Opening Bell: 02.25.13

Current Employees Star In S&P Suit (WSJ) As ammunition against Standard & Poor's Ratings Services, the Justice Department packed its fraud lawsuit with vivid details about more than 25 employees who allegedly put triple-A ratings on shaky bundles of subprime mortgages—or dithered on downgrading the securities as the housing market was collapsing. David Tesher, an S&P managing director in charge of one of the firm's two collateralized-debt-obligation groups, let analysts who reported to him put the highest possible ratings on deals S&P "knew did not accurately reflect the true credit risks," the U.S. government alleged in the suit filed Feb. 4. When a different group of analysts warned that more and more borrowers were falling behind on their payments, Mr. Tesher didn't tell his analysts, federal prosecutors claim. They put his name in the 128-page lawsuit a total of 59 times. Fresh Front In Budget Battle (WSJ) A White House official said the administration wouldn't go along with such a plan to extend the lower spending levels. And Democrats are insisting that the House GOP bill also give new latitude to domestic agencies as well as the Pentagon. But an aide to Senate Democratic leaders said such a measure might be politically difficult for the lawmakers to oppose, lest they bear the blame for shutting down the government. "There's an emerging consensus that it would be a difficult battle to have," said the Senate leadership aide. "I don't think we could force a shutdown." Dimon: Let’s put ‘London Whale’ on ice (NYP) That’s the message Jamie Dimon hopes to deliver at JPMorgan Chase’s annual investor day in New York tomorrow, some nine months after the infamous “London Whale” blew a $6 billion hole in the bank’s balance sheet. Dimon will stress that the nation’s biggest bank has been growing its business and taking market share in a bid to convince investors and analysts that there will be no further whale sightings. JPMorgan, for instance, has boosted its private banker ranks to better cater to wealthy investors, adding some 650 bankers since 2008, according to people familiar with the matter. Dimon is also expected to tout the bank’s ability to ring up record profits in good times and bad. JPMorgan reaped $21.3 billion in profits in 2012, a record year despite rocky markets that shook rivals here and abroad. Knight Capital to Sell Credit Brokerage Unit to Stifel: Report (Reuters) Knight Capital Group, which recently agreed to be bought for $1.4 billion by Getco Holding, has struck a deal to sell its credit-brokerage unit to Stifel Financial, a person familiar with the matter told Reuters. The terms of the deal were not known. But Stifel will be picking up investment-grade, high-yield, asset-backed and mortgage-backed debt brokers in the U.S. and Europe through the deal the source said. Foreign Money Is Revisiting Greece (WSJ) A steady trickle of foreign money pumped €109 million ($143.8 million) into Greek stocks in the last six months of 2012, followed by an additional €27.6 million in January, according to the Athens Stock Exchange. That money helped lift Greece's major stock index 33.4% last year, making it—bizarrely—the best-performing stock market in the European Union. It is up an additional 10.51% this year, to 1003.32, although it remains well off its high of 6355 reached more than 12 years ago. IKEA Meatballs Pulled After Horse-Meat Traces Found (WSJ) IKEA on Monday became the latest company to be drawn into Europe's snowballing horse-meat scandal, as the Swedish furniture giant said it has recalled a batch of meatballs that had been distributed to 13 European countries. The move comes after Czech food inspectors found traces of horse meat in IKEA's meatballs. The company also said it is withdrawing meatball products from sale in Sweden. Japan Picks BOJ Critic to Be Its Next Chief (WSJ) Prime Minister Shinzo Abe plans to nominate former finance-ministry official Haruhiko Kuroda, 68 years old, as the next Bank of Japan governor, according to government officials. Mr. Kuroda, currently chief of the Asian Development Bank, ran the Japanese finance ministry's currency policy for four years in the early 2000s. There, among other things, he oversaw an extended effort to drive down the yen's value in order to make Japanese exports more affordable on the world market. Barnes & Noble Chairman to Bid for Company's Retail Assets (Reuters) Barnes & Noble Chairman Leonard Riggio has told the board he plans to buy all the retail assets of the company. The retail business includes, among other things, Barnes & Noble Booksellers and barnesandnoble.com but excludes Nook Media, Riggio said in a regulatory filing on Monday. Mets Expect To Lose Money And Fans This Year (NYP) The team is expecting to lose more than $10 million this year, after bleeding red the past two seasons, while attendance is projected to fall for a fifth straight year. Monti Gets Investors’ Approval as Bonds Cast Doubt on Berlusconi (Bloomberg) Monti “is the first leader to make it clear you have to look out for future generations and not just tomorrow’s vote,” said Fabrizio Fiorini, chief investment officer at Aletti Gestielle SGR SpA. “This concept of looking out for future generations is absolutely new for Italy.” Angry moms condemn Geico’s cellphone app commercial they claim promotes bestiality (NYDN) One Million Moms wants auto insurance firm Geico to pull its latest TV campaign in which a woman appears to be flirting with a pig. The conservative Christian group that monitors children’s programming issued a statement to condemn the clip. “The Geico marketing team may have thought this would be humorous, but it is disgusting to see how the company takes lightly the act of bestiality,” One Million Moms said in a statement. The press release, which urges members to email their disgust to the firm, added that the advert was “repulsive” and “unnecessary.” It was also a “horrible commercial for families to see,” the group said. The commercial starts with Maxwell the Geico pig and the woman in a parked car on what appears to be a lover’s lane. Not knowing the car has broken down, the woman seems keen to make out with the pig. But he is uninterested and instead shows her the Geico app and the game Fruit Ninjas on his cellphone. Geico has not commented on the complaint.
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Current Employees Star In S&P Suit (WSJ)
As ammunition against Standard & Poor's Ratings Services, the Justice Department packed its fraud lawsuit with vivid details about more than 25 employees who allegedly put triple-A ratings on shaky bundles of subprime mortgages—or dithered on downgrading the securities as the housing market was collapsing. David Tesher, an S&P managing director in charge of one of the firm's two collateralized-debt-obligation groups, let analysts who reported to him put the highest possible ratings on deals S&P "knew did not accurately reflect the true credit risks," the U.S. government alleged in the suit filed Feb. 4. When a different group of analysts warned that more and more borrowers were falling behind on their payments, Mr. Tesher didn't tell his analysts, federal prosecutors claim. They put his name in the 128-page lawsuit a total of 59 times.

Fresh Front In Budget Battle (WSJ)
A White House official said the administration wouldn't go along with such a plan to extend the lower spending levels. And Democrats are insisting that the House GOP bill also give new latitude to domestic agencies as well as the Pentagon. But an aide to Senate Democratic leaders said such a measure might be politically difficult for the lawmakers to oppose, lest they bear the blame for shutting down the government. "There's an emerging consensus that it would be a difficult battle to have," said the Senate leadership aide. "I don't think we could force a shutdown."

Dimon: Let’s put ‘London Whale’ on ice (NYP)
That’s the message Jamie Dimon hopes to deliver at JPMorgan Chase’s annual investor day in New York tomorrow, some nine months after the infamous “London Whale” blew a $6 billion hole in the bank’s balance sheet. Dimon will stress that the nation’s biggest bank has been growing its business and taking market share in a bid to convince investors and analysts that there will be no further whale sightings. JPMorgan, for instance, has boosted its private banker ranks to better cater to wealthy investors, adding some 650 bankers since 2008, according to people familiar with the matter. Dimon is also expected to tout the bank’s ability to ring up record profits in good times and bad. JPMorgan reaped $21.3 billion in profits in 2012, a record year despite rocky markets that shook rivals here and abroad.

