Opening Bell: 04.11.13

J.P. Morgan Takes Goldman's Spot In Corporate-Governance Hot Seat (WSJ) Mr. Dimon's shareholder letter lacked the feisty tone of years past, when he often warned about the unintended consequences of a wave of new regulation of the U.S. banking industry. This year, Mr. Dimon instead said, "I feel terrible we let our regulators down" and pledged to make the firm's compliance with all regulatory obligations a priority. "We are re-prioritizing our major projects and initiatives" and "deploying massive new resources" to the effort, he wrote. The firm is dropping work on a litany of new projects, such as a redesign of its Chase.com web site, so it can focus on the new firm-wide controls, said a person close to the bank. Mr. Dimon also warned that he expects more regulatory slaps in the "coming months." Goldman Deal With Union Lets Blankfein Keep Dual Roles (NYP) CtW Investment Group, an adviser to union pension funds with $250 billion of assets, agreed to withdraw its proxy proposal seeking a split of the chairman and CEO roles after the company agreed to give Goldman’s lead director, James Schiro, new powers such as setting board agendas and writing his own annual letter to shareholders. Fed's Flub Sparks Data Concerns (WSJ) The Fed said Wednesday that a staff member in its congressional liaison office accidentally released minutes of a March 19-20 policy meeting Tuesday afternoon to many of his contacts, including Washington representatives at Goldman Sachs Group Inc., Barclays Capital, Wells Fargo & Co., Citigroup Inc. and UBS AG. Also among the recipients: King Street Capital Management, a hedge fund, and Carlyle Group, a private-equity firm. Officials at the Fed didn't notice the mistake until about 6:30 a.m. Wednesday, after which they scrambled to release the information to the wider public, which was done at 9 a.m. A Fed spokesman said: "Every indication is that [the release] was entirely accidental." While there has been no obvious sign of early trading on the Fed's minutes, the flub comes at a delicate moment and raises questions about how the central bank handles sensitive information. Fed officials are currently debating when to begin winding down an $85 billion-a-month bond-buying program, a decision that is likely to have immense market impact. Market participants eagerly await the meeting minutes, which are released every six weeks, for insight into Fed thinking about the program. Plosser pitches his plan for a post-crisis Fed (Reuters) Plosser, an outspoken policy hawk and longtime critic of the bond-buying, said the Fed would be wise to begin swapping maturing longer-term assets with shorter-term ones, aiming to hold only Treasury bonds and not the mortgage bonds it is now buying. Regulators Feeling 'Social' Pressure (WSJ) The SEC issued guidance last year saying a third party's use of the "like" button could be viewed as a testimonial and suggested investment-advisory firms consider requiring preclearance before posting on social-media sites. SEC staff are currently working on additional guidance to provide more clarity about how to use social media without violating advertising rules, but the agency is unlikely to soften its prohibition against advisers using testimonials, according to the person familiar with the matter. An SEC spokesman declined to comment. Carnival Offers Motel 6 Price for Caribbean After Triumph (Bloomberg) Carnival Corp is offering a Caribbean cruise for as little as $38 a night, less than a stay at Motel 6, after an engine fire on the Triumph stranded passengers at sea for several days. A four-night trip on Carnival’s Imagination, leaving Miami on April 22, costs $149 a person, including meals and some beverages, according to the cruise company’s website yesterday. The lowest nightly rate at the budget-priced Motel 6 chain was $39.99, according to an online ad. Carnival, based in Miami, generated headlines worldwide in February after the engine fire on the Triumph left 3,100 passengers at sea for several days with limited food and toilet service. The ship broke loose from its moorings in high winds last week in Mobile, Alabama, where it is being repaired. Cyprus Central Bank Denies Plan to Sell Gold (CNBC) The Central Bank of Cyprus denied that it will sell 400 million euros ($525 million) worth of its gold reserves as part of the conditions to Europe's bailout of the island state. Aliki Stylianou, a spokesperson at the central bank told CNBC on Thursday that there was "no such thing being discussed." Jobless Claims In US Plunged More Than Forecast Last Week (Bloomberg) Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000. A Labor Department official said no states were estimated and there was nothing unusual in the data. Citadel’s Credit Co-Head Jamey Thompson Quits Hedge Fund (Bloomberg) Thompson became one of the three co-heads of Citadel’s credit group in September, when the hedge fund merged its quantitative credit and convertible-bond teams. He started at Citadel in 2008 as a credit portfolio manager and had previously worked at New York-based hedge fund King Street Capital Management LP. $100,000 worth of burgers stolen in Linden, NJ (MCJ) Capt. James Sarnicki said police responded Tuesday to BMG Logistics, a shipping yard at 720 W. Edgar Road, for a report of a shipping container theft. The owner told police that sometime between 8 p.m. April 8 and 10 a.m. April 9, someone stole a 40-foot-long refrigerated shipping container from the lot containing $100,000 worth of hamburger patties bound for the Netherlands. Detective Frank Leporino said the burgers had been shipped from Kansas City, Mo., and brought to the warehouse and shipping yard before being loaded onto a container Monday. The container was stored in a 2006 trailer with a California license plate 4HR1817. The burger patties were stored in 3,000 cartons. Police have surveillance video footage of the tractor hooked up to the trailer going out of the shipping yard at about 10:33 p.m. Monday.
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J.P. Morgan Takes Goldman's Spot In Corporate-Governance Hot Seat (WSJ)
Mr. Dimon's shareholder letter lacked the feisty tone of years past, when he often warned about the unintended consequences of a wave of new regulation of the U.S. banking industry. This year, Mr. Dimon instead said, "I feel terrible we let our regulators down" and pledged to make the firm's compliance with all regulatory obligations a priority. "We are re-prioritizing our major projects and initiatives" and "deploying massive new resources" to the effort, he wrote. The firm is dropping work on a litany of new projects, such as a redesign of its Chase.com web site, so it can focus on the new firm-wide controls, said a person close to the bank. Mr. Dimon also warned that he expects more regulatory slaps in the "coming months."

Goldman Deal With Union Lets Blankfein Keep Dual Roles (NYP)
CtW Investment Group, an adviser to union pension funds with $250 billion of assets, agreed to withdraw its proxy proposal seeking a split of the chairman and CEO roles after the company agreed to give Goldman’s lead director, James Schiro, new powers such as setting board agendas and writing his own annual letter to shareholders.

Fed's Flub Sparks Data Concerns (WSJ)
The Fed said Wednesday that a staff member in its congressional liaison office accidentally released minutes of a March 19-20 policy meeting Tuesday afternoon to many of his contacts, including Washington representatives at Goldman Sachs Group Inc., Barclays Capital, Wells Fargo & Co., Citigroup Inc. and UBS AG. Also among the recipients: King Street Capital Management, a hedge fund, and Carlyle Group, a private-equity firm. Officials at the Fed didn't notice the mistake until about 6:30 a.m. Wednesday, after which they scrambled to release the information to the wider public, which was done at 9 a.m. A Fed spokesman said: "Every indication is that [the release] was entirely accidental." While there has been no obvious sign of early trading on the Fed's minutes, the flub comes at a delicate moment and raises questions about how the central bank handles sensitive information. Fed officials are currently debating when to begin winding down an $85 billion-a-month bond-buying program, a decision that is likely to have immense market impact. Market participants eagerly await the meeting minutes, which are released every six weeks, for insight into Fed thinking about the program.

