Opening Bell: 04.16.12

Downgrades Loom For European Banks (WSJ) Under pressure from banks, Moody's Investors Service said Friday that it is delaying until early May its highly anticipated decision on whether to downgrade the credit ratings of 114 banks in 16 European countries. Moody's announced the review in February, saying it was needed in light of the banks' weak conditions and the tough environment in which they're operating. It had planned to start unveiling the decisions this week. Obama Bid to End Too-Big-to Fail Undercut as Banks Grow (Bloomberg) Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the credit crisis. Five banks-- JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs-- held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve. Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did during the 2008 crunch. “Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis. Carlyle Takes Cautious Approach in IPO Price (WSJ) Carlyle Group plans to sell 30.5 million shares priced between $23 and $25 in its initial public offering, which could come before the end of the month, according to people familiar with the matter. Those shares would represent about 10% of the Washington, D.C., private-equity firm, in a deal that would value Carlyle at more than $7 billion, these people said. That value is toward the lower end of what earlier had been expected...Carlyle is putting less emphasis on pricing shares high at the IPO, instead hoping they rise in value once they are traded, according to people familiar with the matter. Bond Recipes Use Fresh Ingredients (WSJ) With risk-taking in vogue again, Wall Street is betting on the revival of a market for bonds made out of everything from "The English Patient" to fried chicken. The amount of so-called esoteric bonds backed by unusual assets has nearly doubled this year compared with the same period a year ago, according to Credit Suisse. Thus far this year, there have been $5.6 billion in deals done, more than twice the $2 billion in the same period last year. Over the past several months investors have bought bonds backed by revenue from Domino's Pizza DPZ +0.34% franchises, Miramax films, patents for drugs like Clarinex and Flumist and loans to buyers of Wyndham vacation time-shares. The deals show investors are becoming comfortable again with Wall Street's engineering skills, after many were hammered during the financial crisis by losses on bonds backed by subprime home loans and complex debt pools known as collateralized-debt obligations. The esoteric sales also mark a rare growth area for giant banks that have been hit hard by a slowdown in deal-making and trading. Four-year-old Heidi Hankins joins Mensa with 159 IQ (BBC) A four-year-old girl from Hampshire has been accepted into Mensa with an IQ just one point below Albert Einstein and Stephen Hawking. Heidi Hankins from Winchester has a 159 IQ. She taught herself to read and was able to count to 40 at two years old. British Mensa chief executive John Stevenage said Heidi's parents "correctly identified that she shows great potential." According to Mensa, the average adult IQ score is 100. Geithner Rebuts Romney on Women and Jobs (WSJ) As the fight for women voters intensified in recent days, Mr. Romney took a swipe at Mr. Obama by saying women had borne the vast majority of job losses over the past three years. Labor Department data show women do account for 92.3% of the workers who have lost jobs since Mr. Obama took office in January 2009. But men suffered deeper job losses than women in the year before Mr. Obama's inauguration and men have gained more jobs than women since the recovery began in 2009. "It's a ridiculous way to look at the problem," Mr. Geithner said of Mr. Romney's criticism. Mr. Geithner on Sunday also defended the Obama administration's efforts to reduce the federal budget deficit, and said there was "no risk" that the U.S. would go through a debt crisis in the next two years like the one Greece is experiencing. But he had a warning for Congress, when asked on NBC's "Meet the Press" about whether Congress would act to raise the government's debt ceiling again at the end of this year. "This is Congress's obligation to do as they have always done in the past," he said. "It would be good for the country this time if they did it with less drama." Barclays' Tax Deal Faces US Scrutiny (FT) Barclays’ controversial tax planning business will come under fresh scrutiny in a U.S. court this week over whether a transaction designed by the bank cost the U.S. government more than $1 billion in lost tax receipts. The U.S. Internal Revenue Service claims that complex, cross-border deals Barclays structured for several mid-tier banks in the last decade were an abusive tax shelter that exploited loopholes between U.S. and U.K. tax laws. Prime Brokerages Consolidate After 'Big Bang' (Reuters) Hedge funds are cutting back on the brokerage accounts they hold as the prime brokerage industry begins to consolidate more than four years after the Lehman Brothers bankruptcy blew the sector wide open. Goldman Sachs Said to Raise $2.5 Billion in ICBC Sale (Bloomberg) The Wall Street firm is selling $2.5 billion of shares at HK$5.05 each, according to two people with knowledge of the matter. It sold 3.55 billion shares, or 4 percent of ICBC’s Hong Kong-traded shares, to Temasek, the Singapore state-owned investment group said. Temasek, which is increasing stakes in China’s biggest banks, paid $2.3 billion for the stock, based on the per-share price and stake size. 'Hug Me' Coke Machine Asks for Hugs, Delivers Free Coke (MFDC) Coca-Cola's global marketing campaign dubbed "Open Happiness" takes on a new twist with a Coke vending machine that asks passers by to give it a hug. The big red and white machine, located at the National University in Singapore, has "Hug Me" written across its front side. And people are actually hugging it...and given free Cokes.
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Downgrades Loom For European Banks (WSJ)
Under pressure from banks, Moody's Investors Service said Friday that it is delaying until early May its highly anticipated decision on whether to downgrade the credit ratings of 114 banks in 16 European countries. Moody's announced the review in February, saying it was needed in light of the banks' weak conditions and the tough environment in which they're operating. It had planned to start unveiling the decisions this week.

