Morgan Stanley Posts Loss (WSJ) "The rebound in fixed income and commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter," Chief Executive James Gorman said, referring to Moody's Investors Service's move over the summer to downgrade the credit rating on more than a dozen banks. "We are beginning to unlock the full potential of the Global Wealth Management franchise, having increased our ownership of, and agreed on a purchase price for the rest of, Morgan Stanley Wealth Management." For the quarter, Morgan Stanley reported a loss of $1.02 billion, compared with a year-earlier profit of $2.2 billion. The per-share loss, which reflects the payment of preferred dividends, was 55 cents compared with a profit of $1.15 a year earlier. Stripping out the impact of debt-valuation changes, the per-share profit was 28 cents versus two cents a share a year ago. Revenue fell 46% to $5.29 billion, including a negative impact of $2.3 billion from the tightening of credit spreads related to debt. Stripping out debt-valuation changes revenue was up 18% to $7.55 billion. Analysts polled by Thomson Reuters expected earnings of 24 cents, excluding gains related to debt, on revenue of $6.36 billion. Morgan Stanley Reduces Investment-Bank Pay to $5.2 Billion (Bloomberg) The ratio of compensation to revenue in the unit fell to 44.9 percent, compared with 48.4 percent in the same period a year earlier, when excluding accounting gains and losses related to the firm’s credit spreads. That’s still higher than Goldman Sachs and JPMorgan’s investment bank. Compensation and benefits for all of Morgan Stanley totaled $12 billion in the first nine months, down 4 percent. Goldman Ex-Employee Says Firm Pushed Europe Bank Options (Bloomberg) Goldman Sachs sought to profit last year by persuading clients to buy and sell stock options on European banks such as BNP Paribas SA and UniCredit SpA, according to former employee Greg Smith’s new book. “We must have changed our view on each of these institutions from positive to negative back to positive ten times,” Smith writes in “Why I Left Goldman Sachs: A Wall Street Story,” scheduled for release on Oct. 22. “I remember thinking, ‘How can we be doing this with a straight face? No thinking client could believe that conditions on the ground could change that frequently.”’ [...] Smith also describes being disappointed with his $500,000 bonus at the end of 2006. “By any measure, I should have felt exceptionally lucky and grateful,” he writes. “But by the warped logic of Goldman Sachs and Wall Street, I was being screwed.” U.S. to Get Downgraded Amid Fiscal ‘Theater,’ Pimco Says (Bloomberg) “The U.S. will get downgraded, it’s a question of when,” Scott Mather, Pimco’s head of global portfolio management, said today in Wellington. “It depends on what the end of the year looks like, but it could be fairly soon after that.” Asian Scion's Trades Draw Scrutiny (WSJ) A federal probe into an alleged multimillion-dollar insider trading scheme is focusing on the son of a deposed Central Asian autocrat once courted by the U.S. as a key ally in the war on terror, according to people involved in the investigation. The globe-spanning criminal case marks a turnabout by the U.S. against a ruling family it once relied on to keep open military supply lines to Afghanistan. For years, the U.S. maintained good relations with then-Kyrgyzstan President Kurmanbek Bakiyev. Now, the U.S. has prepared charges against the former strongman's son, Maksim Bakiyev, who officials say spent some of his exile in London profiting from illegal tips on stocks trading on the New York Stock Exchange and Nasdaq. On Friday, the younger Mr. Bakiyev, 35, was arrested in England on an extradition request from the U.S. Mr. Bakiyev's U.K. attorney, Michael O'Kane, declined to comment. Computer programmer 'quadruples productivity' after hiring a woman to slap him in the face every time she catches him looking at Facebook (DM) Maneesh Sethi placed an advert on Craigslist to recruit someone willing to monitor what he was looking at on his laptop. The computer expert and writer, from San Francisco, now pays a female employee £5 ($8) an hour to strike him in the face if she spots him wasting time on social media. Mr Seethi claims the unusual motivational system has helped him boost his productivity from just 35 percent to around 98 percent during the working day...Mr Seethi published details on his blog of his Craigslist advert, which was entitled '(Domestic gigs) Slap me if I get off task'. In it he wrote: 'I'm looking for someone who can work next to me at a defined location (my house or a cafe) and will make sure to watch what is happening on my screen. 'When I am wasting time, you'll have to yell at me or if need be, slap me. 'You can do your own work at the same time. Looking for help asap. Mr Seethi said he was inundated with offers from potential slappers and quickly hired a volunteer he names only as Kara. He wrote: 'Within minutes, my inbox began blowing up. Up to 50% of Greek Workforce Strikes; Tipping Point Nears (CNBC) As European Union leaders prepare to meet in Brussels on Thursday, Greece’s workers aim to make their voices heard by holding a 24-hour strike bringing the country to a halt. With the economy in the fifth year of a recession, the lost production could prove counterproductive and cost the economy 100 million euros ($131 million), according to one expert. Most business and public sector activity is expected to grind to a halt during the strike called by the ADEDY and GSEE unions that represent around 2 million people — half of Greece’s workforce. A protracted news blackout is also expected as television and radio broadcasters and newspapers shut for the day, according to Reuters. Spain Banks Face More Pain as Worst-Case Scenario Turns Real (Bloomberg) Spain’s request for 100 billion euros of European Union financial aid to shore up its banks is increasing concern about the nation’s growing liabilities. Standard & Poor’s downgraded the country’s debt rating by two levels to BBB-, one step above junk, from BBB+ on Oct. 10, saying it wasn’t clear who will bear the cost of recapitalizing banks. It cut the ratings of 11 lenders including Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA, Spain’s largest, two days ago, citing the sovereign downgrade. Brothels Rescue Cash-Strapped Greek Soccer Team (AP) Players on a cash-strapped Greek soccer team now wear pink practice jerseys with the logos "Villa Erotica" and "Soula's House of History," two bordellos it recruited as sponsors after drastic government spending cuts left the country's sports clubs facing ruin. Other teams have also turned to unconventional financing. One has a deal with a local funeral home and others have wooed kebab shops, a jam factory and producers of Greece's trademark feta cheese. But the amateur Voukefalas club — whose players include pizza delivery guys, students, waiters and a bartender — has raised eyebrows with its flamboyant sponsorship choice. Prostitution is legal in Greece, where brothels operate under strict guidelines. Though garish neon signs advertising their services are tolerated, the soccer sponsorship has ruffled some feathers in the sports-mad city of Larissa. League organizers have banned the pink jerseys during games, saying the deal violates "the sporting ideal" and is inappropriate for underage fans...Brothel owner Soula Alevridou, the team's new benefactor, has already paid more than 1,000 euros ($1,312) for players to wear her jerseys. The team is appealing the game ban, but that doesn't worry the 67-year-old Alevridou, who says she's only in it because she loves soccer. "It's not the kind of business that needs promotion," she said, dressed all in white and flanked by two young women in dark leggings at a recent game. "It's a word-of-mouth kind of thing."

