Opening Bell: 04.13.12

JPMorgan Profit Slips (WSJ) J.P. Morgan reported a profit of $5.38 billion, down from $5.56 billion a year earlier. On a per-share basis, earnings were $1.31, up from $1.28 as the share count outstanding declined. The latest quarter included a net 8-cent per-share loss tied to litigation expenses and changes in the value of the bank's debt. Analysts polled by Thomson Reuters expected a per-share profit of $1.18, excluding debt-related charges. Revenue rose 6.3% to $27.42 billion. Analysts were looking for $24.68 billion. Wells Fargo reports higher first-quarter profit (Reuters) Wells Fargo, the nation's fourth-biggest U.S. bank, said net income was $4.25 billion, or 75 cents a share, in the quarter, compared with $3.76 billion, or 67 cents, a share in the same period a year earlier. The average estimate from analysts was 73 cents per share. JPMorgan Said to Transform Treasury to Prop Trading (Bloomberg) Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said. Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms. Bank Bonus That Tops Salary May Be Banned by EU Lawmakers (Bloomberg) Governments and lawmakers in the 27-nation EU are considering rules for lenders that would go far beyond international agreements approved by the Basel Committee on Banking Supervision. Denmark, which holds the rotating presidency of the EU, has proposed empowering nations to set surcharges of up to 3 percent across their banking systems. Karas yesterday suggested adding language to the legislation that would ban banker bonuses that exceed fixed pay, following calls from other lawmakers to rein in excessive compensation. IMF Lifts Growth Forecast, Cautiously (WSJ) Christine Lagarde, managing director of the International Monetary Fund, said the world economy is marked by "a high degree of instability" even though prospects for global growth are better than they were a few months ago. In an interview with The Wall Street Journal, Ms. Lagarde said the IMF, which marked down its 2012 forecast for global growth in January to 3.3%, has now marked it up to reflect improving conditions in the world economy. But she said the new forecast, to be released next week, remains more pessimistic than the one it made last September, which predicted 4% growth. Europe remains the biggest single risk to the global economy, the former French finance minister said. Hedge Fund Driver Guns DownArmed Robber (NYP) A retired NYPD lieutenant blew away a drugstore bandit yesterday as the suspect tried to gun down three police officers during a foot pursuit, sources said. Thomas Barnes, Barnes — a driver for hedge fund manager Philippe Laffont, was filling his tank at the BP station on East 119th Street and First Avenue at around 11 a.m. when he saw gunman Rudolph Wyatt running from the store, and sprang into action. He crouched behind his hedge-fund boss’ Mercedes SUV and squeezed off three shots, killing Wyatt, 23. The trigger-happy thug — wanted on warrants for two other shootings — lay dead in a pool of blood on the sidewalk wearing a black stocking mask with a wad of stolen cash spilling out of his pocket, witnesses said. “Part of the back of his head was missing. He had a large head wound and there was tons of blood,” said witness John Brecevich, 59, owner of the Original Patsy’s restaurant nearby. “It was a scene straight out of NYPD Blue.” Trustees Aim For MF Execs (NYP) The trustee tasked with clawing back money for burned customers of MF Global is training his sights on the brokerage firm’s executives — a list that likely includes former CEO Jon Corzine. In a statement yesterday, trustee James Giddens said he is considering pursuing claims against “certain responsible individuals” who worked for MF at the time customers’ trading accounts were improperly tapped. Kent Jarrell, a spokesman for Giddens, declined to name names but said the trustee is considering civil suits against “officers, directors or other employees” of both the brokerage firm and the holding company. Fed Officials Differ on Need to Keep Rates Low to 2014 (Bloomberg) William C. Dudley, president of the New York Fed, and Vice Chairman Janet Yellen said the 2014 time-frame is needed to lower unemployment from 8.2 percent. Minneapolis Fed President Narayana Kocherlakota said rising inflation may prompt an interest-rate increase as early as this year, while Philadelphia’s Charles Plosser said policy should hinge on economic performance, not a calendar commitment. Newark Mayor Cory Booker: Race into home fire was a "come to Jesus moment" (CBS) Booker arrived home last night to discover his next-door neighbor's house on fire, and rescued a young woman trapped upstairs by carrying here through the flames, suffering second-degree burns in the process. The mayor's security team discovered the fire and pounded on the door to alert residents, when an elderly woman said that her daughter was trapped upstairs. At first, Newark Police Detective Alex Rodriguez would not let Booker into the burning house. "He basically told me, 'This woman is going to die if we don't help her,' and what can I say to that?," Rodriguez said. "I let him go and without thinking twice, he just ran into the flames and rescued this young lady." Booker said that as he jumped through the kitchen on the second floor, "I actually wasn't thinking. When I got there and couldn't find her in all the smoke, looked behind me and saw the kitchen really erupting with flames all over the ceiling, that's when I had very clear thoughts that I'm not going to get out of this place alive and got ... very religious. He admitted he was "not gentle" with her - "I just sort of threw her over my shoulder and dragged her through the kitchen."
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JPMorgan Profit Slips, Beats Estimates (WSJ)
J.P. Morgan reported a profit of $5.38 billion, down from $5.56 billion a year earlier. On a per-share basis, earnings were $1.31, up from $1.28 as the share count outstanding declined. The latest quarter included a net 8-cent per-share loss tied to litigation expenses and changes in the value of the bank's debt. Analysts polled by Thomson Reuters expected a per-share profit of $1.18, excluding debt-related charges. Revenue rose 6.3% to $27.42 billion. Analysts were looking for $24.68 billion.

Wells Fargo reports higher first-quarter profit (Reuters)
Wells Fargo, the nation's fourth-biggest U.S. bank, said net income was $4.25 billion, or 75 cents a share, in the quarter, compared with $3.76 billion, or 67 cents, a share in the same period a year earlier. The average estimate from analysts was 73 cents per share.