Obama Bid to End Too-Big-to Fail Undercut as Banks Grow (Bloomberg)
Two years after President Barack Obama vowed to eliminate the danger of financial institutions becoming “too big to fail,” the nation’s largest banks are bigger than they were before the credit crisis. Five banks-- JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs-- held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to the Federal Reserve. Five years earlier, before the financial crisis, the largest banks’ assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did during the 2008 crunch. “Market participants believe that nothing has changed, that too-big-to-fail is fully intact,” said Gary Stern, former president of the Federal Reserve Bank of Minneapolis.

Carlyle Takes Cautious Approach in IPO Price (WSJ)
Carlyle Group plans to sell 30.5 million shares priced between $23 and $25 in its initial public offering, which could come before the end of the month, according to people familiar with the matter. Those shares would represent about 10% of the Washington, D.C., private-equity firm, in a deal that would value Carlyle at more than $7 billion, these people said. That value is toward the lower end of what earlier had been expected...Carlyle is putting less emphasis on pricing shares high at the IPO, instead hoping they rise in value once they are traded, according to people familiar with the matter.

Bond Recipes Use Fresh Ingredients (WSJ)
With risk-taking in vogue again, Wall Street is betting on the revival of a market for bonds made out of everything from "The English Patient" to fried chicken. The amount of so-called esoteric bonds backed by unusual assets has nearly doubled this year compared with the same period a year ago, according to Credit Suisse. Thus far this year, there have been $5.6 billion in deals done, more than twice the $2 billion in the same period last year. Over the past several months investors have bought bonds backed by revenue from Domino's Pizza DPZ +0.34% franchises, Miramax films, patents for drugs like Clarinex and Flumist and loans to buyers of Wyndham vacation time-shares. The deals show investors are becoming comfortable again with Wall Street's engineering skills, after many were hammered during the financial crisis by losses on bonds backed by subprime home loans and complex debt pools known as collateralized-debt obligations. The esoteric sales also mark a rare growth area for giant banks that have been hit hard by a slowdown in deal-making and trading.

Four-year-old Heidi Hankins joins Mensa with 159 IQ (BBC)
A four-year-old girl from Hampshire has been accepted into Mensa with an IQ just one point below Albert Einstein and Stephen Hawking. Heidi Hankins from Winchester has a 159 IQ. She taught herself to read and was able to count to 40 at two years old. British Mensa chief executive John Stevenage said Heidi's parents "correctly identified that she shows great potential." According to Mensa, the average adult IQ score is 100.

Geithner Rebuts Romney on Women and Jobs (WSJ)
As the fight for women voters intensified in recent days, Mr. Romney took a swipe at Mr. Obama by saying women had borne the vast majority of job losses over the past three years. Labor Department data show women do account for 92.3% of the workers who have lost jobs since Mr. Obama took office in January 2009. But men suffered deeper job losses than women in the year before Mr. Obama's inauguration and men have gained more jobs than women since the recovery began in 2009. "It's a ridiculous way to look at the problem," Mr. Geithner said of Mr. Romney's criticism. Mr. Geithner on Sunday also defended the Obama administration's efforts to reduce the federal budget deficit, and said there was "no risk" that the U.S. would go through a debt crisis in the next two years like the one Greece is experiencing. But he had a warning for Congress, when asked on NBC's "Meet the Press" about whether Congress would act to raise the government's debt ceiling again at the end of this year. "This is Congress's obligation to do as they have always done in the past," he said. "It would be good for the country this time if they did it with less drama."

Barclays' Tax Deal Faces US Scrutiny (FT)
Barclays’ controversial tax planning business will come under fresh scrutiny in a U.S. court this week over whether a transaction designed by the bank cost the U.S. government more than $1 billion in lost tax receipts. The U.S. Internal Revenue Service claims that complex, cross-border deals Barclays structured for several mid-tier banks in the last decade were an abusive tax shelter that exploited loopholes between U.S. and U.K. tax laws.

Prime Brokerages Consolidate After 'Big Bang' (Reuters)
Hedge funds are cutting back on the brokerage accounts they hold as the prime brokerage industry begins to consolidate more than four years after the Lehman Brothers bankruptcy blew the sector wide open.

Goldman Sachs Said to Raise $2.5 Billion in ICBC Sale (Bloomberg)
The Wall Street firm is selling $2.5 billion of shares at HK$5.05 each, according to two people with knowledge of the matter. It sold 3.55 billion shares, or 4 percent of ICBC’s Hong Kong-traded shares, to Temasek, the Singapore state-owned investment group said. Temasek, which is increasing stakes in China’s biggest banks, paid $2.3 billion for the stock, based on the per-share price and stake size.

'Hug Me' Coke Machine Asks for Hugs, Delivers Free Coke (MFDC)
Coca-Cola's global marketing campaign dubbed "Open Happiness" takes on a new twist with a Coke vending machine that asks passers by to give it a hug. The big red and white machine, located at the National University in Singapore, has "Hug Me" written across its front side. And people are actually hugging it...and given free Cokes.

