Opening Bell: 04.01.13

Central Bank Details Losses at Bank of Cyprus (WSJ) Cyprus's central bank spelled out the financial damage to big deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying they will lose almost 40% of their deposits as a result of a sweeping restructuring of the lender. Losses could grow even steeper in the months ahead. In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits over €100,000 ($128,700) will immediately be converted into a special class of shares at the lender as part of its recapitalization plan. As Banks in Cyprus Falter, Other Tax Havens Step In (NYT) Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country's oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing countries are circling. With a flood of e-mails and phone calls in recent days to lawyers and accountants here who make a living from helping wealthy Russians and others avoid taxes, competitors in alternative financial centers across Europe and beyond are promoting their own skills at keeping money hidden and safe. In Herbalife Fight, Both Sides Prevail (WSJ) But for the time being, all three investors are in the black, showing that for all the bluster and bravado, timing is everything in financial markets. Mr. Loeb has cashed out the most, whereas the others have made only paper profits. Mr. Loeb's hedge-fund firm, Third Point LLC, has made at least $50 million on its estimated bet of more than $200 million, according to a person familiar with the firm. As of several weeks ago, the firm had largely exited its Herbalife stake, according to people familiar with Third Point. Mr. Icahn has made roughly $25 million in unrealized gains on his about $590 million bet. Mr. Ackman's Pershing Square Capital Management LP has notched more than $200 million, also in paper profits, on a bet of more than $1 billion. Insider Case Against SAC Manager May Be Tough to Prove (Reuters) On Friday, U.S. authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen's $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia. The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government. "What they're going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it," said Marc Greenwald, a former U.S. prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. "It all depends on what Horvath said he said and whether everybody believes him." Princeton alumna, who told female students to get married, defends provocative advice: ‘Find a husband!' (NYDN) "Here's what nobody is telling you," Patton wrote. "Find a husband on campus before you graduate. Yes, I went there." This controversial column, which she described as "little more than honest advice from a Jewish mother," outraged countless readers when it appeared in The Daily Princetonian on Friday and then went viral. "I sincerely feel that too much focus has been placed on encouraging young women only to achieve professionally," Patton told the Daily News. "I think in the back of their heads they all know this but nobody is saying it." Patton decided to write the open letter after speaking at a Women and Leadership conference on campus a few weeks ago. Many said Patton was scolding women for not marrying her youngest son, a junior at Princeton. ("I am the mother of two sons who are both Princetonians," she said. "My older son had the good judgment and great fortune to marry a classmate of his, but he could have married anyone. My younger son is a junior and the universe of women he can marry is limitless. Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.") Libor Suits by Bondholders Tossed Over Lack of Damages (Bloomberg) While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab, pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor. Michael Dell Said to Consider Blackstone LBO Only With CEO Guarantee (Bloomberg) In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm’s bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing and the two sides may not reach an understanding. Argentina sticks to its guns on debt payout (NYP) The country, in a filing late Friday, refused to follow a court order that mandated it give equal treatment to a group of holdout bondholders led by billionaire hedge fund manager Paul Singer and his Elliott Management. Instead, Kirchner offered the group, owed $1.44 billion, the same deal it offered exchange bondholders in 2010. Pregnant woman's leg amputated after being hit with car (KHOU) The incident happened in the 9600 block of Ravensworth Drive, where Kelly, 21, lives with her boyfriend, Christopher Chaney. Chaney said his ex-girlfriend, 26-year-old Shareyll Hunter, showed up at the house Thursday morning and started arguing with Kelly. "I was in my house asleep, and then one of my kids’ mothers came," Chaney said. "I mean, they been texting and talking over the phone saying they want to fight each other and meet up right here and do it." All of the commotion outside roused Chaney from bed. "When I came outside, I seen my kids’ mother punching on the window and she wanted to fight the other one," Chaney said. He said Hunter jumped into his car and gunned it, pinning her 21-year-old rival between the car and the house, police said. Kelly was rushed to the hospital with two broken legs. Doctors had to amputate one leg. The baby is expected to be OK. Hunter drove off in her ex-boyfriend’s four-door Lincoln LS. She remained on the loose at last check. Hunter is five months pregnant and the victim is four months pregnant. Chaney, 26, says he is the father in both cases. Reporter: "You think it [the hit-and-run] is because of you getting them pregnant?" Christopher Chaney: "I mean, I’m handsome."
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Central Bank Details Losses at Bank of Cyprus (WSJ)
Cyprus's central bank spelled out the financial damage to big deposit holders at Bank of Cyprus PCL, the country's biggest lender, saying they will lose almost 40% of their deposits as a result of a sweeping restructuring of the lender. Losses could grow even steeper in the months ahead. In a statement Saturday, Cyprus's central bank said that 37.5% of all deposits over €100,000 ($128,700) will immediately be converted into a special class of shares at the lender as part of its recapitalization plan.

