Opening Bell: 06.06.12

Greece Warns of Going Broke as Tax Proceeds Dry Up (NYT) Government coffers could be empty as soon as July, shortly after this month’s pivotal elections. In the worst case, Athens might have to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals. Officials, scrambling for solutions, have considered dipping into funds that are supposed to be for Greece’s troubled banks. Some are even suggesting doling out i.o.u.’s. Spain Warns It Needs Help (WSJ) Oh, hey, in case it was unclear: "Spain made its most explicit suggestion yet that it would seek help from Europe for its struggling banks, as the country's budget minister said high interest rates on Spanish bonds were a signal the government risks losing access to financial markets." Nobel Winner Stiglitz Sees More Recession Odds In Romney (Bloomberg) History shows that the adoption of fiscal austerity when an economy is weak can have disastrous consequences, as happened in the U.S. in 1929 on the eve of the Great Depression, Stiglitz told Bloomberg editors and reporters in New York Monday. “The Romney plan is going to slow down the economy, worsen the jobs deficit and significantly increase the likelihood of a recession,” said Stiglitz. US Already in 'Recession,' Extend Tax Cuts: Bill Clinton (CNBC) In a taped interview aired with CNBC, the 42nd president called the current economic conditions a "recession" and said overzealous Republican plans to cut the deficit threaten to plunge the country further into the debt abyss. Blanked Bankers Double As Bonuses Disappear, Survey Shows (Bloomberg) The proportion of investment bankers who got no bonuses last year more than doubled to about 14 percent, a poll by executive-search firm Options Group shows. The percentage of employees who weren’t given an annual award rose from 6 percent in 2010, a report yesterday from the New York-based company said. Getting no bonus, or being “blanked” by your employer, isn’t the smear it once was because base salaries increased afterthe 2008 financial crisis, said Michael Karp, managing partner of Options Group. The pizza has ‘sex’tra toppings (NYP) An Italian eatery just steps from Yankee Stadium is charging customers for slices of pizza — and sex with their wait staff, a new lawsuit claims. Yankee fans heading to Stadium Pizza after ball games are treated to a smorgasbord of waitresses and bartenders moonlighting as prostitutes, according to a lawyer for former employee Olga Contreras, who is suing the restaurant’s owners for sexual harassment, said her lawyers, Matthew Blit and Amanda Gudis. Contreras says she has spotted one worker frequently giving oral sex, and customers disappearing into the restroom with the staff. Morgan Stanley May Sell Piece of Commodities Unit (CNBC) Worried about the potential impact of new regulations, Morgan Stanley is considering selling a minority stake in its commodities business, say people familiar with the matter, and has held preliminary conversations with potential suitors in recent months about how a deal could look. Geithner Said To Seek U.S. Bankers’ Dodd-Frank Objections (Bloomberg) Treasury Secretary Timothy F. Geithner has challenged bankers to give him specifics on their longstanding complaint that the Dodd-Frank Act is imposing costly, confusing and burdensome regulations on them, according to four people familiar with the matter...Geithner offered to use his ability to reach across agencies to better coordinate and streamline rules if he found the report convincing, according to the people, who asked not to be identified because they weren’t authorized to discuss the study. The complaints include the handling of so-called stress tests of banks’ ability to weather a crisis, capital requirements and restrictions on mortgage servicing. Feds probing Nasdaq’s $10.7M FB profit (NYP) ...some of the issues the agency is believed to be looking at is whether the exchange made its trades ahead of clients and other participants, sources said. The regulators also is looking into whether the trading systems at other Nasdaq member firms made matters worse. Italy To Push 'Pink Quotas' (WSJ) A new law requires Italian listed and state-owned companies to ensure that one-third of their board members are women by 2015. Currently, only around 6% of the total number of corporate board members in Italy are women—one of the lowest levels in Europe and a number that reflects how few women work here. Gold Bugs Defy Bear-Market Threat With Soros Buying (Bloomberg) Bank of America was joined by Goldman Sachs Group Inc., Morgan Stanley and Barclays Plc in urging investors to buy in December and January. Now, after gold fell 10 percent in a four-month slide through May, they say prices will rebound this year or next as the Federal Reserve shores up the world’s biggest economy by easing monetary policy and devaluing the dollar. Billionaire George Soros bought more in the first quarter and hedge-fund manager John Paulson held on to the biggest stake in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, Securities and Exchange Commission filings show. Some investors are refusing to capitulate even after failed elections in Greece drove the euro to a two-year low against the dollar and gold slumped as much as 21 percent in December from the record $1,923.70 set in September. Oregon woman wins $900K after contracting herpes from sex partner (NYDN) “He was 69, my client was a very attractive 49. My argument to the jury was he just wanted to sink his hooks into her,” the plaintiff’s attorney said. The jury found that the man was 75% at fault, while the woman was 25% responsible. The jurors also decided that by exposing her to the STD, the man committed battery and made her suffer greatly.
Author:
Updated:
Original:

Greece Warns of Going Broke as Tax Proceeds Dry Up (NYT)
Government coffers could be empty as soon as July, shortly after this month’s pivotal elections. In the worst case, Athens might have to temporarily stop paying for salaries and pensions, along with imports of fuel, food and pharmaceuticals. Officials, scrambling for solutions, have considered dipping into funds that are supposed to be for Greece’s troubled banks. Some are even suggesting doling out i.o.u.’s.

Spain Warns It Needs Help (WSJ)
Oh, hey, in case it was unclear: "Spain made its most explicit suggestion yet that it would seek help from Europe for its struggling banks, as the country's budget minister said high interest rates on Spanish bonds were a signal the government risks losing access to financial markets."

Nobel Winner Stiglitz Sees More Recession Odds In Romney (Bloomberg)
History shows that the adoption of fiscal austerity when an economy is weak can have disastrous consequences, as happened in the U.S. in 1929 on the eve of the Great Depression, Stiglitz told Bloomberg editors and reporters in New York Monday. “The Romney plan is going to slow down the economy, worsen the jobs deficit and significantly increase the likelihood of a recession,” said Stiglitz.

US Already in 'Recession,' Extend Tax Cuts: Bill Clinton (CNBC)
In a taped interview aired with CNBC, the 42nd president called the current economic conditions a "recession" and said overzealous Republican plans to cut the deficit threaten to plunge the country further into the debt abyss.

Blanked Bankers Double As Bonuses Disappear, Survey Shows (Bloomberg)
The proportion of investment bankers who got no bonuses last year more than doubled to about 14 percent, a poll by executive-search firm Options Group shows. The percentage of employees who weren’t given an annual award rose from 6 percent in 2010, a report yesterday from the New York-based company said. Getting no bonus, or being “blanked” by your employer, isn’t the smear it once was because base salaries increased after the 2008 financial crisis, said Michael Karp, managing partner of Options Group.

The pizza has ‘sex’tra toppings (NYP)
An Italian eatery just steps from Yankee Stadium is charging customers for slices of pizza — and sex with their wait staff, a new lawsuit claims. Yankee fans heading to Stadium Pizza after ball games are treated to a smorgasbord of waitresses and bartenders moonlighting as prostitutes, according to a lawyer for former employee Olga Contreras, who is suing the restaurant’s owners for sexual harassment, said her lawyers, Matthew Blit and Amanda Gudis. Contreras says she has spotted one worker frequently giving oral sex, and customers disappearing into the restroom with the staff.