JPMorgan's Losses Are Rival's Boons (WSJ) A group of about a dozen banks, including Goldman Sachs Group and Bank of America have scored profits that collectively could total $500 million to $1 billion on trades that sometimes pit them directly against J.P. Morgan's Chief Investment Office, according to traders and people close to the matter. Facebook 11% Drop Means Morgan Stanley Gets Blame (Bloomberg) Some investors say they felt misled by the underwriters. According to one London-based fund manager who asked not to be named, bankers indicated demand was so strong that he placed a bigger order than he thought he would get, leaving him with 40 percent more Facebook shares than anticipated. He sold most of that stock on the first day of trading. Morgan Stanley Cut Facebook Estimates Just Before IPO (Reuters) In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company. The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast. They say it may have contributed to the weak performance of Facebook shares, which sank on Monday - their second day of trading - to end 10 percent below the IPO price. The $38 per share IPO price valued Facebook at $104 billion. Deutsche Bank: 'Geuro' an Alternative to Greek Euro Exit (CNBC) Greece’s best chance of survival may be to stay in the euro but opt for its own parallel currency or “Geuro,” according to Deutsche Bank’s head of research, Thomas Mayer. In a research piece, Mayer said the Geuro would help Greece balance its primary budget without financial support from the 'Troika' of international lenders (the International Monetary Fund, the European Union and the European Central Bank). This would allow the incoming Greek government to reject the strict austerity program on which aid is contingent. IMF Chief, OECD Call For More Euro Debt Sharing (WSJ) International Monetary Fund head Christine Lagarde Tuesday called on euro-zone governments to accept more common liability for each other's debts, saying that the region urgently needs to take further steps to contain the crisis. "We consider that more needs to be done, particularly by way of fiscal liability-sharing, and there are multiple ways to do that," Ms. Lagarde told a press conference in London to mark the completion of a regular review of U.K. finances. Greece Needs To Accept Bailout Terms, Says South Korea (CNBC) South Korea’s President Lee Myung-bak says Greece needs to accept the terms of a $130 billion international bailout agreed in March and there will be no disbursement of money from the International Monetary Fund (IMF), unless the country does so. Floating bales of marijuana a mystery (OCG) The floating bundles, weighing a total of 8,068 pounds, were first seen by a boater near the harbor around 12:01 p.m. Sunday, U.S. Coast Guard Petty Officer Seth Johnson said. The bales were reportedly floating at least 15 miles off shore. The Orange County Sheriff's Department sent three Harbor Patrol ships to aid in recovering the marijuana. A Coast Guard cutter was also sent to assist. Michael Jimenez, a Border Patrol spokesman, called Sunday's incident unusual. In most scenarios when marijuana bales are found dumped in the water it is because a vessel is trying to flee from authorities. "At other events, they've dumped the bales to get rid of weight if they're being chased," he said. "Generally in these cases we're aware they're being dumped. What's more unusual is that the bales were floating with no boat in sight." Fitch Downgrades Japan (WSJ) Fitch Ratings downgraded Japan's sovereign rating to A-plus and said it was maintaining a negative outlook due to the "leisurely" pace of the county's efforts to remedy its dire fiscal situation. The firm's long-term foreign-currency rating had been AA and its local currency issuer default rating had been AA-minus. JPMorgan Veered From Hedging Practices At Competing Banks (Bloomberg) JPMorgan's biggest U.S. competitors say their corporate investment offices avoid the use of derivatives that led to the bank’s $2 billion loss and buy fewer bonds exposed to credit risk. Bank of America, Citigroup, and Wells Fargo. say the offices don’t trade credit-default swaps on indexes linked to the health of companies. JPMorgan is said to have amassed positions in such indexes that were so large they drove price moves in the $10 trillion market. The loss has prompted shareholders to join regulators in scrutinizing how banks use their investment offices to hedge risks and manage deposits they aren’t using for loans. JPMorgan’s competitors confine corporate-level trading mostly to interest-rate and currency swaps -- the most common derivatives -- and put a greater percentage of funds into U.S. government- backed securities such as Treasury bonds. Blackstone Moves Into Motel 6 (WSJ) Blackstone Group LP is acquiring discount lodging chain Motel 6 in a deal valued at $1.9 billion, as the private-equity firm continues to invest aggressively through its $10 billion real estate war-chest. Jon Corzine Got $8.4 Million In Year Before MF Global Collapse (NYP) Corzine received a bonus of $1.25 million in addition to his salary of about $1.8 million last year. He also was awarded $5.35 million in now-worthless stock options. Other MF Global insiders, including Chief Operating Officer Bradley Abelow, also saw big pay days. Abelow, who is still working at the firm, was paid $2.7 million in cash, including a $1.25 million bonus, plus restricted stock valued at $1.5 million. Woman Claims She Was Fired For Being "Too Hot" (Reuters) A New Jersey woman said on Monday that she was dismissed from a temporary job at a New York lingerie warehouse because her male employers felt she was too busty and dressed too provocatively for the workplace. Wearing a form-fitting sequined black dress and black leather, sequin-studded boots, Lauren Odes, 29, said her Orthodox Jewish employers at Native Intimates told her that outfit and others like it were "too hot" for the warehouse. "We should not be judged by the size of our breasts or the shape of our body," Odes said. Odes's attorney, celebrity lawyer Gloria Allred, said she filed a gender and religious discrimination complaint with the U.S. Equal Employment Opportunity Commission in New York.