As Banks in Cyprus Falter, Other Tax Havens Step In (NYT)
Bloodied by a harsh bailout deal that drives a stake through the heart of this Mediterranean country's oversize financial industry, Cyprus now faces a further blow to its role as an offshore tax haven: the vultures from competing countries are circling. With a flood of e-mails and phone calls in recent days to lawyers and accountants here who make a living from helping wealthy Russians and others avoid taxes, competitors in alternative financial centers across Europe and beyond are promoting their own skills at keeping money hidden and safe.

In Herbalife Fight, Both Sides Prevail (WSJ)
But for the time being, all three investors are in the black, showing that for all the bluster and bravado, timing is everything in financial markets. Mr. Loeb has cashed out the most, whereas the others have made only paper profits. Mr. Loeb's hedge-fund firm, Third Point LLC, has made at least $50 million on its estimated bet of more than $200 million, according to a person familiar with the firm. As of several weeks ago, the firm had largely exited its Herbalife stake, according to people familiar with Third Point. Mr. Icahn has made roughly $25 million in unrealized gains on his about $590 million bet. Mr. Ackman's Pershing Square Capital Management LP has notched more than $200 million, also in paper profits, on a bet of more than $1 billion.

Insider Case Against SAC Manager May Be Tough to Prove (Reuters)
On Friday, U.S. authorities arrested and charged Michael Steinberg, a 16-year veteran of Cohen's $15 billion SAC Capital Advisors, with insider trading in shares of the technology stocks Dell and Nvidia. The case against Steinberg, 40, is built heavily on the testimony of one of his former colleagues, Jon Horvath, who has admitted to insider trading and is now cooperating with the government. "What they're going to need to prove is that Steinberg got inside information that he knew came from an insider and that he then traded on it," said Marc Greenwald, a former U.S. prosecutor in New York who is now a partner at Quinn Emanuel in New York, and not involved in the case. "It all depends on what Horvath said he said and whether everybody believes him."

Princeton alumna, who told female students to get married, defends provocative advice: ‘Find a husband!' (NYDN)
"Here's what nobody is telling you," Patton wrote. "Find a husband on campus before you graduate. Yes, I went there." This controversial column, which she described as "little more than honest advice from a Jewish mother," outraged countless readers when it appeared in The Daily Princetonian on Friday and then went viral. "I sincerely feel that too much focus has been placed on encouraging young women only to achieve professionally," Patton told the Daily News. "I think in the back of their heads they all know this but nobody is saying it." Patton decided to write the open letter after speaking at a Women and Leadership conference on campus a few weeks ago. Many said Patton was scolding women for not marrying her youngest son, a junior at Princeton. ("I am the mother of two sons who are both Princetonians," she said. "My older son had the good judgment and great fortune to marry a classmate of his, but he could have married anyone. My younger son is a junior and the universe of women he can marry is limitless. Men regularly marry women who are younger, less intelligent, less educated. It’s amazing how forgiving men can be about a woman’s lack of erudition, if she is exceptionally pretty. Smart women can’t (shouldn’t) marry men who aren’t at least their intellectual equal. As Princeton women, we have almost priced ourselves out of the market. Simply put, there is a very limited population of men who are as smart or smarter than we are. And I say again — you will never again be surrounded by this concentration of men who are worthy of you.")

Libor Suits by Bondholders Tossed Over Lack of Damages (Bloomberg)
While potential damages were estimated to be in the billions of dollars, the judge ruled the cases must be dismissed because of the inability of litigants that included brokerage Charles Schwab, pension funds and other bondholders to show they were harmed. Buchwald, whose March 29 ruling allowed some commodities-manipulations claims to proceed to a trial, said that, while private plaintiffs must show actual harm, her ruling didn’t impede governments from pursuing antitrust claims tied to attempts to manipulate Libor.

Michael Dell Said to Consider Blackstone LBO Only With CEO Guarantee (Bloomberg)
In several recent meetings in Austin, Texas, with Chinh Chu and David Johnson -- the Blackstone executives overseeing the firm’s bid -- Michael Dell said he would be more likely to support their proposal if he retained an influential role, a second person familiar with the talks said. Negotiations are ongoing and the two sides may not reach an understanding.

Argentina sticks to its guns on debt payout (NYP)
The country, in a filing late Friday, refused to follow a court order that mandated it give equal treatment to a group of holdout bondholders led by billionaire hedge fund manager Paul Singer and his Elliott Management. Instead, Kirchner offered the group, owed $1.44 billion, the same deal it offered exchange bondholders in 2010.