Morgan Stanley May Sell Piece of Commodities Unit (CNBC)
Worried about the potential impact of new regulations, Morgan Stanley is considering selling a minority stake in its commodities business, say people familiar with the matter, and has held preliminary conversations with potential suitors in recent months about how a deal could look.

Geithner Said To Seek U.S. Bankers’ Dodd-Frank Objections (Bloomberg)
Treasury Secretary Timothy F. Geithner has challenged bankers to give him specifics on their longstanding complaint that the Dodd-Frank Act is imposing costly, confusing and burdensome regulations on them, according to four people familiar with the matter...Geithner offered to use his ability to reach across agencies to better coordinate and streamline rules if he found the report convincing, according to the people, who asked not to be identified because they weren’t authorized to discuss the study. The complaints include the handling of so-called stress tests of banks’ ability to weather a crisis, capital requirements and restrictions on mortgage servicing.

Feds probing Nasdaq’s $10.7M FB profit (NYP)
...some of the issues the agency is believed to be looking at is whether the exchange made its trades ahead of clients and other participants, sources said. The regulators also is looking into whether the trading systems at other Nasdaq member firms made matters worse.

Italy To Push 'Pink Quotas' (WSJ)
A new law requires Italian listed and state-owned companies to ensure that one-third of their board members are women by 2015. Currently, only around 6% of the total number of corporate board members in Italy are women—one of the lowest levels in Europe and a number that reflects how few women work here.

Gold Bugs Defy Bear-Market Threat With Soros Buying (Bloomberg)
Bank of America was joined by Goldman Sachs Group Inc., Morgan Stanley and Barclays Plc in urging investors to buy in December and January. Now, after gold fell 10 percent in a four-month slide through May, they say prices will rebound this year or next as the Federal Reserve shores up the world’s biggest economy by easing monetary policy and devaluing the dollar. Billionaire George Soros bought more in the first quarter and hedge-fund manager John Paulson held on to the biggest stake in the SPDR Gold Trust, the largest exchange-traded product backed by bullion, Securities and Exchange Commission filings show. Some investors are refusing to capitulate even after failed elections in Greece drove the euro to a two-year low against the dollar and gold slumped as much as 21 percent in December from the record $1,923.70 set in September.

Oregon woman wins $900K after contracting herpes from sex partner (NYDN)
“He was 69, my client was a very attractive 49. My argument to the jury was he just wanted to sink his hooks into her,” the plaintiff’s attorney said. The jury found that the man was 75% at fault, while the woman was 25% responsible. The jurors also decided that by exposing her to the STD, the man committed battery and made her suffer greatly.

Related

Opening Bell: 09.04.12

Moody's Gives EU Warning (WSJ) Moody's Investors Service has put the European Union's triple-A credit rating on a negative outlook in a move that reflects actions the ratings firm has taken on some of the euro-zone's largest members, including Germany and the Netherlands. "Moody's believes that it is reasonable to assume that the EU's credit-worthiness should move in line with the credit-worthiness of its strongest key member states considering the significant linkages between member states and the EU," Moody's said in a release. Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain (NYT) After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Julio Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks. “The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.” In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system. According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier. Europe Bank Chief Hints At Bond Purchases (WSJ) The comments by Mario Draghi in a closed hearing at the European Parliament on Monday came ahead of the ECB's monthly policy meeting Thursday. That meeting has been keenly awaited in the financial markets for further details of how the bank could help bring down the funding costs of countries such as Spain and Italy to prevent them from having to seek full euro-zone bailouts like Greece, Ireland and Portugal. Switzerland Flirts With Recession (WSJ) "Three months ago, the Swiss economy looked charmingly strong against the backdrop of the euro zone and now it is looking on the brink of recession," said Janwillem Acket, chief economist at Julius Bär in Zurich. Nigeria Uncovers Cocaine-Stuffed Roasted Chicken (AP) The roasted chickens had an unusual stuffing — $150,000 worth of cocaine, according to Nigerian police. A Nigerian mechanic who struggled in Brazil for more than six years had hoped the drugs would buy him a life of luxury in his native land, Nigerian authorities said Monday. "This was like a retirement plan for him," said Mitchell Ofoyeju, spokesman for the National Drug Law Enforcement Agency. The accused was arrested over the weekend at the airport in Lagos after he came in from Sao Paulo with 2.6 kilograms (5.7 pounds) of cocaine, Ofoyeju said. Photos from the agency showed egg-shaped packages wrapped in gold aluminum foil and tucked into the browned chickens. Citibank Hid Firm’s Financial Troubles, Ex-Partner at Dewey & LeBoeuf Says (NYT) In a recent court filing, the former partner, Steven P. Otillar, says Citibank conspired with Dewey's management to hide the law firm's true financial condition in the months before its collapse. Mr. Otillar made the claim in response to a lawsuit brought against him by Citibank seeking repayment of a $210,000 loan. The bank lent Mr. Otillar the money to pay for his capital contribution to Dewey when he joined the partnership in August 2011. (New partners typically must make a financial contribution to a law firm when they join.) The filing said that Citibank had extended Mr. Otillar the loan as part of a fraudulent scheme intended to benefit Citibank and Dewey's management. By recruiting him and other partners to join the financially troubled firm in the months leading up to its demise—and collecting millions of dollars from them—Dewey's partners enriched themselves and kept the firm afloat. Credit Suisse Exec Facing Arrest Order (Reuters) A judge in Argentina has ordered the arrest of Credit Suisse executive and former US Treasury Undersecretary David Mulford because he failed to testify over a 2001 Argentine debt swap, the state news agency reported today. Federal Judge Marcelo Martinez de Giorgi will ask Interpol to issue an international arrest warrant seeking Mulford’s extradition for questioning over the bond exchange carried out by the government in an unsuccessful bid to avoid default. Bernanke Channeling Hatzius Dismissing Gross New Normal (Bloomberg) Federal Reserve Chairman Ben S. Bernanke is betting the new U.S. economy is the same as the old one as he lays out arguments for more stimulus to revive it. He made that diagnosis last week in a rebuttal to those who blame an 8.3 percent unemployment rate on structural shifts in the economy wrought by the financial crisis and who contend joblessness is permanently elevated. “I see little evidence of substantial structural change in recent years,” Bernanke told fellow central bankers and economists at the annual monetary-policy symposium in Jackson Hole, Wyoming. “Following every previous U.S. recession since World War II, the unemployment rate has returned close to its pre-recession level.” Ice Picks Are Still Used As Weapons (NYT) Mann Rosa, 32, who lives on Perry Avenue about a block from the scene of the recent attack, said ice picks were back in vogue among street gangs all across the city. “The ice pick, from what I know, is the new thing,” Mr. Rosa said, noting how easy it was to buy and conceal. “It’s definitely the new wave.” Toward the end of the conversation, almost as if he had an afterthought, Mr. Rosa said he had been stabbed repeatedly with an ice pick about two years ago during a street fight. He rolled up the sleeve of his T-shirt to reveal two dime-size wounds, not unlike scars from a smallpox vaccination, on his shoulder and upper arm. “I was stabbed once in the chest, once in the back and twice in the arm,” Mr. Rosa said; it took 12 stitches to close the wounds. Asked if the police ever caught the perpetrator, Mr. Rosa laughed and shook his head. “We got this thing called street justice. We don’t go to the cops over something like that.”

