Opening Bell: 11.01.12

Wall Street Sputters Back To Life (WSJ) It wasn't until Mayor Michael Bloomberg and NYSE Euronext Chief Executive Officer Duncan Niederauer rang the opening bell that traders knew for sure that the systems would work. "Out of this postapocalyptic world that we're all looking at, that's a ray of good news, that they're actually able to get the exchange open," said Keith Bliss, senior vice president at Cuttone & Co., a brokerage with operations on the NYSE floor. Barclays Faces $435 Million Fine, Another Probe (WSJ) Barclays aced a double-barreled assault from U.S. authorities, as the federal energy-market regulator sought a record $435 million in penalties for the bank's alleged manipulation of U.S. electricity markets, and the lender also disclosed that it was facing a U.S. anticorruption investigation. The corruption investigation focuses on potential violations during the bank's efforts to raise money from Middle Eastern investors in the early days of the financial crisis. The probe, being conducted by the Justice Department and the Securities and Exchange Commission, is at an early stage. Wells Expands Into Investment Banking As Others Retreat (Reuters) The growth worries some investors who want the notoriously conservative bank to stick to its knitting, but Wells Fargo believes that now is a good time to hire. "Our eyes are wide open," said John Shrewsberry, head of the bank's investment banking and capital markets operations, known as Wells Fargo Securities. "There are a lot of very talented people at different stages of availability," he added in an interview this week. The fourth-largest U.S. bank says it can earn solid returns in investment banking while taking little risk for itself. It is focusing on services that its corporate lending customers need, such as stock and bond underwriting and merger advice. For investors, it is looking at areas like processing futures and swaps trades. The bank shies away from riskier undertakings like trading for its own account. The Wells Fargo Securities unit is relatively small now. It's biggest hub is in Charlotte, North Carolina, far from the storm that has hobbled Wall Street this week. In a few years, the unit could account for twice as much of the firm's revenue as it does now - an estimated 10 percent compared to its current five, Deutsche Bank analyst Matt O'Connor wrote in a report. Sandy's Economic Cost: Up To $50 Billion And Counting (CNBC) By contrast, the two costliest hurricanes in U.S. history to date were Katrina, with estimated losses of $146 billion, and Andrew, with loses estimated at $44 billion. But there are offsets and Moody's Mark Zandi and other economists note that there will be considerable rebuilding that will accompany the storm. Because the storm hit early in the quarter, Zandi points out that if $20 billion is spent cleaning up and rebuilding, the actual measured impact on gross domestic product could be zero. IHS Global Insight U.S. Economists Gregory Daco and Nigel Gault are doubtful. They note that the rebuilding often takes the place of investment elsewhere and often not everything is rebuilt. “The effect on growth for the fourth quarter will not be catastrophic but might still be noticeable, especially in an economy with little momentum anyway,” IHS wrote. The debate begs the question of whether such natural disasters can ultimately stimulate an economy. Eric Strobl, of the Ecole Polytechnique in Paris, who has studied the impact of hurricanes for more than a decade, found that hurricanes at the local level are usually negative for growth. NYC Struggles to Come Back to Life as Storm Chaos Lingers (Bloomberg) New York City struggled to return to normal life after superstorm Sandy, managing a partial resumption of mass transit amid a landscape of miles-long traffic jams, widespread blackouts and swarms of marooned residents. Limited service on the Metro-North and Long Island Rail Road commuter trains began today, and service on 14 of 23 subway lines will resume tomorrow, Governor Andrew Cuomo said at a news briefing in Manhattan. Still, power losses kept thousands of people and businesses in the dark and prevented trains from running below 34th Street in Manhattan. Basements and homes were waterlogged or submerged, and 6,300 remained in shelters...The lack of transit options is unprecedented, said Bernie Wagenblast, who has monitored metro traffic for more than 30 years, including stints as a radio reporter on WABC and WINS. “It reminds me a little of back in the ’70s when we had the gas crisis and cars were lined up for long, long distances trying to get gasoline,” Wagenblast said. “Now you’ve got cars in addition to people with their gas cans waiting on line who are trying to get fuel.” In Manhattan, an unofficial line divided the haves with power from the have-nots. South of about 34th Street, far fewer shops or restaurants than usual were open. Traffic lights were inoperable, though an unspoken etiquette emerged as many drivers took turns letting one another pass through intersections. Work was stopped at the Ground Zero construction site, which is still flooded. LaGuardia Airport, the only one of the three major New York-area airports that remains closed, can’t resume flights until floodwaters are drained and ground lights and equipment are checked. Labor Dept. Report on Jobs to Appear Friday as Planned (NYT) The hurricane had shut down government offices on Monday and Tuesday, and threatened to delay the release of the monthly jobs numbers. That led to hand-wringing in the presidential campaigns and even some accusations that the Obama administration might delay the numbers for its political benefit. But a Labor Department spokesman said Wednesday in an e-mail message that the report would come out as planned, at 8:30 a.m. E.S.T. on Friday. The Philadelphia 76ers unveil the world’s largest T-shirt cannon (YS) On opening night, the Sixers [unveiled] Big Bella, the world's largest T-shirt launcher that fires 100 tees in just 60 seconds. Big Bella weighs 600 pounds and, when firing T-shirts into the upper reaches of the Wells Fargo Center, can be up to 10 feet high. The team commissioned the creation of Big Bella from FX in Motion, an entertainment elements company out of New Berlin, Wisc. The team will also drop T-shirts, free game tickets and other promotional items from the rafters of the Wells Fargo Center down to fans below in a new themed "Sixers Parachute Drop." Australia Targets China’s Rich With “Millionaire” Visa (Deal Journal) Got 5 million Australian dollars (US$5.2 million) spare and need a residency visa? Australia’s doors will soon be open. From Nov. 24, Australia will accept applications under a new program, known as the Significant Investor Visa scheme, aimed at attracting the world’s wealthy to make the move and park their money Down Under. The only catch is that the A$5 million must be invested in state and territory Australian government debt, privately-owned Australian companies and managed funds that invest in Australian assets regulated by the Australian Securities & Investment Commission for four years. The new visa has already got financial advisers throughout Australia devising investment solutions for applicants. Consultants expect no shortage of takers especially from China, which is seeing an increasing flow of wealthy citizens sending money overseas, investing in assets as diverse as condos in Cyprus, or education for children overseas. A Wall Street Journal analysis of these flows suggests that in the 12 months through September, about US$225 billion headed out of China, equivalent to about 3% of the nation’s economic output last year. Harvard Business School Survey: HBS Students Favor Obama (Harbus) Surveys completed by 668 members of the HBS student body last week revealed that President Barack Obama had the support of 65% of the student community. Challenger Mitt Romney captured 32% of the vote while the remainder said they supported a third-party candidate, were unsure, or did not plan to vote. A Year After MF Global's Collapse, Brokerage Firms Feel Less Pressure For Change (Dealbook) For their part, many MF Global employees remain chastened by their firm’s collapse. Lawmakers hauled Mr. Corzine, a former senator from New Jersey, to Washington three times to testify before Congressional committees. Some MF Global employees remain unemployed while others took major pay cuts to work for the trustee unwinding the firm’s assets. Several MF Global employees planned to gather on Thursday for drinks at a Midtown Manhattan bar, just blocks from their old firm, to commiserate on their trying year. They canceled the event after another disaster, Hurricane Sandy, left some people stranded without power. Hawaii Tourist Saved By Taekwondo Skills (ABC) A 12-foot-long tiger shark messed with the wrong person. Mariko Haugen, a taekwando black belt, was enjoying a swim in Maui, Hawaii, when she was confronted by the creature. “She saw it a few seconds before it hit – and she gave it her best Tae Kwon Do black belt punch in the nose,” Don Haugen, Mariko’s husband, wrote on Facebook. Haugen’s husband and another man saw the attack and helped carry her to safety. She received more than 100 stitches to close wounds on her right hand and thigh.
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Wall Street Sputters Back To Life (WSJ)
It wasn't until Mayor Michael Bloomberg and NYSE Euronext Chief Executive Officer Duncan Niederauer rang the opening bell that traders knew for sure that the systems would work. "Out of this postapocalyptic world that we're all looking at, that's a ray of good news, that they're actually able to get the exchange open," said Keith Bliss, senior vice president at Cuttone & Co., a brokerage with operations on the NYSE floor.

Barclays Faces $435 Million Fine, Another Probe (WSJ)
Barclays aced a double-barreled assault from U.S. authorities, as the federal energy-market regulator sought a record $435 million in penalties for the bank's alleged manipulation of U.S. electricity markets, and the lender also disclosed that it was facing a U.S. anticorruption investigation. The corruption investigation focuses on potential violations during the bank's efforts to raise money from Middle Eastern investors in the early days of the financial crisis. The probe, being conducted by the Justice Department and the Securities and Exchange Commission, is at an early stage.