Pregnant woman's leg amputated after being hit with car (KHOU)
The incident happened in the 9600 block of Ravensworth Drive, where Kelly, 21, lives with her boyfriend, Christopher Chaney. Chaney said his ex-girlfriend, 26-year-old Shareyll Hunter, showed up at the house Thursday morning and started arguing with Kelly. "I was in my house asleep, and then one of my kids’ mothers came," Chaney said. "I mean, they been texting and talking over the phone saying they want to fight each other and meet up right here and do it." All of the commotion outside roused Chaney from bed. "When I came outside, I seen my kids’ mother punching on the window and she wanted to fight the other one," Chaney said. He said Hunter jumped into his car and gunned it, pinning her 21-year-old rival between the car and the house, police said. Kelly was rushed to the hospital with two broken legs. Doctors had to amputate one leg. The baby is expected to be OK. Hunter drove off in her ex-boyfriend’s four-door Lincoln LS. She remained on the loose at last check. Hunter is five months pregnant and the victim is four months pregnant. Chaney, 26, says he is the father in both cases. Reporter: "You think it [the hit-and-run] is because of you getting them pregnant?" Christopher Chaney: "I mean, I’m handsome."

Related

Opening Bell: 09.13.12

Ray Dalio: US Economy Out Of Intensive Care (Reuters) Hedge fund titan Ray Dalio said the U.S economy had come out of the "intensive care unit," but he warned against any quick move to "austerity" budget measures. "We were in the intensive care unit," Dalio, who runs the $120 billion hedge fund Bridgewater Associates, told more than 200 guests at the Council of Foreign Relations in New York on Wednesday. "We are largely healed and largely operating in a manner that is sustainable if we don't hit an air pocket." Dalio said a major challenge for U.S. politicians will be dealing with the so-called "fiscal cliff," the year-end expiration of the Bush-era tax cuts and previously agreed-upon cuts in defense spending and social programs, a combination which some economists say could lead to a recession. Dalio sided with economists who worry that a sharp reduction in government spending could lead the United States back into recession. "We can't just worry about too much debt," Dalio said. "We have to worry about too much austerity." German Court Clears Rescue Fund (WSJ) Germany's highest court cautiously approved the creation of the euro zone's permanent bailout facility, but insisted that the country keep its effective veto on all of the vehicle's decisions, a ruling that removes a question mark over two crucial elements of the euro zone's plans for mastering its debt crisis. Treasury Backs Plan For Standard Chartered Settlement (NYT) The lawyers approved a potential prepayment amount this week, a crucial step to a final agreement, though it will be much smaller than the $340 million the bank had to pay to New York State’s top banking regulator in a related case, according to three officials with direct knowledge of the settlement talks. The differing penalties stem from determinations by federal authorities and Manhattan prosecutors that the bank’s suspected wrongdoing was much less extensive than the state banking regulator’s claims that Standard Chartered had schemed with Iran to hide from regulators 60,000 transactions worth $250 billion over a decade. Insiders Get Post IPO Pass (WSJ) Wall Street underwriters increasingly are allowing corporate insiders to sidestep agreements that prevent them from quickly selling shares after initial public offerings. In the latest instance, several Wall Street banks on Wednesday allowed early investors and management of ExactTarget Inc. to sell more than seven million shares of the online marketing company a week ahead of the planned end of a "lockup" agreement. Under lockup pacts, underwriters bar company insiders from selling their shares, usually for 180 days after an IPO. The lockup restricts the supply of shares, helping buoy IPO prices; releasing more shares on the market can keep a lid on stock prices. Anna Gristina sits down with TV shrink Dr. Phil, says she won't talk to prosecutors about associate (NYDN) The Soccer Mom Madam's little black book has been whittled down to a single name. In her first major interview since being released from Rikers Island in June, Anna Gristina dishes to TV talk show shrink Dr. Phil about how prosecutors have hounded her for dirt on a just one associate. “They have an agenda to get me to talk about a certain person,” she told the daytime doc. Gristina refused to reveal the mystery man, or woman. Oprah's former head-shrink sidekick, who sat down at the kitchen table in Gristina's Monroe, N.Y. farmhouse, asked why the accused flesh-peddler didn't just save herself and give prosecutors the information they want. “I have a deep sense of loyalty and I'm Scottish." Gristina denied the criminal allegations during the teary interview, maintaining she was developing an online dating site where married men could meet single women. Whistleblower Key To Buyout Probe (WSJ) New York state Attorney General Eric Schneiderman's probe of tax practices at private-equity firms is based on information from a whistleblower, according to a person familiar with the matter. The information came from someone who approached Mr. Schneiderman's office between roughly nine months and a year ago, this person said. Under the state's False Claims Act, the attorney general can investigate alleged fraud against the state basedon a whistleblower's allegations. The ongoing probe is examining whether partners at private-equity firms changed management fees into investment income to delay tax payment and pay less—or avoid taxes altogether. Some private-equity firms use so-called management-fee conversions, while other firms avoid them. Wall Street Hopes for Romney, but Expects Obama to Win (CNBC) In an unscientific poll, 46 percent of respondents to the September CNBC Fed Survey said they expect President Obama to win reelection. Only 24 percent believe Republican Presidential Nominee Mitt Romney will get the job. Longtime Madoff Employee To Plead Guilty (Reuters) Irwin Lipkin, a former controller of Bernard L. Madoff Investment Securities LLC, will appear in Manhattan federal court on Th ursday, prosecutors said in a letter to the judge. He will plead guilty to charges of conspiracy to commit securities fraud and falsifying documents, prosecutors told U.S. District Judge Laura Taylor Swain in the letter. Suspect pulls gun on victim while having sex in a moving car (WNN) The incident began Sep. 2 when the victim and his two friends went to the Paddy Wagon Irish Pub in Port Charlotte. When the bar closed early Monday morning they invited two girls they met to one of the friend’s home on Atlas Street. One of the women and the victim went into a bedroom to have sex. The girl said she needed $250, which he said he didn’t have. She asked how much he had and he gave her $120. The victim then went to the bathroom and when he returned, found the two women had left the home. The victim had obtained the woman’s cell phone number earlier at the bar and called her; they agreed to meet at the Pick N Run store on Peachland Boulevard. When he got there he expected to meet the woman who took the $120. Instead, Linscott walked up to his Nissan Sentra and said the other girl ditched her. Linscott got into his car and as they drove off, he said she began touching him and having sex while he was driving. The victim told detectives she also said she needed money and he told her he already gave her friend $120 earlier. The victim said Linscott then put a .357 Taurus revolver to his head and demanded money. The victim grabbed the gun and a fight ensued in the moving car; he said he punched her in the head so she would release the gun. He told detectives he was in fear of his life and lost control of his car, struck a palm tree, went airborne and then ran across two front yards in the 1200 block of Dewhurst Street.

