Opening Bell: 05.17.12

White House Steps Up Push To Toughen Rules On Banks (WSJ) White House officials have intensified their talks with the Treasury Department in the days since J.P. Morgan's losses came to light, these people say—representing the first tangible political impact from a trading mess that has cost one of the nation's most prominent banks more than $2 billion...White House and Treasury officials are still determining whether the Volcker rule would have prevented the losses at J.P. Morgan, people familiar with the discussions said. Some of the president's political advisers are concerned that the J.P. Morgan trades, even if determined to violate the spirit of the rule, might slip through the regulatory net. From 'Caveman' To 'Whale' (WSJ) Even after Dynegy's holding company filed for bankruptcy protection on Nov. 7, the trade seemed like it still would be a loser for Mr. Iksil and J.P. Morgan. Only about six weeks remained until the trade was set to expire, and another company needed to default for J.P. Morgan to make money and the bullish hedge funds to lose out. Some traders took to calling Mr. Iksil a "caveman" for stubbornly pursing the trade. Mr. Iksil continued to bet against the index, however, and it soon weakened, causing a buzz among unhappy rivals, these traders say. "We called the trade the 'pain trade' and the 'widow maker'; it kept going down for no reason," said a trader at another firm, who called his broker and says he was told it was Mr. Iksil who was doing all the bearish trading. "It felt like Bruno was trying to wipe everyone out." Then on Nov. 29, in something of a shock, AMR Corp., American Airlines' parent company and one of the companies in the index, filed for bankruptcy protection. "People freaked out," recalls a hedge-fund trader. The index weakened significantly, allowing J.P. Morgan to rack up about $450 million in total profits from the trade, according to traders. Rival firms suffered similar-size losses. It capped a successful year for Mr. Iksil and his group, though the profits would be more than offset this year when they shifted to a more bullish tack on corporate credit, losing $2 billion-plus in the process. Goldman to Cash Out $1 Billion of Facebook Holding in IPO (Bloomberg) The investment bank and its funds will sell 28.7 million of the 65.9 million shares they own, more than twice the amount initially planned, Menlo Park, California-based Facebook said yesterday in a filing. The shares are being offered in a range of $34 to $38 apiece, meaning the stock being sold in this week’s IPO is valued between $975 million and $1.09 billion. SEC Probes Roles Of Hedge Fund In CDOs (WSJ) U.S. securities regulators are investigating hedge-fund firm Magnetar Capital LLC, which bet on several mortgage-bond deals that wound up imploding during the financial crisis, according to people familiar with the matter. While Magnetar has faced scrutiny over its role in various collateralized debt obligations, or CDOs, the Illinois firm itself now is a target of an investigation by the Securities and Exchange Commission, these people said. ECB Bars Access to Four Greek Banks (FT) The move raises the pressure on Greece to stick to its international bailout by highlighting the risk that eurozone central bankers could pull the plug on its financial system. It reflected ECB fears that a planned recapitalisation of Greece’s banks could be delayed. Greek Euro Exit Would Risk Asia Crisis-Style Rout, Zeti Says (Bloomberg) A Greek exit from the euro could cause contagion comparable to the Asian financial crisis, according to Malaysia’s central bank Governor Zeti Akhtar Aziz, who had first-hand experience of that turmoil. “The worst-case scenario is what we saw in Asia,” Zeti, 64, said in an interview with Bloomberg Television in Istanbul yesterday. “When one economy collapses, then the market usually moves on to focus on the next one, then there will be a contagion that will affect different countries that probably don’t deserve those kinds of consequences.” Strippers in Paris Go on Strike, Say Wages 'Miserable' (Reuters) The Crazy Horse, one of the most popular establishments of its kind in the world, said it was forced to cancel performances this week for the first time since the cabaret was created in 1951. The night club, which declined to give details on salary demands or current wages, said in a statement that it had always taken the wellbeing of its artists very seriously and that talks were continuing to resolve the dispute. "It's an exceptional place which has the specialty of presenting a fully naked show," Suzanne, one of the dancers, told RTL radio. "What's wrong is that we are asked to work 24 days per month for a pay that is worse than miserable," she said. JPMorgan’s Trading Loss Is Said to Rise at Least 50% (NYT) The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations. Several on FOMC Said Easing May Be Needed on Faltering (Bloomberg) The Federal Reserve signaled further monetary easing remains an option to protect the U.S. economy from the danger that lawmakers will fail to reach agreement on the budget or Europe’s debt woes worsen. Several members of the Federal Open Market Committee said new actions could be necessary if the economy loses momentum or “downside risks to the forecast became great enough,” according to minutes of the Federal Open Market Committee’s April meeting released yesterday in Washington. Judge Denies Gupta's Wiretap Motion (NYP) Ex-Goldman Sachs director Rajat Gupta lost his bid to get three key wiretaps tossed as evidence in his upcoming insider-trading trial. Manhattan federal judge Jed Rakoff gave tentative approval yesterday for the jury to hear the wiretaps, which are crucial to the government’s case against Gupta. A former head of McKinsey & Co., who also sat on Procter & Gamble’s board, Gupta is accused of feeding tips to ex-hedge funder Raj Rajaratnam, who began an 11-year prison term last October for insider trading. The taped conversations between Rajaratnam and his traders have him talking about tips from a unnamed leaker on Goldman’s board. Man protests restaurant's all-you-can-eat policy (TMJ4) A disturbance at a local restaurant when one man got upset that an all-you-can-eat fish fry didn't live up to its name. At 6'6" and 350 lbs, Bill Wisth admits he's a big guy who can pack it away more than most. And he wants one restaurant to make all-you-can-eat, all he can eat too. "It's false advertising," said Wisth to TODAY'S TMJ4. He was there Friday when the restaurant cut him off after he ate a dozen pieces. "Well, we asked for more fish and they refused to give us any more fish," recalled Wisth. The restaurant says it was running out of fish and patience; arguing Bill has been a problem customer before. They sent him on his way with another eight pieces, but that still wasn't enough. He was so fired up, he called the police. "I think that people have to stand up for consumers," said Wisth. Elizabeth Roeming is a waitress there and says they've tried to work with Bill over the years -- like letting him have a tab he still hasn't paid off. Bill isn't backing down, saying his fish fry fight isn't over. But in the end, even he had something nice to say. "They do have like some of the best pizza in town if you like deep dish pizza," said Wisth. He says he will picket every Sunday until the restaurant rethinks what happened.
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White House Steps Up Push To Toughen Rules On Banks (WSJ)
White House officials have intensified their talks with the Treasury Department in the days since J.P. Morgan's losses came to light, these people say—representing the first tangible political impact from a trading mess that has cost one of the nation's most prominent banks more than $2 billion...White House and Treasury officials are still determining whether the Volcker rule would have prevented the losses at J.P. Morgan, people familiar with the discussions said. Some of the president's political advisers are concerned that the J.P. Morgan trades, even if determined to violate the spirit of the rule, might slip through the regulatory net.