Plosser pitches his plan for a post-crisis Fed (Reuters)
Plosser, an outspoken policy hawk and longtime critic of the bond-buying, said the Fed would be wise to begin swapping maturing longer-term assets with shorter-term ones, aiming to hold only Treasury bonds and not the mortgage bonds it is now buying.

Regulators Feeling 'Social' Pressure (WSJ)
The SEC issued guidance last year saying a third party's use of the "like" button could be viewed as a testimonial and suggested investment-advisory firms consider requiring preclearance before posting on social-media sites. SEC staff are currently working on additional guidance to provide more clarity about how to use social media without violating advertising rules, but the agency is unlikely to soften its prohibition against advisers using testimonials, according to the person familiar with the matter. An SEC spokesman declined to comment.

Carnival Offers Motel 6 Price for Caribbean After Triumph (Bloomberg)
Carnival Corp is offering a Caribbean cruise for as little as $38 a night, less than a stay at Motel 6, after an engine fire on the Triumph stranded passengers at sea for several days. A four-night trip on Carnival’s Imagination, leaving Miami on April 22, costs $149 a person, including meals and some beverages, according to the cruise company’s website yesterday. The lowest nightly rate at the budget-priced Motel 6 chain was $39.99, according to an online ad. Carnival, based in Miami, generated headlines worldwide in February after the engine fire on the Triumph left 3,100 passengers at sea for several days with limited food and toilet service. The ship broke loose from its moorings in high winds last week in Mobile, Alabama, where it is being repaired.

Cyprus Central Bank Denies Plan to Sell Gold (CNBC)
The Central Bank of Cyprus denied that it will sell 400 million euros ($525 million) worth of its gold reserves as part of the conditions to Europe's bailout of the island state. Aliki Stylianou, a spokesperson at the central bank told CNBC on Thursday that there was "no such thing being discussed."

Jobless Claims In US Plunged More Than Forecast Last Week (Bloomberg)
Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000. A Labor Department official said no states were estimated and there was nothing unusual in the data.

Citadel’s Credit Co-Head Jamey Thompson Quits Hedge Fund (Bloomberg)
Thompson became one of the three co-heads of Citadel’s credit group in September, when the hedge fund merged its quantitative credit and convertible-bond teams. He started at Citadel in 2008 as a credit portfolio manager and had previously worked at New York-based hedge fund King Street Capital Management LP.

$100,000 worth of burgers stolen in Linden, NJ (MCJ)
Capt. James Sarnicki said police responded Tuesday to BMG Logistics, a shipping yard at 720 W. Edgar Road, for a report of a shipping container theft. The owner told police that sometime between 8 p.m. April 8 and 10 a.m. April 9, someone stole a 40-foot-long refrigerated shipping container from the lot containing $100,000 worth of hamburger patties bound for the Netherlands. Detective Frank Leporino said the burgers had been shipped from Kansas City, Mo., and brought to the warehouse and shipping yard before being loaded onto a container Monday. The container was stored in a 2006 trailer with a California license plate 4HR1817. The burger patties were stored in 3,000 cartons. Police have surveillance video footage of the tractor hooked up to the trailer going out of the shipping yard at about 10:33 p.m. Monday.

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Opening Bell: 05.22.12

JPMorgan's Losses Are Rival's Boons (WSJ) A group of about a dozen banks, including Goldman Sachs Group and Bank of America have scored profits that collectively could total $500 million to $1 billion on trades that sometimes pit them directly against J.P. Morgan's Chief Investment Office, according to traders and people close to the matter. Facebook 11% Drop Means Morgan Stanley Gets Blame (Bloomberg) Some investors say they felt misled by the underwriters. According to one London-based fund manager who asked not to be named, bankers indicated demand was so strong that he placed a bigger order than he thought he would get, leaving him with 40 percent more Facebook shares than anticipated. He sold most of that stock on the first day of trading. Morgan Stanley Cut Facebook Estimates Just Before IPO (Reuters) In the run-up to Facebook's $16 billion IPO, Morgan Stanley, the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, was reducing his revenue forecasts for the company. The sudden caution very close to the huge initial public offering, and while an investor roadshow was underway, was a big shock to some, said two investors who were advised of the revised forecast. They say it may have contributed to the weak performance of Facebook shares, which sank on Monday - their second day of trading - to end 10 percent below the IPO price. The $38 per share IPO price valued Facebook at $104 billion. Deutsche Bank: 'Geuro' an Alternative to Greek Euro Exit (CNBC) Greece’s best chance of survival may be to stay in the euro but opt for its own parallel currency or “Geuro,” according to Deutsche Bank’s head of research, Thomas Mayer. In a research piece, Mayer said the Geuro would help Greece balance its primary budget without financial support from the 'Troika' of international lenders (the International Monetary Fund, the European Union and the European Central Bank). This would allow the incoming Greek government to reject the strict austerity program on which aid is contingent. IMF Chief, OECD Call For More Euro Debt Sharing (WSJ) International Monetary Fund head Christine Lagarde Tuesday called on euro-zone governments to accept more common liability for each other's debts, saying that the region urgently needs to take further steps to contain the crisis. "We consider that more needs to be done, particularly by way of fiscal liability-sharing, and there are multiple ways to do that," Ms. Lagarde told a press conference in London to mark the completion of a regular review of U.K. finances. Greece Needs To Accept Bailout Terms, Says South Korea (CNBC) South Korea’s President Lee Myung-bak says Greece needs to accept the terms of a $130 billion international bailout agreed in March and there will be no disbursement of money from the International Monetary Fund (IMF), unless the country does so. Floating bales of marijuana a mystery (OCG) The floating bundles, weighing a total of 8,068 pounds, were first seen by a boater near the harbor around 12:01 p.m. Sunday, U.S. Coast Guard Petty Officer Seth Johnson said. The bales were reportedly floating at least 15 miles off shore. The Orange County Sheriff's Department sent three Harbor Patrol ships to aid in recovering the marijuana. A Coast Guard cutter was also sent to assist. Michael Jimenez, a Border Patrol spokesman, called Sunday's incident unusual. In most scenarios when marijuana bales are found dumped in the water it is because a vessel is trying to flee from authorities. "At other events, they've dumped the bales to get rid of weight if they're being chased," he said. "Generally in these cases we're aware they're being dumped. What's more unusual is that the bales were floating with no boat in sight." Fitch Downgrades Japan (WSJ) Fitch Ratings downgraded Japan's sovereign rating to A-plus and said it was maintaining a negative outlook due to the "leisurely" pace of the county's efforts to remedy its dire fiscal situation. The firm's long-term foreign-currency rating had been AA and its local currency issuer default rating had been AA-minus. JPMorgan Veered From Hedging Practices At Competing Banks (Bloomberg) JPMorgan's biggest U.S. competitors say their corporate investment offices avoid the use of derivatives that led to the bank’s $2 billion loss and buy fewer bonds exposed to credit risk. Bank of America, Citigroup, and Wells Fargo. say the offices don’t trade credit-default swaps on indexes linked to the health of companies. JPMorgan is said to have amassed positions in such indexes that were so large they drove price moves in the $10 trillion market. The loss has prompted shareholders to join regulators in scrutinizing how banks use their investment offices to hedge risks and manage deposits they aren’t using for loans. JPMorgan’s competitors confine corporate-level trading mostly to interest-rate and currency swaps -- the most common derivatives -- and put a greater percentage of funds into U.S. government- backed securities such as Treasury bonds. Blackstone Moves Into Motel 6 (WSJ) Blackstone Group LP is acquiring discount lodging chain Motel 6 in a deal valued at $1.9 billion, as the private-equity firm continues to invest aggressively through its $10 billion real estate war-chest. Jon Corzine Got $8.4 Million In Year Before MF Global Collapse (NYP) Corzine received a bonus of $1.25 million in addition to his salary of about $1.8 million last year. He also was awarded $5.35 million in now-worthless stock options. Other MF Global insiders, including Chief Operating Officer Bradley Abelow, also saw big pay days. Abelow, who is still working at the firm, was paid $2.7 million in cash, including a $1.25 million bonus, plus restricted stock valued at $1.5 million. Woman Claims She Was Fired For Being "Too Hot" (Reuters) A New Jersey woman said on Monday that she was dismissed from a temporary job at a New York lingerie warehouse because her male employers felt she was too busty and dressed too provocatively for the workplace. Wearing a form-fitting sequined black dress and black leather, sequin-studded boots, Lauren Odes, 29, said her Orthodox Jewish employers at Native Intimates told her that outfit and others like it were "too hot" for the warehouse. "We should not be judged by the size of our breasts or the shape of our body," Odes said. Odes's attorney, celebrity lawyer Gloria Allred, said she filed a gender and religious discrimination complaint with the U.S. Equal Employment Opportunity Commission in New York.

