Skip to main content

Opening Bell: 01.18.13

  • Author:
  • Updated:
    Original:

Morgan Stanley Swings To Profit (WSJ)
Morgan Stanley on Friday reported a profit of $507 million, compared with a year-earlier loss of $250 million. The per-share profit, which reflects the payment of preferred dividends, was 25 cents, compared with a loss of 15 cents a year earlier. The most recent period included a net tax benefit of about $155 million. The year-earlier period included a pretax loss of about $1.7 billion related to a settlement with MBIA Insurance Corp. Banks have to take an accounting charge when their earnings improve and the price of their own bonds rises. Stripping out the impact of debt-valuation changes, the per-share profit was 28 cents, versus a year-earlier loss of 13 cents. Revenue rose 23% to $6.97 billion, or to $7.48 billion stripping out the effect of debt valuation. Analysts polled by Thomson Reuters expected earnings of 27 cents, excluding debt-valuation adjustments, on revenue of $7 billion.

Morgan Stanley Cuts Investment Bank Pay Costs 7.6% for 2012 (Bloomberg)
Morgan Stanley, the bank that’s deferring all bonuses for top earners, set aside $6.65 billion in 2012 to pay investment-bank employees, a 7.6 percent decline from a year earlier. The ratio of compensation to revenue in the unit fell to 44 percent from 53 percent in 2011, when excluding accounting gains and losses related to the firm’s debt prices, according to figures posted today on the company’s website. The bank doesn’t disclose how many people work in the division.

Geithner Muses On Crisis Era (WSJ)
WSJ: You often use the analogy of sports to give people an idea of where we are in recovering from this devastating recession. So where do you put us? Mr. Geithner: I think in the recovery, if you do basketball, we're in the early part of the fourth quarter because unemployment is still very high and still going come down gradually over time. But if you look at how far people have gone to bring debt more in line with income and how far we've moved to bring down leverage risk in the financial system and how far we are through the big adjustment in housing—we're five years into the housing adjustment—that process is very advanced. We're way ahead of other countries in going through that process.

Cyprus May Trigger Big Trouble in Europe (CNBC)
Cyprus may seem too small for markets to care. But UBS has warned that the Mediterranean island is big enough to cause trouble in the euro zone after seeking a bailout from the troika, made up of the International Monetary Fund, the European Commission and the European Central Bank. After all, this is not the first time a relatively small economy has threatened to trigger a pan-European domino effect ranging from Ireland, to Greece and Portugal. "The Cypriot case has all the ingredients to raise questions about the consistency of the euro project again, comparable to -albeit possibly less dangerous than - the Grexit hysteria less than a year ago," said economist Martin Lueck from UBS.

Cayman Islands Opens Up To Scrutiny (FT)
The British overseas territory, which wants to shed its reputation for clandestine financial activity, is introducing sweeping reforms that will make public the names of thousands of previously hidden companies and their directors. In proposals sent to Cayman-based hedge fund businesses and seen by the Financial Times, the islands' powerful monetary authority, CIMA, has outlined plans to create a public database of funds domiciled on the island for the first time. The database will also list funds' directors, pending an ongoing consultation process due to close in mid-March.

Police Say Man Was Too Drunk To Pull Off Attempt Robbery (Lex18)
Wearing a ski mask and sunglasses, police say 25-year-old Ryan Hopkins stumbled into the Little Caesar's on the bypass in Versailles with the intent to steal. An employee told LEX 18 the man walked in before the restaurant had opened smelling of alcohol, and appeared extremely intoxicated. The employee said Hopkins said, "this is a hold up," while badly slurring his speech. The employee asked him to leave the premises, and Hopkins walked out. Hopkins was later picked up by police, and charged with public intoxication. Police say he will not be charged with attempted robbery because he didn't actually have a weapon.