Opening Bell: 10.09.12

Stress For Banks As Tests, Loom (WSJ) U.S. banks and the Federal Reserve are battling over a new round of "stress tests" even before the annual exams get going later this fall. The clash centers on the math regulators are using to produce the results. Bankers want more detail on how the calculations are made, and the Fed thus far has resisted disclosing more than it has already. A senior Fed supervision official, Timothy Clark, irked some bankers last month when he said at a private conference they wouldn't get additional information about the methodology, according to people who attended the event in Boston. Wells Fargo Treasurer Paul Ackerman said at the same conference that he still doesn't understand why the Fed's estimates are so different from Wells's. His remarks drew applause from bankers in the audience, said the people who attended. Bonus Round Is Over (NYP) Wall Street traders, among the best paid in financial circles, are facing another meager bonus season this year — at least by Street standards — after a rough 2011 saw bonuses slashed by as much as 30 percent. Although some groups will fare better than others, equity traders could see their prized bonuses shredded again in 2012 — by as much as 35 percent, according to recruiters and others. In addition to lower bonuses, Wall Streeters are likely to see less of the payout in cash and more in stock — with the stock facing longer deferral periods, one recruiter, Michael Karp, co-founder of Options Group, said. Deutsche Bank has already moved from three-year deferral periods to stricter five-year deferrals and it’s expected that other banks will follow suit. IMF Sees ‘Alarmingly High’ Risk of Deeper Global Slump (Bloomberg) The world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year, the IMF said today, compared with July predictions of 3.5 percent in 2012 and 3.9 percent in 2013. The Washington-based lender now sees “alarmingly high” risks of a steeper slowdown, with a one-in-six chance of growth slipping below 2 percent. Depositors Turn Up Heat On Ailing Spanish Banks (WSJ) Eugenio Nuñez Cobás stormed into a bank branch in this coastal town one morning in August with three dozen fellow customers yelling "Thieves! Thieves! Thieves!" Then they returned to the street and pelted the facade with eggs, forcing the branch to close for the day. Athens Preparing for Anti-Austerity Protests Aimed at Merkel (Bloomberg) Greece’s capital will grind to a halt today for German Chancellor Angela Merkel’s first visit since the financial crisis began, with 7,000 officers deployed around Athens to prevent violence at planned protests. Authorities have declared entire sections of downtown off- limits, notably Prime Minister Antonis Samaras’s office, where the two leaders, will meet and the German embassy. Merkel is due to arrive at 1:30 p.m., around the same time as three separate protest marches gather in front of Parliament. Can Marissa Mayer Really Have It All? (NYM) When faced with a difficult decision, Mayer likes to create a spreadsheet. She went to Stanford as an undergrad, switching from pre-med to an esoteric major called “symbolic systems,” which is a mixture of philosophy, brain science, and artificial intelligence (anybody anywhere can do pre-med, she thought), and then continued on, getting an advanced degree in computer science. She entered the job market in the spring of 1999, at the height of the dot-com boom, and got more than a dozen offers—from several dot-coms, including Google (she interviewed with Page and Sergey Brin at a Ping-Pong table), and one from McKinsey & Co. “I like to do matrices,” she told NPR. “One option per line, different facets for each column. Salary, location, happiness index, failure index, and all that.” That spring, her matrix pointed her toward Google. “To my credit, I actually gave Google a hundred times more likely chance of succeeding than any of the other start-ups [from which she got offers], because I gave them a 2 percent chance of success. I gave all the other start-ups a .02 percent chance of success.” A Beacon For DC, By Ben Bernanke (WSJ) People decry the absence of leadership in Washington these days. My response: Look no further than the home-team dugout at Nationals Park. Under Manager Davey Johnson's confident, laid-back leadership, the Washington Nationals, defying all preseason conventional wisdom, have claimed the 2012 championship of the National League Eastern Division and the best regular-season record in Major League Baseball...Davey, who earned a degree in mathematics from Trinity University, is the epitome of the head-and-heart consensus. He was an early proponent of the use of statistical analysis in baseball decision-making, and it is clear in his tactical management of games that he is very conversant with sabermetric principles. He well understands, for instance, how to use statistics in determining lineups and pitcher-hitter matchups. At the same time, Davey is also really good at identifying and nurturing talent. Most strikingly, he has shown himself willing to sacrifice short-term tactical advantage for the long-term benefit of bolstering the confidence of a player in whom he sees great potential. He lets players play through slumps and gives pitchers who have gotten behind a chance to dig themselves out. His reasoning: Giving a promising player the opportunity the prove himself will often do more for the team in the long run than making an ostensibly better tactical decision in the short run—even if it costs the team a game or two. McKinsey casts gloomy eye on world banking (Reuters) Banks worldwide remain scarred by the 2007-2009 financial crisis and are years away from developing new business models that will produce sustainable profits, according to a new study. Despite progress in meeting regulators' requirements to build capital, revenue growth is slow, costs are rising and new competitors exploiting digital technologies are emerging, McKinsey & Co said in a report released on Monday evening. Obama's Next Fed Chief: Who Gets The Job If Obama Wins Second Term? (WaPo) The top contenders are: Ben Bernanke, Larry Summers, Janet Yellen, Roger Ferguson, Bill Dudley, Tim Geithner, and Don Kohn. Man Dies After Live Roach-Eating Contest In Florida (AP) The winner of a roach-eating contest in South Florida died shortly after downing dozens of the live bugs as well as worms, authorities said Monday. About 30 contestants ate the insects during Friday night's contest at Ben Siegel Reptile Store in Deerfield Beach about 40 miles north of Miami. The grand prize was a python. Edward Archbold, 32, of West Palm Beach became ill shortly after the contest ended and collapsed in front of the store, according to a Broward Sheriff's Office statement released Monday. He was taken to the hospital where he was pronounced dead. Authorities were waiting for results of an autopsy to determine a cause of death...None of the other contestants became ill, the sheriff's office said. There was no updated phone number listed for Archbold in West Palm Beach. "We feel terribly awful," said store owner Ben Siegel, who added that Archbold did not appear to be sick before the contest. "He looked like he just wanted to show off and was very nice," Siegel said, adding that Archbold was "the life of the party."