Opening Bell: 01.16.13

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

Opening Bell: 03.20.13

JPMorgan Bosses Hit By Bank Regulator (WSJ) JP Morgan was downgraded in a confidential government scorecard over concerns about the company's management and its board, a blow to a firm that has long been considered one of the best-run on Wall Street. The New York company's management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment. Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating "satisfactory management." The people said the downgrade to level 3 wasn't solely related to a London employee's large trades—in indexes tracking the health of a group of companies—that led to losses exceeding $6 billion. BlackRock’s CEO Fink Says Cyprus Is Not a Major Problem (Bloomberg) Laurence D. Fink, chief executive officer of BlackRock, the world’s largest asset manager, said Cyprus is not a major problem and U.S. equities will rise 20 percent this year as the economy rebounds. “It has some symbolism impact on Europe, but it’s not a really major economic issue,” Fink said of Cyprus in a Bloomberg Television interview in Hong Kong today. “It’s a $10 billion issue. It does remind us of the frailty of Europe. It does remind us that the European fix will be multiple years.” Freddie Mac Sues Big Banks (WSJ) sued more than a dozen of the world's biggest banks for alleged manipulation of interest rates, in the first government-backed private litigation over the rate-rigging scandal. The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, by the mortgage-finance giant joins scores of other suits piling up in U.S. courts, seeking billions of dollars in damages from banks that allegedly manipulated the London interbank offered rate and other crucial financial benchmarks. Freddie Mac sued the British Bankers' Association alongside the banks, putting the private association of large British banks for the first time in the cross hairs of a Libor lawsuit. A probe by U.S. and U.K. regulators has uncovered evidence of widespread rate rigging by some traders. Three banks have agreed to pay penalties totaling about $2.5 billion, and about a dozen companies remain under investigation. The BBA has agreed to transfer its responsibility for overseeing Libor to a new operator. Litigation Forces Deutsche Bank to Restate Profits (Reuters) Deutsche Bank cut its previously reported 2012 pretax profit by 600 million euros ($773 million) on Wednesday, hit by new charges related to mortgage-related lawsuits and other regulatory investigations. Europe's biggest bank by assets declined to say why it had increased litigation provisions to 2.4 billion euros, forcing it to correct its Jan. 31 earnings report which already showed the worst quarterly loss in four years. Yoga-Pants Supplier Says Lululemon Stretches Truth (WSJ) A Taiwanese supplier to Lululemon Athletica was bent out of shape on Tuesday after the yoga-clothes retailer blamed it for producing a shipment of pants that were unacceptably see-through. The supplier, Eclat Textile Co. of Taiwan, hit back at Lululemon, saying the clothes it shipped weren't "problematic." "All shipments to Lululemon went through a certification process which Lululemon had approved," Eclat Chief Financial Officer Roger Lo said in an interview. "All the pants were manufactured according to the requirements set out in the contract with Lululemon." Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg) The Fed chief will probably halt the unprecedented easing in the first half of next year after expanding central bank assets to a record of about $4 trillion, according to median estimates by 46 economists surveyed March 13-18 before a two-day meeting of policy makers ending today. Unemployment will have fallen to 7.3 percent from its current 7.7 percent when the Fed starts to pull back on its buying, the economists said. Supreme Court Sacks Goldman (NYP) The Supreme Court yesterday refused to hear the bank’s appeal of a federal court ruling in a lawsuit alleging it misled investors about dicey mortgage-backed securities. SEC Digging Into Fund Fees (WSJ) The Securities and Exchange Commission is closely scrutinizing the fees and expenses, including travel and entertainment, that hedge funds and private-equity firms charge to their investors. As part of the Dodd-Frank financial law, the SEC now oversees more than 1,500 additional such advisers that were required to register with the agency. In that capacity, the SEC is checking to ensure they are charging their investors reasonable expenses. "Exotic" expenses like travel, entertainment and consulting arrangements are more likely to attract the agency's attention than routine charges like legal and accounting fees, say compliance consultants who advise funds on registration and reporting requirements. A Volatile Investor Buys Into a Softer Approach (WSJ) It has been a long slog for Mr. Hohn, whose fund bets big on a small number of out-of-favor stocks and often holds on for several years. It lost 43% in 2008, among the worst losses by a hedge-fund that year, according to industry-tracker HFR. Hedge funds on average lost 19% that year. Even the Standard & Poor's 500-stock index, which plunged as the economy descended into the worst financial crisis in decades, did better. But with a 30% return in 2012 and a 14% gain this year, TCI has crossed its high-water mark, or the point at which investment gains make up for losses and managers can begin collecting performance fees again, according to clients. "A lot of people wrote me off," Mr. Hohn said in an interview last month. "A lot of people fired us, a few people stuck by us, and we've worked and worked and made it all back for them." JPMorgan, MF Global Trustee Reach $546 Million Settlement (Reuters) As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers. JPMorgan will also return more than $29 million of the brokerage's funds held by the bank, while releasing claims on$417 million that was previously returned to Giddens. Man, 18, forbidden from saying 'bingo' for 6 months (NKY) As part of 18-year-old Austin Whaley’s punishment, Kenton District Judge Douglas Grothaus recently ordered the Covington man not to say the word “bingo” for six months. “Just like you can’t run into a theater and yell ‘fire’ when it’s not on fire, you can’t run into a crowded bingo hall and yell ‘bingo’ when there isn’t one,” said Park Hills Police Sgt. Richard Webster, the officer who cited Whaley. On Feb. 9, Webster was working an off-duty security detail at a Covington bingo hall on West Pike Street when Whaley entered the hall with several other youths and yelled “bingo,” Webster said. “This caused the hall to quit operating since they thought someone had won,” Webster wrote on his citation. “This delayed the game by several minutes and caused alarm to patrons.” Webster said the crowd of mostly elderly women did not take kindly to Whaley’s bingo call. “At first, everybody started moaning and groaning when they thought they’d lost,” Webster said. “When they realized it wasn’t a real bingo, they started hooting and hollering and yelling and cussing. People take their bingo very seriously.” Had Whaley apologized for his actions, Webster said he probably would have sent him on his way with a warning. “But he refused to say he was sorry,” Webster said...WhenWhaley appeared in Kenton District Court last week, the judge ordered Whaley: “Do not say the word ‘bingo’ for six months.” The youthful defendant could have faced up to 90 days in a jail and a $250 fine on the misdemeanor charge. So long as Whaley, who had no prior criminal record, doesn’t get into any more trouble within six months, though, the charge will be dismissed.