Wells Expands Into Investment Banking As Others Retreat (Reuters)
The growth worries some investors who want the notoriously conservative bank to stick to its knitting, but Wells Fargo believes that now is a good time to hire. "Our eyes are wide open," said John Shrewsberry, head of the bank's investment banking and capital markets operations, known as Wells Fargo Securities. "There are a lot of very talented people at different stages of availability," he added in an interview this week. The fourth-largest U.S. bank says it can earn solid returns in investment banking while taking little risk for itself. It is focusing on services that its corporate lending customers need, such as stock and bond underwriting and merger advice. For investors, it is looking at areas like processing futures and swaps trades. The bank shies away from riskier undertakings like trading for its own account. The Wells Fargo Securities unit is relatively small now. It's biggest hub is in Charlotte, North Carolina, far from the storm that has hobbled Wall Street this week. In a few years, the unit could account for twice as much of the firm's revenue as it does now - an estimated 10 percent compared to its current five, Deutsche Bank analyst Matt O'Connor wrote in a report.

Sandy's Economic Cost: Up To $50 Billion And Counting (CNBC)
By contrast, the two costliest hurricanes in U.S. history to date were Katrina, with estimated losses of $146 billion, and Andrew, with loses estimated at $44 billion. But there are offsets and Moody's Mark Zandi and other economists note that there will be considerable rebuilding that will accompany the storm. Because the storm hit early in the quarter, Zandi points out that if $20 billion is spent cleaning up and rebuilding, the actual measured impact on gross domestic product could be zero. IHS Global Insight U.S. Economists Gregory Daco and Nigel Gault are doubtful. They note that the rebuilding often takes the place of investment elsewhere and often not everything is rebuilt. “The effect on growth for the fourth quarter will not be catastrophic but might still be noticeable, especially in an economy with little momentum anyway,” IHS wrote. The debate begs the question of whether such natural disasters can ultimately stimulate an economy. Eric Strobl, of the Ecole Polytechnique in Paris, who has studied the impact of hurricanes for more than a decade, found that hurricanes at the local level are usually negative for growth.

NYC Struggles to Come Back to Life as Storm Chaos Lingers (Bloomberg)
New York City struggled to return to normal life after superstorm Sandy, managing a partial resumption of mass transit amid a landscape of miles-long traffic jams, widespread blackouts and swarms of marooned residents. Limited service on the Metro-North and Long Island Rail Road commuter trains began today, and service on 14 of 23 subway lines will resume tomorrow, Governor Andrew Cuomo said at a news briefing in Manhattan. Still, power losses kept thousands of people and businesses in the dark and prevented trains from running below 34th Street in Manhattan. Basements and homes were waterlogged or submerged, and 6,300 remained in shelters...The lack of transit options is unprecedented, said Bernie Wagenblast, who has monitored metro traffic for more than 30 years, including stints as a radio reporter on WABC and WINS. “It reminds me a little of back in the ’70s when we had the gas crisis and cars were lined up for long, long distances trying to get gasoline,” Wagenblast said. “Now you’ve got cars in addition to people with their gas cans waiting on line who are trying to get fuel.” In Manhattan, an unofficial line divided the haves with power from the have-nots. South of about 34th Street, far fewer shops or restaurants than usual were open. Traffic lights were inoperable, though an unspoken etiquette emerged as many drivers took turns letting one another pass through intersections. Work was stopped at the Ground Zero construction site, which is still flooded. LaGuardia Airport, the only one of the three major New York-area airports that remains closed, can’t resume flights until floodwaters are drained and ground lights and equipment are checked.

Labor Dept. Report on Jobs to Appear Friday as Planned (NYT)
The hurricane had shut down government offices on Monday and Tuesday, and threatened to delay the release of the monthly jobs numbers. That led to hand-wringing in the presidential campaigns and even some accusations that the Obama administration might delay the numbers for its political benefit. But a Labor Department spokesman said Wednesday in an e-mail message that the report would come out as planned, at 8:30 a.m. E.S.T. on Friday.

The Philadelphia 76ers unveil the world’s largest T-shirt cannon (YS)
On opening night, the Sixers [unveiled] Big Bella, the world's largest T-shirt launcher that fires 100 tees in just 60 seconds. Big Bella weighs 600 pounds and, when firing T-shirts into the upper reaches of the Wells Fargo Center, can be up to 10 feet high. The team commissioned the creation of Big Bella from FX in Motion, an entertainment elements company out of New Berlin, Wisc. The team will also drop T-shirts, free game tickets and other promotional items from the rafters of the Wells Fargo Center down to fans below in a new themed "Sixers Parachute Drop."

Australia Targets China’s Rich With “Millionaire” Visa (Deal Journal)
Got 5 million Australian dollars (US$5.2 million) spare and need a residency visa? Australia’s doors will soon be open. From Nov. 24, Australia will accept applications under a new program, known as the Significant Investor Visa scheme, aimed at attracting the world’s wealthy to make the move and park their money Down Under. The only catch is that the A$5 million must be invested in state and territory Australian government debt, privately-owned Australian companies and managed funds that invest in Australian assets regulated by the Australian Securities & Investment Commission for four years. The new visa has already got financial advisers throughout Australia devising investment solutions for applicants. Consultants expect no shortage of takers especially from China, which is seeing an increasing flow of wealthy citizens sending money overseas, investing in assets as diverse as condos in Cyprus, or education for children overseas. A Wall Street Journal analysis of these flows suggests that in the 12 months through September, about US$225 billion headed out of China, equivalent to about 3% of the nation’s economic output last year.

Harvard Business School Survey: HBS Students Favor Obama (Harbus)
Surveys completed by 668 members of the HBS student body last week revealed that President Barack Obama had the support of 65% of the student community. Challenger Mitt Romney captured 32% of the vote while the remainder said they supported a third-party candidate, were unsure, or did not plan to vote.

A Year After MF Global's Collapse, Brokerage Firms Feel Less Pressure For Change (Dealbook)
For their part, many MF Global employees remain chastened by their firm’s collapse. Lawmakers hauled Mr. Corzine, a former senator from New Jersey, to Washington three times to testify before Congressional committees. Some MF Global employees remain unemployed while others took major pay cuts to work for the trustee unwinding the firm’s assets. Several MF Global employees planned to gather on Thursday for drinks at a Midtown Manhattan bar, just blocks from their old firm, to commiserate on their trying year. They canceled the event after another disaster, Hurricane Sandy, left some people stranded without power.

Hawaii Tourist Saved By Taekwondo Skills (ABC)
A 12-foot-long tiger shark messed with the wrong person. Mariko Haugen, a taekwando black belt, was enjoying a swim in Maui, Hawaii, when she was confronted by the creature. “She saw it a few seconds before it hit – and she gave it her best Tae Kwon Do black belt punch in the nose,” Don Haugen, Mariko’s husband, wrote on Facebook. Haugen’s husband and another man saw the attack and helped carry her to safety. She received more than 100 stitches to close wounds on her right hand and thigh.