Obama Wins Re-Election With Romney Defeated In Key States (Bloomberg) Obama defeated Republican Mitt Romney, winning at least 303 electoral votes in yesterday’s election with 270 needed for the victory. With one state -- Florida -- yet to be decided, Romney had 206 electoral votes...Obama won the battleground states of Ohio, Virginia, Iowa, New Hampshire, Wisconsin, Nevada and Colorado. He also carried Pennsylvania, where Romney made an 11th-hour bid for support to try to derail the president’s drive for re-election. North Carolina was the only battleground Romney won. Romney Campaigns To The End (WSJ) Hours before Mitt Romney lost his six-year quest to win the presidency, he said he had prepared only one speech—a victory speech...Until the final hour, Mr. Romney and his aides expressed confidence that he would win. The candidate, who prefers data and metrics to chitchat, appeared to be caught off guard by the loss even though he trailed in polls in crucial battlegrounds such as Ohio. Triumph Of The Nerds: Nate Silver Wins In 50 States (Mashable) The Fivethirtyeight.com analyst, despite being pilloried by the pundits, outdid even his 2008 prediction. In that year, his mathematical model correctly called 49 out of 50 states, missing only Indiana (which went to Obama by 0.1%.) This year, according to all projections, Silver’s model has correctly predicted 50 out of 50 states. A last-minute flip for Florida, which finally went blue in Silver’s prediction on Monday night, helped him to a perfect game. Loser Ryan Also A Winner (NYP) The Republican vice-presidential hopeful hedged his bet by running for re-election to his congressional seat in Wisconsin — where last night, he was declared the winner for an eighth straight time. Goldman Partners Pocket $22 Million (WSJ) More than 30 executives, including Chief Executive Officer Lloyd C. Blankfein, recently cashed in stock options awarded in the afterglow of the company's initial public offering in 1999. According to a securities filing, the executives, all Goldman partners, pocketed a total of $21.8 million by exercising options and selling the underlying shares in the three days after the firm reported third-quarter results in mid-October. The options expire at the end of November, and cashing in produced instant profits because Goldman's share price is more than 50% higher than when the options were awarded in 2002. "By exercising 10-year-old options before they expired later this year, executives captured some of the value we have built for shareholders over that period," said a spokesman for the securities firm. In contrast, many of the executives' remaining options are worthless, at least for now, because they were granted from 2005 to 2008. The stock peaked in October 2007 at about $239, or 89% higher than Tuesday's closing price of $126.25 in New York Stock Exchange composite trading at 4 p.m. The biggest gain went to Michael S. Sherwood, a Goldman vice chairman and the firm's top executive in Europe, who received $5.2 million from exercising options on 115,211 shares. Mr. Blankfein collected $3.1 million, while departing Chief Financial Officer David A. Viniar got $2.3 million, the filing shows. JPMorgan Nears SEC Settlement (WSJ) JPMorgan is close to a settlement with the Securities and Exchange Commission that would end one probe into how the company's Bear Stearns Cos. unit packaged and sold home loans to investors, according to people familiar with the case. A pact with the nation's largest bank by assets would be the first tangible victory in a wide-ranging SEC investigation into Wall Street's sale of mortgage-backed securities before the onset of the financial crisis. Since 2010, the SEC has issued more than 300 subpoenas or document requests related to the probe and collected more than 30 million pages of documents, enforcement chief Robert Khuzami said earlier this year. BNP Paribas Third Quarter Net Doubles On Trading Gains (Bloomberg) Pretax profit at BNP Paribas’s corporate- and investment- banking unit, or CIB, rose 7.3 percent to 732 million euros, beating analysts’ estimate of 686 million euros. Revenue from equity and advisory operations climbed 51 percent to 444 million euros, while fixed-income sales more than doubled to 1.13 billion euros. After Obama Victory, Donald Trump Rants On Twitter (ABC) “We can’t let this happen. We should march on Washington and stop this travesty,” Trump Tweeted. “Our nation is totally divided! Lets fight like hell and stop this great and disgusting injustice! The world is laughing at us. This election is a total sham and a travesty. We are not a democracy! And then: “Our country is now in serious and unprecedented trouble…like never before. Our nation is a once great nation divided! The electoral college is a disaster for a democracy. Hopefully the House of Representatives can hold our country together for four more years…stay strong and never give up! House of Representatives shouldn’t give anything to Obama unless he terminates Obamacare.” And finally: “This election is a total sham and a travesty. We are not a democracy!” Fitch: No Fiscal Honeymoon For President Obama (CNBC) President Barack Obama will need to quickly secure agreement on avoiding the "fiscal cliff" and raising the debt ceiling following Tuesday's elections, Fitch Ratings said. The economic policy challenge facing the president is to put in place a credible deficit-reduction plan necessary to underpin economic recovery and confidence in the full faith and credit of the U.S., according to Fitch. Resolution of these fiscal policy choices would likely result in the U.S. retaining its triple-A status from Fitch, the firm said. Failure to avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, as well as securing agreement on credible deficit reduction, would likely result in a rating downgrade in 2013, Fitch said. The New Haven For Investors (WSJ) Treasurys have a new rival for safe-haven status: U.S. companies. Bonds of Exxon Mobil and Johnson & Johnson are trading with yields below those of comparable Treasurys, a sign that investors perceive them as a safer bet. It is a rare phenomenon that some market observers said could be the beginning of a new era for debt markets. It could ultimately mean some companies will borrow at lower rates than the U.S. government. Swiss, Greeks Begin Talks On Tax Deal (WSJ) Switzerland has begun formal talks on a deal to tax assets stashed in secret Swiss bank accounts by Greek citizens, in line with similar agreements struck with other European countries, the Swiss government said Wednesday. Woman Wearing MIT Shirt Nearly Banned From Voting In Boca Raton (BNN) A woman attempting to vote in West Boca Raton yesterday was initially prohibited from entering the polling place because she was wearing a t-shirt with the letters MIT. BocaNewsNow.com heard from multiple sources that an election supervisor at the polling place ultimately realized that MIT stands for “Massachusetts Institute of Technology” — a school where students tend to know how to spell — and was not a campaign shirt for the Republican candidate, who spells his name MITT. Campaigning is not permitted within several yards of a polling place. The woman was ultimately allowed to vote.