Mary Jo Eyes For SEC Job (Bloomberg)
Mary Jo White, the former Manhattan US Attorney, is under consideration to become the next chairman of the Securities and Exchange Commission, three people with knowledge of the matter said. White, now a partner at law firm Debevoise & Plimpton in New York, would succeed Elisse Walter, who took over as SEC chairman last month. As US Attorney for the Southern District of New York from 1993 to 2002, White became a leading terrorism prosecutor, winning the conviction of four followers of Osama bin Laden for the 1998 bombings of two US embassies in Africa. Under her direction, prosecutors won convictions for the 1993 World Trade Center bombing and a failed plot to blow up the United Nations headquarters and other New York landmarks.

Buying 'Political Intelligence' Can Pay Off Big For Wall Street (WSJ)
When Edward Kennedy Jr. launched Marwood Group more than a decade ago, he named it after the Maryland estate his grandfather, Joseph Kennedy, lived in when he was the first chairman of the Securities and Exchange Commission in the 1930s. Now, the SEC has issued subpoenas to Marwood, asking for emails and other documents that show how the political research firm was able to warn its Wall Street clients that regulators might delay approving a promising drug in the fall of 2010. The scrutiny doesn't mean any accusations of impropriety will follow, against Marwood or anyone else. But emails subpoenaed in the inquiry, some of them reviewed by The Wall Street Journal, open a rare window into a burgeoning business known as political intelligence, in which firms gather information and analysis about activities in Congress, the White House and federal agencies and sell these insights to investors looking for an edge. A look at Marwood shows how one leading player in this field—an industry that operates with little regulatory oversight—managed to distribute prescient information about a future government decision that ended up sharply moving a stock.

A Reboot For Buyouts? Depends On Dell Deal (WSJ)
The deal, which people familiar with the discussions say could be announced as early as next week, is being closely watched. Mr. Dell and private-equity firm Silver Lake Partners seek some $15 billion in financing, the people said. A success could open the doors to other large deals that may be waiting in the wings. A deal that struggles or even fails to find financing could stymie those plans. "I think if Dell gets done, it certainly will mean that the jumbo LBOs are back," said Richard Farley a lawyer who represents banks in buyouts.

Rental Bonds Hit Snag (WSJ)
Real-estate investors racing to create securities backed by the rental payments of single-family homes have hit a speed bump, with one of the major credit-ratings firms warning it would probably assign ratings just one to three notches above "junk" to a popular structure for the deals. In a research report published Friday, Moody's Investors Service said the structure favored by bankers for the deals would pose serious risks to investors in the securities.

BNP Paribas eyes 1 billion euro overhaul to cut costs (Reuters)
The French bank plans to spend 1 billion euros ($1.3 billion) over three years to pare down its businesses in response to lackluster growth in Europe, according to a union source. Analysts and investors expect France's largest bank to lay out its new strategy in the coming months after a rocky year spent selling assets and cutting jobs.

$4K golden vibrator stolen in armed Brazil heist (AP)
An armed man in Brazil has heisted an 18-carat gold-plated vibrator selling for $4,000 at a luxury sex shop. Police say he walked into the Erotica Luxo store in Brasilia, tied up a clerk and took the item from its display case. He stole nothing else. It's high season for erotic shops in Brazil as the nation celebrates its own Valentine's Day in less than two weeks. Store owner Vanessa Baldini tells the G1 news website the robber might get no satisfaction from Wednesday's theft. She says the Swedish-made vibrator has a stainless steel core, making removing any gold plating extremely difficult. And she notes the robber didn't take the vibrator's charger. She says: "I really don't know what he'll do. I'll leave it up to his imagination."

Related

Opening Bell: 7.21.15

Human traders: 1, Computer traders: 0; Russian billionaire funds search for aliens; Puerto Rico needs $5 billion; "Suspect leads police on slow-speed scooter chase in Nevada"; and more.