From 'Caveman' To 'Whale' (WSJ)
Even after Dynegy's holding company filed for bankruptcy protection on Nov. 7, the trade seemed like it still would be a loser for Mr. Iksil and J.P. Morgan. Only about six weeks remained until the trade was set to expire, and another company needed to default for J.P. Morgan to make money and the bullish hedge funds to lose out. Some traders took to calling Mr. Iksil a "caveman" for stubbornly pursing the trade. Mr. Iksil continued to bet against the index, however, and it soon weakened, causing a buzz among unhappy rivals, these traders say. "We called the trade the 'pain trade' and the 'widow maker'; it kept going down for no reason," said a trader at another firm, who called his broker and says he was told it was Mr. Iksil who was doing all the bearish trading. "It felt like Bruno was trying to wipe everyone out." Then on Nov. 29, in something of a shock, AMR Corp., American Airlines' parent company and one of the companies in the index, filed for bankruptcy protection. "People freaked out," recalls a hedge-fund trader. The index weakened significantly, allowing J.P. Morgan to rack up about $450 million in total profits from the trade, according to traders. Rival firms suffered similar-size losses. It capped a successful year for Mr. Iksil and his group, though the profits would be more than offset this year when they shifted to a more bullish tack on corporate credit, losing $2 billion-plus in the process.

Goldman to Cash Out $1 Billion of Facebook Holding in IPO (Bloomberg)
The investment bank and its funds will sell 28.7 million of the 65.9 million shares they own, more than twice the amount initially planned, Menlo Park, California-based Facebook said yesterday in a filing. The shares are being offered in a range of $34 to $38 apiece, meaning the stock being sold in this week’s IPO is valued between $975 million and $1.09 billion.

SEC Probes Roles Of Hedge Fund In CDOs (WSJ)
U.S. securities regulators are investigating hedge-fund firm Magnetar Capital LLC, which bet on several mortgage-bond deals that wound up imploding during the financial crisis, according to people familiar with the matter. While Magnetar has faced scrutiny over its role in various collateralized debt obligations, or CDOs, the Illinois firm itself now is a target of an investigation by the Securities and Exchange Commission, these people said.

ECB Bars Access to Four Greek Banks (FT)
The move raises the pressure on Greece to stick to its international bailout by highlighting the risk that eurozone central bankers could pull the plug on its financial system. It reflected ECB fears that a planned recapitalisation of Greece’s banks could be delayed.

Greek Euro Exit Would Risk Asia Crisis-Style Rout, Zeti Says (Bloomberg)
A Greek exit from the euro could cause contagion comparable to the Asian financial crisis, according to Malaysia’s central bank Governor Zeti Akhtar Aziz, who had first-hand experience of that turmoil. “The worst-case scenario is what we saw in Asia,” Zeti, 64, said in an interview with Bloomberg Television in Istanbul yesterday. “When one economy collapses, then the market usually moves on to focus on the next one, then there will be a contagion that will affect different countries that probably don’t deserve those kinds of consequences.”

Strippers in Paris Go on Strike, Say Wages 'Miserable' (Reuters)
The Crazy Horse, one of the most popular establishments of its kind in the world, said it was forced to cancel performances this week for the first time since the cabaret was created in 1951. The night club, which declined to give details on salary demands or current wages, said in a statement that it had always taken the wellbeing of its artists very seriously and that talks were continuing to resolve the dispute. "It's an exceptional place which has the specialty of presenting a fully naked show," Suzanne, one of the dancers, told RTL radio. "What's wrong is that we are asked to work 24 days per month for a pay that is worse than miserable," she said.

JPMorgan’s Trading Loss Is Said to Rise at Least 50% (NYT)
The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations.

Several on FOMC Said Easing May Be Needed on Faltering (Bloomberg)
The Federal Reserve signaled further monetary easing remains an option to protect the U.S. economy from the danger that lawmakers will fail to reach agreement on the budget or Europe’s debt woes worsen. Several members of the Federal Open Market Committee said new actions could be necessary if the economy loses momentum or “downside risks to the forecast became great enough,” according to minutes of the Federal Open Market Committee’s April meeting released yesterday in Washington.

Judge Denies Gupta's Wiretap Motion (NYP)
Ex-Goldman Sachs director Rajat Gupta lost his bid to get three key wiretaps tossed as evidence in his upcoming insider-trading trial. Manhattan federal judge Jed Rakoff gave tentative approval yesterday for the jury to hear the wiretaps, which are crucial to the government’s case against Gupta. A former head of McKinsey & Co., who also sat on Procter & Gamble’s board, Gupta is accused of feeding tips to ex-hedge funder Raj Rajaratnam, who began an 11-year prison term last October for insider trading. The taped conversations between Rajaratnam and his traders have him talking about tips from a unnamed leaker on Goldman’s board.

Man protests restaurant's all-you-can-eat policy (TMJ4)
A disturbance at a local restaurant when one man got upset that an all-you-can-eat fish fry didn't live up to its name. At 6'6" and 350 lbs, Bill Wisth admits he's a big guy who can pack it away more than most. And he wants one restaurant to make all-you-can-eat, all he can eat too. "It's false advertising," said Wisth to TODAY'S TMJ4. He was there Friday when the restaurant cut him off after he ate a dozen pieces. "Well, we asked for more fish and they refused to give us any more fish," recalled Wisth. The restaurant says it was running out of fish and patience; arguing Bill has been a problem customer before. They sent him on his way with another eight pieces, but that still wasn't enough. He was so fired up, he called the police. "I think that people have to stand up for consumers," said Wisth. Elizabeth Roeming is a waitress there and says they've tried to work with Bill over the years -- like letting him have a tab he still hasn't paid off. Bill isn't backing down, saying his fish fry fight isn't over. But in the end, even he had something nice to say. "They do have like some of the best pizza in town if you like deep dish pizza," said Wisth. He says he will picket every Sunday until the restaurant rethinks what happened.

