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.”
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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.”

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Opening Bell: 04.11.12

Profit Drop at U.S. Banks Imperils Rally (Bloomberg) The six largest U.S. lenders, including JPMorgan Chase and Wells Fargo, may post an 11 percent drop in first-quarter profit, threatening a rally that has pushed bank stocks 19 percent higher this year. The banks will post $15.3 billion in net income when adjusted for one-time items, down from $17.3 billion in last year’s first quarter, according to a Bloomberg survey of analysts. Trading revenue at the biggest lenders is projected to fall 23 percent to $18.3 billion, according to Morgan Stanley analysts, who didn’t include their firm or Wells Fargo. Making Waves Against 'Whale' (WSJ) Dozens of hedge funds are believed to have placed bets in the derivatives markets that pit them against positions taken by Bruno Iksil, the French-born trader who works for the bank's Chief Investment Office in London, according to people familiar with the matter. Funds that traded against Mr. Iksil earlier this year recorded big paper losses as his trades helped push down one credit index. The losses made Mr. Iksil a target for some hedge funds, who felt they could capitalize on his outsize position, these people say. The funds' wagers against Mr. Iksil's positions have become increasingly profitable in recent weeks as prices in the credit-derivatives index that was at the center of one of Mr. Iksil's trades rose after his trades ceased. "I view the entire market as a chess match playing against this guy," said a person who is familiar with Mr. Iksil's positions and is trading against him. Carlyle nears road show for $8B IPO (NYP) A road show will start as early as next week for the initial public offering (IPO) of Carlyle Group that will value the private-equity firm at between $7.5 billion and $8 billion, according to a person familiar with the matter. Carlyle filed documents to the Securities and Exchange Commission earlier this month to sell a 10 percent stake. The offering is likely to generate as much as $800 million in proceeds, according to the person familiar with the matter. Germany Pays Record Low Yield (WSJ) "The modest demand is due to the historical low yields, where investors are very reluctant to buy long-dated German bonds at these low levels despite the fiscal slippage we see in Spain and the ongoing crisis in the periphery," said Jens Peter Sorensen, chief analyst at Danske Markets. But RBS analysts said poor bund auctions at these yield levels have never been a good predictor for future demand, and thus it recommended not to "overly" focus on the sale to gauge demand for bunds. Weighing SEC's Crackdown on Fraud (WSJ) SEC enforcement chief Robert Khuzami said the current total of 101 cases shows the agency is "highly effective in tackling financial-crisis wrongdoing." Of the 74 cases filed against individuals so far, the SEC went after 55 chief executives, finance chiefs or other top officers. In an interview, Mr. Khuzami said the number is "significant" and "sends a strong deterrent message." Meredith Whitney Muni Call Was 100% Wrong: Bond Pro (CNBC) High-grade municipal bonds remain a solid investment despite their sometimes-battered public image, according to fixed income expert Alexandra Lebenthal. "I have come up with a new measure of risk, which is knowledge risk," said the president and CEO of Lebenthal and Co. "Is the person who is talking about municipal bonds, corporate bonds, equities, what have you, knowledgeable and should people be listening to them?" "Yes, I have an axe to grind," continued Lebenthal, whose father, James, is one of the more prominent names in the bond business. "I am in the municipal bond business, I'm also in the wealth management business and trying to do the best for clients. But I do know what I'm talking about because I have spent over 20 years in this business and another 20 growing up listening to it." Facebook deal ‘surprised’ bankers (NYP) “People are wondering if [Facebook] couldn’t have waited until after the IPO [to purchase Instagram],” said one source, who declined to be identified. Although Facebook is still awaiting IPO clearance from regulators, underwriters led by Morgan Stanley are hoping to launch the company’s share sale next month, possibly the week of May 14. Bankers plan to start the investor marketing campaign, known as a “road show,” about two weeks prior its launch. Zuckerberg held discrete talks with Instagram’s founders and managed to keep underwriters in the dark about the sale until late in the process, sources said. Critics of the controversial deal say Facebook’s timing for the acquisition is questionable, while supporters argue that the Instagram purchase enhances Facebook’s platform and stymies rivals. Investors run scared of Spain's battered banks (Reuters) "Most are currently on liquidity life support from the ECB but asset quality continues to deteriorate as house prices keep falling and unemployment is still rising," said Georg Grodzki, head of credit research at Legal & General Investment Management. "Their funding remains constrained and competition for deposits intense," he told Reuters. Economy Minister Luis De Guindos told Reuters last week that all Spanish banks had met capital requirements set by the European Banking Authority under a 115-billion-euro recapitalization plan decided by European Union leaders in December. But fund managers remain skeptical due to the slow-burning property crash. They include Mark Glazener, head of global equities at Dutch asset manager Robeco, who sold off his exposure to Spain at the end of last year. "Given the scale of over-building over all these years, the present provisioning that the banks have made does not appear to be enough," he said. Zuckerberg Threatened to Disable Ceglia Site Amid Dispute (Bloomberg) Facebook cofounder Mark Zuckerberg threatened in 2004 to disable part of the website he was working on for Paul Ceglia, the New York man now suing him for part-ownership of the multibillion-dollar company, according to copies of e-mails filed by Facebook in federal court...“I must receive $5,000 by next Saturday at midnight, or the scroll search functionality will be removed from the site,” Zuckerberg wrote in a message to Ceglia on Feb. 21, 2004, about two weeks after he put “Thefacebook.com” online. Zuckerberg told Ceglia he owed him $10,500 of the $19,500 he’d been promised, according to the e-mails, filed by Facebook as part of the lawsuit in Buffalo, New York. Facebook last month asked the judge to throw out the lawsuit.