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 Bell: 03.25.13

Cyprus Gets New Bailout Deal (WSJ) Cyprus secured a bailout from its international creditors early Monday, ending a week of financial panic that threatened to see the small island nation become the first government to leave the euro zone. But lasting damage has likely been inflicted on the Cypriot economy. Officials said they believe the country will now need strict controls on money transfers in and out of the economy in the coming weeks or possibly months, cutting off its citizens and companies from much of the rest of the euro zone's financial system. And the bailout program aims to slash the size of Cypriot banks, perhaps forever ending the country's status as an offshore tax haven and financial-services center. Cyprus could see its economy contract by 10% or more in the years ahead, economists said. Dell Confirms Rival Offers (WSJ) Dell has received two alternative takeover proposals—one from activist investor Carl Icahn and the other from a private equity fund managed by Blackstone Group —that a special board committee said may result in superior proposals to the one offered last month by founder Michael Dell. Falcone Follows Michael Jackson Path Taking Fortress Loan (Bloomberg) Hedge-fund manager Philip Falcone, beset by declining assets, federal securities regulators and the bankruptcy of his largest investment, is borrowing money against personal real estate he bought during better days. Falcone and his wife, Lisa, pledged their $39 million Caribbean villa to Fortress Credit Corp., the lender that provided Michael Jackson with a mortgage on his Neverland Ranch when the late pop idol was close to insolvency, according to a February regulatory filing. Within the past year, the couple also agreed to post both of their Manhattan townhouses as collateral for about $25 million of personal loans, real estate records show. SEC Approves Facebook IPO Compensation Plan (WSJ) The Securities and Exchange Commission approved Nasdaq OMX Group Inc.'s plan to pay customers as much as $62 million for losses stemming from last year's bungled Facebook stock-market debut, according to an order made public on Monday by the regulator. Brooklyn man furious his roommate wanted to move out allegedly murdered her fish (NYP) A Brooklyn man furious that his longtime roommate wanted to move out turned his rage on her pet fish — flushing one down the toilet and letting the other suffocate, law-enforcement sources told The Post. José Santiago murdered his roommate’s scaly pals — Bonnie and Clyde — when he saw her packing her bags in their Flatbush apartment on Wednesday, she said. “They were my babies! I can’t have children, so my pets are like my kids,” Brenda Alvarez said yesterday. “They were beautiful fish and cost about $25 each. “I did everything for him, and the only thing I ever asked him to do was the laundry,” she said. “So, why did he do this to me?” Alvarez, 45, said she wanted to move out of the Nostrand Avenue apartment because of growing tension between the longtime friends, who grew up a block apart in Bay Ridge. “I was gonna leave . . . so, I started packing, but he kept antagonizing me,” Alvarez recalled. “Then he went crazy!” U.S. Hedge Funds Swoop on Traders at Struggling Europe Startups (Bloomberg) U.S. hedge funds Pine River Capital Management LP, Millennium Management LLC and SAC Capital Advisors LLC are taking advantage of the struggle of European startup funds to grab their pick of the region’s traders. The three firms, which manage a combined $46 billion, have over the past year all hired employees from hedge funds started by former European bankers, according to regulatory records and people with knowledge of the matter. They joined from firms including Edoma Partners LLP, Occitan Capital Partners LLP and Portman Square Capital LLP, London hedge funds that have either shut down, posted losses or failed to meet their fundraising goals, said the people, who declined to be identified because the companies are private. Buyout Firm to Acquire Blockbuster's U.K. Unit (WSJ) Private-equity firm Gordon Brothers Europe agreed to buy the British arm of DVD-rental firm Blockbuster Inc., which had entered a form of bankruptcy in January. The deal will help save 264 Blockbuster stores and more than 2,000 jobs in the U.K., Gordon Brothers Europe said in a statement Saturday. Terms of the deal weren't disclosed. Man charged with drinking $102,000 worth of pre-Prohibition whiskey (WTAE) Hidden behind a basement staircase at a Westmoreland County mansion was a secret stash of liquid gold: old farm pure rye whiskey. Distilled in 1912 and delivered to industrialist J.P. Brennan in 1917, nearly 100 bottles of West Overton Distilling Company's pure rye collected dust until their discovery recently. Homeowner Patricia Hill surmised Brennan hid the whiskey during Prohibition. Hill purchased the South Broadway mansion from Brennan's daughter at auction in 1986. Since then, Hill has been remodeling the mansion and filling it with antiques in order to open a bed and breakfast, which she did in December 2012. "The whiskey was buried right back here under these stairs. They were doing renovations down here for the plumbing and electrical and they had to rip out underneath the stairs. Whenever they did, they discovered 9 cases of the old farm, pure rye whiskey," said South Broadway Manor's chef and innkeeper, Rick Bruckner. "The story with this isn't just, 'Hey, we have some really old whiskey.' It's, 'Hey, we have some really old, historical whiskey.'" Bruckner explained Brennan was acquainted with Henry Frick and Andrew Carnegie, among other important Pittsburghers during the early 1900's. He said the men would come over to the mansion and likely drink this whiskey. Hill had rented the basement apartment to John Saunders, 62. Saunders is now charged by Scottdale police with consuming 48 bottles of the historic whiskey. In a criminal complaint, Chief Barry Pritts wrote Saunders denied drinking the whiskey or removing labels from the bottles. Saunders reportedly told police he moved the cases to clean them several times but never opened any of the bottles. "Saunders said that the whiskey probably evaporated and being that old, it was probably no good," Pritts wrote.