Knight Capital to Sell Credit Brokerage Unit to Stifel: Report (Reuters)
Knight Capital Group, which recently agreed to be bought for $1.4 billion by Getco Holding, has struck a deal to sell its credit-brokerage unit to Stifel Financial, a person familiar with the matter told Reuters. The terms of the deal were not known. But Stifel will be picking up investment-grade, high-yield, asset-backed and mortgage-backed debt brokers in the U.S. and Europe through the deal the source said.

Foreign Money Is Revisiting Greece (WSJ)
A steady trickle of foreign money pumped €109 million ($143.8 million) into Greek stocks in the last six months of 2012, followed by an additional €27.6 million in January, according to the Athens Stock Exchange. That money helped lift Greece's major stock index 33.4% last year, making it—bizarrely—the best-performing stock market in the European Union. It is up an additional 10.51% this year, to 1003.32, although it remains well off its high of 6355 reached more than 12 years ago.

IKEA Meatballs Pulled After Horse-Meat Traces Found (WSJ)
IKEA on Monday became the latest company to be drawn into Europe's snowballing horse-meat scandal, as the Swedish furniture giant said it has recalled a batch of meatballs that had been distributed to 13 European countries. The move comes after Czech food inspectors found traces of horse meat in IKEA's meatballs. The company also said it is withdrawing meatball products from sale in Sweden.

Japan Picks BOJ Critic to Be Its Next Chief (WSJ)
Prime Minister Shinzo Abe plans to nominate former finance-ministry official Haruhiko Kuroda, 68 years old, as the next Bank of Japan governor, according to government officials. Mr. Kuroda, currently chief of the Asian Development Bank, ran the Japanese finance ministry's currency policy for four years in the early 2000s. There, among other things, he oversaw an extended effort to drive down the yen's value in order to make Japanese exports more affordable on the world market.

Barnes & Noble Chairman to Bid for Company's Retail Assets (Reuters)
Barnes & Noble Chairman Leonard Riggio has told the board he plans to buy all the retail assets of the company. The retail business includes, among other things, Barnes & Noble Booksellers and barnesandnoble.com but excludes Nook Media, Riggio said in a regulatory filing on Monday.

Mets Expect To Lose Money And Fans This Year (NYP)
The team is expecting to lose more than $10 million this year, after bleeding red the past two seasons, while attendance is projected to fall for a fifth straight year.

Monti Gets Investors’ Approval as Bonds Cast Doubt on Berlusconi (Bloomberg)
Monti “is the first leader to make it clear you have to look out for future generations and not just tomorrow’s vote,” said Fabrizio Fiorini, chief investment officer at Aletti Gestielle SGR SpA. “This concept of looking out for future generations is absolutely new for Italy.”

Angry moms condemn Geico’s cellphone app commercial they claim promotes bestiality (NYDN)
One Million Moms wants auto insurance firm Geico to pull its latest TV campaign in which a woman appears to be flirting with a pig. The conservative Christian group that monitors children’s programming issued a statement to condemn the clip. “The Geico marketing team may have thought this would be humorous, but it is disgusting to see how the company takes lightly the act of bestiality,” One Million Moms said in a statement. The press release, which urges members to email their disgust to the firm, added that the advert was “repulsive” and “unnecessary.” It was also a “horrible commercial for families to see,” the group said. The commercial starts with Maxwell the Geico pig and the woman in a parked car on what appears to be a lover’s lane. Not knowing the car has broken down, the woman seems keen to make out with the pig. But he is uninterested and instead shows her the Geico app and the game Fruit Ninjas on his cellphone. Geico has not commented on the complaint.

Related

Opening Bell: 05.18.12

Facebook Employees Spend All Night Programming (DJ) Tech geeks across the Facebook empire — including the New York office — celebrated the company’s IPO and their newfound millions by slugging back energy drinks at all-night code-writing parties. Legions of the social network’s employees, who will be worth an average of $2.9 million apiece on paper when the stock opens trading this morning, dressed for the occasion with matching “Hackathon” T-shirts. They kicked off the party at their Menlo Park, Calif., headquarters, just hours after the company’s 420 million available shares were priced at $38 each. The festivities were expected to rage through the night until founder Mark Zuckerberg rings the Nasdaq opening bell via video feed at 9:30 a.m. Inside JPMorgan's Blunder (WSJ) Chairman and Chief Executive Officer James Dimon had just committed the most expensive blunder of his 30-year career, failing to detect the risk of trades that had begun to generate huge losses at the bank. On April 30, associates who were gathered in a conference room handed Mr. Dimon summaries and analyses of the losses. But there were no details about the trades themselves. "I want to see the positions!" he barked, throwing down the papers, according to attendees. "Now! I want to see everything!" When Mr. Dimon saw the numbers, these people say, he couldn't breathe...Mr. Dimon publicly disclosed the losses in a conference call on May 10. Afterward, he told Mr. Lee: "Maybe I can sleep tonight," according to a person familiar with the conversation...Late that Friday night, several executives gathered in Mr. Dimon's office. Messrs. Dimon and Cavanagh drank vodka. Others had wine. They told their boss how they had let down the firm, attendees say. "We all did," Mr. Dimon replied, according to attendees. "Put on your JPM jerseys and get ready. We are going to take a lot of hits. We'll draft our best team and get through this." Defiant Message From Greece (WSJ) "Our first choice is to convince our European partners that, in their own interest, financing must not be stopped," Mr. Tsipras said in an interview with The Wall Street Journal. He said Greece doesn't intend to take any unilateral action, "but if they proceed with unilateral action on their side, in other words they cut off our funding, then we will be forced to stop paying our creditors, to go to a suspension in payments to our creditors." Groupon Stock Spike Probed (WSJ) A Wall Street regulator is examining trading in Groupon that sent its stock price soaring hours before a favorable earnings announcement Monday, according to a person familiar with the matter. The review by the Financial Industry Regulatory Authority, or Finra, is at an early stage, the person said. It follows unusually heavy trading in shares of the online-coupon company in the run-up to its release of strong financial results. Ex-ECB Chief Trichet Unveils Bold Plan to Save Euro (Reuters) Europe could strengthen its monetary union by giving European politicians the power to declare a sovereign state bankrupt and take over its fiscal policy, the former head of the European Central Bank said on Thursday in unveiling a bold proposal to salvage the euro. Russian man gets stuck in building's garbage chute while trying to hide from girlfriend (NYDN) A Russian man went to great lengths to hide from his girlfriend on Wednesday night when he jumped into a garbage chute on the eighth floor of his apartment building. The unidentified man slid down the chute until he became stuck on the fifth floor of the building in Tyumen, Siberia. Authorities confirmed that they were told of the situation after people in the building heard the man's cries for help. Rescuers used a Jaws-of-Life tool to free the man, according to reports. Santander Among 16 Spanish Banks Downgraded By Moody’s (Bloomberg) "Banks will continue to face highly adverse operating and market funding conditions that pose a threat to their creditworthiness,” the ratings firm said. “The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve” this year. Marc Faber: China Biggest Threat To Global Economy (CNBC) "I think the biggest risk is actually China because if you look at Greece, it's an insignificant economy," Faber said on CNBC Asia's “Capital Connection.” "Yes, they owe money, but the market knows that it's bankrupt." German Finance Minister Sees Two Years Of Turmoil (Bloomberg) German Finance Minister Wolfgang Schaeuble said that turmoil in the financial markets caused by Europe’s debt crisis may last another two years, as Group of Eight leaders prepared to discuss Greece and its impact on the global economy. More than 2 1/2 years after Greece revealed its bloated budget deficit, Europe has “known a lot of crisis,” Schaeuble said in a recorded interview broadcast today on France’s Europe 1 radio. “It’s practically normal.” Even so, “in 12 to 24 months we’ll see a calming of financial markets,” he said.