Related

Opening Bell: 10.31.12

Questions Cloud Market Reopening (WSJ) The New York Stock Exchange said Tuesday that it plans to open as usual at 9:30 a.m. and that its trading floor and headquarters in lower Manhattan were "fully operational" despite widespread blackouts and flooding in that part of the city. The Nasdaq Stock Market and other exchanges will open as well. Bond markets will follow suit. While investors and industry officials breathed a sigh of relief, critics argued that the storm exposed how ill-prepared exchanges and their Wall Street customers are for such an event. Regulators on Tuesday said they plan to probe whether more needs to be done to get exchanges and the trading community ready for such disasters. After Hurricane, Wall Street Back To Work (Dealbook) On Tuesday, the scene around Wall Street was desolate. While the New York Exchange’s building appeared to be unscathed, many other offices in the vicinity were flooded. After an underground parking garage two blocks from the exchange was inundated with water, several cars floated to street level. Two Citigroup buildings were without power. The bank told employees in a memo on Tuesday that one of the buildings, 111 Wall Street, sustained “severe flooding and will be out of commission for several weeks.” Some JPMorgan Chase employees outside New York City were working in central New Jersey. At the bank’s main trading floor in Midtown Manhattan, employees, many in jeans, shirts and rain boots, booked hotels for the night and discussed strategy. The bank, which sustained minimal damages at a building downtown, expected to resume normal operations in Midtown. Credit Suisse also planned to open for business on Wednesday, with its main offices by Madison Square Park running on backup power. In downtown New York, Goldman Sachs was one of the few buildings with power. The firm has a generator in the event of outages, allowing its trading floors to continue to run. On Tuesday, televisions sets and lights inside the building were on, although few employees were there...In a memo to staff, Goldman announced its headquarters would be open on Wednesday. The firm also booked hotels in various locations to make sure employees could get to work. Deutsche Bank Rides Debt-Market Wave (WSJ) Deutsche Bank reported a surge in investment-banking revenues in the third quarter as a rebound in client activity fueled the best quarter ever for its fixed-income division. Deutsche Bank, Europe's largest lender by assets, reported group revenues of €8.7 billion ($11.5 billion), up 19% from the third quarter last year. The result was better than analysts expected, but the bank's legal problems and restructuring efforts nearly flattened net income. At €747 million, the total was up 3% from €725 million a year earlier. The bank's revenue increase was driven in part by bond-buying initiatives announced by the U.S. Federal Reserve and the European Central Bank in recent months. The moves have fueled a resurgence in client activity, including in fixed-income trading—an area where UBS AG and other competitors have announced significant cut backs, allowing Deutsche Bank to gain market share. UBS Moves Quickly On Job Cuts, Revamp (WSJ) Scores of traders at UBS were locked out of the Swiss bank's London offices Tuesday as the institution moved quickly to implement the first of thousands of job cuts in a strategic restructuring. The revamp effectively brings an end to UBS's attempts over the past two decades to build a world-class investment bank, which brought the institution to the brink of collapse in 2008 when it incurred more than $50 billion in losses from the fixed-income business that it is now exiting. Instead, UBS's strategy will center on its private bank, the world's second-largest in assets after Bank of America and a mainstay of the group's earnings. UBS confirmed Tuesday that it will cut risk-weighted assets by around 100 billion Swiss francs ($107 billion) by the end of 2017, eliminate about 10,000 jobs across the bank and reorganize its investment bank to deliver more products and services to ultra-wealthy clients at the private bank. The bank also said Tuesday that charges related to the moves, which come in response to a tougher regulatory and economic climate, helped push it into the red in the third quarter. UBS Chief Executive Sergio Ermotti said that London would bear the brunt of the cuts as the bank attempts to exit almost completely from fixed-income activities and move back to its wealth-management roots. Storm Cripples US East Coast, Death and Damage Toll Climb (CNBC) The U.S. death toll climbed to 50, according to The Associated Press, with many of the victims killed by falling trees. Damage estimates reached into the tens of billions, while the storm disrupted campaigning and early voting ahead of the November 6 presidential election. More than 8.2 million households were without power in 17 states as far west as Michigan. Nearly 2 million of those were in New York, where large swaths of lower Manhattan lost electricity and entire streets ended up under water. New York Subway System Faces Weeks to Recover From Storm (Bloomberg) If you laid the New York City subway system in a line, it would stretch from New York to Detroit. Now imagine inspecting every inch of that track. That’s the job ahead for Metropolitan Transit Administration officials, who must examine 600 miles of track and the electrical systems with it before they can fully reopen the largest U.S. transit system, which took a direct hit by Hurricane Sandy. Seven subway tunnels under New York’s East River flooded, MTA officials said. Pumping them out could take days, and a 2011 state study said it could take three weeks after hurricane- driven flooding to get back to 90 percent of normal operations. That study forecast damages of $50 billion to $55 billion to transportation infrastructure including the subways. How CEOs Improvised In The Wake Of Sandy (WSJ) When the approach of Hurricane Sandy left Lands' End Chief Executive Edgar Huber stranded on a business trip, he retreated to an impromptu backup headquarters—in his mother-in-law's apartment complex...Foot Locker CEO Ken Hicks disregarded the shutdown of his New York headquarters on Monday and worked at his office until 3 p.m. Then he picked up the work again six blocks away at his home in Manhattan's Murray Hill neighborhood. When the power went out, he put on iTunes, lit a lantern and did paperwork for another 2½ hours. "You can be reasonably self-sufficient with a cellphone and a lantern," the CEO says. Celebrities React To Northeast Hurricane (NYDN) “WHY is everyone in SUCH a panic about hurricane (i’m calling Sally)...?” Lindsay Lohan tweeted Sunday night. “Stop projecting negativity! Think positive and pray for peace.” A Year Later, All Eyes Still On 'Edie' (WSJ) Who broke the law by raiding customer accounts at MF Global Holdings? Investigators seem no closer to the answer than they were when the New York brokerage firm filed for bankruptcy exactly a year ago Wednesday, owing thousands of farmers and ranchers, hedge funds and other investors an estimated $1.6 billion. Their money was supposed to be stashed safely at MF Global, but company officials used much of it for margin calls and other obligations. The last, best hope for a breakthrough in the probe is Edith O'Brien, the former assistant treasurer at MF Global. Working in the company's Chicago office, she was the go-to person for emergency money transfers as MF Global flailed for its life. MBA's Rethink Wall Street (WSJ) Many of the nation's top M.B.A. programs, including Harvard Business School and Stanford Graduate School of Business, reported declines in the share of students who took jobs in finance this year. And even those that posted some gains, such as University of Pennsylvania's Wharton School, are still well below their prefinancial crisis levels...A Wall Street gig "isn't as prestigious as it used to be" because the future—promotion opportunities, salary gains, even basic job security— is so unclear, says Mark Brostoff, associate dean and director of the career center at the Olin Business School at Washington University in St. Louis. Though the share of Olin students going into finance increased to 22% of job seekers this year from 15% in 2011, many of those gains came at boutique and regional Midwestern financial firms rather than on Wall Street. One factor affecting student demand: Banks expect young staffers to pick up the slack left by masses of laid-off midlevel employees, without necessarily offering more generous pay packages in return for the long hours. At Harvard Business School, for example, students heading into investment banking—7% of job seekers who accepted jobs, down from 10% in 2011—reported median salaries and signing bonuses were flat with last year, at $100,000 and $40,000, respectively, while other guaranteed compensation fell to $8,750 from $40,000. Disney $4 Billion ‘Star Wars’ Deal Spotlights Content Bet (Bloomberg) Walt Disney agreed to buy George Lucas’s Lucasfilm Ltd. for $4.05 billion, pressing Chief Executive Officer Robert Iger’s $15 billion bet on creative franchises by adding “Star Wars” and “Indiana Jones.” Lucas, 68, the sole owner, will get half in cash and the rest in stock, making him a major investor in the film, theme park and TV company, according to a statement yesterday from Burbank, California-based Disney. The first of a new trilogy of “Star Wars” films will be released in 2015, Disney said. France Can’t Compete With Rest of Europe: WTO Chief (CNBC) France is uncompetitive not only versus China, but against the rest of Europe, according to Pascal Lamy, director general of the World Trade Organization. “The competitiveness of France on foreign markets has been damaged for the last 10 years. This is nowhere more obvious than in Europe, where France has lost market share for the last 10 years,” said Lamy in an exclusive interview with CNBC in Paris. Cop Tasers 10 Year-Old For Refusing To Clean His Car (CN) A New Mexico policeman Tasered a 10-year-old child on a playground because the boy refused to clean his patrol car, the boy claims in court. Guardian ad litem Rachel Higgins sued the New Mexico Department of Public Safety and Motor Transportation Police Officer Chris Webb on behalf of the child, in Santa Fe County Court. Higgins claims Webb used his Taser on the boy, R.D., during a May 4 "career day" visit to Tularosa New Mexico Intermediate School. "Defendant Webb asked the boy, R.D., in a group of boys, who would like to clean his patrol unit," the complaint states. "A number of boys said that they would. R.D., joking, said that he did not want to clean the patrol unit. "Defendant Webb responded by pointing his Taser at R.D. and saying, 'Let me show you what happens to people who do not listen to the police.'" Webb then shot "two barbs into R.D.'s chest," the complaint states. "Both barbs penetrated the boy's shirt, causing the device to deliver 50,000 volts into the boy's body.