Opening Bell: 06.21.12

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

Opening Bell: 07.20.12

Eurogroup approves Spanish banking sector bailout (Reuters) Euro zone finance ministers approved an agreement on Friday to lend up to 100 billion euros ($123 billion) to Spain so it can recapitalize its banks, but the exact size of the loan will probably only be determined in September. Yahoo To Pay Mayer $100 Million Over 5 Years (WSJ) Ms. Mayer is expected to receive around $5.4 million from Yahoo for the remainder of this year and around $20 million a year after that, though some of that amount is tied to performance targets set by the board...The Yahoo pay package includes restricted stock units valued at $14 million in order to "partially compensate" Ms. Mayer for forfeiting her compensation from Google. It also includes a one-time retention award that is valued at $15 million and will vest over five years. Morgan Stanley Joins Citigroup In Job-Cut Push Amid Slump (Bloomberg) Headcount at Morgan Stanley will decline by about 700 in the second half, bringing total 2012 staff reductions to 4,000, Chief Financial Officer Ruth Porat, 54, said yesterday in an interview. Deutsche Bank, Europe’s biggest lender by assets, is considering about 1,000 job cuts at its investment bank, while Citigroup plans to chop about 350, people with knowledge of the decisions said this week. London Fund-Raisers Put Romney in a Scandal’s Glare (NYT) The former chief executive and a top lobbyist for Barclays, the bank at the center of the scandal, helped organize a Romney fund-raiser. The former chief executive, Robert E. Diamond Jr., has since withdrawn his name as the event’s co-host. The bank’s lobbyist, Patrick J. Durkin, remains a co-chairman: he has bundled $1.1 million for Mr. Romney from friends and business associates, more than any other lobbyist, according to federal records. Nasdaq to Release Compensation Plan for Investors Hurt by Facebook IPO Mess (FBN) Nasdaq is looking to release next week the compensation plan for investors who lost out on the bungled IPO of Facebook...Sources say the deal being discussed will be all in cash, and likely above the $40 million originally proposed...Nadsaq had proposed a $40 million deal in which $27 million of it involved trading credits--a move that outraged investors and market makers who may have lost a combined $200 million or more on the botched IPO. Because of that one source says the new Nasdaq proposal could be as high a $100 million and all of it in cash. Insider Traders Face Longer Sentences As Judges Get Tough (Bloomberg) Since Jan. 1, 2011, the judges have sent the average violator to prison for more than 22 months, according to an analysis of sentencing data by Bloomberg News. That was a 20 percent increase from the average term of 18.4 months during the previous eight years. Boxer’s Bloody Nose Leads to Bank Robbery Charges (AP) Martin Tucker won his latest boxing match, but a bloody nose in the ring could send him to prison for bank robbery. The FBI said it obtained a swab used to stop the bleeding and found that DNA matched Tucker's DNA on other evidence from a 2009 robbery at Monroe County Community Credit Union in Temperance, near the Michigan-Ohio border. In a court filing, agent Robert Schmitz said he was aware of Tucker's bout in April in Toledo, Ohio, and obtained the "discarded" Q-tips swab. Tucker's DNA matched DNA from a mask believed to have been used in the robbery and from the steering wheel of the getaway car, the FBI said...Detroit FBI spokesman Simon Shaykhet declined to discuss how Schmitz got the bloody swab. Defense attorney Haytham Faraj said there seems nothing illegal about acquiring it. "We leave our fingerprints, bits of hair and skin all over the place. If you're a boxer, sometimes you leave your blood around," Faraj said in an interview Thursday. Bank of England Says New York Fed Gave No Warning on Rate-Rigging (Dealbook) The call for a review into Libor in 2008 came after Mr. King and Mr. Geithner had talked about potential problems with the rate during a meeting in Basel, Switzerland, in early May 2008. This discussion was followed by a flurry of e-mails a month later in which Mr. Geithner, who is now the Treasury secretary, recommended changes to the rate, which is used as a benchmark for more than $360 trillion financial products worldwide. The suggestions included ‘‘strengthen governance and establish a credible reporting procedure’’ and ‘‘eliminate incentive to misreport,’’ according to documents released by the New York Fed. Mr. King told Mr. Geithner that he supported the suggestions. Yet the New York Fed did not make any allegations of wrongful behavior connected to Libor, according to documents released on Friday. Mr. King told a British parliamentary committee on Tuesday that Mr. Geithner’s suggestions did not represent a warning about the potential manipulation of Libor. Geithner-Led Fed Didn’t Do Enough in Libor Scandal: Sheila Bair (CNBC) "Looking at those emails, it looks like they had pretty explicit notification of some very bad behavior, and I don't understand why they didn't investigate," Bair said today. Banks in Libor probe consider group settlement (Reuters) A group of banks being investigated in an interest-rate rigging scandal are looking to pursue a group settlement with regulators rather than face a Barclays-style backlash by going it alone, people familiar with the banks' thinking said...Barclays Plc was the first to settle with U.S. and British regulators, paying a $453 million penalty and admitting to its role in a deal announced June 27. Its chief executive, Bob Diamond, abruptly quit the next week, bowing to public pressure and erosion of the bank's reputation. The sources told Reuters that none of the banks involved now want to be second in line for fear that they will get similarly hostile treatment from politicians and the public. Rex Ryan's Biggest Loss (NYP) “My surgeon told me one time, ‘How many tacos do you eat?’ because I told him how much I love Mexican food,” Ryan recalled. “I said, ‘I probably can eat about 12 tacos.’ He’s like, ‘OK.’ Never flinched. He said by the time this is really working, you’ll eat about a half or three-quarters of a taco and that’s it. I was like, ‘Why would I want to do that?’ And he said, no, you’ll be satisfied. That’s exactly where I’m at now...I have no clothes that fit. Socks are the only things that fit. Even a hat, underwear, I’ve got to change everything.”