Opening Bell: 03.15.13

JPMorgan Pay Fueled Risk Amid London Whale Loss: Report (Bloomberg) JPMorgan, the biggest U.S. bank by assets, compensated chief investment office traders in a way that encouraged risk-taking before the unit amassed losses exceeding $6.2 billion, a Senate committee said. Pay that rewarded “effective risk management” would have suggested the synthetic credit portfolio functioned as a hedge, the Senate Permanent Subcommittee on Investigations said yesterday in a report on the New York-based bank’s so-called London Whale loss. Instead, compensation practices suggest the bets “functioned more as a proprietary-trading operation.” JPMorgan Report Piles Pressure on Dimon in Too-Big Debate (Bloomberg) Dimon misled investors and dodged regulators as losses escalated on a “monstrous” derivatives bet, according to a 301-page report by the Senate Permanent Subcommittee on Investigations. The bank “mischaracterized high-risk trading as hedging,” and withheld key information from its primary regulator, sometimes at Dimon’s behest, investigators found. Managers manipulated risk models and pressured traders to overvalue their positions in an effort to hide growing losses. Ina Drew Says Subordinates’ Deception at JPMorgan Let Her Down (Bloomberg) Ina Drew, who was forced to leave JPMorgan Chase amid a record trading loss last year, said she relied on other executives to manage a complex book of credit derivatives and didn’t learn of their “deceptive conduct” until after she left the company. “I was, and remain, deeply disappointed and saddened to learn of such conduct and the extent to which the London team let me, and the company, down,” Drew said in testimony prepared for delivery in the Senate today. Credit Suisse Banker Extradited To US (NYP) Former Credit Suisse banker Kareem Serageldin, the highest-ranking Wall Street executive to be charged for crimes tied to the mortgage meltdown, is coming home to face the music, The Post has learned. The 39-tear old Yale graduate was indicted by a Manhattan federal grand jury in February 2012 — along with two Credit Suisse colleagues — for allegedly covering up losses in a $3.5 billion toxic mortgage portfolio as the real estate market was collapsing in 2007. The UK’s Home Secretary Theresa May, who is responsible for Great Britain’s immigration and citizenship, signed off last week on the extradition of Serageldin, a person with knowledge of the case told The Post. Goldman Sachs, JP Morgan Hit (WSJ) The Federal Reserve Thursday dealt a blow to J.P. Morgan Chase and Goldman Sachs, citing weaknesses in their "stress test" capital planning that could hamper their funneling more dividends and share buybacks to investors. The central bank also denied capital plans submitted by BB&T Corp. and Ally Financial Inc. But the Fed at the same time cleared 14 other banks to boost payouts to shareholders, including Citigroup Inc. and Bank of America Corp., both of which in past years had capital requests rejected by the central bank. The Fed also approved a reduced repurchase plan from American Express Co., in the only instance of a bank winning approval for a plan resubmitted to the regulator under a new stress-test wrinkle this year. Mila Kunis Rotates From Cash to Stocks (CNBC) The star of films such as Ted, Friends With Benefits and the TV series That 70s Show told CNBC in London: "I've just started investing in stocks, which is new for me." "I'm an advocate of like put things in the bank, put it in a CD (a certificate of deposit), be safe. And I've been pushed kind of forward to take chances and then learning a little bit about the stock market and companies," she said. Abe Says Japan Will Join Trade Talks (WSJ) Japanese Prime Minister Shinzo Abe announced Friday that his country will take a seat at the negotiation table of the U.S.-led Trans-Pacific Partnership free trade negotiations, a move that may pit him against powerful farm lobbies ahead of upper house elections this summer. "This is our last chance to join the TPP and take part in the rule-making," Mr. Abe told reporters Friday at a news conference to mark his decision to join the talks. "For Japan to remain inward-looking means we are giving up on the possibility of growth." Stifel Agrees to Acquire Fixed-Income Group From Knight (Bloomberg) Knight’s European institutional fixed-income sales and trading team is also part of the deal, which includes about 100 people, Stifel said today in a statement, without disclosing terms. The group covers high-yield and investment-grade corporate bonds, asset-backed and mortgage-backed securities, emerging markets and fixed-income research. No 'Irrational Exuberance' in Stocks Now: Greenspan (CNBC) Greenspan said in a "Squawk Box" interview that stocks by historical standards are "significantly undervalued" even considering the recent moves higher. He added that the payroll tax increase didn't dent spending because of rising asset prices. Could Hungary Be Thrown Out of the EU? (CNBC) Hungary's increasingly aggressive moves against media, judiciary and central bank independence will be discussed by European Union heads of states on Friday, raising the possibility that Hungary could be thrown out of the EU. The European Union is concerned Hungary may be flouting EU rules on human rights, after its parliament voted this week to amend its constitution to allow legislation to bypass approval from the constitutional court. Hungary had defied calls from the European Commission to delay the vote. The Taco That Built 15,000 Jobs (ABC) It may take a village to raise a child. But all it takes to raise employment is a taco. That seems to be the situation at Taco Bell, anyway, which added 15,000 employees last year, company chief executive Greg Creed told the Daily Beast, largely on one new product. Creed attributes the success to Doritos Locos Tacos, which the company rolled out in March, 2012 and was the “biggest launch in Taco Bell history,” he told the Beast. Throughout 2012, the 170-calorie taco, whose shell is made from a nacho cheese Doritos in a collaboration with Frito-Lay, 375 million were gobbled up, which averages out to about one million per day. But why stop there? On March 7, it launched Cool Ranch Dorito Locos Tacos. The slogan? “Collect All Two.” “We believe we can add 2,000 new restaurants in the next 10 years, because what we have is proprietary and exclusive. Nobody else can make a Cool Ranch Doritos Taco. And that’s just in the U.S.,” Creed told the Beast. Creed was traveling today and unavailable to talk to ABC News, a spokesman said.

