Blackstone seen sticking with SAC despite insider trading probe (Reuters / Matthew Goldstein)
Three sources said the asset management arm of Blackstone, which has $550 million invested with SAC Capital, is in no rush to redeem money from the Stamford, Connecticut-based hedge fund. Blackstone has had at least three discussions with the $14 billion hedge fund's executives about the insider trading investigation and talked to its own investors, which include state pension funds, endowments and wealthy individuals.
Hitler parody leaves French bank BNP red-faced (IN24)
French banking giant BNP was left red-faced this week after it emerged managers were shown a motivational video featuring a parody of a famous scene from the film "Downfall" in which Adolf Hitler is portrayed as the boss of Germany's Deutsche Bank. It’s a scene that has been parodied thousands of times before to comic effect. But it appears not many people have seen the funny side of one particular version made by executives of French bank BNP Paribas...In the video, which was shown to around 100 managers from around the world at a seminar in Amsterdam last year, Hitler is turned into a fuming boss of Germany’s Deutsche Bank reacting furiously to news that BNP has gained an edge in the foreign exchange market. But far from being motivated, many of the managers who saw the video were outraged. “We could not believe the bank had actually dared to do that – make an analogy between our competitors and the Nazi regime. It took us a few minutes to take it in,” one BNP employee told French daily Liberation, who revealed the story this week. “We were shocked. Nobody knew how to react. Some Jewish employees from the United States did not find it funny at all,” another employee told the paper. “If this video had been shown by an American bank it would have been a major scandal,” an angry BNP source added. Rather surprisingly the video is believed to have been uploaded to the bank’s internal Intranet site before the management realised it might prove embarrassing and quickly removed it. A spokeswoman for BNP told FRANCE 24 on Friday that the bank’s senior management were totally unaware the video had been made until they were contacted by Libération this week. The spokeswoman said BNP’s CEO Jean Laurent Bonnafé had called his counterpart at Deutsche Bank Jürgen Fitschen to personally apologise for the stunt. In a statement in Libération the bank added that the message in the video was “contrary to the values of BNP."
Obama Summons Congress Leaders as Budget Deadline Nears (Bloomberg)
Obama, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats.
Cliff Talks Down To The Wire (WSJ)
It is still possible the two sides can reach a deal, especially with the leaders meeting Friday. Any resolution would be a scaled-back version of the package Mr. Obama and congressional leaders had anticipated passing after the November election. The White House is pressing for the Senate to extend current tax rates for income up to $250,000, extend unemployment benefits, keep the alternative minimum tax from hitting millions of additional taxpayers and delay spending cuts set to take effect in January. The 11th-hour strategy carries enormous risk because it leaves no margin for error in Congress's balky legislative machinery. Senate Majority Leader Harry Reid (D., Nev.) said the prospects for passage of a bill before the last day of the year are fading rapidly. "I have to be very honest," he said. "I don't know time-wise how it can happen now."
Spain's PM does not rule out asking for European aid (Reuters)
Spanish Prime Minister Mariano Rajoy said on Friday he did not rule out tapping the European Central Bank's bond-buying program for troubled euro zone governments but said Spain did not expect to have to ask for aid for now. "We are not thinking of asking the European Central Bank to intervene and buy bonds in the secondary market," he said at a news conference in Madrid. "But we can't rule it out in the future."
Banks pay $4.5M for muni charges (NYP)
Citigroup and Bank of America’s Merrill Lynch are among five firms that will pay $4.48 million to settle regulatory claims they used funds from municipal and state bond deals to pay lobbyists. Local authorities were unfairly asked to reimburse payments that the firms made over five years to the California Public Securities Association, a lobbying group, to help influence the state, the Financial Industry Regulatory Authority, which oversees securities firms, said yesterday. The firms inadequately described the fees, wrapping them into bond-underwriting expenses, Finra said...The banks, also including Goldman Sachs, JPMorgan and Morgan Stanley, agreed to pay $3.35 million in fines and reimburse certain California bond issuers $1.13 million.
Porsche Wins Dismissal of US Hedge Fund Lawsuit Over VW (Reuters)
A five-justice panel of the New York State appeals court in Manhattan unanimously found that Porsche had met its "heavy burden" to establish that the state was the wrong place in which to bring the lawsuit. That panel reversed an Aug. 6 ruling by New York State Supreme Court Justice Charles Ramos that let the case by hedge funds including Glenhill Capital LP, David Einhorn's Greenlight Capital LP and Chase Coleman's Tiger Global LP proceed. The funds accused Porsche of engineering a "massive short squeeze" in October 2008 by quietly buying nearly all freely traded ordinary VW shares in a bid to take over the company, despite publicly stating it had no plans to take a 75 percent stake.