Opening Bell: 07.10.12

Diamond To Forgo Deferred Bonuses (WSJ) Former Barclays Chief Executive Robert Diamond has given up bonuses of up to £20 million ($31 million) in an apparent effort to shield the lender as the bank looks to defuse anger following the rate-fixing scandal...According to Mr. Diamond's contract, he will receive up to 12 months' salary, pension allowance and other benefits. Barclays Chairman Marcus Agius said that this amounts to around £2 million. Paulson Funds Fell In June As Rally Undercut Euro Wager (Bloomberg) The $22 billion firm had losses in all its funds last month as stock markets rose. The losses were led by a 7.9 percent drop in his Advantage Plus Fund, according to an update to investors obtained by Bloomberg News. That leaves the fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, down 16 percent this year. Einhorn says Fed stimulus counterproductive (Reuters) "I think it's actually counterproductive," Einhorn said of the stimulus program, adding that it lowers the standard of living and drives up food and oil prices. He said he would suggest a rise in interest rates on U.S. Treasury bonds to "a reasonable level" of 2 to 3 percent. Einhorn said Apple, which he praised at this year's Ira Sohn investing conference, was "the best big-growth company we have." "We're two, three years into the Apple investment, and the way it seems headed it's likely we'll be there for a good while longer," he said. "I think the stock is very very substantially undervalued." He said Amazon.com Inc was "tough on its competitors" because it does not "feel the need to make a profit." "It's very hard to compete against somebody who doesn't feel the need to make a profit," he said, adding that he is not "short" Amazon. Investment Bankers Face Termination As Europe Fees Fall (Bloomberg) Credit Suisse and UBS face the most pressure to boost efficiency as that country runs ahead of others in introducing tougher capital and liquidity rules to curtail risk-taking, making some businesses unviable...While the situation may be most acute at the Swiss banks, similar dynamics are at work at other firms as the debt crisis drags on, capital requirements ratchet higher and economic growth grinds to a halt. “Bankers are really gloomy and a lot of people are worried about their jobs,” said Edward Cumming-Bruce, a partner at London-based advisory firm Gleacher Shacklock LLP who has more than 20 years’ experience. “Banks are under remorseless pressure to cut costs and balance sheets as we witness a significant change in the way the financial industry works.” Sitting for More Than Three Hours a Day Cuts Life Expectancy (WSJ) Sitting down for more than three hours a day can shave a person's life expectancy by two years, even if he or she is physically active and refrains from dangerous habits like smoking, according to a study to be published on Tuesday in the online journal BMJ Open. Watching TV for more than two hours a day can exacerbate that problem, decreasing life expectancy by another 1.4 years, said the report, which analyzed five underlying studies of nearly 167,000 people over a range of four to 14 years. Futures Broker Freezes Accounts (WSJ) Peregrine, based in Cedar Falls, Iowa, couldn't be reached for comment on the NFA action, but in an earlier statement to clients said "some accounting irregularities are being investigated regarding company accounts." "What this means is no customers are able to trade except to liquidate positions. Until further notice, PFGBEST is not authorized to release any funds," said PFGBest in its statement. Also in the statement, the firm said Russell R. Wasendorf Sr., its founder, chairman and chief executive, had experienced a "recent emergency" and described it as a "suicide attempt." A spokeswoman for PFGBest said Mr. Wasendorf was in critical condition in a hospital. Four Companies Break Through IPO Drought (WSJ) What do two fast-growing technology companies, an iconic guitar maker and a skin-infection specialist have in common? All four aim to break the latest dry spell in the IPO market. Fender Musical Instruments Corp., which has supplied guitars to rock artists from Buddy Holly to Kurt Cobain and John Mayer, network-security firm Palo Alto Networks Inc., travel website Kayak Software Corp. and pharmaceutical firm Durata Therapeutics Inc. said Monday that they plan to push ahead with initial public offerings in coming weeks. JPMorgan Silence On Risk Model Spurs Calls For Disclosure (Bloomberg) The U.S. Securities and Exchange Commission is probing JPMorgan’s belated May 10 disclosure that a change to its mathematical model for gauging trading risk helped fuel the loss in its chief investment office. While the SEC would have to prove that the biggest U.S. bank improperly kept important information from investors, regulators probably will press Wall Street firms to tell more about the risks they’re taking, three former SEC lawyers said. Would You Stress Over A Millionaire Wife? (CNBC) The study, conducted by SEI and Phoenix Marketing, found that a third of the women who are the financial leads in millionaire households say their partner feels “stressed” by their financial roles. By contrast, only 14 percent of males in male-led millionaire households said they feel tension from their partner. Actor who kicked in doors to Ed Sullivan theater escapes jail time (NYDN) The struggling actor who kicked in the glass doors to the Ed Sullivan Theatre and urinated on the lobby floor last year got lucky with a no-jail sentence Monday. But he had to pay $7,377.28 in restitution. James Whittemore, 23, who now deejays in Massachusetts under the name DJ Nutron, never formally apologized to David Letterman face to face, but he said he'd like to..."Someone stole my iPhone, I quit my job, my girlfriend broke up with me, I was having a rough day," he said.