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Opening Bell: 03.12.12

Greek Bailout Payment Set to Be Approved by Euro Ministers After Debt Deal (Bloomberg) Ministers from the 17 nations that share the euro will gather in Brussels today to sign off on the 130 billion-euro ($170 billion) second package for Greece after bondholders agreed last week to take a loss on the country’s debt. They’ll also focus on Spain’s budget-cutting efforts and Portugal’s aid program, underscoring their desire to prevent contagion. MF Global Bonuses Under Fire (WSJ) In a letter to former Federal Bureau of Investigation Director Louis Freeh, Sen. Jon Tester (D., Mont.) said it would be "outrageous" to proceed with a proposal to a bankruptcy judge that could result in payouts of several hundred thousand dollars each for MF Global's chief operating officer, finance chief and general counsel. The size of the bonuses would depend on their job performance in helping Mr. Freeh maximize value for creditors of the company. Pandit Pay Climbs as Citigroup Revenue Slumps (Bloomberg) Pandit’s $15 million pay package for 2011 and a multi-year retention package announced in May could total $53 million, based on regulatory filings and an analyst’s estimate. The CEO also received $80 million last year from the New York-based firm’s purchase of his Old Lane Partners LP hedge fund in 2007. Latest Stress Tests Are Expected to Show Progress at Most Banks (NYT) In another milestone in the banking industry’s recovery from the financial crisis, the Federal Reserve this week will release the results of its latest stress tests, which are expected to show broadly improved balance sheets at most institutions...The examination is not merely an intellectual exercise. If institutions fall short, they could be required to raise billions in new capital, depressing their shares. If they pass, dividend increases and stock buybacks by the strongest institutions will follow as they did after the second round of tests a year ago, pleasing investors whose banks’ stocks still trade at levels far below where they where before the collapse of Lehman Brothers in September 2008. Mortgage Deal Is Built On Tradeoffs (WSJ) Banks agreed to cut loan balances, a step they had long resisted, but they won't only get credit against their shares of the $25 billion settlement for reducing balances of loans they own. In some cases, they can receive partial credit if investors shoulder the cost of writing down loans the banks service. The banks also will receive credit for some steps they are already taking, such as approving short sales, where a home is sold for less than the amount owed, according to draft settlement documents reviewed by The Wall Street Journal. The Unravelling Of A Casino Marriage (WSJ) Messrs. Wynn and Okada, both known for their big, demanding egos, were something of an odd couple. Mr. Wynn is famous for a Cheshire-cat grin and smooth, grandiose soliloquies. Mr. Okada, a former engineer who had specialized in vacuum tubes, was sometimes seen as sullen and withdrawn by company outsiders. Born the same year, 1942, Mr. Wynn and Mr. Okada became "completely and totally bonded," Mr. Wynn said after they were introduced by a mutual friend. Mr. Wynn was hunting for investors who would give him leeway to create resorts that might take years to design and build. Mr. Wynn came of age during an era when casino operators were emerging from the industry's mob-infested roots. He hobnobbed with such celebrities as Steven Spielberg and Clint Eastwood. Mr. Okada, though often ranked among the richest people in Japan, largely stayed out of the spotlight. Missing Hiker Cuddled With Cat (AP) Snuggling in a blue sleeping bag, Margaret Page and her cat survived 3 1/2 weeks in a rugged New Mexico national forest, even though temperatures dropped below freezing nearly every night...The area had seen average highs reach around 60 degrees with evening lows in the 20s. It didn’t see much rain or snow, but there were some high winds...Relying on a creek for drinking water, Page and her cat named Miya lived on just a handful of supplies, rescue workers said Friday. Wells Fargo Poised to Lead Payouts Higher (Bloomberg) Wells Fargo and Citigroup may join banks unleashing more than $9 billion in dividend increases and share buybacks if they get passing grades this week on the Federal Reserve’s annual stress test. Thirteen of the 19 largest U.S. lenders may say they’ll pay out $3.79 billion in extra dividends this year and buy $5.52 billion of additional shares, according to estimates of six analysts compiled by Bloomberg. That’s 30 percent more than they spent last year. San Francisco-based Wells Fargo probably will offer the biggest difference at a combined $4.16 billion, followed by Citigroup with $2.92 billion. SEC Probes Operators’ Use of Multiple Markets (FT) According to people familiar with the probe, SEC officials are focusing on whether operators use multiple exchanges to appease customers which provide large order flows. At Lunch, Bloomberg And Obama Discuss Future (NYT) Mr. Bloomberg’s precise response is unknown. But their meeting a few weeks ago, confirmed by aides to both leaders and previously undisclosed, was potentially significant for both men, as Mr. Obama seeks support for his presidential campaign and Mr. Bloomberg ponders his post-mayoral career. Soros-led hookup may save American Apparel (NYP) George Soros has found a new financial disaster from which to profit: American Apparel. The billionaire octogenarian — who, like American Apparel’s controversial CEO Dov Charney, has lately been entangled in lawsuits with young, beautiful women — is backing a firm that’s in talks to extend a credit line worth as much as $80 million to the cash-strapped clothing chain, The Post has learned. The credit facility from Crystal Financial, a Boston-based firm that boasts Soros’ hedge fund as its lead investor, will immediately replace and expand a $75 million revolving credit line from Bank of America that matures in July, sources said. How To Become A Skeeball Master (YG) Not all skeeball machines are created equal. Between the shape of the ramp, the geometry of the backboard, and the precise characteristics of the rolling surfaces, each skeeball machine plays slightly differently -- and those variations can throw you off your game. If you're getting settled into a serious practice session, stock up with plenty of tokens and don't step away from your chosen spot....many skeeball aficionados prefer to kneel down to play. Maybe the lower stance helps them line up their shot, or perhaps being closer to the action helps them judge their throwing power a little more accurately. Whatever the reason, it's a tried and true technique for expert skeeball players -- and it might work for you, too. If you're struggling to settle into a comfortable throw, give it a try.

