Opening Bell: 03.11.13

EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (Bloomberg) European leaders grappling with political deadlock in Italy and spiraling unemployment in France will turn to a financial rescue for Cyprus in an effort to stave off a return of market turmoil over the debt crisis. European Union leaders will meet for a March 14-15 summit in Brussels to discuss terms for Cyprus, including the island nation’s debt sustainability and possibly imposing losses on depositors. That comes as Italy struggles to form a government after an inconclusive Feb. 24-25 election and as concern over the French economy mounts with unemployment at a 13-year high. Spain's Bailout Fund Said to Seek Help on Bank Strategy (WSJ) Spain's bank bailout fund is seeking to hire advisers to help shape a long-term strategy for dealing with its portfolio of nationalized lenders, a week after calling off an auction of one of the most troubled banks. People briefed about the plan said the fund, known by its Spanish acronym FROB, will make contact with strategic consultants, and possibly with investment banks, once the plan has been approved by the FROB's board of directors. Is There Life After Work? By Erin Callan (NYT) "I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left...I have often wondered whether I would have been asked to be C.F.O. if I had not worked the way that I did. Until recently, I thought my singular focus on my career was the most powerful ingredient in my success. But I am beginning to realize that I sold myself short. I was talented, intelligent and energetic. It didn’t have to be so extreme. Besides, there were diminishing returns to that kind of labor. I didn’t have to be on my BlackBerry from my first moment in the morning to my last moment at night. I didn’t have to eat the majority of my meals at my desk. I didn’t have to fly overnight to a meeting in Europe on my birthday. I now believe that I could have made it to a similar place with at least some better version of a personal life. Not without sacrifice — I don’t think I could have “had it all” — but with somewhat more harmony. I have also wondered where I would be today if Lehman Brothers hadn’t collapsed. In 2007, I did start to have my doubts about the way I was living my life. Or not really living it. But I felt locked in to my career. I had just been asked to be C.F.O. I had a responsibility. Without the crisis, I may never have been strong enough to step away. Perhaps I needed what felt at the time like some of the worst experiences in my life to come to a place where I could be grateful for the life I had. I had to learn to begin to appreciate what was left. At the end of the day, that is the best guidance I can give. Whatever valuable advice I have about managing a career, I am only now learning how to manage a life." Paper Trail Goes Cold in Case Against S&P (Reuters) In early 2007, as signs of distress began appearing in securities backed by residential mortgages, executives at Standard & Poor's began advising analysts responsible for rating mortgage bonds that they should put the phrase "privileged and confidential" on emails to one another. Analysts working for the McGraw Hill Cos division also were discouraged from doodling on notepads and official documents during meetings to discuss pending deals and existing ratings, several former S&P employees said. That was not the first time S&P had tried to caution employees about paper trails. In 2005, a full two years before the housing market began to melt down, several top S&P managers attended an off-site meeting at hotel in Old Saybrook, Connecticut, to discuss ways to increase the fees it collected from Wall Street banks for rating mortgage bonds. A former S&P executive said that after the meeting, employees were instructed to discard any notes they had taken from the meeting. InTrade Shuts Down (WSJ) InTrade, the Ireland-based website that allows users to place wagers on non-sports-related upcoming events, announced on Sunday that it is shutting its site down. In an official statement, the company does not go into great detail as to why it is closing its doors, only that it is related to “financial irregularities which, in accordance with Irish law,” require InTrade to cease operations until resolved. “At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded,” the company said. Commodities Squeeze Banks (WSJ) The sharp fall in commodity revenue has already claimed some victims. UBS AG, the Swiss bank that has been under pressure to cut costs and improve its performance, last year closed all its commodities-trading desks aside from those dealing in precious metals. Goldman, UBS, Deutsche Bank, and Barclays have all suffered departures of senior commodity traders to hedge funds and independent trading companies over the last several months. Average staffing in commodities trading declined 5.9% last year at major banks, according to Coalition. Artist Teaches George W. Bush How To Paint (Fox5) An artist in Cumming, GA spent a month teaching former President George W. Bush how to paint. Bonnie Flood said that President Bush has a passion for painting and shows real potential as an artists. "He started off painting dogs. I think he said he painted 50 dogs," Flood said. "He pulled out this canvas and started painting dogs and I thought, 'Oh my God, I don't paint dogs!" Flood, who does most of paintings at her home in Cumming, occasionally conducts workshops in Florida. That's where the former President heard about her. The next thing she knew, she was packing up her paints to spend a month in Boca Grande with President Bush. She said that she spent about six hours a day with the President, mixing paints and teaching him proper brush strokes. She says she wasn't intimidated but admits she really didn't know what to call him until she found the magic number. "I called him '43' because that's the way he signed his paintings. "When I really wanted him to do something, I would say, 'Mr. President you know that you don't do it that way.'" She says the President learned quickly and soon started painting fewer dogs and more landscapes. "He has such a passion for painting, it's amazing," Flood said. "He's going to go down in the history books as a great artist." Hostess Creditor, Private-Equity Firms Show Interest in Twinkies Brand (Reuters) Hostess Brands creditor Silver Point Capital and hedge fund Hurst Capital have expressed interest in buying Hostess's snack cake brands, including Twinkies, the New York Post reported. Paulson Said to Explore Puerto Rico as Home With Low Tax (Bloomberg) John Paulson, a lifelong New Yorker, is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5 billion he has invested in his own hedge funds, according to four people who have spoken to him about a possible relocation. More US Profits Parked Abroad (WSJ) A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40% of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011. Twitter, Social Media Are Fertile Ground For Stock Hoaxes (Reuters) "Twitter pump and dump schemes are obviously something for the market to be concerned about, even if they are just a new way for people to do schemes that have been done forever," said Keith McCullough, chief executive officer at Hedgeye Risk Management in New Haven, Connecticut. He uses Twitter and has more than 22,000 followers. In such hoaxes, anonymous users set up accounts with names that sound like prominent market players, issue negative commentary, and spark massive declines. The selling that follows shows how the rapid spread of information on social media can make for volatile trading, and is a warning to investors who trade on news before fully verifying the source. SEC: Goldman Cannot Ignore Proposal to Split Chairman, CEO Roles (Reuters) SEC staff sent a letter to Goldman internal counsel Beverly O'Toole this week, saying the agency is "unable to concur" with Goldman's view that the shareholder proposal does not warrant a vote. El Paso Sheriff's deputies arrest 2 ice cream men for possession of pot (EPT) Saturday afternoon, Sheriff's deputies spotted a purple ice cream truck with a cracked windshield and an expired registration sticker along the 8600 block of Alameda. During the traffic stop, one of the occupants left the vehicle and led deputies on a brief foot pursuit before being caught. Two tupperware bowls containing a green leafy substance, believed to be marijuana, was found on the man, who was identified as 19-year-old Elijah Sanchez. The second occupant, identified as 29-year-old Anthony Arellano, was also charged with possession of marijuana after deputies found marijuana inside the vehicle. Arellano has been arrested in the past for numerous felony charges and a previous possession of marijuana charge in 2006, deputies said.
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EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (Bloomberg)
European leaders grappling with political deadlock in Italy and spiraling unemployment in France will turn to a financial rescue for Cyprus in an effort to stave off a return of market turmoil over the debt crisis. European Union leaders will meet for a March 14-15 summit in Brussels to discuss terms for Cyprus, including the island nation’s debt sustainability and possibly imposing losses on depositors. That comes as Italy struggles to form a government after an inconclusive Feb. 24-25 election and as concern over the French economy mounts with unemployment at a 13-year high.

