Opening Bell: 03.30.12

Three Major Banks Prepare for Possible Credit Downgrades (NYT) Moody’s Investors Service has said it will decide in mid-May whether to lower its ratings for 17 global financial companies. Morgan Stanley, which was hit hard in the financial crisis, appears to be the most vulnerable. Moody’s is threatening to cut the bank’s ratings by three notches, to a level that would be well below the rating of a rival like JPMorgan Chase. Eurozone Lifts Firewall (WSJ) Euro-zone finance ministers on Friday agreed on a temporary boost of the bloc's bailout lending limit to €700 billion ($931 billion), opting for a less ambitious plan that some fear won't be enough to prevent a re-awakening of euro zone financial turmoil. Dalio Earns $3.9bn to Top Hedge Fund Pay List (FT) Ray Dalio, head of Bridgewater, the world’s largest hedge fund, personally made $3.9 billion in a year that his $70 billion Pure Alpha fund produced $13.8 billion of investment profits for its investors, according to industry rankings. He tops a list published Friday by Absolute Return magazine of the richest 25 hedge fund managers. The select group took home $14.4 billion in pay and paper profits on their own investments last year, down from $22 billion in 2010 in a sign of the industry’s struggle to deliver returns for its clients in 2011. Goldman Bets on Property Rebound With New Fund: Mortgages (Bloomberg) The U.S. Housing Recovery Fund is expected to finish its first round of capital raising and open April 1, according to a marketing document obtained by Bloomberg News. It will focus on senior-ranked securities without government backing, many of which now carry junk credit grades. BATS Weighs Cooling Its Listing Push (WSJ) BATS Global Markets Inc. is considering suspending its efforts to recruit corporate listings after a software glitch last Friday derailed the exchange operator's IPO, people familiar with the matter said. Concerns about BATS's bungled initial public offering could disrupt its efforts to draw other companies to list their stocks on its electronic exchange, forestalling ambitions by the electronic-markets operator to become a full-service exchange company. Such a move could entail notifying the Securities and Exchange Commission, which last year approved BATS's plan to list shares and exchange-traded products. Canada Eliminates Penny Costing Penny-and-a-Half to Make (Bloomberg) Canada will withdraw the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel, the government announced in its budget today. Grand Central nabs tell-all by ex-Goldman exec Smith (NYP) Greg Smith, the former Goldman Sachs executive who became an instant sensation when he ripped the Wall Street investment bank with a resignation letter published as an Op-Ed piece in the New York Times, has scored a $1.5 million advance to write a memoir of his experiences. Oil Rally Fails to Lift Commodity Hedge Funds' Returns (FT) Many multibillion managers have been wary of potential political shocks in the Middle East and a repeat of last year’s May oil sell-off. They have shunned risk over the past three months or lost out by betting that oil markets would become more choppy. Many of the sector’s leading names have underperformed broader hedge fund peers, which have enjoyed one of their best quarters on the back of rising global equity markets. Billions Lost In Tax Refund Scam (WSJ) The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don't have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns. In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed. The plot, which includes participants from around the U.S. and Latin America, has been around for at least five years. Prosecutors have obtained multiple convictions but none involving those believed to be among the top players in the operation, according to several people briefed on investigations into the fraud. BlackBerry Maker In Turmoil (WSJ) The overhaul comes just two months after Thorsten Heins took the reins at RIM and confidently proclaimed there was no need for "seismic" change. But with the company's sales tumbling 25% in the latest quarter, new BlackBerrys piling up unsold and a crucial lineup of new devices still not expected to arrive until later this year, Mr. Heins is taking more drastic actions. RIM will back out of its high-profile attempt to win business among consumers to focus on its core corporate customers. Queen Creek couple accused in dog-sex plan plead not guilty (AZC) A Queen Creek couple have pleaded not guilty to charges of planning to have sex with a dog. The case prompted Sheriff Joe Arpaio to ask the website Craigslist to better monitor its personal ads. Shane Walker, 33, and his wife Sarah Walker, 39, posted a Craigslist ad on Feb. 7 titled, "Wife looking for K9," according to Maricopa County Superior Court records.
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Three Major Banks Prepare for Possible Credit Downgrades (NYT)
Moody’s Investors Service has said it will decide in mid-May whether to lower its ratings for 17 global financial companies. Morgan Stanley, which was hit hard in the financial crisis, appears to be the most vulnerable. Moody’s is threatening to cut the bank’s ratings by three notches, to a level that would be well below the rating of a rival like JPMorgan Chase.

Eurozone Lifts Firewall (WSJ)
Euro-zone finance ministers on Friday agreed on a temporary boost of the bloc's bailout lending limit to €700 billion ($931 billion), opting for a less ambitious plan that some fear won't be enough to prevent a re-awakening of euro zone financial turmoil.

Dalio Earns $3.9bn to Top Hedge Fund Pay List (FT)
Ray Dalio, head of Bridgewater, the world’s largest hedge fund, personally made $3.9 billion in a year that his $70 billion Pure Alpha fund produced $13.8 billion of investment profits for its investors, according to industry rankings. He tops a list published Friday by Absolute Return magazine of the richest 25 hedge fund managers. The select group took home $14.4 billion in pay and paper profits on their own investments last year, down from $22 billion in 2010 in a sign of the industry’s struggle to deliver returns for its clients in 2011.

Goldman Bets on Property Rebound With New Fund: Mortgages (Bloomberg)
The U.S. Housing Recovery Fund is expected to finish its first round of capital raising and open April 1, according to a marketing document obtained by Bloomberg News. It will focus on senior-ranked securities without government backing, many of which now carry junk credit grades.

BATS Weighs Cooling Its Listing Push (WSJ)
BATS Global Markets Inc. is considering suspending its efforts to recruit corporate listings after a software glitch last Friday derailed the exchange operator's IPO, people familiar with the matter said. Concerns about BATS's bungled initial public offering could disrupt its efforts to draw other companies to list their stocks on its electronic exchange, forestalling ambitions by the electronic-markets operator to become a full-service exchange company. Such a move could entail notifying the Securities and Exchange Commission, which last year approved BATS's plan to list shares and exchange-traded products.

Canada Eliminates Penny Costing Penny-and-a-Half to Make (Bloomberg)
Canada will withdraw the penny from circulation this year, saving taxpayers about C$11 million ($11 million) annually and forcing retailers to round prices to the nearest nickel, the government announced in its budget today.

Grand Central nabs tell-all by ex-Goldman exec Smith (NYP)
Greg Smith, the former Goldman Sachs executive who became an instant sensation when he ripped the Wall Street investment bank with a resignation letter published as an Op-Ed piece in the New York Times, has scored a $1.5 million advance to write a memoir of his experiences.

Oil Rally Fails to Lift Commodity Hedge Funds' Returns (FT)
Many multibillion managers have been wary of potential political shocks in the Middle East and a repeat of last year’s May oil sell-off. They have shunned risk over the past three months or lost out by betting that oil markets would become more choppy. Many of the sector’s leading names have underperformed broader hedge fund peers, which have enjoyed one of their best quarters on the back of rising global equity markets.