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Opening Bell: 07.25.12

Sandy Weill: Break Up The Big Banks (CNBC) “What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.” He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be market-to-market so they’re never going to be hit.” Bank Of England Spotted Risks At JPMorgan (WSJ) More than a year before JPMorgan racked up billions of dollars in losses from bad trades in its London investment office, Bank of England officials raised concerns internally about potential risks arising from some of the office's activities, but didn't formally alert other regulators, according to people involved in the central bank's talks. In late 2010, employees at the central bank worried that the London arm of J.P. Morgan's Chief Investment Office had come to dominate some important corners of the city's financial markets—including residential mortgage-backed securities—and they were concerned about the potential impact that could have on the stability of U.K. markets, these people said. The concerns were relayed to a top central-bank oficial. But the Bank of England doesn't appear to have acted on the concerns or flagged them to regulators responsible for supervising J.P. Morgan. Private-equity bigs: no proof of bid-rigging (NYP) A handful of the country’s wealthiest and most powerful private-equity firms have asked a federal judge to toss an explosive investor lawsuit that claims the group conspired to rig the bids on $270 billion in deals over four years. The firms — including KKR, Bain Capital, Blackstone Group and Apollo Global Management — agreed not to bid on specific deals headed by a rival, thus fraudulently depressing the value of the deal. As a result, investors in those publicly-traded companies were short-changed. The group of 11 financial giants named in the suit, including Goldman Sachs and JPMorgan Chase, claim there is no evidence of a vast bid-rigging conspiracy. New York Fed Faces Questions Over Policing Wall Street (Dealbook) In recent years, the New York Fed has beefed up oversight. Under the president, William C. Dudley, the regulator has increased the expertise of its examiners and hired new senior officials. Even so, the JPMorgan debacle and the interest-rate investigation have raised questions about the New York Fed. They highlight how the regulator is hampered by its lack of enforcement authority and dogged by concerns that it is overly cozy with the banks. Fed Moves Closer To Action (WSJ) Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act. Sidekick of Soccer Mom Madam to court: It's not prostitution if you just pay to watch (NYDN) Jaynie Mae Baker, the woman busted with accused Manhattan brothel operator Anna Gristina, revealed in court papers filed Tuesday that the undercover cop who arrested her watched two women have sex but didn’t participate in any. Baker’s lawyer, Robert Gottlieb, says the only recorded conversation in evidence that includes Baker took place July 19, 2011, at a Manhattan restaurant where his client, Gristina and the cop had lunch. The cop tells Baker and Gristina he is “looking for a little adventure" and to “please corrupt me," but there's no talk of arranging payment, Gottlieb says in the filing. Six days later in the sting operation, the cop is secretly videotaped in a room with two other women at Gristina's alleged brothel on E. 78th St., but he does not participate in the sex. “The undercover officer apparently remains fully clothed and merely observed the two women perform for him,” Gottlieb writes...Gottlieb says there “was not a scintilla of evidence that was produced ... establishing Ms. Baker’s involvement in arranging payment in exchange for any kind of sexual activity.” What occurred not prostitution because the undercover cop was not a participant, Gottlieb says. If watching is prostitution, then every strip club and porno director is guilty, too, he said. Germans React Coolly To Moody's Warning (WSJ) Wolf Klinz, a German member of the European Parliament from the pro-business Free Democrats, Ms. Merkel's junior coalition partner, said he doesn't dispute Moody's conclusions about Germany's risks, but rather the timing of the announcement. "There are no hard facts yet" about Germany's ultimate price tag, Mr. Klinz said. "Why come out with this right now? It may have political implications" even if that wasn't the intention, he said. Preet hit with suit by law student (NYP) Second-year law student Benula Bensam sued Bharara, along with the US Marshals Service and the Justice Department, in Manhattan federal court for “unreasonable search and seizure” after the marshals took her cell phone away during the trial of ex-Goldman Sachs director Rajat Gupta. The 25-year-old Bensam, who is representing herself, said the marshals kept her phone overnight after she refused to answer their questions about letters she wrote to Judge Jed Rakoff during Gupta’s insider-trading trial. Bensam, who attends law school at Yeshiva University and lives in the Woodside section of Queens, stopped writing Rakoff about the case after he reprimanded her. In the complaint, Bensam said Bharara “may have instigated” her dispute with the marshals. Euro Zone as We Know It Has 2 Years Left: Jim O’Neill (CNBC) “Two years maximum is my perception of the time the euro zone has left to survive in its current form, though the reality is probably far less than that. Markets being markets we’ve unveiled a degree of speed with the Spanish and Italian bond yields and I can’t see us getting through the summer without some serious consequences,” said Jim O’Neill, Chairman at Goldman Sachs Asset Management. Child Treated After Being Bit By Rabid Bat Woman Gave Go-Ahead To Touch (CBS) Even as the summer fun rolls on for JoJo Keefe, a freshly healed cut on the 10-year-old’s finger reminds her of a scary detour. “I was like oh my God it bit me!” She’s talking about a rabid bat that sunk its tiny teeth into her finger last Tuesday during a visit to the Spencer Town Beach on Lake Whittemore. The small bat was attracting quite a bit of attention on the shoreline just beyond the picnic area. The trouble really began when a woman picked it up and began asking the children gathered around her if they wanted to hold it. “Another little girl said ‘oh I want to hold it will it bite me?’ And the lady was like no it’s the friendliest thing ever,” she says...Her mother retrieved the sick animal which then tested positive for rabies. Soon after, JoJo was getting the first in a series of life saving antibiotic shots (you can’t wait with rabies).