Spain's Bailout Fund Said to Seek Help on Bank Strategy (WSJ)
Spain's bank bailout fund is seeking to hire advisers to help shape a long-term strategy for dealing with its portfolio of nationalized lenders, a week after calling off an auction of one of the most troubled banks. People briefed about the plan said the fund, known by its Spanish acronym FROB, will make contact with strategic consultants, and possibly with investment banks, once the plan has been approved by the FROB's board of directors.

Is There Life After Work? By Erin Callan (NYT)
"I didn’t start out with the goal of devoting all of myself to my job. It crept in over time. Each year that went by, slight modifications became the new normal. First I spent a half-hour on Sunday organizing my e-mail, to-do list and calendar to make Monday morning easier. Then I was working a few hours on Sunday, then all day. My boundaries slipped away until work was all that was left...I have often wondered whether I would have been asked to be C.F.O. if I had not worked the way that I did. Until recently, I thought my singular focus on my career was the most powerful ingredient in my success. But I am beginning to realize that I sold myself short. I was talented, intelligent and energetic. It didn’t have to be so extreme. Besides, there were diminishing returns to that kind of labor. I didn’t have to be on my BlackBerry from my first moment in the morning to my last moment at night. I didn’t have to eat the majority of my meals at my desk. I didn’t have to fly overnight to a meeting in Europe on my birthday. I now believe that I could have made it to a similar place with at least some better version of a personal life. Not without sacrifice — I don’t think I could have “had it all” — but with somewhat more harmony. I have also wondered where I would be today if Lehman Brothers hadn’t collapsed. In 2007, I did start to have my doubts about the way I was living my life. Or not really living it. But I felt locked in to my career. I had just been asked to be C.F.O. I had a responsibility. Without the crisis, I may never have been strong enough to step away. Perhaps I needed what felt at the time like some of the worst experiences in my life to come to a place where I could be grateful for the life I had. I had to learn to begin to appreciate what was left. At the end of the day, that is the best guidance I can give. Whatever valuable advice I have about managing a career, I am only now learning how to manage a life."

Paper Trail Goes Cold in Case Against S&P (Reuters)
In early 2007, as signs of distress began appearing in securities backed by residential mortgages, executives at Standard & Poor's began advising analysts responsible for rating mortgage bonds that they should put the phrase "privileged and confidential" on emails to one another. Analysts working for the McGraw Hill Cos division also were discouraged from doodling on notepads and official documents during meetings to discuss pending deals and existing ratings, several former S&P employees said. That was not the first time S&P had tried to caution employees about paper trails. In 2005, a full two years before the housing market began to melt down, several top S&P managers attended an off-site meeting at hotel in Old Saybrook, Connecticut, to discuss ways to increase the fees it collected from Wall Street banks for rating mortgage bonds. A former S&P executive said that after the meeting, employees were instructed to discard any notes they had taken from the meeting.

InTrade Shuts Down (WSJ)
InTrade, the Ireland-based website that allows users to place wagers on non-sports-related upcoming events, announced on Sunday that it is shutting its site down. In an official statement, the company does not go into great detail as to why it is closing its doors, only that it is related to “financial irregularities which, in accordance with Irish law,” require InTrade to cease operations until resolved. “At this time and until further notice, it is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded,” the company said.

Commodities Squeeze Banks (WSJ)
The sharp fall in commodity revenue has already claimed some victims. UBS AG, the Swiss bank that has been under pressure to cut costs and improve its performance, last year closed all its commodities-trading desks aside from those dealing in precious metals. Goldman, UBS, Deutsche Bank, and Barclays have all suffered departures of senior commodity traders to hedge funds and independent trading companies over the last several months. Average staffing in commodities trading declined 5.9% last year at major banks, according to Coalition.

Artist Teaches George W. Bush How To Paint (Fox5)
An artist in Cumming, GA spent a month teaching former President George W. Bush how to paint. Bonnie Flood said that President Bush has a passion for painting and shows real potential as an artists. "He started off painting dogs. I think he said he painted 50 dogs," Flood said. "He pulled out this canvas and started painting dogs and I thought, 'Oh my God, I don't paint dogs!" Flood, who does most of paintings at her home in Cumming, occasionally conducts workshops in Florida. That's where the former President heard about her. The next thing she knew, she was packing up her paints to spend a month in Boca Grande with President Bush. She said that she spent about six hours a day with the President, mixing paints and teaching him proper brush strokes. She says she wasn't intimidated but admits she really didn't know what to call him until she found the magic number. "I called him '43' because that's the way he signed his paintings. "When I really wanted him to do something, I would say, 'Mr. President you know that you don't do it that way.'" She says the President learned quickly and soon started painting fewer dogs and more landscapes. "He has such a passion for painting, it's amazing," Flood said. "He's going to go down in the history books as a great artist."

Hostess Creditor, Private-Equity Firms Show Interest in Twinkies Brand (Reuters)
Hostess Brands creditor Silver Point Capital and hedge fund Hurst Capital have expressed interest in buying Hostess's snack cake brands, including Twinkies, the New York Post reported.

Paulson Said to Explore Puerto Rico as Home With Low Tax (Bloomberg)
John Paulson, a lifelong New Yorker, is exploring a move to Puerto Rico, where a new law would eliminate taxes on gains from the $9.5 billion he has invested in his own hedge funds, according to four people who have spoken to him about a possible relocation.

More US Profits Parked Abroad (WSJ)
A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40% of their annual profits from U.S. taxes, though it left the money off-limits for paying dividends, buying back shares or making investments in the U.S. The 60 companies were chosen for the analysis because each of them had held at least $5 billion offshore in 2011.

Twitter, Social Media Are Fertile Ground For Stock Hoaxes (Reuters)
"Twitter pump and dump schemes are obviously something for the market to be concerned about, even if they are just a new way for people to do schemes that have been done forever," said Keith McCullough, chief executive officer at Hedgeye Risk Management in New Haven, Connecticut. He uses Twitter and has more than 22,000 followers. In such hoaxes, anonymous users set up accounts with names that sound like prominent market players, issue negative commentary, and spark massive declines. The selling that follows shows how the rapid spread of information on social media can make for volatile trading, and is a warning to investors who trade on news before fully verifying the source.

SEC: Goldman Cannot Ignore Proposal to Split Chairman, CEO Roles (Reuters)
SEC staff sent a letter to Goldman internal counsel Beverly O'Toole this week, saying the agency is "unable to concur" with Goldman's view that the shareholder proposal does not warrant a vote.

El Paso Sheriff's deputies arrest 2 ice cream men for possession of pot (EPT)
Saturday afternoon, Sheriff's deputies spotted a purple ice cream truck with a cracked windshield and an expired registration sticker along the 8600 block of Alameda. During the traffic stop, one of the occupants left the vehicle and led deputies on a brief foot pursuit before being caught. Two tupperware bowls containing a green leafy substance, believed to be marijuana, was found on the man, who was identified as 19-year-old Elijah Sanchez. The second occupant, identified as 29-year-old Anthony Arellano, was also charged with possession of marijuana after deputies found marijuana inside the vehicle. Arellano has been arrested in the past for numerous felony charges and a previous possession of marijuana charge in 2006, deputies said.