Billions Lost In Tax Refund Scam (WSJ)
The perpetrators of the scheme, authorities say, swipe the Social Security numbers of Puerto Rican citizens, who don't have to pay federal income tax—and are less likely to be on the IRS radar—and use their information to file fake returns. In some cases, they enlist U.S. mail carriers to intercept the refund checks that are disbursed. The plot, which includes participants from around the U.S. and Latin America, has been around for at least five years. Prosecutors have obtained multiple convictions but none involving those believed to be among the top players in the operation, according to several people briefed on investigations into the fraud.

BlackBerry Maker In Turmoil (WSJ)
The overhaul comes just two months after Thorsten Heins took the reins at RIM and confidently proclaimed there was no need for "seismic" change. But with the company's sales tumbling 25% in the latest quarter, new BlackBerrys piling up unsold and a crucial lineup of new devices still not expected to arrive until later this year, Mr. Heins is taking more drastic actions. RIM will back out of its high-profile attempt to win business among consumers to focus on its core corporate customers.

Queen Creek couple accused in dog-sex plan plead not guilty (AZC)
A Queen Creek couple have pleaded not guilty to charges of planning to have sex with a dog. The case prompted Sheriff Joe Arpaio to ask the website Craigslist to better monitor its personal ads. Shane Walker, 33, and his wife Sarah Walker, 39, posted a Craigslist ad on Feb. 7 titled, "Wife looking for K9," according to Maricopa County Superior Court records.

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Opening/Hurricane Bell: 10.29.12

Bracing for Storm, U.S. Stock Markets to Close (Dealbook) All United States stock and options markets will close on Monday as Hurricane Sandy approaches, reversing course as Wall Street braces for the storm to barrel through the heart of the country’s financial center. The decision, made late Sunday night, leaves the American stock markets closed for weather conditions for the first time in nearly three decades. The New York Stock Exchange had previously planned on closing only its physical trading floor, while allowing for trading on its Arca electronic exchange. It has now decided to halt all trading. The Nasdaq and BATS stock markets, which are built on electronic trading, also decided to close. The CME Group, which operates the Nymex commodities exchange, said earlier on Sunday that it would close its physical trading floor on Monday, though trading would continue on its electronic trading platforms. The Securities Industry and Financial Markets Association, or Sifma, said in an e-mailed statement that it was calling for bond trading, which is all done electronically, to close at noon Monday, though it left the final decision to member firms. The N.Y.S.E. last closed trading for weather reasons in 1985, when Hurricane Gloria lashed the metropolitan area. Markets Go Dark Ahead Of Storm (WSJ) Customers had complained to the exchanges and to the Securities and Exchange Commission that partial closures of the market would be too complicated, according to people with knowledge of the matter. US Stock Markets To Possibly Stay Closed Through Tuesday (Reuters) In a statement, the company said that "the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority." Citigroup, Goldman Sachs Shut Some NYC Offices for Storm (Bloomberg) Citigroup and and Goldman Sachs are among Wall Street firms planning to shift operations to other cities and have staff work from home as Hurricane Sandy’s arrival in New York forces evacuations. Employees at Citigroup, the third-biggest U.S. bank by assets, won’t be able to enter Lower Manhattan offices on Greenwich Street and Wall Street, which include the main trading floor, according to a memo sent to workers and confirmed by Shannon Bell, a spokeswoman. Goldman Sachs, whose corporate headquarters at 200 West St. is also located in an evacuation zone, told the staff in an internal memo that most of them will work from home...European-based firms including Deutsche Bank AG, Credit Suisse Group AG and UBS AG, which have offices outside of the mandatory evacuation zone, are making arrangements to provide transportation and hotels for workers. Christie: "Don't Be Stupid" (AP) A year after telling New Jersey residents to "Get the hell off the beach" as Hurricane Irene approached, Gov. Chris Christie has a new message for people on the coastline: "Don't be stupid — get out," Christie said Sunday afternoon at a news conference, where he updated residents on the status of the huge storm bearing down on the state. Stock Pickers Game The Fiscal Cliff (WSJ) A number of companies are seeking to get ahead of the tax increases by paying out big special dividends before Dec. 31. In the past two weeks, at least four Standard & Poor's 500 companies have announced special payouts, including a $750 million payout by casino operator Wynn Resorts Ltd., a $1.1 billion dividend from hospital operator HCA Holdings Inc. and a $1.6 billion dividend from LyondellBasell Industries NV, a New York-listed chemicals group. The game for investors is to figure out which companies could be next. Jay Wong, a Los Angeles-based portfolio manager for Payden & Rydel, a money manager with $75 billion under management, is on high alert for potential payouts. He increased his stake in Wynn earlier this month in anticipation of a special dividend and is looking for others. He declined to be specific, citing a desire to not give his trades away. Occupy Wall Street's Stacey Hessler Splits From Husband (NYP, earlier) The filing lists Curtiss’ occupation as banker and says he earns $65,000 a year. Her job is listed in court papers as “protester” and her employer as “Occupy Wall Street.” Annual salary: $0. Divorce papers cite “irreconcilable differences” for the split, saying the 19-year marriage “is irretrievably broken.” One OWS protester who knows her says that Stacey’s devotion to the movement caused the divorce but that she was unfazed by the breakup. “She didn’t seem sad about any of it,” the source said. “It was just so matter-of-fact.” As recently as last month, Stacey, 39, was sleeping in front of a Wells Fargo bank branch in the Financial District near Zuccotti Park, but it appears she scrambled back home to suburban DeLand to finalize the divorce. Wearing her professional-protester uniform — a bandana and patchwork clothes — she refused to say what her plans were or when she’d be leaving the house. But she did respond when a Post reporter asked about a YouTube video showing her making out with another protester during an Occupy “Kiss In” on Valentine’s Day. “I actually made out with four guys,” she said, laughing wildly. Governments to debate 50 billion euro cut to EU budget (Reuters) The cut will be proposed in the latest EU negotiating text on the bloc's spending plan for 2014-2020, but is unlikely to be deep enough to satisfy Britain, Germany, France and other net budget contributors. They want strict limits on EU spending to reflect the austerity imposed by national governments to reduce debt, and called for cuts of 100-200 billion euros to the total proposed by the EU's executive, the European Commission. The proposal is also likely to anger Poland and other former communist EU countries who are the major beneficiaries of EU funds, and oppose any cuts to the Commission's blueprint which they argue is vital for their future economic growth. "As I see it now, the reduction from the Commission proposal will be 50 billion euros plus. That will be the basis for negotiations," said the source, who spoke on condition of anonymity. Greek Journalist Held Over List of Swiss-Account Holders (Bloomberg) Kostas Vaxevanis, editor of the Greek magazine Hot Doc, was arrested in Athens today, according to a message posted on his Twitter account at 11 a.m. local time. An arrest warrant was issued yesterday after the magazine published what’s been dubbed the “Lagarde list,” an electronic file given to Greece in 2010 by then-French Finance Minister Christine Lagarde of about 2,000 Greeks with Swiss accounts. Insurers Prepare For Impact Of Hurricane Sandy (Reuters) Had Sandy hit in 2011, it may have been more of a problem for the insurance industry, which dealt with record-breaking losses around the world last year, mostly from U.S. tornadoes and Asia-Pacific earthquakes. But in 2012, most insurers' disaster losses are down substantially, leaving them with more capacity to absorb the billions of dollars in costs some expect from Hurricane Sandy. "In terms of losses, I certainly don't think it's going to be the largest loss of the last 100 years," Tom Larsen, senior vice president of Eqecat, said in an interview late Friday. "It's not an end-of-days scenario." SEC Weighs Bringing Back Fractions in Stock Prices (WSJ) The move would at least partly undo an 11-year-old rule that replaced fractions of a dollar in stock prices, like 1/8 and 1/16, with pennies. The idea of that change was to trim investors' trading costs: One-cent increments can lead to narrower gaps between the prices at which brokers buy and sell shares—potentially reducing their opportunity to shave off profits. Those championing the fraction's return say it would spur securities firms to buy and sell more shares of some companies by making it more profitable for them to do so. Opponents say fractions would increase trading costs for investors with little or no benefit to companies. UBS, RBS Traders Suspended as Rates Probe Goes Beyond Libor (Bloomberg) UBS and Royal Bank of Scotland suspended more than three traders in Singapore as regulators investigating Libor-rigging turn their attention to the rates used to set prices on foreign exchange derivatives. At least two foreign-exchange traders at UBS, Switzerland’s largest bank, have been put on leave as part of an internal probe into the manipulation of non-deliverable forwards, a derivative traders use to speculate on the movement of currencies that are subject to domestic foreign exchange restrictions, according to a person with direct knowledge of the operation. Edinburgh-based RBS also put Ken Choy, a director in its emerging markets foreign exchange trading unit, on leave, a person briefed on the matter said on Oct. 26. Women who knew 'cannibal cop' worried they were on his 'cook list' (NYP) “Freaked-out” female acquaintances of would-be cannibal cop Gilberto “Gil” Valle yesterday wondered whether they were on his alleged list of 100 ladies to kidnap, rape, torture, cook — and eat. “I was so shaken when I found out it was him,” said Beverly Seiger, who knew Valle, 28, from the Forest Hills, Queens, park he visited nightly with his wife and baby daughter. “I used to walk his dog. I’ve been to his house many times. He’s been to my house,” she said of Valle, whom federal prosecutors accuse of plotting with three fiendish pals to kidnap, cook and consume scores of females. “I don’t want to be on his list!” Seiger said. “I’m so thin, he would use me as toothpicks. “The women in this neighborhood now are freaked out,” she said. Another female resident asked a reporter, “Are we on this list? “I fit in an oven,” she said, referring to Valle’s alleged boasting online of having an oven “big enough to fit one of these girls if I folded their legs.”