Opening Bell: 03.05.12

Greek Bond Swap Deal Rests on Knife Edge (FT) People close to some bondholders warned other investors to take seriously threats by policymakers that if the deal fails Greece will default on its debt. “Some investors seem to think they will be rescued. That just isn’t the case,” one said. People involved in the deal denied that there was any nervousness about the outcome but nobody was willing to guess how high the participation rate would be. Slim Beats Gates in First Daily Billionaire Ranking (Bloomberg) If you like obsessively measuring your penis you'll love this: Carlos Slim, the telecommunications tycoon who controls Mexico’s America Movil SAB, is the richest person on Earth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 20 wealthiest individuals...The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York. The valuations are listed in U.S. dollars. Zuckerberg Doesn’t Rank on Billionaire Index (Bloomberg) Sad trombone: At the time of the offering, Zuckerberg is likely to sell about $1.75 billion of Facebook stock to pay off the tax obligation he will incur when he exercises options to buy 120 million shares. The combined transactions will dilute Zuckerberg’s stake from 28.4 percent to about 21 percent. If the company maintains its projected $100 billion valuation, that would make Zuckerberg worth about $21 billion, less than the $28.4 billion implied by his stated ownership. At that net worth, Zuckerberg isn’t rich enough to qualify for the Bloomberg Billionaires Index, a new daily ranking of the world’s 20 richest people. The 20th spot is currently occupied by L’Oreal heiress Liliane Bettencourt. AIG to Sell $6 Billion In Asian Insurer's Stock (WSJ) American International Group Inc. kicked off a $6 billion sale of shares in Asian life insurer AIA Group Ltd. on Monday morning in Hong Kong, moving forward with plans to repay another chunk of its 2008 U.S. bailout. AIG said the shares will be placed with institutional investors and expects them to be priced by Tuesday. The 1.7 billion shares up for sale represent around 14% of AIA, less than half the 32.9% stake AIG holds, according to a term sheet. Proceeds from this week's sale have been earmarked to repay the U.S. government, which rescued AIG from near collapse during the financial crisis with a record $182.3 billion bailout that has been partially repaid. The Treasury Department still has to recoup about $50 billion in taxpayer funds, and about $8.4 billion of that amount will be repaid when AIG sells the AIA shares and other assets, including its airplane-leasing subsidiary. The rest of the money—roughly $42 billion—is supposed to come from the government's sale of its 77% stake in AIG. Lenders Stress Over Test Results (WSJ) The 19 biggest U.S. banks in January submitted reams of data in response to regulators' questions, outlining how they would perform in a severe downturn. Now, citing competitive concerns, bankers are pressing the Fed to limit its release of information—expected as early as next week—to what was published after the first test of big banks in 2009. JFK Airport search of drug mule who said she was three months pregnant reveals she carried $20,000 worth of heroin (NYDN) Awoyemi, coming off an Air France flight from Paris to New York and wearing a “loose-fitting dress” was asked whether she was pregnant, and the woman replied that she was three months along, Homeland Security special agent John Moloney stated in a complaint filed in Brooklyn Federal Court. The customs inspector noted that Awoyemi appeared nervous, so she was selected for a pat-down search. After feeling a “bulge” in Awoyemi’s groin area, the situation escalated to a partial strip-search, according to the complaint. When she dropped her drawers, Awoyemi’s scheme fell apart. Pellets containing brown powder began dropping from her groin area — and the substance tested positive for heroin. Awoyemi was taken to a medical facility at the airport, where the federal cops administered a pregnancy test that came back negative. An X-ray showed more pellets in her intestinal tract, and by the end of the day she had passed about 25 pellets of heroin in a special commode that Customs officials have dubbed the “Drug Loo.” The high-tech toilet sanitizes the incriminating evidence. More On The Morgan Stanley Executive Charged in Cab Hate Crime Attack (Bloomberg) Jennings left a bank holiday party sometime before 11 p.m. and headed to the street, where he was supposed to be met by a car service, Jennings said. He hailed Ammar’s cab after the livery car didn’t appear, according to the report. Ammar said Jennings agreed on the fare and told him he would pay cash. Jennings fell asleep during the trip, the driver said. Once at the destination, though, Jennings said “he did not feel like paying” because he was already home, Ammar told police...When Ammar threatened to call the local police, Jennings said they wouldn’t do anything to help because he pays $10,000 in taxes, according to a report by the Darien police department...The Morgan Stanley executive told police he was afraid to come forward after the incident because the cab driver knew where he lived. He then went on vacation to Florida, police said. Jennings told officers he subsequently called his lawyer after a friend told him police were looking for a suspect in the stabbing incident, according to the report. JPMorgan Star To Launch Own Hedge Fund (FT) London-based Mike Stewart, JPMorgan’s global head of proprietary trading, and former head of emerging markets, is set to start his own new hedge fund, Whard Stewart, in the second quarter, people familiar with his plans said. Mr Stewart’s emerging markets trading team at the bank is expected to join him. The departures come despite word last week that US regulators will probably delay implementation of the so-called “Volcker rule” , under which banks are in effect banned from proprietary trading. Friends With Benefits (NYP) Unlike his fallen pal Raj Rajaratnam, former Goldman Sachs director Rajat Gupta appears to have no shortage of character witnesses willing to testify at his upcoming insider trading trial. Indeed, dozens of well-heeled supporters are already putting their names on the line for the former consulting titan, including world-renowned speaker Deepak Chopra and Mukesh Ambani, the ninth-richest man in the world. “I have never seen him ask for anything for himself, always for the greater good,” Ambani, the chairman of Reliance Industries, said recently on a little-noticed website called friendsofrajat.com. Cigarettes: The Most Stable International Currency (BusinessWeek) Cartons of Good Cat brand cigarettes are selling for as much as RMB5,600 (US$890) per carton in the city of Xi’an, in Shaanxi Province. The suspicion, according to reports this week, is that they are being used to bribe officials. Election Year Poses Challenge For Stocks (WSJ) The Dow is off to its best start to a year since 1998. But if history is a guide, this exuberance soon could give way to the first pangs of electoral anxiety. In a typical presidential-election year, stocks start well but slip into a funk by spring, according to Ned Davis Research, which has measured election-year trends back to 1900. At least in part, the slump reflects the electoral unknowns, Ned Davis has concluded. In a good year, investors deal with their jitters by late summer or early autumn and stocks recover. People get more comfortable with the November election outlook and put money back into stocks. This year, with the Dow Jones Industrial Average up 6.2% in just over two months, many investors and analysts expect a pullback soon. The looming election adds to ambient uncertainty about European debt and U.S. and Chinese growth prospects. Tony Welch, an analyst at Ned Davis Research, says the Dow could pull back 5% or 6% in the coming weeks. "We think the election-year trend could be strong this year," Mr. Welch says. "The market prefers certainty. It doesn't like unknowns." Ochocinco was urinated on by a lion and lived to tweet the tale (YS) The New England Patriots receiver was at a charity event in Miami on Saturday night when he ran into the caged animal. According to Ochocinco's Twitter account, the king of the jungle proceeded to become the urine sprayer at the party. Tweets included: "Swear to lil 10 pound bearded baby Jesus I just got peed on by a real "Lion" I'm not lying either. And y'all wonder why I don't go out!!!!!," "It's not funny i have on my good church clothes," and "I wasn't that close, he sprayed like a water gun."