Related

Opening Bell: 02.08.13

Barclays CEO’s Ethics Talk Drowns Out Silence on Profit (Bloomberg) Jenkins, who took over after Robert Diamond departed in the wake of the bank’s fine for rigging Libor, is set to reveal the conclusions of his six-month review of the lender’s operations at London’s Royal Horticultural Halls on Feb. 12. While he may cut about 2,000 jobs, pledge to reform culture and reduce pay to boost returns, he’s unlikely to follow UBS AG and eliminate entire business lines, according to investors and analysts. That’s because the securities unit that Diamond built out of the remains of Barclays De Zoete Wedd over the 15 years from 1996 still contributes about half of the lender’s profit. Meredith Whitney Pans New Citi Chief Corbat (NYP) “He didn’t give us an agenda and he didn’t even give us a stamp for when he’s going to give us an agenda, so it left people a little bit uninspired,” she said during an interview with Bloomberg TV yesterday. Deutsche Bank Said to Fire 10 Traders as Banks Retrench (Bloomberg) Deutsche Bank AG fired between 10 and 12 European power and natural gas traders in London as it cuts staff trading physical commodities, two people with knowledge of the matter said. There are at least two traders still unwinding positions as Europe’s biggest lender is reducing trading in physical energy markets, said the people, who asked for anonymity because the information is private. Nick Bone, a company spokesman in London, declined to comment when reached yesterday by phone. Buffett’s Son Says He’s Prepared Whole Life for Berkshire Role (Bloomberg) Protecting Berkshire’s culture “means that I need to make sure that people feel that they’ve been treated fairly, that whatever my dad committed to them remains committed,” Howard Buffett, 58, said in an interview with Bloomberg Television’s Betty Liu, airing today. The younger Buffett is a director of Coca-Cola Co., the world’s largest soft-drink maker, and once was the head of investor relations for Archer-Daniels-Midland Co. He said observing his father has helped him get ready to lead a board that also includes Microsoft Corp. co-founder Bill Gates and Stephen Burke, CEO of Comcast Corp.’s NBC Universal unit. “In a way, I’ve been preparing for it all my life,” Buffett told Liu. “In another way, I’ve been on the Berkshire board now 20 years. That’s a preparation.” Justin Timberlake Named Creative Director of Bud Light Platinum (Billboard) As part of the deal, Timberlake will be charged with providing “creative, musical and cultural curation” for the Bud Light Platinum brand, per a press release announcing the partnership. Additional terms were not disclosed. “Bud Light Platinum brings a refined, discerning aesthetic to beer that plays well with what I'm doing,” Timberlake said in a statement. Monte Paschi says considering legal action to protect business (Reuters) talian bank Monte dei Paschi said on Friday it is considering legal action against anyone who damages its commercial activity or spreads false information about the bank. In a statement, the bank said it had become the target of "attacks of various kinds involving, in certain circumstances, employees, creating considerable problems in the normal course of business. It said it was considering civil and penal action. Audacious Hack Exposes Bush Family Pix, E-Mail (TSG) The hacker also intercepted photos that George W. Bush e-mailed two months ago to his sister showing paintings that he was working on, including self-portraits of him showering and in a bathtub. Another image shows the former president painting at the family’s Maine retreat. Goldman Readies Fund Business For 'Volcker' (WSJ) For 20 years, Goldman wooed clients to invest in its private-equity funds with the security blanket that the bank and its partners went along for the same ride. But that is about to change. The looming "Volcker rule" is expected to sharply reduce the bank's investment in its own funds. That is forcing Goldman to make major changes in a $50 billion business that has reaped big profits for the bank and its employees and clients. Goldman likely will have to shrink the size of its own investment in its funds to just 3% from as much as 37% once the rule is finalized later this summer. The rule, part of the Dodd-Frank financial-overhaul law and named after former Federal Reserve Chairman Paul Volcker, aims to restrict banks from making big bets with their own money. Goldman expects new funds it raises will be considerably smaller. The New York bank also will change the name of the business to avoid referencing its own name. GS Capital Partners and future funds may become "Broad Street," referring to both the firm's old headquarters and its first leveraged-buyout fund launched in 1986, according to people involved in the business. Ex-Tyco chief gets another chance at parole (NYP) Kozlowski was denied parole in April when state officials tossed out his application saying his release was not "compatible with the welfare of society at large." But in a ruling made public today, Justice Carol Huff this week called that decision "an unauthorized re-sentencing" of Kozlowski, adding that it lacked specifics. In making its decision, she said, the parole board must consider other factors beyond the crime including the inmate's institutional record, which the tycoon asserted is exemplary. The Politics Of Chris Christie's Weight (WSJ) The latest chatter about Mr. Christie's heaviness began on the "Late Show With David Letterman," when he pulled out a pastry and began eating as the comic asked whether his frequent jokes about the overweight Republican were offensive. The day after the good-natured stunt, Mr. Christie opened up about his struggles to lose weight. Later, a former White House physician, Connie Mariano, said she worried his weight made him a "time-bomb" at risk of dying in office. Mr. Christie quickly shot back, calling Dr. Mariano a fame-seeking "hack" who didn't know his health history and was needlessly worrying his children. On Thursday, Dr. Mariano, who attended to presidents George H.W. Bush, Bill Clinton and George W. Bush, said she stood by her assessment. "When I see someone of that size, I worry about various medical issues," she said. "It was not meant to be an attack on him personally."