Opening Bell: 11.02.12

Economy Adds 171,000 Jobs (WSJ) U.S. payrolls increased by a seasonally adjusted 171,000 jobs last month, the Labor Department said Friday. The politically important unemployment rate, obtained by a separate survey of U.S. households, rose one-tenth of a percentage point to 7.9%. Economists surveyed by Dow Jones Newswires expected a gain of 125,000 in payrolls and a 7.9% jobless rate. Hedge Fund Cashes In On Greek Bonds (Reuters) London-based hedge fund Adelante Asset Management has made a 70 percent gain on a sale of Greek bonds, showing the potential for big profits from betting on a recovery in the fortunes of a country effectively off-limits to investors a few months ago...Since the restructuring, Greek government bond prices have strengthened, allowing Adelante to sell them for around 24 cents on the euro, having bought them for around 14 cents in June, the company said. A Greek government bond maturing in 2042, for example, is currently trading at around 20.8 cents on the euro, Thomson Reuters data shows. Other hedge funds have made similar bets. Third Point, a high profile New York hedge fund, for example, has been a significant buying of cut-price Greek bonds. RBS Eyes Libor Settlement Soon (WSJ) RBS wants to seal a settlement with regulators over its alleged rigging of key interest rates in the coming months, as the partstate-owned bank looks to draw a line under the scandal. Speaking to reporters at the bank's third-quarter results presentation, Chief Executive Stephen Hester said he would be "disappointed" if he couldn't provide details on a settlement by February. "We are up for settling with all and everyone as soon as they are ready. But each regulator has to satisfy itself that it has all the facts," he said. Deutsche Bank Faces Top Surcharge as FSB Shuffles Tiers (Bloomberg) Deutsche Bank would be required to hold more capital and Bank of America Corp.’s burden stands to be reduced as global regulators shuffled the competitive balance among the world’s biggest banks. Citigroup, HSBC and JPMorgan join Deutsche Bank as firms that will be targeted for a capital surcharge of 2.5 percent, according to an updated list published yesterday by the Financial Stability Board. The change means Bank of America already exceeds requirements, while Deutsche Bank would be more than 2 percentage points below the new minimum of 9.5 percent. “That limits earnings potential for Citigroup, JPMorgan and Deutsche Bank compared to Bank of America, all other things being equal, so it’s certainly a competitive advantage for them,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. Short-Sellers of Europe Set to Be Unmasked (CNBC) The European Securities and Markets Authority (ESMA), the EU regulator, has issued new rules on the short-selling of securities indicating that anyone with short positions of greater than 0.2 percent in an EU company’s shares must report it to regulators. Positions of more than 0.5 percent will be publicly released, naming both the company and the short-seller. Public disclosure is triggered any time that level is hit with each 0.1 percent increase or decrease after that. NYSE Open For Business Shows Wall Street Still Vulnerable (Bloomberg) The Securities and Exchange Commission may consider whether exchanges’ emergency regimens need to be bolstered, according to a person familiar with the regulator’s thinking who asked not to be named because the matter is private. The industry’s decision to halt equities and bond trading shows the challenge of maintaining markets when a catastrophe threatens New York City, home to 168,700 securities industry workers. “One of the purposes of having electronic exchanges and basing them away from New York City is for the market to be more robust and stay open,” Charles Jones, a finance professor at Columbia Business School in New York, said in a phone interview. “This is what the back-up plans were designed for. But the markets didn’t open.” David Blaine Entertains New Yorkers After Hurricane Sandy (NYP) When a backup generator at Old Homestead Steakhouse sputtered, the restaurant started serving hundreds of pounds of steaks, burgers, lobster tails and shrimp on the street outside for downtown denizens. David Blaine, the modern-day Harry Houdini who spent days recently being shocked in a steel suit, pitched in to provide spontaneous street entertainment. “David was rumbling by on his motorcycle, and he stopped to see why there was a line on 14th Street,” said a spy, adding 800 chowed down. Blaine then asked restaurant co-owner Greg Sherry if there was a deck of cards in the house. Blaine used the full deck and some spare silverware to perform magic tricks outside for an hour and a half. The magic man, an Old Homestead regular, was offered a doggie bag but said he’s on a special diet in preparation for his next stunt. Romney Faces Sale With A Win (WSJ) Mr. Romney's assets, valued at between $190 million and $250 million, include investments in hedge funds, private-equity funds and partnerships at Bain Capital, which he ran for 15 years. These entities have ownership stakes in dozens of companies that could be affected by government action, such as radio firm Clear Channel Communications Inc. and a video-surveillance firm based in China. Many businessmen and wealthy individuals have entered government service and sold off holdings. But a Romney sale would be especially complicated. Investments in private-equity funds can be difficult to value and seldom change hands. Any sale would have to be handled carefully to avoid any appearance that the incoming president was getting favorable treatment from a buyer. What Do Asia Markets Fear? Romney As President (CNBC) At a time of heightened uncertainty, with the ongoing European debt crisis and the upcoming leadership transition in China, a new president in the world’s largest economy will cause additional nervousness among Asian investors, experts told CNBC. “Asian traders don’t like change in leadership. You would see weakness in the markets if Romney won, because people would question how well he would deal with the impending doom of the ‘fiscal cliff.’ Obama would be a safer bet, as investors would enjoy continuity at a time of a lot of uncertainty,” said Justin Harper, market strategist, at IG Markets...Besides, Romney’s stance on China is particularly worrying feels Harper. The presidential hopeful has said he will name China a “currency manipulator,” which could lead to more tensions with the mainland, including on the trade front. “You would expect trade between the two nations to suffer, this would have a knee-jerk reaction on trade in the region,” he added. Fed Up With Fees (NYP) The manager of a large public pension’s private-equity program said for the last 24 months he has not committed money to any new private-equity fund that doesn’t give all fees it charges its companies back to investors. He is doing this because he wants an alignment of interest where he and the private-equity firm only make money by reselling a business. PE firms, he believes, will stop charging their companies fees if there is little in it for them. So, KKR, for example — responding to pressure — has agreed to give all fees it charges its companies in its new fund back to investors, the pension manager said. KKR is not the only firm making this change. Apax Partners, Blackstone Group, Centerbridge Partners, Providence Equity and TPG Capital are among those making the same concessions, the pension manager said. Local shelter mistakenly euthanizes family pet (WRCB) After waiting 10 days to be reunited with his dog, a local college student learned the family's pet had been euthanized by mistake. The Lab mix was being held at McKamey Animal Center, where administrators say a paperwork mix up led to the dog's death. Matt Sadler adopted the three-year-old Lab mix when he was just a puppy. "That was my best friend," Sadler says. "He was there for me through my parents' divorce and a lot of really hard tough times in my life." It was hard for Matt when Zion was quarantined last week, after jumping on a pizza delivery driver. "The lady didn't want to press charges, it wasn't anything serious, but the law has a 10-day quarantine period," he says. Because Zion was a month past due on his yearly rabies vaccine, he was held for the full 10 days at McKamey Animal Center. Thursday, Matt eagerly returned to the facility to take Zion home. "She says, ‘I'm sorry, Matt, we accidentally euthanized your dog'," Sadler says...McKamey has offered to cremate Zion, and allow Matt to adopt any dog he chooses.

Opening Bell: 10.15.12

Global Finance Chiefs At Odds (WSJ) At the annual meetings here of the International Monetary Fund and World Bank, European officials bickered about the damage caused by austerity; this week they head into a major euro-zone summit with no clear rescue plan for Greece. A territorial row between China and Japan, the world's second- and third-largest economies, bled into the conference with no sign of resolution, highlighting a new risk to growth. And many top finance officials pointed fingers at the U.S. for casting a new cloud over global markets by failing to make progress on the budget mess in the world's largest economy. Thousands March In Spain To Protest Austerity (Reuters) Several thousand anti-austerity protesters in Spain marched down a major street in the capital banging pots and pans Saturday. Many protesters also blew whistles as they blocked part of the Castellana boulevard Saturday carrying placards saying "We don't owe, we won't pay." "None of us pushed the banks to lend huge sums of money to greedy property speculators, yet we are being asked to pay for other's mistakes," 34-year-old civil servant Maria Costa, who was banging an old pot along with her two children, said. Bernanke Defends Fed From Claims It Is Being Selfish (NYT) Critics say the Fed’s unorthodox policies weaken the dollar and bolster the currencies of developing countries, hurting their ability to export. “It is not at all clear that accommodative policies in advanced economies impose net costs on emerging market economies,” Mr. Bernanke said at an event sponsored by the Bank of Japan and the International Monetary Fund. The Fed last month announced a program of open-ended bond purchases that will be continued until there is substantial improvement in labor market conditions, barring a sustained and unexpected spike in inflation. To start off, the central bank will buy $40 billion in mortgage-backed securities each month. “This policy not only helps strengthen the U.S. economic recovery, but by boosting U.S. spending and growth, it has the effect of helping support the global economy as well,” Mr. Bernanke said. Fischer Backs Fed QE3 as World ‘Awfully Close’ to Recession (Bloomberg) While there has been “a lot of progress made” to improve the global economy, its impact hasn’t materialized, Fischer said in an interview in Tokyo with Bloomberg Television airing Sunday. He signaled that by deciding not to set an end date or total amount to its third program of bond buying, the Fed is easing worries it will run out of ammunition before achieving its goals. Can Morgan Stanley's Gorman Save Wall Street? (BV) Gorman’s strategic moves are enough to convince one natural born skeptic, Mike Mayo, a financial-industry research analyst at Credit Agricole SA (ACA), to recommend Morgan Stanley’s stock for the first time in years. “The stock is valued as if it is a Greek or Spanish bank but its risk is far less,” he wrote in an e-mail to me. For Morgan Stanley to return to its glory days, he said, margins need to be improved in asset management, fixed-income trading needs to be further slimmed down and the core investment-banking franchise needs to be maintained and reinvigorated. Good advice. A firm built around lower risk-taking and lower overall pay while still providing clients with the advice and capital they need to innovate and expand is what we need on Wall Street. It’s the vision of one man taking seriously his responsibility to make the capital markets safe and productive for economies all over the world, instead of just some casino gone haywire where the house absorbs the losses and the profits go to the gamblers. The question is whether other leaders on Wall Street will follow Gorman’s example. Sex Life Was ‘Out of Step,’ Strauss-Kahn Says, but Not Illegal (NYT) More than a year after resigning in disgrace as the managing director of the International Monetary Fund, Dominique Strauss-Kahn is seeking redemption with a new consulting company, the lecture circuit and a uniquely French legal defense to settle a criminal inquiry that exposed his hidden life as a libertine...In France, “Libertinage” has a long history in the culture, dating from a 16th-century religious sect of libertines. But the most perplexing question in the Strauss-Kahn affair is how a career politician with ambition to lead one of Europe’s most powerful nations was blinded to the possibility that his zest for sex parties could present a liability, or risk blackmail. The exclusive orgies called “parties fines” — lavish Champagne affairs costing around $13,000 each — were organized as a roving international circuit from Paris to Washington by businessmen seeking to ingratiate themselves with Mr. Strauss-Kahn. Some of that money, according to a lawyer for the main host, ultimately paid for prostitutes because of a shortage of women at the mixed soirees orchestrated largely for the benefit of Mr. Strauss-Kahn, who sometimes sought sex with three or four women. German finance chief Wolfgang Schaeuble says Greece won't default or exit (Telegraph) "Greece has to take a lot of very serious reforms" and "everyone is trusting that the Greek government is doing what is necessary", he said at a meeting with business leaders in Singapore on Sunday. Mr Schaeuble said an increasing majority of Greeks understand that being in the euro "is in the best interest of Greece" and said did not think there would be a ‘staatsbankrott’ - or state bankruptcy. He said he did not see “any sense to speculate on Greece leaving the euro” because it would be very damaging for both the country and the region. High-Speed Trading No Longer Hurtling Forward (NYT) Profits from high-speed trading in American stocks are on track to be, at most, $1.25 billion this year, down 35 percent from last year and 74 percent lower than the peak of about $4.9 billion in 2009, according to estimates from the brokerage firm Rosenblatt Securities. By comparison, Wells Fargo and JPMorgan Chase each earned more in the last quarter than the high-speed trading industry will earn this year. Titanic Tycoon Plans Stake Sale Talks for $8 Billion Gas Project (Bloomberg) Australian mining magnate Clive Palmer, who’s planning to build a modern replica of the Titanic, aims to start talks next year to sell stakes in a potential $8 billion natural gas project in Papua New Guinea. “We’ve had interest from major petrochemical companies who want to joint venture” including Exxon Mobil Corp. and Chinese companies, Palmer said in an interview. “We will talk to them at the appropriate time,” likely mid-2013 when field work is scheduled to be completed, he said. Occupy Supporters Stage Protest in London (AP) Several supporters of the anti-corporate Occupy movement chained themselves to the pulpit of St. Paul’s Cathedral during a service on Sunday in an action for the anniversary of its now-dismantled protest camp outside the London landmark. The dean of St. Paul’s, David Ison, said he was conducting an evening prayer service when “four young women dressed in white” chained themselves to the structure. Dutch make massive cocaine bust in fruit shipment headed for zoo, arrest five (AP) A major cocaine seizure in Europe turned out to be good news for the animals at Rotterdam’s zoo. The drugs were hidden among boxes of bananas, and the fruit went to the monkeys and other creatures at the Blijdorp zoo. Dutch prosecutors said Friday more than eight tons of cocaine was hidden among the bananas on a ship from Ecuador. The drugs were seized Monday in the Belgian port of Antwerp, while the bananas were allowed to continue on to Rotterdam – the shipment’s final destination. Dutch police arrested a Belgian truck driver and four Dutch men on Tuesday.