Opening Bell: 04.19.12

Morgan Stanley Beats Estimates as Trading Gain Tops Peers (Bloomberg) The net loss of $94 million, or 6 cents a share, compared with profit of $968 million, or 50 cents, a year earlier, the New York-based company said today in a statement. Excluding accounting charges tied to the firm’s own credit spreads, profit was 71 cents a share, topping the 44-cent average estimate of 17 analysts surveyed by Bloomberg. Fixed-income trading revenue surged 34 percent, surpassing the 19 percent gain at Citigroup Inc. and Goldman Sachs Group Inc.’s drop of more than 15 percent, excluding accounting adjustments. Morgan Stanley Chief Executive Officer James Gorman, 53, has set a goal of 15 percent return on equity after lingering pressures from the financial crisis held that measure below 10 percent for five straight years. First-quarter return on equity was 9.2 percent. BofA Profit Falls But Beats Estimates (WSJ) The bank reported a profit of $653 million, compared with a year-earlier profit of $2.05 billion. Per-share earnings, which reflect the payment of preferred dividends, fell to three cents from 17 cents a year ago. The latest quarter included, among other items, a $4.8 billion pretax hit tied to changes in the value of the bank's debt. Excluding accounting changes related to the bank's debt, BofA reported profits of 31 cents per share, compared with the 12 cents estimated by analysts polled by Thomson Reuters. Blackstone First-Quarter Profit Falls on Performance Fees (Bloomberg) Economic net income, a measure of earnings excluding some costs tied to the firm’s 2007 initial public offering, dropped to $432.3 million, or 39 cents a share, from $571 million, or 51 cents, a year earlier, New York-based Blackstone said today in a statement. Analysts had expected earnings of 40 cents a share, according to the average of nine estimates in a Bloomberg survey. Fitch Analyst Reportedly Warns on Dutch Rating (Reuters) "The Dutch are on the edge of a negative rating action," the Telegraph quoted Fitch analyst Chris Pryce, the rating agency's expert on the Netherlands, as saying. Ackman Plans 2013 listing for $4bn fund (FT) Pershing Square is planning a $4bn public flotation for a new fund in January 2013. Bill Ackman intends to float the vehicle, which has already been set up in Guernsey and is known as Pershing Square Holdings, on a "major exchange." PSH will be a shell company and invest all its assets in Pershing Square’s offshore hedge funds. As such, after flotation, it would offer Mr Ackman a source of permanent capital. Man accuses Blackhawks, Cubs of 'stealing his ideas' (Chicago Tribune) Emanuel Kuvakos, 56, was arrested Tuesday night and charged with three counts of misdemeanor harassment by electronic means, police said. Kuvakos sent “a number’’ of emails to Blackhawks CEO John McDonough and to Jim Hendry, the former general manager of the Chicago Cubs, that accused them of “stealing his ideas to win championships,’’ according to a police report. On Saturday, he sent them another email stating that he would keep the Blackhawks from winning the Stanley Cup, police said. While being interviewed by authorities, he claimed he also sent a message to Rocky Wirtz, the Blackhawks owner, saying that if he ever saw Wirtz, he would beat him, according to the police report. Kuvakos, whose nickname is “Mike,” said during a telephone interview with the Chicago Tribune that he has been a freelance sportswriter for 30 years, and claimed he is a sports psychologist and “savant” who works for the Blackhawks, White Sox and the Cubs. Talks With Instagram Suggest a $104 Billion Valuation for Facebook (Dealbook) Facebook bought the photo-sharing service for $1 billion in early April, agreeing to pay roughly 30 percent in cash and 70 percent in stock, according to people briefed on the negotiations who did not want to be identified because the discussions were private. At that level, Facebook is pegging its own stock price at roughly $30 a share. Based on those numbers, the giant social network is valued at north of $75 billion. But Facebook could actually be worth more. During the negotiations with Instagram, the parties framed the deal around a logical assumption: Facebook could soon trade publicly at a much higher market value. As part of the talks, the companies discussed a potential value of about $104 billion for Facebook, these people said. One of Instagram’s founders, Kevin Systrom, first broached the number, one of the people said. At $104 billion, the value is roughly in line with where Facebook has at times traded on the secondary market: shares of the privately held company have been selling for as high as $40. More Americans Than Forecast Filed Weekly Jobless Claims (Bloomberg) Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. KKR's Real-Estate Arm Makes Its First Investment (WSJ) The Yorktown Center mall has 1.5 million square feet of retail space and more than 150 stores including a J.C. Penney and a Victoria's Secret. KKR's co-investor in the deal is YTC Pacific, which will manage the property, these people said. As is typical in a private-equity real-estate investment, KKR plans to improve the look of the mall and increase the occupancy rate with an eye toward reselling the property. Facebook Photo Sinks Man Who Stole Police Gas (TSG) A Kentucky man is facing a misdemeanor rap after he siphoned gasoline from a police car, a theft that came to the attention of cops after the perp posted a Facebook photo memorializing the crime. As Michael Baker, 20, was swiping the gas last month from a Jenkins Police Department squad car, he made sure to flip the bird as his girlfriend snapped a picture. While the siphoning photo has been removed from his Facebook page, Baker yesterday updated his 380 friends on his legal problems. “just got out of jail,” he wrote in one post, adding later that “yea lol i went too jail over facebook.” Responding to a friend who had not seen the image before it was yanked, Baker assured, “yea lol u would just have to seen it it was funny as hell tho.”