Opening Bell: 03.15.13

JPMorgan Pay Fueled Risk Amid London Whale Loss: Report (Bloomberg) JPMorgan, the biggest U.S. bank by assets, compensated chief investment office traders in a way that encouraged risk-taking before the unit amassed losses exceeding $6.2 billion, a Senate committee said. Pay that rewarded “effective risk management” would have suggested the synthetic credit portfolio functioned as a hedge, the Senate Permanent Subcommittee on Investigations said yesterday in a report on the New York-based bank’s so-called London Whale loss. Instead, compensation practices suggest the bets “functioned more as a proprietary-trading operation.” JPMorgan Report Piles Pressure on Dimon in Too-Big Debate (Bloomberg) Dimon misled investors and dodged regulators as losses escalated on a “monstrous” derivatives bet, according to a 301-page report by the Senate Permanent Subcommittee on Investigations. The bank “mischaracterized high-risk trading as hedging,” and withheld key information from its primary regulator, sometimes at Dimon’s behest, investigators found. Managers manipulated risk models and pressured traders to overvalue their positions in an effort to hide growing losses. Ina Drew Says Subordinates’ Deception at JPMorgan Let Her Down (Bloomberg) Ina Drew, who was forced to leave JPMorgan Chase amid a record trading loss last year, said she relied on other executives to manage a complex book of credit derivatives and didn’t learn of their “deceptive conduct” until after she left the company. “I was, and remain, deeply disappointed and saddened to learn of such conduct and the extent to which the London team let me, and the company, down,” Drew said in testimony prepared for delivery in the Senate today. Credit Suisse Banker Extradited To US (NYP) Former Credit Suisse banker Kareem Serageldin, the highest-ranking Wall Street executive to be charged for crimes tied to the mortgage meltdown, is coming home to face the music, The Post has learned. The 39-tear old Yale graduate was indicted by a Manhattan federal grand jury in February 2012 — along with two Credit Suisse colleagues — for allegedly covering up losses in a $3.5 billion toxic mortgage portfolio as the real estate market was collapsing in 2007. The UK’s Home Secretary Theresa May, who is responsible for Great Britain’s immigration and citizenship, signed off last week on the extradition of Serageldin, a person with knowledge of the case told The Post. Goldman Sachs, JP Morgan Hit (WSJ) The Federal Reserve Thursday dealt a blow to J.P. Morgan Chase and Goldman Sachs, citing weaknesses in their "stress test" capital planning that could hamper their funneling more dividends and share buybacks to investors. The central bank also denied capital plans submitted by BB&T Corp. and Ally Financial Inc. But the Fed at the same time cleared 14 other banks to boost payouts to shareholders, including Citigroup Inc. and Bank of America Corp., both of which in past years had capital requests rejected by the central bank. The Fed also approved a reduced repurchase plan from American Express Co., in the only instance of a bank winning approval for a plan resubmitted to the regulator under a new stress-test wrinkle this year. Mila Kunis Rotates From Cash to Stocks (CNBC) The star of films such as Ted, Friends With Benefits and the TV series That 70s Show told CNBC in London: "I've just started investing in stocks, which is new for me." "I'm an advocate of like put things in the bank, put it in a CD (a certificate of deposit), be safe. And I've been pushed kind of forward to take chances and then learning a little bit about the stock market and companies," she said. Abe Says Japan Will Join Trade Talks (WSJ) Japanese Prime Minister Shinzo Abe announced Friday that his country will take a seat at the negotiation table of the U.S.-led Trans-Pacific Partnership free trade negotiations, a move that may pit him against powerful farm lobbies ahead of upper house elections this summer. "This is our last chance to join the TPP and take part in the rule-making," Mr. Abe told reporters Friday at a news conference to mark his decision to join the talks. "For Japan to remain inward-looking means we are giving up on the possibility of growth." Stifel Agrees to Acquire Fixed-Income Group From Knight (Bloomberg) Knight’s European institutional fixed-income sales and trading team is also part of the deal, which includes about 100 people, Stifel said today in a statement, without disclosing terms. The group covers high-yield and investment-grade corporate bonds, asset-backed and mortgage-backed securities, emerging markets and fixed-income research. No 'Irrational Exuberance' in Stocks Now: Greenspan (CNBC) Greenspan said in a "Squawk Box" interview that stocks by historical standards are "significantly undervalued" even considering the recent moves higher. He added that the payroll tax increase didn't dent spending because of rising asset prices. Could Hungary Be Thrown Out of the EU? (CNBC) Hungary's increasingly aggressive moves against media, judiciary and central bank independence will be discussed by European Union heads of states on Friday, raising the possibility that Hungary could be thrown out of the EU. The European Union is concerned Hungary may be flouting EU rules on human rights, after its parliament voted this week to amend its constitution to allow legislation to bypass approval from the constitutional court. Hungary had defied calls from the European Commission to delay the vote. The Taco That Built 15,000 Jobs (ABC) It may take a village to raise a child. But all it takes to raise employment is a taco. That seems to be the situation at Taco Bell, anyway, which added 15,000 employees last year, company chief executive Greg Creed told the Daily Beast, largely on one new product. Creed attributes the success to Doritos Locos Tacos, which the company rolled out in March, 2012 and was the “biggest launch in Taco Bell history,” he told the Beast. Throughout 2012, the 170-calorie taco, whose shell is made from a nacho cheese Doritos in a collaboration with Frito-Lay, 375 million were gobbled up, which averages out to about one million per day. But why stop there? On March 7, it launched Cool Ranch Dorito Locos Tacos. The slogan? “Collect All Two.” “We believe we can add 2,000 new restaurants in the next 10 years, because what we have is proprietary and exclusive. Nobody else can make a Cool Ranch Doritos Taco. And that’s just in the U.S.,” Creed told the Beast. Creed was traveling today and unavailable to talk to ABC News, a spokesman said.