Opening Bell: 01.15.13

Westminster Hits At Goldman Sachs Bonus Plan (FT) Goldman Sachs provoked a furious reaction in Westminster after it emerged that the U.S. investment bank was mulling a plan to delay its U.K. bonus payments to take advantage of the imminent cut to the top rate of tax. John Mann, a Labour member of the Treasury select committee, criticized an "opportunistic money grab" by banks at a time of intensifying public anger against the sector. Some 10 banks had previously considered delaying bonuses until the top rate falls from 50 to 45 pence - although most have since concluded that this would be damaging. Chris Leslie, shadow Treasury minister, said banks needed to think carefully about their reputations. Fitch Warns Of US Downgrade Over Debt Fight (CNBC) In a statement Fitch said the debt ceiling was "an ineffective and potentially dangerous mechanism for enforcing fiscal discipline. It does not prevent tax and spending decisions that will incur debt issuance in excess of the ceiling while the sanction of not raising the ceilingrisks a sovereign default and renders such a threat incredible." Fitch Upbeat On Ireland (Reuters) If [Ireland's] debts could be shared out among euro zone states through the region's bailout mechanisms there could be scope for Ireland's BBB-plus rating to rise into the single-A category, according to Fitch analyst Douglas Renwick. "If there is an element of risk sharing, say perhaps through the ESM (European Stability Mechanism) over a bit of time, it could rise back to the single-A (range)," Renwick said. JPMorgan Ordered To Fix Lapses (WSJ) US regulators hit JPMorgan with four formal enforcement actions targeting lapses in risk-management and money-laundering controls, including the first sanctions in response to the bank's multibillion-dollar 2012 trading debacle. One set of cease-and-desist orders from the Office of the Comptroller of the Currency and the Federal Reserve instructs the largest U.S. bank by assets to remedy the breakdowns that allowed a small group of London-based traders to rack up more than $6 billion in losses last year. Another requires the bank to beef up its antimoney-laundering procedures and mirrors an action taken last April when regulators ordered Citigroup to upgrade its transaction-monitoring procedures and enhance internal audit. None of the orders issued Monday require any fines or monetary penalties, but regulators left the door open to future action. Wells Fargo Bets On Charlotte Trading After BofA Flees (Bloomberg) \Wells Fargo is betting its securities business can thrive 600 miles from New York in the same city Bank of America's traders largely abandoned. The first of 900 Wells Fargo employees moved last month into a new space on two floors of a 48-story tower in Charlotte, North Carolina. From their windows they can see the complex a half-mile away where Bank of America built its own state-of-the- art facility less than a decade ago for about 550 traders and investment bankers. Most have since been fired or moved to New York. Police: Teacher offers sexual favors to officer to avoid DUI arrest (WPBF) According to the arrest report, an empty gallon jug of Carlo Rossi wine was found behind the driver's seat of Maloney's damaged van, which was parked on the side of the street when officers arrived. Police said Maloney refused to cooperate with officers during their DUI investigation. Police said she began yelling at them and made random vulgar statements. While she was on her way to the police station, Maloney allegedly told an officer, "How much do I need to pay you to just let me go? Don't you understand I am a school teacher?" She then offered to perform oral sex on the officer and let him fondle her breasts, the report stated. RBS Libor Fine May Hit $800M+ (Bloomberg) US and UK regulators could hit the Royal Bank of Scotland with as much as $804 million in fines next week to settle allegations traders tried to rig interest rates, two people with knowledge of the matter said. Investment banking chief John Hourican and Peter Nielsen, the head of markets, may also be asked to leave because they had responsibility for the parts of the company where the alleged wrongdoing occurred. The fine would be the second-largest levied by regulators in their investigation into allegations traders at the world’s biggest lenders manipulated submissions used to set the London interbank offered rate. UBS AG, Switzerland’s biggest lender, was fined $1.5 billion in December for rate-rigging, exceeding the 290 million pounds Barclays paid in June. Bob Khuzami, Master Blaster (NYP) Robert Khuzami yesterday took aim at a Columbia University professor who chided the SEC’s head of enforcement for not suing enough high-ranking individuals at large financial institutions, choosing instead to settle with those companies...Khuzami said in a blistering 1,500-word article in the National Law Journal that the SEC has charged a total of 102 individuals associated with the credit crisis, including high-level executives at Citigroup, Credit Suisse, Bear Stearns, and Fannie Mae and Freddie Mac...It’s the second time in as many weeks that Khuzami has called out his critics by name. Just before New Year’s Eve, the Brooklyn native blasted Simon Johnson, a professor at MIT Sloan School of Management, for a New York Times blog that said Khuzami’s hire was a “mistake” because of his former ties to Deutsche Bank. Khuzami shot back in the comment section of the blog — an unusual move for a public official. Wall Street Pay Gets Tougher Look (WSJ) Daniel Loeb, who runs hedge-fund firm Third Point LLC, has raised questions about whether compensation levels at Morgan Stanley are justified given the New York company's size and relative simplicity compared with larger bank. Hedge Funds' Manhattan Migration (WSJ) Of the new firms starting out in Manhattan, Greenwich or Stamford, about 86% picked the Big Apple, on average, from 2003 to 2008, according to eVestment, which tracks data on about 70% of U.S. hedge-fund firms. In 2009 and 2010, Manhattan was home to an average of 92% of the fund launches. Data for 2011 suggest the trend has continued. "There are blips in the data, but it's clear launches shifted toward New York after the crisis," says Peter Laurelli, eVestment's head of research. Detroit mafia boss says Jimmy Hoffa is buried in shallow grave north of Detroit (NYDN) Tony Zerilli, 85, says Hoffa was buried in a field outside Detroit, about 20 miles from the restaurant where he was last seen in July 1975. The aging Zerilli, who was in prison at the time of Hoffa’s disappearance, told TV news stations WNBC and WDIV that the plan was to move Hoffa’s body, but that never happened. “The master plan was, that I understood, was that they were going to put him in a shallow grave here. Then, they were going to take him from here to Rogers City upstate,” Zerilli said. “There was a hunting lodge and they were going to bury in a shallow grave then take him up there for final burial. Then, I understand, that it just fell through.” It was unclear why Zerilli chose to speak now about the 37-year-old mystery that has elicited dozens of false leads and conspiracy theories in the past. Zerilli said is to be ailing and penniless since his release from prison in 2008. WNBC reported he is promoting an upcoming book titled "Hoffa Found.” “All this speculation about where he is and he’s not,” Zerilli said. “They say he was in a meat grinder. It’s all baloney.”