Opening Bell: 12.06.12

Diamondback to Close Down as Investors Pull $520 Million (WSJ) Diamondback Capital Management LLC, among the hedge funds that was raided by the FBI about two years ago as part of the U.S. investigation of insider trading on Wall Street, is liquidating after clients pulled money. The Stamford, Connecticut-based fund received requests from investors to withdraw about $520 million, or 26 percent of its assets, co-founders Richard Schimel and Lawrence Sapanski, said today in a client letter. They said they plan to return the majority of the money next month. “We especially appreciate your patience and support during the last two difficult years during which we reached closure of the government’s investigation,” they said in the letter. SEC Probes Deutsche Bank (Bloomberg) U.S. securities regulators are investigating allegations that Deutsche Bank hid billions of dollars of paper losses during the financial crisis, according to people close to the investigation. The German bank said Wednesday that the allegations, by three former U.S.-based employees, were "wholly unfounded" and had been the subject of a "careful and thorough" review it had commissioned. The former employees have told the Securities and Exchange Commission that traders at Deutsche Bank overvalued a portfolio of derivatives to hide rapidly mounting losses when financial markets were collapsing in 2008, the people close to the investigation said. The details of the allegations were reported by the Financial Times on Wednesday. Wall Street Job Reductions Seen Persisting After Citigroup Cuts (WSJ) Wall Street’s cost cuts and dismissals, which have helped erase more than 300,000 financial- industry jobs in the past two years, are far from over. Citigroup's announcement yesterday of plans to eliminate 11,000 positions in units spanning equities trading to consumer banking is the latest sign of strain from a market slowdown, stiffer capital rules and weak economic growth. Lenders around the globe are likely to trim more jobs if revenue doesn’t rebound sharply next year, analysts and recruiters said. “The knives are sharpened and ready,” said Jason Kennedy, chief executive officer of London-based search firm Kennedy Group. “These institutions are too big for the business they are generating but they are still quite bullish that the market will return by mid-2013. Unless the markets picks up, there will be more cuts in the first half.” Broadening Tax Base and Raising Rates Key to 'Cliff' Deal: Summers (CNBC) The wiggle-room in the "fiscal cliff" negotiations comes down to a balanced approach on raising tax rates for wealthier Americans and broadening the tax base by closing loopholes and deductions, former Clinton Treasury Secretary Lawrence Summers told CNBC. "The president is not signing legislation — no way — that does not raise tax rates. The president has been clear as day," Summers said Thursday on "Squawk Box." Summers also pointed out that President Barack Obama isn't married to repealing the Bush tax cuts for the top 2 percent of wage earners all the way back to the Clinton-era tax rates of 39.6 percent. So rates might not go that high if there's sufficient revenue coming from the base-broadening side of the equation. Geithner: Ready to Go Over 'Cliff' If Taxes Don't Rise (CNBC) Treasury Secretary Timothy Geither told CNBC Wednesday that Republicans are "making a little bit of progress" in "fiscal cliff" talks but said the Obama administration was "absolutely" ready to go over the cliff if the GOP doesn't agree to raise tax rates on the wealthy. "I think they're making a little bit of progress," Geithner said. "They're clearly moving and figuring out how to try to move further." But Geithner said the White House would "absolutely" go over the fiscal cliff — triggering over $600 billion in automatic spending cuts and tax increases — unless tax rates increase on the top 2 percent of wage earners. Steinberg Is Eyed In SAC Trial (NYP) Prosecutors yesterday confirmed the worst-kept secret in the insider-trading trial unfolding in Manhattan federal court: They view former SAC Capital money manager Michael Steinberg as a co-conspirator in the case. Prosecutor Antonia Apps argued yesterday that Steinberg, a portfolio manager with SAC’s Sigma Alpha unit, should be officially labeled a co-conspirator in the case because he knew his former analyst, John Horvath, was receiving illegal tips on computer-maker Dell. The government has already alluded to Steinberg’s alleged role in earlier court documents, when it referred to four unnamed co-conspirators, including “the portfolio manager to whom Jon Horvath reported at his hedge fund.” That person is Steinberg. New Zealand Dogs Learn How to Drive (ABC) Who says you can’t teach an old dog new tricks? Not the New Zealand chapter of the Society for the Prevention of Cruelty to Animals (SPCA), which has launched a marketing campaign featuring dogs — real dogs — learning how to drive. Really. SPCA Auckland chose three abandoned dogs — Monty, Ginny and Porter — and