Opening Bell: 04.26.12

Barclays Cautious Despite Investment Bank Gains (WSJ) In the first quarter of 2012 Barclays said total revenue fell 25% to £5.52 billion ($8.92 billion) from £7.34 billion a year before. The group recorded a net loss of £337 million for the quarter compared with net profit of £1.24 billion a year earlier. Chief Executive Bob Diamond said the business environment picked up in the second half of last year, but "frankly it remains quite challenging." Mr. Diamond warned that economic conditions across Europe and the U.K. had deteriorated since January, as the sugar rush caused by cheap loans dished out by the European Central Bank began to fade. "It was not a robust first quarter; it was only robust compared to the third and fourth quarter," Mr. Diamond said. "There is still slow economic growth around the world." Deutsche Bank Profit Drops On Debt Crisis (BW) The slowdown in April hasn’t been “significant” and Deutsche Bank needs to assess the effect of the Easter holidays on revenue, Chief Financial Officer Stefan Krause said today on a conference call. Pretax profit at Deutsche Bank’s investment banking unit fell to 1.72 billion euros in the first quarter from 2.29 billion euros a year earlier and compares with a 422 million loss in the fourth quarter. That beat the 1.64 billion-euro average estimate of eight analysts. More Americans Than Projected Filed Jobless Claims Last Week (Bloomberg) Jobless claims fell by 1,000 to 388,000 in the week ended April 21 from a revised 389,000 the prior period that was the highest since early January, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg News called for a drop to 375,000. SEC Faces Questions About Tipster Policy (WSJ) "Whistleblowers are essential to root out fraud and malfeasance," the senator wrote in a letter sent Wednesday afternoon to SEC Chairman Mary Schapiro and reviewed by the Journal. "I am concerned that the SEC may not be properly protecting the identity of whistleblowers and others who come to the SEC with information on securities law violations." La Guardia flights delayed when dog flees Delta jet and sprints to runway (NYP) A puppy took flight at La Guardia Airport yesterday, speeding down a busy runway and dodging planes and a posse of desperate pursuers. Taxiing airliners ground to a screeching halt, giving their passengers front-row views of the spectacle that at one point saw a frustrated worker get down on his hands and knees in an unsuccessful attempt to convince the 14-month-old Rhodesian ridgeback, named Byrdie, to surrender. In a final fit of desperation, Port Authority cops pulled the dog’s owner, Austin Varner, off her Delta flight and drove her out to the tarmac. Byrdie broke free while being loaded on the plane in a kennel at around 10:20 a.m. — and the 70-pound pooch made a beeline down the tarmac. An air-traffic controller barked into his radio, “We got a dog running like crazy down there.” Former Morgan Stanley Exec Pleads Guilty In Anti-Bribery Case (Reuters) A former Morgan Stanley executive pleaded guilty to conspiring to evade internal controls required by a US anti-bribery law, in a case that underlines the fall of a once high-flying dealmaker for the firm in China. Garth Peterson, who was a managing director in Morgan Stanley’s real estate investment and fund advisory business, also settled yesterday related charges with securities regulators, and agreed to roughly $3.7 million in sanctions and a permanent bar from the industry. Peterson secretly arranged to have millions paid to himself and a Chinese official and disguised the payments as finder’s fees charged to Morgan Stanley, regulators said. Geithner Warns Of Economic Risks (Bloomberg) Treasury Secretary Tim Geithner is warning that the US economy faces risks from the “severe and protracted crisis” in Europe while the feud with Iran has put upward pressure on oil prices. He added the economy will encounter a “fiscal cliff” at the end of the year when large spending cuts and tax increases are set to take effect. “That cliff presents a risk, but it also provides an opportunity for bipartisan agreement Bernanke Says Prepared To Do More As Policy Unchanged (Bloomberg) “We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Additional bond-buying is still “very much on the table.” Bull Market For Chicken Feed (WSJ) In case you were wondering: "Futures for soybean meal, the protein in feed that makes broilers plump and juicy, are up 34% so far this year. Prices for the yellow powder, a soybean byproduct that resembles wheat germ, are outpacing the likes of crude oil and gold." In Mayfair, outrage over tire-slashing arrest (Philly) It was a little more than two months ago when a 44-year-old butcher named David Toledo had a message for the vandal who was slashing car tires up and down his block of Aldine Street and on nearby streets in his Holmesburg neighborhood. “I feel like butchering the one who is doing this,” Toledo said shortly after reporting to police that all four tires on his Jeep Cherokee had been slashed, just one week after the same thing had happened to his wife’s car. Wednesday night, Toledo’s outraged neighbors had a message for him: Back at ya, pal. The news that police had arrested Toledo in connection with the wave of tire slashings that had plagued parts of the Northeast angered and infuriated his neighbors, as they spilled out onto front steps on a bright spring evening to gossip and to vent. Adding insult to the injured tires is the fact that Toledo had been arguably the most vocal neighbor in speaking out against the vandalism and in urging fellow residents to organize a community watch group to nab the slasher.
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Barclays Cautious Despite Investment Bank Gains (WSJ)
In the first quarter of 2012 Barclays said total revenue fell 25% to £5.52 billion ($8.92 billion) from £7.34 billion a year before. The group recorded a net loss of £337 million for the quarter compared with net profit of £1.24 billion a year earlier. Chief Executive Bob Diamond said the business environment picked up in the second half of last year, but "frankly it remains quite challenging." Mr. Diamond warned that economic conditions across Europe and the U.K. had deteriorated since January, as the sugar rush caused by cheap loans dished out by the European Central Bank began to fade. "It was not a robust first quarter; it was only robust compared to the third and fourth quarter," Mr. Diamond said. "There is still slow economic growth around the world."

Deutsche Bank Profit Drops On Debt Crisis (BW)
The slowdown in April hasn’t been “significant” and Deutsche Bank needs to assess the effect of the Easter holidays on revenue, Chief Financial Officer Stefan Krause said today on a conference call. Pretax profit at Deutsche Bank’s investment banking unit fell to 1.72 billion euros in the first quarter from 2.29 billion euros a year earlier and compares with a 422 million loss in the fourth quarter. That beat the 1.64 billion-euro average estimate of eight analysts.

More Americans Than Projected Filed Jobless Claims Last Week (Bloomberg)
Jobless claims fell by 1,000 to 388,000 in the week ended April 21 from a revised 389,000 the prior period that was the highest since early January, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg News called for a drop to 375,000.

