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Opening Bell: 07.11.12

Claw Is Out For 'Whale' Officials (WSJ) The nation's biggest bank is expected to claw back compensation from individuals including Ina Drew, who ran the company's Chief Investment Office, according to people familiar with the bank's plans. Dimon Risk Reputation On Line As JPMorgan Faces Analysts (Bloomberg) In a departure from his customary earnings-day conference call, Dimon will meet analysts for two hours on July 13 at the bank’s New York headquarters to field questions about the loss and what he’s doing to contain the damage. Scandal Shakes Trading Firm (WSJ) The firm, Peregrine Financial Group Inc., filed Tuesday evening in Chicago to liquidate under Chapter 7 of the bankruptcy code. Earlier in the day, the Commodity Futures Trading Commission filed a lawsuit in federal court in Chicago accusing Peregrine Financial and its founder, Russell Wasendorf Sr., of fraud, customer-funds violations and making false statements. The CFTC said shortfalls may have been present since at least February 2010. A spokeswoman for the FBI said it has also begun an investigation into the company, also known as PFGBest. Brokerage and retail customers had their accounts frozen as regulators began looking into the company's books. Police in Cedar Falls, Iowa, said they found Mr. Wasendorf, 64, in his silver Chevrolet Cavalier Monday morning outside the company headquarters, with a hose running from the car's tailpipe. His son, company President Russell Wasendorf Jr., told the company's roughly 200 employees late Monday that his father had left behind a note alluding to "a crime that had been committed," according to one employee. Diamond Rebuts Claims By UK Lawmakers (WSJ) Former Barclays CEO Robert Diamond hit back at allegations he had misled U.K. lawmakers when giving evidence over an interest-rate scandal, calling them "unfair and unfounded." HSBC Is Sorry (WSJ) will apologize at a U.S. Senate hearing for its lax efforts to prevent money laundering, the London-based lender's chief executive said in an internal memo. "Between 2004 and 2010, our anti-money-laundering controls should have been stronger and more effective and we failed to spot and deal with unacceptable behaviour," Stuart Gulliver said in the memo, sent to employees Tuesday. Tigers Kill Man Who Scaled Fence At Danish Zoo (Reuters) A man was killed by tigers at a zoo on Wednesday after he scaled a fence and crossed a moat to get into their enclosure in the Danish capital Copenhagen, police said. The man, in his early 20s, was savaged by three tigers after he broke into Copenhagen Zoo in the early hours. He was dead when staff arrived for work. "We received an emergency call at about 7:30 a.m. that a person had been found lying in the tiger pen and that three tigers were surrounding that person," police Superintendent Lars Borg told Reuters. "The tigers attacked him and killed him. It is likely that a bite to the throat was the primary reason for his death," Borg said. Australia Is No Spain, Says Official (CNBC) Australia’s Deputy Prime Minister and Treasurer Wayne Swan has denied that Australia’s economy is at risk of a Spain-like economic crisis, calling the thesis put forth by the former chief Asia-Pacific economist for Morgan Stanley, Andy Xie “absurd”. “Let’s go through the fundamentals," Swan said. "Bringing our budget back to surplus in 2012-2013, low unemployment, strong job creation over time, a record investment pipeline in resources – half a trillion (dollars). What planet does he live on?” San Bernardino Becomes Third California City Seeking Bankruptcy (Reuters) The decision by the leaders of San Bernardino, a city of about 210,000 residents approximately 65 miles east of Los Angeles, followed a report by city staff that said the city faced an imminent financial crisis. The report said the city had exhausted its reserves and projected spending would exceed revenue by $45 million in the current fiscal year which started on July 1. Dalio Hits Midyear Off 2.7% (NYP) After leaving its rivals in the dust for the past two years with mouth-watering double-digit returns, Bridgewater is now trailing them. Its flagship fund, Pure Alpha, fell 2.7 percent in 2012’s first half. Wildebeest takes on 18ft killer crocodile (DM) As regular as the seasons themselves, herds of wildebeest make an annual migration across east Africa - following rainfall and the growth of new grass. Exploiting this predictability, each year predators lay in wait until the migrating beasts come into their killing zone. Day or night, death can come to the young, sick or simply unlucky members of the herd - swiftly from a single cheetah, or without mercy from a pride of lions or pack of hyenas. For one young male, the end came not on the plains but in one of Kenya's heaving rivers - delivered by one of nature's apex killing machines. Like all in his herd, the doomed wildebeest was taking his chances crossing the Mara River in the Masai Mara reserve in Kenya. Unfortunately for him, he walked straight into the path of an 18ft Nile crocodile - a species of predator so efficient that it has barely changed throughout evolution. The crocodile used its huge weight and strength to attack the beast as it was already caught off balance by the rushing water and uneven footing. Its enormous jaw span virtually took in the entire wildebeest's body as the victim attempted in vain to escape the attack.
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Claw Is Out For 'Whale' Officials (WSJ)
The nation's biggest bank is expected to claw back compensation from individuals including Ina Drew, who ran the company's Chief Investment Office, according to people familiar with the bank's plans.

Dimon Risk Reputation On Line As JPMorgan Faces Analysts (Bloomberg)
In a departure from his customary earnings-day conference call, Dimon will meet analysts for two hours on July 13 at the bank’s New York headquarters to field questions about the loss and what he’s doing to contain the damage.

Scandal Shakes Trading Firm (WSJ)
The firm, Peregrine Financial Group Inc., filed Tuesday evening in Chicago to liquidate under Chapter 7 of the bankruptcy code. Earlier in the day, the Commodity Futures Trading Commission filed a lawsuit in federal court in Chicago accusing Peregrine Financial and its founder, Russell Wasendorf Sr., of fraud, customer-funds violations and making false statements. The CFTC said shortfalls may have been present since at least February 2010. A spokeswoman for the FBI said it has also begun an investigation into the company, also known as PFGBest. Brokerage and retail customers had their accounts frozen as regulators began looking into the company's books. Police in Cedar Falls, Iowa, said they found Mr. Wasendorf, 64, in his silver Chevrolet Cavalier Monday morning outside the company headquarters, with a hose running from the car's tailpipe. His son, company President Russell Wasendorf Jr., told the company's roughly 200 employees late Monday that his father had left behind a note alluding to "a crime that had been committed," according to one employee.