JPMorgan Said to Transform Treasury to Prop Trading (Bloomberg)
Achilles Macris, hired in 2006 as the CIO’s top executive in London, led an expansion into corporate and mortgage-debt investments with a mandate to generate profits for the New York- based bank, three of the former employees said. Dimon, 56, closely supervised the shift from the CIO’s previous focus on protecting JPMorgan from risks inherent in its banking business, such as interest-rate and currency movements, they said. Some of Macris’s bets are now so large that JPMorgan probably can’t unwind them without losing money or roiling financial markets, the former executives said, based on knowledge gleaned from people inside the bank and dealers at other firms.

Bank Bonus That Tops Salary May Be Banned by EU Lawmakers (Bloomberg)
Governments and lawmakers in the 27-nation EU are considering rules for lenders that would go far beyond international agreements approved by the Basel Committee on Banking Supervision. Denmark, which holds the rotating presidency of the EU, has proposed empowering nations to set surcharges of up to 3 percent across their banking systems. Karas yesterday suggested adding language to the legislation that would ban banker bonuses that exceed fixed pay, following calls from other lawmakers to rein in excessive compensation.

Hedge Fund Driver Guns Down Armed Robber (NYP)
A retired NYPD lieutenant blew away a drugstore bandit yesterday as the suspect tried to gun down three police officers during a foot pursuit, sources said. Thomas Barnes, Barnes — a driver for hedge fund manager Philippe Laffont, was filling his tank at the BP station on East 119th Street and First Avenue at around 11 a.m. when he saw gunman Rudolph Wyatt running from the store, and sprang into action. He crouched behind his hedge-fund boss’ Mercedes SUV and squeezed off three shots, killing Wyatt, 23. The trigger-happy thug — wanted on warrants for two other shootings — lay dead in a pool of blood on the sidewalk wearing a black stocking mask with a wad of stolen cash spilling out of his pocket, witnesses said. “Part of the back of his head was missing. He had a large head wound and there was tons of blood,” said witness John Brecevich, 59, owner of the Original Patsy’s restaurant nearby. “It was a scene straight out of NYPD Blue.”

Trustees Aim For MF Execs (NYP)
The trustee tasked with clawing back money for burned customers of MF Global is training his sights on the brokerage firm’s executives — a list that likely includes former CEO Jon Corzine. In a statement yesterday, trustee James Giddens said he is considering pursuing claims against “certain responsible individuals” who worked for MF at the time customers’ trading accounts were improperly tapped. Kent Jarrell, a spokesman for Giddens, declined to name names but said the trustee is considering civil suits against “officers, directors or other employees” of both the brokerage firm and the holding company.

Goldman Heeds Pesky Proxy Fights (WSJ)
Pressed by unions, religious institutions and other investors on company policies on issues from tax secrecy and corporate governance to executive compensation and political lobbying, the New York securities firm increasingly has been engaging these critics—and negotiating compromises that address some of their concerns. This year, Goldman held discussions with three investors who later dropped their proposals rather than submit them for shareholder votes. The company has had mixed results in getting proposals dropped in the past.

IMF Lifts Growth Forecast, Cautiously (WSJ)
Christine Lagarde, managing director of the International Monetary Fund, said the world economy is marked by "a high degree of instability" even though prospects for global growth are better than they were a few months ago. In an interview with The Wall Street Journal, Ms. Lagarde said the IMF, which marked down its 2012 forecast for global growth in January to 3.3%, has now marked it up to reflect improving conditions in the world economy. But she said the new forecast, to be released next week, remains more pessimistic than the one it made last September, which predicted 4% growth. Europe remains the biggest single risk to the global economy, the former French finance minister said.

Fed Officials Differ on Need to Keep Rates Low to 2014 (Bloomberg)
William C. Dudley, president of the New York Fed, and Vice Chairman Janet Yellen said the 2014 time-frame is needed to lower unemployment from 8.2 percent. Minneapolis Fed President Narayana Kocherlakota said rising inflation may prompt an interest-rate increase as early as this year, while Philadelphia’s Charles Plosser said policy should hinge on economic performance, not a calendar commitment.

Newark Mayor Cory Booker: Race into home fire was a "come to Jesus moment" (CBS)
Booker arrived home last night to discover his next-door neighbor's house on fire, and rescued a young woman trapped upstairs by carrying here through the flames, suffering second-degree burns in the process. The mayor's security team discovered the fire and pounded on the door to alert residents, when an elderly woman said that her daughter was trapped upstairs. At first, Newark Police Detective Alex Rodriguez would not let Booker into the burning house. "He basically told me, 'This woman is going to die if we don't help her,' and what can I say to that?," Rodriguez said. "I let him go and without thinking twice, he just ran into the flames and rescued this young lady." Booker said that as he jumped through the kitchen on the second floor, "I actually wasn't thinking. When I got there and couldn't find her in all the smoke, looked behind me and saw the kitchen really erupting with flames all over the ceiling, that's when I had very clear thoughts that I'm not going to get out of this place alive and got ... very religious. He admitted he was "not gentle" with her - "I just sort of threw her over my shoulder and dragged her through the kitchen."