Opening Bell: 03.13.13

Ackman Applauds Call For Herbalife Investigation (AP) The National Consumers League said that it wants the FTC to investigate the claims against Herbalife as well as the vitamin and supplement products company's responses. Ackman alleged in December that Herbalife was a pyramid scheme and made a bet the stock would fall, arguing that the company makes most of its money by recruiting new salespeople rather than on the products they sell. Herbalife disputes that. In a statement late Tuesday, Pershing Square Capital Management's Ackman said that he was pleased that the NCL was requesting an FTC investigation and believes it will show that the company is a pyramid scheme. On Wednesday, Herbalife said in a statement that "We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife." Troika, Cyprus In Talks To Shrink Bailout Package (WSJ) Officials from the troika of lenders—the European Commission, the European Central Bank and the International Monetary Fund—are working with the Cypriot government to bring the headline figure for the bailout package to about €10 billion ($13.03 billion), two officials said. The aid package had been earlier expected to be as much as €17 billion—with just shy €10 billion of that going for bank recapitalizations. Big Sugar Set For Sweet Bailout (WSJ) The U.S. Department of Agriculture is considering buying 400,000 tons of sugar—enough for 142 billion Hershey's Kisses—to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The action aims to prop up tumbling U.S. sugar prices, which have fallen 18% since the USDA made the nine-month operations-financing loans beginning in October. The purchases could leave the price-support program with an $80 million loss, its biggest in 13 years, said Barbara Fecso, an economist at the USDA, in an interview. U.S. Tax Cheats Picked Off After Adviser Mails It In (Bloomberg) Everybody knows the danger of sending things inadvertently in an e-mail. Beda Singenberger’s case shows you also have to be pretty careful when you mail things the old-fashioned way. Over an 11-year period, federal prosecutors charge, Swiss financial adviser Singenberger helped 60 people in the U.S. hide $184 million in secret offshore accounts bearing colorful names like Real Cool Investments Ltd. and Wanderlust Foundation. Then, according to a prosecutor, Singenberger inadvertently mailed a list of his U.S. clients, including their names and incriminating details, which somehow wound up in the hands of federal authorities. Now, U.S. authorities appear to be picking off the clients on that list one by one. Singenberger’s goof has already ensnared Jacques Wajsfelner, an 83-year-old exile from Nazi Germany, and Michael Canale, a retired U.S. Army surgeon, court records show. Another customer, cancer researcher Michael Reiss, pleaded guilty, though his court records don’t mention the list. White Pressed On Past Representing Banks (WSJ) Since 2002, President Barack Obama's pick to become chairman of the Securities and Exchange Commission has worked for the law firm Debevoise & Plimpton LLC, where she often represented large corporations and banks. Members of the Senate Banking Committee, often from the president's own party, pressed her to guarantee that her law-firm work wouldn't stop her from taking on Wall Street's wrongdoers. "What have you done [in] the last decade that ordinary investors can look at and be assured that you will advocate for them?" Sen. Sherrod Brown (D., Ohio) asked Ms. White. Wearing a bright red jacket, her hands neatly folded on the table before her, Ms. White said her work at Debevoise "hasn't changed me as a person." Killer Ukrainian dolphins on the loose (JustinGregg) After rebooting the Soviet Union’s marine mammal program just last year with the goal of teaching dolphins to find underwater mines and kill enemy divers, three of the Ukrainian military’s new recruits have gone AWOL. Apparently they swam away from their trainers this morning ostensibly in search of a “mate” out in open waters. It might not be such a big deal except that these dolphins have been trained to “attack enemy combat swimmers using special knives or pistols fixed to their heads.” Dimon’s Extra $1.4 Million Payout Hangs on Fed Decision (Bloomberg) That’s how much extra income Dimon could get from his stake of about 6 million shares if his New York-based bank raises its payout as much as analysts predict. The sum dwarfs the combined $73,300 of new annual dividends at stake for his CEO peers at Bank of America Corp., Goldman Sachs Group Inc. and Wells Fargo & Co., based on forecasts compiled by Bloomberg. Bankers will find out whether they get any boost tomorrow when the Fed announces which capital plans at the 18 largest U.S. lenders won approval. Regulators have pressed firms since the 2008 credit crisis to give executives more stock and less cash to align their interests with those of shareholders. CEOs are poised to get a windfall if payouts increase and shares rise -- or to suffer with their investors if results sputter. BofA Ordered to Pay Ex-Merrill Banker Jailed in Brazil (Bloomberg) Sao Paulo’s 26th labor court said it was “incontrovertible” that the imprisonment was because of his position as a junior financial consultant at Merrill Lynch, now a division of Charlotte, North Carolina-based Bank of America, according to a document published in the nation’s official Gazette earlier this month. Caiado wasn’t convicted of any wrongdoing. Caiado, 42, was jailed in June 2006 in a Curitiba federal prison over allegations he helped Merrill’s clients make illegal overseas money transfers. His arrest was part of an investigation that resulted in indictments of 18 bankers at Credit Suisse AG and UBS AG in Brazil. Merrill fired Caiado nine months later, saying the dismissal was part of a restructuring. Carlyle Group Lowers Velvet Rope (WSJ) In the latest effort by private-equity firms to broaden their customer base, Carlyle Group is letting some people invest in its buyout funds with as little as $50,000. The move comes as other large firms—known for offering exclusivity to big-money clients—have broadened their investment offerings in search of fresh sources of funds. KKR, for example, recently began offering mutual funds investing in bonds, with minimum investments set at $2,500. Blackstone Group launched a fund last year that for the first time lets affluent individuals invest in hedge funds and has told regulators it plans to offer another fund, though it hasn't disclosed many details about the forthcoming offering. Greenland Votes for Tougher Rules for Foreign Investors (WSJ) Voters in Greenland have elected a new ruling party that has pledged to toughen up on foreign investors looking to take advantage of the nation's wealth of natural resources. The Social Democratic Siumut party collected 43% of the votes in an election held Tuesday, enabling the party to leapfrog the ruling Inuit Ataqatigiit, which over the past four years has worked to open up the secluded country to mining companies and others capable of advancing industry. Greenland is believed to have a vast supply of untapped rare-earth minerals, oil, gas and other resources. Blankfein On Trader Talent Hunt At Morgan Stanley (NYP) The Goldman Sachs CEO is taking dead aim at Morgan Stanley’s most prized assets — its best and brightest employees — after his rival decided to defer pay for senior bankers. Blankfein, as a big game hunter, recently landed 13-year Morgan Stanley veteran Kate Richdale, head of its Asia Pacific investment banking business. The CEO’s talent hunt is continuing, sources said. Goldman currently is in selective talks with other Morgan Stanley bankers and has also lured a handful of traders from the bank. Golfer Survives Fall Into Course Sinkhole (AP) Mark Mihal was having a good opening day on the links when he noticed an unusual depression on the 14th fairway at Annbriar Golf Club in southern Illinois. Remarking to his friends how awkward it would be to have to hit out of it, he went over for a closer look. One step onto the pocked section and the 43-year-old mortgage broker plunged into a sinkhole. He landed 18 feet down with a painful thud, and his friends managed to hoist him to safety with a rope after about 20 minutes. But Friday's experience gave Mihal quite a fright, particularly after the recent death of a Florida man whose body hasn't been found since a sinkhole swallowed him and his bedroom. "I feel lucky just to come out of it with a shoulder injury, falling that far and not knowing what I was going to hit," Mihal, from the St. Louis suburb of Creve Coeur, told The Associated Press before heading off to learn whether he'll need surgery. "It was absolutely crazy."