Diamond Rebuts Claims By UK Lawmakers (WSJ)
Former Barclays CEO Robert Diamond hit back at allegations he had misled U.K. lawmakers when giving evidence over an interest-rate scandal, calling them "unfair and unfounded."

HSBC Is Sorry (WSJ)
The bank will apologize at a U.S. Senate hearing for its lax efforts to prevent money laundering, the London-based lender's chief executive said in an internal memo. "Between 2004 and 2010, our anti-money-laundering controls should have been stronger and more effective and we failed to spot and deal with unacceptable behaviour," Stuart Gulliver said in the memo, sent to employees Tuesday.

Tigers Kill Man Who Scaled Fence At Danish Zoo (Reuters)
A man was killed by tigers at a zoo on Wednesday after he scaled a fence and crossed a moat to get into their enclosure in the Danish capital Copenhagen, police said. The man, in his early 20s, was savaged by three tigers after he broke into Copenhagen Zoo in the early hours. He was dead when staff arrived for work. "We received an emergency call at about 7:30 a.m. that a person had been found lying in the tiger pen and that three tigers were surrounding that person," police Superintendent Lars Borg told Reuters. "The tigers attacked him and killed him. It is likely that a bite to the throat was the primary reason for his death," Borg said.

Australia Is No Spain, Says Official (CNBC)
Australia’s Deputy Prime Minister and Treasurer Wayne Swan has denied that Australia’s economy is at risk of a Spain-like economic crisis, calling the thesis put forth by the former chief Asia-Pacific economist for Morgan Stanley, Andy Xie “absurd”. “Let’s go through the fundamentals," Swan said. "Bringing our budget back to surplus in 2012-2013, low unemployment, strong job creation over time, a record investment pipeline in resources – half a trillion (dollars). What planet does he live on?”

San Bernardino Becomes Third California City Seeking Bankruptcy (Reuters)
The decision by the leaders of San Bernardino, a city of about 210,000 residents approximately 65 miles east of Los Angeles, followed a report by city staff that said the city faced an imminent financial crisis. The report said the city had exhausted its reserves and projected spending would exceed revenue by $45 million in the current fiscal year which started on July 1.

Dalio Hits Midyear Off 2.7% (NYP)
After leaving its rivals in the dust for the past two years with mouth-watering double-digit returns, Bridgewater is now trailing them. Its flagship fund, Pure Alpha, fell 2.7 percent in 2012’s first half.

Wildebeest takes on 18ft killer crocodile (DM)
As regular as the seasons themselves, herds of wildebeest make an annual migration across east Africa - following rainfall and the growth of new grass. Exploiting this predictability, each year predators lay in wait until the migrating beasts come into their killing zone. Day or night, death can come to the young, sick or simply unlucky members of the herd - swiftly from a single cheetah, or without mercy from a pride of lions or pack of hyenas. For one young male, the end came not on the plains but in one of Kenya's heaving rivers - delivered by one of nature's apex killing machines. Like all in his herd, the doomed wildebeest was taking his chances crossing the Mara River in the Masai Mara reserve in Kenya. Unfortunately for him, he walked straight into the path of an 18ft Nile crocodile - a species of predator so efficient that it has barely changed throughout evolution. The crocodile used its huge weight and strength to attack the beast as it was already caught off balance by the rushing water and uneven footing. Its enormous jaw span virtually took in the entire wildebeest's body as the victim attempted in vain to escape the attack.