SEC Faces Questions About Tipster Policy (WSJ)
"Whistleblowers are essential to root out fraud and malfeasance," the senator wrote in a letter sent Wednesday afternoon to SEC Chairman Mary Schapiro and reviewed by the Journal. "I am concerned that the SEC may not be properly protecting the identity of whistleblowers and others who come to the SEC with information on securities law violations."

La Guardia flights delayed when dog flees Delta jet and sprints to runway (NYP)
A puppy took flight at La Guardia Airport yesterday, speeding down a busy runway and dodging planes and a posse of desperate pursuers. Taxiing airliners ground to a screeching halt, giving their passengers front-row views of the spectacle that at one point saw a frustrated worker get down on his hands and knees in an unsuccessful attempt to convince the 14-month-old Rhodesian ridgeback, named Byrdie, to surrender. In a final fit of desperation, Port Authority cops pulled the dog’s owner, Austin Varner, off her Delta flight and drove her out to the tarmac. Byrdie broke free while being loaded on the plane in a kennel at around 10:20 a.m. — and the 70-pound pooch made a beeline down the tarmac. An air-traffic controller barked into his radio, “We got a dog running like crazy down there.”

Former Morgan Stanley Exec Pleads Guilty In Anti-Bribery Case (Reuters)
A former Morgan Stanley executive pleaded guilty to conspiring to evade internal controls required by a US anti-bribery law, in a case that underlines the fall of a once high-flying dealmaker for the firm in China. Garth Peterson, who was a managing director in Morgan Stanley’s real estate investment and fund advisory business, also settled yesterday related charges with securities regulators, and agreed to roughly $3.7 million in sanctions and a permanent bar from the industry. Peterson secretly arranged to have millions paid to himself and a Chinese official and disguised the payments as finder’s fees charged to Morgan Stanley, regulators said.

Geithner Warns Of Economic Risks (Bloomberg)
Treasury Secretary Tim Geithner is warning that the US economy faces risks from the “severe and protracted crisis” in Europe while the feud with Iran has put upward pressure on oil prices. He added the economy will encounter a “fiscal cliff” at the end of the year when large spending cuts and tax increases are set to take effect. “That cliff presents a risk, but it also provides an opportunity for bipartisan agreement

Bernanke Says Prepared To Do More As Policy Unchanged (Bloomberg)
“We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target,” he said at a press conference today following a meeting of the Federal Open Market Committee in Washington. Additional bond-buying is still “very much on the table.”

Bull Market For Chicken Feed (WSJ)
In case you were wondering: "Futures for soybean meal, the protein in feed that makes broilers plump and juicy, are up 34% so far this year. Prices for the yellow powder, a soybean byproduct that resembles wheat germ, are outpacing the likes of crude oil and gold."

In Mayfair, outrage over tire-slashing arrest (Philly)
It was a little more than two months ago when a 44-year-old butcher named David Toledo had a message for the vandal who was slashing car tires up and down his block of Aldine Street and on nearby streets in his Holmesburg neighborhood. “I feel like butchering the one who is doing this,” Toledo said shortly after reporting to police that all four tires on his Jeep Cherokee had been slashed, just one week after the same thing had happened to his wife’s car. Wednesday night, Toledo’s outraged neighbors had a message for him: Back at ya, pal. The news that police had arrested Toledo in connection with the wave of tire slashings that had plagued parts of the Northeast angered and infuriated his neighbors, as they spilled out onto front steps on a bright spring evening to gossip and to vent. Adding insult to the injured tires is the fact that Toledo had been arguably the most vocal neighbor in speaking out against the vandalism and in urging fellow residents to organize a community watch group to nab the slasher.