Opening Bell: 07.18.12

BofA Swings To Profit, Topping Analysts' Estimates (WSJ) Bank of America reported a profit of $2.46 billion, compared with a year-earlier loss of $8.83 billion. On a per-share basis, which reflect the payment of preferred dividends, earnings came in at 19 cents from a loss of 90 cents a year earlier. The year-ago quarter's results included a charge of $1.23 a share in mortgage-related and other adjustments. Total revenue surged 66% to $21.97 billion. Analysts polled by Thomson Reuters expected earnings of 14 cents a share on $22.87 billion in revenue. The bank's profit was helped by reduced provisions for loan losses as credit quality continued to improve. Credit-loss provisions totaled $1.77 billion compared with $3.26 billion a year ago and $2.42 billion in the first quarter. HSBC Probe Brings Promises Regulator, Bank Will Clean Up Act (Bloomberg) HSBC executives apologized for opening their U.S. affiliate to a river of Mexican drug lords’ cash, and the U.S. regulator that failed to stem the flow vowed to prevent a repeat. “I deeply regret we did not act sooner and more decisively,” Comptroller of the Currency Thomas Curry said at a day-long hearing yesterday of the Senate Permanent Subcommittee on Investigations. He said his agency, which regulates HSBC’s U.S. arm, is partially responsible for letting Europe’s largest bank give terrorists, drug cartels and criminals access to the U.S. financial system and will take “a much more aggressive posture.” Opinion: Investing In America Produces The Best Returns, By Lloyd Blankfein (Politico) The question I’m most often asked these days is, “Where should I invest?” In recent years, we all know, there has been an unusually high degree of uncertainty. It falls into two broad categories: cyclical concerns that focus on the outlook for near-term economic growth and structural concerns that center on the viability of existing political or economic systems — for example, the European Union. The cyclical and structural challenges are considerable, and in some cases, even daunting. But when I meet with chief executive officers and institutional investors and they ask me where to invest, my response is that the United States remains as attractive as ever. And it would be even more attractive if it can make some short-term progress in a few key areas. Hugh Hendry: ‘Bad Things are Going to Happen’ (FT) Hendry believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.” For Yahoo CEO, Two New Roles (WSJ) Just hours after Yahoo named Marissa Mayer as its new chief, the real conversation kicked in: how she will juggle pregnancy and being the CEO charged with saving a foundering Internet giant. The 37 year-old former Google executive is expecting her first child, a son, in early October. On Tuesday, she started her new job at Yahoo, which reported another quarter of lackluster sales growth...No Yahoo directors expressed concern about her pregnancy, according to Ms. Mayer, who told the board in late June, about a week after Yahoo's recruiter contacted her. She says she plans to work during her maternity leave, which will last several weeks...Ms. Mayer's husband, Zachary Bogue, a former attorney, is co-managing partner at Data Collective, an early-stage venture capital fund specializing in tech start-ups. JFK jet in laser scare (NYP) A lunatic aimed a powerful laser beam at an airliner flying over Long Island on its way into JFK — sending the pilot to the hospital and endangering the lives of the 84 people aboard. The first officer on JetBlue Flight 657 from Syracuse was treated for injuries to both eyes after the blinding flash of light lit up the cockpit Sunday night — as the FBI and Suffolk cops hunted for the person responsible, who could face federal prison time. The Embraer E190 jet landed safely, and the injured pilot — identified by sources as First Officer Robert Pemberton, 52 — was met at the gate and taken to Jamaica Hospital. Authorities believe the beam came from around West Islip, Babylon or Lindenhurst. “You wouldn’t think a pen laser would go that far of a