Opening Bell: 01.16.13

Goldman Profit Soars (WSJ) "While economic conditions remained challenging for much of last year, the strengths of our business model and client franchise, coupled with our focus on disciplined management, delivered solid performance for our shareholders," Chief Executive Lloyd C. Blankfein said. Overall, the investment-banking arm recorded revenue of $1.41 billion for the quarter, up from $857 million a year ago and $1.16 billion in the third quarter. Financial advisory revenue rose 8.1% from year ago. Debt underwriting revenue surged to $593 million from $196 million in the year ago and the $466 million reported in the third quarter. Equity underwriting revenue popped 59% from the year ago and 61% from the prior quarter to $304 million. Revenue from fixed income, currency and commodity trading totaled $2.04 billion, versus $1.36 billion a year earlier and $2.22 billion in the third quarter. Revenue from equities execution rose 45% from a year ago to $764 million but fell 10% from the third quarter. Overall profit for the fourth quarter totaled $2.89 billion, compared with a year-earlier profit of $1.01 billion. Earnings per share, reflecting the payment of preferred dividends, jumped to $5.60 from $1.84. Net revenue, including net interest income, surged 53% to $9.24 billion. JPMorgan Profit Tops Estimates (WSJ) JPMorgan's fourth-quarter earnings surged 53% on strong revenue and better credit, as the bank further detailed the fallout from more than $6 billion in trading losses last year. The outsized, complex trades on credit default swaps tied to corporate bonds became known as the "London Whale." On Wednesday, the bank made public an internal report outlining mistakes and oversights by executives who played a role in the matter, including Chief Investment Officer Ina Drew, who has since left the bank, and Douglas Braunstein, who was chief financial officer during the episode and has since become a vice chairman. It also said its Treasury and Chief Investment Office, where the "Whale" trades were made, recorded a loss of $157 million on the fourth quarter, compared to net income of $417 million in the year ago. J.P. Morgan also said it halved the 2012 compensation of Chief Executive James Dimon to $11.5 million. Additionally, he will have to wait up to another 18 months before he can start exercising two million options that were awarded to him five years ago. Overall, J.P. Morgan reported a profit of $5.69 billion, or $1.39 a share, for the fourth quarter, up from $3.73 billion, or 90 cents a share, a year ago. Bankers Get IOUs Instead Of Bonus Cash (WSJ) Several thousand Morgan Stanley traders, investment bankers and other employees will get IOUs instead of cash when bonus day arrives Thursday, a fundamental change in Wall Street pay triggered by the financial crisis. The New York company will pay its bonuses in four equal installments, according to people briefed on the plan, with the first chunk coming in May and the last in January 2016. Employees who quit or are laid off before the payments stand to lose their deferred compensation unless they negotiate a separate deal with the company. "I don't think there will be a lot of cheers on the trading floors of Morgan Stanley," said Mark Williams, a former Federal Reserve bank examiner who now teaches at Boston University. "Bonuses were used to buy houses and cars. They were savings vehicles." AIG Seeks Approval To File More Bank Suits (NYT) Since the summer of 2011, the insurance giant American International Group has been battling Bank of America over claims that the bank packaged and sold it defective mortgages that dealt A.I.G. billions of dollars in losses. Now A.I.G. wants to be able to sue other banks that sold it mortgage-backed securities that plunged in value during the financial crisis. It has not said which banks, but possibilities include Deutsche Bank, Goldman Sachs and JPMorgan Chase. But to sue, A.I.G. first must win a court fight with an entity controlled by the Federal Reserve Bank of New York, which the insurer says is blocking its efforts to pursue the banks that caused it financial harm. Hungary Attacks Roubini Over Currency 'Advice' (CNBC) Hungary's Ministry for National Economy said in a statement that the forint began to depreciate after economist Nouriel Roubini – dubbed Dr Doom for his pessimistic forecasts – said in a newsletter that failure to secure a deal with the International Monetary Fund was bad news for the currency. The forint has been in decline since last week hitting seven-month lows earlier this week but has since gained some ground. Hungarian officials rounded on Roubini saying; "On Thursday speculators seem to have taken Roubini's advice and attacked the forint." BofA Takes A Mortgage Mulligan (WSJ) Less than two years after embarking on a painful retreat from home lending, Bank of America Corp. is girding for a new run at the U.S. mortgage business. Whether that gamble pays off will depend in large measure on how long the mortgage market's run of record profits continues. The Charlotte, N.C., company aims to sell more mortgages through its 5,000-plus branches, executives said. The fourth-biggest U.S. mortgage lender, after Wells Fargo & Co., J.P. Morgan Chase & Co. and U.S. Bancorp, is intent on "growing that business," Chief Executive Brian Moynihan said at a December investor conference. Eurozone Plan May Be Watered Down (WSJ) One of the euro zone's most significant commitments last year aimed at containing its financial crisis—a plan to allow the bloc's bailout fund to directly boost the capital of banks in countries facing debt troubles—could be undermined by technical complications and second thoughts by some governments. Germany Repatriates Gold Reserves (WSJ) Germany's central bank said it would remove nearly a fifth of its total gold reserves from deposits at the New York Federal Reserve Bank and the Bank of France and bring them back to Germany, amid a debate in the country over the transparency of its global gold holdings. Inside Trader Sent To Kinnu-can (NYP) John Kinnucan, the former head of Portland, Ore.-based firm Broadband Research, was sentenced to four years and three months in prison after admitting to feeding illegal stock tips to his well-heeled hedge fund clients. Reporter fired for secret stripping job gets new journalism gig with same (NYDN) Tressler, 30, is now a reporter for the San Antonio Express-News, covering “cops, crime and general mayhem,” according to her Twitter account. In April, the gorgeous Tressler was fired from her job as a society reporter for the Houston Chronicle for failing to tell the newspaper about her after-hours gig as a stripper, which she chronicled in her blog, “Diary of an Angry Stripper.” Tressler then sued her former employer's parent company, the Hearst Corp., which also owns the Express-News, alleging that the firing was unfair. She hired celebrity lawyer Gloria Allred and filed a complaint with the U.S. Equal Employment Opportunity Commission, saying the paper’s reason for firing her -- failing to write on her application that she had been working part-time as a stripper -- was ridiculous. "I've worked at KB Toys. I've worked at a surf shop. I've worked at multiple coffee shops. I've worked at Taco Bell. I've worked as a line cook at a restaurant," Tressler told the Las Vegas Review-Journal in June. “Do you really want me to put every single one of those on my job application?" Over the summer, Tressler embarked on a national stripping tour and pushed a book, which shared the same title as her blog. She also picked up some freelance assignments for “Good Morning America.” After the suit and the tour, it seemed unlikely Tressler would re-enter Texas journalism, let alone for a newspaper owned by the same parent company that fired her. Some have suspected that her new job was part of a settlement she reached with the company.