Opening Bell: 09.13.12

Ray Dalio: US Economy Out Of Intensive Care (Reuters) Hedge fund titan Ray Dalio said the U.S economy had come out of the "intensive care unit," but he warned against any quick move to "austerity" budget measures. "We were in the intensive care unit," Dalio, who runs the $120 billion hedge fund Bridgewater Associates, told more than 200 guests at the Council of Foreign Relations in New York on Wednesday. "We are largely healed and largely operating in a manner that is sustainable if we don't hit an air pocket." Dalio said a major challenge for U.S. politicians will be dealing with the so-called "fiscal cliff," the year-end expiration of the Bush-era tax cuts and previously agreed-upon cuts in defense spending and social programs, a combination which some economists say could lead to a recession. Dalio sided with economists who worry that a sharp reduction in government spending could lead the United States back into recession. "We can't just worry about too much debt," Dalio said. "We have to worry about too much austerity." German Court Clears Rescue Fund (WSJ) Germany's highest court cautiously approved the creation of the euro zone's permanent bailout facility, but insisted that the country keep its effective veto on all of the vehicle's decisions, a ruling that removes a question mark over two crucial elements of the euro zone's plans for mastering its debt crisis. Treasury Backs Plan For Standard Chartered Settlement (NYT) The lawyers approved a potential prepayment amount this week, a crucial step to a final agreement, though it will be much smaller than the $340 million the bank had to pay to New York State’s top banking regulator in a related case, according to three officials with direct knowledge of the settlement talks. The differing penalties stem from determinations by federal authorities and Manhattan prosecutors that the bank’s suspected wrongdoing was much less extensive than the state banking regulator’s claims that Standard Chartered had schemed with Iran to hide from regulators 60,000 transactions worth $250 billion over a decade. Insiders Get Post IPO Pass (WSJ) Wall Street underwriters increasingly are allowing corporate insiders to sidestep agreements that prevent them from quickly selling shares after initial public offerings. In the latest instance, several Wall Street banks on Wednesday allowed early investors and management of ExactTarget Inc. to sell more than seven million shares of the online marketing company a week ahead of the planned end of a "lockup" agreement. Under lockup pacts, underwriters bar company insiders from selling their shares, usually for 180 days after an IPO. The lockup restricts the supply of shares, helping buoy IPO prices; releasing more shares on the market can keep a lid on stock prices. Anna Gristina sits down with TV shrink Dr. Phil, says she won't talk to prosecutors about associate (NYDN) The Soccer Mom Madam's little black book has been whittled down to a single name. In her first major interview since being released from Rikers Island in June, Anna Gristina dishes to TV talk show shrink Dr. Phil about how prosecutors have hounded her for dirt on a just one associate. “They have an agenda to get me to talk about a certain person,” she told the daytime doc. Gristina refused to reveal the mystery man, or woman. Oprah's former head-shrink sidekick, who sat down at the kitchen table in Gristina's Monroe, N.Y. farmhouse, asked why the accused flesh-peddler didn't just save herself and give prosecutors the information they want. “I have a deep sense of loyalty and I'm Scottish." Gristina denied the criminal allegations during the teary interview, maintaining she was developing an online dating site where married men could meet single women. Whistleblower Key To Buyout Probe (WSJ) New York state Attorney General Eric Schneiderman's probe of tax practices at private-equity firms is based on information from a whistleblower, according to a person familiar with the matter. The information came from someone who approached Mr. Schneiderman's office between roughly nine months and a year ago, this person said. Under the state's False Claims Act, the attorney general can investigate alleged fraud against the state basedon a whistleblower's allegations. The ongoing probe is examining whether partners at private-equity firms changed management fees into investment income to delay tax payment and pay less—or avoid taxes altogether. Some private-equity firms use so-called management-fee conversions, while other firms avoid them. Wall Street Hopes for Romney, but Expects Obama to Win (CNBC) In an unscientific poll, 46 percent of respondents to the September CNBC Fed Survey said they expect President Obama to win reelection. Only 24 percent believe Republican Presidential Nominee Mitt Romney will get the job. Longtime Madoff Employee To Plead Guilty (Reuters) Irwin Lipkin, a former controller of Bernard L. Madoff Investment Securities LLC, will appear in Manhattan federal court on Th ursday, prosecutors said in a letter to the judge. He will plead guilty to charges of conspiracy to commit securities fraud and falsifying documents, prosecutors told U.S. District Judge Laura Taylor Swain in the letter. Suspect pulls gun on victim while having sex in a moving car (WNN) The incident began Sep. 2 when the victim and his two friends went to the Paddy Wagon Irish Pub in Port Charlotte. When the bar closed early Monday morning they invited two girls they met to one of the friend’s home on Atlas Street. One of the women and the victim went into a bedroom to have sex. The girl said she needed $250, which he said he didn’t have. She asked how much he had and he gave her $120. The victim then went to the bathroom and when he returned, found the two women had left the home. The victim had obtained the woman’s cell phone number earlier at the bar and called her; they agreed to meet at the Pick N Run store on Peachland Boulevard. When he got there he expected to meet the woman who took the $120. Instead, Linscott walked up to his Nissan Sentra and said the other girl ditched her. Linscott got into his car and as they drove off, he said she began touching him and having sex while he was driving. The victim told detectives she also said she needed money and he told her he already gave her friend $120 earlier. The victim said Linscott then put a .357 Taurus revolver to his head and demanded money. The victim grabbed the gun and a fight ensued in the moving car; he said he punched her in the head so she would release the gun. He told detectives he was in fear of his life and lost control of his car, struck a palm tree, went airborne and then ran across two front yards in the 1200 block of Dewhurst Street.