distance,” said shocked West Babylon resident Cindy Konik, 50...A startled co-pilot, who was not identified, immediately took over the controls from his temporarily blinded colleague. “We just got lasered up here — two green flashes into the cockpit,” the captain radioed controllers at Ronkonkoma. Credit Suisse Sets Capital Plan (WSJ) moved Wednesday to stanch recent concerns about its financial strength, saying it is raising capital through the sale of convertible bonds, more divestments and the launch of another cost-savings program. It is a surprise twist in a spat with the country's central bank, which recently warned that Switzerland's number two bank wasn't strong enough to withstand a major crisis. Credit Suisse initially rejected the central bank's criticism, saying it was among the world's best-capitalized banks. This didn't impress investors, who offloaded their shares, wiping out 2 billion Swiss francs ($2.05 billion) in market value. At one point last month the bank even felt compelled to reassure investors that it was profitable in the second quarter, even though profitability over the period was never in doubt. Strong Possibility Of Further Fed Easing By September: Goldman (CNBC) In a testimony before the Senate Banking Committee on Tuesday, Federal Reserve Chairman Ben Bernanke offered no new hints that the central bank is planning more easing, but repeated a pledge that the Fed “is prepared to take further action as appropriate to promote stronger economic recovery.” “While we think that a modest easing step is a strong possibility at the August or September meeting, we suspect that a large move is more likely to come after the election or in early 2013, barring rapid further deterioration in the already-cautious near term Fed economic outlook,” Goldman Sachs conomist Andrew Tilton said in a report. BlackRock's Net Slips 11% (WSJ) BlackRock reported a profit of $554 million, or $3.08 a share, compared with a year-earlier profit of $619 million, or $3.21 a share. Stripping out one-time items, per-share earnings rose to $3.10 from $3. Revenue slipped 5% to $2.23 billion. Analysts expected earnings of $3.01 a share on $2.26 billion in revenue, according to a poll conducted by Thomson Reuters. BNY Mellon profit falls 37 percent on litigation charge (Reuters) Bank of New York Mellon Corp said on Wednesday that second-quarter net income had fallen 37 percent on lower foreign exchange revenue and after it paid $212 million to settle an investor lawsuit. The world's largest custody bank reported net income of $466 million, or 39 cents a share, compared with $735 million, or 59 cents a share, a year earlier. As announced earlier this month, the results included an after-tax charge of $212 million to settle an investor lawsuit accusing the bank of imprudently investing their cash in a risky debt vehicle that collapsed in 2008. Quarterly revenue fell to $3.62 billion from $3.85 billion. Residents warned: 6-foot lizard loose in Colorado (AP) A sheriff has warned residents in a tourist town northwest of Colorado Springs that a strong, aggressive 6-foot lizard that eats small animals — including dogs and cats — is on the loose in the area. Teller County Sheriff Mike Ensinger said Tuesday that a 25-pound pet Nile monitor lizard has gone missing after breaking a mesh leash and crawling away. Ensinger said about 400 homes in the Woodland Park area were warned. He added that the animal, which escaped Monday and is known as Dino, has not bitten any humans — yet. "We have a 6-foot reptile out and about," Ensinger said. "If it gets hungry enough, we don't know what it will do." Ensinger said officers may use a tracking dog if Dino isn't located by Tuesday afternoon. "I'm not going after it," Ensinger said. "I don't do reptiles."

By Luccadomina (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Opening Bell: 10.4.16

Banks will get no special treatment in Brexit negotiations; Deutsche layoffs; Illinois expects others to cut ties with Wells Fargo; Man busted on lewdness charge for wearing Saran Wrap bikini on NJ beach; and more.