put them behind the wheel of a car to show that rescue dogs are a first-rate choice for adoptions. “I think sometimes people think because they’re getting an animal that’s been abandoned that somehow it’s a second-class animal,” SPCA Auckland’s CEO, Christine Kalin, told the New Zealand Herald. “Driving a car actively demonstrates to potential rescue dog adopters that you can teach an old dog new tricks.” The trio of highway-ready rescue dogs was chosen by SPCA two months ago and then relocated to Animals on Q, a “premiere New Zealand animal talent agency,” according to its website, to begin their “doggy driver training process,” the Herald reported. The dogs have trained for the past eight weeks under the supervision of Animals on Q owner Mark Vette. Next week one of the dog’s skills will be put to the test in front of a live national TV audience. Porter, a 10-month-old Beardie Cross and the star among the three pups, will drive a Mini Countryman on the “Campbell Live” program on New Zealand’s 3 News, the station reported in a sneak peek that aired last night. The TV appearance will mark the first time that Porter, or any of the other pups, drives without human assistance. While training, Porter — along with Monty, an 18-month Giant Schnauzer, and, Ginny, a 1-year-old whippets cross — used a canine-modified Mini, but had human help in the form of steering wheel adjustments and verbal commands. Nasdaq drops ball on IPO — again (NYP) The electronic exchange run by CEO Robert Greifeld was forced yesterday to cancel orders on a planned $100 million initial public offering of WhiteHorse Finance due to “human error,” a Nasdaq spokesman said. A staffer in the exchange’s market-watch department “inadvertently” pressed a button to cancel trading rather than to delay the launch of the company. Standard Chartered to Pay Additional $330 Million in Iran Settlement (WSJ) Standard Chartered said Thursday it expects to pay an additional $330 million to settle with U.S. authorities over past transactions with Iranian clients that may have violated U.S. sanctions, putting its total bill at around $670 million. Madam Set To Name NFL Big (NYP) Notorious Upper East Side madam Anna Gristina is about to start naming names of high-power clients from her little black book — and an unlucky NFL executive will be the first bombshell name she lets fly, we’re told. “There is going to be a giant name dropped — actually, a couple of them,” Gristina told The Post’s Laura Italiano, speaking of her plans for an upcoming interview with TV host psychologist Dr. Phil. Asked if those names would be “giant” with a capital “G,” the Hockey Mom Madam gave a distinctly mischievous laugh that portends bad news for the bigwig client...“Everyone’s going to have to watch Dr. Phil,” she said. “I will tell you that one of the names is high-level [NFL] management. Then there’s an older [football] player who’s still very well known. Tune in to Dr. Phil!” Jobless Claims Fall (Reuters) Initial claims for state unemployment benefits dropped 25,000 to a seasonally adjusted 370,000, the Labor Department said on Thursday. The prior week's figure was revised to show 2,000 more applications than previously reported. EU Pushes Crackdown On Tax Havens (WSJ) The European Union's executive Thursday moved to step up efforts against tax havens, encouraging members to name and shame ultra-low-tax jurisdictions and crack down on cross-border tax avoidance within the 27-nation bloc. Guatemalan Police Arrest Software Guru McAfee (AP) Software company founder John McAfee was arrested by police in Guatemala on Wednesday for entering the country illegally, hours after he said he would seek asylum in the Central American country. The anti-virus guru was detained at a hotel in an upscale Guatemala City neighborhood with the help of Interpol agents and taken to an old, three-story building used to house migrants who enter the country illegally, said Interior Minister Mauricio Lopez Bonilla. It was the latest twist in a bizarre tale that has seen McAfee refuse to turn himself in to authorities in Belize, where he is a person of interest in the killing of a neighbor, then go on the lam, updating his progress on a blog and claiming to be hiding in plain sight, before secretly crossing the border into Guatemala. "He will be in danger if he is returned to Belize, where he has denounced authorities," said his lawyer in Guatemala, Telesforo Guerra. "His life is in danger." Guerra said he would ask that a judge look at McAfee's case as soon as possible. "From them moment he asked for asylum he has to have the protection of the Guatemalan government." Earlier Wednesday, McAfee said he had formally requested asylum in Guatemala after entering the country from Belize, where he says he fears for his safety because he has sensitive information about official corruption and refused to donate to local politicians. "Yes, we are presenting this, and I want it to be clear, because of the persecution, not because of the murder," he told the AP about his asylum bid.