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Opening Bell: 12.07.12

SEC Warns Netflix CEO Over Facebook Post (WSJ) Mr. Hastings boasted on his Facebook page in July that Netflix exceeded 1 billion hours of video streaming in a month for the first time. The post may have violated rules of fair disclosure, the SEC said. The SEC said it may also issue a cease-and-desist proceeding against Netflix and Mr. Hastings. Mr. Hastings responded in another Facebook post Thursday. He said further disclosure at the time wasn't necessary because he has more than 200,000 subscribers to his Facebook page, which makes it a "very public" forum. Netflix had also disclosed on its blog in June that it was nearing the 1 billion streaming hours milestone, he said. Mr. Hastings, who is also on the board of Facebook, added that, at any rate, such information isn't a "material" event to investors. Germany's Central Bank Cuts Forecasts (WSJ) "The cyclical outlook for the German economy has dimmed [and] there are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013," the Bundesbank said in its monthly report. In its semiannual economic projections, the central bank slashed its forecast for German growth next year to 0.4% from its previous estimate of 1.6% in June. It also lowered its forecast for 2012 growth to 0.7% from 1.0%. Moody's: It's Deal Or Die (NYP) The American economy will fall into “severe recession by the spring” unless Congress lessens the tax increases and spending cuts that are set to begin in January, said Mark Zandi, chief economist at Moody’s Analytics. “We’ve got to nail this down; uncertainty is killing us,” Zandi told lawmakers yesterday at a Joint Economic Committee hearing in Washington...If Congress were to “kick the can down the road” by extending the current tax-and-spend policies, Zandi predicted the US would lose its Aaa rating because “it would signal that the political will is lacking to put the nation on a sustainable fiscal path.” Fiscal Cliff? France Has ‘Fiscal Mountain’: PPR CEO (CNBC) The head of one of France's biggest companies has warned that France's problems dwarf those of the U.S. in an interview with CNBC. Francois-Henri Pinault, chief executive of luxury goods company PPR, said: "When we talk about the fiscal cliff in France it's a mountain, it's much higher than a cliff. And when it comes to France the only solution that has been put on the table is tax raises, nothing about cutting expenses. So it's a completely different situation." Greece sticks to buyback plan, says will shield banks (Reuters) Greece says it is sticking to plans to close its offer to buy back its own bonds from investors on Friday in a deal that should meet a debt writedown target set by its international lenders. The government said it would shield the country's banks from any lawsuits over losses booked if they take part in the buyback. The buyback, part of a broader debt relief package worth 40 billion euros ($52 billion) agreed by Greece's euro zone and International Monetary Fund lenders last month, is central to efforts to bring its debt to manageable levels. Judge: Ganek, Steinberg conspirators (NYP) Manhattan federal judge Richard Sullivan yesterday ruled that SAC Capital money manager Michael Steinberg and Level Global co-founder David Ganek can be named co-conspirators in the current insider trading case unfolding downtown. Neither Steinberg nor Ganek has been charged in the case, but the ruling lets prosecutors submit their e-mails and instant messages as evidence in their case against Todd Newman, a former portfolio manager at Diamondback, and Anthony Chiasson, Ganek’s former Level Global partner. The feds have accused Chiasson and Newman of improperly profiting off insider tips on Dell and Nvidia. Chiasson lawyer Greg Morvillo objected, saying that Chiasson’s former analyst Sam Adondakis, who pleaded guilty, testified that he never told Ganek he had an inside source at Dell. Judge Sullivan said the evidence is “certainly circumstantial” but sufficient enough for the government’s request to be granted. Sullivan cited the “precise information” Ganek had received leading up to Dell’s earnings as well as the “large trading positions” he authorized on the computer maker. The judge relied on three e-mail communications to implicate Steinberg, one of which he said made “clear references to keeping things on the down-low and being extra sensitive.” Burglary suspect calls 911 after Springtown homeowner holds him at gunpoint (DN) In a strange flip of events, a burglary suspect called 911 early Tuesday to report that he was being held at gunpoint by a Springtown homeowner and his son. The homeowner called 911, too, but by then he was in control, holding him at gunpoint and demanding to know what he was doing in his home. “Just unlucky, I guess,” the man responded, according to a release from the Parker County Sheriff’s Department. The incident happened around 12:30 a.m. when the homeowner and his wife woke up to find an intruder in the bedroom of their home in the 100 block of Lelon Lane. The suspect, identified as 41-year-old Christopher Lance Moore of Bedford, left the home and sat in his GMC pickup, parked in the family’s driveway. The homeowner followed him with a pistol, took the suspect’s keys and blocked his getaway with his own vehicle, while his stepson trained a shotgun on Moore, Fox 4 News reports. “If he gets out of the truck, shoot him in the legs,” James Gerow told his son. “You ain’t gotta kill him; just shoot him in the legs. … If he’d got out, I’d have expected him to shoot him.” When deputies arrived, both men were on the phone with 911. Deputies asked Moore why he had broken into the home, to which he merely said he had “bad intentions.” Morgan Stanley Alters Broker Pay Plan as Revenue Bonus Takes Hit (Bloomberg) Morgan Stanley, the brokerage with the biggest corps of financial advisers, changed its wealth- management compensation plan to encourage brokers to increase revenue and allow them to buy discounted stock. The 2013 program pays a bonus of 2 to 5 percentage points of revenue for advisers who bring in new assets and are in the top 40 percent in revenue growth, according to terms outlined in a summary obtained yesterday by Bloomberg News. That comes at the expense of a 2 percentage-point reduction in the revenue bonus paid to all brokers who generate at least $750,000. JPM Bonus Bummer (Bloomberg) JPMorgan Chase’s bonus pool for the corporate and investment bank may shrink as much as 2 percent this year as the firm completes performance reviews, three executives with direct knowledge of the process said. Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (Bloomberg) A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. Danger Lurks Inside The Bond Boom (WSJ) Amid the rush of bond deals, which already have topped $1 trillion in value, these managers—from BlackRock to Federated Investment Management Co.—are pointing to unusual wrinkles suggesting that now could be one of the most dangerous times in decades to lend to investment-grade companies. Interest rates are so low and bond prices so high, they warn, that there is little room left for gains. Some worry that even a small increase in interest rates—a traditional enemy of bond returns—could eat away at bond prices. College Student Poisons Roommate's Iced Tea With Bleach Following Argument (DM) A college student faces 15 years in jail after she allegedly sprayed bleach into her roommate's iced tea. Kayla Ashlyn Bonkowski, 19, was charged with felony poisoning and appeared in court on Wednesday. She reportedly told police that she had put chemicals in the drink following an argument about cleaning the dishes with her 20-year-old roommate Emily Joseph. The poisoning occurred on November 7 at the students' apartment in Union Township, located near the Mount Pleasant school of Central Michigan University, authorities said. Miss Joseph was taken to hospital for treatment but later released. After she filed a complaint, Bonkowski was arrested. The 19-year-old 'verbally admitted' to police that she put bleach in the drink because 'Joseph is mean', according to ABC. She was arraigned on Wednesday at 2pm before posting $2,000 bond. She entered a plea of not guilty to the charge of poisoning a food, drink, medicine or water supply. The college student faces up to 15 years in prison. Reached by e-mail, Bonkowski said on Wednesday morning that she needed to consult with a lawyer before commenting.