Opening Bell: 01.28.13

Davos Money Men Say World Emerges From Doldrums Fretting Relapse (Bloomberg) “Optimism, but with a sober tone,” was how Bank of America Chief Executive Officer Brian T. Moynihan characterized the mood pervading the World Economic Forum’s annual meeting, even as investors were lifting the Standard & Poor’s 500 Index above 1,500 for the first time since 2007. Fed To Keep Money Spigot Open (WSJ) Federal Reserve officials are likely to continue their easy-money policies when they gather this week to weigh a mixed economic outlook and a recent run of low inflation. The Fed has said it would maintain its $85 billion bond-buying programs, aimed at boosting the economy by lowering long-term interest rates, until it sees substantial progress in labor markets. It has also said it would keep short-term interest rates near zero until the jobless rate drops to at least 6.5%, as long as inflation remains steady. Beneath the Calm, SAC Works to Contain Fallout From Inquiry (NYT) "This has always been a stressful place to work," said an SAC employee who requested anonymity because he was unauthorized to speak publicly about the fund. "Now it's just more stressful." Mr. Cohen's fund was dealt a blow last week when a Citigroup unit that manages money for wealthy families disclosed that it was withdrawing its $187 million investment. The move by the bank was the most prominent client departure since November, when the multiyear investigation into SAC's trading practices entered a more serious phase. Citigroup's withdrawal represents a tiny percentage of SAC's $14 billion in assets under management. The fund has said it expects total investor redemptions for the first quarter of up to $1 billion, a number that an SAC spokesman has said will not adversely affect its business...Still, the Citigroup decision stung, say peopleclose to SAC's business, because of the longstanding and lucrative relationship between the bank and the fund. Another concern, said these people, is that the move could influence other large SAC investors currently weighing whether to keep their money at the fund. For Citigroup, its withdrawal of money from SAC carries substantial business risk. The bank has a vast relationship with SAC, earning revenue by providing the fund with financing and trading services. SAC could exact retribution on Citigroup by terminating, or at least scaling back, its broader relationship with the bank. An SAC spokesman declined to comment. Credit Suisse Could Owe $2 Billion Over Fraud (Reuters) Credit Suisse Group faces a potential $2 billion of exposure over fraud that occurred a decade ago at National Century Financial Enterprises, a result of a federal judge's determination on how to apportion responsibility. Friday's decision by U.S. District Judge James Graham could expose the Swiss bank to hundreds of millions of dollars of added liability over the activities of Lance Poulsen, who co-founded National Century in 1990 and was its chief executive. He is now serving a 30-year prison term and is presumed insolvent. Goldman Raising $1 Billion From ICBC Share Sale (WSJ) The Wall Street company is selling the Hong Kong-listed shares in a block trade at 5.77 Hong Kong dollars (US$0.74) each, the people said, without disclosing the number of shares. The price represents a 3.0% discount to ICBC's HK$5.95 closing price Monday. A person familiar with the situation said the sale reflects prudent risk management on Goldman's part to reduce the size of its ICBC investment. MBA's Salary Enhancing Power Slashed (FT) Students on the top US MBA programs in the mid-1990s saw their salaries triple in five years, but those who graduated from the same schools in 2008 and 2009 saw that increase halved, according to data collected for the FT's annual Global MBA rankings. At the same time, MBA fees have risen by 7 percent a year. MBA students who enrolled in 2012 paid 62 percent more in fees - up 44 percent in real terms - than those who began their programs in 2005, even though the increases in post-MBA salaries remained in line with inflation. Beyonce has yet to apologize to Chuck Schumer for lip-syncing at inauguration (NYP) The New York senator angrily admitted yesterday that the pop queen has not called him to say sorry after she turned last week’s inaugural bash into an unexpected Milli Vanilli concert by lip-syncing “The Star-Spangled Banner.” “I have not heard from her before, during or after,” a testy Schumer told The Post after he was asked if Beyoncé had called him to give a musical mea culpa. “She did not talk to me at all. I didn’t say any words to her, period.” Schumer has been credited with drawing the pop diva and her hubby Jay-Z to the inauguration, where many said they stole the show from the president and first lady walking hand-in-hand on the steps of Capitol Hill. Schumer was seen beaming with pride just steps behind Beyoncé while she appeared to be belting out the National Anthem. Obama administration insiders and inauguration planners were in the dark about Beyoncé’s decision to use a prerecorded tape of her singing with the Marine Band during the swearing in. They were later left fuming over the embarrassment, according to reports. Some on Capitol Hill have even placed the blame on Schumer for the Star-Spangled sham. There’s a Twinkie in the eye of Apollo (NYP) Hostess Brands is expected to name Leon Black’s Apollo Global Management as the preferred bidder for Twinkies and its other snack brands, The Post has learned. The announcement from the bankrupt baker could come as soon as today, sources said. The selection of Apollo would give Manhattan buyout billionaire Leon Black the inside track to buying one of the country’s most well-known consumer brands. Black’s Apollo and co-bidder C. Dean Metropoulos, a veteran food exec, were vying with Grupo Bimbo, the Mexico-based baker, for the right to be the preferred, or stalking horse, bidder for Twinkies, Ho Ho’s, Ding Dongs and other Hostess snacks. Bank of America Moves $50 Billion of Derivatives to UK (FT) Bank of America has begun moving more than $50bn of derivatives business out of its Dublin-based operation and into its UK subsidiary, according to people close to the operation. The move, part of the group's global drive to rationalize its operations, has been encouraged by regulators but will also allow BofA to benefit from tax breaks stemming from the accumulated losses in its UK business. Singer Backs Off Aggressive Stance In Dealings With Buenos Aires (NYP) After a decade of aggressively pursuing $1.44 billion he claims the country owes him and a group of bondholders, including successfully pressing Ghana to seize a locally docked Argentine naval vessel to help pay down the debt, the billionaire New York hedge fund mogul is sounding like Bobby McFerrin in “Don’t Worry, Be Happy.” Singer’s Elliott Management now feels Argentina will do the right thing, according to recent court filings. It’s quite a change from last fall’s legal arguments, in which Singer urged a federal judge to hurry up and force Buenos Aires to put some of the monies owed into escrow, citing the country’s president’s plot to avoid the debt payment. Italians Have a New Tool to Unearth Tax Cheats (NYT) Despite the government's best efforts, tax evasion remains something of a pastime in Italy, where, famously, more than a few of the Ferrari-driving set claim impoverishment when it comes to declaring their incomes. So this month, not without controversy, the National Revenue Agency decided to try a new tack. Rather than attempting to ferret out how much suspected tax cheats earn, the agency began trying to infer it from how much they spend. The new tool, known as the ''redditometro,'' or income measurer, aims to minimize the wiggle room for evasion by examining a taxpayer's expenditures in dozens of categories, like household costs, car ownership, vacations, gym subscriptions, cellphone usage and clothing. If the taxpayer's spending appears to be more than 20 percent greater than the income he or she has declared, the agency will ask for an explanation. Traders Make Peace With Computers (WSJ) On a recent day on Barclays PLC's stock-trading desk in Manhattan, an electronic platform posted a notice that Barclays was selling a large block of Pfizer shares. In recent years, a computer typically would have swiftly matched such an order with a buyer, sidestepping trading floors altogether. But soft trading volume has left many traders unable to move stock as quickly as they might like. That is one reason why Barclays connected its recently launched DirectEx platform to its trading floor. The move paid off when a client who was buying 150,000 shares on the electronic network decided, after chatting with a Barclays salesman, to take an additional 150,000 shares. Woman Found with 92 Pounds of Marijuana in N. Bellmore (Patch) According to detectives, around 6 p.m., an unmarked First Precinct police car observed Mizzie Artis, 27, of Bellport, operating a 1999 Hyundai eastbound on Columbus Avenue while talking on a cell phone and not wearing a seat belt. Police then observed Artis drive to Armand Street where she met with a male subject in a minivan. As officers drove by both vehicles to further observe, the male subject fled the scene in the van, police said. Artis drove away and failed to stop at a stop sign and did not signal when turning, police said. Officers stopped Artis and, upon approaching the car, observed two large cardboard boxes in the auto. Officers also detected an odor of marijuana emanating from the vehicle. K-9 officers responded to the scene and performed a narcotic search of the vehicle. The cardboard boxes in the front seat had a positive alert for narcotics, police said. Two additional boxes were recovered from the trunk containing marijuana, bringing the total approximate weight to 92 pounds.