Opening Bell: 06.01.12

Employment In U.S. Increased 69,000 In May (Bloomberg) American employers in May added the smallest number of workers in a year and the unemployment rate unexpectedly increased as job-seekers re-entered the workforce, further evidence that the labor-market recovery is stalling. Payrolls climbed by 69,000 last month, less than the most- pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent, while hours worked declined. JPMorgan Probe Widens (WSJ) Federal regulators are using powers they gained in the Dodd-Frank financial overhaul law to ramp up an inquiry into the recent trading blunders at J.P. Morgan Chase, people close to the investigation said...The probe focuses on what J.P. Morgan traders told their supervisors and internal risk-management staff as their wrong-way bets started to sour, the people said. If investigators find that employees made deceptive statements to superiors, that could constitute fraud under their authority to police the so-called swaps market...The probe could mark the agency's first use of tools it was granted in the Dodd-Frank Act of 2010. The measure extended the CFTC's oversight and lowered the bar for bringing certain cases. JPMorgan’s Iksil Said To Take Big Risks Long Before Loss (Bloomberg) Iksil’s value-at-risk was typically $30 million to $40 million even before this year’s buildup, said the person, who wasn’t authorized to discuss the trades. Sometimes the figure could surpass $60 million, the person said. That’s about as high as the level for the firm’s entire investment bank, which employs 26,000 people. Josh Fink On A Losing Streak (NYP) Josh Fink, the son of BlackRock chairman Larry Fink, is losing money hand over fist in his hedge fund, Enso Global Fund. Enso fell 60.5 percent last year, and is down more than 7 percent through April. As a result of the losses, the 34-year-old Fink now manages just $44 million, down from as much as $700 million in 2008. ‘Fear of the Future’ Keeps Lid on Economic Growth Says Greenspan (CNBC) The former central bank leader — nicknamed "The Maestro" by his supporters — said he worries the current economy could be heading on a path similar to 1979, when the 10-year Treasury note was yielding around 9 percent before surging dramatically, gaining 4 percentage points in just a few months. "I listen to a lot of what people say that we don't have to worry. We can do it in our own time," Greenspan said in regard to trying to bring down Washington's $1.2 trillion budget gap. "Good luck. The markets have not been told this." This Summer an 'Eerie Echo' of Pre-Lehman: Zoellick (CNBC) The summer of 2012 is looking like an “eerie” echo of 2008 but euro zone sovereign debt has replaced mortgages as the risky asset class that markets are anxious about, said Robert Zoellick, President of the World Bank. “The European Central Bank, like the U.S. Federal Reserve in 2008, has sought to reassure markets by providing generous liquidity, but collateral quality is declining as the better pickings on bank balance sheets are used up,” he added. To prevent investors from fleeing in panic, Europe must be ready with more than liquidity injections to contain the consequences of a possible Greek exit. “If Greece leaves the eurozone, the contagion is impossible to predict, just as Lehman (Brothers’ collapse) had unexpected consequences,” Zoellick said. Manhattan student who 'bedded' teacher scores $400 in wager with buddies (NYP) The high-school senior caught on camera locking lips with his hot-to-trot teacher won a bet with four of his buddies to see who would hook up with her first, The Post has learned. Eric Arty, 18, beat his pals — who each ponied up $100 — to win the jackpot as well as the affections of glamorous global-studies teacher Julie Warning, 26. “It was a bet with a group of his friends,” said Andrew Cabrera, a junior at Manhattan Theater Lab HS, where Warning worked until Tuesday, when she was reassigned to an administrative job. Cabrera said yesterday that Arty began the race as a long shot. “He would go after class and basically try to seduce her,’’ he said. “I don’t know if she knew [about the bet]. They were all trying to get with her. One of his [Arty’s] friends flirted with her more than anyone — I thought he would be the one, but Eric came out of nowhere and got her.” Spain Says It Has Months To Raise Bailout Funds (WSJ) Spain's government says it has until at least October to raise the funds it needs for the €19 billion ($23.5 billion) rescue of lender Bankia SA, a move government officials hope will let Madrid pick the right moment to raise funds from financial markets and explore other funding options as it aims to avoid an international bailout. "We don't have to raise the money right away, and when we do, it doesn't have to be all at once," a government spokeswoman said. Euro-Zone Data Deepen Gloom (WSJ) European Union statistics agency Eurostat said there were 17.4 million people without jobs in the 17 nations that use the euro in April, an increase of 110,000 since March and 1.8 million higher than a year earlier. That's the highest total since comparable records began in January 1995, a spokesman said. Dimon Heading To The Hill (DJ) JPMorgan’s trader, Bruno Iksil, known as the “London Whale,” who is at the center of the bank’s $2 billion debacle, will not appear at a Senate Banking Committee hearing to discuss his role in causing the red ink. Instead, CEO Jamie Dimon appears set to square off against lawmakers alone on June 13. The once-unsullied bank executive will have to explain how he was blind to his Chief Investment Office’s outsized, wrong-way bet. Dimon is slated to meet with members of the House on June 19, sources said. Facebook Fiasco Coupled With European Crunch Freezes IPOs (Bloomberg) Facebook led U.S. initial public offerings to their worst monthly performance since Lehman Brothers Holdings Inc. collapsed, as Europe’s debt crisis scuttled IPO plans from New York to Hong Kong. The Bloomberg IPO Index (BIPO), which tracks U.S. equities in the first year after their IPOs, sank 15 percent last month, with Facebook posting the worst one-week performance among the 30 largest U.S. IPOs since 2011. The IPO index’s decline is in line with the drop in October 2008, the month after Lehman’s bankruptcy triggered the worst financial crisis since the Great Depression. Green Lantern latest superhero to be outed as gay in 'Earth 2' issue two, following Marvel's Northstar storyline (NYDN) DC Comics said Friday that Alan Scott, the original Green Lantern — a superhero first introduced in 1940 — will be reintroduced as gay in “Earth 2” issue two, hitting stores next Wednesday. The storyline was born out of the publisher’s reboot of their whole fictional universe last year, which reintroduces the heroes as younger versions of themselves again. The reboot effectively wrote out of existence Scott’s openly gay adult son, the superhero Obsidian. “I was sort of putting the team together and I realized one of the only downsides to relaunching the Justice Society as young, vibrant heroes again was that Alan Scott’s son was no longer going to exist in the reboot,” says “Earth 2” series writer James Robinson, who wrote a 1998 storyline about Obsidian that featured the first gay superhero kiss in comics. “I thought that was a shame and then it occurred to me, why not just make Alan Scott gay.”