Opening Bell: 04.12.12

Buffett Feasts On Goldman Scraps (WSJ) Details of one trade in particular have recently caused a stir in the market. In November, Goldman sold about $85 million of loans in troubled newspaper publisher Lee Enterprises Goldman sold the debt at about 65 cents on the dollar, having bought it months before at around 80 cents, resulting in a loss of at least $13 million. The buyer: a unit of Warren Buffett's Berkshire Hathaway Inc., according to several people familiar with the matter. Mr. Buffett has since made a tidy paper profit on the loans, which are now worth about 82 cents on the dollar, the people said. Jim Chanos: Chinese Banks ‘Great Shorts,’ Won’t Be Broken Up (CNBC) Chanos, the head of Kynikos Associates, has been betting against China — despite its role as a global economic leader — primarily because he believes the country is overbuilt and does not have the internal demand to support its ambitious growth plans. Nowhere has that trend been more apparent than in the banking system. "If you looked at the performance of the banks over the last two years...they have been great shorts," Chanos said. "They have been going down — they're down 30 percent over the last two years." George Soros: Exceptional Measures Needed to Save EU (FT) "Other countries have gone through similar experiences. Latin American countries suffered a lost decade after 1982, and Japan has been stagnating for a quarter of a century; both have survived. But the European Union is not a country and it is unlikely to survive. The deflationary debt trap threatens to destroy a still-incomplete political union," he wrote. Blackstone President To Raise For Obama (Morning Money) "Tony James, the president of Blackstone Group LP, has agreed to hold a fundraiser for... Obama’s re-election campaign, according to two people familiar...By agreeing to raise money for Obama, James has diversified Blackstone’s political bets for the November election. Blackstone Chairman Stephen Schwarzman has been raising money for former Massachusetts governor Mitt Romney, the likely Republican nominee." SEC, Goldman to Settle Research Case (Reuters) U.S. securities regulators are preparing to announce that Goldman Sachs will pay $22 million to settle allegations the bank did not have adequate policies to prevent research from being passed inappropriately to preferred clients, people familiar with the matter said on Wednesday. BlackRock's Street Shortcut (WSJ) BlackRock is planning to launch a trading platform this year that would let the world's largest money manager and its peers bypass Wall Street and trade bonds directly with one another. The electronic trading hub has the potential to reduce a lucrative revenue stream for investment banks at a time when their businesses are being squeezed by lackluster markets and new regulations put in place to curb risk in the aftermath of the financial crisis. The trading platform would be run by the New York-based company's BlackRock Solutions arm and offer 46 clients—including sovereign-wealth funds, insurance companies and other money managers—the ability to trade in corporate bonds, mortgage securities and other assets, company executives say. Under the plan, the platform would seek to match buyers and sellers of the same securities, in a process known as "crossing trades." BlackRock Solutions would charge a small fee for the service that would be much lower than Wall Street's trading commissions. New Yorker breaks up subway scuffle, snacks in hand (NYDN) Sonder, 24, played the role of hungry hero “two or three Thursdays ago” after hopping on an uptown 6 train at Spring St. The calm inside the subway car was shattered a minute later when a tussle broke out between a man and a woman. “I turned around and I saw these two kicking each other pretty viciously,” said the sturdy Sonder, who stands six-feet tall and weighs 200 pounds. “I stepped over and tried to see if I could help.” Mid Pringle, Sonder thrust himself between the pugilists. More chips were eaten, but no other punches or kicks were thrown. “I just got caught up in the moment,” said Sonder, who was also holding a bag of gummy bears during the incident. Dimon Vows Fight Moynihan Lost Over Claims From Mortgages (Bloomberg) “We are going to fight repurchase claims that pretend the steep decline in home prices and unprecedented market conditions had no impact on loan performance,” Dimon, chief executive officer of the New York-based lender, wrote in the April 4 letter. He’ll also oppose “securities claims brought by sophisticated investors who understood and accepted the risks.” Jobless Claims Post Jump; PPI Up, Trade Deficit Down (Reuters) Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday. The prior week's figure was revised up to 367,000 from the previously reported 357,000. Fur Flies in High-Stakes Airlifts of Animals by Lufthansa (Bloomberg) An African white rhinoceros peers through the bars of its Frankfurt compound, while across the floor a Madagascan chameleon inches around its vivarium and an Andean alpaca plucks hay from a bale. It’s not a scene from the city’s zoo but from Deutsche Lufthansa AG’s Animal Lounge, a state-of-the-art complex that’s at the center of the German carrier’s plans to dominate the most specialized part of the $66 billion air-cargo industry. Lufthansa, Air France-KLM Group and Dubai-based Emirates, which transports thoroughbreds for Sheikh Mohammed bin Rashid Al Maktoum, horseracing’s leading owner, are competing in a high- stakes market. Premium profit margins come with the risk of an in-flight death involving a beloved family pet, top-ranked stallion or priceless panda. “It’s not like pharmaceuticals, where your main concern is the temperature,” said Animal Lounge Director Axel Heitmann. “If a bag of fish leaks it needs replacing with the right kind of water and the right oxygen. And if something goes wrong you can’t just hand a customer $1,000 and tell him to buy another pet. He wants the dog or cat he’s had for 10 years.” KKR Invests in China Cord Blood (WSJ) Kohlberg Kravis Roberts & Co. L.P. will invest $65 million into China Cord Blood Corp., the country's largest operator of services for umbilical cord blood that is rich in stem cells, to capitalize on China's fast growing healthcare services industry. Police: Dealer tied 89 bags to penis, peed at the station (Philly) Police Corporal Christopher Eiserman said another officer was on routine patrol Friday when he pulled Ray Woods over for a broken rear light and found marijuana in his car. When the officer searched Woods before placing him in the police cruiser, he discovered "a large bulge" in the front of his pants, Eiserman said. Police say Woods actually had the balls to deny that there was any contraband down there. “He stopped him for the traffic violation and one thing led to another," Eiserman said. Back at the station, Eiserman said, police discovered that Woods had tied a large plastic bag around his penis that contained a whopping 89 small bags of suspected heroin and cocaine. Then things got messy. “I tried to remove it. Unfortunately, and I don't know if it was nervousness or not, but he started urinating all over," Eiserman said. While it wasn't exactly what Eiserman had in mind when he started his shift Friday, he couldn't help but chuckle at the ingenuity, or lack thereof, of street-level drug dealers. “In 14 years, I’ve seen it down their pants, in their a--, but I've never seen it tied to their penis," he said.