Opening Bell: 10.04.12

France’s LBO Firms See ‘Death’ From Hollande’s 75% Carry Tax (Bloomberg) Hollande, who released his first annual budget on Sept. 28, plans to tax fund managers’ share of the profit from their investments, known as carried interest, at a rate of as much as 75 percent, part of a wider effort to increase taxes on the wealthy and narrow the country’s deficit. France also plans to as much as double taxes on capital gains and restrict the amount of debt interest payments a company can deduct from its taxable income, a measure that will reduce returns on leveraged buyouts. Facebook Test Turns Users Into Advertisers (FT) Facebook is testing a new product in the US that allows ordinary users to pay to promote their own status updates, marking a shift in the social network’s willingness to charge its users for a core service. The product has potential to generate revenues, analysts said, but could also threaten the organic feel of the site as people pay to market their own social lives. Mark Zuckerberg Confirms: 'I wear the same thing everyday' (DL) "I mean, I wear the same thing every day, right? I mean, it's literally, if you could see my closet," Zuckerberg starts to explain, as Lauer asks if he owns 12 of the same gray t-shirt. "Maybe about 20," Zuckerberg admits, somewhere between discussing the future of Facebook, his daily routine, the iPhone 5, and his wedding to college sweetheart Priscilla Chan last May. The Facebook CEO says that he doesn't really have much in his closet — it's mainly used by his wife, who graduated from medical school at the University of California at San Francisco shortly before their marriage. Instead, Zuckerberg's identical t-shirt collection lives in the one drawer he's allotted. Tiger Global Up 22.4 Percent (Reuters) Tiger Global, one of the world's best-performing hedge funds, ended the third quarter with strong gains, leaving the fund up 22.4 percent for the year, two people familiar with the numbers said on Wednesday. The roughly $6 billion fund, run by Chase Coleman and Feroz Dewan, has been the darling of the investment community for its string of strong returns at a time when the average hedge fund is delivering only low single-digit returns. In 2011, when most funds nursed losses, Tiger Global captured headlines with a 45 percent gain for the year after having made a good chunk of money on the short side, people familiar with the portfolio said. 'Dark Pool' And SEC Settle (WSJ) The Securities and Exchange Commission alleged in its order that Boston-based broker-dealer eBX LLC allowed the third-party operator of its trading platform, called LeveL ATS, to use details on client orders, including the stocks involved and whether they were buy or sell orders, to its own advantage. That operator is Lava Trading, an electronic-trading unit of Citigroup, according to eBX. eBX agreed to pay $800,000 to settle the SEC's allegations. It did so without admitting or denying wrongdoing. Mohamed El-Erian: No corner offices at PIMCO (Fortune) "It doesn't matter whether you're CEO or whether you're an associate, you have the same size office. No corner offices. Just a conference room. And then I knew that I had made the right decision when my very first outing with PIMCO, I had come from the IMF, 15 years working on emerging markets. I had a swagger, I thought I knew what I was talking about. I put forward my view, and this summer intern felt safe enough to get up and say, "You know what? Mohamed is wrong and this is why he's wrong." The fact that PIMCO had created this safe zone where a summer intern could get up and question someone who was supposed to be an expert confirmed to me that I was in the right place." Bank-Friendly U.S. Regulator Shifts Focus to Revamp Reputation (Bloomberg) In a stately hearing room stuffed with senators and bankers, Thomas Curry began his apologies. His agency should have stopped a major bank from helping drug cartels launder cash. The violations went on for years while his agency was overly passive. “I deeply regret we did not act sooner,” he said. Curry had been on the job for just over three months on that day in July, so the mistakes hadn’t been made on his watch. His apologies were less a confession than a signal the new Comptroller of the Currency -- long seen as the most bank- friendly of U.S. regulators -- was changing course. “I’m not interested in what people thought about in the past,” Curry said in an interview. “My focus is going forward.” Since he took over in March, at least two key staff members closely associated with the agency’s pro-industry stance have departed, notably chief counsel Julie Williams. Williams, a 19- year OCC veteran, was known for helping nationally chartered banks resist state regulation by arguing they were preempted by often less-stringent federal rules. Curry has also raised the profile of consumer protection and shifted focus toward “operational risk” -- the idea that bank practices and management can pose as much of a threat to safety and soundness as external forces. Argentine Navy Ship Seized In Asset Fight (FT) An Argentine naval vessel crewed by more than 200 sailors has been seized in Ghana as part of an attempt by the US hedge fund Elliott Capital Management to collect on bonds on which Buenos Aires defaulted in 2001. A Ghanaian court ordered an injunction and interim preservation order against the ARA Libertad, a 100-metre long tall ship, following an application by Elliott subsidiary NML Capital on Tuesday. The hedge fund, run by the US billionaire Paul Singer, has been closely monitoring the course of the Libertad, according to sources familiar with the firm. Elliott had been waiting for the ship to stop in a port where it would have a chance to enforce legal judgments previously awarded by UK and US courts. The hedge fund declined to comment. Argentina slammed the interception of the Libertad as a “trick which these unscrupulous financiers” had pulled, adding that it “violates the Vienna Convention on diplomatic immunity”. Morgan Stanley commodities talks with Qatar hit snag (Reuters) Morgan Stanley's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said. One of the top banks in commodity trading over the past 30 years, Morgan Stanley has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said. "There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent." Maple syrup stolen in Quebec seized by police in New Brunswick (The Star) Quebec police have seized between 700 and 800 barrels of maple syrup from a New Brunswick exporter, linking the drums to August’s massive heist of the sweet stuff. Étienne St-Pierre, owner of S.K. Exports in Kedgwick, N.B., told the Star that police executed a search warrant Sept. 26 and hauled away the barrels. “They said they were searching to find some stolen drums from Quebec,” he said. “It was a surprise. That was the first news I received.” St-Pierre said each barrel weighs about 270 kilograms and holds 170 litres of syrup, meaning police seized at least 119,000 litres of gooey Quebec gold. A spokesperson for the Sûreté du Québec, Sgt. Bruno Beaulieu, confirmed a search warrant had been executed in Kedgwick but said he could not comment on the investigation. The Federation of Quebec Maple Syrup Producers has never revealed the amount of syrup stolen from its secure St-Louis-de-Blandford, Que. warehouse in August. The facility held about 3.75 million litres of syrup, enough to fill one and a half Olympic swimming pools. St-Pierre said he obtained the barrels from a regular Quebec supplier, who he refused to identify.