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Opening Bell: 04.05.12

Falcone Says Bankruptcy Is an Option for LightSquared (Bloomberg) Phil Falcone said he may consider voluntary bankruptcy for LightSquared Inc., the broadband wireless venture majority owned by his hedge fund that has been derailed by regulators. “There are arguments that we would be better off in bankruptcy than not,” Falcone said in an interview. “LightSquared, if I have to, I’ll put it into bankruptcy. I don’t care,” adding that he would maintain control of the Reston, Virginia-based company if it filed. Jobless Claims Decline (WSJ) New applications for jobless benefits fell to the lowest level in nearly four years last week, further evidence that U.S. employers likely added a healthy number of workers to their payrolls in March. Initial jobless claims decreased by 6,000 to a seasonally adjusted 357,000 in the week ended March 31, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires predicted that 360,000 new claims would be filed last week. Morgan Stanley Tries to Stave Off Ratings Cut (FT) James Gorman, Morgan Stanley’s chief executive, has been in discussions with Moody’s in an attempt to maintain its credit ratings and stave off a downgrade that could diminish the bank’s ability to buy the rest of Citigroup brokerage Smith Barney, according to people familiar with the matter...Morgan Stanley would most likely have to issue debt to fund the purchase, people say. That would become more expensive if Morgan Stanley is downgraded. Moody’s put Morgan Stanley, along with five other banks, on review for a downgrade in February. The bank could see its rating reduced by as many as three notches to Baa2 - two levels above junk status. A downgrade would also force Morgan Stanley to provide additional collateral to back its vast derivatives business, where it acts as a counterparty. JPMorgan Investment Bank Chief Widens Pay Lead on Rival (Bloomberg) Jes Staley, chief executive officer of JPMorgan’s investment bank, beat his Bank of America counterpart in compensation after boosting earnings amid a market slump. Staley’s $16 million award for 2011 almost held steady from the $17 million he made the previous year as profit at the firm’s investment bank climbed 2.3 percent to $6.8 billion. Bank of America co-chief operating officer Thomas K. Montag’s pay dropped 25 percent to $12 million after profit at the lender’s investment bank plunged by more than half to $2.97 billion. Gorman's Pay Falls (Bloomberg) Morgan Stanley Chief Executive Officer James Gorman’s compensation for 2011 totaled $10.5 million, a 25 percent cut from 2010 as the firm’s shares fell by almost half. Gorman, 53, got $5.04 million in restricted shares, and $1.94 million in shares tied to company performance, according to a proxy filing today from the New York-based investment bank. He also received a deferred cash bonus of $2.72 million that can be clawed back, in addition to his $800,000 salary. He didn’t receive an immediate cash bonus. Mets in Opening Day ticket panic (NYP) The Mets are so terrified by the embarrassing prospect of playing to empty seats at today's opener, they've made an Amazin' "buy one get one free" pitch. Some 15,000 of their fans have been offered one free seat for Saturday's or Sunday's Atlanta game in exchange for every ticket they buy for today’s opener. Plenty of the 41,880 seats for this afternoon’s game at Citi Field against the Braves were still available early today. If the Mets don’t sell out, it will be the first home opener since 1997 that didn’t fill their stadium. Madoff wives to face trustee claims in Ponzi case (Reuters) The trustee seeking money for victims of Bernard Madoff's Ponzi scheme, who lost an estimated $20 billion, may pursue claims against wives of the imprisoned swindler's sons, a U.S. federal court judge said on Wednesday. U.S. Bankruptcy Judge Burton Lifland in Manhattan said the trustee Irving Picard may pursue about $43 million of claims against Deborah Madoff, who married Andrew Madoff; and $33 million of claims against Stephanie Mack, the widow of Mark Madoff. Germany, Switzerland Sign Tax Plan (WSJ) Germany and Switzerland signed a new tax deal which allows wealthy Germans to retain their anonymity, while generating billions of euros in tax revenues for Berlin and ending a bruising dispute between the two neighboring countries over tax evasion and bank secrecy. The deal comes after Berlin and Bern agreed on last-minute amendments to a pact reached last summer in an effort to make it more appealing to German opposition leaders, who said Thursday they plan to veto it. "We believe it would be irresponsible to sign this deal, which is a slap in the face of every honest taxpayer," said Sigmar Gabriel, leader of the Social Democrats. Mega Millions ‘winner’ Mirlande Wilson's lawyer: 'I cannot say with any certainty this ticket exists' (NYDN) McDonald’s worker who claims she has a $218 million-winning Mega Millions ticket called a huge press conference Wednesday - and then arrived late only to tell the press to leave. Her lawyer announced to the mystified journalists packed into his Baltimore law office that the purpose of the press conference was “to ask you all to go home.” Mirlande Wilson, 37, of Maryland, who is said by coworkers to crave attention, hit one jackpot: a chaotic scrum of reporters and camera crews waiting to talk to her. But she never spoke. Asked if this was her plea for 15 minutes of fame, she shook her head. Her lawyer, Edward Smith, said, “no, she doesn't want 15 minutes of fame." Instead, he said, she would "like you all to go home." For the record, Smith says he hasn’t seen the purported ticket either. “I cannot say with any certainty this ticket exists,” he said, unreasurringly. Wilson has told various conflicting stories about how she came by her alleged ducat. She told a TV station she bought it at a 7-Eleven store for herself. Then she said a coworker purchased it for her alone while separately buying tickets for the pool organized at her McDonald’s in Baltimore. “I thought I'd play one dollar by myself,” she told the Daily News. She has said she definitely won; she thinks she won; she has the ticket at home; she stashed the ticket at McDonalds; and she has it in another, unspecified secret “safe” place. On Monday, she told the News that she hasn’t even checked her ticket against the winning numbers.