Greece's Conservatives Start Coalition Talks (WSJ) Greece's conservative leader Antonis Samaras, whose New Democracy party came first in a crucial election Sunday, is set to meet the main opposition leader, radical left Syriza's Alexis Tsipras, to start the formal process of coalition-building talks. Mr. Samaras saw the Greek president of the republic earlier Monday and received the formal mandate to start coalition-building talks, as his party is 21 seats shy of an absolute majority in the 300-seat parliament. The talks with Mr. Tsipras are purely a formality, as the radical left leader made it plain Sunday night that he wouldn't join a coalition with New Democracy. "Don't expect any surprises, this is a formal procedure. Mr. Samaras has to see the leader of the second party first, that's the protocol," Syriza's spokesman said. Greek Election Defuses One Crisis, but More Lurk (NYT) “Unless they make a radical change, we will be back with another Greek cliffhanger in three or four months’ time,” said Darren Williams, a European economist at AllianceBernstein in London. Wilbur Ross: Real Question For Greece Is What Now (CNBC) Ross also said the government has to improve tax collection for a more permanent solution to the country’s debt problems and said higher revenues would allow the country to ease up on austerity measures. “The tax avoidance in Greece — including by government officials — is ridiculous. The black economy is a ridiculously high percentage,” he said. “Those are the problems they have to deal with and if they can deal with those than more limited austerity is what’s needed.” Europe Gets Emerging Market Crisis Ultimatum As G-20 Meet (Bloomberg) As elections in Greece reduced the immediate risk of the euro area’s breakup, China and Indonesia signaled growing exasperation with more than two years of European crisis- fighting that has failed to stem the threat of global contagion. World Bank President Robert Zoellick said that policy makers bungled their attempt to rescue Spain’s banks. CUNY biz school fixed Wall Streeters' GPAs to keep receiving tuition (NYP) An internal CUNY probe found the course grades of “approximately 15 students” were falsified to keep their GPAs high enough to stay in the programs, Baruch officials acknowledged. The trickery prevented enrollees, including many mid-level Wall Streeters whose firms picked up their tabs, from flunking out — and kept their tuition checks flowing in. The accelerated “executive programs” in business and finance allow students to earn a master’s degree in 10 to 22 months while working full-time. The tuition: $45,000 to $75,000. Baruch has referred the matter to law-enforcement agencies, the college said in a statement. Spokeswoman Christina Latouf would not say if students knew their grades were being changed or were complicit in the scheme. But Baruch has started calling some recent graduates with disturbing news: Their sheepskins are invalid. “What do you mean? My diploma’s on my wall. How can you tell me I don’t have a degree?” one grad said, according to a source...Zicklin officials gave a sales pitch for prospective students last week, but directors and professors made no mention of the problems. Instead, they promised “respected and well-recognized” degrees that would put grads on the path to become chief executives and financial officers. “This is a master’s program on steroids,” one said. Pressure Mounts On Credit Suisse Chief (FT) Investors and analysts have already grown impatient in the past 12 months over Mr Dougan’s efforts to improve the bank’s profitability and cost base, which are lagging behind rivals in Europe. Although they do not question Mr. Dougan’s credentials as a bank manager, they say that a capital raising now would make it difficult for him to stay in his job. Not only would shareholders resent the dilution, but the change of tack would undermine his strategy in recent years of making generous dividend payouts, in contrast to rivals, which have used a larger share of profits to boost capital. Dollar Shortage Seen In $2 Trillion Gap Says Morgan Stanley (Bloomberg) After falling to an all-time low of 60.5 percent in the second quarter of last year, the dollar’s share of global reserves rose 1.6 percentage points to 62.1 percent in December, the latest International Monetary Fund figures show. The buying has left the private sector with $2 trillion less than it needs, according to investment-flow data by Morgan Stanley, which sees the dollar gaining 8.2 percent in 2012, the most in seven years. App Developers Too Young To Drive (WSJ) Paul Dunahoo went on a business trip to San Francisco last week, where he attended technical sessions at Apple Inc.'s AAPL +0.45% developer conference, networked with other programmers and received feedback from Apple engineers on his six productivity apps. Then, Mr. Dunahoo, chief executive of Bread and Butter Software LLC, returned to Connecticut to get ready for the eighth grade. "It's a very rare opportunity" to be at Apple's conference, said Mr. Dunahoo, who is 13 years old and wears red braces. Mr. Dunahoo is one of a growing number of teens joining the app-making frenzy. Apple, the app industry's ringleader, is encouraging the trend. Fitch Cuts India Credit Rating To Outlook Negative (Reuters) "A significant loosening of fiscal policy, which leads to an increase in the gross general government debt /GDP ratio, would result in a downgrade of India's sovereign ratings," Fitch said in a statement on Monday. Woman claims Southwest wouldn't let her board plane because of her cleavage: report (NYDN) Southwest Airlines was forced to apologize to a woman who was told she couldn't board her flight because her cleavage was "inappropriate." Jezebel reports that the woman, Avital — she only gave her first name — was boarding a 6 a.m. flight from Las Vegas to New York on June 5 when a ticket agent remarked that she couldn't fly unless she covered her breasts. Clad in a comfy cotton dress, a baggy flannel shirt and bright scarf, Avital ignored the warning and marched aboard anyway. "I didn't want to let the representative's Big Feelings about my breasts change the way I intended to board my flight," she told Jezebel. "And lo and behold, the plane didn't fall out of the sky... my cleavage did not interfere with the plane's ability to function properly." Avital slammed the Southwest for "slut shaming," and said a man on her flight had on a provocative piece of clothing, but wasn't hassled. "The guy sitting in front of me on the plane was wearing a shirt with an actual Trojan condom embedded behind a clear plastic applique and had no trouble getting on his flight," she said.