Opening Bell: 04.24.12

Dubai Debtors Go on Hunger Strike (FT) About 20 jailed foreign businessmen have gone on hunger strike in Dubai to protest against lengthy sentences for writing checks that bounced, a criminal offence in the United Arab Emirates. “I’ve exhausted every avenue that I can see,” Peter Margetts, 48, a former property developer, told the Financial Times from a prison pay phone. “I’ve exhausted the legal system, the lawyers have their hands tied here and they’re not going to rock the boat.” Mr. Margetts is one of three British prisoners who started a hunger strike on Sunday. Other jailed businessmen come from Ireland, Saudi Arabia, Bahrain, Lebanon, India and Pakistan. Many of the hunger strikers fell victim to Dubai’s once-thriving real estate market, struggling to meet their payments when boom turned to bust in 2008. Twelve face sentences of more than 20 years because each bounced check can translate into a jail term of up to three years. Wall Street Promotes Junk Bonds as Europe Erupts (Bloomberg) Morgan Stanley said last week that U.S. high-yield obligations were in a “sweet spot” as borrowers cut their debt loads. JPMorgan said junk yields will fall more than half a percentage point by year-end. Bank of America favors debentures rated in the middle tier of speculative grade. Gains on U.S. high-yield, high-risk bonds, which are little changed since the end of February, are set to accelerate as central banks respond more aggressively to contain Europe’s fiscal imbalances, Morgan Stanley and JPMorgan said. While forecasting the default rate will rise this year, Moody’s Investors Service says the figure will stay below historic averages. Facebook's Growth Slows (WSJ) In what is likely to be the last snapshot of its financial condition before the expected May IPO, Facebook disclosed Monday that its first-quarter profit and revenue declined from the final quarter of 2011...The company's first-quarter revenue was $1.06 billion, down 6% from the December quarter. In a regulatory filing, the company blamed the decline on "seasonal trends" in the advertising business and user growth in markets where Facebook generates less revenue per user. CIT Group Swings To A Loss (WSJ) CIT Group, the business lender that emerged from bankruptcy more than two years ago, posted a wider-than-expected loss of $446.5 million in the first quarter as costs tied to debt repayments weighed on earnings. CIT's lending activity increased, though, and its profit margins on loans improved from a year earlier, a trend that should continue as its efforts to slash debt helps reduce its funding costs in the long run. "We made further progress this quarter positioning CIT for profitability and growth," John Thain, the long-time Wall Street executive who took the helm of CIT in 2010, said in a statement. Harbinger Pays Early (AP) Phil Falcone’s Harbinger Capital Partners made a $48 million payment on its $190 million loan from Jefferies Group, avoiding a forced sale of assets of his hedge fund, according to a person familiar with the fund. The payment was made a week early and a half million dollars more than what’s due on April 30. Falcone raised money for the loan by selling some investments, said the person. Father And Son Ran 'Brothel On Wheels' (NYP) A father and son from Queens ran a lucrative — and cruel — brothel on wheels for two decades, using six livery drivers to deliver hookers to hotels and apartments, Manhattan prosecutors said today in announcing the ring’s breakup...Johns on the go could purchase and enjoy a sex act without ever leaving the back seat, officials said of the operation, quoting the price scale at $200 to $500 per customer. Business was good — one woman alone allegedly earned half-a-million dollars for the father and son last year, and the Georges employed five women at the time of the bust, officials said. But as nice as they were to customers, the alleged father and son pimps were nasty to their prostitutes, threatening them, giving them little money so as to keep them helpless and even branding them with tattoos — including a bar code on one woman’s neck, according to officials. At least one of the women had a heart tattoo on her breast with the word “Vee,” which is the dad’s nickname. At least three of the women had tattoos featuring the son’s nickname, “King Koby.” Calpers Scalpers (NYP) The former head of the nation’s biggest pension defrauded funds run by private-equity titan Leon Black’s Apollo Global Management to pay a pal’s placement agencies $20 million, a lawsuit filed yesterday charged. Federico Buenrostro, the CEO of the $235 billion California Public Employees’ Retirement System from 2002 to 2008, teamed up with buddy Alfred Villalobos’ Arvco Capital Research on a scheme to pocket the boatload of fees from Apollo, the Securities and Exchange Commission charged in a civil suit filed in a Nevada federal court. Villalobos was the deputy mayor of Los Angeles in 1993. It is charged that the two ginned up fake “disclosure letters” and sent them to Apollo, making it appear that Calpers OK’d the payment when, in fact, it had not. The two used the fake letters four times, the suit alleges. Judge: DA Can Subpoena Occupy Protester Tweets (NBC) A judge says an Occupy Wall Street protester can't stop prosecutors from getting his tweets as part of a case surrounding his arrest at a demonstration. A Manhattan criminal court judge ruled Friday there are reasonable grounds to believe the information is relevant. The judge also says Malcolm Harris can't legally challenge the subpoena sent to Twitter Inc., not him. Harris was among more than 700 demonstrators arrested Oct. 1 on the Brooklyn Bridge. Wal-Mart Said To Be Subject Of US Criminal Probe (Bloomberg) The Justice Department is investigating potential criminal charges under the U.S. Foreign Corrupt Practices Act, according to the person familiar with the probe who wasn’t authorized to speak publicly about it. Wal-Mart is conducting its own review of allegations that its representatives paid local officials in Mexico to get stores opened faster in the early 2000s. Chris Christie Not Happy With NJ Nets Move To Brooklyn (NYDN) As the Nets were preparing their farewell, the Governor of New Jersey was kicking them out the door. “I’m not going to the Nets game tonight and my message to the Nets is ‘Goodbye,’ ” Christie said. “If you don’t want to stay, we don’t want you. Seriously, I’m not going to be in the business of begging people to stay here. That’s one of the most beautiful arenas in America that they’ve had a chance to play in. It’s in one of the country’s most vibrant cities. “They want to leave here and go to Brooklyn? Good riddance. See you later.”

