midwestern heartland on Wednesday, touring a Wisconsin padlock factory and stressing the potential of "insourcing" jobs back to the United States from overseas. The day after meeting China's leader-in-waiting, Vice President Xi Jinping, at the White House, Obama was set to make the case for exploiting U.S. advantages over fast-growing economies where labor and business costs are rising. In Milwaukee, best known as the home of Miller beer, he will visit the company Master Lock that he lauded in his State of the Union address last month for having moved back about 100 union jobs from China since mid-2010. Master Lock, a unit of Fortune Brands Home & Security, is the world's largest manufacturer of padlocks and related products to secure homes, cars and bicycles. It says its Milwaukee plant is running at full capacity for the first time in 15 years - an example the White House is eager to replicate as the November 6 election nears. "Right now we have an excellent opportunity to bring manufacturing back - but we have to seize it," Obama said in a statement released before the Wisconsin visit, which starts a three-day trip where the Democrat will raise funds in California and stop in at aircraft manufacturer Boeing in Washington state.

Warren Buffett's Berkshire Hathaway Hikes DIRECTV Stake By $738M, Cuts J&J By $545M (CNBC)
The 13-F filing with the SEC also shows two new holdings: 1.7 million shares of Liberty Media (Capital), worth $145 million at yesterday's close, and 2.7 million shares of DaVita, worth $227 million.

Jackie Chan Jet Shows Embraer Breakthrough (Bloomberg)
Embraer SA (EMBR3) is using the star power of Hong Kong-born actor Jackie Chan at the Singapore Airshow as competition intensifies in China’s business-jet market. Chan’s Embraer Legacy 650 jet, with his name and the Chinese character for “dragon” on its tail, is on display at this week’s event as the Brazilian manufacturer competes with General Dynamics Corp. (GD)’s Gulfstream and Bombardier Inc. (BBD/B) in capturing Chinese sales projected to grow 15 percent a year.

Obama Returns to NYC for First Wall Street Fundraiser of Year (Bloomberg)
The $35,800-per-person dinner at ABC Kitchen, the first of the evening’s four fund-raising events, is being hosted by many of Obama’s top Wall Street donors, according to a person familiar with the matter. Sponsors include Blair W. Effron, partner and co-founder of Centerview Partners LLP; Marc Lasry, managing partner and founder of Avenue Capital Group; Mark Gallogly, a managing principal of Centerbridge Partners; James Rubin, managing director of BC Partners; Robert Wolf, UBS AG’s chairman for the Americas; and Antonio Weiss, global head of investment banking at Lazard Ltd.

Knicks phenom Jeremy Lin is homeless no more (NYDN)
Lin, who in the span of five games has gone from benchwarmer to the cover of Sports Illustrated, has sublet a two-bedroom apartment from former Knick David Lee in a Trump Tower, sources told the Daily News. The building is in downtown White Plains, a 35-story building right off Main Street that is home to several other Knicks players and some New York Rangers as well, sources said. Lin, a 6-foot-3 point guard who crashed with his brother when he first joined the Knicks this year, will be able to stretch out in his new digs and not have worry about nailing his noggin — it has nine foot ceilings. Experts estimated that Lin, who is 23 and single, will pay around $3,800-a-month in rent.