Bank Of America Reaches Settlement In Merrill Lynch Acquisition-Related Class Action Litigation (BW) Under terms of the proposed settlement, Bank of America would pay a total of $2.43 billion and institute certain corporate governance policies. Plaintiffs had alleged, among other claims, that Bank of America and certain of its officers made false or misleading statements about the financial health of Bank of America and Merrill Lynch. Bank of America denies the allegations and is entering into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation. Greece Seeks Taxes From Wealthy With Cash Havens in London (NYT) At the request of the Athens government, the British financial authorities recently handed over a detailed list of about 400 Greek individuals who have bought and sold London properties since 2009. The list, closely guarded, has not been publicly disclosed. But Greek officials are examining it to determine whether the people named — who they say include prominent businessmen, bankers, shipping tycoons and professional athletes — have deceived the tax authorities by understating their wealth. Libor Riggers May Be Criminal, Even If Acts Not Illegal at Time (CNBC) Those who took part in the manipulation of the London interbank offered rate (Libor), the key benchmark rate, could face criminal prosecution even though Libor manipulation is not yet a criminal offense. Martin Wheatley, who is advising the U.K. government on what changes could be made to Libor to stop manipulation in the future, said that U.K. regulator the Financial Services Authority (FSA) is considering prosecuting those who took part under “broad principles of conduct.” He also recommended that the government should give the FSA power to prosecute future Libor manipulation. Libor Furor: Key Rate Gets New Scrutiny (WSJ) "There's a concern that if you're going to base financial decisions on a particular interest rate" it should be a measure that responds to changes in market conditions, "and that's not Libor," said Andrew Lo, a finance professor at the Massachusetts Institute of Technology. Macquarie Bonuses Whack Profit (WSJ) Macquarie Group may have lost its reputation as the Millionaire’s Factory as profits slumped since the onset of the global financial crisis, but according to Citigroup analysts the bank’s net profit could have been 60% higher last financial year if not for a dramatic rise in bonus payments to staff...Wes Nason estimates that while the bank’s return on equity fell to 6.8% last financial year-–hitting its lowest level since it listed in the first half of fiscal 2012 and compared with a 10-year average of 18.4%—-its average bonus payments almost tripled to A$73,000 a head, up from A$26,000 in 2009. Replacement referee Lance Easley stands by touchdown call (NYDN) Lance Easley has been vilified for awarding the Seattle Seahawks a touchdown on its Hail Mary pass in the closing seconds of Monday night’s game against the Green Bay Packers even though pretty much everyone in the country saw that the pass had been intercepted. “I processed everything properly,” Easley told the Daily News Thursday. “It was supported on video. But the bad thing is, people don’t understand the rules in that whole play. “But that play rarely ever happens, it rarely happens in the field of play and it never happens in an NFL game,” he added. “And here I got stuck in the middle of it.” The call was reviewed on instant replay — and, amazingly, upheld, despite the refs also missing a pass interference infraction by a Seattle player. Since then the 52-year-old Bank of America banker has been swept up in a whirlwind of national outrage — one that forced the NFL to end a seven-week lockout of its unionized refs early Thursday. But Easley said he and his replacements did a good job in their stint in zebra stripes. “I know where I stand,” he said. “Everything I did ... I got support from all the referees and everything, and replay and our league office and anybody else that understands the rules and how those plays function. Spanish Rescue May Throw Crisis Spotlight on Italy (Reuters) Italian government bonds risk being thrown back into the spotlight of the euro zone debt crisis once Spain decides to request aid and secures central bank support for its debt. A partial bailout for Madrid would probably trigger the European Central Bank's bond-buying plan, lowering Spain's borrowing costs and increasing investor appetite for riskier assets in general, including debt issued by Italy. But Italy could then return to the forefront of market concern as the next weak link. "The risks increase that you will get a contagion into Italy," said David Keeble, global head of fixed income strategy at Credit Agricole. Cyber Attacks On Banks Expose Computer Vulnerability (WSJ) Cyber attacks on the biggest U.S. banks, including JPMorgan Chase & Co. and Wells Fargo & Co., have breached some of the nation’s most advanced computer defenses and exposed the vulnerability of its infrastructure, said cybersecurity specialists tracking the assaults. The attack, which a U.S. official yesterday said was waged by a still-unidentified group outside the country, flooded bank websites with traffic, rendering them unavailable to consumers and disrupting transactions for hours at a time. Such a sustained network attack ranks among the worst-case scenarios envisioned by the National Security Agency, according to the U.S. official, who asked not to be identified because he isn’t authorized to speak publicly. The extent of the damage may not be known for weeks or months, said the official, who has access to classified information. Fitch Ratings Cuts China, India 2012 Growth Forecasts (CNBC) In its September Global Economic Outlook, the ratings agency said it now expected China’s economy, the world’s second largest, to grow 7.8 percent this year, down from a forecast of 8 percent made in June. It also lowered its forecast for economic growth in India to 6 percent in the financial year ending in March 2013 from a previous estimate of 6.5 percent. CIT Chief Tries To Rescue Reputation (NYP) John Thain yesterday said he brought up executive compensation at the time his firm was getting bailed out by taxpayers not for selfish reasons but to determine how much control Washington would have over his company. “One of the issues we were worried about at the time was, if you take government money how much say does the government have in how you run your business?” Thain said during an interview on CNBC. Days earlier, Thain was trashed by former bank regulator Sheila Bair, who, in her upcoming book, “Bull By the Horns,” accuses the Wall Street veteran of being fixated on pay during the height of the financial Armageddon. Bair, the former Federal Deposit Insurance Corp. boss, wrote that Thain “was desperate for capital but was worried about restrictions on executive compensation.” “I could not believe it. Where were this guy’s priorities?” she wrote, referring to Thain. The CEO, who was tapped to run the troubled lender in 2010, also addressed during the CNBC interview rumors that CIT was looking to sell itself to a large bank. “It’s absolutely not true,” Thain said yesterday. Canada Cheese-Smuggling Ring Busted (BBC) A Canadian police officer was among three people charged as the country's authorities announced they had busted a major cheese-smuggling ring. A joint US-Canadian investigation found C$200,000 (£125,600) of cheese and other products were illicitly brought over the border into southern Ontario. The smugglers sold large quantities of cheese, which is cheaper in the US, to restaurants, it is alleged. The other two men charged were civilians, one a former police officer. The charges come three days after CBC News first reported the force was conducting an internal investigation into cheese smuggling. A pizzeria owner west of Niagara Falls told CBC that he had been questioned by police over the issue, but assured them he had not bought any contraband dairy. "We get all our stuff legit," said the restaurateur. "We thought it was a joke at first. Who is going to go around trying to sell smuggled cheese?"