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: 04.18.13

Morgan Stanley Sees Core Earnings Weaken (WSJ) Morgan Stanley saw core earnings weaken, although the investment bank swung to a first-quarter profit as it benefited from a comparison with a year-earlier period bogged down by a heavy charge. For the quarter, the bank reported a profit of $984 million, compared with a year-earlier loss of $94 million. The per-share profit, which reflects the payment of preferred dividends, was 49 cents compared with a loss of six cents a year earlier. The latest period featured a decline in fixed-income trading revenue, but strong stock trading and continued improvements in Morgan Stanley's wealth-management division, which was buoyed by strong markets. ... Revenue jumped 18% to $8.16 billion. Excluding debt valuation, revenue was $8.48 billion. Analysts polled by Thomson Reuters most recently expected earnings, excluding debt-valuation adjustments, of 57 cents, on revenue of $8.35 billion. Blackstone First-Quarter Profit Rises on Fund Performance (Bloomberg) Blackstone Group LP (BX), the world’s biggest buyout firm, said first-quarter profit rose 28 percent as market gains lifted the carrying value of its holdings. Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, increased to $628.3 million, or 55 cents a share, from $491.2 million, or 44 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 53 cents a share, according to the average of 15 estimates in a Bloomberg survey. Barclays Head of Investment Banking Rich Ricci to Retire in June (Bloomberg) Barclays Plc’s Rich Ricci, the head of investment banking and one of the last members of former Chief Executive Officer Robert Diamond’s management team, will retire at the end of June. Ricci, 49, will be replaced by Eric Bommensath and Tom King, 52, as co-chief executive officers of corporate and investment banking in May, the London-based bank said in a statement today. “The market will see this as an inevitable and appropriate piece of transitioning,” said Ian Gordon, an analyst at Investec Plc (INVP) in London. “Few tears will be shed and the reshuffle will be broadly welcomed.” Special Report: The battle for the Swiss soul (Reuters) A sign on display in UBS's museum, from a bank founded in 1747 in the Italian-speaking part of Switzerland, could almost be Switzerland's mantra: "MASSIMA DISCREZIONE" it promises. Swiss bankers have long adhered to an unwritten code similar to that observed by doctors or priests. Bankers do not acknowledge clients in public for fear of exposing them as account holders; they often carry business cards with just a name, rather than bank or contact details; and, at least until the 1990s, they never advertised abroad. ... Even today, few Swiss like to discuss the fact that much of the country's prosperity was built on bankers helping foreigners evade taxes. Visitors should avoid personal questions, advises Communicaid, a consultancy which advises businesses on cross-cultural awareness. It would also be wise to steer clear of discussing "Swiss banks, money or Switzerland's military role in World War One or Two." Reinhart/Rogoff and Growth in a Time Before Debt (RortyBomb via Felix Salmon) Here is a simple question: does a high debt-to-GDP ratio better predict future growth rates, or past ones? If the former is true, it would be consistent with the argument that higher debt levels cause growth to fall. On the other hand, if higher debt "predicts" past growth, that is a signature of reverse causality. ... As is evident, current period debt-to-GDP is a pretty poor predictor of future GDP growth at debt-to-GDP ratios of 30 or greater—the range where one might expect to find a tipping point dynamic. But it does a great job predicting past growth. Ottawa sets up taxpayer-funded food truck in Mexico to promote Canadian cuisine (National Post) When author Anita Stewart first heard about the Canadian government’s new food truck parked in Mexico City, she laughed so hard she cried. The new Canada-branded, taxpayer-funded venture, which kicked off its three-week pilot project last week, is serving up a Mexican-ized version of poutine, using Oaxaca cheese instead of curds. Also on the menu are Alberta beef tourtière, and maple-glazed Albacore tuna. China Vows Wider Yuan Movement (WSJ) China's central bank plans to widen the yuan's trading band in the near future, People's Bank of China Vice Governor Yi Gang said Wednesday, suggesting that China's leaders will press ahead with change despite the surprise slowing of the economy. "The exchange rate is going to be more market-oriented," Mr. Yi said on a panel at the International Monetary Fund spring meetings in Washington. "I think in the near future we are going to increase the floating band even further." IMF warns on risks of excessive easing (FT) Extraordinarily loose monetary policy risks sparking credit bubbles that threaten to tip the world back into financial crisis, the International Monetary Fund warned on Wednesday. In its global financial stability report, the fund cautioned that policy reforms were needed urgently to restore long-term health to the financial system before the long-term dangers of monetary stimulus materialised. German Parliament Approves Bailout for Cyprus (WSJ) German Finance Minister Wolfgang Schäuble called the vote a "strong signal" by Germany in favor of the euro and the euro zone. The parliament also voted in favor of a seven-year extension of the maturity on European Financial Stability Facility loans for Ireland and Portugal with a large majority. SEC to Move Past Financial Crisis Cases Under New Chairman White (Bloomberg) Mary Jo White, the first former prosecutor to serve as chairman of the U.S. Securities and Exchange Commission, has pledged to run a “bold and unrelenting” enforcement program at the agency charged with regulating Wall Street. With financial crisis cases mostly done and some of the biggest insider-trading cases in history closed, White will have to chart a course into new areas to keep that pledge. White, who was sworn in last week, has already provided a few signals about what that might be. During her Senate confirmation hearing, she said she intends to focus on high- frequency and automated trading. She has also raised questions about a drop in the number of accounting fraud cases the agency has brought in recent years. Dispute in Hamptons Set Off by Effort to Hold Back Ocean (NYT) Soon after Hurricane Sandy hit last fall, Joshua Harris, a billionaire hedge fund founder and an owner of the Philadelphia 76ers, began to fear that his $25 million home on the water in Southampton might fall victim to the next major storm. So he installed a costly defense against incoming waves: a shield of large metal plates on the beach, camouflaged by sand. His neighbor, Mark Rachesky, another billionaire hedge fund founder, put up similar fortifications between his home and the surf. Chris Shumway, who closed his $8 billion hedge fund two years ago, trucked in boulders the size of Volkswagens. Across a section of this wealthy town, some residents, accustomed to having their way in the business world, are now trying to hold back the ocean. ‘Elvis’ is busted in ricin terror (NYP) The FBI last night busted a troubled Mississippi Elvis impersonator as the poison-wielding man who mailed ricin-laced letters to President Obama and two other officials. ... Despite his rock ’n’ roll hobby, Curtis shows his angry side on Facebook, where he lashes out in a conspiracy-filled rant. “I’m on the hidden front lines of a secret war,” he wrote. “They burned down my home, killed my dogs, my cat, my rabbit, blew up my 1966 Plymouth Valiant . . . and guess what? I am still a thorn in their corrupt anals! I will remain here until Jesus Christ decides it’s time for me to go.”

Opening Bell: 04.18.12

IMF Says Recovery Remains Fragile (WSJ) "An uneasy calm remains," IMF chief economist Olivier Blanchard said. "One has the feeling that any moment, things could well get very bad again." Worst Yet to Come as Crisis Rescue Cash Ebbs, Deutsche Bank Says (Bloomberg) The worst may be yet to come in the global financial crisis as the central bank spending that kept defaults low runs out, according to Deutsche Bank AG. Credit-default swap prices imply that four or more European nations may suffer so-called credit events such as having to restructure their debt, strategists led by Jim Reid and Nick Burns said in a note. The Markit iTraxx SovX Western Europe Index of contracts on 15 governments including Spain and Italy jumped 26 percent in the past month as the region’s crisis flared up. “If these implied defaults come vaguely close to being realised then the next five years of corporate and financial defaults could easily be worse than the last five relatively calm years,” the analysts in London said. “Much may eventually depend on how much money-printing can be tolerated as we are very close to being maxed out fiscally.” BNY Mellon Profit Falls as Record-Low Rates Cut Returns (Bloomberg) Net income fell to $619 million, or 52 cents a share, from $625 million or 50 cents, a year earlier, BNY Mellon said today in a statement. Analysts (BK) had expected the New York-based company to report a profit of 51 cents a share, according to the average of 15 estimates in a Bloomberg survey. Flat BlackRock Profit Tops Forecasts (WSJ) BlackRock reported a profit of $572 million, or $3.14 a share, compared with a year-earlier profit of $568 million, or $2.89 a share. Stripping out one-time items, per-share earnings rose to $3.16 from $2.96 a year ago. Revenue slipped 1.4% to $2.25 billion. Analysts expected earnings of $3.04 a share on $2.23 billion in revenue, according to a poll conducted by Thomson Reuters. Paulson Goes Short on German Bunds (FT) Paulson told investors in a call on Monday that he was betting against the creditworthiness of Germany, regarded in markets as among the safest sovereign borrowers, because he saw the problems affecting the euro zone deteriorating severely, said a person familiar with his strategy. Guy With Spreadsheet of Match.com ‘Prospects’ Says He Was Just Trying to Be Organized (Jezebel, earlier) "I work with spreadsheets a lot," he said. "It's a great additional tool. I work long days, go to the gym, go out on a couple of midweek dates or what not, get home late...how am I going to remember them? I'm not. So I made the spreadsheets. My comments aren't malicious or mean. This was an honest attempt to stay organized." He said he sent the spreadsheet to his date because "she works with spreadsheets a lot too" and she "seemed like a very sweet girl." Italy Puts Back Balanced Budget Goal by a Year (Reuters) Italy will delay by a year its plan to balance the budget in 2013 due to a weakening economic outlook, according to a draft document due to be approved by the cabinet of Prime Minister Mario Monti on Wednesday. The draft Economic and Financial document (DEF), which has been obtained by Reuters, raises the budget deficit forecasts for 2012-2014 and slashes this year's economic growth outlook. Bank of America Faces Bad Home-Equity Loans: Mortgages (Bloomberg) Bank of America, whose home- equity mortgage portfolio exceeds its stock market value, probably will say about $2 billion of junior loans are bad assets tomorrow even as some borrowers are still paying on time. That’s what Barclays Capital estimates the bank will report in its first-quarter results, following decisions by JPMorgan Chase, Wells Fargo and Citigroup to reclassify $4.1 billion of junior liens as nonperforming. In Facebook Deal For Instagram, Board Was Little Involved (WSJ) On the morning of Sunday, April 8, Facebook Inc.'s youthful chief executive, Mark Zuckerberg, alerted his board of directors that he intended to buy Instagram, the hot photo-sharing service. It was the first the board heard of what, later that day, would become Facebook's largest acquisition ever, according to several people familiar with the matter. Mr. Zuckerberg and his counterpart at Instagram, Kevin Systrom, had already been talking over the deal for three days, these people said. Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom's opening number, $2 billion, and whittled it down over several meetings at Mr. Zuckerberg's $7 million five-bedroom home in Palo Alto. Later that Sunday, the two 20-somethings would agree on a sale valued at $1 billion.