Opening Bell: 02.13.12

Société Générale to Restructure (WSJ) Société Générale said Wednesday it will roll out a restructuring plan to cut costs and boost revenue, as the French bank posted a larger-than-expected fourth-quarter loss and painted a stark picture of the outlook for retail banking in France against the backdrop of a stagnant economy...The Paris-based lender, France's second-largest publicly listed bank by market capitalization, reported a €476 million net loss ($640 million) in the three months ended Dec. 31, compared with €100 million net profit last year, well below analysts' expectations. Apple's Cook Calls Einhorn Lawsuit 'Silly Sideshow', Says Company's Not Tight-Fisted (CNBC) Wading into a controversy that was bought to a head last week by fund manager David Einhorn, Cook touted his company's investment in product development and research. The CEO rejected the basis of a lawsuit filed by Einhorn that the fund manager asserts will restrict Apple's ability to distribute its excess cash to its investors. "Frankly I find it bizarre that we would find ourselves being sued for doing something that's good for shareholders," Cook told the Goldman Sachs' Technology and Internet Conference. Apple checkmate: Another big investor backs company vs. Einhorn (NYP) The California State Teachers’ Retirement System, a $157.8 billion pension fund that owns 1.6 million Apple shares, told The Post they are siding with Apple against Einhorn. CalSTRS supports the proposal because “blank check” preferred stock “can be used as anti-takeover defenses and entrench a board,” said Anne Sheehan, the director of corporate governance. SAC Probe Said to Be Hampered by Auto-Deleted E-Mails (Bloomberg) The federal investigation of insider trading by SAC Capital Advisors LP and its founder, Steven A. Cohen, has been hampered by a lack of extensive e-mail evidence. One reason: During the period of time at the heart of the probe, July 2008, SAC automatically deleted its e-mails. Unluckily for the U.S. government, SAC changed its policy just months later, requiring preservation of electronic communications. By then, most messages relevant to the $700 million in alleged illegal trades had been erased, according to a person familiar with the matter. Until the fall of 2008, SAC e-mails were deleted from employee electronic mailboxes every 30 or 60 days, according to SAC General Counsel Peter Nussbaum. Comcast Buys Rest Of NBC's Parent (WSJ) Comcast Corp, in a bullish bet on traditional entertainment, is buying General Electric Co.'s stake in NBCUniversal for $16.7 billion, giving the cable operator full ownership of the film and television giant much sooner than expected. Kate Upton on Antarctic shoot for SI: 'My body was shutting down' (NBC) The theme of this year’s issue, which hit newsstands Tuesday, put models in exotic settings on all seven continents. Upton was sent to the most forbidding one of them all, Antarctica, to endure with frigid temperatures in skimpy outfits, including the parka top and bikini bottom she is wearing on the magazine's cover. “I was very surprised by the news that that’s where my shoot was going to be located,’’ she said on TODAY Tuesday in her first interview since making the cover. “It was freezing. I’m from Florida, so it wasn’t great for me. When I came back I was losing hearing and eyesight because my body was shutting down, it was working so hard to keep warm. I was thinking warm thoughts." Eurozone Worries Intensify (WSJ) Industrial production in the euro zone fell at its sharpest quarterly rate in more than three years at the end of last year, despite rising in December, stoking fears of a third consecutive quarterly economic contraction. But data released on Wednesday suggested the euro-zone economy reached a low point in November and could be showing early signs of recovery, as production in Germany, the currency bloc's biggest single economy, rose in December after falling for four consecutive months. Russia Says It Is Moving Away From Currency Manipulation (CNBC) FYI. ING To Cut 2,400 More Jobs (WSJ) The Netherlands' biggest bank by assets, which had about 85,000 employees world-wide at the end of the fourth quarter, is cutting costs in response to the weak European economy and tougher regulations for banks. As US Gasoline Prices Soar, Hedge Fund Oil Bets Near Record (Reuters) U.S. motorists searching for someone to blame for the highest gasoline prices ever at this time of year have an easy target: hedge funds who have been quietly amassing winning bets on hundreds of millions of barrels of oil. At a filling station in Midtown New York last week, several people were prepared to blame traders on Wall Street as they paid more than $4 per gallon to fill up their cars. "It really is not supply and demand. It's definitely speculation," said John Keegan, an exterminator with pest control company Terminate Control, who was filling up his van. A cab driver said he was convinced the price would be just $1 a gallon if the government "stopped Wall Street trading oil." No Ordinary Affenpinscher, Banana Joe Is Named Best in Show (NYT) Banana Joe, a black dog with a monkeylike face, became the first affenpinscher to win Best in Show at the Westminster Kennel Club Dog Show on Tuesday night. He defeated six dogs, one a Portuguese water dog on the same night that Bo, who is the same breed, watched his master, President Obama, deliver the State of the Union address. “He’s won a lot of big, big shows, but none like this one,” said his handler, Ernesto Lara, who held onto Joey, as he calls him, during a postshow news conference. Joey sat calmly, as if he could have gone back onto the floor of Madison Square Garden and taken on his challengers again. He stuck his tongue out as Lara answered questions. He didn’t appear to need any celebratory drinks or snacks. “I don’t think he has anything to prove,” Lara said. “I’m not bragging, this is just the way he is. The best thing is that I was in cue with him.” He added: “This isn’t a breed you train. He’s like a human. You befriend him.”

Opening Bell: 03.19.12

Goldman Sachs Board Must Act on Smith Op-Ed, Ex-Partner Writes (Bloomberg) Goldman Sachs directors must investigate a former employee’s allegations about a change in the firm’s culture, Jacki Zehner, who was a partner when she left the firm in 2002, wrote on her blog. “These are very serious accusations from a credible person in my view and I hope it does indeed provide a ‘wake-up’ call to the board of directors,” wrote Zehner, who was the first female trader promoted to partner and is married to a former partner. She is now CEO and president of Women Moving Millions, a non- profit supporting the advancement of women and girls worldwide. “It is the board that is accountable to shareholders and before they take another paycheck I hope they ask a heck of a lot of questions and get honest answers,” Zehner, 47, wrote in her March 16 commentary...Janet Tiebout Hanson, who left Goldman Sachs after almost 14 years in 1993 and in 1997 founded the women’s networking firm 85 Broads, wrote her own blog response to Smith’s op-ed piece, calling it a “cowardly act.” “By tossing a verbal hand grenade on his way out the door, he sullied the reputations of the vast majority of the people at the firm who work and live by the highest possible professional standards every single day,” wrote Hanson, who was the first woman at Goldman Sachs to be promoted into sales management. “He is just a quitter who never gave management an opportunity to respond before he verbally strafed the entire firm in print.” Is it Magic Johnson vs. Steve Cohen for Dodgers? (CBS) Cohen's appeal? Cash, mostly. Although Johnson is believed to have the highest total offer on the table (a rumored $1.6 billion), Cohen's bid has more cold, hard, redeemable U.S. currency involved ($900 million, to be precise). That may appeal to McCourt, who's facing a pricey divorce settlement with little more than exposed pocket linings and the Dodger Stadium parking lots to his sullied name. Additionally, as CBSSports.com Insider Jon Heyman has reported, Cohen may have additional credibility in the eyes of MLB because of his willingness to bring on board seasoned baseball men like Tony La Russa and former deputy commissioner Steve Greenberg. Lagarde Says World Can’t Be Lulled Into Sense of Security (Bloomberg) nternational Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant as oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” Lagarde said today at a speech in Beijing at the China Development Forum. “We cannot go back to business as usual.” Gupta’s Lawyer Says ‘Wrong Man’ on Trial in Insider Case (Bloomberg) Gupta’s lawyer, Gary Naftalis, said that Rajaratnam had a different Goldman Sachs tipper, who gave him confidential information about Intel Corp. and Apple, the lawyer said. That Goldman source was also caught on government wiretaps passing the inside information, Naftalis said. Where Was The Bracket Born? (WSJ) Steven Murray, a Colorado Mesa University professor who has studied the history of sports, said the concept that inspired the bracket—a single-elimination sporting competition with many rounds—isn't a modern invention. He said the ancient Greeks held wrestling and boxing competitions starting around 700 B.C. where the combatants would draw lots to set pairings. If the tournament pairings were posted in a bracket form, Murray said, they probably would have been painted with pigment on scrolls, placards or walls and wouldn't have survived...By some accounts, the oldest existing sports bracket lies in the archives of the Wimbledon Lawn Tennis Museum, which houses memorabilia from the famous tennis tournament. According to the curator, Honor Godfrey, the Lawn Tennis Championship printed a bracket in the program to display the pairings in its inaugural year, 1877. Godfrey said she couldn't find a copy of that program, but she did unearth a Xeroxed copy of the program from the following year, 1878. That program, issued by the "All England Croquet and Lawn-Tennis Club" announced the "Lawn Tennis Championship Meeting," which would be contested for a prize of 19 Guineas. Inside, on a full page, is a one-sided bracket with 34 names. To make the pairings add up correctly, a certain E.R. Seymour and a certain H.F. Lawford were awarded byes. To this day, Wimbledon's program includes a bracket of the tournament field. Apple To Say Monday How It Will Use Cash Hoard (NYT) Apple has finally decided what to do with its cash hoard of nearly $100 billion. The company issued an unusual media alert on Sunday evening saying it planned to announce on Monday morning the long-awaited outcome to a discussion by its board about what to do with its cash balance. It will announce its plans in a conference call at 9 a.m. Eastern time. Goldman's God Problem Goes Away, For Now (Reuters) For the past two years, a group of religious institutions that hold Goldman shares has asked the investment bank to review executive compensation packages and has been successful in getting its proposal taken up at regular shareholders' meetings. This year, the group, including the Sisters of St. Francis of Philadelphia, again sought to have its proposal voted on by shareholders. But for the first time, the U.S. Securities and Exchange Commission sided with Goldman, which argued it had already complied with the request Scores Arrested as the Police Clear Zuccotti Park (City Room) The operation occurred after hundreds of people had gathered in the financial district to observe the founding of Occupy Wall Street six months ago. Earlier, protesters had embarked upon a winding march, after which police officers made initial arrests of about a dozen people near the park...Kobi Skolnick, 30, said that officers pushed him in several directions and that as he tried to walk away, he was struck from behind in the neck. “One of the police ran and hit me with a baton,” he said. Cambodia Embracing Capitalism With First IPO Since Khmer Rouge (Bloomberg) Enthusiasm about the start of trading at the exchange, which opened last July without a single listed company, extends beyond the borders of the Southeast Asian country. Investors including Templeton Emerging Markets Group Chairman Mark Mobius said they plan to participate in Cambodia’s stock market after state-owned Phnom Penh Water Supply Authority has its initial public offering next month. “The potential for investors in Cambodia is excellent,” Mobius, who oversees about $50 billion, wrote in an e-mail. “The listing of publicly traded stocks will drive up interest and demand. If a country can list its state-owned enterprises and list enough stocks so that foreign investors can get involved, then it can be very, very good.” E! Network Brings Clint Eastwood Clan (WSJ) Actor and director Clint Eastwood is about to add a credit to his nearly 60-year career: reality-television star. Mr. Eastwood; his wife, Dina; and two of his children, 18-year-old Francesca and 15-year-old Morgan, will appear in "Mrs. Eastwood & Co.," a reality series that tracks the family in Los Angeles, at their Carmel, Calif., home and beyond. The 10-episode series also will follow Overtone, a South African singing group that Mrs. Eastwood manages. The band appeared on the soundtrack of Mr. Eastwood's 2009 film "Invictus," which recounts Nelson Mandela's attempt to use rugby to help unify post-apartheid South Africa.