Opening Bell: 06.21.13

U.S. Weighs Doubling Leverage Standard for Biggest Banks (Bloomberg) The standard would increase the amount of capital the lenders must hold to 6 percent of total assets, regardless of their risk, according to four people with knowledge of the talks. That’s twice the level set by global banking supervisors. ... "The 3 percent was clearly inadequate, nothing really,” said Simon Johnson, an economics professor at the Massachusetts Institute of Technology and a former chief economist for the International Monetary Fund. “Going up to five or six will make the rule be worth something. Having a lot of capital is crucial for banks to be sound. The leverage ratio is a good safety tool because risk-weighting can be gamed by banks so easily.” China steps back from severe cash crunch (FT) China pulled back from the brink of a severe cash crunch on Friday, with money rates falling after reports that the People’s Bank of China, the central bank, had acted to alleviate market stresses. Nevertheless, interbank conditions remained tight and analysts said the PBoC would continue its hard line of recent days to compel financial institutions to pare back their leverage. Sprint Beats Dish’s Latest Bid for Clearwire (DealBook) Sprint Nextel raised its bid for Clearwire to $5 a share on Thursday, hoping to knock out a rival offer from Dish Network. The new offer, which values Clearwire at about $14 billion, is 47 percent higher than Sprint’s last proposal. It is also higher than Dish’s most recent bid of $4.40 a share. Banks Race to Increase Salaries to Beat EU Bonus Caps (IBT) Banks are racing to overhaul their remuneration structures by bumping up fixed salaries ahead of European Union-imposed bonus caps in 2015. According to a prominent employment partner at law firm Pinsent Masons, banks are stuck between having to overhaul remuneration procedures by a certain deadline but without concrete rules, which is likely to result in across-the-board increases in salary. FAA to Relax Rules for Gadgets in Flight (WSJ) The Federal Aviation Administration is expected to relax the ban on using some types of personal-electronic devices at low altitudes, allowing passengers leeway during taxiing and even takeoffs and landings, according to industry officials and draft recommendations prepared by a high-level advisory panel to the agency. For fliers, the new rules would likely mean an end to familiar admonitions to turn off and stow all electronic devices. Cellphone calls are expected to remain off limits, however. War of words erupts after wedding guests gift bride 'cheap and embarrassing' food hamper containing marshmallow fluff and croutons Kathy Mason from Hamilton, Ontario, and her boyfriend, who wished to remain anonymous, decided to create a food hamper for their friends' same-sex marriage and packed it with a mix of 'fun' treats including pasta, olive oil, croutons, biscuits, Marshmallow Fluff and Sour Patch Kids. They attached a carefully worded card to the parcel which read: 'Enjoy . . . Life is delicious.' However, the European newlyweds were less than impressed with the gesture and contacted the couple the next day via text message to ask if they had the receipt so they could get the money back instead. ... 'You ate steak, chicken, booze, and a beautiful venue . . . If anything you should be embarrassed for being so cheap and embarrassing,' the brides said in one message. Creeping mistrust stops euro zone banks lending to peers across bloc (Reuters) In a trend that could reignite fears about the euro and its banks, European Central Bank data shows the share of interbank funding that crosses borders within the euro zone dropped by a third, to just 22.5 percent in April from 34.5 percent at the beginning of 2008. Banks are now lending to other banks across euro zone borders at only about the same rate as when the single currency was first launched, 15 years ago. Greek markets rattled by political disarray (FT) The benchmark 10-year bond yield of Greece rose 75 basis points to 11.6 per cent by late morning in London, while the Athens stock exchange index fell 2.9 per cent to its lowest level since early April. ... Investor sentiment towards Greece is not helped by uncertainty over how to plug a funding gap in the country’s bailout programme. The FT reported on Thursday that the International Monetary Fund might suspend aid to Greece next month unless the eurozone stepped in. Losses loom for investors enmeshed in U.S. mortgage chaos (Reuters) A review of loan documents, property records and the monthly reports made available to investors show that mortgage servicers are reporting individual houses are still in foreclosure long after they have been sold to new buyers or the underlying mortgages have been paid off. ... In one case, Reuters found that Bank of America Corp had been collecting a monthlyservicing fee of $50.73 from investors on a loan that had been paid off nearly two years ago, investor reports show. Bank of America filed a document at a local county office on July 22, 2011 showing that the $162,400 loan on a cream-colored duplex in Greenacres, Florida, owned by a drywall hanger named Roman Pino, had been satisfied and "cancelled." But investors in Pino's loan and more than 6,700 other similar mortgages that are bundled together in a subprime mortgage bond still have not been informed that the loan no longer exists, according to the last investor report in May. Good and Evil Battle Volatility on Summer Solstice (CNBC) "Summer Solstice is upon us: the longest day of the year in the northern hemisphere where some religions in the western world believe the sun defeats the forces of evil." Also it's triple witching. Oracle to Leave Nasdaq for the Big Board (DealBook) Oracle, one of the most prominent technology companies listed on the Nasdaq, is defecting to a rival exchange. The company, which has been traded on the Nasdaq since 1986, has applied to be listed on the New York Stock Exchange, it said in a filing on Thursday. The transfer, among the largest ever between the exchanges, represents a significant gain for the Big Board, which has been trying to bolster its technology credentials. FINRA beefs up policing of arbitrators (Reuters) The Financial Industry Regulatory Authority's policy change comes after Reuters asked questions about the background of Demetrio Timban, a Medford, New Jersey-based arbitrator who has become a central figure in a lawsuit between Goldman Sachs Group Inc and a wealthy investor. Timban was indicted by the state of New Jersey for practicing law without a license, although charges were later dropped under a state program to deal with non-violent offences. He was also reprimanded by a Michigan regulator for the New Jersey incident and passing $18,000 in bad checks. Timban said in an interview he had closed his New Jersey office and the check-writing incident was "accidental," as a family member was supposed to wire funds to cover the check. But FINRA said it did not learn of the New Jersey indictment for five months and that Timban failed to tell it about the Michigan problems altogether, while he arbitrated the Goldman case. Brooklyn framer accuses former boss of firing him for being too fat (NYP) The owner of a picture-framing shop in Brooklyn fired a worker because he was too fat to fit in the aisles, a lawsuit claims. Seth Bogadanove, 52, of Bath Beach, is suing Frame It In Brooklyn, in Sunset Park, and owner Jerry Greenberg, claiming he was canned after gaining weight because of medication. “Oh, my God! What happened to you? You got so fat!” the suit says Greenberg told Bogadanove after he returned from a leave. ... But Greenberg told The Post he never hired Bogadanove back, only gave him an opportunity to work from home. He called Bogadonove’s story “ridiculous.” “He was sweating, and he couldn’t make it up stairs,” Greenberg recalled. “But that would never come out of my mouth in my wildest dreams.” Video shows woman tossing perceived rival off cliff (CBS) Surveillance video caught a brutal fight between a woman and her perceived romantic rival in Arequipa, Peru, but it's pretty one-sided. A woman caught her husband walking with a younger woman while they were out on a stroll by a cliff back in January. She is seen grabbing the younger woman by the hair and dragging her off a cliff, where she reportedly plunged about 20 feet. She is okay after the fall - she only sustained some cuts and bruises, was treated at a hospital and released.