Opening Bell: 09.27.12

Spain Gears Up For Day Of Cuts After Riots (Reuters) Prime Minister Mariano Rajoy will enact further cutbacks as his efforts to bring down one of the euro zone's largest public deficits have been undermined by falling tax revenues in a recession. "We know what we have to do, and since we know it, we're doing it," Rajoy said in a speech in New York on Wednesday. "We also know this entails a lot of sacrifices distributed ... evenly throughout the Spanish society," Rajoy said in an address to the Americas Society. Thousands of anti-austerity demonstrators demanding that Rajoy resign gathered for a second night on Wednesday in Madrid near the national parliament, which was guarded by hundreds of police. Ex-Credit Suisse Banker Arrested In UK (WSJ) U.K. authorities arrested Kareem Serageldin, former global head of the Swiss bank's Structured Credit Trading business. He was taken into custody Wednesday by the Metropolitan Police in London outside the U.S. Embassy. Mr. Serageldin, 39 years old, was among three people charged criminally in the U.S. in a high-profile case in February. Mr. Serageldin, a U.K. resident, didn't formally answer the charges. His lawyer said then he did nothing wrong. Mr. Serageldin represents the highest-level Wall Street executive to be charged in a case relating to the 2008 financial meltdown. No Plans For Twitter IPO Or Sale (AP) FYI: Twitter is not readying a stock public offering, nor is it seeking to be sold to another group, CEO Dick Costolo said yesterday. In an interview on CNBC, Costolo brushed aside any suggestion of an imminent initial public offering or sale. The question of an IPO is “a decision we’ll make when we think the time is right for us,” he said. M&A Slumps to Lowest Level Since Financial Crisis’s Nadir (Bloomberg) “Executives have the cash, but they don’t have the conviction,” said Andrew Bednar, head of advisory at Perella Weinberg Partners LP, the New York-based investment bank. “I don’t see any miraculous change in the M&A markets for the foreseeable future.” This quarter’s slowdown has been most pronounced in Europe, where takeovers accounted for about $92 billion, or 21 percent, of global activity, the continent’s lowest share since 2010. The Americas accounted for $248 billion of transactions, and there were $104.5 billion in the Asia-Pacific region. Shark Attacks Spark Kill Orders To Protect Aussi Beaches (BW) The government of Western Australia said it plans to track, catch and if necessary kill sharks threatening beachgoers after a record five fatal attacks in the state in the past year. Officials will be allowed to destroy sharks “posing an imminent threat,” Fisheries Minister Norman Moore said in an e- mailed statement today as he announced a A$6.85 million ($7.1 million) protection, research and education program. Previously the state only issued kill orders following a shark attack. Tourism operators in Western Australia are attempting to lure domestic and international visitors to the state’s 12,000- kilometer-long (7,500-mile) coastline, which is studded with pristine beaches. The most recent attack saw a 24-year-old surfer taken by a five-meter great white shark on July 14 off an isolated beach about 160 kilometers north of the state capital Perth. Hedge Fund Managers Face Lower Pay In Wake Of Weak Returns (NYP) As of the end of the second quarter, only 43 percent of hedge funds had cleared the performance hurdle known as high-water marks over the past 12 months, according to data from fund tracker Hedge Fund Research. For many, those that fail to hit their marks by the end of the year will forgo their usual fee of 20 percent of profits until clients have recovered from losses. SEC Looks For The 'Kill Switches' (WSJ) The Securities and Exchange Commission has in recent days requested details from major broker-dealers about the internal controls of their automated trading systems, which direct the buying and selling of shares on exchanges and electronic-trading venue, according to people with knowledge of the review. The agency also wants to know about any recent malfunctions and how they were handled as well as how firms can override their computers and shut them off. Jobless Claims Fall More In US To Two Month Low (Bloomberg) Applications for jobless benefits decreased 26,000 to 359,000 in the week ended Sept. 22, the lowest since July, Labor Department figures showed today. Economists forecast 375,000 claims, according to the median estimate in a Bloomberg survey. There was nothing unusual in last week’s data, a Labor Department spokesman said as the figures were released to the press. Ed Sullivan window-smasher back in court for punching straphanger (NYP) Two months after pleading guilty to a late night, drunken, window-smashing rampage at the Ed Sullivan Theater, James Whittemore was back in Manhattan Criminal Court today for allegedly socking a fellow straphanger in the nose on a Harlem A-train platform. “I lost it,” the diminutive 23-year-old admitted to The Post of throwing the first punch at an apparently deranged homeless man who’d gotten “in my face.” “It’s the Irish in me.” The would-be NYC actor had won his 15-minutes of fame — and a mention on David Letterman’s Top 10 list — two summers ago, after he was found passed out drunk on the broken-glass-covered and urine-soaked carpeting of the lobby of the theater, home to the “Late Show.”