Opening Bell: 04.20.12

Gupta Lawyers Cite Fourth Goldman Insider (WSJ) Gary Naftalis, the lead attorney representing Mr. Gupta, said in court Thursday that prosecutors informed him late Wednesday night that federal prosecutors in Los Angeles were investigating another Goldman employee for passing inside information about two public companies to Mr. Rajaratnam. U.S. Investigates a Goldman Executive Over Insider Trading (Dealbook) The new evidence could help Mr. Gupta’s defense, by suggesting that Mr. Rajaratnam had other possible tipsters inside Goldman Sachs. The Goldman executive under investigation in California was not named. “The wrong man is on trial,” Gary P. Naftalis, a lawyer for Mr. Gupta, said in a previous hearing. Mr. Naftalis has called the government’s charges baseless. Bond Trading Surge Boosts Wall Street Banks (FT) Wall Street has enjoyed its best quarter for bond trading in two years, rounded off with a surge in revenues at Morgan Stanley and Bank of America, in spite of a steep decline in risk-taking and the introduction of new regulations. Morgan Stanley and BofA both beat expectations, with each bank’s fixed income, currencies and commodities businesses driving the outperformance. Credit Suisse said the five biggest banks generated combined revenues of $20bn from their so-called FICC divisions in the first three months of this year, the best since the start of 2010. “We’re all making significantly more amounts of money with less risk,” said Bruce Thompson, chief financial officer at BofA, whose FICC division’s revenues rise 10 per cent to $4.1bn, or 170 per cent higher than the miserable final quarter of last year. World’s Richest Worth $1 Trillion on Billionaire List (Bloomberg) Mexican telecommunications magnate Carlos Slim, 72, remains the richest person in the world, with a fortune of $68.8 billion, down $572.3 million for the day. Second is Microsoft Corp. (MSFT) co-founder Bill Gates, 56, with $62.7 billion, followed by Warren Buffett, who’s worth $44.6 billion. Mark Zuckerberg is 25th on the ranking. Based on a roughly $100 billion valuation the Menlo Park, California-based company was trading at in the private market when it ceased trading April 3, Zuckerberg may be worth $20.5 billion, or about 25 percent less than previous estimates, once Facebook holds its initial public offering. Barclays Investors Force Bonus Changes (FT) After a series of bruising meetings with Barclays’ biggest shareholders over the past few weeks, Bob Diamond, chief executive, volunteered on Thursday to forgo half his 2.7 million pounds bonus for 2011 until Barclays had improved profitability. In Euro Zone, Who Will Renege Budget Targets Next? (CNBC) France is likely to be the next country to move its budget goalposts, particularly if Socialist Francois Hollande gets into the Elysee in May, according to analysts and economists. The Netherlands is also believed to be in line for changes to its budget targets after an analyst at credit rating agency Fitch warned of possible negative risks to its rating from the country’s heavy debt pile and potential property market devaluation. “The Netherlands has a rather Anglo-Saxon tendency in terms of the property market, and now it’s risking a property bubble,” Jeremy Stretch, head of currency strategy at CIBC, said. “This all shows that problems are getting closer to the core and lapping at the toes of Germany.” Woman entitled to compensation for sex injury suffered on work trip, judge rules (AAP) A public servant servant injured on a work trip while having sex with an acquaintance in a motel room is entitled to compensation, a judge has ruled...The woman, who cannot be named for legal reasons, had challenged the rejection of her workers' compensation claim for facial and psychological injuries suffered when a glass light fitting came away from the wall above the bed as she was having sex in November 2007. The judge said the tribunal erred in finding it was necessary for the woman to show she had been taking part in an activity which led to her injury "which was expressly or impliedly induced or encouraged by her employer." “If the applicant had been injured while playing a game of cards in her motel room she would have been entitled to compensation” even though it could not be said her employer induced or encouraged that activity. Nine U.S. Banks Said to be Examined on Overdraft Fees (Bloomberg) The agency, which will decide by the end of the year whether to write new rules, is scrutinizing nine banks including JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC) and Bank of America Corp., said four people briefed on the examination. The inquiry focuses on how financial institutions persuade customers to enroll in what they call overdraft protection programs. Examiners are looking at online and mailed marketing material as well as scripts used by the banks’ customer-service representatives to determine whether they could be confusing to consumers, said the people. Lagarde: IMF loan for Egypt won't be enough (Reuters) Egypt's request for a $3.2 billion IMF loan will not be enough to meet the country's financial needs and will require additional resources from donor countries, the head of the International Monetary Fund said on Wednesday. "It will not be sufficient, and everybody knows that, so it will require other donors, other participants to also come to the table to help Egypt," IMF Managing Director Christine Lagarde told a news conference before the start of the IMF and World Bank meetings in Washington. "As is always the case, we will play the catalyst role that we always play," she added. Doritos tacos spur rebound in Taco Bell sales (NYP) Taco Bell's introduction of Doritos Locos Tacos in early March has been "enormously successful," Carucci told industry analysts Thursday, one day after Yum reported sharply higher first-quarter earnings on the strength of robust overseas sales and a rebound in its U.S. performance. Rollout of tacos that use shells made of Nacho Cheese Doritos came late in the first quarter, so their full impact will be felt in the current quarter. Taco Bell also said at the time of the rollout that Cool Ranch flavored shells are in the works.