Opening Bell: 01.04.13

SEC Drops Case Against Ex-Berkshire Exec Sokol (Reuters) The U.S. securities regulator has decided not to take action against David Sokol, once considered a possible candidate for the top job at Warren Buffett's Berkshire Hathaway, Sokol's lawyer told Reuters. In 2011, Buffett said Sokol violated the company's insider trading rules to score a $3 million windfall profit on shares of U.S. chemicals maker Lubrizol, which rose by nearly a third after Berkshire Hathaway announced it would buy the company. The U.S. Securities and Exchange Commission began investigating Sokol's investment in Lubrizol shortly after Sokol resigned from Berkshire Hathaway. Sokol's lawyer Barry Wm. Levine told Reuters late on Thursday that he was informed that the SEC had wrapped up its probe and decided not to take action against Sokol. "SEC has terminated its investigation and has concluded not to bring any proceedings against Sokol," said Levine, a lawyer at legal firm Dickstein Shapiro. Sokol has been "completely cleared" as there was no evidence against his client, Levine said. Cohen’s SAC Tops Most Profitable List Amid Insider Probes (Bloomberg) SAC Capital International, Cohen’s flagship fund, was the world’s most-profitable hedge fund in the first 10 months of 2012, earning $789.5 million for Cohen, 56, and his managers, according to Bloomberg Markets’ annual ranking of hedge funds...SAC Capital International is No. 1 not because of performance; it ties for No. 86 on that measure, with a 10 percent return in the Markets ranking of the 100 top-performing funds. Rather, the fund earned the most money because Cohen charges some of the highest fees on Wall Street. While most funds impose a 1 to 2 percent management fee and then take 15 to 20 percent of the profits, Cohen levies 3 percent and as much as 50 percent, according to investors. Geithner's Planned Departure Puts Obama In A Tough Spot (Reuters) The Treasury Department said Geithner would stick to his previously announced schedule to stay until sometime around the Jan. 21 inauguration. Obama chose Geithner to lead the just-ended negotiations with Congress to avert the Dec. 31 fiscal cliff of spending cuts and tax hikes that threatened to push the economy back into recession. But the deal, which preserved most of the Bush-era tax breaks for Americans, sets up a series of crucial fiscal deadlines by delaying automatic spending cuts until March 1 and not increasing the government's borrowing limit. That puts Obama in the tough spot of nominating another Treasury secretary and asking the Senate to approve his choice when lawmakers are in the middle of another budget battle. Egan Jones Says Further US Downgrades Unlikely (CNBC) "This latest round (of negotiations) indicates a sign of health. You have a major ideological clash going on in Congress and many people uncomfortable with it, but it is part of democracy. The more positive light is that we actually have a deal and can move forward," Sean Egan, managing director of Egan-Jones told CNBC on Friday. "We've gotten a lot more comfortable about the U.S. and we probably won't take additional negative actions for the foreseeable future," he added. Almost All of Wall Street Got 2012 Market Calls Wrong (Bloomberg) From John Paulson’s call for a collapse in Europe to Morgan Stanley’s warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended. Paulson, who manages $19 billion in hedge funds, said the euro would fall apart and bet against the region’s debt. Morgan Stanley predicted the Standard & Poor’s 500 Index would lose 7 percent and Credit Suisse foresaw wider swings in equity prices. All of them proved wrong last year and investors would have done better listening to Goldman Sachs Chief Executive Officer Lloyd C. Blankfein, who said the real risk was being too pessimistic. The ill-timed advice shows that even the largest banks and most-successful investors failed to anticipate how government actions would influence markets. Unprecedented central bank stimulus in the U.S. and Europe sparked a 16 percent gain in the S&P 500 including dividends, led to a 23 percent drop in the Chicago Board Options Exchange Volatility Index, paid investors in Greek debt 78 percent and gave Treasuries a 2.2 percent return even after Warren Buffett called bonds “dangerous.” Fed Divided Over Bond Buys (WSJ) A new fault line has opened up at the Federal Reserve over how long to continue bond-buying programs aimed at spurring stronger economic growth. Minutes released Thursday of the Fed's Dec. 11-12 policy meeting showed that officials were divided. Some wanted to continue the programs through the end of 2013, others wanted to end them well before then and a minority wanted to halt the programs right away. Swiss Bank Pleads Guilty In Probe (WSJ) In the latest blow to Switzerland's centuries-old banking practices, the country's oldest bank pleaded guilty to a criminal conspiracy charge in the U.S. on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad. Wegelin & Co., founded in 1741, is the latest Swiss bank to reach a deal with U.S. prosecutors as they crack down on Americans who kept their money in secret accounts overseas and the entities which helped them. Three Wegelin bankers also were charged criminally in the U.S. last year. Subway worker tells customer to 'fight me like a man,' during confrontation over ketchup (WFTV) Luis Martinez said he stopped by a Subway shop in a Walmart on South Semoran Boulevard late Tuesday night to get something to eat. He said he ordered a Philly cheese steak the way he always does. "American cheese, onions and ketchup," said Martinez. Lawrence Ordone was working behind the counter. "He wants ketchup on the Philly cheese steak and I have never put -- we don't even have ketchup at Subway -- I've never put ketchup on anybody's sandwich," said Ordone. Martinez said he didn't want the sandwich without the ketchup and that a man next to him in line offered to buy the sandwich. Ordone said that Martinez mouthed off at the man. Martinez denied saying anything, but neither he or Ordone disputed what they said happened next. "That's when I flew off the handle," said Ordone. "He shoved a chair to the side, like knocked it down to come at me, and I said, 'This is going to be serious,'" said Martinez. "I said, 'Let's go, fight me like a man,'" said Ordone. "I was scared. Next thing, I'm thinking a gun's going to come out," said Martinez. Ordone said he blocked the customer so he couldn't get out. "He threatened to kill me in front of my wife," said Martinez. Martinez called 911, but by the time police got there the Subway worker had already left. Ordone said he was fired from his job Wednesday, and that he is baffled the confrontation started over something as simple as ketchup. "There's ketchup three aisles down. You can go buy your own ketchup, and I promise to God, you can put as much as you want on it and nobody's going to say nothing," said Ordone. Economy Adds 155,000 Jobs (WSJ) Rebuilding following superstorm Sandy, which struck the Northeast in late October, likely added to job growth last month. Nationally, employment in the construction sector advanced by 30,000 jobs. Meanwhile, manufacturing payrolls increased by 25,000 and health-care jobs grew by 45,000. JPMorgan Faces Sanction for Refusing to Provide Madoff Documents (Bloomberg) The Treasury Department’s inspector general has threatened to punish JPMorgan Chase for failing to turn over documents to regulators investigating the bank’s ties to Bernard Madoff’s Ponzi scheme. Inspector General Eric Thorson gave the largest U.S. bank a Jan. 11 deadline to cooperate with the Office of the Comptroller of the Currency probe or risk sanctions for impeding the agency’s oversight. JPMorgan, according to the Dec. 21 letter, contends the information is protected by attorney-client privilege. Rich Catch a Break With Budget Deal Providing Deductions (Bloomberg) “The increases in taxes and limits to deductions are more favorable than expected,” said Christopher Zander, partner and head of wealth planning at Evercore Partners Inc. (EVR)’s wealth management unit. “They could have been worse for high net-worth taxpayers.” Regulators to ease up on banks to get credit flowing (Reuters) Banks will get more time to build up cash buffers to protect against market shocks under a rule change that could help free up credit for struggling economies, a European regulatory source said. The Basel Committee, made up of banking supervisors from nearly 30 countries, is expected to announce the revision on Sunday to its "liquidity coverage" ratio or LCR, part of efforts to make banks less likely to need taxpayer help again in a crisis. The change comes after heavy pressure from banks and some regulators, who feared Basel's original version would suck up too much liquidity at a time when ailing economies are badly in need of a ready supply of credit to finance growth. 'Stripper' arrested after performance art leads to ruckus in Hallandale (SS) According to police and witnesses, Mena, 25, was first spotted standing and yelling in the middle of A1A outside her condo building along the 1800 block of South Ocean Drive about 10:45 a.m. on Wednesday. Noel von Kauffman, 40, said he was walking along the street when he noticed Mena trying to direct traffic while wearing a tank-top, cut-off jean shorts and tall boots...At some point, Mena picked up a traffic cone and threw it at a car driven by Dieter Heinrich, 49, of Dania Beach, according to an arrest report. The cone broke the car's side mirror, causing about $300 in damages, the report indicated. When Heinrich got out of his car, Mena allegedly spat in his face. Von Kauffman said he jumped in to help Heinrich, who had children in the back seat of his car. Mena scratched von Kauffman's wrist as the two men tried to restrain her and move her away from the busy roadway, according to the police report. After pinning her to the ground, von Kauffman said the woman first tried to say the incident was part of a television show and that everything was being caught on camera. Then she claimed she was a federal agent. Then she said she was friends with Hallandale Beach Mayor Joy Cooper and everyone involved would be in trouble, von Kauffman said.