Opening Bell: 05.08.12

When Facebook Met Wall Street (WSJ) On Monday, investors piled into the hotel to hear what Mr. Zuckerberg and his lieutenants had to say about the offering. At one point, the line, leading to a second-floor ballroom where the meeting was scheduled to be held at 11:45 a.m., stretched down to the first floor and spilled out of the hotel for nearly half a city block. At least one investor waiting in line said he didn't expect anything to be revealed that wasn't already in Facebook's securities filings. Rather, he was there to take in the show, and lunch (which was Cobb salad and grilled chicken). A 30-minute video about Facebook, which had been widely distributed before Monday, led the lunch, according to attendees. The next part of the presentation was briefly delayed by Mr. Zuckerberg's absence. The CEO was in the bathroom, explained Chief Financial Officer David Ebersman to attendees. (Mr. Ebersman wore a navy suit.) Yahoo CEO Apologizes in Memo, Board Meets (Reuters, earlier) Yahoo Inc's board convened on Monday afternoon to discuss the mounting upset surrounding Chief Executive Scott Thompson, who has apologized to employees after being accused last week by activist investor Daniel Loeb of padding his resume, a source with knowledge of the matter said..."I want you to know how deeply I regret how this issue has affected the company and all of you," Thompson wrote in his first extended memo to employees since the disclosures emerged on May 3. "We have all been working very hard to move the company forward and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you." Billion-Dollar Traders Quit Wall Street For Hedge Funds (Bloomberg) Wall Street’s biggest banks have lost almost two dozen of their most-profitable credit traders in the past 13 months as regulators limit the kind of risk-taking that amplified the housing crisis four years ago. As banks slash or defer pay and reduce the amount they’re willing to wager, the traders are seeing better opportunities at hedge funds and investment firms that seek to profit in markets lenders are retreating from. Wall Street Banks Depressed In Secular Shift (Bloomberg) To Kevin Conn, who has been analyzing bank stocks for 15 years, the investment climate for Wall Street’s biggest firms has entered the realm of science fiction. “It’s like that Ray Bradbury short story where it rains for months in a row,” said Conn, who works for Massachusetts Financial Services Co., referring to “The Long Rain,” published in 1950. “It’s one of these terrifically depressing short stories where the weather just never changes.” Spain To Spend Billions On Bank Rescue (FT) Spain is planning a state bail-out of Bankia, the country’s third biggest bank by assets, in a move likely to involve the injection of billions of euros of public money into the troubled lender. In an abrupt reversal of policy, the Spanish government, which had previously insisted that no additional state money would be needed to clean up the country’s banking sector, confirmed that an intervention was being prepared. OWS Mom Snubs Plea (NYP) Occupy Wall Street protester Stacey Hessler, 39, arrested in November for resisting arrest and disorderly conduct, yesterday refused an offer to have her charges dismissed and will instead face a trial...Hessler had originally planned to accept the judge’s offer of an adjournment contemplating dismissal, which erases the charge if the defendant stays out of trouble for six months, but later changed her mind, her attorney said. SEC Orders Probe Of Watchdog Office (WSJ) The Securities and Exchange Commission has ordered an independent inquiry into allegations of sexual misconduct by current and former staff working for its office of the inspector general, according to a person familiar with the matter. The complaint includes allegations that the misconduct compromised certain investigations of the SEC, according to the person familiar with the situation. Apollo's Profit More Than Doubles (WSJ) For the first quarter, Apollo reported a profit of $98 million, or 66 cents a share, up from a year-earlier profit of $38.2 million, or 33 cents a share. Economic net income rose to $1.10 from 99 cents a year earlier. Analysts surveyed by Thomson Reuters expected 78 cents a share...Total revenue rose 12% to $776.7 million, far better than the $547 million expected by analysts. Bank of America Offers Principal Reductions to 200,000 Homeowners (CNBC) “If people get these things and toss them, they won’t be eligible,” says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance. But the offer is real, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages. It is all part of the $25 billion settlement reached this year between federal and state agencies and the nation’s five largest mortgage servicers over fraudulent foreclosure document processing (so-called “robo-signing”). No Repeating Slowdown Seen by U.S. With Banks to Housing (Bloomberg) Rising auto sales, improving bank credit and stabilization of housing are among the signs the economy is more resilient now than it was around the same time in 2010 and 2011, according to Marisa Di Natale, an economist at Moody’s Analytics in West Chester, Pennsylvania. “From where we sit right now, we think the economy looks fundamentally stronger,” Di Natale said. “Surveys of business and consumer confidence are better, the labor market data looks a lot better than it did last year, even some of the housing data looks better.” Ex-Tyco CFO: Gimme the $ I didn’t steal! (Reuters) Former Tyco International Chief Financial Officer Mark Swartz, who is serving a prison sentence for looting the company, has sued for $60 million in retirement and other money he says he is owed. The lawsuit, which was made public yesterday, accuses Tyco of breach of contract and unjust enrichment for not paying him some $48 million from an executive retirement agreement, $9 million in reimbursement for New York taxes, and other money. Winner Of Mexican Presidential Debate? Julia Orayen (AP) Who won Mexico's presidential debate? According to the media and Twitter frenzy, at least, the victor wasn't any candidate but a curvaceous model in a tight gown who puzzled millions by appearing on stage for less than 30 seconds during the showdown. Julia Orayen has posed nude for Playboy and appeared barely dressed in other media, but she made her mark on Mexican minds Sunday night by carrying an urn filled with bits of paper determining the order that candidates would speak. She wore a tight, white dress with a wide, tear-drop cutout that revealed her ample decolletage. The image was splashed across newspaper front pages and websites by Monday. "The best was the girl in white with the cleavage at the beginning," tweeted former Mexican Foreign Minister Jorge Castaneda, who is also a New York University professor...Alfredo Figueroa, director of the Federal Electoral Institute responsible for organizing the debate, blamed the incident on a production associate hired by the institute to help with the debate. The institute later issued an apology to Mexican citizens and the candidates for the woman's dress.