Opening Bell: 01.04.13

SEC Drops Case Against Ex-Berkshire Exec Sokol (Reuters) The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway, Sokol's lawyer told Reuters. In 2011, Buffett said Sokol violated the company's insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company. The U.S. Securities and Exchange Commission began investigating Sokol's investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway. Sokol's lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol. "SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol," said Levine, a lawyer at legal firm Dickstein Shapiro. Sokol has been "completely cleared" as there was no evidence against his client, Levine said. Cohen’s SAC Tops Most Profitable List Amid Insider Probes (Bloomberg) SAC Capital International, Cohen’s flagship fund, was the world’s most-profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds...SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors. Geithner's Planned Departure Puts Obama In A Tough Spot (Reuters) The Treasury Department said Geithner would stick to his previously announced schedule to stay until sometime around the Jan. 21 inauguration. Obama chose Geithner to lead the just-ended negotiations with Congress to avert the Dec. 31 fiscal cliff of spending cuts and tax hikes that threatened to push the economy back into recession. But the deal, which preserved most of the Bush-era tax breaks for Americans, sets up a series of crucial fiscal deadlines by delaying automatic spending cuts until March 1 and not increasing the government's borrowing limit. That puts Obama in the tough spot of nominating another Treasury secretary and asking the Senate to approve his choice when lawmakers are in the middle of another budget battle. Egan Jones Says Further US Downgrades Unlikely (CNBC) "This latest round (of negotiations) indicates a sign of health. You have a major ideological clash going on in Congress and many people uncomfortable with it, but it is part of democracy. The more positive light is that we actually have a deal and can move forward," Sean Egan, managing director of Egan-Jones told CNBC on Friday. "We've gotten a lot more comfortable about the U.S. and we probably won't take additional negative actions for the foreseeable future," he added. Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg) From John Paulson’s call for a collapse in Europe to Morgan Stanley’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. The ill-timed advice shows that even the largest banks and most-successful investors failed to anticipate how government actions would influence markets. Unprecedented central bank stimulus in the U.S. and Europe sparked a 16 percent gain in the S&P 500 including dividends, led to a 23 percent drop in the Chicago Board Options Exchange Volatility Index, paid investors in Greek debt 78 percent and gave Treasuries a 2.2 percent return even after Warren Buffett called bonds “dangerous.” Fed Divided Over Bond Buys (WSJ) A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth. Minutes released Thursday of the Fed's Dec. 11-12 policy meeting showed that officials were divided. Some wanted to continue the programs through the end of 2013, others wanted to end them well before then and a minority wanted to halt the programs right away. Swiss Bank Pleads Guilty In Probe (WSJ) In the latest blow to Switzerland's centuries-old banking practices, the country's oldest bank pleaded guilty to a criminal conspiracy charge in the U.S. on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad. Wegelin & Co., founded in 1741, is the latest Swiss bank to reach a deal with U.S. prosecutors as they crack down on Americans who kept their money in secret accounts overseas and the entities which helped them. Three Wegelin bankers also were charged criminally in the U.S. last year. Subway worker tells customer to 'fight me like a man,' during confrontation over ketchup (WFTV) Luis Martinez said he stopped by a Subway shop in a Walmart on South Semoran Boulevard late Tuesday night to get something to eat. He said he ordered a Philly cheese steak the way he always does. "American cheese, onions and ketchup," said Martinez. Lawrence Ordone was working behind the counter. "He wants ketchup on the Philly cheese steak and I have never put -- we don't even have ketchup at Subway -- I've never put ketchup on anybody's sandwich," said Ordone. Martinez said he didn't want the sandwich without the ketchup and that a man next to him in line offered to buy the sandwich. Ordone said that Martinez mouthed off at the man. Martinez denied saying anything, but neither he or Ordone disputed what they said happened next. "That's when I flew off the handle," said Ordone. "He shoved a chair to the side, like knocked it down to come at me, and I said, 'This is going to be serious,'" said Martinez. "I said, 'Let's go, fight me like a man,'" said Ordone. "I was scared. Next thing, I'm thinking a gun's going to come out," said Martinez. Ordone said he blocked the customer so he couldn't get out. "He threatened to kill me in front of my wife," said Martinez. Martinez called 911, but by the time police got there the Subway worker had already left. Ordone said he was fired from his job Wednesday, and that he is baffled the confrontation started over something as simple as ketchup. "There's ketchup three aisles down. You can go buy your own ketchup, and I promise to God, you can put as much as you want on it and nobody's going to say nothing," said Ordone. Economy Adds 155,000 Jobs (WSJ) Rebuilding following superstorm Sandy, which struck the Northeast in late October, likely added to job growth last month. Nationally, employment in the construction sector advanced by 30,000 jobs. Meanwhile, manufacturing payrolls increased by 25,000 and health-care jobs grew by 45,000. JPMorgan Faces Sanction for Refusing to Provide Madoff Documents (Bloomberg) The Treasury Department’s inspector general has threatened to punish JPMorgan Chase for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme. Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege. Rich Catch a Break With Budget Deal Providing Deductions (Bloomberg) “The increases in taxes and limits to deductions are more favorable than expected,” said Christopher Zander, partner and head of wealth planning at Evercore Partners Inc. (EVR)’s wealth management unit. “They could have been worse for high net-worth taxpayers.” Regulators to ease up on banks to get credit flowing (Reuters) Banks will get more time to build up cash buffers to protect against market shocks under a rule change that could help free up credit for struggling economies, a European regulatory source said. The Basel Committee, made up of banking supervisors from nearly 30 countries, is expected to announce the revision on Sunday to its "liquidity coverage" ratio or LCR, part of efforts to make banks less likely to need taxpayer help again in a crisis. The change comes after heavy pressure from banks and some regulators, who feared Basel's original version would suck up too much liquidity at a time when ailing economies are badly in need of a ready supply of credit to finance growth. 'Stripper' arrested after performance art leads to ruckus in Hallandale (SS) According to police and witnesses, Mena, 25, was first spotted standing and yelling in the middle of A1A outside her condo building along the 1800 block of South Ocean Drive about 10:45 a.m. on Wednesday. Noel von Kauffman, 40, said he was walking along the street when he noticed Mena trying to direct traffic while wearing a tank-top, cut-off jean shorts and tall boots...At some point, Mena picked up a traffic cone and threw it at a car driven by Dieter Heinrich, 49, of Dania Beach, according to an arrest report. The cone broke the car's side mirror, causing about $300 in damages, the report indicated. When Heinrich got out of his car, Mena allegedly spat in his face. Von Kauffman said he jumped in to help Heinrich, who had children in the back seat of his car. Mena scratched von Kauffman's wrist as the two men tried to restrain her and move her away from the busy roadway, according to the police report. After pinning her to the ground, von Kauffman said the woman first tried to say the incident was part of a television show and that everything was being caught on camera. Then she claimed she was a federal agent. Then she said she was friends with Hallandale Beach Mayor Joy Cooper and everyone involved would be in trouble, von Kauffman said.