Opening Bell: 02.27.13

Bernanke Affirms Bond Buying (WSJ) In his semiannual report to Congress Tuesday, Mr. Bernanke said the bond buying is helping the economy by holding down long-term interest rates and ought to be sustained. "Keeping long-term interest rates low has helped spark a recovery in the housing market and has led to increased sales and production of automobiles and other durable goods," he said. The Fed has accumulated $2.8 trillion of Treasury and mortgage securities. Mr. Bernanke's remarks signaled little change in the central bank's plans to purchase $85 billion a month of long-term Treasury and mortgage debt. The Fed's next policy meeting is March 19-20. Regulators Hope For Libor Pacts (WSJ) Regulators investigating alleged interest-rate manipulation are hoping to reach settlements with at least three major financial institutions by the end of summer, according to a person familiar with the probes. It isn't clear if the companies will go along with any proposed settlements, and previous agreements with banks were delayed before being completed. So far, regulators have settled rate-rigging charges with Barclays, RBS, and UBS collecting about $2.5 billion in penalties. All three banks admitted that employees sought to rig rates. Barclays to Unveil Numbers Earning 1 Million (FT) Barclays is set to reveal the number of staff who earned above 1 million pounds ($1.5 million) last year, in a push for transparency that could turn the bank into a trailblazer for the sector. In its annual report next week, the British retail and investment bank will for the first time give an outline of the various pay brackets among its 140,000 staff, people close to the situation said. Analysts estimate that between 600 and 700 employees – mostly in the investment bank – will be revealed as having taken home more than 1 million pounds last year. JPMorgan To Cut 17,000 Jobs (WSJ) The move announced Tuesday by the New York company, the nation's most profitable bank in 2012 and the biggest U.S. lender by assets, will reduce its staff by 6.5% in one of the most aggressive reductions to date amid widespread financial-industry cutbacks. Bond brawl: Singer v. Argentina today (NYP) Lawyers Ted Olsen and David Boies will appear before a Manhattan US appeals court to argue over how $1.44 billion in Argentina debt should be paid. Olsen represents billionaire hedge fund magnate Paul Singer, who claims he and other bondholder holdouts should be paid alongside those holders who agreed to a steep haircut during a debt restructuring. Argentina President Cristina Kirchner has long insisted she will never pay “one dollar” to the Singer holdouts. Boies represents the bondholders who agreed to the restructuring — and they oppose Singer, believing that Argentina will never go along with a pro-holdout ruling, thus putting their bonds at risk of default. Cops: Florida Man, 36, Assaulted Teen Relative With Taco Bell Burrito (TSG) The victim told cops that he was having a “verbal altercation” with his mother and Brown, his brother-in-law, when Brown “asked his mother to bring him the burrito,” according to an arrest affidavit. Brown then allegedly threw the burrito “with force” at the victim, striking the boy in the face with the fast food item. While interviewing the teen, cops noted that he had “burrito cheese, sauce and meat all over his clothing and face.” Brown told police that the victim was disrespectful to his mother and had cursed at the woman. He also acknowledged that he had “delivered” the burrito. After being booked into the county jail, Brown warned that he would “take care” of the teen upon his release from custody, adding that the victim “was going to get knocked out.” Best Buy Takeover Attempt by Founder in Jeopardy (Reuters) Best Buy founder Richard Schulze's effort to take the company private is in trouble after attempts to secure financing faltered while an alternative strategy to line up minority investors may not pan out either, five sources familiar with the matter said. No longer pursuing a full takeover bid for the troubled electronics retailer, Schulze has focused discussions in recent weeks on a potential deal in which private equity firms would buy a non-controlling stake, the sources, who declined to be named because the discussions are private, said. 'Penta-Millionaires' Happier Than Merely Rich: Study (CNBC) Breaking: A survey from Spectrem Group found that individuals worth $5 million or more are far more satisfied with their jobs, relationships and work than those worth $100,000 or less. Dimon Says Banks Have More Capital Than They Can Use (Bloomberg) The biggest U.S. banks are lending the smallest portion of their deposits in five years as cash floods in from savers, a slow economy damps demand from borrowers and regulators push financial firms to bolster themselves against any future credit crisis. The average loan-to-deposit ratio for the top eight commercial banks fell to 84 percent in the fourth quarter from 87 percent a year earlier and 101 percent in 2007, according to data compiled by Credit Suisse Group AG. JPMorgan had the lowest ratio in the group at 61 percent. “I don’t want to say it’s anti-American” to be held to international standards, Dimon said, adding that the bank’s assets include highly rated securities. “That balance sheet is almost as liquid as you can get.” Budweiser Has Been Sued 3 Times for Watering Down All Those Watery Beers (Atlantic Wire) The plaintiffs — including one guy who bought a case of Michelob Ultra a month, for some reason — allege that the public doesn't know what all the beers under the Budweiser umbrella really taste like, and that they're not getting their money's worth. There is no science backing up the defendants' claims, and AB InBev has yet to respond in court. The krux of the evidence comes from "information from former workers" of Anheuser-Busch breweries who claim watering down the beer in post-production is a company policy.

Opening Bell: 02.21.13

Feds Split Over When To Close Cash Spigot (WSJ) Minutes released Wednesday from the Fed's January policy meeting show officials concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets. The Fed is buying $85 billion in mortgage and U.S. Treasury securities a month to drive down long-term rates and has promised to keep short-term rates near zero until unemployment improves. Citigroup Chairman Not Pressing Bank Breakup (WSJ) Michael E. O'Neill was among a small group of directors who after the financial crisis urged the company to weigh the pros and cons of splitting up the third-largest U.S. bank, said people familiar with the deliberations. Mr. O'Neill, now chairman, has overseen a management shake-up in the past year and is backing a broad cost-cutting plan. But exploring a breakup is no longer among his top priorities. Mr. O'Neill has concluded that breaking up Citigroup doesn't make sense now, given economic and regulatory uncertainty as well as a host of financial considerations, these people said. Wells Fargo ramps up private equity despite Volcker Rule (Reuters) The fine print of the Volcker Rule is expected to be finalized as soon as this year. Major banks such as Bank of America Corp and Citigroup are already pulling back from private equity investments ahead of the rules. But Wells Fargo is taking a different path. The bank invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees. By avoiding equity from outside investors, the bank is considered to be engaging in "merchant banking," an activity that is likely to be exempt under the Volcker Rule, lawyers and people familiar with the matter said. Dimon Defends His Duel Leadership Roles (NYP) JPMorgan Chase CEO Jamie Dimon has no intention of relinquishing his chairmanship, insiders say, despite renewed calls from a group of shareholders to split the roles at the nation’s biggest lender. The American Federation of State, County and Municipal Employees, a granddaddy of public employee unions, as well as New York City and Connecticut pension funds, are pressuring the bank in the wake of its $6 billion “London Whale” trading blunder. The shareholders, which hold about $1 billion worth of bank shares, say the move would help to avoid a repeat of last year’s debacle, which led the board to slash Dimon’s pay in half. JPMorgan officials, though, don’t want to go as far as splitting the roles, saying their boss steered the bank successfully through the financial crisis and is well suited for both jobs. Regulator Weighs Ban For Corzine (WSJ) Two newly elected directors of the National Futures Association plan to push the agency to hold a hearing on the matter, having criticized the response of federal regulators some 16 months after the industry was shaken by the collapse of brokerage MF Global where the former New Jersey governor was chief executive. Shia LaBeouf Pulls Out Of Broadway's Orphans (NYP) Producers announced that LaBeouf parted ways with the show after just a week of rehearsals due to “creative differences,” even though the play’s scheduled to begin previews March 19. But last night LaBeouf, 26, posted e-mail exchanges on Twitter revealing divisions between him and bombastic Baldwin. In a message titled “Creative Differences” LaBeouf posted an e-mail to him from director Dan Sullivan, which reads, “I’m too old for disagreeable situations. You’re one hell of a great actor. Alec is who he is. You are who you are. You two are incompatible. I should have known it. This one will haunt me. You tried to warn me. You said you were a different breed. I didn’t get it.” Russia's Missing Billions Revealed (FT) Russia's central bank governor has lifted the lid on $49 billion in illegal capital flight - more than half of which, he says, is controlled "by one well-organized group of individuals" that he declined to name. Sergei Ignatiev, due to step down in June after 11 years in his post, is seldom outspoken about any issue other than interest rates. But he unburdened himself in an interview with the Moscow newspaper Vedomosti about money leaving the country through the back door, which he said equaled 2.5 percent of gross domestic product last year. "This might be payment for supplies of narcotics...illegal imports...bribes and kickbacks for bureaucrats...and avoiding taxes," he told the daily, which is part-owned by the Financial Times. New York Times Looks To Sell Boston Globe (CNBC) This follows the Times Company's sale of other regional papers as well as the About.com group, as it focuses in on its core asset — the New York Times brand. And with that focus, the publisher is honing in on what's really been working for the company — the New York Times subscription model. The company has retained Evercore Partners to advise on and manage the sale, but won't say who it's already talked to, or how much it thinks the assets are worth. Citi analyst Leo Kulp, who calls this a "positive move," estimates that the segment could fetch about $200 million. The segment generated $395 million in 2012 revenue, which Kulp says implies about $67 million in EBITDA in 2012. He applies a three times multiple — "on the high end of comparable large metro newspaper sales" — to give the paper a $200 million price tag. Herbalife Prez Goes On Offensive (NYP) President Des Walsh, in a conference call, said that “despite what we believe to be unprecedented, unfair and untrue attacks on this company, our business continues to do well.” Deputies: Couple started fighting over man scratching himself (WWSB) According to the Manatee County Sheriff’s Office, Shalamar Petrarca complained to her boyfriend, 30-year-old Ronald Howard, that it was rude and disgusting to be “scratching his testicles” while she was about to eat dinner. She told deputies that Howard began yelling at her, pushed her into the kitchen, causing her to get a scratch on her ankle, then threw her out of the house. Howard told deputies that she punched him in the eye for “scratching his balls”, and the he pushed her through the door in self-defense. Deputies say Howard had no visible injuries, but Petrarca did have a scratch on her ankle.