Opening Bell: 07.18.12

BofA Swings To Profit, Topping Analysts' Estimates (WSJ) Bank of America reported a profit of $2.46 billion, compared with a year-earlier loss of $8.83 billion. On a per-share basis, which reflect the payment of preferred dividends, earnings came in at 19 cents from a loss of 90 cents a year earlier. The year-ago quarter's results included a charge of $1.23 a share in mortgage-related and other adjustments. Total revenue surged 66% to $21.97 billion. Analysts polled by Thomson Reuters expected earnings of 14 cents a share on $22.87 billion in revenue. The bank's profit was helped by reduced provisions for loan losses as credit quality continued to improve. Credit-loss provisions totaled $1.77 billion compared with $3.26 billion a year ago and $2.42 billion in the first quarter. HSBC Probe Brings Promises Regulator, Bank Will Clean Up Act (Bloomberg) HSBC executives apologized for opening their U.S. affiliate to a river of Mexican drug lords’ cash, and the U.S. regulator that failed to stem the flow vowed to prevent a repeat. “I deeply regret we did not act sooner and more decisively,” Comptroller of the Currency Thomas Curry said at a day-long hearing yesterday of the Senate Permanent Subcommittee on Investigations. He said his agency, which regulates HSBC’s U.S. arm, is partially responsible for letting Europe’s largest bank give terrorists, drug cartels and criminals access to the U.S. financial system and will take “a much more aggressive posture.” Opinion: Investing In America Produces The Best Returns, By Lloyd Blankfein (Politico) The question I’m most often asked these days is, “Where should I invest?” In recent years, we all know, there has been an unusually high degree of uncertainty. It falls into two broad categories: cyclical concerns that focus on the outlook for near-term economic growth and structural concerns that center on the viability of existing political or economic systems — for example, the European Union. The cyclical and structural challenges are considerable, and in some cases, even daunting. But when I meet with chief executive officers and institutional investors and they ask me where to invest, my response is that the United States remains as attractive as ever. And it would be even more attractive if it can make some short-term progress in a few key areas. Hugh Hendry: ‘Bad Things are Going to Happen’ (FT) Hendry believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.” For Yahoo CEO, Two New Roles (WSJ) Just hours after Yahoo named Marissa Mayer as its new chief, the real conversation kicked in: how she will juggle pregnancy and being the CEO charged with saving a foundering Internet giant. The 37 year-old former Google executive is expecting her first child, a son, in early October. On Tuesday, she started her new job at Yahoo, which reported another quarter of lackluster sales growth...No Yahoo directors expressed concern about her pregnancy, according to Ms. Mayer, who told the board in late June, about a week after Yahoo's recruiter contacted her. She says she plans to work during her maternity leave, which will last several weeks...Ms. Mayer's husband, Zachary Bogue, a former attorney, is co-managing partner at Data Collective, an early-stage venture capital fund specializing in tech start-ups. JFK jet in laser scare (NYP) A lunatic aimed a powerful laser beam at an airliner flying over Long Island on its way into JFK — sending the pilot to the hospital and endangering the lives of the 84 people aboard. The first officer on JetBlue Flight 657 from Syracuse was treated for injuries to both eyes after the blinding flash of light lit up the cockpit Sunday night — as the FBI and Suffolk cops hunted for the person responsible, who could face federal prison time. The Embraer E190 jet landed safely, and the injured pilot — identified by sources as First Officer Robert Pemberton, 52 — was met at the gate and taken to Jamaica Hospital. Authorities believe the beam came from around West Islip, Babylon or Lindenhurst. “You wouldn’t think a pen laser would go that far of a distance,” said shocked West Babylon resident Cindy Konik, 50...A startled co-pilot, who was not identified, immediately took over the controls from his temporarily blinded colleague. “We just got lasered up here — two green flashes into the cockpit,” the captain radioed controllers at Ronkonkoma. Credit Suisse Sets Capital Plan (WSJ) moved Wednesday to stanch recent concerns about its financial strength, saying it is raising capital through the sale of convertible bonds, more divestments and the launch of another cost-savings program. It is a surprise twist in a spat with the country's central bank, which recently warned that Switzerland's number two bank wasn't strong enough to withstand a major crisis. Credit Suisse initially rejected the central bank's criticism, saying it was among the world's best-capitalized banks. This didn't impress investors, who offloaded their shares, wiping out 2 billion Swiss francs ($2.05 billion) in market value. At one point last month the bank even felt compelled to reassure investors that it was profitable in the second quarter, even though profitability over the period was never in doubt. Strong Possibility Of Further Fed Easing By September: Goldman (CNBC) In a testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke offered no new hints that the central bank is planning more easing, but repeated a pledge that the Fed “is prepared to take further action as appropriate to promote stronger economic recovery.” “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deterioration in the already-cautious near term Fed economic outlook,” Goldman Sachs conomist Andrew Tilton said in a report. BlackRock's Net Slips 11% (WSJ) BlackRock reported a profit of $554 million, or $3.08 a share, compared with a year-earlier profit of $619 million, or $3.21 a share. Stripping out one-time items, per-share earnings rose to $3.10 from $3. Revenue slipped 5% to $2.23 billion. Analysts expected earnings of $3.01 a share on $2.26 billion in revenue, according to a poll conducted by Thomson Reuters. BNY Mellon profit falls 37 percent on litigation charge (Reuters) Bank of New York Mellon Corp said on Wednesday that second-quarter net income had fallen 37 percent on lower foreign exchange revenue and after it paid $212 million to settle an investor lawsuit. The world's largest custody bank reported net income of $466 million, or 39 cents a share, compared with $735 million, or 59 cents a share, a year earlier. As announced earlier this month, the results included an after-tax charge of $212 million to settle an investor lawsuit accusing the bank of imprudently investing their cash in a risky debt vehicle that collapsed in 2008. Quarterly revenue fell to $3.62 billion from $3.85 billion. Residents warned: 6-foot lizard loose in Colorado (AP) A sheriff has warned residents in a tourist town northwest of Colorado Springs that a strong, aggressive 6-foot lizard that eats small animals — including dogs and cats — is on the loose in the area. Teller County Sheriff Mike Ensinger said Tuesday that a 25-pound pet Nile monitor lizard has gone missing after breaking a mesh leash and crawling away. Ensinger said about 400 homes in the Woodland Park area were warned. He added that the animal, which escaped Monday and is known as Dino, has not bitten any humans — yet. "We have a 6-foot reptile out and about," Ensinger said. "If it gets hungry enough, we don't know what it will do." Ensinger said officers may use a tracking dog if Dino isn't located by Tuesday afternoon. "I'm not going after it," Ensinger said. "I don't do reptiles."