Opening Bell: 03.28.12

Top MF Global Witness Talks Deal With Justice (WSJ) The star witness in a congressional hearing about MF Global Holdings Ltd.'s collapse has told Justice Department representatives through her lawyers details about transactions that ended up dipping into customer funds, people familiar with the matter said. But Edith O'Brien, the assistant treasurer at MF Global, isn't expected to reveal those details when she appears at Wednesday's hearing of the House Financial Services Committee's oversight and investigations subcommittee. Ms. O'Brien plans to invoke her constitutional right against self-incrimination and to decline to answer questions, people familiar with the matter said. J.P. Morgan Was 'Assured' on MF GlobalTransfers (WSJ) MF Global Holdings Ltd. Chairman and Chief Executive Jon S. Corzine was in direct contact with J.P. Morgan Chase officials about a large transfer of customer funds to the bank shortly before the securities firm collapsed, according to prepared testimony from a J.P. Morgan lawyer for a House subcommittee hearing Wednesday. The testimony by Diane Genova, deputy general counsel for J.P. Morgan, provides additional details about a transfer of $175 million in MF Global customer funds to a J.P. Morgan account on Oct. 28. That move is the subject of scrutiny as investigators hunt for clues about how MF Global firm lost about $1.6 billion in customer funds. Magic Johnson Group to Buy L.A. Dodgers for $2 Billion (Bloomberg) The group was chosen yesterday by Dodgers owner Frank McCourt over billionaire Steve Cohen, who runs hedge fund manager SAC Capital Advisors LP, and Stan Kroenke, who owns the National Football League’s St. Louis Rams and Arsenal of English soccer’s Premier League. [WHO DOES STEVE COHEN HAVE TO SCREW AROUND HERE TO BUY A BASEBALL TEAM???] BATS Chairman Will Give Up Post (WSJ) BATS Global Markets Inc.'s directors voted to remove Joe Ratterman as chairman Tuesday, while expressing unanimous support for him to stay on as the company's chief executive. The vote came after Friday's collapse of the exchange operator's initial public offering, which raised questions about BATS's technology and put Mr. Ratterman on the defensive...BATS has launched a search for a new chairman, according to a spokesman. Face time with Facebook CEO stirs concerns on Wall Street (Reuters) Two people who attended Facebook's March 19 meeting remarked on the young CEO's absence and privately said they expected at least a cursory appearance. One analyst asked how involved Zuckerberg would be in future. In response, the company said expectations should be set pretty low, according to one of the two who was at the meeting. "Investors are crazy to want to get in bed with a company where the guy who controls it doesn't even pretend to care about the rest of the shareholders," said Greg Taxin of activist investment firm Spotlight Advisors, who will not buy shares. "That seems like a recipe for disaster." Texas journalist Sarah Tressler outed for leading a double life (NYDN) By day, she’s a reporter who strips through the veneer of Houston’s high society. By night, she’s a reporter who strips off her clothes. And Sarah Tressler, a 2008 graduate of NYU’s School of Journalism, is not ashamed. In fact, until recently, the 29-year-old brunette blogged about her after-hours gig and posted pictures of herself in scanty outfits on a Facebook page entitled “Diary of an Angry Stripper.” Since the outcry, that — and her titillating Twitter account — have been moved to a protected site. Before Tressler went underground, one of her juicier postings was about an alleged and “somewhat disappointing” sexual encounter with “Entourage” star Jeremy Piven. Europeans Sees Crisis Near End (Bloomberg) The euro area’s woes are “almost over” after a slow initial response by policy makers, Italian Prime Minister Mario Monti said in Tokyo today. German Chancellor Angela Merkel said yesterday that the crisis is ebbing and her country’s borrowing costs will probably rise as its status as a haven wanes. Jefferies CEO Handler’s Pay Drops 7.9% for 2011 After Stock Rout (Bloomberg) Handler, 50, was awarded $14 million for the fiscal year ended Nov. 30, compared with $15.2 million for the 11 months through November 2010, New York-based Jefferies said today in a filing. The package included $1 million in salary and $13 million in restricted-stock units that were granted in 2010. Handler elected to not receive a bonus for 2011. Goldman Bows To Pressure (WSJ) Goldman Sachs agreed to change its board structure in order to persuade a union pension fund to drop a shareholder proposal that could have cost Chief Executive Lloyd C. Blankfein his job as chairman. The deal between the New York securities firm and the American Federation of State, County and Municipal Employees means Goldman will appoint a "lead" director, but shareholders won't get a chance to vote at the firm's annual meeting in May on the proposal to replace Mr. Blankfein with an independent chairman. Ben Bernanke: The World Needs More Nerds (OS) In an exclusive interview with ABC’s Diane Sawyer, Federal Reserve Chairman Ben Bernanke said it’s important not to be complacent about the improving economy...[he also said] he takes no offense that Time magazine, in naming him Person of the Year for 2009, described him as “the most powerful nerd on the planet.” “I am very proud of my nerd-dom,” he told Sawyer. “In fact, the world needs more nerds. Nerds, you know, create more jobs and advance science, and I hope make good economic policy, but that remains to be seen.”