Opening Bell: 08.07.12

Probe May Hit UK Bank's Clean Image (WSJ) Last week, Standard Chartered PLC Chief Executive Peter Sands told analysts that "our culture and values are our first and last line of defense." On Tuesday, allegations by a New York financial regulator that Standard Chartered hid illegal Iranian transactions seemed to breach that line, sending the lender's shares down and wiping £7.65 billion ($11.9 billion) off its market value. In the U.K., Mr. Sands has long been heralded as a voice of reason in the country's turbulent banking sector. The former consultant, who was named Standard Chartered CEO in 2006, regularly espoused the importance of sound governance and sensible investment. While several of its British peers were being bailed out by taxpayers, Mr. Sands was guiding the Asia-focused bank to record profits boosted by growing trade between emerging nations. The executive stressed the fact that Standard Chartered doesn't have an investment bank and didn't need European Central Bank cheap loans to keep its business ticking over. Italian's Job: Premier Talks Tough in Bid to Save Euro (WSJ) During an all-night European summit in June, Mario Monti, the Italian prime minister, gave German Chancellor Angela Merkel an unexpected ultimatum: He would block all deals until she agreed to take action against Italy's and Spain's rising borrowing costs. Ms. Merkel, who has held most of the euro's cards for the past two years, wasn't used to being put on the defensive. "This is not helpful, Mario," Ms. Merkel warned, according to people present. Europe's leaders were gathered on the fifth floor of the European Union's boxy glass headquarters in Brussels, about to break for dinner. "I know," Italy's premier replied. Bill Gross: Stay Away From Europe (CNBC) “Investors get distracted by the hundreds of billions of euros in sovereign policy checks, promises that make for media headlines but forget it’s their trillions that are the real objective,” Gross wrote. “Even Mr Hollande in left-leaning France recognizes that the private sector is critical for future growth in the EU. He knows that, without its partnership, a one-sided funding via state-controlled banks and central banks will inevitably lead to high debt-to-GDP ratios and a downhill vicious cycle of recession.” “Psst…investors: Stay dry my friends!” Gross said. Richest Family Offices Seeing Fastest Growth As Firms Oust Banks (Bloomberg Markets) They call it “money camp.” Twice a week, 6- to 11-year-old scions of wealthy families take classes on being rich. They compete to corner commodities markets in Pit, the raucous Parker Brothers card game, and take part in a workshop called “business in a box,” examining products that aren’t obvious gold mines, such as the packaging on Apple Inc.’s iPhone rather than the phone itself. It’s all part of managing money for the wealthiest families, says Katherine Lintz, founder of Clayton, Missouri- based Financial Management Partners, which runs the camp for the children of clients. Supplying the families with good stock picks and a wily tax strategy isn’t enough anymore. These days, it’s about applying the human touch, she says. Lintz, 58, is on to something. Her 22-year-old firm was No. 2 among the fastest-growing multifamily offices in the second annual Bloomberg Markets ranking of companies that manage affairs for dynastic clans, Bloomberg Markets magazine reports in its September issue. The assets that FMP supervises grew 30 percent to $2.6 billion as of Dec. 31, just behind Signature, a Norfolk, Virginia-based family office that expanded 36 percent in 2011 to $3.6 billion. MS Takes Trading Hit (NYP) Morgan Stanley, which had the largest trading-revenue drop among major US banks last quarter, lost money in that business on 15 days in the period, up from eight days a year earlier. Morgan Stanley traders generated more than $100 million on three days in the period, compared with seven days in the second quarter of 2011, the company said in a regulatory filing yesterday. None of the daily losses exceeded the firm’s value-at-risk, a measure of how much the bank estimates it could lose on 95 percent of days. Morgan Stanley had a 48 percent year-over-year decrease in trading revenue, excluding accounting gains, led by a 60 percent drop in fixed-income revenue. Former Lloyds Digital Security Chief Admits $3.76 Million Fraud (Bloomberg) Lloyds Banking Group's former head of digital banking fraud and security pleaded guilty to submitting false invoices totaling more than 2.4 million pounds ($3.76 million)...Jessica Harper admitted to submitting fake invoices between 2007 and 2011 and then laundering the proceeds, the CPS said. She will be sentenced on Sept. 21, and faces as long as 24 years in prison for the two charges, a CPS spokesman said, although she will get credit for the guilty plea. Ex Lehman Exec Requests Rehab To Avoid Jail Time (NYP) Former Lehman Brothers Co-Chief Operating Officer Bradley H. Jack, arrested twice in less than a year on charges of prescription forgery, said he is willing to undergo a program for drug and alcohol treatment to avoid prosecution. Jack applied for the program at a hearing yesterday in Connecticut Superior Court in Norwalk. Judge Bruce Hudock ordered a doctor’s report to determine if he is eligible for the new program, which the judge said would be “a rare event.” Fed Official Calls For Bond Buying (WSJ) Eric Rosengren, president of the Federal Reserve Bank of Boston, called on the Fed to launch an aggressive, open-ended bond buying program that the central bank would continue until economic growth picks up and unemployment starts falling again. His call came in an interview with The Wall Street Journal, the first since the central bank signaled last week that it was leaning strongly toward taking new measures to support economic growth. Mr. Rosengren isn't currently among the regional Fed bank presidents with a vote on monetary policy. Although all 12 presidents participate in Fed deliberations, only five join the seven Fed governors in Washington in the formal committee vote. Tokyo Exchange Glitch Halts Derivatives Trading (WSJ) The Tokyo Stock Exchange on Tuesday temporarily suspended all derivatives trading soon after the morning open due to an unidentified system problem, the second significant trading glitch on the exchange this year. Amazon Exec Swindled By Tom Petty Con Artist (NYDN) Brian Valentine simply wanted to give his wife the wedding present of a lifetime - a performance by Tom Petty and the Heartbreakers. The senior vice president of Amazon, instead, fell victim to fraud, losing a whopping $165,000 to a Las Vegas man who pretended to be a concert booking agent, the Smoking Gun reported. FBI agents arrested the fraudulent agent, Chad Christopher Lund, on Aug. 2 in Illinois, after a private investigator Valentine had hired found that Lund had skipped town. But the ordeal began almost ten months before in late 2011, a year after Valentine, 52, popped the question to fellow Amazon employee, Gianna Puerini, 39, according to a wire fraud complaint unsealed by the U.S. District Court. Valentine decided that he wanted the "Won't Back Down" singer to perform a set at the couple's wedding reception since he proposed to Puerini at a Petty concert in Seattle. He turned to the Internet, where he found the website of Lund's firm, lundlive.com, boasting to have booked acts like Petty, Run-DMC and Ludacris. Lundlive.com no longer exists. Valentine connected with Lund over email and by October 2011, Lund told the Amazon exec that he had negotiated with Petty's representatives "down to a price of $330,000 for the performance." Later in the month, Lund sent Valentine a contract with the forged signature of Petty's manager, Tony Dimitraides. Valentine sent Lund a $165,000 down payment in return. Valentine finally uncovered the fraud in early April 2012, when the wedding was just three months away. He contacted Petty's management to discuss the performance only to find out that they had no idea about the planned appearance. "We have never heard of Chris Lund or his agency," Dimitraides wrote in an email to Valentine. "We are not aware of any deal for Tom Petty to play Seattle in July and I have never signed a contract for any such." "It looks like you have been defrauded."