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.

Opening Bell: 04.23.12

IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. Buffett Joined by 12 Families Pledging Wealth to Charity (Bloomberg) Twelve families promised to donate most of their wealth to philanthropy, joining the Giving Pledge initiative started by Warren Buffett and Bill and Melinda Gates. The families include hedge-fund manager Bill Ackman and his wife Karen, Tesla Motors Inc.’s billionaire owner Elon Musk and film producer Steve Bing, according to an e-mailed statement from the initiative. Arthur M. Blank, Edgar M. Bronfman, Glenn and Eva Dubin, Red and Charline McCombs, Michael Moritz and Harriet Heyman, John and Ginger Sall, Henry and Susan Samueli, John A. and Susan Sobrato, John Michael Sobrato, and Ted and Vada Stanley also signed the pledge. Aiming for Clarity, Fed Still Falls Short in Some Eyes (NYT) But as Mr. Bernanke prepares to meet the press for the fifth time Wednesday afternoon, after a scheduled meeting of the Fed’s policy-making committee on Tuesday and Wednesday, there are reasons to doubt that the efforts are increasing public understanding of monetary policy. Experts and investors have continued to disagree about the plain meaning of the Fed’s recent policy statements. Some say the increased volume of communication is creating cacophony rather than clarity. Political criticism of the Fed has continued unabated. Man's nightmare since NYPD labeled him ‘Gentleman Groper’ (NYP) A citywide manhunt ensued after four Manhattan women were fondled in tony neighborhoods in a 35-day stretch. On April 13, authorities paraded their main suspect past snapping cameras. He defied the conventional image of a creepy perv. He was young, handsome, well-dressed, affluent, educated, a churchgoer. A gentleman groper. That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"