Opening Bell: 08.07.12

Probe May Hit UK Bank's Clean Image (WSJ) Last week, Standard Chartered PLC Chief Executive Peter Sands told analysts that "our culture and values are our first and last line of defense." On Tuesday, allegations by a New York financial regulator that Standard Chartered hid illegal Iranian transactions seemed to breach that line, sending the lender's shares down and wiping £7.65 billion ($11.9 billion) off its market value. In the U.K., Mr. Sands has long been heralded as a voice of reason in the country's turbulent banking sector. The former consultant, who was named Standard Chartered CEO in 2006, regularly espoused the importance of sound governance and sensible investment. While several of its British peers were being bailed out by taxpayers, Mr. Sands was guiding the Asia-focused bank to record profits boosted by growing trade between emerging nations. The executive stressed the fact that Standard Chartered doesn't have an investment bank and didn't need European Central Bank cheap loans to keep its business ticking over. Italian's Job: Premier Talks Tough in Bid to Save Euro (WSJ) During an all-night European summit in June, Mario Monti, the Italian prime minister, gave German Chancellor Angela Merkel an unexpected ultimatum: He would block all deals until she agreed to take action against Italy's and Spain's rising borrowing costs. Ms. Merkel, who has held most of the euro's cards for the past two years, wasn't used to being put on the defensive. "This is not helpful, Mario," Ms. Merkel warned, according to people present. Europe's leaders were gathered on the fifth floor of the European Union's boxy glass headquarters in Brussels, about to break for dinner. "I know," Italy's premier replied. Bill Gross: Stay Away From Europe (CNBC) “Investors get distracted by the hundreds of billions of euros in sovereign policy checks, promises that make for media headlines but forget it’s their trillions that are the real objective,” Gross wrote. “Even Mr Hollande in left-leaning France recognizes that the private sector is critical for future growth in the EU. He knows that, without its partnership, a one-sided funding via state-controlled banks and central banks will inevitably lead to high debt-to-GDP ratios and a downhill vicious cycle of recession.” “Psst…investors: Stay dry my friends!” Gross said. Richest Family Offices Seeing Fastest Growth As Firms Oust Banks (Bloomberg Markets) They call it “money camp.” Twice a week, 6- to 11-year-old scions of wealthy families take classes on being rich. They compete to corner commodities markets in Pit, the raucous Parker Brothers card game, and take part in a workshop called “business in a box,” examining products that aren’t obvious gold mines, such as the packaging on Apple Inc.’s iPhone rather than the phone itself. It’s all part of managing money for the wealthiest families, says Katherine Lintz, founder of Clayton, Missouri- based Financial Management Partners, which runs the camp for the children of clients. Supplying the families with good stock picks and a wily tax strategy isn’t enough anymore. These days, it’s about applying the human touch, she says. Lintz, 58, is on to something. Her 22-year-old firm was No. 2 among the fastest-growing multifamily offices in the second annual Bloomberg Markets ranking of companies that manage affairs for dynastic clans, Bloomberg Markets magazine reports in its September issue. The assets that FMP supervises grew 30 percent to $2.6 billion as of Dec. 31, just behind Signature, a Norfolk, Virginia-based family office that expanded 36 percent in 2011 to $3.6 billion. MS Takes Trading Hit (NYP) Morgan Stanley, which had the largest trading-revenue drop among major US banks last quarter, lost money in that business on 15 days in the period, up from eight days a year earlier. Morgan Stanley traders generated more than $100 million on three days in the period, compared with seven days in the second quarter of 2011, the company said in a regulatory filing yesterday. None of the daily losses exceeded the firm’s value-at-risk, a measure of how much the bank estimates it could lose on 95 percent of days. Morgan Stanley had a 48 percent year-over-year decrease in trading revenue, excluding accounting gains, led by a 60 percent drop in fixed-income revenue. Former Lloyds Digital Security Chief Admits $3.76 Million Fraud (Bloomberg) Lloyds Banking Group's former head of digital banking fraud and security pleaded guilty to submitting false invoices totaling more than 2.4 million pounds ($3.76 million)...Jessica Harper admitted to submitting fake invoices between 2007 and 2011 and then laundering the proceeds, the CPS said. She will be sentenced on Sept. 21, and faces as long as 24 years in prison for the two charges, a CPS spokesman said, although she will get credit for the guilty plea. Ex Lehman Exec Requests Rehab To Avoid Jail Time (NYP) Former Lehman Brothers Co-Chief Operating Officer Bradley H. Jack, arrested twice in less than a year on charges of prescription forgery, said he is willing to undergo a program for drug and alcohol treatment to avoid prosecution. Jack applied for the program at a hearing yesterday in Connecticut Superior Court in Norwalk. Judge Bruce Hudock ordered a doctor’s report to determine if he is eligible for the new program, which the judge said would be “a rare event.” Fed Official Calls For Bond Buying (WSJ) Eric Rosengren, president of the Federal Reserve Bank of Boston, called on the Fed to launch an aggressive, open-ended bond buying program that the central bank would continue until economic growth picks up and unemployment starts falling again. His call came in an interview with The Wall Street Journal, the first since the central bank signaled last week that it was leaning strongly toward taking new measures to support economic growth. Mr. Rosengren isn't currently among the regional Fed bank presidents with a vote on monetary policy. Although all 12 presidents participate in Fed deliberations, only five join the seven Fed governors in Washington in the formal committee vote. Tokyo Exchange Glitch Halts Derivatives Trading (WSJ) The Tokyo Stock Exchange on Tuesday temporarily suspended all derivatives trading soon after the morning open due to an unidentified system problem, the second significant trading glitch on the exchange this year. Amazon Exec Swindled By Tom Petty Con Artist (NYDN) Brian Valentine simply wanted to give his wife the wedding present of a lifetime - a performance by Tom Petty and the Heartbreakers. The senior vice president of Amazon, instead, fell victim to fraud, losing a whopping $165,000 to a Las Vegas man who pretended to be a concert booking agent, the Smoking Gun reported. FBI agents arrested the fraudulent agent, Chad Christopher Lund, on Aug. 2 in Illinois, after a private investigator Valentine had hired found that Lund had skipped town. But the ordeal began almost ten months before in late 2011, a year after Valentine, 52, popped the question to fellow Amazon employee, Gianna Puerini, 39, according to a wire fraud complaint unsealed by the U.S. District Court. Valentine decided that he wanted the "Won't Back Down" singer to perform a set at the couple's wedding reception since he proposed to Puerini at a Petty concert in Seattle. He turned to the Internet, where he found the website of Lund's firm, lundlive.com, boasting to have booked acts like Petty, Run-DMC and Ludacris. Lundlive.com no longer exists. Valentine connected with Lund over email and by October 2011, Lund told the Amazon exec that he had negotiated with Petty's representatives "down to a price of $330,000 for the performance." Later in the month, Lund sent Valentine a contract with the forged signature of Petty's manager, Tony Dimitraides. Valentine sent Lund a $165,000 down payment in return. Valentine finally uncovered the fraud in early April 2012, when the wedding was just three months away. He contacted Petty's management to discuss the performance only to find out that they had no idea about the planned appearance. "We have never heard of Chris Lund or his agency," Dimitraides wrote in an email to Valentine. "We are not aware of any deal for Tom Petty to play Seattle in July and I have never signed a contract for any such." "It looks like you have been defrauded."