Opening Bell: 11.15.12

FSA Warns Global Banks Over Bonus Levels (FT) Global banks operating in London have been warned by the top UK bank supervisor that this year’s staff bonuses must reflect the mis-selling and market manipulation scandals that have damaged the sector in the past 12 months. Andrew Bailey, head of the Financial Services Authority’s prudential business unit, wrote to bank chief executives in late October ahead of this year’s bonus round warning them that the watchdog would be looking for evidence they had “clawed back” deferred bonuses from people involved in scandals. He also urged banks to consider firm-wide bonus reductions to account for the impact of the scandals. The letter went not only to UK banks but also global institutions with substantial presences in the country. Blankfein Backs Higher Taxes (NYP) “I believe that tax increases, especially for the wealthiest, are appropriate,” Blankfein wrote in his 1,000-plus-word column entitled “The Business Plan for American Revival.” He added that raising taxes needed to be coupled with “serious” cuts to discretionary spending and entitlements. JPMorgan Energy Unit Curbed (WSJ) U.S. energy-market regulators Wednesday handed J.P. Morgan Chase's energy-trading unit a six-month suspension from some of its activities in electricity markets, the latest in a string of clashes with Wall Street. The Federal Energy Regulatory Commission cited false information it has said the company submitted as part of a probe into alleged market manipulation. It was a rare move for the commission and another signal that it is trying to assert itself as a regulatory heavy hitter. The agency, which oversees transmission lines and natural-gas pipelines, also recently proposed a record penalty of nearly $470 million against Barclays for alleged market manipulation. Barclays denies the charges. FHA Nears Need For Taxpayer Funds (WSJ) The Federal Housing Administration is expected to report this week it could exhaust its reserves because of rising mortgage delinquencies, according to people familiar with the agency's finances, a development that could result in the agency needing to draw on taxpayer funding for the first time in its 78-year history. Fed Moves Toward Tying Interest-Rate Decisions to Economic Data (Bloomberg) Policy makers “generally favored the use of economic variables” to provide guidance on the when they are likely to approve their first interest-rate increase since 2008, according to minutes of their Oct. 23-24 meeting released yesterday. Such measures might replace or supplement a calendar date, currently set at mid-2015. Israel Wages Twitter War With Hamas Over #Gaza Attacks (BusinessWeek) The Israeli Defense Forces took to its Twitter account yesterday to announce “a widespread campaign on terror sites & operatives in the Gaza Strip” even as its jets began attacking. Within minutes, Hamas, the group that controls Gaza, announced through its English-language account the assassination of its “top leader Ahmed Jabari” by “Israeli drones.” As Israeli jets bombarded suspected missile facilities and other buildings in Gaza, the service run by San Francisco-based Twitter lit up with 140-character chronicles of the assault and the reaction. Most of the messages known as tweets were identified with #Gaza, a “hashtag” with a pound sign before a key word that lets those on Twitter search for information. The two sides even fought for sympathy through the names they gave the operation. While Israeli tweeters called it #PillarOfDefense, Palestinians used #GazaUnderAttack. As airstrikes intensified, an IDF spokesman tweeted that “we recommend that no Hamas operatives, whether low level or senior leaders, show their faces aboveground in the days ahead.” Hamas’s @AlqassamBrigades account quickly retorted, “@idfspokesperson Our blessed hands will reach your leaders and soldiers wherever they are (You Opened Hell Gates on Yourselves.” Hedge Funds Back Off Apple (NYP) Lee Ainslie’s Maverick Capital, Chase Coleman’s Tiger Global, Eric Mindich’s Eton Park Capital, David Einhorn’s Greenlight Capital and Steve Cohen’s SAC Capital Advisors each pared their Apple positions during the quarter, according to reports with the Securities and Exchange Commission filed yesterday...Despite selling off Apple shares, the tech titan remains one of the biggest holdings for Maverick, Tiger Global and Greenlight. In fact, its slide pushed their monthly returns negative. Jobless Claims Rise Following Storm (WSJ) People seeking unemployment benefits increased by 78,000 to a seasonally adjusted 439,000 in the week ended Nov. 10, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 375,000 new applications for jobless benefits. Bank of America Slashes $4.75 Billion Off Mortgages (CNBC) The bank, which took on the burden of Countrywide Financial’s mortgage ills when it bought the company, has completed or approved a total of $15.8 billion in consumer relief for about 164,000 homeowners as of Sept. 30 and is on track, according to officials, to meet its total financial obligations within the first year of the three-year agreement. South Africa holds diamond smuggler who swallowed 220 gems (BBC) South African police have arrested a man who they say swallowed 220 polished diamonds in an attempt to smuggle them out of the country. The man was arrested as he waited to board a plane at Johannesburg airport. Officials said a scan of his body revealed the diamonds he had ingested, worth $2.3m (£1.4m; 1.8m euros), inside.

Opening Bell: 01.25.13

Ex-Barclays CEO Diamond Is Named on Latest Libor-Lawsuit List (Bloomberg) Ex-Barclays Chief Executive Officer Robert Diamond and Former Chief Operating Officer Jerry Del Missier were among 25 bank employees anonymously referred to by regulators when the lender was fined for attempted interest rate rigging. Diamond and Del Missier were included on a second list released in a London court case linking Barclays staff to the London interbank offered rate. Judge Julian Flaux refused a request by some employees to prevent their names being published in connection to the case. Deutsche Bank Trader Fired Over Rate-Rigging Loses $53 Million (Bloomberg) Deutsche Bank's Christian Bittar, one of the firm’s best-paid traders, lost about 40 million euros ($53 million) in bonuses after he was fired for trying to rig interest rates, three people with knowledge of the move said. The lender dismissed Bittar in December 2011, claiming he colluded with a Barclays Plc (BARC) trader to manipulate rates and boost the value of his trades in 2006 and 2007, said the people, who requested anonymity because they weren’t authorized to speak publicly. His attempts to rig the euro interbank offered rate and similar efforts by derivatives trader Guillaume Adolph over yen Libor are the focus of the bank’s probe, the people said. Both traders declined to comment for this story. “Upon discovering that a limited number of employees acted inappropriately, we sanctioned or dismissed those involved and clawed back all of their unvested compensation,” Deutsche Bank spokesman Michael Golden said in a statement. “To date we have found no link between the inappropriate conduct of a limited number of employees and the profits generated by these trades.” Aleksey Vayner may have died of drug overdose (DM) The Yale student who catapulted to Internet infamy with a disastrous video resume he sent to a prospective employer died at his home in Queens, New York. Vayner passed away at the age of 29, according to the New York City Medical Examiner - and reports from relatives suggest that he may have experienced a drug overdose...In the video, titled 'Impossible is Nothing,' a gravely serious Vayner attempts to prove his mental and physical fitness by talking about the meaning of success while lifting 495-pound weights, smacking tennis balls faster than 140 miles per hour, ball-dancing with a scantily-clad woman and breaking seven bricks with his hand. 'Ignore the losers, bring your A-game, your determination and your drive to the field, and the success will follow you,' he says in the video. JPMorgan to Block Shareholder Vote on Bank Break-Up (Reuters) A federation of U.S. labor unions is looking to force JPMorgan Chase's board to consider breaking up the company after the disastrous "London Whale" affair, but the bank is trying to ensure that its shareholders do not get to vote on the union's proposal. The largest U.S. bank is seeking permission from the U.S. Securities and Exchange Commission to omit the proposal from the measures that shareholders vote on this spring,according to a letter sent to the agency on January 14. The proposal, from the AFL-CIO's Reserve Fund, a union fund that owns JPMorgan shares, calls on bank directors to form a committee that would explore "extraordinary transactions that could enhance stockholder value," including breaking off one or more of the company's businesses. As Cohen parties in Davos, legal eagles circle at home (NYP) Hedge-fund titan Steve Cohen took a break from battlinginvestor redemptions to hob-knob with other heavyweights at the World Economic Forum in Davos Switzerland. But Cohen, who runs $14 billion Stamford, Conn., hedge-fund giant SAC Capital, could be facing more trouble when he gets home. At least one class-action law firm is trying to rustle up investors to sue SAC for its ties to an alleged insider-trading scheme that led to the arrest of a former portfolio manager. Wilmington, Del.-based Chimicles & Tikellis posted a notice on its website saying it is seeking SAC investors and limited partners and is “actively investigating a proposed investor lawsuit against SAC Capital.” Any resulting lawsuit would be pegged to SAC’s “mismanagement of the limited partnership and certain hedge funds.” Wisconsin Man Wearing "Breathalyzer" T-Shirt Arrested For Sixth Time For Drunk Driving (TSG) The 30-year-old was arrested early Saturday morning for drunk driving after he was found passed out at the wheel of a Chevrolet Cavalier that was parked with its engine running in the middle of a Wisconsin road. Wendler, who reeked of intoxicants, failed a series of field sobriety tests and appeared “dazed and confused,” according to a Marathon County Sheriff’s Department report, which noted that a deputy spotted an unopened six-pack of beer on the vehicle’s passenger seat. A breath sample recorded Wendler’s blood alcohol content as .19, more than twice the legal limit. As a result, he was charged with operating a motor vehicle while intoxicated--the sixth time he has been busted for drunk driving. Wendler’s extensive DWI history, of course, makes his t-shirt choice a strange one. As seen in his mug shot, Wandler was nabbed while wearing a shirt referencing drinking and a “free Breathalyzer test.” The shirt also includes an arrow (beneath the words “blow here”) pointing downward toward Wendler’s crotch. Financial Job Losses Near Four-Year High as Europe Leads (Bloomberg) Financial-services firms are on track to cut the most jobs in January since the start of 2009 as Europe struggles to emerge from the debt crisis and regulators impose tougher capital rules. The 16,040 announced and expected reductions in the past three weeks are just short of the 16,389 cuts made in the industry during January 2009 after Lehman Brothers Holdings Inc. collapsed, according to data compiled by Bloomberg. Bankers and consultants expect the cuts to accelerate in coming months even as financial stocks gained 26 percent last year. Credit Bubble Seen in Davos as Cohn Warns of Repricing (Bloomberg) Goldman Sachs President Gary Cohn warned of a potential drop in fixed-income prices as bankers and policy makers in Davos celebrated surging demand for financial assets. Debt markets that have seen junk-bond yields drop to record lows may face a “substantial repricing” if interest rates spike or investors begin pulling money out of fixed income, Cohn, 52, said in an interview yesterday with Bloomberg Television’s Erik Schatzker at the World Economic Forum in Davos, Switzerland. Morgan Stanley CEO To Take Pay Cut (WSJ) Morgan Stanley disclosed Thursday that Mr. Gorman would receive about $2.6 million in stock options for 2012. All told, he will receive $6 million in salary, cash and stock for the year, said a person familiar with the company's compensation plans, plus participation in an incentive plan whose value wasn't disclosed. His full pay package won't be disclosed until this spring's proxy statement. Thousands of crocodiles on loose after floods hit South African farm (The Guardian) Around 15,000 crocodiles made the great escape from the Rakwena crocodile farm near the border with Botswana on Sunday, according to the newspaper Beeld. Although "a few thousand" have since been recaptured, including one at a school rugby ground 75 miles away, more than half of the reptiles are still at large.