Opening Bell: 11.30.12

Germany Approves Greek Aid (WSJ) German parliamentarians approved with an overwhelming majority a package of new aid measures for Greece Friday, clinching support for a plan to close a €14 billion ($18.17 billion) gap in the heavily indebted nation's finances and to ready a near €44 billion tranche of promised aid. The vote shows that German Chancellor Angela Merkel has been able to consolidate the support of her center-right coalition of Christian Democrats and Free Democrats, many of whom have expressed skepticism that Greece can be saved without significant costs to German taxpayers. Her coalition voted 90% in favor of the measures. Leave "fairy world" behind, Draghi tells euro zone (Reuters) "We have not yet emerged from the crisis," Draghi told Europe 1 radio. "The recovery for most of the euro zone will certainly begin in the second half of 2013." "The crisis has shown that we were living in a fairy world," the ECB chief later added at a conference with top financial officials, pointing to the unsustainable debts, weak banks and poor policy coordination that gave birth to the crisis three years ago. Obama Takes ‘Fiscal Cliff’ on the Road; Republicans Stew (CNBC) President Barack Obama, reapplying his re-election campaign theme of protecting the middle class, heads to Pennsylvania on Friday suggesting that Republicans could spoil Christmas by driving the country over the "fiscal cliff." The president's road trip, visiting a factory that makes Hasbro's [HAS 38.60 --- UNCH] Tinkertoys, is infuriating Republicans. House Speaker John Boehner called it a "victory lap" as he rejected Obama's proposals to avoid the cliff, the combination of tax increases and spending cuts set to start taking effect in January. Berkshire Hathaway, CaixaBank Agree to Reinsurance Deal (WSJ) Berkshire Hathaway will pay CaixaBank SA million €600 million ($778.7 million) for the future cash flow from a portfolio of life insurance policies, the Barcelona-based bank said Friday, a rare dip into a fiscally stressed euro-zone country for the investment firm run by Warren Buffett. If You Like Late Nights, Try Being an Analyst in Hungary (WSJ) As the clock ticked toward midnight on a recent night, stock analyst Gergely Gabler sat sleepily in his pajamas at the small desk in his bedroom, waiting. Then, just after 12, he sprang into action, evaluating the newly released earnings report of Hungary's largest bank. For the next two hours, Mr. Gabler worked on a report about OTP Bank's performance for clients of his firm, Hungarian brokerage Equilor Investments, before catching some shut eye, only to awake about 3½ hours later so he could be in his office to field questions by 7 a.m. Burning the midnight oil is a painful quarterly tradition for analysts and financial journalists in Hungary, where the country's biggest blue-chip companies publish their results in the wee hours, after markets in New York have closed and long before they open anywhere in Europe. "I'm a night owl, so I don't mind staying up," Mr. Gabler said. The hard part, the 28-year-old said, is getting out of bed the next day. That morning, he grabbed a red-and-black can of Hell, a caffeine-laden Hungarian energy drink, to fuel his workday. Moody's Puts Aston Martin on Watch for Downgrade (NYT) “The review was prompted by a significant deterioration in Aston Martin’s liquidity profile as per end September 2012, caused by a much weaker cash generation and operating performance in the third quarter than anticipated by the company and compared to Moody’s expectations,” Falk Frey, a Moody’s analyst, said in a statement. Harvard Approves BDSM Group (Crimson) It started last October with a meal in Currier dining hall with a handful of friends who shared something in common: an affinity for kinky sex. More than a year after the group first began informally meeting over meals to discuss issues and topics relating to kinky sex, Harvard College Munch has grown from seven to about 30 members and is one of 15 student organization that will be approved by the Committee on Student Life this Friday. Michael, who was granted anonymity by The Crimson to protect his privacy, is the founder of Munch, an informal lunch or dinner meeting for people across the kink community. For him, the recognition will provide a sense of ease for current and future members, knowing they are receiving institutional support. “It’s a little hyperbolic for me to get teary-eyed and paternal about sophomores, but it’s really a joy to see the experience they will have now,” Michael said. Michael said there are many benefits to being officially recognized on campus such as being able to poster for events and promote Munch’s presence...But for Michael, the biggest advantage to being recognized comes with “the fact of legitimacy,” he said. “[Our recognition] shows we are being taken seriously.” Mae, a member of the organization who asked to be identified by her middle name, said since its formation the group has provided her with a comfortable space to discuss her interests. “I didn’t think that anyone was even remotely interested [in kink] on campus,” Mae said. “It’s a community where you can feel safe, and you can feel comfortable talking about [kink].” Cohen's Damage Control (NYP) Beleaguered hedge fund honcho Steve Cohen held a conference call yesterday for his roughly 1,000 employees to explain potential civil charges against his firm, SAC Capital Advisors. The call with SAC’s employees went over similar talking points as the call with investors the previous day, according to a person familiar with the call. In the latest call, officials notified employees that last week, the $14 billion Stamford, Conn., hedge fund received a Wells Notice from the Securities and Exchange Commission tied to trading by a former portfolio manager who was arrested Nov. 20 on insider trading charges. McDonald’s Starved for Ideas as Burger King Lures Diners (Bloomberg) Burger King has been excelling at a game McDonald’s worked to perfect years ago, introducing a steady stream of new menu items, such as snack wraps and gingerbread sundaes for the holidays. McDonald’s has “not had anything to talk about of substance,” Michael Kelter, a New York-based analyst at Goldman Sachs Group Inc., said in an interview. “People are going elsewhere.” Hong Kong IPOs Generate Little Excitement (WSJ) Hong Kong appears unlikely to regain its position as the world's top venue for initial public offerings anytime soon. In recent days, the city's biggest IPO in two years drew only lukewarm support, while another deal ran up against insufficient demand and a third was postponed. Recession Left Baby Bust as U.S. Births Lowest Since 1920 (Bloomberg) The country’s birth rate fell 8 percent from 2007 to 2010, according to a Pew Research Center report. The rate dropped 6 percent for U.S.-born women and plummeted 14 percent for foreign-born females since 2007, the onset of the worst economic downturn since the Great Depression. The decline continued last year to the lowest point since records began in 1920. Rogue caviar fugitive Mario Garbarino admits his guilt in fishy egg smuggling scheme (NYDN) Isidoro (Mario) Garbarino, 69, who went on the lam 23 years ago pleaded guilty Thursday to smuggling $10 million worth of Russian and Iranian savruga and beluga to New York more than two decades ago. Garbarino’s plea deal requires him to pay $3 million in restitution. He also faces up to four years in prison when he is sentenced in January. Garbarino, a supplier to fancy gourmet shops including Zabar's, was indicted in 1987 for cheating the government on import duties. Feds say his Bronx company, Aquamar Gourmet Imports, engaged in an elaborate scheme to smuggle more than 100,000 pounds of the expensive delicacy from 1984 to 1987. As part of the plot, Garbarino switched the high-quality caviar with much cheaper American caviar which he then sold to Pan Am, other airlines and cruise ships operators as the real thing. In 1989, Garbarino fled. He was nabbed two months ago in Panama and extradited to New York. "Isidoro Garbarino ran his high-end importation business in a low-end way — cheating the government out of millions of dollars in tax revenues and defrauding his international clients who paid top dollar for exotic caviar they did not receive," said Manhattan U.S. Attorney Preet Bharara...Garbarino admitted he “occasionally misrepresented the nature of the caviar” to avoid paying the required taxes.