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Opening Bell

Opening Bell: 05.24.12

Europe Plans Girds Greece Exit (WSJ) Emerging from Wednesday night's informal European Union summit, Italian Prime Minister Mario Monti said most leaders had backed issuing common debt, or euro-zone bonds, to help support troubled members. But Germany and others opposed them and demanded Greece do more. "We want Greece to remain in the euro zone," German Chancellor Angela Merkel told reporters after nearly eight hours of talks. "But the precondition is that Greece upholds the commitments it has made." Citi: Greek To Exit Euro, New Currency To Fall 60% (CNBC) Greece will leave the euro zone next year and the country's new currency will "immediately fall by 60 percent," according to Citi chief economist Willem Buiter. "The elections (on June 17th) will not produce a viable government that can follow the troika plan, leading to a stalemate between the Greek government and official creditors, and to the suspension of EFSF-IMF funding,” Buiter wrote in Citi's latest Global Economic Outlook. Slim Family Sees European Crisis As Good Time To Invest (Bloomberg) Carlos Slim sees Europe’s debt crisis as a “good moment” to apply his strategy of investing in times of turmoil, said the billionaire’s son, America Movil SAB Co-Chairman Carlos Slim Domit. America Movil, controlled by the elder Slim, announced a $3.4 billion bid to increase its stake in former Dutch phone monopoly Royal KPN NV earlier this month. While the acquisition would be Slim’s first major European foray, it follows a longstanding pattern, his son said. America Movil tries to stay as efficient and financially sound as possible so that it can quickly capitalize on fresh opportunities, he said. “When hard times come, you can look at opportunities in a very agile way,” Slim Domit, 45, said in an interview this week in Mexico City. “Europe is in a good moment.” After Facebook Fiasco, NYSE-Nasdaq Rivalry Heats Up (WSJ) "In the short term, if I'm deciding which platform to go with, I'd think twice at this point" before choosing Nasdaq, said Sang Lee, managing partner with Aite Group, a consultancy that researches exchanges. Investors Leery Of Paulson's Big Gold Bet (NYP) Investors are upset over Paulson’s huge gold positions — specifically, his outsize holding of AngloGold Ashanti, down 20 percent this year. That has dragged down two of Paulson’s funds. “I would be happier if he cut the gold position in half,” says one investor who put in a notice to take his money out of the fund in June. “He would have been up 4 percent in the first quarter if it weren’t for the goddamned gold.” Auction Of Ronald Reagan's Blood Stirs Debate (WSJ) Since his death in 2004 at age 93, President Ronald Reagan's popularity has only increased. Republican candidates invoke his name and policies. About 400,000 visitors a year flock to his hilltop museum outside Los Angeles, where a gift shop sells biographies, photos and his favorite jelly beans. Many people, it seems, want a piece of Mr. Reagan. But now, the sale of a very personal effect of the late president is stirring a controversy. Bidding for a vial purported to hold Mr. Reagan's blood topped $14,000 Wednesday in an online auction scheduled to end Thursday—if the Ronald Reagan Presidential Foundation doesn't try to block the sale first. PFC Auctions, based in the British Channel Islands, is offering the vial, said to have been obtained from a Maryland laboratory after the failed assassination attempt on Mr. Reagan in 1981. The sample was sent to the lab to test Mr. Reagan's blood for lead. A lab employee kept the vial as a memento and later passed it on to her adult child, according to the auction site. The head of the Reagan Foundation, a nonprofit group, called the sale "a craven act" and is fighting to stop it. It is uncertain what claims, if any, the foundation may have on the vial, which appears to contain dried blood residue, as depicted in a picture on the auction site...The seller, an admirer of Mr. Reagan's free-market policies, said in comments on the auction page, "I was a real fan of Reaganomics and felt that Pres. Reagan himself would rather see me sell it rather than donating it." Morgan Stanley, Others Make Profit of $100 Million Stabilizing Facebook (WSJ) These gains are expected to be offset somewhat by losses associated with reimbursing clients who lost money because of technology snafus at the Nasdaq Stock Market in Facebook's first day of trading, one of these people added. The Next Treasury Secretary (NYT) On the Democratic side, possibilities include Laurence D. Fink of BlackRock, the asset manager; Erskine Bowles, who served on President Obama’s National Commission on Fiscal Responsibility and Reform; Daniel K. Tarullo, a member of the Federal Reserve Board; and Roger C. Altman, the investment banker. For the Republicans, the front-runners include Robert B. Zoellick, the head of the World Bank; John B. Taylor, the Stanford economist; Glenn Hubbard, the head of Columbia Business School and a Mitt Romney adviser; and Kevin Warsh, a former member of the Federal Reserve Board. Spain To Recapitalize Bankia (WSJ) The Spanish government will provide about €9 billion ($11.4 billion) to cover Bankia SA's provisioning needs, Finance Minister Luis de Guindos said Wednesday, in the latest sign that Spain's economic deterioration is forcing authorities to inject more public funds to bail out ailing banks. Since Bankia won't be able to meet provisioning and capital needs, Spain's Fund for Orderly Bank Restructuring will be ready to inject capital into Bankia's unlisted parent company, Banco Financiero & de Ahorros SA, which holds the company's most toxic real-estate assets, Mr. de Guindos told legislators in Parliament. Indian State OKs Shooting Tiger Poachers On Sight (AP) A state in western India has declared war on animal poaching by allowing forest guards to shoot hunters on sight in an effort to curb rampant attacks on tigers and other wildlife. The government in Maharashtra says injuring or killing suspected poachers will no longer be considered a crime. Forest guards should not be "booked for human rights violations when they have taken action against poachers," Maharashtra Forest Minister Patangrao Kadam said Tuesday. The state also will send more rangers and jeeps into the forest, and will offer secret payments to informers who give tips about poachers and animal smugglers, he said.