Opening Bell: 05.14.12

JPMorgan Loss Claims Official Who Oversaw Trading Unit (NYTimes) The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said. Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon...Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe. “This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Jamie Dimon: Trading Losses Are Not Life-Threatening (CNBC) “This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.” Yahoo’s Thompson Out Amid Inquiry; Levinsohn Is Interim CEO (Bloomberg, earlier) Thompson, 54, was brought on to orchestrate a turnaround after Google Inc. and Facebook Inc. lured users and advertising dollars. Thompson’s undoing stems from erroneous biographical references to him as holding a bachelor’s degree in computer science from Stonehill College. A former EBay Inc. (EBAY) executive, he earned a degree in accounting from the Easton, Massachusetts- based school, and the information is correctly listed in EBay regulatory filings and some Yahoo press releases. The incorrect degree showed up in Yahoo’s April 27 10-K filing, as well as on the company’s website. As part of the board changes, Daniel Loeb, chief executive officer of Third Point, joins as a director along with Harry Wilson and Michael Wolf. A fourth nominee, Jeffrey Zucker, said in today’s statement that he withdrew his nomination to allow a quick transition. Euro Officials Begin to Weigh Greek Exit (Bloomberg) Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay. LightSquared Moves Toward Bankruptcy Filing (WSJ) Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Facebook cofounder living large in Singapore as he stiffs US for a possible $600M in taxes (NYP) Saverin is renouncing his US citizenship in favor of Singapore, the Southeast Asian city-state that has no capital-gains tax, where he has lived like royalty since 2009. The move already has saved him about $288 million in taxes, and will save him much more if he chooses to sell his $4 billion personal stake in Facebook, which goes public next week. “This pisses me off,” fellow tech-industry billionaire Mark Cuban spat on Twitter Friday upon hearing news of Saverin’s decision. Saverin’s spokesman has defended the move, claiming he has investments in the Far East, and Europe and the permanent move makes perfect sense. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s spokesman told Bloomberg. JPMorgan Unit's London Staff May Go as Loss Prompts Exits (Bloomberg) The entire London staff of JPMorgan Chase’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. In Wake Of JPMorgan Loss, Rivals Fret About New Rules, Downgrades (WSJ) Over the weekend, rival banks scurried to explain why they believe a similar trading loss couldn't happen at their firm. Some companies pointed to moves already taken to reduce risk and sell off volatile and opaque assets such as derivatives on credit indexes. In a statement, Citigroup "has a small amount of straight-forward economic hedges managed at the corporate center to mitigate our credit exposure, principally relating to consumer loans." About half of that total is in cash, with most of the rest in U.S. Treasury bonds and other conservative investments. At Morgan Stanley, the portfolio most similar to J.P. Morgan's investment office is a $32 billion "available for sale" portfolio. The portfolio primarily consists of easily traded U.S. Treasury and government agency securities. It doesn't hold any derivatives instruments, a person familiar with Morgan Stanley's operations said. Goldman Sachs has no similar unit to the one at J.P. Morgan that suffered the loss. Apple Founder Wozniak to Buy Facebook Regardless of Price (Bloomberg) “I would invest in Facebook,” he said in an interview yesterday on Bloomberg Television. “I don’t care what the opening price is.” Missing: Stats on Crisis Convictions (WSJ) It is a question that has been asked time and again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer. That is because the department doesn't keep count of the numbers of board-level prosecutions. In a response earlier this month to a March request from Sen. Charles Grassley (R.,Iowa), the Justice Department said it doesn't hold information on defendants' business titles. "Consequently, we are unable to generate the [requested] comprehensive list" of Wall Street convictions stemming from the 2008 meltdown, the letter from the Department of Justice to Mr. Grassley said. Man Charged in Death Offers Victim's Foot for Deal (AP) A homeless man charged with killing and dismembering his friend says he can't remember much about the crime. But in a jailhouse interview, Leslie Sandoval told the Anderson Independent-Mail he remembers where he put the victim's missing left foot and is willing to tell a prosecutor if she will make him a deal. Sandoval says he went on a January drinking binge with Seth Foster. Foster's torso was found under an Anderson home, and his head, hands and right foot were found different places. Sandoval says he is confused about exactly what happened. But he disagrees with a coroner's finding he beat Foster and denies a claim from investigators that he confessed and gave them the knife used to dismember Foster.

Opening Bell: 03.20.13

JPMorgan Bosses Hit By Bank Regulator (WSJ) JP Morgan was downgraded in a confidential government scorecard over concerns about the company's management and its board, a blow to a firm that has long been considered one of the best-run on Wall Street. The New York company's management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment. Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating "satisfactory management." The people said the downgrade to level 3 wasn't solely related to a London employee's large trades—in indexes tracking the health of a group of companies—that led to losses exceeding $6 billion. BlackRock’s CEO Fink Says Cyprus Is Not a Major Problem (Bloomberg) Laurence D. Fink, chief executive officer of BlackRock, the world’s largest asset manager, said Cyprus is not a major problem and U.S. equities will rise 20 percent this year as the economy rebounds. “It has some symbolism impact on Europe, but it’s not a really major economic issue,” Fink said of Cyprus in a Bloomberg Television interview in Hong Kong today. “It’s a $10 billion issue. It does remind us of the frailty of Europe. It does remind us that the European fix will be multiple years.” Freddie Mac Sues Big Banks (WSJ) sued more than a dozen of the world's biggest banks for alleged manipulation of interest rates, in the first government-backed private litigation over the rate-rigging scandal. The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, by the mortgage-finance giant joins scores of other suits piling up in U.S. courts, seeking billions of dollars in damages from banks that allegedly manipulated the London interbank offered rate and other crucial financial benchmarks. Freddie Mac sued the British Bankers' Association alongside the banks, putting the private association of large British banks for the first time in the cross hairs of a Libor lawsuit. A probe by U.S. and U.K. regulators has uncovered evidence of widespread rate rigging by some traders. Three banks have agreed to pay penalties totaling about $2.5 billion, and about a dozen companies remain under investigation. The BBA has agreed to transfer its responsibility for overseeing Libor to a new operator. Litigation Forces Deutsche Bank to Restate Profits (Reuters) Deutsche Bank cut its previously reported 2012 pretax profit by 600 million euros ($773 million) on Wednesday, hit by new charges related to mortgage-related lawsuits and other regulatory investigations. Europe's biggest bank by assets declined to say why it had increased litigation provisions to 2.4 billion euros, forcing it to correct its Jan. 31 earnings report which already showed the worst quarterly loss in four years. Yoga-Pants Supplier Says Lululemon Stretches Truth (WSJ) A Taiwanese supplier to Lululemon Athletica was bent out of shape on Tuesday after the yoga-clothes retailer blamed it for producing a shipment of pants that were unacceptably see-through. The supplier, Eclat Textile Co. of Taiwan, hit back at Lululemon, saying the clothes it shipped weren't "problematic." "All shipments to Lululemon went through a certification process which Lululemon had approved," Eclat Chief Financial Officer Roger Lo said in an interview. "All the pants were manufactured according to the requirements set out in the contract with Lululemon." Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg) The Fed chief will probably halt the unprecedented easing in the first half of next year after expanding central bank assets to a record of about $4 trillion, according to median estimates by 46 economists surveyed March 13-18 before a two-day meeting of policy makers ending today. Unemployment will have fallen to 7.3 percent from its current 7.7 percent when the Fed starts to pull back on its buying, the economists said. Supreme Court Sacks Goldman (NYP) The Supreme Court yesterday refused to hear the bank’s appeal of a federal court ruling in a lawsuit alleging it misled investors about dicey mortgage-backed securities. SEC Digging Into Fund Fees (WSJ) The Securities and Exchange Commission is closely scrutinizing the fees and expenses, including travel and entertainment, that hedge funds and private-equity firms charge to their investors. As part of the Dodd-Frank financial law, the SEC now oversees more than 1,500 additional such advisers that were required to register with the agency. In that capacity, the SEC is checking to ensure they are charging their investors reasonable expenses. "Exotic" expenses like travel, entertainment and consulting arrangements are more likely to attract the agency's attention than routine charges like legal and accounting fees, say compliance consultants who advise funds on registration and reporting requirements. A Volatile Investor Buys Into a Softer Approach (WSJ) It has been a long slog for Mr. Hohn, whose fund bets big on a small number of out-of-favor stocks and often holds on for several years. It lost 43% in 2008, among the worst losses by a hedge-fund that year, according to industry-tracker HFR. Hedge funds on average lost 19% that year. Even the Standard & Poor's 500-stock index, which plunged as the economy descended into the worst financial crisis in decades, did better. But with a 30% return in 2012 and a 14% gain this year, TCI has crossed its high-water mark, or the point at which investment gains make up for losses and managers can begin collecting performance fees again, according to clients. "A lot of people wrote me off," Mr. Hohn said in an interview last month. "A lot of people fired us, a few people stuck by us, and we've worked and worked and made it all back for them." JPMorgan, MF Global Trustee Reach $546 Million Settlement (Reuters) As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers. JPMorgan will also return more than $29 million of the brokerage's funds held by the bank, while releasing claims on$417 million that was previously returned to Giddens. Man, 18, forbidden from saying 'bingo' for 6 months (NKY) As part of 18-year-old Austin Whaley’s punishment, Kenton District Judge Douglas Grothaus recently ordered the Covington man not to say the word “bingo” for six months. “Just like you can’t run into a theater and yell ‘fire’ when it’s not on fire, you can’t run into a crowded bingo hall and yell ‘bingo’ when there isn’t one,” said Park Hills Police Sgt. Richard Webster, the officer who cited Whaley. On Feb. 9, Webster was working an off-duty security detail at a Covington bingo hall on West Pike Street when Whaley entered the hall with several other youths and yelled “bingo,” Webster said. “This caused the hall to quit operating since they thought someone had won,” Webster wrote on his citation. “This delayed the game by several minutes and caused alarm to patrons.” Webster said the crowd of mostly elderly women did not take kindly to Whaley’s bingo call. “At first, everybody started moaning and groaning when they thought they’d lost,” Webster said. “When they realized it wasn’t a real bingo, they started hooting and hollering and yelling and cussing. People take their bingo very seriously.” Had Whaley apologized for his actions, Webster said he probably would have sent him on his way with a warning. “But he refused to say he was sorry,” Webster said...WhenWhaley appeared in Kenton District Court last week, the judge ordered Whaley: “Do not say the word ‘bingo’ for six months.” The youthful defendant could have faced up to 90 days in a jail and a $250 fine on the misdemeanor charge. So long as Whaley, who had no prior criminal record, doesn’t get into any more trouble within six months, though, the charge will be dismissed.