Opening Bell: 11.19.12

Geithner: Deal To Avoid 'Fiscal Cliff' Can Be Made In Weeks (Bloomberg) Treasury Secretary Timothy F. Geithner said he’s confident an agreement on averting the fiscal cliff can be concluded within weeks after White House talks between President Barack Obama and congressional leaders. “It was a good meeting, and the tone was very good,” Geithner said in an interview in Washington. “I think this is doable within several weeks.” Geithner said a deal must be reached soon to prevent further damaging consumer confidence. The lack of agreement is “this huge cloud of uncertainty hanging over the economy,” he said. As the peak of holiday shopping season approaches, “You’d want to do it as soon as you can.” “This is within our grasp, within our reach,” Geithner said. “It’s not that complicated.” Geithner repeated the administration’s calls for an immediate extension of middle-class tax cuts, and said a deal on high-end tax cuts shouldn’t be delayed. “I think deferring things doesn’t work,” he said. “You know, we’ve had several periods now where there was a choice made to defer.” Obama Calls CEOs, Including Buffett, Dimon (Politico) President Obama made calls to a handful of top business leaders over the weekend, a White House official said Sunday, as part of effort to build support for his approach to averting the fiscal cliff. In conversations that came during his weekend of travel to and in Asia, Obama stressed "the need to find a balanced deficit reduction solution that protects the middle class and continues to move our economy forward," the official said. Obama spoke to Berkshire Hathaway CEO Warren Buffett, Apple CEO Tim Cook, JPMorgan Chase CEO Jamie Dimon, Boeing CEO Jim McNerney and Costco CEO Craig Jelinek, the official said. Lagarde: Reality' Not 'Wishful Thinking' Needed on Greece (Reuters) "I am always trying to be constructive but I am driven by two objectives," Lagarde said in an interview, "to build and approve a program for Greece that is solid, that is convincing today, that will be sustainable tomorrow, that is rooted in reality and not in wishful thinking. Investment Falls Off A Cliff (WSJ) U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery. Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls. Sahara Feeling Heat Over Bond Sales (WSJ) India's Sahara Group has built an empire by offering financial products to tens of millions of rural Indians who typically stashed their meager savings under the mattress. Business was so good that Sahara, using fees and investments from its customers' deposits, grew into a multi-billion-dollar conglomerate that includes a 10,000-acre township, New York's Plaza Hotel building and a Formula-1 racing team. Today, the company's practices are coming under intense public scrutiny, the product of years of tussle between Sahara and regulators who worry India's informal financial sector has grown dangerously fast and without oversight. Many savers who scraped together money to put with Sahara now fear they could face lengthy delays in getting their money back. Opportunists Stockpile Twinkies for Big Payday (AP) Hours after the maker of Twinkies, Hostess Brands, announced its plans to close forever, people flocked to stores to fill their shopping baskets with boxes of Twinkies, which are cream-filled sponge cakes, and other snacks made by the company — Ding Dongs, Ho Hos and Zingers. Late Friday and Saturday, the opportunists took to the Web sites eBay and Craigslist. They began marketing their hoards to whimsical collectors and junk-food lovers for hundreds, in some cases thousands, of dollars. That is a fat profit margin, considering the retail price for a box of 10 Twinkies is about $5. Bond Investor Takes Big Punt On Ireland (FT) Franklin Templeton funds increased their holdings of Irish bonds by more than a third to at least €8.4 billion in the third quarter. This means that the San Francisco-based US asset manager now controls almost a 10th of Ireland’s entire government bond market. Most of the bonds have been snapped up by funds controlled by Michael Hasenstab, co-director of Franklin Templeton’s international bond department, and particularly by the $64 billion Templeton Global Bond Fund he manages. Kim Kardashian Weighs In On The Israeli-Palestinian Conflict (HP) Kim Kardashian is apparently neutral when it comes to the current Israeli-Palestinian conflict. The reality star first tweeted support for Israel: "Praying for everyone in Israel," she wrote. And after five minutes of backlash, the star tweeted again: "And praying for everyone in Palestine and across the world!" she wrote. Kardashian is clearly the last person anyone wanted to hear from regarding the issue, and the 32-year-old was immediately hit with more backlash over the tweets -- including death threats. The star has since deleted the tweets and explained her reasons for tweeting about the conflict in a blog post on her website. Shadow Banking Grows to $67 Trillion Industry, Regulators Say (Bloomberg) The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off- balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector. “Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks,” the FSB said in the report published on its website. Lehman Trustee Ends Citigroup Fight (WSJ) The trustee unwinding Lehman Brothers Inc. reached an agreement with Citigroup that ends a long-running legal fight over more than $1 billion that Lehman deposited at the bank the week it filed for bankruptcy protection. The deal puts $435 million in the coffers of Lehman's brokerage unit, LBI, for distribution to customers and other creditors, according to the settlement filed Friday night in U.S. Bankruptcy Court in Manhattan. Europe Seeks More Taxes From US Multinationals (NYT) Google, Amazon, Starbucks and other American companies facing tax scrutiny say they are doing nothing wrong. They use complex accounting strategies to exploit national differences across Europe in corporate tax rates, which range from less than 10 percent to more than 30 percent, and loopholes that can reduce their effective European tax levies to almost nothing. Google, for example, records most of its international revenue at its European headquarters in Ireland, where the corporate tax rate is 12.5 percent. Across Europe, customers who buy advertising, Google’s primary source of revenue, sign contracts with the company’s subsidiary in Ireland, rather than with local branches. Google ends up paying Irish taxes on only a fraction of the billions of euros that course through its Dublin office. That is because the company uses a variety of methods, including royalty payments to a unit in Bermuda, to reduce further the amount of money exposed to tax liability. So, while Google told the Securities and Exchange Commission that it generated more than $4 billion in sales in Britain last year, it reported revenue of only £396 million, or $629 million, in itsofficial filings there. Central New York district attorney Marc Suben admits to '70s porn star past (NYDN) Prior to this year’s election, Marc Suben denied appearing in 1970s skin flicks, telling reporters he was the subject of a campaign by political rivals who wanted to sully his reputation. But Friday, CNYCentral.com published a story highlighting a YouTube video comparing Suben with porn actor Gus Thomas, whose IMDB film credits include “Deep Throat Part 2” and “Doctor’s Teenage Dilemma.” Suben swiftly called a press conference and “humbly” apologized to those he had deceived. He admitted to using “bad judgment” both by appearing in adult films in his youth and by lying about them as a public official. He was first elected in 2008. “I was shocked and embarrassed to be confronted with this so many years later,” said Suben, who has also served as a judge. “I was embarrassed for my family and friends who stood by me. I also denied my actions to my family, my friends and my staff.” He declined to say whether he plans to resign.