Opening Bell: 07.02.12

Barclays Chairman Resigns (WSJ) "Last week's events, evidencing as they do unacceptable standards of behaviour within the bank, have dealt a devastating blow to Barclays' reputation," Mr. Agius said in a statement Monday. "As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside." Falcone To Argue That Taking Loan Was Best For Investors (NYP) Falcone had roughly $1 billion in personal assets in 2009, at the time of the loan, sources said. That included $790 million in a deferred compensation plan tied to his flagship Masters fund, and $228 million in Harbinger’s Special Situations fund, which he eventually tapped for the loan. He also had $11 million in cash — a nice chunk of change but far short of the $113 million he needed to satisfy Uncle Sam, said a person with knowledge of the case. If the case goes to trial, Falcone will likely say that he considered taking his money from the Master fund, which was allowing withdrawals at the time. But he didn’t after he was advised that doing so could hurt clients by triggering a sell-off, potentially at fire-sale prices. Global IPO Market Keeps Shrinking (WSJ) It was in the pool. Gilt Faces Disruption During Olympics (FT) The UK Treasury has called off its weekly gilt auctions for a four-week period between mid-July and mid-August, apparently because it is afraid that too many bond traders will be working from home – or not at all – during the Olympics. Facebook To Remain On Nasdaq (WSJ) Facebook executives have decided to keep the company's stock listing on the Nasdaq Stock Market, despite lingering frustration with the exchange's bungling of its widely anticipated initial public offering. They determined a move would further drain confidence in the company's battered shares. Facebook executives have quietly blamed Nasdaq OMX Group Inc. NDAQ +3.71% for the technical glitches that marred the stock's May 18 debut. While the company considered a switch in the days after the IPO, Facebook had decided by mid-June to stay put for now, according to people familiar with the company's plans. BNP Said To Mull Plan For $50 Billion Spain-Italy Funds Gap (Bloomberg) BNP Paribas is looking to address funding concerns in Spain and Italy, where the Paris-based bank’s loans outweighing deposits was among reasons cited by Moody’s Investors Service for downgrading its credit rating last month. Transfers of loans from elsewhere to Belgium might be capped at 20 billion euros ($25 billion) and at 10 billion Swiss francs ($10.4 billion) to Switzerland, according to one of the people. Bond Market Backs Obama With Record Demand For New Debt (Bloomberg) Investors are plowing cash into new U.S. Treasuries at a record pace, making economic growth rather than budget austerity a key issue as President Barack Obama and Mitt Romney face off in November’s presidential election. Bidders offered $3.16 for each dollar of the $1.075 trillion of notes and bonds auctioned by the Treasury Department this year as yields reached all-time lows, above the previous high of $3.04 in all of 2011, according to data compiled by Bloomberg. The so-called bid-to-cover ratio was 2.26 from 1998 to 2001 when the nation ran budget surpluses. China Big 4 Banks Took 29% of 2011 Global Profit (Reuters) Three Chinese banks topped the profit table, led by Industrial and Commercial Bank of China (ICBC) for the second successive year, with pretax earnings of $43.2 billion, according to The Banker. ICBC was followed by China Construction Bank, which delivered a $34.8 billion profit, and Bank of China, with earnings of $26.8 billion. JPMorgan was fourth with a profit of $26.7 billion, while HSBC was the most profitable European bank, with earnings of $21.9 billion. Lolong, a massive crocodile captured in the Philippines in 2011, is the largest croc in captivity in the world (NYDN) A huge crocodile blamed for deadly attacks in the southern Philippines is the largest in captivity in the world, Guinness World Records has declared. The giant reptile has brought fear, pride, tourism revenues and attention to the remote town where it was captured. The saltwater crocodile named Lolong, which was captured last September in Bunawan town in Agusan del Sur province, measures 20.24 feet and weighs more than a ton, Guinness spokeswoman Anne-Lise Rouse said in a statement Sunday. The reptile took the top spot from an Australian crocodile measuring more than 17 feet and weighing nearly a ton. Bunawan Mayor Edwin Cox Elorde said the news sparked celebrations in his farming town of 37,000, but also fostered concerns that more giant crocodiles might be lurking in a nearby marshland and creek where villagers fish. “There were mixed feelings,” Elorde said by telephone. “We’re really proud because it proves the rich biodiversity of our place, but at the same time, there are fears that Lolong may not be alone.” Lolong has become the star attraction of a new ecotourism park and research center in the outskirts of Bunawan, and has drawn thousands of tourists since news of its capture spread. Elorde said his town has earned $72,000 from the modest entrance fees at the park, with most of the money being used to feed and care for the crocodile and for park maintenance.