Opening Bell: 01.08.13

Obama Said Close to Choosing Lew for Treasury Secretary (Bloomberg) President Barack Obama may choose White House Chief of Staff Jack Lew to replace Treasury Secretary Timothy F. Geithner as soon as this week, according to two people familiar with the matter. The selection of Lew would trigger a White House shuffle for Obama’s second term as he replaces his chief of staff and moves senior aides into new roles, said the people, who requested anonymity to discuss personnel matters. While Obama hasn’t made a final decision to pick Lew, the president’s staff has been instructed to prepare for his nomination, said one of the people. Rescued by a Bailout, AIG May Sue Its Savior (NYT) The board of A.I.G. will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the government, court records show. The lawsuit does not argue that government help was not needed. It contends that the onerous nature of the rescue — the taking of what became a 92 percent stake in the company, the deal's high interest rates and the funneling of billions to the insurer's Wall Street clients — deprived shareholders of tens of billions of dollars and violated the Fifth Amendment, which prohibits the taking of private property for "public use, without just compensation." Greenberg: 'Cadre' Hurt AIG (NYP) Maurice “Hank” Greenberg, former chief executive officer of American International Group, says in a soon-to-be-published book that the company was almost destroyed by overzealous overseers. The insurer was “ultimately taken over and run aground by a cadre of auditors, lawyers, outside directors, and government officials,” according to an excerpt of “The AIG Story” on Amazon.com’s website. JPMorgan’s Staley Quits to Join BlueMountain Hedge Fund (Bloomberg) ames E. Staley, the JPMorgan Chase executive who was once seen as a possible candidate to become chief executive officer, quit to join BlueMountain Capital Management LLC, a $12 billion hedge fund with close ties to the New York bank. Staley, who was at JPMorgan for more than 34 years, most recently as chairman of the corporate and investment bank, will become a managing partner and purchase a stake in BlueMountain, the New York-based firm said today in a statement. Proceeds from the stake sale will be invested in new infrastructure, technology and people, the firm said. “I’m very excited to be joining BlueMountain at a time when sea changes in the financial industry combined with the firm’s unique strengths open up enormous possibilities to deliver value to clients,” Staley, 56, said in the statement. HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (Bloomberg) A New Jersey client of HSBC Holdings pleaded guilty to charges that he hid as much as $4.7 million through Swiss and Indian accounts not declared to the U.S. Internal Revenue Service. Sanjay Sethi, 52, who owns SanVision Technology Inc., conspired with HSBC bankers in New York, London and Geneva to hide assets from the IRS, he admitted yesterday in federal court in Newark, New Jersey. Sethi will pay a $2.37 million penalty for failing to file reports required for foreign accounts. “Sethi and his co-conspirators used nominee and shell companies formed in tax-haven jurisdictions and elsewhere to conceal the defendant’s ownership and control of assets and income from the IRS,” according to his charging document. Bill Ackman Says Just Getting Started Exposing Herbalife (Bloomberg) “We’re prepared to spend whatever it costs and do whatever is required to make sure that the world understands the facts about this company,” he said in a telephone interview. “We can’t imagine how the SEC or the Federal Trade Commission or any other relevant regulator will ignore what we have said.” Ackman said he would make all his information available to U.S. regulators. Chinese Tech Titans Eye Brazil (WSJ) The Chinese like emerging markets because, for a change, they don't have to start way behind established American companies. By moving into Brazil aggressively, Chinese PC maker Lenovo Group and Internet-search company Baidu hope to gain an edge over companies like Hewlett-Packard and Google In addition, some U.S. companies that are leaders at home and in Europe have a smaller footprint here because of Brazil's long history of protectionism and red tape and its high cost of labor, particularly compared with Asia. Oregon brewer Daniel Keeton creates nutritional, non-alcoholic brew for his dog (NYDN) Oregon man Daniel Keeton enjoys serving beer to customers at the brewery he works for, so why shouldn't he serve up some healthy brew for the dog he cares about? The dog brew is non-alcoholic of course, but it is a big hit with Keeton's canine Lola Jane. And now Keeton's special brew is available to anyone who wants it. After years of planning, Keeton launched his company Dawg Grog over the summer. Keeton, who works at Boneyard Brewery in Bend, says Dawg Grog is good for the dogs, and they can't seem to get enough of it. "Bend is a dog-loving community and a beer-loving community," Keeton told the Daily News on Monday. "I wanted to marry those two together in some way." Keeton spent years refining the ingredients to his special brew, which includes low-sodium vegetable broth, water and spent grain from Boneyard Brewery. "After a couple of years of trying recipes I came up with one that I am really happy with, and one that my dog is really happy with," he said. Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Bloomberg) MSI wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said...The team of about a dozen people, based at the firm’s Manhattan headquarters, is headed by Daniel Oneglia and Geoff Adamson. Oneglia was treasurer of the Princeton eating club Tiger Inn, where his nicknames included “the Don” and “the Weasel,” according to the university’s website. Adamson was coxswain for men’s heavyweight varsity crew. A Boston Globe photo shows teammates flinging him into a Massachusetts lake after a victory. Carlyle Bags $4 Billion Profit From China Insurance Exit (Reuters) Private equity firm Carlyle Group sold its remaining stake in China's No.3 insurer CPIC in a deal valued at $793 million, exiting the business with its largest dollar profit on an investment. After several stake sales in the past two years, Carlyle will finish with a total profit of more than $4 billion, five times the $800 million it invested in CPIC between 2005 and 2007 for a 17 percent stake, Thomson Reuters calculations show. By private equity standards, where making two times cash paid and a few hundred million is considered a success, the CPIC exit is an historic deal for Carlyle. London Quantitative Hedge Funds Report Second Year of Losses (Bloomberg) The performance of the funds belies their popularity with investors, who’ve poured $108.2 billion into the pools since the end of 2008, according to Fairfield, Iowa-based BarclayHedge Ltd. While quants made money during the financial crisis when other hedge funds didn’t, they’ve since stumbled as market sentiment swung from optimism to pessimism following political announcements in Washington and Brussels, breaking up the trends they try to follow. That may force investors to withdraw money. Japan Executives Warn Yen May Get Too Weak (WSJ) The executives, who gathered at an annual New Year's reception held by Japan's three biggest corporate lobbies, praised Prime Minister Shinzo Abe's new government for its proposals to boost the economy and tame the strong yen, which erodes exporters' profits and makes it harder to sell Japan-made goods overseas. But they also cautioned that if the economy stays weak, or if the government doesn't take steps to get its bloated finances under control, investors could lose confidence in Japan and flee, sending the yen into free fall. KFC diner stumbles upon strange brain-like organ in his meal (TS) Disgusted Ibrahim Langoo was tucking into a Gladiator box meal when he spotted what he thought was a “wrinkled brain” inside a piece of chicken. KFC have apologised and, after having the photographs analysed, reckon the unsightly organ may in fact be a kidney. The 19-year-old took a photograph of the three-inch stomach-churning discovery on his mobile phone and complained to staff. Apologetic bosses at the fast-food chain – known for its Finger Lickin’ Good slogan – have now offered him vouchers for even more KFC meals.