Opening Bell

Opening Bell: 07.31.12

RBS Braces Itself For Libor Deal (WSJ) RBS stands apart from the other banks caught up in a trans-Atlantic probe of the rate misdeeds because of the U.K. government's 83% stake in the lender. That has put U.K. authorities in an awkward position: They are under intense pressure to get tough on wayward banks but also are eager to protect the value of a taxpayer asset. Defendant in Insider Case: I Was Just Doing My Job (WSJ) Doug Whitman, a former hedge-fund manager, doesn't deny that he probed public companies for nonpublic information. But his criminal-defense team plans to argue that its client was doing exactly what he was supposed to do when he persuaded employees of public companies to give him information that those companies' top brass didn't want getting out. Mr. Whitman "was doing what every diligent, competent fund manager and analyst should do—checking up on companies' management to make sure they are being forthright with their investors," said David Anderson, Mr. Whitman's lead defense attorney, in an email. Tiger Management Helps Next Generation Funds (NYT) In a relatively young industry where stars can quickly fade, Tiger Management — and its myriad affiliates like Falcon Edge — is the closest thing to a hedge fund dynasty. After a brief career in finance, Mr. Robertson started Tiger in 1980 with seed money from friends and family. He regularly racked up double-digit returns by taking big positions in companies with good long-term growth prospects and aggressively betting against those stocks poised to fall. Mr. Robertson trained his young protégés — the so-called Tiger cubs — in the same tradition, creating the next generation of hedge funds stars. After leaving Tiger in 1993, Lee Ainslie started Maverick Capital, which currently manages roughly $10 billion. Stephen F. Mandel Jr. began Lone Pine Capital in 1997. Two years later, Andreas Halvorsen opened Viking Global. “We really gravitated to young people, and that was a great deal of our success,” said Mr. Robertson, 80, who often hired people in their 20s. “I was just an old goat with all these young geniuses around.” As the first wave of Tiger cubs age, they are breeding new funds, too. Blue Ridge Capital, where Mr. Gerson honed his skills, has been a particularly good incubator for talent. While Blue Ridge has subscribed to the long-term strategy of Tiger, the founder, Mr. Griffin, has infused the firm with his own philosophy. As a proponent of behavioral finance, he trained analysts like Mr. Gerson to identify how ego and emotion can affect the market and stock performance. Biggest Chapter Yet For A Poison Pen (WSJ) Daniel Loeb isn't one given to half-measures. The hedge-fund manager competes in triathlons, never, ever drinks from a plastic water bottle and is unsparing at times in his criticism of corporate executives. That is exactly how his investors like him. "I didn't give him the money to have a mellow Dan Loeb," said Hugh F. Culverhouse, a Miami investor whose family once owned the Tampa Bay Buccaneers football team. "If I want a mellow Dan Loeb, let me redeem."...The Yahoo campaign signals a new phase in Mr. Loeb's career. Until now, he was perhaps best-known for his poison-pen letters, in which he has scolded executives for everything from keeping relatives on the payroll to socializing at the U.S. Open tennis tournament. Armed with a much bigger war chest—Third Point managed just $1.7 billion as of April 2009—Mr. Loeb can now aim for bigger targets. Mr. Loeb and his investors have a lot riding on a Yahoo revival. "If he makes money on his position, it will be good," said David Tepper, a fellow hedge-fund manager who has known Mr. Loeb for years. "If he doesn't make money, what is the point?" British man rescued off French Atlantic coast after being overcome with Olympic mania and trying to swim to America (DM) The unnamed 34 year old holidaymaker told his friends on the beach at Biarritz that he was off to New York to carry the Olympic spirit across the Atlantic. They thought he was joking but knowing that he was a strong swimmer decided to let him go telling him that a boat would come to rescue him if he got into difficulty. The man swam well beyond buoys 300 yards out to sea marking legal limits for bathing. Then, watched by lifeguards on the shore, he continued swimming until he was out of sight on his 3,594-mile journey. The lifeguards called out a helicopter and a diver dropped into the sea and explained to the man that it was not a good idea to swim across the Atlantic and advised him to head back towards France. He replied that he was a strong swimmer and felt up to it. At the same time lifeguards arrived in a rescue dinghy and threw the eccentric a line before towing him back to the beach. Laurent Saintespes, senior officer at Biarritz airbase told Agence France Presse, ‘He was a bit naive. But at a time when the Olympics are taking place in London you have to see the funny side of things’. Billionaire Jeff Greene On Democracy (NYM) Lately—like at a recent lunch with Steve Schwarzman, who has likened Obama to Hitler—Greene’s been trying another tactic. “Now I appeal to them selfishly,” he says. “ ‘Don’t you realize that if you don’t take care of this kid when they are 10 years old, you’ll take care of them when they are 20 and 100 instead? We just have to pay a little more taxes. It’s not going to kill us. You buy car insurance. Why not buy some democracy insurance?’ People think that Obama is this leftist, socialist guy,” he says. “But I don’t think they understand what people can go for when they are at the end of their line.” South Korean Youth Eschew Samsung Jobs For Facebook Dreams (Bloomberg) Not so long ago, South Korean students dreamed of lifetime jobs at Samsung Electronics Co. Now, many are shunning the juggernaut, intent on trying to emulate the likes of Facebook’s Mark Zuckerberg. Sim Cheol Hwan, 27, is typical of the trend. He wants to take a break from college in Seoul to set up a company rather than line up for job interviews at Asia’s biggest electronics company paying an average of 77.6 million won ($68,300) a year. So he’s set himself up in his own business making apps for Samsung and Apple phones. “I don’t want to get a job at a top 10 Korean company,” said the Hanyang University engineering student, who spent two years in the military. “Zuckerberg’s success proves that there is a lot of money to be made” in startups. Regulators Target Day-Trading Firm (WSJ) In the Romanian city of Cluj-Napoca, inside a garret up a narrow wooden staircase, four young men in T-shirts spend the day moving rapidly in and out of stocks, trying to ride their shifting momentum for profits. "It's very stressful," says one, dressed in a green T-shirt, blue shorts and Adidas sneakers. "The market is very hard to figure out." The four traders are part of a world-wide network initially set up by a Toronto-owned firm called Swift Trade Inc. Swift's founder, Peter Beck, turned it into one of the largest day-trading operations in the world over the past decade by aggressively expanding into far-flung locations, from China to Nicaragua to Romania, where he could recruit traders on the cheap. Mr. Beck also took an aggressive stance toward the law, say regulators in several countries where his firm has traded. The Financial Industry Regulatory Authority is expected on Tuesday to announce a settlement with Mr. Beck and an in-house brokerage unit for not establishing a supervisory system to prevent "a pattern of manipulative trading activity," according to a copy of the settlement reviewed by The Wall Street Journal. The Best CFOs: A Wall Street Journal Ranking (WSJ) #16: Ann Marie Petach, BlackRock. Chewbacca costume head from ‘Star Wars’ sold for $172K (NYDN) A Chewbacca headpiece used in the original "Star Wars" trilogy sold for a whopping $172,200 at a movie memorabilia auction this weekend. The loyal and lovable walking carpet swept the competition, which included an "Edward Scissorhands" costume worn by Johnny Depp that sold for $86,100 and an Everlasting Gobstopper used in the 1971 movie "Willy Wonka & The Chocolate Factory" that sold for $49,200. The Chewie mask was described by auctioneer Profiles in History as the "finest full costume headpiece of Chewbacca from the original trilogy in private hands," and "the finest screen-correct Chewbacca costume head from the Star Wars trilogy known to exist." The eyes are actual casts of Chewbacca actor Peter Mayhew's closed eyes, the auctioneer said. The expected price for the well-liked Wookie was between $60,000 and $80,000, plus fees and taxes, according to the auction catalog...Four years ago, someone spent a reported $240,000 to get the lightsaber prop used by actor Mark Hamill in the first two movies.