Opening/Hurricane Bell: 10.29.12

Bracing for Storm, U.S. Stock Markets to Close (Dealbook) All United States stock and options markets will close on Monday as Hurricane Sandy approaches, reversing course as Wall Street braces for the storm to barrel through the heart of the country’s financial center. The decision, made late Sunday night, leaves the American stock markets closed for weather conditions for the first time in nearly three decades. The New York Stock Exchange had previously planned on closing only its physical trading floor, while allowing for trading on its Arca electronic exchange. It has now decided to halt all trading. The Nasdaq and BATS stock markets, which are built on electronic trading, also decided to close. The CME Group, which operates the Nymex commodities exchange, said earlier on Sunday that it would close its physical trading floor on Monday, though trading would continue on its electronic trading platforms. The Securities Industry and Financial Markets Association, or Sifma, said in an e-mailed statement that it was calling for bond trading, which is all done electronically, to close at noon Monday, though it left the final decision to member firms. The N.Y.S.E. last closed trading for weather reasons in 1985, when Hurricane Gloria lashed the metropolitan area. Markets Go Dark Ahead Of Storm (WSJ) Customers had complained to the exchanges and to the Securities and Exchange Commission that partial closures of the market would be too complicated, according to people with knowledge of the matter. US Stock Markets To Possibly Stay Closed Through Tuesday (Reuters) In a statement, the company said that "the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority." Citigroup, Goldman Sachs Shut Some NYC Offices for Storm (Bloomberg) Citigroup and and Goldman Sachs are among Wall Street firms planning to shift operations to other cities and have staff work from home as Hurricane Sandy’s arrival in New York forces evacuations. Employees at Citigroup, the third-biggest U.S. bank by assets, won’t be able to enter Lower Manhattan offices on Greenwich Street and Wall Street, which include the main trading floor, according to a memo sent to workers and confirmed by Shannon Bell, a spokeswoman. Goldman Sachs, whose corporate headquarters at 200 West St. is also located in an evacuation zone, told the staff in an internal memo that most of them will work from home...European-based firms including Deutsche Bank AG, Credit Suisse Group AG and UBS AG, which have offices outside of the mandatory evacuation zone, are making arrangements to provide transportation and hotels for workers. Christie: "Don't Be Stupid" (AP) A year after telling New Jersey residents to "Get the hell off the beach" as Hurricane Irene approached, Gov. Chris Christie has a new message for people on the coastline: "Don't be stupid — get out," Christie said Sunday afternoon at a news conference, where he updated residents on the status of the huge storm bearing down on the state. Stock Pickers Game The Fiscal Cliff (WSJ) A number of companies are seeking to get ahead of the tax increases by paying out big special dividends before Dec. 31. In the past two weeks, at least four Standard & Poor's 500 companies have announced special payouts, including a $750 million payout by casino operator Wynn Resorts Ltd., a $1.1 billion dividend from hospital operator HCA Holdings Inc. and a $1.6 billion dividend from LyondellBasell Industries NV, a New York-listed chemicals group. The game for investors is to figure out which companies could be next. Jay Wong, a Los Angeles-based portfolio manager for Payden & Rydel, a money manager with $75 billion under management, is on high alert for potential payouts. He increased his stake in Wynn earlier this month in anticipation of a special dividend and is looking for others. He declined to be specific, citing a desire to not give his trades away. Occupy Wall Street's Stacey Hessler Splits From Husband (NYP, earlier) The filing lists Curtiss’ occupation as banker and says he earns $65,000 a year. Her job is listed in court papers as “protester” and her employer as “Occupy Wall Street.” Annual salary: $0. Divorce papers cite “irreconcilable differences” for the split, saying the 19-year marriage “is irretrievably broken.” One OWS protester who knows her says that Stacey’s devotion to the movement caused the divorce but that she was unfazed by the breakup. “She didn’t seem sad about any of it,” the source said. “It was just so matter-of-fact.” As recently as last month, Stacey, 39, was sleeping in front of a Wells Fargo bank branch in the Financial District near Zuccotti Park, but it appears she scrambled back home to suburban DeLand to finalize the divorce. Wearing her professional-protester uniform — a bandana and patchwork clothes — she refused to say what her plans were or when she’d be leaving the house. But she did respond when a Post reporter asked about a YouTube video showing her making out with another protester during an Occupy “Kiss In” on Valentine’s Day. “I actually made out with four guys,” she said, laughing wildly. Governments to debate 50 billion euro cut to EU budget (Reuters) The cut will be proposed in the latest EU negotiating text on the bloc's spending plan for 2014-2020, but is unlikely to be deep enough to satisfy Britain, Germany, France and other net budget contributors. They want strict limits on EU spending to reflect the austerity imposed by national governments to reduce debt, and called for cuts of 100-200 billion euros to the total proposed by the EU's executive, the European Commission. The proposal is also likely to anger Poland and other former communist EU countries who are the major beneficiaries of EU funds, and oppose any cuts to the Commission's blueprint which they argue is vital for their future economic growth. "As I see it now, the reduction from the Commission proposal will be 50 billion euros plus. That will be the basis for negotiations," said the source, who spoke on condition of anonymity. Greek Journalist Held Over List of Swiss-Account Holders (Bloomberg) Kostas Vaxevanis, editor of the Greek magazine Hot Doc, was arrested in Athens today, according to a message posted on his Twitter account at 11 a.m. local time. An arrest warrant was issued yesterday after the magazine published what’s been dubbed the “Lagarde list,” an electronic file given to Greece in 2010 by then-French Finance Minister Christine Lagarde of about 2,000 Greeks with Swiss accounts. Insurers Prepare For Impact Of Hurricane Sandy (Reuters) Had Sandy hit in 2011, it may have been more of a problem for the insurance industry, which dealt with record-breaking losses around the world last year, mostly from U.S. tornadoes and Asia-Pacific earthquakes. But in 2012, most insurers' disaster losses are down substantially, leaving them with more capacity to absorb the billions of dollars in costs some expect from Hurricane Sandy. "In terms of losses, I certainly don't think it's going to be the largest loss of the last 100 years," Tom Larsen, senior vice president of Eqecat, said in an interview late Friday. "It's not an end-of-days scenario." SEC Weighs Bringing Back Fractions in Stock Prices (WSJ) The move would at least partly undo an 11-year-old rule that replaced fractions of a dollar in stock prices, like 1/8 and 1/16, with pennies. The idea of that change was to trim investors' trading costs: One-cent increments can lead to narrower gaps between the prices at which brokers buy and sell shares—potentially reducing their opportunity to shave off profits. Those championing the fraction's return say it would spur securities firms to buy and sell more shares of some companies by making it more profitable for them to do so. Opponents say fractions would increase trading costs for investors with little or no benefit to companies. UBS, RBS Traders Suspended as Rates Probe Goes Beyond Libor (Bloomberg) UBS and Royal Bank of Scotland suspended more than three traders in Singapore as regulators investigating Libor-rigging turn their attention to the rates used to set prices on foreign exchange derivatives. At least two foreign-exchange traders at UBS, Switzerland’s largest bank, have been put on leave as part of an internal probe into the manipulation of non-deliverable forwards, a derivative traders use to speculate on the movement of currencies that are subject to domestic foreign exchange restrictions, according to a person with direct knowledge of the operation. Edinburgh-based RBS also put Ken Choy, a director in its emerging markets foreign exchange trading unit, on leave, a person briefed on the matter said on Oct. 26. Women who knew 'cannibal cop' worried they were on his 'cook list' (NYP) “Freaked-out” female acquaintances of would-be cannibal cop Gilberto “Gil” Valle yesterday wondered whether they were on his alleged list of 100 ladies to kidnap, rape, torture, cook — and eat. “I was so shaken when I found out it was him,” said Beverly Seiger, who knew Valle, 28, from the Forest Hills, Queens, park he visited nightly with his wife and baby daughter. “I used to walk his dog. I’ve been to his house many times. He’s been to my house,” she said of Valle, whom federal prosecutors accuse of plotting with three fiendish pals to kidnap, cook and consume scores of females. “I don’t want to be on his list!” Seiger said. “I’m so thin, he would use me as toothpicks. “The women in this neighborhood now are freaked out,” she said. Another female resident asked a reporter, “Are we on this list? “I fit in an oven,” she said, referring to Valle’s alleged boasting online of having an oven “big enough to fit one of these girls if I folded their legs.”

Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Opening Bell: 07.25.12

Sandy Weill: Break Up The Big Banks (CNBC) “What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.” He added: “If they want to hedge what they’re doing with their investments, let them do it in a way that’s going to be market-to-market so they’re never going to be hit.” Bank Of England Spotted Risks At JPMorgan (WSJ) More than a year before JPMorgan racked up billions of dollars in losses from bad trades in its London investment office, Bank of England officials raised concerns internally about potential risks arising from some of the office's activities, but didn't formally alert other regulators, according to people involved in the central bank's talks. In late 2010, employees at the central bank worried that the London arm of J.P. Morgan's Chief Investment Office had come to dominate some important corners of the city's financial markets—including residential mortgage-backed securities—and they were concerned about the potential impact that could have on the stability of U.K. markets, these people said. The concerns were relayed to a top central-bank oficial. But the Bank of England doesn't appear to have acted on the concerns or flagged them to regulators responsible for supervising J.P. Morgan. Private-equity bigs: no proof of bid-rigging (NYP) A handful of the country’s wealthiest and most powerful private-equity firms have asked a federal judge to toss an explosive investor lawsuit that claims the group conspired to rig the bids on $270 billion in deals over four years. The firms — including KKR, Bain Capital, Blackstone Group and Apollo Global Management — agreed not to bid on specific deals headed by a rival, thus fraudulently depressing the value of the deal. As a result, investors in those publicly-traded companies were short-changed. The group of 11 financial giants named in the suit, including Goldman Sachs and JPMorgan Chase, claim there is no evidence of a vast bid-rigging conspiracy. New York Fed Faces Questions Over Policing Wall Street (Dealbook) In recent years, the New York Fed has beefed up oversight. Under the president, William C. Dudley, the regulator has increased the expertise of its examiners and hired new senior officials. Even so, the JPMorgan debacle and the interest-rate investigation have raised questions about the New York Fed. They highlight how the regulator is hampered by its lack of enforcement authority and dogged by concerns that it is overly cozy with the banks. Fed Moves Closer To Action (WSJ) Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act. Sidekick of Soccer Mom Madam to court: It's not prostitution if you just pay to watch (NYDN) Jaynie Mae Baker, the woman busted with accused Manhattan brothel operator Anna Gristina, revealed in court papers filed Tuesday that the undercover cop who arrested her watched two women have sex but didn’t participate in any. Baker’s lawyer, Robert Gottlieb, says the only recorded conversation in evidence that includes Baker took place July 19, 2011, at a Manhattan restaurant where his client, Gristina and the cop had lunch. The cop tells Baker and Gristina he is “looking for a little adventure" and to “please corrupt me," but there's no talk of arranging payment, Gottlieb says in the filing. Six days later in the sting operation, the cop is secretly videotaped in a room with two other women at Gristina's alleged brothel on E. 78th St., but he does not participate in the sex. “The undercover officer apparently remains fully clothed and merely observed the two women perform for him,” Gottlieb writes...Gottlieb says there “was not a scintilla of evidence that was produced ... establishing Ms. Baker’s involvement in arranging payment in exchange for any kind of sexual activity.” What occurred not prostitution because the undercover cop was not a participant, Gottlieb says. If watching is prostitution, then every strip club and porno director is guilty, too, he said. Germans React Coolly To Moody's Warning (WSJ) Wolf Klinz, a German member of the European Parliament from the pro-business Free Democrats, Ms. Merkel's junior coalition partner, said he doesn't dispute Moody's conclusions about Germany's risks, but rather the timing of the announcement. "There are no hard facts yet" about Germany's ultimate price tag, Mr. Klinz said. "Why come out with this right now? It may have political implications" even if that wasn't the intention, he said. Preet hit with suit by law student (NYP) Second-year law student Benula Bensam sued Bharara, along with the US Marshals Service and the Justice Department, in Manhattan federal court for “unreasonable search and seizure” after the marshals took her cell phone away during the trial of ex-Goldman Sachs director Rajat Gupta. The 25-year-old Bensam, who is representing herself, said the marshals kept her phone overnight after she refused to answer their questions about letters she wrote to Judge Jed Rakoff during Gupta’s insider-trading trial. Bensam, who attends law school at Yeshiva University and lives in the Woodside section of Queens, stopped writing Rakoff about the case after he reprimanded her. In the complaint, Bensam said Bharara “may have instigated” her dispute with the marshals. Euro Zone as We Know It Has 2 Years Left: Jim O’Neill (CNBC) “Two years maximum is my perception of the time the euro zone has left to survive in its current form, though the reality is probably far less than that. Markets being markets we’ve unveiled a degree of speed with the Spanish and Italian bond yields and I can’t see us getting through the summer without some serious consequences,” said Jim O’Neill, Chairman at Goldman Sachs Asset Management. Child Treated After Being Bit By Rabid Bat Woman Gave Go-Ahead To Touch (CBS) Even as the summer fun rolls on for JoJo Keefe, a freshly healed cut on the 10-year-old’s finger reminds her of a scary detour. “I was like oh my God it bit me!” She’s talking about a rabid bat that sunk its tiny teeth into her finger last Tuesday during a visit to the Spencer Town Beach on Lake Whittemore. The small bat was attracting quite a bit of attention on the shoreline just beyond the picnic area. The trouble really began when a woman picked it up and began asking the children gathered around her if they wanted to hold it. “Another little girl said ‘oh I want to hold it will it bite me?’ And the lady was like no it’s the friendliest thing ever,” she says...Her mother retrieved the sick animal which then tested positive for rabies. Soon after, JoJo was getting the first in a series of life saving antibiotic shots (you can’t wait with rabies).