Opening Bell: 08.15.12

Standard Chartered Faces Fed Probes After N.Y. Deal (Bloomberg) Regulators including the U.S. Treasury, Federal Reserve, Justice Department and Manhattan District Attorney declined attempts at a global settlement, said two people familiar with the matter. A coordinated effort was already in progress before New York’s unilateral deal, announced yesterday by financial regulator Benjamin Lawsky, one of the people said. The agreement doesn’t take into account all of the bank’s alleged violations, including those involving nations such as Sudan, said one of the people, who added that September is the earliest a universal deal may be reached. Paulson Steps Up Gold Bet To 44% Of Firm’s Equity Assets (Bloomberg) John Paulson raised his stake in an exchange-traded fund tracking the price of gold while selling other stocks during the second quarter, leaving his $21 billion hedge fund with more than 44 percent of its U.S. traded equities tied to bullion. Paulson & Co. purchased an additional 4.53 million shares of the SPDR Gold Trust, the firm’s largest position, and bought more shares of NovaGold Resources Inc, according to a Form 13F filed yesterday with the U.S. Securities and Exchange Commission. Goldman Sachs, SkyBridge Among Mitt Romney's Hedge Fund Bundlers (AR) FYI. Brevan Howard Raising Money In U.S. For Currency Hedge Fund (Bloomberg) London-based Brevan Howard filed an Aug. 9 private- placement notice with the U.S. Securities and Exchange Commission to raise an unspecified amount of assets for its Macro FX fund. The $1 billion currency fund is managed by Luke Ding, a former Merrill Lynch & Co. foreign exchange trader who joined Brevan Howard in 2007. Greece Staves Off Default (WSJ) Greece successfully staved off a default on debts owed to the European Central Bank, as more information dribbled out on the parlous state of its economy and banking system. The Greek economy shrank 6.2% year-on-year in the second quarter, European Union statistics agency Eurostat estimated on Tuesday, and senior bankers said more than 20% of loans to the domestic economy are now officially nonperforming. They warned that the problem may overwhelm the sector and derail the country's bailout program. He Whipped, She Snapped (NYP) Frankie Santiago embraced a role as live-in fetish slave to dominating Manhattan investment-banker beau Edward Sonderling, playing out a bondage fantasy similar to college student Anastasia Steele and older Christian Grey in the erotic novel “Fifty Shades of Grey.” But it all took a twisted turn when Santiago, 27, found out Sonderling, 53, had been training his whips on her replacement. The submissive Santiago exploded in a fit of rage, law-enforcement sources said, allegedy shattering Sonderling’s car windshield and bombarding him with dozens of text threats. “If I ever see you with her I will not hold back. I have nothing to lose,” Santiago railed in one text. “I hope she has a disease you catch.” Santiago — who is known in the bondage-domination S&M community as Althea Lyn — was arrested Monday after what sources said was a knock-down, drag-out fight with Sonderling at the East 57th Street apartment where she once did his daily bidding. Santiago and Sonderling — who has the body of a much younger man and is known as King Eddo — were regulars on Manhattan’s BDSM circuit, where Sonderling boasted of being a “whipping aficionado,” said a source who knows the pair. A Horace Mann and Brown graduate, Sonderling runs his own firm, Priority Investors LLC, He declined to comment on Santiago’s arrest and his extracurricular BDSM activities. “I don’t think that I have anything to say about it. Why would I?” he said. Fund Managers Unload Big Banks (WSJ) Some well-known money managers reported significantly reduced stakes in big banks, including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., as well as food companies such as Kraft Foods Inc. in the second quarter. Billionaire investor George Soros's Soros Fund Management LLC eliminated positions in J.P. Morgan Chase and Goldman, as well as Citigroup Inc., according to a regulatory filing late Tuesday. The investment company also reported a new stake in retailer Wal-Mart Stores Inc. and a 341,000-share stake in Facebook Inc. Goldman executives win dismissal of mortgage, TARP lawsuit (Reuters) Goldman Sachs Group Inc Chief Executive Lloyd Blankfein and other bank officials won the dismissal of a shareholder lawsuit accusing them of tolerating poor mortgage practices and quitting a federal bailout program early to boost executive pay. U.S. District Judge William Pauley in Manhattan said the shareholders failed to show there were "red flags" to put bank directors on notice of "broken controls" in Goldman's mortgage servicing business, including that workers at its Litton unit may have been "robo-signing" documents. Pauley also cited a similar lack of red flags to suggest directors knew Goldman was packaging troubled loans in residential mortgage-backed securities, including loans the bank sold "short" in a bet they would lose value. The judge also said the plaintiffs did not show that directors acted in bad faith in letting Goldman repay $10 billion taken from the Troubled Asset Relief Program early, in June 2009, freeing the bank from restrictions on executive pay. Giuliani: Biden Lacks ‘Mental Capacity’ for VP Job (CNBC) “I've never seen a vice president that has made as many mistakes, said as many stupid things,” he said on “The Kudlow Report.” “I mean, there’s a real fear if, God forbid, he ever had to be entrusted with the presidency, whether he really has the mental capacity to handle it. I mean, this guy just isn’t bright. He’s never been bright. He isn’t bright. And people think, ‘Well, he just talks a little too much.’ Actually, he’s just not very smart.”