UBS In $1.5 Billion Libor Fine (WSJ) As part of the deal, UBS acknowledged that dozens of its employees were involved in widespread efforts to manipulate the London interbank offered rate, or Libor, as well as other benchmark rates, which together serve as the basis for interest rates on hundreds of trillions of dollars of financial contracts around the world. UBS's unit in Japan, where much of the attempted manipulation took place, pleaded guilty to one U.S. count of fraud. Authorities on Wednesday painted a picture of "routine and widespread" attempts by UBS employees to rig Libor and the euro interbank offered rate, or Euribor. The U.K. Financial Services Authority said it had identified more than 2,000 such attempts between 2005 and 2010 with the participation or awareness of at least 45 UBS traders and executives. Regulators on Wednesday released a trove of internal UBS emails and other communications—many of them colorful and expletive-laden—in which bank traders, sometimes with the knowledge of their managers, sought to manipulate the rates in order to boost their trading profits or mask the Swiss bank's mounting financial problems in 2008. UBS Traders' 'Humongous' Libor-Fixing Boasts (CNBC) The FSA documents suggest a macho trading culture on the UBS trading floor. Trader A also said: "if you keep 6s [i.e. the six month JPY LIBOR rate] unchanged today ... I will ****ing do one humongous deal with you ... Like a 50,000 buck deal." Traders and brokers implicated in the scandal referred to each other as "the three muscateers [sic]" and "captain caos [sic]." SAC's top consumer trader draws scrutiny from U.S. authorities (Reuters) U.S. authorities are examining trading by one of SAC Capital Advisors' most successful portfolio managers, Gabriel Plotkin, as part of a probe into the $14 billion hedge fund firm's investment in Weight Watchers International Inc last year, according to a person familiar with the investigation. Plotkin, a specialist in consumer and retail stocks who makes investment decisions for more than $1.2 billion worth of assets, is among several SAC portfolio managers whose trades are being investigated, said the source, who did not want to be identified. The source would not name the other managers. Federal authorities are trying to determine whether any of SAC Capital's retail and consumer portfolio managers traded Weight Watchers shares based on non-public confidential information about the diet company, said the source and another person familiar with the investigation. The two sources said it is too soon to conclude if there was any insider trading. Authorities have not charged Plotkin with any wrongdoing. Banks See Biggest Returns Since ’03 as Employees Suffer (Bloomberg) Shareholders, impatient for the industry to boost profit, were rewarded as Wall Street firms cut jobs and pay, and exited businesses. The shrinking unnerved employees, who watched the chiefs of two big banks lose their jobs and others contend with a drop in deal making and stock trading, stiffer regulations, trading losses, rating downgrades and scandals involving interest-rate manipulation and money laundering. “There’s always grumbling on Wall Street, which is pathetic given how overpaid we all are, but there is a level of angst this year that is just unprecedented,” Gordon Dean, who left a 26-year career at Morgan Stanley (MS) to co-found a San Francisco boutique advisory firm this year, said in a telephone interview. “It’s just a profound sadness and dissatisfaction.” Greek Bond Bet Pays Off for Hedge Fund (FT) One of the world's most prominent hedge funds is sitting on a $500 million profit after making a bet that Greece would not be forced to leave the euro zone, bucking the trend in a difficult year for the industry. Third Point, headed by the billionaire US investor Dan Loeb, tendered the majority of a $1 billion position in Greek government bonds, built up only months earlier, as part of a landmark debt buyback deal by Athens on Monday, according to people familiar with the firm. The windfall marks out the New York-based firm as one of the few hedge fund managers to have profited from the eurozone crisis. Standard and Poor's, the rating agency, raised its assessment of Greece's sovereign debt by several notches on Tuesday, citing the euro zone's"strong determination" to keep the country inside the common currency area. Fitch Warns US Could Lose AAA If 'Fiscal Cliff' Hits (Reuters) "Failure to avoid the fiscal cliff.. would exacerbate rather than diminish the uncertainty over fiscal policy, and tip the US into an avoidable and unnecessary recession," Fitch said in its 2013 global outlook published on Wednesday. "That could erode medium-term growth potential and financial stability. In such a scenario, there would be an increased likelihood that the U.S. would lose its AAA status." Science explains Rudolph's red reindeer nose (CNET) A collection of Dutch scientists contributed to a paper titled "Microcirculatory investigations of nasal mucosa in reindeer Rangifer tarandus (Mammalia, Artiodactyla, Cervidae): Rudolph's nose was overheated." According to the paper, "The exceptional physical burden of flying with a sleigh with Santa Claus as a heavy load could have caused cerebral and bodily hyperthermia, resulting in an overworked nasal cooling mechanism that resembles an overheated cooling radiator in a car: Rudolph suffered from hyperemia of the nasal mucosa (a red nose) under more extreme heat loads during flight with a sleigh." Of course, scientists don't like to put all their scientific eggs into just one basket of science. The paper's authors acknowledge other theories for the red nose, including the common cold, alcoholic intoxication, or a parasitic infection of the nostrils. GM To Buy Back Stock From Treasury (WSJ) GM said it will purchase 200 million shares of stock held by the U.S. Treasury Department in the first step of the government's eventual exit from the auto maker within the next 12 to 15 months. The auto maker will pay $5.5 billion for the shares in a deal that is expected to close by the end of the year. The repurchase price of $27.50 a share represents a 7.9% premium over the closing price on Dec. 18. Berlusconi Says Italy May Be Forced to Leave the Euro Zone (Reuters) "If Germany doesn't accept that the ECB must be a real central bank, if interest rates don't come down, we will be forced to leave the euro and return to our own currency in order to be competitive," Berlusconi said in comments reported by Italian news agencies Ansa and Agi. Knight, Getco Confirm Merger (WSJ) The $1.8 billion deal for Knight, which values the firm at $1.4 billion plus $400 million in debt held by Getco, will create a trading powerhouse ranking as one of the largest players on U.S. exchanges and the main trading partner of online brokerage firms that service everyday investors. Porsche Executives Charged Over VW Bid (WSJ) Prosecutors have charged the former top executives of Porsche Automobil Holding SE with allegedly manipulating financial markets during the company's attempt to take over Volkswagen AG in 2008, lawyers representing the executives said Wednesday. A court in Stuttgart must now decide whether to open criminal proceedings against Porsche's former chief executive Wendelin Wiedeking and former finance chief Holger Härter, who are suspected of misleading investors when they denied trying to take over VW in 2008. Market manipulation in Germany can be punished with up to five years' imprisonment. From early March to October of 2008, Porsche issued at least five statements denying it was trying to raise its stake in Volkswagen to 75%, but the prosecutors allege that Messrs. Wiedeking and Härter had already decided to try to raise the stake and were preparing for the move by purchasing buy options on ordinary and preference shares of Volkswagen. The denials induced investors to sell or make bets the shares would fall by so-called short selling, the prosecutors said, which benefited Porsche by lowering the share price ahead of the planned takeover. Spanx Bandit On The Loose After JCPenney Heist (TSG) An unknown thief (or thieves) stole a whopping $4182 worth of the popular body shapers from a JCPenney in Vero Beach, according to an Indian River County Sheriff’s Office report. The Spanx theft was reported Friday afternoon after a JCPenney employee noticed “the empty rack in the women’s undergarment section.” The worker noted that the Spanx stock had been there the prior evening. A subsequent search of the store revealed that about 100 Spanx “were taken along with their plastic hangers.” The purloined undergarments--tan and black tops and bottoms--were from Spanx’s Assets Red Hot Label line, police reported. A JCPenney store manager gave cops an itemized list of the boosted body shapers, but it appears the Spanx Bandit will escape unscathed. Due to a lack of witnesses, evidence, or store surveillance video, no further investigative activity could be undertaken by a sheriff’s deputy.