Opening Bell: 10.01.12

British Banks Face Heat From On High (WSJ) The Right Reverend Justin Welby, Bishop of Durham, is grilling top bankers as part of a new parliamentary inquiry into "banking standards" that represents the U.K. government's latest attempt to shake up the industry. The inquiry was established in July on the heels of news that several banks allegedly sought to rig interest rates such as the London interbank lending rate, known as Libor. Bishop Welby, a former oil executive who sits in Britain's House of Lords, has joined nine other lawmakers in assembling a report that will consider new rules on everything from corporate governance to conflicts of interest. The inquiry also involves a series of public hearings already under way. Sitting in a castle in his diocese in northern England, Bishop Welby said the inquiry isn't about digging into the details of banks' alleged failings in the Libor scandal and other matters. Rather, it is an attempt to determine more broadly the future role of the industry. "It's an existential question," he said. "It's about why the bankingindustry is here." Spain To Borrow $267 Billion Of Debt Amid Rescue Pressure (Bloomberg) Spain’s debt will widen to 90.5 percent of gross domestic product in 2013 as the state absorbs the cost of bailing out its banks, the power system and euro-region partners Greece, Ireland and Portugal. This year’s budget deficit will be 7.4 percent of economic output, Budget Minister Cristobal Montoro said at a press conference. Spain’s 6.3 percent target will be met because it can exclude the cost of the bank rescue, he said. Euro Leaders Face October of Unrest After ECB’s September Rally (Bloomberg) With the first of three summit meetings that European Union President Herman Van Rompuy has called “crucial” taking place in Brussels on Oct. 18-19, investor sentiment toward the euro area that surged in September is on the wane. “People are beginning to look at this in a more sober way” after the ECB bond-buying plan and a German high-court decision releasing bailout financing spurred optimism over the past month, Clemens Fuest, an economist at Oxford University’s Said Business School, said in an interview yesterday. October, which marks the third anniversary of the debt crisis, will showcase euro-area leaders fighting out their differences. The discord underscores the inadequacy so far of ECB President Mario Draghi’s bid to calm the crisis through a pledge on sovereign-debt purchases. Graduates Turn Away From Wall Street (FT) MBA statistics show a steady decline in the number of graduates taking jobs at investment banks. The Wharton school at the University of Pennsylvania, which bankers consider the “conveyor belt of Wall Street”, sent 16.6 percent of its class to investment banks in 2011 compared with more than one in four in 2008. The pattern is similar at other large business schools. “The number of students going into financial services has remained steady but what’s changed has been the types of roles,” said Maryellen Lamb, director of MBA career management at Wharton. “We’ve seen more opportunity for students in private equity and hedge fund roles.” Yield hunt pushes funds into CLOs, CDOs (Reuters) Fund managers are increasingly eyeing riskier exotic assets, some of which haven't been in fashion since the financial crisis, as yields on traditional investments get close to rock bottom. Returns from investments in "junk" bonds, government guaranteed mortgage securities and even some battered euro-zone debt are plunging in the wake of global central bank policies intended to suppress borrowing costs. In particular, the Federal Reserve's latest move to juice the U.S. economy by purchasing $40 billion of agency mortgage-backed securities every month is forcing some money managers who had previously been feasting on those securities to get more creative. The only problem is they may be getting out of their comfort zones and taking on too much risk. "I would not be surprised if some managers are reaching outside of their expertise for a few extra basis points," said Bonnie Baha, a portfolio manager for DoubleLine's Global Developed Credit strategy. Arnold Schwarzenegger 60 minutes interview video: admits habit of keeping secrets, affairs (CNN) While he did not specify how many affairs he'd had before Shriver filed for divorce in July 2011, Schwarzenegger admits two women he was involved with include "Red Sonja" co-star Brigitte Nielsen (while he and Shriver were dating, according to Schwarzenegger) and his family's longtime housekeeper, Mildred Patricia Baena. Nine months after Schwarzenegger and Baena had their affair, she gave birth to a son -- less than a week after he and Shriver's fourth child, Christopher, was born. Baena remained the family's housekeeper for years, with her son sometimes around the house as well. But Schwarzenegger said in the "60 Minutes" interview that he didn't have any suspicions he was the father until the boy was 7 or 8 years old and he began to notice "that he started looking like me." "It was never discussed, but I put things together," said Schwarzenegger, whose autobiography "Total Recall" hits bookshelves Monday. After that realization, he said he began sending Baena extra money for her and her son, without talking about his being the boy's father. Schwarzenegger also denied to Shriver that he'd had an affair and that Baena's child was his son -- until Shriver confronted him during a marriage counseling session a few months before their break-up. "She said, 'Am I off on this or am I not?' And I said, 'You are absolutely correct.'" More Wall Street Layoffs Coming (NYP) Nomura analyst Glenn Schorr said in a recent report warns that many banks, which are still overstaffed, need a more liberal wielding of the ax to squeeze out more profits in the coming years, amid a global market that continues to look sluggish. “While overcapacity is weighing on returns under the current environment, most bank managements have been in the camp that the industry is currently experiencing a cyclical rather than secular downturn,” Schorr writes. “So they’ve been slow to do too much on the head-count front,” the bank analyst said regarding layoffs. According to Schorr’s research, big banks like JPMorgan, Credit Suisse, UBS and Barclays have actually added jobs over the past three years. Goldman Sachs and Morgan Stanley have only slashed about 1 and 2 percent of their work forces, respectively. Orange Juice Gets Squeezed (WSJ) Since the start of the current hurricane season, futures prices have climbed as high as $1.4095 a pound. Traders and analysts said the possibility of storm damage fueled much of the rise. But since no such storm has materialized, investors are taking profits or cutting their losses, they added. Vikram's Housing Woes (NYP) Pandit is on track to lose money on the sale of his Greenwich, Conn. home, which he bought in June 2001 for $4.1 million. Pandit, 55, put the two-story Colonial on the market for $4.3 million in April. Now he has lowered the price to $3.9 million, according to Trulia.com. South Florida Man Inherits 13,000 Clown Items (SS) Richard Levine is now trying to wrap his head around the unusual pickle he inherited when his father-in-law and business partner died two years ago and left him essentially a warehouse full of curated items of buffoonery. There are clown dolls with faces of joy and sorrow. Clown paintings, some more colorful than others. Clown figurines and clown puppets, some tiny, some huge, some very disturbing. There are clown photographs, clown books and clown costumes...Levine, who runs the same Waterboy Sprinklers business his father-in-law started in the 1970s, said he barely has had the time to go through all of the items. He hopes to inventory all of it, sell most of it, keep some of it and donate the rest to a local charity group. "I am slowly starting to like them and getting enthusiastic about them. I can see how Jack was into them," Levine said. "I don't go for the sad clowns much though, but I really enjoy the happy ones."