Opening Bell: 08.17.12

Facebook Investors Cash Out (WSJ) Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be "painful" to watch as investors continue to retreat from Facebook's stock, according to people familiar with the meeting. Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg) Facebook's 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011. Wall Street Bonus Estimates Cut By Pay Consultant Johnson (Bloomberg) Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. The biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed. “They had a terrible 2011, so it’s off of a low base,” Johnson said. “We hoped that that business would have recovered more dramatically, but it hasn’t, so I guess you’d say it’s gone from terrible to so-so.” Executives Say Obama Better For World Economy (Reuters) Twice as many business executives around the world say the global economy will prosper better with President Barack Obama than with Mitt Romney, according to a poll out Friday. Democrat Obama was chosen by 42.7 percent in the 1,700-respondent poll, compared with 20.5 percent for Romney. The rest said "neither." 'Broken' Fund Shifts Blame (WSJ) Nearly four years after the collapse of Lehman Brothers Holdings Inc. "broke the buck" at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008. The Securities and Exchange Commission alleges that the two men falsely claimed they would prop up the fund's $1 net asset value even though they "secretly harbored" doubts. The two Bents have denied the allegations in the SEC's civil lawsuit ever since it was filed in U.S. District Court for the Southern District of New York in 2009. Former Spitzer call girl Ashley Dupre is engaged and pregnant (NYP) “On the record, yes, I can confirm I’m almost seven months,” Dupre, 27, enthused when contacted yesterday. “I can’t tell you when the wedding date is just yet.” In four short years, Dupre’s gone from Client No. 9 to Husband No. 1, and now owns Femme by Ashley, a lingerie and swimwear shop in Red Bank, NJ, which she her husband to be, New Jersey asphalt scion Thomas “TJ” Earle, helped her open in May. Ex-MS Banker In China Bribery Case (CNBC) Garth Peterson joined Morgan Stanley in Asia in 2002, just as the Chinese real estate market was taking off. His job would be making real estate deals for the firm, and Peterson seemed the ideal person for the position. A blonde, blue-eyed American raised in Singapore, Peterson — then in his early 30s — was fluent in Mandarin, and in the local culture. “The language is, you know, essential, I would say, being able to speak Mandarin well,” Peterson said. “But beyond that, I worked in the Chinese real estate industry since 1993.” In 2006 alone, according to news reports at the time, Morgan Stanley invested $3 billion in Chinese real estate. Peterson, by then a vice president, was at the forefront. “I was given more and more support, and the business just grew exponentially,” he said. Today, his fortunes have drastically changed. On Thursday, Peterson was sentenced to 9 months in prison and 3 years supervised release after pleading guilty to evading Morgan Stanley’s internal controls — a federal offense. Prosecutors said he engineered a deal that transferred Morgan Stanley’s interest in a multi-million dollar Shanghai real estate development to a shell company secretly controlled by Peterson and a Chinese government official. The official, who was not identified, made an instant paper profit of $2.5 million. Treasury To Amend Terms Of Fannie, Freddie Bailout (WSJ) Under the new arrangement between Treasury and the companies' federal regulator, all the firms' quarterly profits would be turned over to the government as a dividend payment; the government wouldn't require such payments in periods when the firms are unprofitable. Backstop For Futures Trades (WSJ) Support is growing for an insurance fund that would protect customers of futures brokerages that collapse. While numerous hurdles remain, the process took an important step Thursday when futures-exchange operator CME Group met with other industry officials and a customer-advocacy group in Chicago to discuss how to set up a customer-protection fund. It could take months or even longer for a specific plan to emerge, but participants in the meeting said it is increasingly likely that the government, futures industry or both will propose such an insurance fund. "Restoring customer confidence is very important," and "we're looking at all potential solutions, including an insurance fund," said Walt Lukken, president of the Futures Industry Association, a trade group.