Westminster Hits At Goldman Sachs Bonus Plan (FT) Goldman Sachs provoked a furious reaction in Westminster after it emerged that the U.S. investment bank was mulling a plan to delay its U.K. bonus payments to take advantage of the imminent cut to the top rate of tax. John Mann, a Labour member of the Treasury select committee, criticized an "opportunistic money grab" by banks at a time of intensifying public anger against the sector. Some 10 banks had previously considered delaying bonuses until the top rate falls from 50 to 45 pence - although most have since concluded that this would be damaging. Chris Leslie, shadow Treasury minister, said banks needed to think carefully about their reputations. Fitch Warns Of US Downgrade Over Debt Fight (CNBC) In a statement Fitch said the debt ceiling was "an ineffective and potentially dangerous mechanism for enforcing fiscal discipline. It does not prevent tax and spending decisions that will incur debt issuance in excess of the ceiling while the sanction of not raising the ceilingrisks a sovereign default and renders such a threat incredible." Fitch Upbeat On Ireland (Reuters) If [Ireland's] debts could be shared out among euro zone states through the region's bailout mechanisms there could be scope for Ireland's BBB-plus rating to rise into the single-A category, according to Fitch analyst Douglas Renwick. "If there is an element of risk sharing, say perhaps through the ESM (European Stability Mechanism) over a bit of time, it could rise back to the single-A (range)," Renwick said. JPMorgan Ordered To Fix Lapses (WSJ) US regulators hit JPMorgan with four formal enforcement actions targeting lapses in risk-management and money-laundering controls, including the first sanctions in response to the bank's multibillion-dollar 2012 trading debacle. One set of cease-and-desist orders from the Office of the Comptroller of the Currency and the Federal Reserve instructs the largest U.S. bank by assets to remedy the breakdowns that allowed a small group of London-based traders to rack up more than $6 billion in losses last year. Another requires the bank to beef up its antimoney-laundering procedures and mirrors an action taken last April when regulators ordered Citigroup to upgrade its transaction-monitoring procedures and enhance internal audit. None of the orders issued Monday require any fines or monetary penalties, but regulators left the door open to future action. Wells Fargo Bets On Charlotte Trading After BofA Flees (Bloomberg) \Wells Fargo is betting its securities business can thrive 600 miles from New York in the same city Bank of America's traders largely abandoned. The first of 900 Wells Fargo employees moved last month into a new space on two floors of a 48-story tower in Charlotte, North Carolina. From their windows they can see the complex a half-mile away where Bank of America built its own state-of-the- art facility less than a decade ago for about 550 traders and investment bankers. Most have since been fired or moved to New York. Police: Teacher offers sexual favors to officer to avoid DUI arrest (WPBF) According to the arrest report, an empty gallon jug of Carlo Rossi wine was found behind the driver's seat of Maloney's damaged van, which was parked on the side of the street when officers arrived. Police said Maloney refused to cooperate with officers during their DUI investigation. Police said she began yelling at them and made random vulgar statements. While she was on her way to the police station, Maloney allegedly told an officer, "How much do I need to pay you to just let me go? Don't you understand I am a school teacher?" She then offered to perform oral sex on the officer and let him fondle her breasts, the report stated. RBS Libor Fine May Hit $800M+ (Bloomberg) US and UK regulators could hit the Royal Bank of Scotland with as much as $804 million in fines next week to settle allegations traders tried to rig interest rates, two people with knowledge of the matter said. Investment banking chief John Hourican and Peter Nielsen, the head of markets, may also be asked to leave because they had responsibility for the parts of the company where the alleged wrongdoing occurred. The fine would be the second-largest levied by regulators in their investigation into allegations traders at the world’s biggest lenders manipulated submissions used to set the London interbank offered rate. UBS AG, Switzerland’s biggest lender, was fined $1.5 billion in December for rate-rigging, exceeding the 290 million pounds Barclays paid in June. Bob Khuzami, Master Blaster (NYP) Robert Khuzami yesterday took aim at a Columbia University professor who chided the SEC’s head of enforcement for not suing enough high-ranking individuals at large financial institutions, choosing instead to settle with those companies...Khuzami said in a blistering 1,500-word article in the National Law Journal that the SEC has charged a total of 102 individuals associated with the credit crisis, including high-level executives at Citigroup, Credit Suisse, Bear Stearns, and Fannie Mae and Freddie Mac...It’s the second time in as many weeks that Khuzami has called out his critics by name. Just before New Year’s Eve, the Brooklyn native blasted Simon Johnson, a professor at MIT Sloan School of Management, for a New York Times blog that said Khuzami’s hire was a “mistake” because of his former ties to Deutsche Bank. Khuzami shot back in the comment section of the blog — an unusual move for a public official. Wall Street Pay Gets Tougher Look (WSJ) Daniel Loeb, who runs hedge-fund firm Third Point LLC, has raised questions about whether compensation levels at Morgan Stanley are justified given the New York company's size and relative simplicity compared with larger bank. Hedge Funds' Manhattan Migration (WSJ) Of the new firms starting out in Manhattan, Greenwich or Stamford, about 86% picked the Big Apple, on average, from 2003 to 2008, according to eVestment, which tracks data on about 70% of U.S. hedge-fund firms. In 2009 and 2010, Manhattan was home to an average of 92% of the fund launches. Data for 2011 suggest the trend has continued. "There are blips in the data, but it's clear launches shifted toward New York after the crisis," says Peter Laurelli, eVestment's head of research. Detroit mafia boss says Jimmy Hoffa is buried in shallow grave north of Detroit (NYDN) Tony Zerilli, 85, says Hoffa was buried in a field outside Detroit, about 20 miles from the restaurant where he was last seen in July 1975. The aging Zerilli, who was in prison at the time of Hoffa’s disappearance, told TV news stations WNBC and WDIV that the plan was to move Hoffa’s body, but that never happened. “The master plan was, that I understood, was that they were going to put him in a shallow grave here. Then, they were going to take him from here to Rogers City upstate,” Zerilli said. “There was a hunting lodge and they were going to bury in a shallow grave then take him up there for final burial. Then, I understand, that it just fell through.” It was unclear why Zerilli chose to speak now about the 37-year-old mystery that has elicited dozens of false leads and conspiracy theories in the past. Zerilli said is to be ailing and penniless since his release from prison in 2008. WNBC reported he is promoting an upcoming book titled "Hoffa Found.” “All this speculation about where he is and he’s not,” Zerilli said. “They say he was in a meat grinder. It’s all baloney.”