Opening Bell: 09.19.12

Goldman Names New Finance Chief (WSJ) Mr. Viniar has told colleagues he wants to spend more time at his home in Santa Barbara, Calif., where he often returns on the weekends. His thrice-weekly basketball game has been on hold since he underwent knee-replacement surgery this year. Goldman's New CFO Harvey Schwartz to Receive $1.85 Million in Annual Salary (Reuters) Schwartz's predecessor is among the best-paid executives on Wall Street. He earned $15.8 million last year and held 1.8 million shares of Goldman as of March 26, according to a proxy filing. In 2007, he made $58.5 million. Mary Schapiro May Be Heading For Exit (NYP) Sources say that Schapiro is chafing under the political gridlock in Washington that she feels has stymied a number of her initiatives. “Part of the problem for [Schapiro] is that the tone in Washington has been so partisan,” said Christopher Whalen, of Tangent Capital Partners. The chairwoman’s recent handling of talks surrounding new rules governing money-market funds, some detractors say, has also created bad blood within the SEC. “She’s just frustrated,” Whalen noted. However, Schapiro’s critics say she hasn’t cracked the whip hard enough on Wall Street bad guys. One former Washington insider said that Schapiro is liked by President Obama and would stay on until a replacement is named, should he win re-election. One possible early front-runner to replace Schapiro may be FINRA CEO Richard Ketchum, sources speculate. For Superfast Stock Traders, A Way To Jump Ahead In Line (WSJ) Haim Bodek was a Wall Street insider at Goldman Sachs and UBS before launching his own trading firm. Now he is taking on the financial establishment that spawned him. Mr. Bodek approached the Securities and Exchange Commission last year alleging that stock exchanges, in a race for more revenue, had worked with rapid-fire trading firms to give them an unfair edge over everyday investors. He became convinced exchanges were providing such an edge after he says he was offered one himself when he ran a high-speed trading firm—a way to place orders that can be filled ahead of others placed earlier. The key: a kind of order called "Hide Not Slide." The encounter set off an odyssey for Mr. Bodek that has fueled a sweeping SEC inquiry into the activities of sophisticated trading firms and stock-exchange operators—including Nasdaq OMX Group Inc., NYSE Euronext, Direct Edge Holdings LLC and BATS Global Markets—according to exchange and other officials, and lawyers with knowledge of the inquiry. Vulture Funds Seek Fresh Meat (WSJ) “There hasn’t been a big bankruptcy in the last six to nine months,” said a hedge fund investor. “More stuff is coming out of distress than is going in.” US corporate bankruptcy filings peaked in the second quarter of 2009, at around 16,000, and have been trending downward ever since. In the first quarter of 2011, they hit about 11,000, according to the American Bankruptcy Institute. Silver Point co-founder Edward Mulé is optimistic the feast will continue. The $6.7 billion firm has had one of the best performances of distressed funds. It gained 10.36 percent this year through August and is up 98.6 percent since January 2009. “The tail of the 2008/2009 distressed credit cycle, coupled with weak global growth and de-leveraging, will continue to generate a steady stream of interesting opportunities,” said Mulé in a recent investor letter. Inside The Dark World Of Online Sugar Daddies (BuzzFeed Shift) Shortly after my profile's approval, emails started flooding my new fake account. One was from "International Finance Don Juan." He wrote: "You look hot. Let's meet." He claimed he was exotic and athletic, over six feet and an independent stockbroker on his profile. After some small talk, he asked to meet me at the W — a "cool" luxury chain where seemingly all these guys wanted to meet or get a hotel room. “Don Juan” had sent a face shot of himself. It was cropped and a little blurry, but I had a general idea of what he looked like. When he walked in to the lobby bar, though, instead of "athletic," he looked as if he could have checked off "more to love." I guess all that matters is that these guys have the cash they say they have...He asked what I'd like to drink. I said I liked pinot noir or champagne. "Oh, Prosecco is basically the same thing," he said, and ordered me one. I had made up a story that I was a graduate student in literature at Sarah Lawrence so I was only in the city once or twice a week to see friends. He wasn't trying to feign interest, but was looking my body over in a conspicuous way. "You've got an amazing ass," he said. "I looked when we were walking in. I hope you don't mind." He attempted to wink, but it seemed more like a tic. I said thanks in the most convincing way I could to a sweaty, slobbering guy with the most repugnant perpetual hard-on visible through his khakis. "You like me?" he asked. "You seem very nice. I'm just, I'm just suddenly not feeling well," I blurted out. "You feel sick, or you're not into me?" he asked. "You know, if you want, I live close. You could come and lie down and I can give you a massage. Since it's our first time meeting, once you're better, you could just give me a blow job. How about $550? Probably the quickest $550 you'll ever make, huh?" Soros Fund Invests in Mozambique Ethanol Project (WSJ) The Soros Economic Development Fund on Wednesday said its investment will give it a 19% stake in the $20 million project, started by food-and-energy company CleanStar Mozambique. Executives say the investment is in line with the fund's aim of backing businesses that provide a return on capital and spur broader economic development. US Fiscal Cliff Trumps EU Crisis as Top Worry (CNBC) A looming fiscal problem in the U.S. is now identified as the top tail risk for investors, marking the first time in 17 months that Europe’s debt crisis was not seen as the biggest concern for fund managers, a monthly survey by Bank of America/Merrill Lynch shows. The U.S. “fiscal cliff,” a combination of tax hikes and spending cuts set to come into force in January 2013, was identified by 35 percent of respondents as the largest risk going forward, up from 26 percent in August. In contrast, 33 percent of the respondents rated the euro zone debt crisis as their biggest concern, down from 48 percent in August. The survey of 186 fund managers, who oversee a combined $524 billion, was conducted from Sept. 7 to 13. BOE Looks Set For More Stimulus (WSJ) Rate-setters think the annual rate of inflation will take longer to fall to its 2% target than they thought last month because of rising commodity prices and an increase in companies' labor costs, according to the minutes of the September meeting of the central bank's Monetary Policy Committee, published Wednesday. Annual inflation was 2.5% in August. Lindsay Lohan arrested in New York after striking pedestrian outside nightclub (NYDN) Lohan was arrested early Wednesday in New York after hitting a pedestrian with a Porsche, police said. The troubled actress was maneuvering around a crowd of people in an alley between the Dream Downtown, a hotel and nightclub in the Meatpacking District, and the Maritime restaurant. "She's driving in this freight area, going very slow," a police source said. "She's hitting her horn because there's a lot of people in the area. The crowd moves but she kind of brushes against this one guy. Lohan was driving a 2010 black Porsche Carrera, not hers, when the incident occured around 12:30 a.m. Lohan and friends went inside the club, and the man — who hasn't been named but is 34 — called police. Lohan was later arrested about 2:30 a.m. and booked for leaving the scene of an accident with an injury. She was issued a desk appearance ticket. Her lawyer took the car after the arrest.