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: 04.01.13

Central Bank Details Losses at Bank of Cyprus (WSJ) Cyprus's central bank spelled out the financial damage to big deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying they will lose almost 40% of their deposits as a result of a sweeping restructuring of the lender. Losses could grow even steeper in the months ahead. In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits over €100,000 ($128,700) will immediately be converted into a special class of shares at the lender as part of its recapitalization plan. As Banks in Cyprus Falter, Other Tax Havens Step In (NYT) Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country's oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing countries are circling. With a flood of e-mails and phone calls in recent days to lawyers and accountants here who make a living from helping wealthy Russians and others avoid taxes, competitors in alternative financial centers across Europe and beyond are promoting their own skills at keeping money hidden and safe. In Herbalife Fight, Both Sides Prevail (WSJ) But for the time being, all three investors are in the black, showing that for all the bluster and bravado, timing is everything in financial markets. Mr. Loeb has cashed out the most, whereas the others have made only paper profits. Mr. Loeb's hedge-fund firm, Third Point LLC, has made at least $50 million on its estimated bet of more than $200 million, according to a person familiar with the firm. As of several weeks ago, the firm had largely exited its Herbalife stake, according to people familiar with Third Point. Mr. Icahn has made roughly $25 million in unrealized gains on his about $590 million bet. Mr. Ackman's Pershing Square Capital Management LP has notched more than $200 million, also in paper profits, on a bet of more than $1 billion. Insider Case Against SAC Manager May Be Tough to Prove (Reuters) On Friday, U.S. authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen's $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia. The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government. "What they're going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it," said Marc Greenwald, a former U.S. prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. "It all depends on what Horvath said he said and whether everybody believes him." Princeton alumna, who told female students to get married, defends provocative advice: ‘Find a husband!' (NYDN) "Here's what nobody is telling you," Patton wrote. "Find a husband on campus before you graduate. Yes, I went there." This controversial column, which she described as "little more than honest advice from a Jewish mother," outraged countless readers when it appeared in The Daily Princetonian on Friday and then went viral. "I sincerely feel that too much focus has been placed on encouraging young women only to achieve professionally," Patton told the Daily News. "I think in the back of their heads they all know this but nobody is saying it." Patton decided to write the open letter after speaking at a Women and Leadership conference on campus a few weeks ago. Many said Patton was scolding women for not marrying her youngest son, a junior at Princeton. ("I am the mother of two sons who are both Princetonians," she said. "My older son had the good judgment and great fortune to marry a classmate of his, but he could have married anyone. My younger son is a junior and the universe of women he can marry is limitless. Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.") Libor Suits by Bondholders Tossed Over Lack of Damages (Bloomberg) While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab, pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor. Michael Dell Said to Consider Blackstone LBO Only With CEO Guarantee (Bloomberg) In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm’s bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing and the two sides may not reach an understanding. Argentina sticks to its guns on debt payout (NYP) The country, in a filing late Friday, refused to follow a court order that mandated it give equal treatment to a group of holdout bondholders led by billionaire hedge fund manager Paul Singer and his Elliott Management. Instead, Kirchner offered the group, owed $1.44 billion, the same deal it offered exchange bondholders in 2010. Pregnant woman's leg amputated after being hit with car (KHOU) The incident happened in the 9600 block of Ravensworth Drive, where Kelly, 21, lives with her boyfriend, Christopher Chaney. Chaney said his ex-girlfriend, 26-year-old Shareyll Hunter, showed up at the house Thursday morning and started arguing with Kelly. "I was in my house asleep, and then one of my kids’ mothers came," Chaney said. "I mean, they been texting and talking over the phone saying they want to fight each other and meet up right here and do it." All of the commotion outside roused Chaney from bed. "When I came outside, I seen my kids’ mother punching on the window and she wanted to fight the other one," Chaney said. He said Hunter jumped into his car and gunned it, pinning her 21-year-old rival between the car and the house, police said. Kelly was rushed to the hospital with two broken legs. Doctors had to amputate one leg. The baby is expected to be OK. Hunter drove off in her ex-boyfriend’s four-door Lincoln LS. She remained on the loose at last check. Hunter is five months pregnant and the victim is four months pregnant. Chaney, 26, says he is the father in both cases. Reporter: "You think it [the hit-and-run] is because of you getting them pregnant?" Christopher Chaney: "I mean, I’m handsome."