Opening Bell: 09.24.12

Germany Losing Patience With Spain as EU Warns on Crisis Effort (Bloomberg) Germany’s governing coalition showed growing exasperation with Spain, as a senior ally of Chancellor Angela Merkel said Prime Minister Mariano Rajoy must stop prevaricating and decide whether Spain needs a full rescue. “He must spell out what the situation is,” Michael Meister, the chief whip and finance spokesman for Merkel’s Christian Democratic Union, said in an interview in Berlin today. The fact he’s not doing so shows “Rajoy evidently has a communications problem. If he needs help he must say so.” Germany Dismisses Talk of Boosting Bailout Fund (WSJ) Europe is discussing ways to leverage the assets of its €500 billion ($649.05 billion) bailout fund through the involvement of private-sector investors, but reports that this could boost the firepower of the European Stability Mechanism to more than €2 trillion are "completely illusory," a spokesman for the German Finance Ministry said on Monday. Cost of Leaving Greece Rises for Crédit Agricole (WSJ) Crédit Agricole will likely have to pour a further €600 million ($779 million) to €700 million into its flailing Greek unit before it will be able sell the subsidiary, according to people from both the private and public sectors with knowledge of the sales process. Under Ben Bernanke, An Open And More Forceful Fed (WaPo) In what might be his final years as chairman of the Federal Reserve, Ben S. Bernanke is transforming the U.S. central bank, seeking to shed its reclusive habits and make it a constant presence in bolstering the economy. The new approach would make the Fed’s policies more responsive to the needs of the economy — and likely more forceful, because what the Fed is planning to do would be much clearer. A key feature of the strategy could be producing a set of scenarios for when and how the Fed would intervene, which would mark a dramatic shift for an organization that throughout its history has been famously opaque. Bernanke has already pushed the Fed far along this path. The central bank this month pledged to stimulate the economy until it no longer needs the help, an unprecedented promise to intervene for years. That’s a big change from the Fed’s usual role as a curb on inflation and buffer against financial crises. “It’s a re-imagining of Fed policy,” said John E. Silvia, chief economist at Wells Fargo. “It’s a much more explicit commitment than people had thought about in the past. It’s a much stronger commitment to focus on unemployment.” Economists Say US Needs More Taxes, Spending Cuts (AP) A slight majority of respondents — 59 percent — said that current U.S. monetary policy was "about right." The percentage replying that monetary policy was "too stimulative" fell slightly compared with the percentage that held that same view in March, while the proportion answering that policy was "too restrictive" edged up. Flight attendant brings revolver through Philly airport security (NYDN) Republic Airlines flight attendant Jaclyn Luby was walking through airport screening around 6:50 a.m. when she placed her carry-on bag through the X-ray machine. Transportation Security Administration screeners saw the gun, described as a .38 caliber Smith and Wesson Airweight revolver, and notified a Philadelphia police officer. Luby was in another screening room with police when the gun went off. The bullet fired into a TSA break room, where an employee was sitting, police told NBC 10 Philadelphia. The gun discharged when the officer tried to put the safety on. Luby, a flight attendant for more than five years, told authorities that she had a permit to carry a gun — but forgot hers was in her handbag...“We are human and everybody does make mistakes and I understand that, even though she’s a seasoned veteran, she needs to be careful,” US Airways passenger Andrea Burger said, adding, “I’m sure it will be a great learning opportunity for her.” Winkelvoss Twins Weigh In On Facebook IPO (NYP) Cameron and Tyler Winklevoss have put their $65 million Facebook lawsuit settlement money to work, starting Winklevoss Capital, a venture-capital firm focused on technology investments. The duo were asked by Yahoo!’s Daily Ticker what went wrong with the Facebook initial public offering. Cameron Winklevoss said the insiders got greedy and didn’t leave something on the table. “I think when you alienate a group of investors, it takes time to build that rapport back.” Tyler Winklevoss thought the hoodie and “hacker way” ethos didn’t play well with public investors. Mark Zuckerberg’s business model “might work in Silicon Valley with venture-capital firms, but when you go public and you’re talking to the Street, they’re much more concerned with numbers and bottom line and accountability.” Hedge Funds Cut Bets as Prices Drop Most Since June (Bloomberg) Hedge funds cut bullish commodity bets for the first time this month as weaker manufacturing from China and Europe eclipsed central banks’ efforts to boost growth, driving down prices the most since June. Money managers decreased their net-long positions across 18 U.S. futures and options by 1.7 percent to 1.307 million contracts in the week ended Sept. 18, halting two weeks of gains that had sent holdings to a 16-month high, U.S. Commodity Futures Trading Commission data show. Wells Fargo Should Buy CIT Group, Says Analyst (Reuters) FYI. U.K. to Set Up Business Bank (WSJ) The U.K. government is investing £1 billion ($1.62 billion) to set up a new state-backed business bank that it hopes will eventually support up to £10 billion of new lending for small and medium-size companies, Business Secretary Vince Cable will announce on Monday. The new wholesale bank, which will operate at arms length from the government, aims to attract more than £1 billion of private-sector capital to help tackle what it sees as the long-standing problem of a lack of credit for smaller companies. Houston Officer Kills Double Amputee in Wheelchair (AP) A Houston police officer shot and killed a one-armed, one-legged man in a wheelchair Saturday inside a group home after police say the double amputee threatened the officer and aggressively waved a metal object that turned out to be a pen. Police spokeswoman Jodi Silva said the man cornered the officer in his wheelchair and was making threats while trying to stab the officer with the pen. At the time, the officer did not know what the metal object was that the man was waving, Silva said. She said the man came "within inches to a foot" of the officer and did not follow instructions to calm down and remain still. "Fearing for his partner's safety and his own safety, he discharged his weapon," Silva told The Associated Press.