Opening Bell

Opening Bell: 11.16.12

JPMorgan Faces US Action (WSJ) Regulators are expected to serve J.P. Morgan Chase with a formal action alleging weaknesses in the bank's antimoney-laundering systems, said people close to the situation. The cease-and-desist order from the Office of the Comptroller of the Currency is part of a broader crackdown on the nation's largest banks, the people said. The OCC is expected to require J.P. Morgan to beef up its procedures and examine past transactions, these people said...The unusually blunt tone of the OCC's meetings with large banks on Nov. 8-9 spread quickly among bank executives. Some viewed the meeting as an attempt by the OCC to counter the perception that it had been too cozy with the banking industry and to step out of the shadows of the year-old Consumer Financial Protection Bureau, which has been aggressive about publicizing enforcement actions and fines levied on banks. "It was a spanking," said one senior bank executive who didn't attend the meeting but heard about it from colleagues. "The message was, 'You are living in a world of zero tolerance,'" said another bank executive briefed on the meeting. FHA To Exhaust Capital Reserves (WSJ) The Federal Housing Administration's projected losses hit $16.3 billion at the end of September, according to an independent annual audit to be released Friday, a much larger figure than had been forecast earlier. The report suggests the FHA will require taxpayer funding for the first time in its 78 years, though that won't be decided until early next year. Citigroup Seeing FX Signals of Early End to Stimulus (Bloomberg) “Does the market really believe that the 2015 Fed is going to be constrained by the 2012 Fed?” Steven Englander, Citigroup’s New York-based global head of G-10 strategy, said in a telephone interview from New York. “The answer is ‘no.’” UK Bank Bailout Money ‘May Never Be Recovered’: Report (CNBC) “There is a risk that the 66 billion pounds invested in RBS and Lloyds may never be recovered,” Margaret Hodge, chair of the Committee of Public Accounts, warned in a report into the sale of taxpayer-backed Northern Rock. Banks Seen Shrinking for Good as Layoffs Near 160,000 (Reuters) Major banks have announced some 160,000 job cuts since early last year and with more layoffs to come as the industry restructures, many will leave the shrinking sector for good as redundancies outpace new hires by roughly 2-to-1...Well-paid investment bankers are bearing the brunt of cost cuts as deals dry up and trading income falls. That is particularly the case in some activities such as stock trading, where low volumes and thin margins are squeezing banks. "When I let go tons of people in cash equities this year, I knew most would be finished in this business. It is pretty dead. Some will just have to find something completely different to do," said one top executive at an international bank in London, on condition of anonymity. Twinkies Maker to Liquidate, Lay Off 18,500 (Reuters) Hostess Brands, the bankrupt maker of Twinkies and Wonder Bread, said it had sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers...Irving, Texas-based Hostess has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride, and Merita, but it is probably best known for Twinkies — basically a cream-filled sponge cake. Lagarde on Greece: 'Not Over Till the Fat Lady Sings' (Reuters) "It is a question of working hard, putting our mind to it, making sure that we focus on the same objective which is that the country in particular, Greece, can operate on a sustainable basis, can recover, can get back on its feet, can reaccess markets as early as possible," Lagarde said when asked about the possibility of a Greek deal next week. "It is not over until the fat lady sings as the saying goes." Alabama secessionist says working people must unite to save America, Bring Back His Topless Carwash (AL) “Derrick B.,” the man who started a petition seeking Alabama’s withdrawal from the U.S., is a truck driving, knife collecting former owner of a topless car wash who describes himself as “an absolute Libertarian.” Derrick Belcher, 45, of Chunchula, said in an interview late Monday that secession may be the only way to save working Americans from crushing debt, burdensome federal regulations and rising taxes. “I don’t want to live in Russia. I don’t believe in socialism,” said Belcher, an operations manager for a Mobile trucking company. “America is supposed to be free.” Belcher blamed the government for shutting down his former business. Belcher said his Euro Details car wash, which featured topless women, was successful for a decade on Halls Mill Road in Mobile. But he said he was arrested and charged with obscenity by city officials in 2001. “The government ripped my business away, and now they’re choking America to death with rules and regulations,” he said. Belcher said he fully expects the petition to reach 25,000 signatures -– in fact, he’s aiming far higher, saying he’d like to double that number to ensure that it is recognized by the White House. He said the petition got a jump start at a gun and knife show held at the Greater Gulf State Fairgrounds last weekend. Tiger Global To Give Investors (Some Of) Their Money Back (NYP) Hedge-fund honchos rarely return capital voluntarily. Recently, Moore Capital’s Louis Bacon gave money back to investors, but it was because the poorly performing fund couldn’t find enough investing opportunities. That’s clearly not the case for Tiger Global, which has gained 25.5 percent so far this year. “We continue to believe that managing a smaller asset base gives us the best chance to generate strong returns over the long-term,” the managers wrote in a Nov. 9 letter to investors Journalist To Be Tried Again Over Swiss Bank List (Reuters) Greek journalist who published the names of more than 2,000 Greeks with Swiss bank accounts will stand trial again after a prosecutor appealed a decision to acquit him of breaking data privacy laws, court officials said on Friday. The speedy arrest, trial and acquittal of magazine editor Costas Vaxevanis for publishing the so-called "Lagarde List" had aroused international concern and captivated recession-weary Greeks angry at the privileges of the elite. The Athens Public Prosecutor's office said the November 1 acquittal was faulty and that Vaxevanis must be tried again by a higher misdemeanor court on the same charges. If found guilty, Vaxevanis could be jailed for up to two years or face a fine. T-Mobile customer stabbed while disputing bill (Philly) A customer who went to an Upper Darby T-Mobile store Tuesday to complain about his bill left with a stab wound to his abdomen that police said had been inflicted by an employee. Upper Darby Police Superintendent Michael Chitwood said the 59-year-old victim went to the store on State Road near Lansdowne Avenue about 1:15 p.m. to complain about being double-billed. What started out as a conversation between the customer and employee Darnell Schoolfield devolved into a physical confrontation, police said. During the fight, the customer ripped Schoolfield's name tag from his shirt and took the tag to the Upper Darby police station to file an assault complaint. "During the course of filing the complaint, he realizes he's bleeding profusely from the left side of the stomach," Chitwood said. "He'd thought he was just punched." The victim was taken to the Hospital of the University of Pennsylvania, where he had surgery and was listed in serious condition. It's unknown what Schoolfield used to allegedly stab the victim or how their interaction went so awry.