Opening Bell: 11.07.12

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

Opening Bell: 02.05.13

Barclays CEO Vows To Improve Bank's Ethics (WSJ) Chief Executive Antony Jenkins said Tuesday he is "shredding" the legacy of the bank's self-serving culture by improving its ethics and moving beyond the misconduct issues that have cost it billions of pounds. Mr. Jenkins told a U.K. parliamentary group that his efforts so far include changing the way employee bonuses are calculated and abolishing commissions on financial-product sales. He said the changes would take time to produce results, but that ultimately he wants to eliminate a culture that at times has been "too short-term focused, too aggressive and on occasions, too self-serving." "Our resolve and intent behind this is absolute," Mr. Jenkins said. McGraw-Hill, S&P Sued by U.S. Over Mortgage-Bond Ratings (Bloomberg) The U.S. Justice Department filed a complaint Monday in federal court in Los Angeles, accusing McGraw-Hill and S&P of mail fraud, wire fraud and financial institutions fraud. Under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, the U.S. seeks civil penalties that can be as high as $1.1 million for each violation. Earlier today, the company’s shares tumbled the most in 25 years when it said it expected the lawsuit, the first federal case against a ratings firm for grades related to the credit crisis. “It’s a new use of this statute,” Claire Hill, a law professor at the University of Minnesota who has written about the ratings firms, said in a phone interview today from Minneapolis. “This is not a line to my knowledge that has been taken before.” Dell Nears $25 Billion Deal To Go Private (WSJ) Late Monday, Mr. Dell was in talks with Microsoft Corp and private-equity firm Silver Lake Partners to offer shareholders between $13.50 and $13.75 a share, said people familiar with the matter, about a 25% premium to Dell's stock price in January before the possibility of a deal became public. The buyout, if approved by shareholders, would be the largest such deal since the financial crisis. It also would be an admission by Mr. Dell that he wasn't able to pull off the changes needed to improve his company's revenue and profit under Wall Street's glare. The buyout would give Mr. Dell the largest stake in the company, ensuring that the 47-year-old is the one who gets to oversee any changes. Gross: Beware 'Credit Supernova' Looming Ahead (CNBC) The head of the Pacific Investment Management bond giant has issued an ominous forecast in which he worries that the global central bank-induced credit bubble "is running out of energy and time." As a result, investors will have to get used to an atmosphere of diminishing returns and portfolios that will hold more hard assets like commodities and fewer less-tangible financial assets like stocks. "Our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic," Gross said in his February newsletter. Obama to Meet With CEOs of Goldman, Yahoo, Other Firms (Reuters) President Barack Obama will meet with chief executives from 12 companies including Goldman Sachs Group's Lloyd Blankfein and Yahoo's Marissa Mayer on Tuesday to discuss immigration and deficit reduction, according to a White House official. "The president will continue his engagement with outside leaders on a number of issues, including immigration reform and how it fits into his broader economic agenda, and his efforts to achieve balanced deficit reduction," the official said Monday. Other chief executives include Arne Sorenson of Marriott International, Jeff Smisek of United Continental Holdings, and Klaus Kleinfeld of Alcoa. A Billion-Dollar Club And Not So Exclusive (NYT) an unprecedented number of high technology start-ups, easily 25 and possibly exceeding 40, are valued at $1 billion or more. Many employees are quietly getting rich, or at least building a big cushion against a crash, as they sell shares to outside investors. Airbnb, Pinterest, SurveyMonkey and Spotify are among the better-known privately held companies that have reached $1 billion. But many more with less familiar names, including Box, Violin Memory and Zscaler, are selling services to other companies. “A year from now that might be 100,” said Jim Goetz, a partner at Sequoia Capital, a venture capital business. Sequoia counts a dozen such companies in its portfolio. It is part of what he calls “a permanent change” in the way people are building their companies and financers are pushing up values. The owners of these companies say the valuations make them giddy, but also create unease. Once $1 billion was a milestone, now it is also a millstone. Bigger expectations must be managed and greater uncertainty looms. Donald Trump to sue Bill Maher after bet feud (Politico) Donald Trump filed a lawsuit Monday in California against liberal comic Bill Maher, suing him for $5 million after Trump says Maher did not follow through on a $5 million public bet he made on “The Tonight Show.” “I don’t know whether this case will be won or lost, but I felt a major obligation to bring it on behalf of the charities,” Trump said in a public statement first obtained by