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

Opening Bell

Opening Bell: 12.10.12

U.S. authorities probe SAC for Weight Watchers (Reuters) U.S. authorities are investigating Steven A. Cohen's SAC Capital Advisors hedge fund for possible insider trading in the shares of the popular diet company Weight Watchers International Inc, according to people familiar with the matter. The investigation focuses on trading in Weight Watchers shares in the first half of 2011, when SAC Capital had taken a sizeable position in the stock, and potentially could implicate the billionaire hedge fund manager, the sources said on Friday. Regulatory filings show that Cohen's $14 billion fund briefly held 2.1 million shares in Weight Watchers during the period under scrutiny by authorities - at which time the diet company's stock price roughly doubled. The inquiry is in its early stages and it is not clear whether anything improper was done either by SAC Capital or Cohen himself, said the people familiar with the matter, who requested anonymity. The trading in Weight Watchers would be permissible as long as it was based on fundamental research or derived from individuals who did not have access to non-public corporate information. Big Money Bets On Housing Rebound (NYT) A flurry of private-equity giants and hedge funds have spent billions of dollars to buy thousands of foreclosed single-family homes. They are purchasing them on the cheap through bank auctions, multiple listing services, short sales and bulk purchases from local investors in need of cash, with plans to fix up the properties, rent them out and watch their values soar as the industry rebounds. They have raised as much as $8 billion to invest, according to Jade Rahmani, an analyst at Keefe Bruyette & Woods. The Blackstone Group, the New York private-equity firm run by Stephen A. Schwarzman, has spent more than $1 billion to buy 6,500 single-family homes so far this year. The Colony Capital Group, headed by the Los Angeles billionaire Thomas J. Barrack Jr., has bought 4,000. Wall Street workers expecting worst bonus season since 2008 (NYP) State Comptroller Thomas DiNapoli estimates that the average bonus this year will be $101,000 — a 16.5 percent decline from last year and almost a 50 percent decline since 2006, when the average was $191,360. ‘‘I don’t think this year’s bonuses are going to be very good,’’ said Dan Shaffer, CEO of Shaffer Asset Management. ‘‘I don’t believe the typical bonuses, as we used to know them, exist anymore.’’ Obama Meets with Boehner Privately at White House (Bloomberg) The meeting was the first known face-to-face conversation between the two leaders since Nov. 16, when Boehner and other congressional leaders sat down with Obama at the White House. They have talked on the telephone since then. Obama met with Nancy Pelosi, the House Democratic minority leader, on Dec. 7. Investors offer about $38.8 billion in Greek debt buyback (Reuters) Greece is set to purchase back about half of its debt owned by private investors, broadly succeeding in a bond buyback that is key to the country's international bailout, a Greek government official said on Saturday. Hefner Husband Takes Insider Trading Into Playboy Bedroom (Bloomberg) Christie Hefner, [daughter of Hugh and] former chief executive officer of Playboy Enterprises Inc., said she was shocked as her husband of 15 years, William Marovitz, confessed to her that he was being investigated for suspicious trading in Playboy shares. They were in their apartment atop a 42-story Lincoln Park tower overlooking the glittering Chicago skyline and Lake Michigan on a March evening in 2010. “He told me he had been contacted by the SEC,” Hefner said later in testimony before the U.S. Securities and Exchange Commission, which didn’t accuse her of any wrongdoing. “And when did you learn your husband owned shares of Playboy?” she was asked. “In that conversation,” she replied. Hefner's husband is just one of more than 400 persons the SEC and the U.S. Department of Justice have accused of insider trading in a crackdown in the last five years, according to data compiled by Bloomberg. All involved betrayal -- of clients, employers, relatives or friends. The Hefner episode and a handful of cases like it include an especially cruel breach of trust: betrayal of a wife by a husband. Tennis star Novak buys up world's supply of donkey cheese at £400 a pound for new restaurant chain (DM) The cheese, known as pule, will be one of the key attractions at a chain of restaurants the Wimbledon champion and world number one is opening in his Serbian homeland...The Zasavica farm, which lies 50 miles west of the Serbian capital Belgrade, boasts a herd of 130 and is said to be the only place in the world where donkeys are milked for cheese. Banking Industry Squirms Over European Rate Probe (WSJ) The scandal over banks' attempted manipulation of interest rates has mostly centered on the London interbank offered rate. But Libor's lesser known cousin, the euro interbank offered rate, or Euribor, is facing mounting attacks. The European Union is expected soon to accuse multiple banks of attempted collusion in the setting of Euribor, according to people briefed on the probe. Barclays has already acknowledged trying to rig the rate, and other banks are likely to be pressed by regulators in the U.S., U.K. and elsewhere into similar admissions, according to industry and regulatory officials. Mortgage Crisis Presents a New Reckoning to Banks (NYT) Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages. Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life. Crisis Measure Nears End (WSJ) Barring action by Congress, the FDIC on Dec. 31 will stop providing an unlimited guarantee on zero-interest bank accounts used by businesses and municipalities for payroll and other services. The guarantee would then revert to the normal $250,000 in insurance per depositor at any given bank. If the guarantee isn't extended, FBR Capital Markets estimates as much as $250 billion in deposits could flow out of smaller banks to large banks or big money-market mutual funds. Stylish primate charms Toronto shoppers (The Star) A North York Ikea store attracted an unusual customer Sunday afternoon, when a tiny monkey dressed in a fitted faux shearling coat and diapers appeared in the store’s upper parking garage around 2 p.m. “It was just running around screaming,” said shopper Bronwyn Page...“It was really cute,” said Lisa Lin, another shopper. “It was smaller than a cat.” But if the monkey had hoped to stock up on Billy bookcases or Swedish meatballs, its plans were thwarted. The diminutive shopper never made it into the store, said manager Alvaro Carmona. No one was hurt in the incident, which lasted no more than half an hour, he added. Animal Services identified the monkey as a rhesus macaque, an Asian species that is prohibited in Ontario. The monkeys are known for their ability to live in diverse habitats – although Canadian winters obviously require a warm coat. The owner of the primate turned himself in to Animal Services just after 5 p.m. He was charged with owning a prohibited animal, an offence that carries a $200 fine. The seven-month-old monkey has somehow managed to escape his owner’s car in the Ikea parking lot, said animal control officer David Behan.

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