Opening Bell

Opening Bell: 07.02.12

Barclays Chairman Resigns (WSJ) "Last week's events, evidencing as they do unacceptable standards of behaviour within the bank, have dealt a devastating blow to Barclays' reputation," Mr. Agius said in a statement Monday. "As chairman, I am the ultimate guardian of the bank's reputation. Accordingly, the buck stops with me and I must acknowledge responsibility by standing aside." Falcone To Argue That Taking Loan Was Best For Investors (NYP) Falcone had roughly $1 billion in personal assets in 2009, at the time of the loan, sources said. That included $790 million in a deferred compensation plan tied to his flagship Masters fund, and $228 million in Harbinger’s Special Situations fund, which he eventually tapped for the loan. He also had $11 million in cash — a nice chunk of change but far short of the $113 million he needed to satisfy Uncle Sam, said a person with knowledge of the case. If the case goes to trial, Falcone will likely say that he considered taking his money from the Master fund, which was allowing withdrawals at the time. But he didn’t after he was advised that doing so could hurt clients by triggering a sell-off, potentially at fire-sale prices. Global IPO Market Keeps Shrinking (WSJ) It was in the pool. Gilt Faces Disruption During Olympics (FT) The UK Treasury has called off its weekly gilt auctions for a four-week period between mid-July and mid-August, apparently because it is afraid that too many bond traders will be working from home – or not at all – during the Olympics. Facebook To Remain On Nasdaq (WSJ) Facebook executives have decided to keep the company's stock listing on the Nasdaq Stock Market, despite lingering frustration with the exchange's bungling of its widely anticipated initial public offering. They determined a move would further drain confidence in the company's battered shares. Facebook executives have quietly blamed Nasdaq OMX Group Inc. NDAQ +3.71% for the technical glitches that marred the stock's May 18 debut. While the company considered a switch in the days after the IPO, Facebook had decided by mid-June to stay put for now, according to people familiar with the company's plans. BNP Said To Mull Plan For $50 Billion Spain-Italy Funds Gap (Bloomberg) BNP Paribas is looking to address funding concerns in Spain and Italy, where the Paris-based bank’s loans outweighing deposits was among reasons cited by Moody’s Investors Service for downgrading its credit rating last month. Transfers of loans from elsewhere to Belgium might be capped at 20 billion euros ($25 billion) and at 10 billion Swiss francs ($10.4 billion) to Switzerland, according to one of the people. Bond Market Backs Obama With Record Demand For New Debt (Bloomberg) Investors are plowing cash into new U.S. Treasuries at a record pace, making economic growth rather than budget austerity a key issue as President Barack Obama and Mitt Romney face off in November’s presidential election. Bidders offered $3.16 for each dollar of the $1.075 trillion of notes and bonds auctioned by the Treasury Department this year as yields reached all-time lows, above the previous high of $3.04 in all of 2011, according to data compiled by Bloomberg. The so-called bid-to-cover ratio was 2.26 from 1998 to 2001 when the nation ran budget surpluses. China Big 4 Banks Took 29% of 2011 Global Profit (Reuters) Three Chinese banks topped the profit table, led by Industrial and Commercial Bank of China (ICBC) for the second successive year, with pretax earnings of $43.2 billion, according to The Banker. ICBC was followed by China Construction Bank, which delivered a $34.8 billion profit, and Bank of China, with earnings of $26.8 billion. JPMorgan was fourth with a profit of $26.7 billion, while HSBC was the most profitable European bank, with earnings of $21.9 billion. Lolong, a massive crocodile captured in the Philippines in 2011, is the largest croc in captivity in the world (NYDN) A huge crocodile blamed for deadly attacks in the southern Philippines is the largest in captivity in the world, Guinness World Records has declared. The giant reptile has brought fear, pride, tourism revenues and attention to the remote town where it was captured. The saltwater crocodile named Lolong, which was captured last September in Bunawan town in Agusan del Sur province, measures 20.24 feet and weighs more than a ton, Guinness spokeswoman Anne-Lise Rouse said in a statement Sunday. The reptile took the top spot from an Australian crocodile measuring more than 17 feet and weighing nearly a ton. Bunawan Mayor Edwin Cox Elorde said the news sparked celebrations in his farming town of 37,000, but also fostered concerns that more giant crocodiles might be lurking in a nearby marshland and creek where villagers fish. “There were mixed feelings,” Elorde said by telephone. “We’re really proud because it proves the rich biodiversity of our place, but at the same time, there are fears that Lolong may not be alone.” Lolong has become the star attraction of a new ecotourism park and research center in the outskirts of Bunawan, and has drawn thousands of tourists since news of its capture spread. Elorde said his town has earned $72,000 from the modest entrance fees at the park, with most of the money being used to feed and care for the crocodile and for park maintenance.