POLITICO. Last month, Maher said on NBC to Jay Leno that he would pay $5 million to Trump’s charity of choice if he provided a birth certificate proving that he’s not “spawn of his mother having sex with orangutan.” It was similar to an offer Trump made to President Barack Obama during the presidential campaign season, in which Trump wanted Obama to release his college records. Trump’s statement continued: “Bill Maher made an unconditional offer while offer while on The Jay Leno Show and I, without hesitation, accepted his offer and provided him with the appropriate documentation. Money-Market Funds Best By Excess Cash (WSJ) Money-market funds have a high-quality problem: investors are entrusting them with too much cash. The flood of money is prompting the funds, which buy short-term, top-rated debt, to seek higher returns in investments that until recently were seen as too risky, including French bank debt. Investors plowed $149 billion into U.S.-based money-market funds between the start of November and Jan. 30, bringing total assets under management to $2.695 trillion, close to the most since mid-2011, according to the Investment Company Institute. Knight Capital Group to Cut Workforce by 5 Percent (Reuters) Knight Capital, which recently agreed to be bought for $1.4 billion by Getco, will lay off 5 percent of its global workforce as part of efforts to restructure the automated trading firm, according to a regulatory filing released on Monday. FTC Corrects Language On Herbalife (NYP) The Federal Trade Commission yesterday corrected an earlier statement regarding a “law enforcement investigation” into Herbalife. In response to a Freedom of Information Act request by The Post, the FTC said some complaints against the company were withheld because the information was “obtained through a law enforcement investigation.” The agency said yesterday that the language in its letter accompanying the FOIA request was incorrect and it should have said that the exemption from disclosure was related to “foreign sources.” FTC spokesman Frank Dorman defined “foreign sources” as government entities, including law enforcement agencies, and the exemption relates to information-sharing between the FTC and these foreign government agencies. The FTC said that it “may not disclose any material reflecting a consumer complaint obtained from a foreign source if that foreign source has requested confidential information.” The agency said it could not confirm, or deny, an investigation into the nutritional supplements company. Hedge Fund Mogul, Swiss Villagers Clash Over Ski Slopes (Bloomberg) Since hotelier Tobias Zurbriggen can remember, the business of running Saas-Fee has been a local affair. Now, the Swiss ski resort neighboring the Matterhorn is feeling the heat from a New York-based financier. Edmond Offermann, a nuclear scientist turned millionaire working for hedge fund Renaissance Technologies LLC, invested 15 million Swiss francs ($16.4 million) in 2010 to revive Saas- Fee’s struggling ski-lift company. “It’s like a hobby, which completely got out of control,” Offermann, 53, said in an interview from Long Island, New York. He wants to shake things up by managing hotels and the ski-lift operator in one company controlled by a single chief executive. JPMorgan Joins Rental Rush For Wealthy Clients (Bloomberg) The firm’s unit that caters to individuals and families with more than $5 million, put client money in a partnership that bought more than 5,000 single family homes to rent in Florida, Arizona, Nevada and California, said David Lyon, a managing director and investment specialist at J.P. Morgan Private Bank. Investors can expect returns of as much as 8 percent annually from rental incomeas well as part of the profits when the homes are sold, he said. Man Allegedly Tries To Walk Out Of Costco With 24 Quarts Of Oil — Strapped To His Body (CBS) Jorge Sanchez, 35, was spotted about 4:30 p.m. trying to leave a Burbank Costco without paying for the oil. Store employees gave chase and officials said they lost Sanchez after he jumped a fence at the west side of the Costco parking lot. Burbank Police Sgt. Darin Ryburn told CBS2/KCAL9 reporter Andrea Fujii that nine of the 24 quarts were recovered during the foot chase. Authorities said Sanchez walked into the Costco and went straight to the oil aisle. He allegedly grabbed a couple of cases and emptied them. Said Ryburn, “He proceeded to hide the quarts of oil in his pants, socks, and in his shirt.” Sanchez was later apprehended near Beachwood Drive and Monterey Avenue, about eight blocks from the store. Officials said he was arrested on suspicion of burglary charges. Margo Martin was a witness to the apprehension. “All of a sudden, I hear ‘Get down on the ground’ and there is this man laying in our driveway.” Witnesses thought the man was running funny and weren’t sure why. Witness Manuel Atlas said, “He looked kind of heavy and out of shape.” Police said Sanchez was also running funny because he still had 15 quarts of oil strapped to him. Police said he used a bungee cord to strap the bottles down.

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."