Opening Bell: 04.22.13

Bill Gross Attacks UK and Euro Zone Austerity (FT) Bill Gross, manager of the world's largest bond fund for Pimco, has launched a stinging attack on efforts by Britain and much of the euro zone to cut debt rapidly with severe austerity measures, warning that such action risks stifling recovery. "The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not," Mr Gross told the Financial Times. "You've got to spend money." Argentina's New Debt Offer Rejected by Holdout Creditors (WSJ) Holdout creditors on Friday rejected Argentina's proposal to pay them about 20 cents on every U.S. dollar of bonds they own, leaving a U.S. appeals court to decide how to enforce a ruling that may push Argentina into a new default. "Not only are the details of Argentina's proposal unacceptable and unresponsive; Argentina fails even to provide this court with meaningful 'assurances' that it will actually comply with its own proposal," said Theodore Olson, a lawyer for the holdouts, in a brief filed Friday. Argentina's own math values the offer at $210 million, less than 15% of the $1.47 billion that holdouts were owed on their defaulted bonds as of March 1, according to the brief. Hedge Fund Stars Suit Up At Yankee Stadium To Attract Investors (NYP) Hedge-fund mogul Stevie Cohen will be pitching at Yankee Stadium tomorrow. No, the 56-year-old billionaire is not suiting up for the Bronx Bombers — but he will be hoping the magic of the House that Ruth Built will yield some investment cash. Cohen, whose SAC Capital faces a loss of $1.7 billion from investors who want out of his $15 billion hedge fund, is one of about 70 hedge fund managers who’ll be at the Stadium tomorrow making a pitch to prospective new investors at a day-long event sponsored by Goldman Sachs. Singapore Will Replace Switzerland As Wealth Capital (CNBC) Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth. Switzerland accounts for 34 percent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore's assets could more than quadruple by then. Somali Banking Starts From Ground Up (WSJ) Abdusalam Omer is a central bank governor without much to govern. The Central Bank of Somalia doesn't hold reserves in the country's currency, the shilling. There are no functioning commercial banks in the strife-torn country for it to regulate. The 75-strong staff that still turns up for work after two decades of civil war is a motley crew of money men and handymen. "I don't know why the central bank employs painters," says the 58-year-old who was named the country's top banker in January. Eventbrite Funding Slows Its IPO Chase (WSJ) Eventbrite Inc., an event ticketing company, has raised $60 million from two investors, making it the latest example of a startup to raise significant private late-stage funding that puts off an initial public offering. San Francisco-based Eventbrite had sparked expectations of an imminent IPO when it said earlier this month that it hired a chief financial officer, Mark Rubash, who previously worked at Yahoo Inc. and eBay Inc. Instead, it joins a growing number of companies that have found plentiful funding in the private markets rather than going public at an early stage. The company has raised the new cash from mutual-fund firm T. Rowe Price Group Inc. and Tiger Global Management LLC, an investment-management firm, said Kevin Hartz, co-founder and chief executive. That brings its total private fundraising to some $135 million since its inception in 2006. "This gives us flexibility in setting the timeline for a later IPO, on our schedule," said Mr. Hartz. Deutsche Bank Margin Call on Vik Sparks $2.5 Billion Dispute (Bloomberg) Alexander Vik went to Deutsche Bank AG’s London office in October 2008 to meet account managers who congratulated the Norwegian entrepreneur on how well his Sebastian Holdings Inc. investment fund was doing. Within a month, as global markets tumbled into crisis, the same bankers demanded about $530 million against the fund’s currency bets and began to liquidate its positions. Vik, 58, will argue at a 12-week trial starting in London today that the bank’s actions resulted in losses and missed profits totaling about $2.5 billion. A judge will have to decide whether Sebastian’s calculation of lost trading gains is accurate, said John Day, a lawyer at London-based litigation firm DaySparkes. Zimbabwe Prepares Law to Seize Company Stakes Without Paying (Bloomberg) Zimbabwe’s government is preparing a law that would allow it to seize controlling stakes in companies without compensation, according to a draft of the legislation obtained by Bloomberg News. The law would be an amendment to a 2007 act that compels foreign and white-owned companies such as Rio Tinto Group, Sinosteel Corp. and Impala Platinum Holding Ltd. to sell or cede 51 percent of their shares to black nationalsor state-approved agencies.