Opening Bell: 07.23.12

Prosecutors, regulators close to making Libor arrests (Reuters) U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rigging scandal...Defense lawyers, some of whom represent suspects, said prosecutors have indicated they plan to begin making arrests and filing criminal charges in the next few weeks. Diamond Exit Fells Last Pillar In London’s Gekko Generation (Bloomberg) When Mervyn King and Adair Turner, the U.K.’s top two financial overseers, agreed to summon Barclays’s chairman to the Bank of England on July 2 and said they had lost confidence in Diamond, London’s best-known banker, they were making clear that the rules of the road had changed. “The signal to the City has got to be that if you behave badly you will be removed from your employment,” said Paul Myners, the government’s financial-services minister from 2008 to 2010 and former chairman of Gartmore Investment Management Ltd. “It will send shivers down the spine of anybody who is up to no good.” Spain Bans Short-Selling For Three Months (Reuters) Spain's stock market regulator banned short-selling on all Spanish securities on Monday for three months and said it may extend the ban beyond Oct. 23. The ban, which will not apply to market makers, will apply to any operation on stocks or indexes, including cash operations, derivatives traded on platforms as well as OTC derivatives, the regulator said in a statement. Greece Should Pay Wages in Drachmas Says German Lawmaker (Reuters) "Greece should start to pay half of its civil service wages, pensions and other expenditures in drachmas now," Dobrint said. "A soft return to the old currency is better for Greece than a drastic move. Having the drachma as a parallel currency would allow the chance for economic growth to develop." All Eyes On Facebook Revenue (WSJ) Analysts polled by Thomson Reuters expect Facebook to report second-quarter revenue of $1.1 billion on earnings of 12 cents a share. Facebook needs to hit those marks to prove that it can grow into the $100 billion valuation that it gave itself in its IPO. The valuation implies Facebook will grow at a significant pace, said Citigroup analyst Mark Mahaney. Facebook's "business has been showing significant revenue-growth deceleration," he said. "The market valuation implies at least a stabilization of revenue growth this year and next year." Using Small Business Loans To Generate Big Profits (WSJ) At a recent group-lending meeting in the Kawangware slum, about 10 miles from downtown, Jackson Munyovi sought $350 to build a new shanty for his wife and two children. The 31-year-old welder asked fellow church congregants and friends to co-sign a loan to finance building materials. A church deacon vouched for the borrower's assets, including a few metal-shop machines and his marital bed, and Mr. Munyovi promised to repay the loan in six months, plus 8% interest. And with that, Equity Bank Group—one of Africa's most ambitious banks—snagged another customer. The Kenyan bank has enjoyed a booming business lending to people with little collateral beyond the potential disgrace of letting friends down. Equity executives aren't shy about a business model that leverages societal mores and shame—often the strongest collateral to be found on a continent where formal credit records are scarce beyond the biggest cities. Avenue Capital Places Faith In Eurozone (NYT) Now, even as Europe’s economic problems worsen and the markets punish giants like Spain and Italy, Mr. Lasry is betting on a long-term comeback for the Continent. This month, his hedge fund, Avenue Capital, finished raising nearly $3 billion for a fund that will invest in the debt of troubled European companies. He has committed roughly $75 million of his own money to the new fund. That’s still a small part of his estimated $1.3 billion fortune, but Mr. Lasry is among a coterie of hedge fund and private equity managers who are gambling that the euro zone will stay intact and revive over the long run. Wealth chief could be Morgan Stanley’s No.2 (NYP) Morgan Stanley CEO James Gorman may have found his No.2: Greg Fleming. That’s after Fleming, the president of Morgan Stanley Smith Barney and Morgan’s wealth management unit, proved to be the only bright spot in the firm’s otherwise disappointing second-quarter results...Gorman, 53, hasn’t anointed a second-in-command since he took over as CEO from John Mack back in 2009. But Morgan Stanley’s co-presidents of institutional securities, Colm Kelleher and Paul Taubman, and possibly CFO Ruth Porat (if she chooses to accept), are among those who could be named. Though still relatively new, having joined the company in 2009, Fleming has shown he’s a worthy contender for the crown. Tony Robbins ‘Firewalk Experience’ goes wrong (AP) Fire officials in California say at least 21 people were treated for burns after attendees of an event for motivational speaker Tony Robbins tried to walk on hot coals...at least three people went to a hospital and most suffered second or third-degree burns. Robbins was hosting a 4-day gathering called “Unleash the Power Within” at the San Jose Convention Center. Witnesses say on Thursday, a crowd went to a park where 12 lanes of hot coals were on the grass. Robbins’ website promotes “The Firewalk Experience” in which people walk on super-heated coals. Witness Jonathan Correll says he heard “screams of agony.”