Opening Bell

Opening Bell: 05.14.12

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

Opening Bell

Opening Bell: 01.29.13

US Wants Criminal Charges For RBS (WSJ) U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks.U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland Group RBS.LN +0.52% PLC that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks. IRS can seek UBS records for taxpayers hiding income at Wegelin (Reuters) A federal judge on Monday authorized the Internal Revenue Service to seek records from UBS AG of U.S. taxpayers suspected of hiding their income in accounts with Swiss bank Wegelin. Wegelin, the oldest Swiss private bank, pleaded guilty in Manhattan federal court on January 3 to charges of helping wealthy Americans evade taxes through secret accounts and then announced it would close down as a result. Little Debbie Maker to Buy Drake’s Brand, Hostess Says (Bloomberg) Hostess Brands Inc. said McKee Foods Corp., maker of Little Debbie snacks, agreed to pay $27.5 million for its Drake’s brand and United States Bakery Inc. offered to buy certain bread brands for $28.9 million. “The contemplated purchase prices for Drake’s and the four bread brands, together with our previous announced stalking- horse bid for the majority of our bread business, means we have agreements to sell these assets for at least $440 million,” Hostess Chief Executive Officer Gregory F. Rayburn said today in a statement. United States Bakery agreed to buy the Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s bread brands, four bakeries and 14 depots, plus certain equipment, according to court papers. Iceland Wins Case On Deposit Guarantees (WSJ) Iceland won a sweeping victory in a court fight over its responsibilities to foreign depositors in Icelandic bank Landsbanki, which failed in 2008. The court of the European Free Trade Association on Monday said Iceland didn't breach European Economic Area directives on deposit guarantees by not compensating U.K. and Dutch depositors in Landsbanki's online savings accounts, known as Icesave accounts. The EFTA Surveillance Authority, or ESA, which brought the case against Iceland, had claimed that Iceland should have made sure U.K. and Dutch savers who lost money on Icesave got repaid from deposit insurance. Jamie-Lynn Sigler engaged to Lenny Dykstra's son (NYDN) The actress who played Meadow Soprano announced on Twitter Monday that she's engaged to Cutter Dykstra, a baseball player with the Washington Nationals. "So this just happened," she tweeted along with a photo showing off her huge new diamond alongside her smiling fiancé. "Thank you so much for all the love everyone. I am so happy and more importantly lucky," Sigler, 31, said in a follow-up tweet. "She said yes!!" Cutter, 23, wrote on his own Twitter feed. Sigler was by Cutter's side last month when family members filed into a federal courthouse in downtown Los Angeles for Lenny Dykstra's sentencing in his bankruptcy fraud case. Yahoo Profit Drops But Revenue Rises (WSJ) For Ms. Mayer, the results were enough that the "honeymoon period is going to last at least a couple of more quarters" while investors wait to see progress, said Sameet Sinha, an analyst at B. Riley & Co. Mayor Bloomberg Has Opinions (NYDN) In a New York Magazine profile about Christine Quinn, the City Council Speaker and candidate for mayor, the author recalled being introduced to Bloomberg at what he described as “a Christmas party for the rich” on the Upper East Side. “My friend and I followed the host over, shook Bloomberg’s hand, and my friend thanked him for his position on gun control,” the author writes. “Without even acknowledging the comment, Bloomberg gestured toward a woman in a very tight floor-length gown standing nearby and said, ‘Look at the ass on her.’” According to the article, Bloomberg also has strong opinions about Quinn’s appearance – turning up his nose when she wears flats or waits too long before coloring her hair. “The mayor has no use for flat shoes,” Quinn told the reporter. “I was at a parade with him once and he said, ‘What are those?’ and I said, ‘They’re comfortable,’ and he said, ‘I never want to hear those words out of your mouth again,’” she recalled. “He likes me in high heels.” “Another big thing with the mayor, when I am rooting … like, the couple of days a week before I need to get my hair colored, he’ll say, ‘Do you pay a lot to make your hair be two colors? Because now it’s three with the gray,’” Quinn continued. TARP Firms' Pay Unchecked (WSJ) Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, on Monday said the Treasury failed to look out for taxpayers by relying "to a great extent on the companies' proposals and justifications without conducting its own independent analysis." Ms. Romero also said the Treasury hasn't put in place policies that would ensure salaries are within guidelines designed to discourage excessive risk taking by companies receiving bailout aid. Bridgewater’s Dalio Sees ‘Game Changer’ as Money Shifts (Bloomberg) Ray Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, said 2013 will be a “game changer” for the economy as investors reallocate money after risks such as Europe’s sovereign debt crisis receded. “There’s a lot of money in a place that’s getting a very bad return and in this particular year there’s going to be, in my opinion, a shift,” Dalio said at a Bloomberg panel discussion at the World Economic Forum in Davos, Switzerland. “The complexion of the world will change as that money goes from cash into other things. The landscape will change, particularly later in the year and beyond.” Will the New BlackBerry Win Back Corporate Customers? (WSJ) Survey says: probably not but maybe, who knows. Credit Suisse Said to Seek to Sublet at Hong Kong Skyscraper (Bloomberg) If you know anyone who's interested: Credit Suisse is seeking to sublet as much as 64,000 square feet of office space in Hong Kong’s tallest skyscraper, as prime office vacancies rise in the city amid job cuts by global financial services companies. The Zurich-based bank is looking for tenants to take up two floors, or about a fifth of the space it currently occupies at the International Commerce Centre in West Kowloon, according to two people with knowledge of the matter, who declined to be identified because the information isn’t public. Woman accused of putting poison in her privates in bid to kill husband (Mirror) A woman is being sued by her husband for allegedly trying to kill him by putting poison in her genitals and then asking him to perform oral sex. The Brazilian wife is accused of planting a toxic substance on her genitals before luring her husband to bed. Reports in the South American country suggest he was ready and willing, and only escaped death because he noticed a strange smell. The curious husband then took his wife to hospital in Sao Jose do Rito Preto to find out the cause of the unusual odour. The alleged attempt on his life was exposed when tests on his wife discovered traces of a poisonous substance down below.