IPOs Slump To Lowest Levels Since Financial Crisis (Bloomberg)
IPOs have raised $112 billion worldwide this year, the least since 2008, according to data compiled by Bloomberg. Initial sales in western Europe dropped to one-third of last year’s level, while concern about China’s economy helped cut proceeds in Asia by almost half. U.S. offerings raised $41 billion, little changed from last year, as Facebook’s IPO spurred a monthlong drought in U.S. deals.
Avery Johnson Jr. vents on Twitter after dad, Avery Johnson, is fired by Brooklyn Nets (NYDN, RELATED)
The ex-Nets coach’s teenage son took to Twitter to vent after news broke that his dad had been given a pink slip by billionaire Mikhail Prokhorov and the Nets. “This is a f------ Outrage. My dad is a great coach, he just got coach of the month and they Fire him. #Smh. Completely new team he had,” Johnson Jr. wrote on Twitter. “The expectations were way to high for this team. We didn’t even have a losing record.... Didn’t even give my dad a full season. #OUTRAGE,” Johnson Jr. continued. Johnson was fired a day after the new-look Nets fell to .500 following a listless road loss to the Bucks. The canning comes on the heels of Deron Williams saying he’s never been comfortable playing in Johnson’s offense. Williams, who did not play in Wednesday night’s loss, is mired in a season-long shooting slump with field goal and 3-point percentages at career-worst levels. “I’m sorry (our) best players couldn’t make open shots. Yeah that’s my dad’s fault totally,” Johnson Jr. tweeted.
'Whale' Capsized Banks' Rule Effort (WSJ)
Wall Street banks entered 2012 confident they could stall a wave of rules that they feared would hurt profits. But they are ending the year largely resigned that their activities will be constrained and monitored more closely by the government. One big reason for the change: J.P. Morgan Chase JPM -0.76% & Co.'s "London whale" losses. The bad trades, ultimately resulting in about $6 billion in losses, disrupted the banks' campaign against the Dodd-Frank financial overhaul, according to regulators, lawmakers and close observers of policy debates in Washington. The trades damaged the reputation of J.P. Morgan, which suffered less than other banks from the financial crisis, and its chief executive, James Dimon, during a crucial period of policy debate in Washington, putting critics of Dodd-Frank on the defensive. Before news of the whale losses emerged, banks were arguing, with some success, that too-tight regulations were crimping lending during a time of slow growth. Michael Greenberger, a finance professor at the University of Maryland and an advocate of regulations aimed at reining in bank trading, said that in early 2012 his allies' "backs were against the wall." "Then the London whale blew all of that out of the water," he said.
Mortgages Fueled Hedge Funds To 13.9 Percent Gain (NYP)
Hedge funds that invest in mortgage-backed securities gained 13.9 percent through November to make them the industry’s best-performing strategy, according to the Absolute Return index. Top players that did even better included Metacapital Management, Pine River, Axonic Capital, and Greg Lippman's LibreMax Capital.
High-Speed Traders Race to Fend Off Regulators (WSJ)
Defenders say high-frequency trading keeps markets lubricated with a constant supply of buy and sell orders that enables all participants to trade more efficiently and get better pricing. High-speed traders, supporters add, have helped foster competition among exchanges and other trading venues, lowering commission-based fees for small investors and helping bring down overall costs for mutual-fund managers. Another benefit some cite: Technology innovations spurred by high-speed traders serve to connect more investors to more trading venues, broadening their options in the markets. Critics, for their part, worry that the traders' order torrent makes markets more opaque, less stable and ultimately less fair.
Will 'Fiscal Clif' Accelerate Millionaire Deaths? (NetNet)
John Carney: "...it at least seems likely that some deaths that might otherwise have occurred shortly after January 1 will occur shortly before."
Man gets DUI after driving on AA co-founder's lawn (AP)
Vermont State Police say a man faces a drunken driving charge after driving onto the lawn of a historic home once owned by the co-founder of Alcoholics Anonymous. Police say 55-year-old Donald Blood III of Marlborough, Mass., was ordered to appear in court in Bennington on Jan. 14. Police say Blood thought he was driving into a parking lot, but actually it was the lawn of the Wilson House, built in 1852 in Dorset, the birthplace of AA co-founder Bill Wilson. The Wilson House's website describes it as a "place of sanctuary where people can come to give thanks to God for their new lives." It still hosts several AA meetings each week.
Programming Note<: We’re on an abbreviated, vacation-esque schedule this week (opening news roundups and limited updates whenever the urge to reach out and touch you moves us). We still want to hear from you, though, so if anything happens that you think might tickle our fancy, do not hesitate to let us know.