Opening Bell: 04.02.13

Cyprus Finance Minister Sarris Resigns After Brokering Rescue (Bloomberg) Cyprus Finance Minister Michael Sarris quit the government today after helping clinch the final terms of an international aid agreement to stave off a financial collapse of the island. Sarris told reporters in Nicosia that he resigned due to a committee set up today to investigate the reasons that led to Cyprus’s economic crisis. Sarris has served as chairman of Cyprus Popular Bank Pcl, the second-largest lender, which has been shut as part of the financial rescue. Fannie Logs Record Profit (WSJ) Fannie Mae reported an annual profit of $17.2 billion on Tuesday, its first annual profit since 2006 and its largest annual profit ever, boosted by the housing market's turnaround and sustained declines in the number of soured home loans. Fannie's profit compares with a year-earlier loss of $16.9 billion. Fannie and its smaller sibling, Freddie Mac, posted banner earnings for 2012 because rising home prices have allowed them to set aside much less to cover the cost of defaulting home loans. Bank of America Finds Profit in Foreign Tax Credit Moves (Bloomberg) Bank of America Corp. more than doubled its profits in 2012 -- with some help from the tax code. What the bank calls “restructuring” of its non-U.S. operations yielded $1.7 billion in foreign tax credits, or 41 percent of the $4.2 billion the company reported in 2012 earnings, according to securities documents including the form 10-K it filed Feb. 28. While the maneuvers didn’t provide an immediate cash tax benefit for Bank of America, the foreign tax credits count toward net income under accounting rules. Goldman Unit To Seek Risk (WSJ) Goldman Sachs is launching a specialty finance company to invest in high-risk debt primarily of midsize U.S. companies with no credit ratings. The New York firm said in a filing with the Securities and Exchange Commission late Friday that it plans to offer shares in the new unit, Goldman Sachs Liberty Harbor Capital LLC, "as soon as practicable after the effective date of this registration statement." SEC Ex-Chief Lands at Consultant (WSJ) Promontory Financial Group LLC is expected to announce Tuesday that it has hired Ms. Schapiro, who was chairman of the Securities and Exchange Commission for nearly four years. "In my case, there's no revolving door…I won't ever be going back to government," the 57-year-old Ms. Schapiro said in an interview. She decided that after spending "28 of the last 32 years as a regulator," now was the "right time…to do something different." Mothers brawl during Seattle zoo Easter egg hunt (SPI) A fight between two women during an Easter egg hunt at Woodland Park Zoo led to a bloody nose and several crying children Sunday, according to police and a witness. The incident began about 1 p.m. when a woman allegedly pushed a child aside as her own child was scrambling toward some brightly colored eggs, police spokesman Jonah Spagenthal-Lee said. “The shoving sparked a confrontation between the first woman (the supposed shover) and the second child’s mother, who began fighting and had to be separated three or four times,” Spagenthal-Lee said in a statement. “The brawl left the first woman with a bloody nose.” The children, mostly 4- to 6-year-olds, were subjected to foul language. The bloody scene left several children crying. Judge Questions Fairness of Citigroup $590 Million Settlement (Reuters) A Manhattan federal judge on Monday signaled he will not rubber-stamp Citigroup's proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets. U.S. District Judge Sidney Stein asked lawyers for the bank and its shareholders to address several issues at an April 8 fairness hearing, including requested legal fees and expenses of roughly $100 million, and the absence of payments by former Citigroup executives. Argentine-bond tango heats up (NYP) The yearly cost to insure the debt in the credit default swaps market for five years jumped by nearly 10 percent yesterday after President Cristina Kirchner and her government refused to come up with a better offer for bondholders led by hedge fund billionaire Paul Singer’s Elliott Management. A New York appeals court is expected to rule that Argentina must pay the Elliott group $1.44 billion, and its latest proposal indicated that it will not, which could push its bonds into default. Nasdaq Accepts Credit Rating Risk in Quest to Expand (Bloomberg) For Nasdaq OMX Group Inc., the benefits of expanding into electronic bond trading justify the risk of a lower credit rating. The second-biggest operator of American equity exchanges agreed yesterday to acquire eSpeed, a platform for U.S. Treasuries, from BGC Partners Inc. (BGCP) for $750 million cash, or $1.2 billion should sales goals be met. Moody’s Investors Service said Nasdaq’s Baa3 senior rating may be cut following the deal. Hampton Waffle House employee charged for April Fool’s joke (WTKR) A Hampton Waffle House employee is now charged after officers say she played an April Fool’s joke on them. Susan Tinker is charged for lying about a robbery. Police say around 6 a.m. Monday morning, Tinker called to report the robbery at the restaurant on West Mercury Boulevard. Police say they got to the scene and spent more than an hour investigating. While waiting for the manger to get there to review surveillance tape, they figured out there was no robbery. Tinker told police it was all an April Fool’s joke. But officers say this was no laughing matter. A spokesperson for the Waffle House says they do not tolerate this kind of behavior and Tinker is no longer employed there.