Opening Bell: 05.17.12

White House Steps Up Push To Toughen Rules On Banks (WSJ) White House officials have intensified their talks with the Treasury Department in the days since J.P. Morgan's losses came to light, these people say—representing the first tangible political impact from a trading mess that has cost one of the nation's most prominent banks more than $2 billion...White House and Treasury officials are still determining whether the Volcker rule would have prevented the losses at J.P. Morgan, people familiar with the discussions said. Some of the president's political advisers are concerned that the J.P. Morgan trades, even if determined to violate the spirit of the rule, might slip through the regulatory net. From 'Caveman' To 'Whale' (WSJ) Even after Dynegy's holding company filed for bankruptcy protection on Nov. 7, the trade seemed like it still would be a loser for Mr. Iksil and J.P. Morgan. Only about six weeks remained until the trade was set to expire, and another company needed to default for J.P. Morgan to make money and the bullish hedge funds to lose out. Some traders took to calling Mr. Iksil a "caveman" for stubbornly pursing the trade. Mr. Iksil continued to bet against the index, however, and it soon weakened, causing a buzz among unhappy rivals, these traders say. "We called the trade the 'pain trade' and the 'widow maker'; it kept going down for no reason," said a trader at another firm, who called his broker and says he was told it was Mr. Iksil who was doing all the bearish trading. "It felt like Bruno was trying to wipe everyone out." Then on Nov. 29, in something of a shock, AMR Corp., American Airlines' parent company and one of the companies in the index, filed for bankruptcy protection. "People freaked out," recalls a hedge-fund trader. The index weakened significantly, allowing J.P. Morgan to rack up about $450 million in total profits from the trade, according to traders. Rival firms suffered similar-size losses. It capped a successful year for Mr. Iksil and his group, though the profits would be more than offset this year when they shifted to a more bullish tack on corporate credit, losing $2 billion-plus in the process. Goldman to Cash Out $1 Billion of Facebook Holding in IPO (Bloomberg) The investment bank and its funds will sell 28.7 million of the 65.9 million shares they own, more than twice the amount initially planned, Menlo Park, California-based Facebook said yesterday in a filing. The shares are being offered in a range of $34 to $38 apiece, meaning the stock being sold in this week’s IPO is valued between $975 million and $1.09 billion. SEC Probes Roles Of Hedge Fund In CDOs (WSJ) U.S. securities regulators are investigating hedge-fund firm Magnetar Capital LLC, which bet on several mortgage-bond deals that wound up imploding during the financial crisis, according to people familiar with the matter. While Magnetar has faced scrutiny over its role in various collateralized debt obligations, or CDOs, the Illinois firm itself now is a target of an investigation by the Securities and Exchange Commission, these people said. ECB Bars Access to Four Greek Banks (FT) The move raises the pressure on Greece to stick to its international bailout by highlighting the risk that eurozone central bankers could pull the plug on its financial system. It reflected ECB fears that a planned recapitalisation of Greece’s banks could be delayed. Greek Euro Exit Would Risk Asia Crisis-Style Rout, Zeti Says (Bloomberg) A Greek exit from the euro could cause contagion comparable to the Asian financial crisis, according to Malaysia’s central bank Governor Zeti Akhtar Aziz, who had first-hand experience of that turmoil. “The worst-case scenario is what we saw in Asia,” Zeti, 64, said in an interview with Bloomberg Television in Istanbul yesterday. “When one economy collapses, then the market usually moves on to focus on the next one, then there will be a contagion that will affect different countries that probably don’t deserve those kinds of consequences.” Strippers in Paris Go on Strike, Say Wages 'Miserable' (Reuters) The Crazy Horse, one of the most popular establishments of its kind in the world, said it was forced to cancel performances this week for the first time since the cabaret was created in 1951. The night club, which declined to give details on salary demands or current wages, said in a statement that it had always taken the wellbeing of its artists very seriously and that talks were continuing to resolve the dispute. "It's an exceptional place which has the specialty of presenting a fully naked show," Suzanne, one of the dancers, told RTL radio. "What's wrong is that we are asked to work 24 days per month for a pay that is worse than miserable," she said. JPMorgan’s Trading Loss Is Said to Rise at Least 50% (NYT) The trading losses suffered by JPMorgan Chase have surged in recent days, surpassing the bank’s initial $2 billion estimate by at least $1 billion, according to people with knowledge of the losses. When Jamie Dimon, JPMorgan’s chief executive, announced the losses last Thursday, he indicated they could double within the next few quarters. But that process has been compressed into four trading days as hedge funds and other investors take advantage of JPMorgan’s distress, fueling faster deterioration in the underlying credit market positions held by the bank. A spokeswoman for the bank declined to comment, although Mr. Dimon has said the total paper trading losses will be volatile depending on day-to-day market fluctuations. Several on FOMC Said Easing May Be Needed on Faltering (Bloomberg) The Federal Reserve signaled further monetary easing remains an option to protect the U.S. economy from the danger that lawmakers will fail to reach agreement on the budget or Europe’s debt woes worsen. Several members of the Federal Open Market Committee said new actions could be necessary if the economy loses momentum or “downside risks to the forecast became great enough,” according to minutes of the Federal Open Market Committee’s April meeting released yesterday in Washington. Judge Denies Gupta's Wiretap Motion (NYP) Ex-Goldman Sachs director Rajat Gupta lost his bid to get three key wiretaps tossed as evidence in his upcoming insider-trading trial. Manhattan federal judge Jed Rakoff gave tentative approval yesterday for the jury to hear the wiretaps, which are crucial to the government’s case against Gupta. A former head of McKinsey & Co., who also sat on Procter & Gamble’s board, Gupta is accused of feeding tips to ex-hedge funder Raj Rajaratnam, who began an 11-year prison term last October for insider trading. The taped conversations between Rajaratnam and his traders have him talking about tips from a unnamed leaker on Goldman’s board. Man protests restaurant's all-you-can-eat policy (TMJ4) A disturbance at a local restaurant when one man got upset that an all-you-can-eat fish fry didn't live up to its name. At 6'6" and 350 lbs, Bill Wisth admits he's a big guy who can pack it away more than most. And he wants one restaurant to make all-you-can-eat, all he can eat too. "It's false advertising," said Wisth to TODAY'S TMJ4. He was there Friday when the restaurant cut him off after he ate a dozen pieces. "Well, we asked for more fish and they refused to give us any more fish," recalled Wisth. The restaurant says it was running out of fish and patience; arguing Bill has been a problem customer before. They sent him on his way with another eight pieces, but that still wasn't enough. He was so fired up, he called the police. "I think that people have to stand up for consumers," said Wisth. Elizabeth Roeming is a waitress there and says they've tried to work with Bill over the years -- like letting him have a tab he still hasn't paid off. Bill isn't backing down, saying his fish fry fight isn't over. But in the end, even he had something nice to say. "They do have like some of the best pizza in town if you like deep dish pizza," said Wisth. He says he will picket every Sunday until the restaurant rethinks what happened.