Opening Bell: 02.15.13

SEC Looks At Trades A Day Before Heinz Deal (NYT) Regulators are scrutinizing unusual trading surrounding the planned $23 billion takeover of the food company H. J. Heinz, raising questions about potential illegal activity in one of the biggest deals in recent memory, a person briefed on the matter said. The Securities and Exchange Commission opened an insider trading inquiry on Thursday as Berkshire Hathaway and the investment firm 3G Capital agreed to pay $72.50 a share for Heinz, this person said. Regulators first noticed a suspicious spike in trading on Wednesday. Deferred Pay Draws Fed's Scrutiny (WSJ) U.S. banks and securities firms would have to step up their compensation disclosures under rules being considered by the Federal Reserve, said a person familiar with the central bank's regulatory efforts. The rules are in the formative stages and wouldn't take effect for some time. But an early draft has circulated internally at the Fed, this person said, marking a step on the path toward a public proposal. The Fed's push ultimately could give investors sheaves of new data on how and when companies pay their employees—including scarce numbers on how much compensation has been promised but not yet paid out. Shifting Blame Muddles S&P Suit (WSJ) The Delphinus deal, which means "dolphin" in Latin and is the name of a small constellation in the Northern Hemisphere, was one of more than 30 CDOs included in the federal government's lawsuit against Standard & Poor's Ratings Services last week. Federal prosecutors say that S&P, a unit of McGraw-Hill Cos., disregarded its own standards when rating Delphinus and the other CDOs, misled investors and should cover losses suffered by federally insured banks and credit unions that bought the securities, which included bundles of subprime mortgages. The discrepancy could give S&P a way to counterattack the Justice Department as the two sides gird for a battle that legal experts say will be grueling. U.S. Attorney General Eric Holder is seeking more than $5 billion in damages from S&P, which claims the allegations are "meritless." The U.S. government's conflicting opinions about the Delphinus deal might be a problem if the civil-fraud suit goes to trial. The ratings firm probably will argue that "these banks aren't victims," says Samuel Buell, a former federal prosecutor who now is a law professor at Duke University. Ackman: Herbalife Short Unaffected By Icahn Stake (CNBC) In his first public comments following the disclosure of activist investor Carl Icahn's stake in Herbalife, hedge fund manager Bill Ackman, who made $1 billion short bet against the stock, told CNBC he remains convinced that "Herbalife is a pyramid scheme." Ackman's statement read, "We invest based on a careful analysis of the facts. After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme. Our conclusions are unaffected by who is on the other side of the investment. Our goal was to shine a spotlight on Herbalife. To the extent Mr. Icahn is helping achieve this objective, we welcome his involvement." G-20 Seeks Common Ground on Currencies After Yen Split (Bloomberg) Group of 20 finance ministers and central bankers begin talks in Moscow today with investors seeking clarity on how comfortable they are with a sliding yen. Questions are being asked after the Group of Seven united around a pledge not to target exchange rates only to divide over its meaning for Japan. “We have to get to the bottom of this, of course, listen to our Japanese colleagues and how they explain this and what decisions they will take and what exchange-rate policy they will follow,” Russian Finance Minister Anton Siluanov said in an interview yesterday before hosting the meeting. He said the G-20 should adopt more “specific” language opposing exchange-rate interference in a statement to be released tomorrow. Corvette's stick shift thwarts Orlando man (OS) Orlando police said the 20-year-old tried to carjack a man inside a Corvette near Orlando Regional Medical Center late last month, but couldn't steal the car because he didn't know how to use the clutch or stick-shift. He and his accomplice ran away from the car, but not before stealing the victim's wallet and cell phone, police said. Soon after the failed carjacking, the victim's credit card was used at a McDonald's on Kirkman Road. Surveillance video inside the restaurant showed Sayles at the register, placing an order at about 12:15 a.m. Jan. 28. Not long after, the stolen cellphone's internal GPS registered with the phone company. Authorities tracked the phone to a home on Grandiflora Drive in a neighborhood off Kirkman Road. On Feb. 8, police went to the home, and Sayles answered the door. Officers noted in their arrest report that they immediately recognized him from the surveillance video inside the McDonald's. When asked why the victim's stolen cellphone would detect at his house, the report said, Sayles said a lot of people come to his residence and they could have brought it. One-Man Bank Keeps German Village Business Running (Reuters) The Raiffeisen Gammesfeld eG cooperative bank in southern Germany is one of the country's 10 smallest banks by deposits and is the only one to be run by just one member of staff. Small banks like this dominate the German banking landscape. Rooted in communities, they offer a limited range of accounts and loans to personal and local business customers. While numbers have shrunk from around 7,000 in the 1970s to around 1,100 now, cooperative banks like Raiffeisen Gammesfeld provide competition for Germany's two largest banks - Deutsche Bank and Commerzbank. A typical day's work for Breiter involves providing villagers with cash for their day-to-day needs and arranging small loans for local businesses. Not to mention cleaning the one-story building that houses the bank, which is 200 meters from his own front door. Moving from a bigger bank, where it was all "sell, sell, sell", Gammesfeld-born Breiter says taking up this job in 2008 was the best decision he ever made. The advertisement required someone to work by hand, without computers. The typewriter and the adding machine bear the signs of constant use, although Breiter, in his standard work outfit of jeans and jumper, does now have a computer. "It's so much fun," Breiter, a keen mathematician, says as he deals with a steady stream of lunchtime customers. He knows his customers by name and regularly offers advice on jobs, relationship and money woes. Ex-Analyst At SAC Felt Pressured For Tips (WSJ) The Federal Bureau of Investigation and the Manhattan U.S. Attorney's office now are using the statements from the analyst to try to build a case against the SAC portfolio manager, Michael Steinberg, and others that could result in charges in the coming months, these people said. Authorities currently are preparing to present evidence to a grand jury against Mr. Steinberg, according to a person familiar with the investigation. The development ramps up the legal pressure on the big hedge fund, highlighting that the previously reported insider-trading investigation of SAC and its founder, Steven A. Cohen, is proceeding on multiple fronts. Blackstone Keeps Most Of Its Money With SAC (NYT) The Blackstone Group, the largest outside investor in the hedge fund SAC Capital Advisors, said it would keep most of its $550 million with the hedge fund for three more months while it monitors developments in the government's insider trading investigation. Performance Tops Pedigree in Money Managers’ Fortunes (Bloomberg) Virtus Investment Partners Inc. and Artio Global Investors Inc. set out on their own in 2009 within nine months of one another. The paths of the two money managers couldn’t have been more different. Virtus, which started as a virtually unknown money manager, has surged 18-fold since its public debut as assets have soared, with its shares hitting a record on Feb. 14. Artio, which listed in September 2009 after spinning out from Switzerland’s 122- year-old wealth manager Julius Baer Group Ltd., saw its life as an independent firm come to an abrupt end with its Feb. 14 acquisition by Aberdeen Asset Management Plc after assets slumped and shares plunged about 90 percent. Banks Warned Not To Leave Libor (WSJ) The Financial Services Authority recently sent letters to a handful of major banks—including France's BNP Paribas SA and the Netherlands' Rabobank Group—warning them not to pull out of the panel that sets the London interbank offered rate, or Libor, these people said. The letters came after executives at those banks privately informed the British Bankers' Association, the trade organization that oversees Libor, that they planned to exit the rate-setting panel. Australian couple get married in IKEA (DM) Lynne said: 'We wanted to get married in IKEA for a very simple reason - we adore IKEA. 'It felt right to be able to show our commitment to one another by getting married somewhere we both love and to show the world that romance can be alive anywhere, even in the aisles of IKEA. Our visits to IKEA over the years have actually brought the two of us closer!' Every element of the special day featured IKEA products handpicked by the happy couple, including crockery, lighting, dining furniture, decorations, glassware and meatballs.

Opening Bell: 12.10.12

U.S. authorities probe SAC for Weight Watchers (Reuters) U.S. authorities are investigating Steven A. Cohen's SAC Capital Advisors hedge fund for possible insider trading in the shares of the popular diet company Weight Watchers International Inc, according to people familiar with the matter. The investigation focuses on trading in Weight Watchers shares in the first half of 2011, when SAC Capital had taken a sizeable position in the stock, and potentially could implicate the billionaire hedge fund manager, the sources said on Friday. Regulatory filings show that Cohen's $14 billion fund briefly held 2.1 million shares in Weight Watchers during the period under scrutiny by authorities - at which time the diet company's stock price roughly doubled. The inquiry is in its early stages and it is not clear whether anything improper was done either by SAC Capital or Cohen himself, said the people familiar with the matter, who requested anonymity. The trading in Weight Watchers would be permissible as long as it was based on fundamental research or derived from individuals who did not have access to non-public corporate information. Big Money Bets On Housing Rebound (NYT) A flurry of private-equity giants and hedge funds have spent billions of dollars to buy thousands of foreclosed single-family homes. They are purchasing them on the cheap through bank auctions, multiple listing services, short sales and bulk purchases from local investors in need of cash, with plans to fix up the properties, rent them out and watch their values soar as the industry rebounds. They have raised as much as $8 billion to invest, according to Jade Rahmani, an analyst at Keefe Bruyette & Woods. The Blackstone Group, the New York private-equity firm run by Stephen A. Schwarzman, has spent more than $1 billion to buy 6,500 single-family homes so far this year. The Colony Capital Group, headed by the Los Angeles billionaire Thomas J. Barrack Jr., has bought 4,000. Wall Street workers expecting worst bonus season since 2008 (NYP) State Comptroller Thomas DiNapoli estimates that the average bonus this year will be $101,000 — a 16.5 percent decline from last year and almost a 50 percent decline since 2006, when the average was $191,360. ‘‘I don’t think this year’s bonuses are going to be very good,’’ said Dan Shaffer, CEO of Shaffer Asset Management. ‘‘I don’t believe the typical bonuses, as we used to know them, exist anymore.’’ Obama Meets with Boehner Privately at White House (Bloomberg) The meeting was the first known face-to-face conversation between the two leaders since Nov. 16, when Boehner and other congressional leaders sat down with Obama at the White House. They have talked on the telephone since then. Obama met with Nancy Pelosi, the House Democratic minority leader, on Dec. 7. Investors offer about $38.8 billion in Greek debt buyback (Reuters) Greece is set to purchase back about half of its debt owned by private investors, broadly succeeding in a bond buyback that is key to the country's international bailout, a Greek government official said on Saturday. Hefner Husband Takes Insider Trading Into Playboy Bedroom (Bloomberg) Christie Hefner, [daughter of Hugh and] former chief executive officer of Playboy Enterprises Inc., said she was shocked as her husband of 15 years, William Marovitz, confessed to her that he was being investigated for suspicious trading in Playboy shares. They were in their apartment atop a 42-story Lincoln Park tower overlooking the glittering Chicago skyline and Lake Michigan on a March evening in 2010. “He told me he had been contacted by the SEC,” Hefner said later in testimony before the U.S. Securities and Exchange Commission, which didn’t accuse her of any wrongdoing. “And when did you learn your husband owned shares of Playboy?” she was asked. “In that conversation,” she replied. Hefner's husband is just one of more than 400 persons the SEC and the U.S. Department of Justice have accused of insider trading in a crackdown in the last five years, according to data compiled by Bloomberg. All involved betrayal -- of clients, employers, relatives or friends. The Hefner episode and a handful of cases like it include an especially cruel breach of trust: betrayal of a wife by a husband. Tennis star Novak buys up world's supply of donkey cheese at £400 a pound for new restaurant chain (DM) The cheese, known as pule, will be one of the key attractions at a chain of restaurants the Wimbledon champion and world number one is opening in his Serbian homeland...The Zasavica farm, which lies 50 miles west of the Serbian capital Belgrade, boasts a herd of 130 and is said to be the only place in the world where donkeys are milked for cheese. Banking Industry Squirms Over European Rate Probe (WSJ) The scandal over banks' attempted manipulation of interest rates has mostly centered on the London interbank offered rate. But Libor's lesser known cousin, the euro interbank offered rate, or Euribor, is facing mounting attacks. The European Union is expected soon to accuse multiple banks of attempted collusion in the setting of Euribor, according to people briefed on the probe. Barclays has already acknowledged trying to rig the rate, and other banks are likely to be pressed by regulators in the U.S., U.K. and elsewhere into similar admissions, according to industry and regulatory officials. Mortgage Crisis Presents a New Reckoning to Banks (NYT) Regulators, prosecutors, investors and insurers have filed dozens of new claims against Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and others, related to more than $1 trillion worth of securities backed by residential mortgages. Estimates of potential costs from these cases vary widely, but some in the banking industry fear they could reach $300 billion if the institutions lose all of the litigation. Depending on the final price tag, the costs could lower profits and slow the economic recovery by weakening the banks’ ability to lend just as the housing market is showing signs of life. Crisis Measure Nears End (WSJ) Barring action by Congress, the FDIC on Dec. 31 will stop providing an unlimited guarantee on zero-interest bank accounts used by businesses and municipalities for payroll and other services. The guarantee would then revert to the normal $250,000 in insurance per depositor at any given bank. If the guarantee isn't extended, FBR Capital Markets estimates as much as $250 billion in deposits could flow out of smaller banks to large banks or big money-market mutual funds. Stylish primate charms Toronto shoppers (The Star) A North York Ikea store attracted an unusual customer Sunday afternoon, when a tiny monkey dressed in a fitted faux shearling coat and diapers appeared in the store’s upper parking garage around 2 p.m. “It was just running around screaming,” said shopper Bronwyn Page...“It was really cute,” said Lisa Lin, another shopper. “It was smaller than a cat.” But if the monkey had hoped to stock up on Billy bookcases or Swedish meatballs, its plans were thwarted. The diminutive shopper never made it into the store, said manager Alvaro Carmona. No one was hurt in the incident, which lasted no more than half an hour, he added. Animal Services identified the monkey as a rhesus macaque, an Asian species that is prohibited in Ontario. The monkeys are known for their ability to live in diverse habitats – although Canadian winters obviously require a warm coat. The owner of the primate turned himself in to Animal Services just after 5 p.m. He was charged with owning a prohibited animal, an offence that carries a $200 fine. The seven-month-old monkey has somehow managed to escape his owner’s car in the Ikea parking lot, said animal control officer David Behan.