Opening Bell: 11.13.12

Wall Street Damps Pay Expectations After 2011 Bonus Shock (Bloomberg) Almost 20 percent of employees won’t get year-end bonuses, according to Options Group, an executive-search company that advises banks on pay. Those collecting awards may see payouts unchanged from last year or boosted by as much as 10 percent, compensation consultant Johnson Associates Inc. estimates. Decisions are being made as banks cut costs and firms including UBS AG (UBSN) and Nomura Holdings Inc. (8604) fire investment-bank staff. Some employees were surprised as companies chopped average 2011 bonuses by as much as 30 percent and capped how much could be paid in cash. That experience, along with public statements from top executives, low trading volumes in the first half and a dearth of hiring has employees bracing for another lackluster year, consultants and recruiters said. “A lot of senior managers won’t have to pay up because they’re saying, ‘Where are these guys going to go?’” said Michael Karp, chief executive officer of New York-based Options Group. “We’re in an environment where a lot of people are just happy to have a job. Expectations have been managed so low that people will be happy with what they get.” Goldman Pares Back Partner Picks (WSJ) The New York company is expected to announce this week the promotion of about 70 employees to partner, said people familiar with the situation. The likely total is roughly one-third smaller than the 110 employees named partner by Goldman in 2010...As of Monday, the Goldman partnership committee hadn't finished the list of new partners, said people familiar with the matter. Greece Avoids Defaults (WSJ) Cash-strapped Greece on Tuesday raised the money it needs to avoid default when a Treasury bill matures later this week, but investor nerves are unlikely to be calmed as negotiations for the next slice of much-needed aid continue. The rift among Greece's official lenders over how to pare the country's growing debt pile spilled into the open late Monday, complicating efforts for an agreement that will free up a long-delayed aid payment to the country. The European Central Bank's reluctance to provide additional money to Greek banks poses a risk to the government, which in order to keep afloat has depended on support from local banks to sell its debt. Greece Needs Another 80 Billion Euros: Goldman Sachs (CNBC) The authors of the report, economists Themistoklis Fiotakis, Lasse Holboell Nielsen and Antoine Demongeot, note that the IMF’s target is “unlikely” without such a “drastic debt stock reduction.” “To increase the likelihood that the Greek debt-to-GDP ratio approaches its 120 percent by 2020 target under realistic assumptions, a much more drastic debt stock reduction (possibly north of 80 billion euros in total) will be required,” the report states. Japan Lawmakers Agree To Avert 'Fiscal Cliff' (Reuters) Japan's ruling and opposition parties agreed on Tuesday to quickly pass a deficit funding bill in parliament, in a move that will keep the country from falling off its version of a 'fiscal cliff' as the prime minister eyes elections as early as next month. The bill is needed to borrow some $480 billion and fund roughly 40 percent of this fiscal year's budget. Without it, the government could run out of money by the end of this month and would have to stop debt auctions next month, just as the economy teeters on the brink of a recession. Marc Faber: Prepare For A Massive Market Meltdown (CNBC) “I don’t think markets are going down because of Greece, I don’t think markets are going down because of the “fiscal cliff” – because there won’t be a “fiscal cliff,” Faber told CNBC’s “Squawk Box.” “The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view.” FBI Agent in Petraeus Case Under Scrutiny (WSJ) A federal agent who launched the investigation that ultimately led to the resignation of Central Intelligence Agency chief David Petraeus was barred from taking part in the case over the summer due to superiors' concerns that he was personally involved in the case, according to officials familiar with the probe. After being blocked from the case, the agent continued to press the matter, relaying his concerns to a member of Congress, the officials said. New details about how the Federal Bureau of Investigation handled the case suggest that even as the bureau delved into Mr. Petraeus's personal life, the agency had to address conduct by its own agent—who allegedly sent shirtless photos of himself to a woman involved in the case prior to the investigation. Trial to Open in $68 Million Insider Trading Case (Dealbook) On Tuesday, Mr. Chiasson, 39, a co-founder of the now-defunct Level Global Investors, and Mr. Newman, 47, a former portfolio manager at Diamondback Capital Management, are set to stand trial in Federal District Court in Manhattan. Prosecutors say they were part of a conspiracy that made about $68 million illegally trading the computer company Dell and the chip maker Nvidia. MF Report Coming (Reuters) A US House of Representatives panel will release a long-awaited report that will dissect the collapse of failed commodities brokerage MF Global. The House Financial Services Committee said its Subcommittee on Oversight and Investigations will post the report online Thursday. A Dose of Realism for the Chief of J.C. Penney (NYT) Andrew Ross Sorkin: "You should know you have a problem when sales at your stores fall 26.1 percent in one quarter. That was the surprising decline J.C. Penney reported last week, when it disclosed that it had lost $123 million in the previous three months...Here's the good news: In the stores that have been transformed, J.C. Penney is making $269 in sales a square foot, versus $134 in sales a square foot in the older stores. So the model itself is working. And Mr. Johnson has the support of the company's largest shareholder, Pershing Square's Bill Ackman, who personally recruited Mr. Johnson. If Mr. Johnson were starting with a blank slate, it might be a great business." China Banker Sees Lower Bar for Yuan Globalization (WSJ) "Renminbi internationalization can be realized based on a partial opening of the capital-account and partial convertibility of the currency," said Mr. Li, a delegate to the 18th Communist Party Congress and longtime advocate of a greater global role for the yuan. The Eximbank is a major arm of the Chinese government for financing trade and investment overseas. Finally, a Place in Brazil Where Dogs Can Go for Discreet Sex (NYT) Heart-shaped ceiling mirror: check. Curtains drawn against the bright day: check. Red mattress: check. The establishment that opened here this year has features that demanding clients naturally expect from a love motel. Brazil, after all, is a world leader in these short-stay pleasure palaces, which beckon couples for trysts away from prying eyes with names like Swing, Absinthe and Alibi, and design motifs like medieval castles or of the American Wild West. But Belo Horizonte’s newest love motel stands apart from the crowd in one crucial aspect. It is for dogs. “I adore the romantic feel of this place,” said Andreia Kfoury, 43, a manager at a technology company who peeked inside the Motel Pet one recent morning while she and her husband were on a clothes-buying spree for their Yorkshire terrier, Harley. The couple, who are motorcycle enthusiasts, bought about $500 worth of imported Harley-Davidson brand items for their dog. “I’m definitely bringing Harley back here when it’s time for him to breed,” a smiling Ms. Kfoury said. “He is very macho, and would be a hit in this place.” Whether dogs like Harley actually need a romantic curtained-off suite to breed seems beside the point. Some dog owners simply like the concept of a love motel for their amorous pets and are willing to pay about $50 for each session, which Animalle will happily arrange.

Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Opening Bell: 11.08.12

On Wall Street, Time To Mend Fences With Obama (NYT) Few industries have made such a one-sided bet as Wall Street did in opposing President Obama and supporting his Republican rival. The top five sources of contributions to Mr. Romney, a former top private equity executive, were big banks like Goldman Sachs and JPMorgan Chase, according to the Center for Responsive Politics. Wealthy financiers — led by hedge fund investors — were the biggest group of givers to the main “super PAC” backing Mr. Romney, providing almost $33 million, and gave generously to outside groups in races around the country. On Wednesday, Dan Loeb, who had supported Mr. Obama in 2008, was sanguine. “You win some, you lose some,” he said in an interview. “We can all disagree. I have friends and we have spirited discussions. Sure, I am not getting invited to the White House anytime soon, but as citizens of the country we are all friendly.” [...] “Wall Street is now going to have to figure out how to make this relationship work,” said Glenn Schorr, an analyst who follows the big banks for the investment bank Nomura. “It’s not impossible, but it’s not the starting point they had hoped for.” Morgan Stanley Reassures Its Bankers (WSJ) The New York bank said Monday that investment-banking chief Paul Taubman would leave the firm at year-end. Mr. Taubman was passed over for a new job overseeing both the trading and investment-banking operations, people involved in the process said. The position went to Colm Kelleher, who has overseen sales and trading. To calm nerves and soothe egos among the firms' bankers, Morgan Stanley gathered its new team of investment-banking leaders in New York this week. Mr. Kelleher and one of his new banking lieutenants, Franck Petitgas, traveled from their London office, and Mr. Petitgas spent much of the week meeting with managers in the investment-banking division and senior bankers, people familiar with the discussions said. Top executives reassured senior bankers Monday that the investment-banking business was a priority for Morgan Stanley. In a memo to employees, Chief Executive James Gorman said Morgan Stanley would "continue to build on our leadership position in investment banking and capital markets." The messages came as some rank-and-file bankers at Morgan Stanley privately expressed surprise and dismay at the news from Mr. Taubman, who announced his departure to colleagues in an emotional meeting Monday with Messrs. Kelleher and Gorman in attendance. Some Morgan Stanley bankers said they worried that the new chiefs of investment banking didn't have the stature of Mr. Taubman, who spent a significant amount of time as a mergers banker and was known internally for his staunch support of the firm's investment-banking franchise. "People are upset," one senior person inside the company said. Wall Street Trades Foiled Romney Dreams For Bowles Hopes (Bloomberg) Wall Street executives who lost a bet that Republican Mitt Romney would defeat President Barack Obama are bracing for tougher regulation and hoping a deal can be struck with Congress to cut the deficit. Obama’s choice to succeed Treasury Secretary Timothy F. Geithner will be watched closely for signs about the administration’s approach to business and the deficit, industry executives said. Erskine Bowles, who served as chief of staff under former President Bill Clinton, would be a sign that Obama is willing to endorse a bipartisan debt-reduction plan supported by many business leaders, they said. “With the appointment of the Treasury secretary, Obama will be sending an important message to the public and to the foreign governments who own a lot of Treasuries,” Curtis Arledge, chief executive officer of Bank of New York Mellon Corp.’s investment-management arm, which oversees $1.4 trillion, told journalists in New York yesterday. “If he goes with somebody like Erskine Bowles, then the message will be that he cares about the deficit and is serious about cutting it.” Focus Shifts To Fiscal Cliff (WSJ) Barry Knapp, head of U.S. equity portfolio strategy at Barclays, turned more bearish after seeing the election results, arguing that the risk of fiscal-cliff disaster increased to more than half, from about 30% before. "When I look at what happened, I see a government that grew farther apart, which might be worse than the status quo," Mr. Knapp said. "The risk of going off the cliff has just gotten huge." Jobless Claims Fall (WSJ) Initial jobless claims, which are a measure of layoffs, decreased by 8,000 to a seasonally adjusted 355,000 in the week ended Nov. 3, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires expected 365,000 new applications for jobless benefits. Greek Jobless Rate Hits New High (WSJ) Elstat, the Greek statistical agency, Thursday said the seasonally adjusted rate of unemployment increased to 25.4% from 24.8% in July and 18.4% in August 2011. That was just below the 25.5% unemployment rate recorded by Spain in the same month, the highest in the European Union. Herd of elephants go on drunken rampage after mammoth booze up (Metro) The trunk and disorderly mammals ransacked a shop, three houses and ruined crops in the eastern village of Dumurkota, India. Police say the gang of over-the-limit tuskers downed more than 500litres of moonshine alcohol, managing to drink the place dry in a matter of minutes. The unruly mob demolished dozens of houses in their desperate hunt for more booze after hoovering up the hard stuff in record time. Local police officer Asish Samanat said the drunken elephants were more 'aggressive' than usual after their mammoth drinking session. 'Unfortunately these animals live in close proximity to man and they recognised the smell of the drink,' he explained. 'They were like any other drunk - aggressive and unreasonable but much, much bigger.' ECB Stands Ready to Buy Bonds as Economy Weakens (Bloomberg) “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said today at a press conference in Frankfurt after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said. SocGen CEO Blames ‘Stupid’ Accounting for Profit Drop (CNBC) “Exceptional items are related in particular to this stupid accounting thing which means that when you have a credit that is improving, your CDS is going down and you have to recognise negative revenues,” Frederic Oudea told CNBC in Paris. SocGen’s third-quarter net profit was 85 million euros, down by 86 percent on the same period in 2011, after losses on asset sales. That was lower than analysts’ mean estimate of 139.1 million euros. Blackstone Leads Hedge Funds Attracting Bond-Rally Bears (Bloomberg) Funds that bet on both gains and losses in credit attracted $12.6 billion of deposits in the three months ended Sept. 30, the most since the period ended Dec. 31, 2007, according to HFR. Blackstone Group LP raised $4.05 billion during the period for its debt unit, which includes so-called long-short funds. Panning Capital Management, which was founded by Kieran Goodwin this year, started such a fund on Nov. 1 with $500 million. Two-Tier Global Housing Market Could Lead to Bubble: Goldman (CNBC) In a report titled: “Just don’t look down some house markets are flying again” Goldman argues easy money policies by the world’s major central banks has had a ripple effect on countries which have avoided the worst of the global financial crisis, boosting their house prices. According to Goldman, there now exist housing “high-flyers” - countries that have experienced real house price increases and “low-lyers” - countries where the housing market downturn appears to be more protracted. “High flyers” include Germany, Finland, Norway, France, Switzerland and Israel as well as Canada and Australia. The “low lyers” include the U.S., and the euro zone periphery of Spain, Greece, Italy and Ireland- but also those places where prices fell in the post-crisis period but have since stabilized such as the U.K., Japan and Denmark. Judge throws Dallas attorney back in jail after his Design District office trashed, vandalized with obscene drawings (DN) Attorney Tom Corea was charged earlier this year with four felonies alleging he stole from his clients. He was arrested, posted bond and was released. Weeks later, he was evicted for not paying rent for his upscale office in the 2000 block of Farrington Street near Interstate 35E and Market Center Boulevard, according to testimony before state District Judge Mike Snipes. Corea was ordered out by Oct. 31. When the president of the real estate company that represents the building, Doug Molny, showed up the next day to check out the property, he found “complete destruction,” including “penis graffiti on every single wall throughout the building,” Molny said. Written next to some of the penises was the name Doug. Molny said it appeared someone took a sledgehammer to granite counters. Additionally, doors, light fixtures, cabinets and appliances were destroyed or removed.