Opening Bell: 06.21.12

SEC Said To Depose SAC’s Cohen In Insider-Trading Probe (Bloomberg) Cohen, 56, was recently deposed by Securities and Exchange Commission investigators in New York about trades made close to news such as mergers and earnings that generated profits at his hedge fund, said one of the people, who asked not to be identified because the investigation isn’t public. Neither Cohen nor SAC Capital, which oversees about $14 billion, has been accused of wrongdoing. Four-Week Jobless Claims Average Reaches 2012 High (Reuters) Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 387,000, the Labor Department said. The prior week's figure was revised up to 389,000 from the previously reported 386,000. Lawmakers Call For IPO Overhaul (WSJ) A bipartisan group of lawmakers called on regulators to overhaul the way initial public offerings are conducted, concerned that last month's flubbed stock sale by Facebook shows the current system unfairly punishes small investors. In a letter to Securities and Exchange Commission Chairman Mary Schapiro, Rep. Darrell Issa (R., Calif.) prodded the agency to revamp rules for pricing and disclosure in IPOs. Mr. Issa, who wrote the letter on behalf of the House Oversight and Government Reform Committee, said the social-networking company's steep share-price decline since its May 18 offering is a sign that investment banks are able to "dictate pricing while only indirectly considering market supply-and-demand." Separately, the Democratic chairman of a subcommittee of the Senate Banking Committee said regulatory changes are needed to bolster investor confidence sapped by Facebook's botched debut. Facebook’s 22% Rally Helps Stock Avoid Worst IPO Return In U.S. (Bloomberg) So that's something! Riskier Bets Pitched To Asia's Rising Rich (WSJ) In Japan, brokers are dangling what they claim is a tasty product in front of wealthy investors: a "triple-decker" that uses options to squeeze higher returns from stocks, "junk" bonds or other assets. If a triple-decker doesn't suit an investor's fancy, there is the increasingly popular—and slightly less complex—"double-decker." Elsewhere in Asia, so-called hybrid bonds and other high-yield varieties can be had. Investors in Singapore recently could buy so-called perpetual bonds through ATMs. Across Asia, brokers are pushing to sell increasingly complex products to the region's expanding ranks of investors, especially wealthy ones. These types of products appeal to those hungry for yield who normally focus on stocks and real estate but are worried about falling equity markets and the sudden shortage of initial public offerings. BlueMountain Said To Help Unwind JPMorgan’s Whale Trades (Bloomberg) A hedge fund run by a former JPMorgan Chase executive who helped create the credit- derivatives market is aiding the lender as it unwinds trades in an index at the heart of a loss of more than $2 billion. BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, has been compiling trades in Series 9 of the Markit CDX North America Investment Grade Index in recent weeks, then selling the positions to the New York-based bank, according to three people outside the firms who are familiar with the strategy. JPMorgan tapped BlueMountain as a middleman after trades in its London chief investment office grew so large that the bank was creating price distortions that hedge funds sought to exploit, said the market participants, who asked not to be identified because they weren’t authorized to discuss the trades. BlueMountain was one of the funds that benefited from the price dislocations, the people said. US Olympic committee send cease and desist letter to knitting Olympics (TNT) The US Olympic committee has sent a cease and desist letter to the social networking group Ravelry, who had organised a Ravelympics in which contestants would compete in events such as ‘scarf hockey’ while watching the actual Games on TV...The US Olympic Committee has said that “the athletes of Team USA have spent the better part of the entire lives training for the opportunity to compete at the Olympic Games and represent their country in a sport that means everything to them” and that “using the name ‘Ravelympics’ for a competition that involves an afghan marathon and sweater triathlon tends to denigrate the true nature of the Olympic Games”. Romney Campaign Said To Ask Scott To Downplay Job Gains (Bloomberg) Mitt Romney’s presidential campaign asked Florida Governor Rick Scott to tone down his statements heralding improvements in the state’s economy because they clash with the presumptive Republican nominee’s message that the nation is suffering under President Barack Obama, according to two people familiar with the matter. Scott, a Republican, was asked to say that the state’s jobless rate could improve faster under a Romney presidency, according to the people, who asked not to be named. Lonely Hedge Fund Bullish On Greece Tries To Woo Investors (Bloomberg) In March, Elliott met with the investment chief of a family office in London who said within seconds of sitting down that the firm had no interest in giving money to a hedge fund wagering on Greece. The executive merely wanted to hear his story, Elliott, the founder of Naftilia Asset Management Ltd., said in a telephone interview from his office in Athens. Elliott, 39, responded by asking a few questions of his own, including whether the executive had invested in Russia after its 1998 currency crisis, in Argentina 10 years ago after the nation defaulted on its debt or in the Standard & Poor’s 500 Index (SPX) in March 2009, when the benchmark plunged to its lowest point in 13 years. Finally, Elliott questioned whether the family office’s investment chief had ever bought shares of Apple. In all cases, the answer was no. “Then you are not qualified to be discussing Greece with me because you have missed the best investment opportunities over the past 20 years,” Elliott retorted. National Bank Of Greece To Sell Luxury Resort As Slump Bites (Bloomberg) If you know anyone who's interested: The 3.3 million-square-foot (307,000 square-meter) Astir Palace complex has already drawn investors’ interest, according to Aristotelis Karytinos, general manager of real estate at the lender. The Athens-based bank and Greece’s privatization fund, which owns part of the property, will put out a public tender in coming months, he said. Fed Warns Of Risk To Economy (WSJ) Fed Chairman Ben Bernanke made clear in a news conference after the policy makers' meeting that he is prepared to take further action if he doesn't see progress on bringing down unemployment, which was 8.2% in May. "I wouldn't accept the proposition though that the Fed has no more ammunition," Mr. Bernanke said. He added, "if we don't see continued improvement in the labor market we'll be prepared to take additional steps." Australian mega-brothel gets go-ahead (AP) A Sydney brothel has received the green light for a multi-million-dollar expansion which will see it become Australia's largest sex premises, with rooms featuring multiple beds and pool tables. Plans to double the number of rooms at inner Sydney's "Stiletto" into a mega-brothel complex were knocked back late last year by the city council on the grounds that it was too big. But the owners won an appeal to the Land and Environment Court this week, with Commissioner Susan O'Neill ruling the Aus$12 million ($12.2 million) development, including a wing for group bookings, should go ahead...Stiletto promotes itself as "the world's finest short-stay boutique hotel and Sydney brothel". Its standard hourly rate of Aus$370 includes room, lady of choice and beverages.