Opening Bell: 10.11.12

Fed Governor: Put Cap On Big Financial Firms (WSJ) In a Philadelphia speech, Fed governor Daniel Tarullo recommended curbing banks' growth by putting a limit on their nondeposit liabilities, which are sources of funding for operations that go beyond consumer deposits. The idea takes direct aim at the biggest U.S. banks, including J.P. Morgan, Bank of America, Goldman Sachs, and Citigroup, all of which rely heavily on such funding. Firms outside of this tier make much greater use of regular deposits. With Tapes, Authorities Build Criminal Case Over JPMorgan Loss (Dealbook) Federal authorities are using taped phone conversations to build criminal cases related to the multibillion-dollar trading loss at JPMorgan Chase, focusing on calls in which employees openly discussed how to value the troubled bets in a favorable way. Investigators are looking into the actions of four people who previously worked for the team based in London responsible for the $6 billion loss, according to officials briefed on the case. The Federal Bureau of Investigation could make some arrests in the next several months, said one person who spoke on the condition of anonymity because the inquiry was ongoing. The phone recordings, which were turned over to authorities by JPMorgan, have helped focus the investigation, the officials said. Authorities are poring over thousands of conversations, in English and French. They are also relying on notes that employees took during staff meetings, instant messages circulated among traders and e-mails sent within the group. Cyber Slips Boost Facebook's Ad Clicks (NYP) Facebook is suffering from fat-finger syndrome. That’s the opinion of one influential Wall Street analyst — bolstered by a growing body of research — who believes that some of the company’s recently touted mobile ad performance can be chalked up to accidental or fraudulent clicks. “Fat fingers” — when people click on an ad as they’re trying to click on something else — is an issue across the mobile Web as users try to navigate smaller screens, according to BTIG analyst Richard Greenfield. “People don’t have trouble with a mouse or touch pads,” Greenfield said yesterday. “But on mobile, when you’re gliding through on a touch screen, everything is touchable, and a lot of mistakes are happening.” JPMorgan CFO To Exit Post (WSJ) JPMorgan's chief financial officer is expected to step down over the next two quarters and is likely to move into a different job at the bank, people close to the company say. Douglas Braunstein, 51 years old, has been finance chief at the largest U.S. bank, by assets, since 2010. Before that, the longtime deal maker ran J.P. Morgan's investment-banking operations in North and South America and was heavily involved in the bank's acquisitions of securities firm Bear Stearns Cos. and the failed banking operations of Washington Mutual. Mr. Braunstein's status was diminished as part of an executive shake-up in July. Since then, he has reported to Matt Zames, 41, the company's co-chief operating officer, rather than Chairman and Chief Executive James Dimon. It isn't clear where Mr. Braunstein will decide to go within the bank, but the possibilities include J.P. Morgan's recently combined corporate and investment bank, these people said. He is expected to make his decision over the next quarter or two. Spain Lowers Rating On S&P (WSJ) The ratings company warned Wednesday that Spain's creditworthiness might continue to deteriorate as Madrid struggles to close a yawning budget gap, and said the Spanish government's "hesitation" to request a bailout from the European Union is "potentially raising the downside risks to Spain's rating." Brazil Cuts Rate for Tenth Straight Time to Bolster Recovery (Reuters) Brazil cut its benchmark interest rate for the tenth straight time to 7.25 percent on Wednesday, injecting extra stimulus into a languid recovery threatened by a worsening global economy. TSA screener accused of intentionally slapping flier's testicles (DJ) "A bulky young TSA agent came over to pat me down," Steven DeForest told the Huffington Post. "He told me to turn around. He was using his command voice, barking orders. I told him that I wasn't comfortable turning away from my luggage, which had already been screened, and wanted to keep it in my sight." According to deForest, the screener knelt down to begin the pat-down procedure before making a shocking move. "As he raised his hands he was looking at me. Then he gave a quick flick and smacked me in one of my testicles," deForest said. The episode left deForest in a state of "humiliation, rage, and frustration," according to the report. DeForest believes the agent slapped his gentials as punishment for refusing to enter the backscatter x-ray machine. "I was deliberately assaulted by someone who knew that he could get away with it," he stated. While the motives of the TSA screener cannot be confirmed, other agents have already admitted to performing invasive pat downs in order to force air travelers to choose the body scanners instead. JPMorgan's Dimon hits back at government over Bear Stearns suit (Bloomberg) During a wide-ranging hour-long discussion that went from the "fiscal cliff" to the impact of regulations, Dimon bristled when a member of the audience asked him if he now regretted participating with the government to rescue Bear Stearns in light of the lawsuit. "We didn't participate with the Federal Reserve, OK?" he said. "Let's get this one exactly right. We were asked to do it. We did it at great risk to ourselves ... Would I have done Bear Stearns again knowing what I know today? It's real close." Dimon went on to recount how he warned a senior regulator at the time of the deal to "please take into consideration when you want to come after us down the road for something that Bear Stearns did, that JPMorgan was asked to do this by the federal government." He added that JPMorgan, which will report its third-quarter earnings on Friday, will come out fine in the end. But if he is ever put in a similar position again, he said he "wouldn't do it." "I'm a big boy. I'll survive," he said. "But I think the government should think twice before they punish business every single time things go wrong." Australians World’s Wealthiest on Housing, Credit Suisse Says (Bloomberg) Australians have the world’s highest median worth and the Asia-Pacific topped Europe as the largest wealth-holding region, according to Credit Suisse. Australians have a median wealth per adult of $193,653, the Credit Suisse global wealth report showed, the highest of 216 countries surveyed. With plentiful land, sparse population, natural resources and high home prices, Australia’s proportion of individuals with wealth above $100,000 is the most of any country and eight times the world average, the report said. USADA says Lance Armstrong's Postal Service cycling team 'ran the most sophisticated, professionalized and successful doping program that sport has ever seen' (NYDN) The report describes an underground network of support staff -- smugglers, dope doctors, drug runners -- who kept Armstrong's illicit program in business. “The evidence is overwhelming that Lance Armstrong did not just use performance-enhancing drugs, he supplied them to his teammates,” USADA says of the embattled cyclist and cancer survivor. “He did not merely go alone to Dr. Michele Ferrari for doping advice, he expected that others would follow,” the report continued, referring to the physician who was banned by USADA for his role in cycling’s steroid scandal. Eleven former Armstrong teammates provided testimony against Armstrong, including respected veteran cyclist George Hincapie, whom Armstrong has described as his "best bro" in the peloton and competed with Armstrong during each of his Tour de France victories. “It was not enough that his teammates give maximum effort on the bike, he also required that they adhere to the doping program outlined for them or be replaced. He was not just part of the doping culture of his team, he enforced it and re-enforced it. Armstrong’s use of drugs was extensive, and the doping program on his team, designed in large part to benefit Armstrong, was massive and pervasive.”