Opening Bell: 01.16.13

Goldman Profit Soars (WSJ) "While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders," Chief Executive Lloyd C. Blankfein said. Overall, the investment-banking arm recorded revenue of $1.41 billion for the quarter, up from $857 million a year ago and $1.16 billion in the third quarter. Financial advisory revenue rose 8.1% from year ago. Debt underwriting revenue surged to $593 million from $196 million in the year ago and the $466 million reported in the third quarter. Equity underwriting revenue popped 59% from the year ago and 61% from the prior quarter to $304 million. Revenue from fixed income, currency and commodity trading totaled $2.04 billion, versus $1.36 billion a year earlier and $2.22 billion in the third quarter. Revenue from equities execution rose 45% from a year ago to $764 million but fell 10% from the third quarter. Overall profit for the fourth quarter totaled $2.89 billion, compared with a year-earlier profit of $1.01 billion. Earnings per share, reflecting the payment of preferred dividends, jumped to $5.60 from $1.84. Net revenue, including net interest income, surged 53% to $9.24 billion. JPMorgan Profit Tops Estimates (WSJ) JPMorgan's fourth-quarter earnings surged 53% on strong revenue and better credit, as the bank further detailed the fallout from more than $6 billion in trading losses last year. The outsized, complex trades on credit default swaps tied to corporate bonds became known as the "London Whale." On Wednesday, the bank made public an internal report outlining mistakes and oversights by executives who played a role in the matter, including Chief Investment Officer Ina Drew, who has since left the bank, and Douglas Braunstein, who was chief financial officer during the episode and has since become a vice chairman. It also said its Treasury and Chief Investment Office, where the "Whale" trades were made, recorded a loss of $157 million on the fourth quarter, compared to net income of $417 million in the year ago. J.P. Morgan also said it halved the 2012 compensation of Chief Executive James Dimon to $11.5 million. Additionally, he will have to wait up to another 18 months before he can start exercising two million options that were awarded to him five years ago. Overall, J.P. Morgan reported a profit of $5.69 billion, or $1.39 a share, for the fourth quarter, up from $3.73 billion, or 90 cents a share, a year ago. Bankers Get IOUs Instead Of Bonus Cash (WSJ) Several thousand Morgan Stanley traders, investment bankers and other employees will get IOUs instead of cash when bonus day arrives Thursday, a fundamental change in Wall Street pay triggered by the financial crisis. The New York company will pay its bonuses in four equal installments, according to people briefed on the plan, with the first chunk coming in May and the last in January 2016. Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company. "I don't think there will be a lot of cheers on the trading floors of Morgan Stanley," said Mark Williams, a former Federal Reserve bank examiner who now teaches at Boston University. "Bonuses were used to buy houses and cars. They were savings vehicles." AIG Seeks Approval To File More Bank Suits (NYT) Since the summer of 2011, the insurance giant American International Group has been battling Bank of America over claims that the bank packaged and sold it defective mortgages that dealt A.I.G. billions of dollars in losses. Now A.I.G. wants to be able to sue other banks that sold it mortgage-backed securities that plunged in value during the financial crisis. It has not said which banks, but possibilities include Deutsche Bank, Goldman Sachs and JPMorgan Chase. But to sue, A.I.G. first must win a court fight with an entity controlled by the Federal Reserve Bank of New York, which the insurer says is blocking its efforts to pursue the banks that caused it financial harm. Hungary Attacks Roubini Over Currency 'Advice' (CNBC) Hungary's Ministry for National Economy said in a statement that the forint began to depreciate after economist Nouriel Roubini – dubbed Dr Doom for his pessimistic forecasts – said in a newsletter that failure to secure a deal with the International Monetary Fund was bad news for the currency. The forint has been in decline since last week hitting seven-month lows earlier this week but has since gained some ground. Hungarian officials rounded on Roubini saying; "On Thursday speculators seem to have taken Roubini's advice and attacked the forint." BofA Takes A Mortgage Mulligan (WSJ) Less than two years after embarking on a painful retreat from home lending, Bank of America Corp. is girding for a new run at the U.S. mortgage business. Whether that gamble pays off will depend in large measure on how long the mortgage market's run of record profits continues. The Charlotte, N.C., company aims to sell more mortgages through its 5,000-plus branches, executives said. The fourth-biggest U.S. mortgage lender, after Wells Fargo & Co., J.P. Morgan Chase & Co. and U.S. Bancorp, is intent on "growing that business," Chief Executive Brian Moynihan said at a December investor conference. Eurozone Plan May Be Watered Down (WSJ) One of the euro zone's most significant commitments last year aimed at containing its financial crisis—a plan to allow the bloc's bailout fund to directly boost the capital of banks in countries facing debt troubles—could be undermined by technical complications and second thoughts by some governments. Germany Repatriates Gold Reserves (WSJ) Germany's central bank said it would remove nearly a fifth of its total gold reserves from deposits at the New York Federal Reserve Bank and the Bank of France and bring them back to Germany, amid a debate in the country over the transparency of its global gold holdings. Inside Trader Sent To Kinnu-can (NYP) John Kinnucan, the former head of Portland, Ore.-based firm Broadband Research, was sentenced to four years and three months in prison after admitting to feeding illegal stock tips to his well-heeled hedge fund clients. Reporter fired for secret stripping job gets new journalism gig with same (NYDN) Tressler, 30, is now a reporter for the San Antonio Express-News, covering “cops, crime and general mayhem,” according to her Twitter account. In April, the gorgeous Tressler was fired from her job as a society reporter for the Houston Chronicle for failing to tell the newspaper about her after-hours gig as a stripper, which she chronicled in her blog, “Diary of an Angry Stripper.” Tressler then sued her former employer's parent company, the Hearst Corp., which also owns the Express-News, alleging that the firing was unfair. She hired celebrity lawyer Gloria Allred and filed a complaint with the U.S. Equal Employment Opportunity Commission, saying the paper’s reason for firing her -- failing to write on her application that she had been working part-time as a stripper -- was ridiculous. "I've worked at KB Toys. I've worked at a surf shop. I've worked at multiple coffee shops. I've worked at Taco Bell. I've worked as a line cook at a restaurant," Tressler told the Las Vegas Review-Journal in June. “Do you really want me to put every single one of those on my job application?" Over the summer, Tressler embarked on a national stripping tour and pushed a book, which shared the same title as her blog. She also picked up some freelance assignments for “Good Morning America.” After the suit and the tour, it seemed unlikely Tressler would re-enter Texas journalism, let alone for a newspaper owned by the same parent company that fired her. Some have suspected that her new job was part of a settlement she reached with the company.