Opening Bell: 11.20.12

Former UBS Trader Found Guilty (WSJ) Former trader Kweku Adoboli was found guilty on one count of fraud in connection with a $2.3 billion loss the Swiss bank suffered last year, as the juryin the alleged rogue-trading case continued to deliberate on five other counts he was charged with. The partial verdict comes nearly a week after the jury began deliberating following a roughly eight-week trial. It is unclear when the jury might reach verdicts on the other five counts or when sentencing might take place. Mr. Adoboli pleaded not guilty to all six counts. Shakeup At Credit Suisse (WSJ) Credit Suisse said Tuesday that it will combine the Swiss bank's asset management unit with its private bank, but stopped short of announcing the more drastic revamp analysts expected after crosstown rival UBS decided to fire 10,000 bankers. Robert Shafir, who currently heads the U.S. business of Credit Suisse, will take the helm of a new private banking and wealth management division jointly with Hans-Ulrich Meister, who has run the private banking business, the bank said. At the investment bank, Gael deBoissard is being promoted to co-head of the division, jointly with incumbent Eric Varvel. Following the revamp, Credit Suisse will have only two units—wealth management and investment banking--which are distinctly separate from each other, a move that is "in alignment with the new regulatory reality," Chairman Urs Rohner said. Greece Waits Nervously For Vital Bailout Funds (Reuters) Officials familiar with preparations for the finance ministers' meeting expect a "political endorsement in principle" on unfreezing loans to Athens, after Greece completed almost all the reforms that were required of it in exchange for funding. The final go-ahead from the ministers is likely to come only once the remaining few Greek reforms are in place and once there is agreement in the euro zone on how to reduce the country's huge debt and secure extra financing while it is being done. French Downgrade Widens Gulf With Germany as Talks Loom (Bloomberg) France’s loss of the top credit rating at Moody’s Investors Service may weaken President Francois Hollande’s leverage in European budget talks and deepen concern in Germany over its neighbor’s lagging competitiveness. The downgrade late yesterday of Europe’s second-biggest economy underscores the concern expressed by allies of German Chancellor Angela Merkel that the Socialist Hollande’s failure to recognize the urgency of France’s woes risks a deepening of Europe’s slump. “This downgrade will certainly increase pressure on France big-time,” Jan Techau, director of the Carnegie Endowment for International Peace office in Brussels, said today in a phone interview. “It gives Germany more of an edge over France.” ‘Tide Turning’ Against France, Say Economists (CNBC) “The tide is turning for France. Although the country's bond market is likely to remain resilient — the yield on 10-year paper is little changed [Tuesday] morning and still stands a whisker above its record low of 2.06 percent on July 19 — French debt looks more and more overvalued relative to fundamentals,” Nicholas Spiro, Managing Director of Spiro Sovereign Strategy, said in a note on Tuesday. France has enjoyed low borrowing costs as investors have viewed the country as a safe haven in comparison with its southern European cousins. The downgrade of France to AA1 with a negative outlook by Moody’s has thrown its “deteriorating fundamentals….into sharp relief” Spiro said. China’s Richest Woman Divorces Husband, Fortune Declines (Bloomberg) Longfor Properties Co. Chairwoman Wu Yajun is no longer China’s richest woman after divorcing Cai Kui and transferring about 40 percent of the developer’s shares the couple used to own to her ex-husband. Her stake in Longfor, which Wu co-founded with Cai, dropped from a combined 72 percent to 43 percent, while Cai retains 29 percent, according to filings from Hong Kong’s stock exchange. Wu’s net worth is estimated at $4.2 billion, down from $7.3 billion as of 5:30 p.m. New York time yesterday, according to the Bloomberg Billionaires Index. New York Prepares Lawsuit Against Credit Suisse (Reuters) The New York attorney-general is preparing to file a civil lawsuit against Credit Suisse for misleading investors who lost billions of dollars on mortgage-backed securities, according to a source familiar with the matter. The lawsuit, which is expected to be filed on Wednesday, will allege that Credit Suisse misrepresented the quality of loans packaged in securities, according to the source. Petraeus Mistress Paula Broadwell To Jill Kelley: 'I can make you go away' (NYDN) The notes Paula Broadwell sent to Jill Kelley were far more sinister than previously reported and seemed like the rantings of someone “clearly unhinged,” a close friend of Kelley said Monday. “This wasn’t just a catfight. Any normal person who got emails like that would have immediately called the police,” said the friend. She said Kelley read her the emails when she called, panic-stricken and seeking advice in the days before the scandal became a stunning public spectacle and led to Petraeus’ resignation as CIA director. The friend, who did not want to be identified, said Kelley saw the emails as death threats, specifically one in which Broadwell vowed to “make you go away.” [Meanwhile,] Broadwell...bloodied a female news photographer’s forehead Monday in a confrontation outside the biographer’s Charlotte, N.C., home. Broadwell smacked the photographer with the driver’s-side door of her Nissan Pathfinder SUV. “I had my camera and in all the chaos the door slammed and I got hit in the head with the flash,” said Nell Redmond, a freelancer for The Associated Press. Redmond suffered a small cut and is not pressing charges. Morgan Stanley’s Doom Scenario: Major Recession in 2013 (CNBC) The bank’s economics team forecasts a full-blown recession next year, under a pessimistic scenario, with global gross domestic product (GDP) likely to plunge 2 percent. “More than ever, the economic outlook hinges upon the actions taken or not taken by governments and central banks,” Morgan Stanley said in a report. Under the bank’s more gloomy scenario, the U.S. would go over the “fiscal cliff” leading to a contraction in U.S. GDP for the first three quarters of 2013. In Europe, the bank’s pessimistic scenario assumes a failure of the European Central Bank (ECB) in cutting rates and a delay of its bond-buying program. Judge Tosses Suit Over AIG (WSJ) A federal judge in Manhattan dismissed a $25 billion lawsuit by Starr International Co., which Mr. Greenberg runs, against the New York Federal Reserve Bank over claims the Fed breached its fiduciary duty to AIG's shareholders in the rescue during the U.S. financial crisis. It is one of two lawsuits Starr, AIG's largest shareholder at the time of the government takeover, is pursuing over the bailout. Mark Cuban Throws A Tantrum On Facebook Fee (NYP) Facebook used to be a “time suck” — now it just sucks. That’s the view of Dallas Mavericks owner Mark Cuban, who is urging marketers to take their business elsewhere after the social network started charging the tech billionaire to send messages to all the team’s fans. “In the past we put FB first, Twitter second,” Cuban wrote in a roughly 1,700-word blog post calling out the social network. “FB has been moved to the bottom of a longer list.” He added: “FB doesn’t seem to want to accept that its best purpose in life is as a huge time suck.” At issue is Facebook’s filtering of posts that appear in users’ news feeds. The site says it is trying to present users with content that they have shown an interest in while cutting down on spam. But Cuban says it is a pay-to-play move. He argues that Facebook is making it harder for marketers to reach their fans without paying for so-called “promoted posts.” And making the site more targeted and efficient is actually a mistake, according to Cuban. He claims most people go to the site because it’s a “time suck” that they enjoy. Cannibal Cop Pleads Not Guilty (NYDN) “cannibal cop,” accused of conspiring with an online buddy to kidnap, rape and slow-cook women, pleaded “not guilty” Monday to two federal charges. Gilberto Valle, 28, was arraigned in Manhattan Federal Court on charges of conspiracy to commit kidnapping and accessing the federal National Crime Information Center database without authorization. Valle’s public defender, Julia Gatto, made a third attempt at getting bail for her now-infamous client. "You have a hard row to hoe," said Judge Paul Gardephe...Valle — who was suspended after being arrested last month in a joint NYPD and FBI investigation — is accused of chatting last July with a sick online buddy about “kidnapping, cooking and eating body parts” of a woman identified as Victim 1, according to the indictment released Friday.