Opening Bell: 05.21.12

JPMorgan CIO Risk Chief Said To Have Trading-Loss History (Bloomberg) Irvin Goldman, who oversaw risks in the JPMorgan Chase & Co. (JPM) unit that suffered more than $2 billion in trading losses, was fired by another Wall Street firm in 2007 for money-losing bets that prompted a regulatory sanction at the firm, Cantor Fitzgerald LP, three people with direct knowledge of the matter said. JPMorgan appointed Goldman in February as the top risk official in its chief investment office while the unit was managing trades that later spiraled into what Chief Executive Officer Jamie Dimon called “egregious,” self-inflicted mistakes. The bank knew when it picked Goldman that his earlier work at Cantor led regulators to penalize that company, according to a person briefed on the situation. Risk Manager's Past Scrutinized (WSJ) Mr. Goldman joined J.P. Morgan's CIO in January 2008 as a trader. The bank placed him on leave in September 2008 after it learned that NYSE Arca had opened a regulatory inquiry tied to his trading activities at Cantor Fitzgerald, people familiar with the matter said. After J.P. Morgan placed him on leave, Mr. Goldman founded a consulting firm based in New York called IJG Advisors LLC. He rejoined J.P. Morgan in September 2010 in the Chief Investment Office, this time focusing on strategy. Current J.P. Morgan Chase Chief Risk Officer John Hogan chose Mr. Goldman to serve as CRO of the office, a position that had been filled by Peter Weiland, who remains with J.P. Morgan's CIO. Mr. Hogan wasn't aware of the Cantor Fitzgerald incident or the earlier trading losses at J.P. Morgan Chase, said a person close to the bank. Eurobonds To Be Discussed At EU Summit (Reuters) Merkel has said she is not opposed to jointly underwritten euro area bonds per se, but believes it can only be discussed once the conditions are right, including much closer economic integration and coordination across the euro zone, including on fiscal matters. That remains a long way off. Will Greece Be Able to Print Drachma in a Rush? (Reuters) If or when policymakers finally decide Greece should leave the euro, the exit could happen so quickly that "new drachma" currency notes might not be printed in time. "It would be chaos," says Marios Efthymiopoulos, a visiting scholar at Johns Hopkins University Center for Advanced International Studies and president of Thessaloniki-based think tank Global Strategy. "The banks would collapse and you would have to nationalize them. You wouldn't be able to pay anyone except in coupons. There is only one (currency) printing press in Greece. It is in the museum in Athens and it doesn't work any more." Ryanair CEO: ‘No’ Campaigners in Irish Vote Are Crazy (CNBC) “I think Ireland will vote yes in the referendum and Ireland should vote yes. We have no alternative. People who are borrowing $15 billion a year to keep the lights turned on don’t have the wherewithal to vote no to the people that are lending them the money. There is no argument for voting no,” Michael O'Leary, CEO of budget airline Ryanair said. He described “no” campaigners as a “bunch of idiots and lunatics.” Barclays To Sell Entire BlackRock Stake (WSJ) Barclays said BlackRock agreed to repurchase $1 billion worth of the 19.6% stake that the bank holds in the asset-management company. The remainder of the stake will then be listed on a stock exchange. The decision to sell comes as the bank faces pressure from investors to boost its return on equity and prepares to mitigate the effects of regulation that will force the lender to hold a bigger capital buffer. Mark Zuckerberg Gets Married (AP) The couple met at Harvard and have been together for more than nine years, a guest who insisted on anonymity said. The ceremony took place in Zuckerberg's backyard before fewer than 100 guests, including Facebook's chief operating officer Sheryl Sandberg. The guests all thought they were coming to celebrate Chan's graduation but were told after they arrived that the event was in fact a wedding. "Everybody was shocked," the guest said. The two had been planning the marriage for months but were waiting until Chan had graduated from medical school to hold the wedding. The timing wasn't tied to the IPO, since the date the company planned to go public was a "moving target," the guest said. Zuckerberg designed the ring featuring "a very simple ruby." Hedge Funds Rebuild Euro Bear Bets On Greek Exit Banks Weigh (Bloomberg) Hedge funds and other large speculators, which pared trades that would profit from a drop in the euro to the lowest levels since November, rebuilt them to a record high last week, figures released May 18 by the Washington-based Commodity Futures Trading Commission showed. The premium for options that grant the right to sell the euro has more than doubled since March. Nasdaq CEO Blames Software Design For Delayed Facebook Trading (Bloomberg) Nasdaq OMX Group, under scrutiny after shares of Facebook Inc. were plagued by delays and mishandled orders on its first day of trading, blamed “poor design” in the software it uses for driving auctions in initial public offerings. Fed Proves More Bullish Than Wall Street Forecasting U.S. Growth (Bloomberg) Stephen Stanley, chief economist at Pierpont Securities LLC, has derided the Federal Reserve for downplaying improvement in the U.S. economy. Yet his 2.6 percent forecast for growth this year is below the midpoint in the central bank’s projection of 2.4 percent to 2.9 percent...“I’ve been banging my head against the wall,” said Stanley in Stamford, Connecticut, a former researcher at the Federal Reserve Bank of Richmond, who had predicted an interest- rate increase as early as last year and now says the Fed probably will tighten in the middle of next year. “They’re willing to let things run for longer and let inflation accelerate more than historically.” Judge mulls suit vs. woman sending messages to driving boyfriend (NYP) In a case believed to be the first of its kind in the country, a New Jersey college student could be held liable this week for texting her boyfriend — knowing he was behind the wheel — and allegedly causing him to crash into a couple riding a motorcycle. “She texts. Instantly, he texts back, and, bang, the accident occurs,” said Skippy Weinstein, attorney for motorcycle enthusiasts David and Linda Kubert, both 59, who lost their left legs in the horrific 2009 accident in Mine Hill. It’s now up to a Superior Court judge in Morristown, NJ, to decide whether Shannon Colonna can be added to the suit against driver Kyle Best.