Geithner Seeks More Euro-Zone Measures (WSJ) Treasury Secretary Timothy Geithner called the bailout of Spain's banking system "a good, concrete signal" of the euro-zone commitment to financial integration, but said the currency union must act quickly with more measures to quell its crisis. "This is a very challenging crisis for them still," he said Wednesday in a discussion at the Council on Foreign Relations. "They recognize they're going to have to do a bunch more to…restore a bit of calm and to convince people they're going to do what's necessary to make this work." Spanish Crisis Deepens (WSJ) The financial crisis threatening the Spanish government deepened Thursday as Spain's borrowing costs surpassed their euro-zone record, touching levels that previously forced other euro-zone countries to seek sovereign debt bailouts. The move followed yet another sovereign credit downgrade and coincided with fresh evidence Thursday of economic and financial stress as the decline of Spanish housing prices accelerated to a 12.6% annual rate in the first quarter and Spanish banks increased their reliance on European Central Bank funding. Spain Credit Rating Slashed by Moody's, Egan-Jones (Reuters) Moody's Investors Service cut its rating on Spanish government debt by three notches on Wednesday From A-3 to to Baa-3, saying the newly approved euro zone plan to help the country's banks will increase the country's debt burden. Moody's, which said it could lower Spain's rating further, also cited the Spanish government's "very limited'' access to international debt markets and the weakness of the country's economy. Greek Banks Under Pressure (WSJ) In a sign of heightened nervousness within the country, depositors have been steadily increasing their withdrawals from Greek banks. The withdrawals, according to senior bankers in Athens, approach the level of deposit flight seen when government coalition talks collapsed after inconclusive elections on May 6, forcing the new vote. "Why I'm Betting Big On Europe" (Fortune) David Herro seems awfully relaxed for a man who has more than $1 billion invested in European banks. It's a sunny morning in late May, and I'm sitting across from the boyish 51-year-old fund manager in his downtown Chicago office. He's giving me his full attention, but I can't stop glancing at the headlines blinking on the Bloomberg terminal behind him. The euro is about to hit a two-year low. Greece is on the brink of disaster. Spain's real estate market is in shambles, and Italian sovereign debt is as fragile as stained glass. The global economy is roiling, and Herro is positively beatific. "Eventually they're going to get these problems solved," he says. "If you look at the economic history of the world, problems come and problems go. There are problems, and they do have to be dealt with. And our view is that all these problems are manageable." Large Institutions Discuss New Marketplace for Bonds (WSJ) In recent weeks, senior traders at investment managers and big Wall Street banks have been discussing how the financial industry can set up a centralized electronic market that would let all participants trade bonds freely with one another, according to people involved in the talks. BofA Beating JPMorgan As BNP Leads French Lenders Retreat (Bloomberg) Bank of America overtook JPMorgan Chase as the biggest lender to the commodities industry in the first five months as French lenders led by BNP Paribas retreated amid the debt crisis. Commodity loans arranged by Charlotte, North Carolina-based Bank of America totaled $14.71 billion, and New York-based JPMorgan’s $14.41 billion ranked it second, according to syndicated-loan data compiled by Bloomberg. Citigroup was the third biggest with $13.68 billion of financing, rising from fourth last year. BNP Paribas slipped to 17th from second. Lazard elects former Citigroup chairman Richard Parsons to board (NYP) Financial advisory and asset management firm Lazard Ltd. said Wednesday that it elected former Citigroup chairman Richard Parsons to its board, effective immediately. Parsons served as chairman of Citigroup Inc. from February 2009 until his retirement in April 2012. He had served as a director on its board since 1996. Before that, he was chairman and chief executive of the media and entertainment company Time Warner Inc. Montreal teacher suspended with pay for showing students ‘Canadian Cannibal’ Luke Magnotta murder video (NYDN) A Canadian teacher was fighting for his job after he was suspended for showing students a gory video allegedly showing Maple Leaf man-eater Luke Magnotta killing his Chinese lover. The Cavelier-De LaSalle High School 10th grade teacher appeared before a labor board on Wednesday to explain himself, and Montreal police were mulling whether to slap him with criminal charges, The Canadian Press reported. School officials said the teacher, who is in his 20s, polled students about whether they wanted to watch the grisly snuff video during class on June 4. The yays outweighed the nays, according to the Press. In the 11-minute video, Magnotta, a porn actor and sometime escort, allegedly tortured Jun Lin, 33 — beheading and dismembering his body, eating his flesh with a knife and fork and performing sex acts on the corpse.