Opening Bell: 01.31.13

Deutsche Bank Swings To A $2.9 Billion Loss (WSJ) In the fourth quarter alone, the bank took €2.9 billion in charges, €1 billion of which was for "litigation-related charges." Mr. Jain said the charges "relate to developments in regulatory investigations and adverse court rulings which you are all familiar with," but didn't elaborate further. Deutsche Bank is currently embroiled in a number of legal disputes on both sides of the Atlantic, including the decade-long legal battle in the 2002 bankruptcy of Germany's Kirch Media Group. It is also among the banks that are under official investigation for allegedly rigging interbank benchmark rates, including the London Interbank Offered Rate. The rest of the quarter's charges were mainly related to losses from businesses bought before 2003, such as Bankers Trust and Scudder in the U.S., and impairments related to its investment in the Cosmopolitan Resort in Las Vegas and Maher Terminals in North America, which it put into an internal bad bank. The quarter's net loss of €2.17 billion compares with a profit of €147 million a year earlier. For the full year, net profit was €611 million, down from €4.13 billion. Deutsche Bank Beats Capital Goal as Jain Shrugs Off Loss (Bloomberg) “We’ve galvanized Deutsche Bank around the achievement of our capital targets,” Jain, 50, said on a conference call with analysts. The loss “reflects a number of decisions we took to position Deutsche Bank,” he said. Barclays, RBS May Pay Billions Over Improper Derivatives Sales (Bloomberg) The lenders, including Lloyds Banking Group Plc and HSBC Holdings Plc, have set aside around 740 million pounds to cover the claims. Analysts say the total charges for the industry may be much higher than that after the Financial Services Authority said it found “serious failings” in reviews of product sales. SAC And Elan Blasted By Investor Who Lost Nest Egg (NYP) Ronald Weiland realized he’d made a bad bet in 2008, when he lost his $1 million nest egg trading shares of drug company Elan. What he didn’t know then was that the cards were stacked against him. Weiland now believes that he and other investors were played by Steve Cohen’s SAC Capital Advisors when the hedge fund giant — acting on information from a former trader accused of insider trading — abruptly dumped its huge long position in Elan and Wyeth and started shorting both stocks. “They had information that I didn’t have access to,” said Weiland, a 53-year-old former consultant for Arthur Andersen. “It’s totally a matter of seeing very wealthy people being able to game the system.” The big trading swing that netted $276 million for SAC and led to the arrest of former trader Mathew Martoma has also landed the firm in hot water. Elan investors have filed at least two lawsuits against SAC, accusing the firm of costing them millions, and several class-action law firms are looking to tee up more. US Targeting Tax Evasion (WSJ) On Monday, a federal judge in New York approved an Internal Revenue Service summons demanding still more records from UBS. According to court filings, the government now is focusing on U.S. taxpayers with accounts at smaller Swiss banks that didn't have U.S. branches but served customers through a UBS account in Stamford, Conn. Interactive Map: What NYC Neighborhoods Have The Most Public Drinking Complaints? (Gothamist) Greenpoint, Williamsburg, the Lower East Side, Hamilton Heights, East Harlem and Washington Heights are the worst offenders—on the other hand, almost no one is getting in trouble in Midtown, the Financial District, Red Hook, Dumbo, and the Upper East and West Sides. Since we already know there can be a a historical correlation between public drinking and public urinating (and sometimes only the urinating part is public), we decided to look at public urination complaints too...Some conclusions from this comparison: Midtown East and Chelsea have way more urination complaints than drinking ones. Union Square, Greenpoint and Randalls Island are also urinary offenders. It seems like nobody on Staten Island cares about people urinating on their lawns, and same goes for anywhere west of East Flushing. Blackstone Swings To Fourth Quarter Profit (WSJ) As of the quarter's end, total assets under management reached a record $210.22 billion, up 26% from the year earlier, as all of Blackstone's investment businesses continued to see net inflows and carrying-value appreciation...Blackstone posted a profit of $106.4 million, or 19 cents a unit, compared with a year-earlier loss of $22.7 million, or five cents a unit. On the basis of so-called economic net income, the firm reported a profit of 59 cents a unit, versus a profit of 42 cents a unit a year earlier. Analysts surveyed by Thomson Reuters recently expected a per-share profit of 47 cents. Ackman Ahead In Herbalife Bet (NYP) Ackman has scored a gross profit of about $260 million on his $1 billion short bet against the nutritional supplements company, based on an estimated 20 million shares shorted at an average price of $50. Loeb, who bought 8.9 million shares at an average price of $32, is up $44.5 million. Ackman has widened his lead considerably. Just two weeks ago, his gross gain stood closer to $120 million while Loeb had made an estimated $108 million. Threats Cloud Euro's Flight (WSJ) The euro, once on death's door, is on a monthslong tear, rising Wednesday to its highest level since November 2011. But even some investors who helped propel the currency above $1.3560 Wednesday say it can't fly much further. Europe's economy is still in the doldrums, they say, and a stronger euro could make the situation worse. And with central banks elsewhere racing to push down their own currencies, boosting the relative value of the euro, the European Central Bank eventually could be compelled to join them. Jobless Claims in U.S. Rose 38,000 Last Week to 368,000 (Bloomberg) Economists forecast 350,000 filings, according to the Bloomberg survey median. The increase followed a combined 45,000 drop in the prior two weeks. Guy Inadvertently Posts Public YouTube Video Inviting His Fiancée’s Best Friend Over for a Threeway (Gawker) We've all been there. You're super excited after getting the go ahead from your fiancée Cynthia to invite her best friend Zoey over for a threeway, so you hastily record a video introducing yourself to Zoey and letting her know that you're totally open to having a threeway this week, next week, the week after that, whenever, anytime, today, or maybe tomorrow, whenever possible, and you're just really excited to show her things that she's never seen and do things that were never done before in a threeway. Then you hastily upload the video to your public YouTube account that 300 people are subscribed to, and await your threeway.