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: 05.11.12

JPMorgan's $2 Billion Blunder (WSJ) The CEO emphasized that the bank remains profitable despite the trading loss. "While we don't give overall earnings guidance and we are not confirming current analyst estimates, if you did adjust current analyst estimates for the loss, we still earned approximately $4 billion after-tax this quarter give or take," he said on the call. The bank earned $5.38 billion in the first quarter. Drew Built 30-Year JPMorgan Career Embracing Risk (Bloomberg) JPMorgan Chief Investment Officer Ina R. Drew, head of the unit responsible for a $2 billion trading loss, built a 30-year career at the largest U.S. bank by embracing risk and avoiding the spotlight. “With everything she does, she thinks in terms of trading,” said Stephen Murray, head of CCMP Capital Advisors LLC, created from a JPMorgan private-equity unit in 2006. “There are risk-lovers, there are risk-haters, and the best traders will take the risk as long as they get paid for it.” Drew’s operation, which helps manage the bank’s risk, has been transformed under Chief Executive Officer Jamie Dimon to make bigger speculative bets with the firm’s own money, according to five former employees, Bloomberg News reported last month. Some bets were so big JPMorgan probably couldn’t unwind them without roiling markets, the former executives said. JPMorgan Holding Talks With UK Regulator (WSJ) JPMorgan has been holding discussions with U.K. regulators about the roughly $2 billion of trading losses incurred by the giant bank's investment office, according to people familiar with the matter. The talks with the Financial Services Authority don't represent a formal inquiry by the regulator, one person said, and it isn't clear whether it will result in any action by the regulatory agency. The FSA has been requesting information from J.P. Morgan about how the trading losses occurred and what steps the bank is taking to avoid such situations in the future, the people said. Volcker Rule Proponents Say JPMorgan Loss Bolsters Case (Bloomberg) Senator Carl Levin, the co-author of the so-called Volcker rule and chairman of the Permanent Subcommittee on Investigations, said the New York-based bank’s disclosure yesterday served as a “stark reminder” to regulators drafting the proprietary-trading ban required by the 2010 Dodd-Frank Act. “The enormous loss JPMorgan announced today is just the latest evidence that what banks call ‘hedges’ are often risky bets that so-called ‘too-big-to-fail’ banks have no business making,” Levin, a Michigan Democrat, said in a statement. Wall Street's Go-To Guy Trips Up (WSJ) "I am not sure how many times I can say this: It was bad strategy, executed poorly," Mr. Dimon said of the losses the company suffered in the past six weeks. The acknowledgment is a rare blow for Mr. Dimon, 56 years old, who has been on the top of the banking heap since joining J.P. Morgan Chase in 2004. He regularly extols J.P. Morgan's "fortress balance sheet" and has repeatedly lashed out against lawmakers and regulators who have slapped more rules on the banking industry. Italian man becomes mayor by accident (BBC) Though he had not given much thought to a political platform before the vote, now he is in office he has said that he will focus on promoting tourism to the area. EU Signs Of Recovery, Risks Remain (WSJ) "A recovery is in sight, but the economic situation remains fragile, with still large disparities across member States," Olli Rehn, Commissioner for Economic and Monetary Affairs said in a statement. "Without further determined action, however, low growth in the European Union could remain." Chesapeake Deals Carry $1.4 Billion In Undisclosed Liability (WSJ) Most of these costs will hit this year and next, at a time when the company needs to raise substantial cash to cover operating expenses and its move into the more lucrative oil business. Faber Sees '87-Type Crash If U.S. Stocks Rise Without QE3 (Bloomberg) “I think the market will have difficulties to move up strongly unless we have a massive QE3,” Faber, who manages $300 million at Marc Faber Ltd., told Betty Liu on Bloomberg Television’s “In the Loop” from Zurich today, referring to a third round of large-scale asset purchases by the Fed. “If it moves and makes a high above 1,422, the second half of the year could witness a crash, like in 1987.” Third masseur accuses John Travolta of inappropriate behavior (NYP) Fabian Zanzi, a Chilean-born cruise worker who worked in VIP services, said Travolta offered him $12,000 for the tryst. Zanzi says he refused. Travolta was on the five-day cruise in 2009 without wife Kelly Preston and hit on Zanzi with a cheesy pickup line, the cruise worker said. “He said that I had something on my neck. I thought it was lint,” Zanzi told the Chilean news show “Primer Plano.” “When he got close to me, he took off his white robe and he was naked.”