Opening Bell

Opening Bell: 06.04.12

Kerviel’s Refusal To Be SocGen Scapegoat May Harm Appeal Chances (Bloomberg) Jerome Kerviel began his fight today against a 2010 conviction for Societe Generale’s 4.9 billion- euro ($6.2 billion) trading loss, telling a Paris appeals court that the bank knew about his actions. His lawyers said they’ll show judges at the four-week appeal starting today that the bank knew before the 2008 trading loss that he was exceeding his mandate with risky bets and can’t claim to be an innocent victim. “I think that I’m not responsible for this loss,” Kerviel told judge Mireille Filippini at the start of the hearing today in response to a question about why he was appealing. “I always acted with the knowledge” of the bank. Germany Signals Crisis Shift (WSJ) Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe. China Making Contingency Plans for a Greek Exit (Reuters) The Chinese government has called on key agencies, including the central bank, to come up with plans to deal with the potential economic risks of a Greek withdrawal from the euro zone, three sources with knowledge of the matter told Reuters on Monday. The sources said the plans may include implementing measures to keep the yuan currency stable, increasing checks on cross-border capital flows, and stepping up policies to stabilize the domestic economy. Oversight Of JPMorgan Probed (WSJ) A federal agency that oversees J.P. Morgan Chase is taking heat over how much it knew about risk-taking in the part of the bank that suffered more than $2 billion in trading losses. Sen. Sherrod Brown (D., Ohio) asked Comptroller of the Currency Thomas Curry in a letter Friday for details about the regulator's supervision of trading operations at the largest U.S. bank by assets. Mr. Brown also wants more information about the Office of the Comptroller of the Currency's "process for reviewing trading operations" at J.P. Morgan and other big banks. The Senate Banking Committee, which includes Mr. Brown, is scheduled to hold a hearing Wednesday that will focus on the trading loss. JPMorgan Was Warned About Lax Risk Controls (NYT) A small group of shareholder advocates delivered an urgent message to top executives at JPMorgan Chase more than a year ago: the bank’s risk controls needed to be improved. JPMorgan officials dismissed the warning from the CtW Investment Group, the advocates, who also cautioned bank officials that the company had fallen behind the risk-management practices of its peers. Merrill Losses Were Withheld Before Bank of America Deal (NYT) What Bank of America’s top executives, including its chief executive then, Kenneth D. Lewis, knew about Merrill’s vast mortgage losses and when they knew it emerged in court documents filed Sunday evening in a shareholder lawsuit being heard in Federal District Court in Manhattan: Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed. Mets crasher out of jail, says he 'got caught up in the moment' (NYP) Mets fanatic Rafael Diaz said he got such an adrenaline rush from Johan Santana’s no-hitter at Citi Field that “he couldn’t help” himself from running on the field to celebrate. “I was overcome with emotion, just being a die-hard Mets fan,” Diaz said after his release from jail yesterday. “That’s all it was.” Diaz, 32, was charged with trespassing for taking part in the on-field celebration. He spent two nights behind bars before a Queens judge released him and pal John Ries, 25, on their own recognizance. Diaz returned to his Massapequa, LI, home, wearing the same Gary Carter No. 8 jersey he had on Friday night. He hit the showers and donned a fresh Santana jersey before explaining his stunt. After Santana retired the final St. Louis batter on Friday night, Diaz jumped over the railing on from his field-level perch on the first-base side of Citi Field. Moments later, Diaz was rubbing elbows with Santana, R.A. Dickey and Ike Davis in a joyous Mets mob. “I couldn’t help myself,” Diaz said. “I just wanted to be on the mound celebrating the no-hitter.” Diaz paid a stiff penalty, both at home and Citi Field. He missed his 1-year-old son’s birthday party Saturday, and the Mets have banned him for life from their home park. “That’s the bad part,” Diaz said of missing his son’s bash. Feds Eye MFGlobal's False Promise (Bloomberg) Three days before MF Global filed for bankruptcy-court protection, CME Group was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money. But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S. IPO doubts plague Nasdaq’s Grief-eld (DJ) Companies in the early stages of going public are raising questions about whether they want to list with Nasdaq...The questions, coming two weeks after Bob Greifeld’s exchange botched the largest, most anticipated initial public offering in a generation – Facebook’s $16 billion coming-out party – are the first indication that Nasdaq’s headaches over the snafu are likely to linger. “There’s no question, this Facebook situation has put on the table the question of Nasdaq’s market structure and its market quality,” one exchange expert said. Madoff kin having trouble finding an apartment (NYP) Andrew Madoff and girlfriend Catherine Hooper have tried to cover up their connection to the Ponzi schemer by making appointments under Hooper’s name. She then shows up alone to view the $20,000-per-month pads, brokers said. Hooper speaks generally, saying the space is for her, her fiancé and their children, the sources said. But once the brokers explain who Hooper is to the landlord, the couple is immediately rejected, the sources added. “My owners would never, ever rent to him,” said a broker. “They will go through a lot of rejections.” China Muzzles Online Talk of Tiananmen Anniversary (WSJ) China's Internet monitors have unleashed a broad clampdown on online discussion of the 23rd anniversary of the Tiananmen Square crackdown, restricting even discussion of the nation's main stock market when it fell by a number that hinted at the sensitive date. Officials minding China's popular Twitter-like microblogging service Sina Weibo beginning this weekend began blocking a number of terms that could refer to the 1989 Tiananmen Square crackdown, an incident often referred to as June 4 or 64 in the Chinese-speaking world. Under the crackdown the government ordered troops to fire on unarmed demonstrators, likely killings hundreds. Dennis Gartman: 100% Chance Of Further Fed Easing (CNBC) Gartman believes a third round of quantitative easing could come as early as the Fed’s next meeting on June 19-20, or at the following meeting on July 31-Aug. 1. The central bank will want to ease as “far ahead” of the U.S. presidential election in November as possible, so it doesn't come off as being "politically amenable" to the current administration, he noted. Dutch artist turns dead cat into remote-controlled helicopter, dubbed ‘Orvillecopter’ (NYDN) A Dutch artist, upset over losing his beloved pet, Orville, had the animal stuffed and transformed its body into a remote-controlled helicopter. The “half cat, half machine” piece of art was dubbed the “Orvillecopter.” The cat, who was killed when it was hit by a car, was named after famed American aviator Orville Wright. “After a period of mourning, he received his propellers posthumously,” Jansen said. A video posted to YouTube shows the flying feline slowly hover several feet in the air in a park, it's body permanantely spread eagle with propellors on its front paws. Artist Bart Jansen teamed up with radio control helicopter expert Arjen Beltman after having a taxidermist preserve the pussy cat.

Opening Bell

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.