Opening Bell: 08.03.12

JPMorgan London Whale Was Prodded (WSJ) A JPMorgan executive encouraged the trader known as the "London whale" to boost valuations on some trades, said a person who reviewed communications emerging from the bank's internal probe of recent trading losses. After reviewing emails and voice-mail messages, the bank has concluded that Bruno Iksil, the J.P. Morgan trader nicknamed for the large positions he took in the credit markets, was urged by his boss to put higher values on some positions than they might have fetched in the open market at the time, people familiar with the probe said. The bank's conclusion is based on a series of emails and voice communications in late March and April, as losses on his bullish credit-market bet mounted, the people said. The bank believes they show the executive, Javier Martin-Artajo, pushing Mr. Iksil to adjust trade prices higher, according to people close to the bank's investigation. At the time, Mr. Martin-Artajo was credit-trading chief for the company's Chief Investment Office, or CIO. RBS Loss Widens (WSJ) The 82%-government-owned bank reported a net loss of £1.99 billion ($3.09 billion), wider than the loss of £1.43 billion a year earlier. However, the result was hit by a £3 billion accounting charge for the fair value of the company's debt and a number of provisions for misselling financial products. Analysts focused on the more-positive underlying figures for the half, helping to make its shares the leading gainer on the FTSE 100. Excluding the own-debt charge, RBS would have posted a net profit of £287 million. It posted an operating profit of £1.83 billion, down from the £1.97 billion a year earlier. Nevertheless, RBS warned that it faces a number of lawsuits. The bank is cooperating with regulators in the U.S., Japan and the U.K., who are probing whether banks colluded to try and rig benchmark rates including the London interbank offered rate. RBS said that it had fired a number of traders following the investigations but said it was too early to estimate the fines the bank may have to pay. RBS’s CEO Blames Libor-Manipulation On ‘Handful’ Of Individuals (Bloomberg) RBS dismissed four employees for trying to influence the individual responsible for Libor submissions following an internal investigation, the bank said today, without identifying the staff involved. Hester said it is too early to estimate the potential cost of fines and litigation linked to rate-rigging. “The Libor issue is more to do with the wrongdoing of individuals than it is to do with a systemic problem,” Hester, 51, said on a call with journalists today after the Edinburgh- based bank reported a 22 percent drop in second-quarter operating profit. “It’s hugely regrettable that the actions of a relatively small number of wrongdoers, which seems to be the key issue here, has such a tainting effect on the industry.” Knight Said To Open Books To Suitors As Loss Pressure Grows (Bloomberg) Bank of America Corp. was among several potential partners that was in talks with Knight yesterday, said a person with knowledge of the matter. John Yiannacopoulos, a Bank of America spokesman, declined to comment. Loss Swamps Trading Firm (WSJ) Knight wouldn't comment on the status of the rescue talks. But market participants said the firm is running out of time. In the span of two days, the company's market value has plunged to $253.4 million from $1.01 billion, and its shares continued their nosedive in after-hours trading. "If they don't get an investor within the next 48 to 72 hours, I think Knight's going to have trouble surviving," said David Simon, chief executive of hedge fund Twin Capital Management LLC. Mt. Sinai urologist busted on charges he used spy cam to peek up subway riders’ skirts (NYDN) Dr. Adam Levinson, an assistant professor of urology at the hospital’s school of medicine, allegedly clipped a pen camera to a folded newspaper so he could peek up a woman’s skirt on a southbound 4 train about 5 p.m. Tuesday, authorities and a witness said. Sheldon Birthwright, 46, a construction worker who once worked for the Transportation Security Administration, said he sensed something wrong almost immediately after Levinson stepped on the train at E. 59th St. The doctor — a New York Medical College grad who twice won a national Patients’ Choice Award — held the newspaper at his side as he inched toward a woman wearing a knee-high dress and reading a Kindle. “He’s leaning on the pole right next to the door,” Birthwright told the Daily News. “He has a paper in his hand. But what’s mysterious about it, there’s a pen attached to the paper...He has it down in a very unsuspicious way. But every time the woman would move, he would move.” Catholic Fund Fails To Convince Believers (FT) JPMorgan Asset Management had hoped to attract investors who wanted exposure to investments that would not clash with tenets on issues such as birth control and civil rights. It also eschewed investments in governments of countries that have the death penalty. The aim was to replicate the success of funds compliant with Shariah law which have been in strong demand with Muslim investors. However, JPMorgan is to liquidate the Global Catholic Ethical Balanced Fund just over a year since it was launched. At May 31, it had net assets of just 4.3 million euros ($5.24 million), far short of a $30 million threshold outlined in its prospectus. Fake-bookers (NYP) Facebook admitted that some 83 million of the social network’s 955 million total users are fakes — meaning duplicates, spam or silly pages for pets. That represents nearly 9 percent of profiles on the site. The rash of fakes — equal to the population of Egypt — has shot up since Facebook’s rocky public debut in May, when it estimated “false” profiles accounted for 5 percent to 6 percent of its users. “These estimates are based on an internal review of a limited sample of accounts, and we apply significant judgment in making this determination, such as identifying names that appear to be fake or other behavior that appears inauthentic,” the company said in a recent regulatory filing. The spike is a major cause for concern, with advertisers and investors questioning Facebook’s effectiveness in reaching consumers. In particular, Facebook has been under scrutiny for slowing ad sales growth. Economy Adds 163,000 Jobs (WSJ) U.S. employers stepped up hiring in July as the economy continued its uneven recovery heading into this fall's presidential election. U.S. payrolls increased by a seasonally adjusted 163,000 jobs last month, the Labor Department said Friday, but the unemployment rate, obtained by a separate survey of U.S. households, ticked up one-tenth of a percent to 8.3%. Economists surveyed by Dow Jones Newswires expected a gain of 95,000 in payrolls and an 8.2% jobless rate. Family kept grandparents' deaths secret from Chinese diver until she won gold medal (YS) Chinese diver Wu Minxia's celebrations at winning a third Olympic gold medal were cut short after her family revealed the details of a devastating secret they had kept for several years. Wu's parents decided to withhold news of both the death of her grandparents and of her mother's long battle with breast cancer until after she won the 3-meter springboard in London so as to not interfere with her diving career. "It was essential to tell this white lie," said her father Wu Yuming...Wu's mother defended the decision to keep her situation private and admitted she only broached the subject of her breast cancer at this point because she is now in remission. Both of Wu's grandparents died more than a year ago, but the diver knew nothing of their passing until this week.

Opening Bell: 10.18.12

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."

Opening Bell: 07.16.12

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