Opening Bell: 08.17.12

Facebook Investors Cash Out (WSJ) Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be "painful" to watch as investors continue to retreat from Facebook's stock, according to people familiar with the meeting. Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg) Facebook's 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011. Wall Street Bonus Estimates Cut By Pay Consultant Johnson (Bloomberg) Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. The biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed. “They had a terrible 2011, so it’s off of a low base,” Johnson said. “We hoped that that business would have recovered more dramatically, but it hasn’t, so I guess you’d say it’s gone from terrible to so-so.” Executives Say Obama Better For World Economy (Reuters) Twice as many business executives around the world say the global economy will prosper better with President Barack Obama than with Mitt Romney, according to a poll out Friday. Democrat Obama was chosen by 42.7 percent in the 1,700-respondent poll, compared with 20.5 percent for Romney. The rest said "neither." 'Broken' Fund Shifts Blame (WSJ) Nearly four years after the collapse of Lehman Brothers Holdings Inc. "broke the buck" at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008. The Securities and Exchange Commission alleges that the two men falsely claimed they would prop up the fund's $1 net asset value even though they "secretly harbored" doubts. The two Bents have denied the allegations in the SEC's civil lawsuit ever since it was filed in U.S. District Court for the Southern District of New York in 2009. Former Spitzer call girl Ashley Dupre is engaged and pregnant (NYP) “On the record, yes, I can confirm I’m almost seven months,” Dupre, 27, enthused when contacted yesterday. “I can’t tell you when the wedding date is just yet.” In four short years, Dupre’s gone from Client No. 9 to Husband No. 1, and now owns Femme by Ashley, a lingerie and swimwear shop in Red Bank, NJ, which she her husband to be, New Jersey asphalt scion Thomas “TJ” Earle, helped her open in May. Ex-MS Banker In China Bribery Case (CNBC) Garth Peterson joined Morgan Stanley in Asia in 2002, just as the Chinese real estate market was taking off. His job would be making real estate deals for the firm, and Peterson seemed the ideal person for the position. A blonde, blue-eyed American raised in Singapore, Peterson — then in his early 30s — was fluent in Mandarin, and in the local culture. “The language is, you know, essential, I would say, being able to speak Mandarin well,” Peterson said. “But beyond that, I worked in the Chinese real estate industry since 1993.” In 2006 alone, according to news reports at the time, Morgan Stanley invested $3 billion in Chinese real estate. Peterson, by then a vice president, was at the forefront. “I was given more and more support, and the business just grew exponentially,” he said. Today, his fortunes have drastically changed. On Thursday, Peterson was sentenced to 9 months in prison and 3 years supervised release after pleading guilty to evading Morgan Stanley’s internal controls — a federal offense. Prosecutors said he engineered a deal that transferred Morgan Stanley’s interest in a multi-million dollar Shanghai real estate development to a shell company secretly controlled by Peterson and a Chinese government official. The official, who was not identified, made an instant paper profit of $2.5 million. Treasury To Amend Terms Of Fannie, Freddie Bailout (WSJ) Under the new arrangement between Treasury and the companies' federal regulator, all the firms' quarterly profits would be turned over to the government as a dividend payment; the government wouldn't require such payments in periods when the firms are unprofitable. Backstop For Futures Trades (WSJ) Support is growing for an insurance fund that would protect customers of futures brokerages that collapse. While numerous hurdles remain, the process took an important step Thursday when futures-exchange operator CME Group met with other industry officials and a customer-advocacy group in Chicago to discuss how to set up a customer-protection fund. It could take months or even longer for a specific plan to emerge, but participants in the meeting said it is increasingly likely that the government, futures industry or both will propose such an insurance fund. "Restoring customer confidence is very important," and "we're looking at all potential solutions, including an insurance fund," said Walt Lukken, president of the Futures Industry Association, a trade group.