Opening Bell: 04.30.13

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UBS Records $1 Billion First Quarter Profit (DealBook)
UBS earnings for the first quarter beat analyst forecasts on Tuesday, helped by stronger performances at its wealth management and investment banking operations. Profit fell 5 percent to 988 million Swiss francs ($1 billion) from 1 billion francs in the first quarter of last year. A group of analysts surveyed by Bloomberg News had predicted earnings of 412 million francs. Sergio P. Ermotti, the chief executive, said in a statement that he was “very pleased” with the performance. He added that it was “too early to declare victory,” but that the earnings showed the company’s “business model works in practice.”

Eurozone jobless rate hits record high as inflation falls (FT)
The seasonally adjusted unemployment rate hit 12.1 per cent, up from 12.0 per cent in March and 11.0 per cent a year ago, Eurostat, the EU’s statistics office said. Youth unemployment was nearly double the headline rate and there was no sign of improvement in the worst-hit countries such as Spain and Portugal. In the short run, the latest data add to a growing list of reasons for the European Central Bank to cut interest rates when it meets on Thursday, even in the face of widespread doubts that a cut will do much to stimulate those economies still worst-hit by the debt crisis.

Japan household spending surges as "Abenomics" gains momentum (Reuters)
Japan's household spending surged in March at the fastest pace in nine years in a sign that Prime Minister Shinzo Abe's bold efforts to end two decades of stagnation are lifting consumer confidence and setting the stage for an economic revival. A recent run of data has provided encouraging early hope that Abe's push for aggressive fiscal and monetary policies to get the world's third-largest economy motoring is having the desired effect. Separate data on Tuesday also showed the jobless rate fell to the lowest in more than four years, providing another piece of evidence that domestic demand could play a critical role in underwriting economic growth in coming months.

Paulson Leads Hedge-Fund Lobby Push to Privatize Fannie (Bloomberg)
The improving finances of the two government-owned mortgage companies have kindled hopes among shareholders that they could be revived as private firms. Even as lawmakers from both parties and U.S. housing officials say that won’t happen, preferred shares of Fannie Mae have more than doubled in price since early March. They closed at $4.75 yesterday. ... “There are funds that have taken very large positions, large hedge funds, and they are lobbying heavily,” Senator Bob Corker, a Tennessee Republican, said in an interview, declining to confirm any names. “I don’t give investment advice, but I don’t see how these are going to be worth anything down the road.”

Banker Roommates Follow Zuckerberg Not Blankfein With IvyConnect (Bloomberg)
IvyConnect is competing with the Ivy Connection, the Ivy Plus Society and IvyLife for Ivy League-themed dating, drinking and networking. ... IvyConnect members aren’t all Ivy League alumni. The group borrows part of the conference’s name “to leverage the Ivy brand heritage,” said Meric, a 2006 Brown University graduate.

‘Ricin’ man put on ice (NYP)
J. Everett Dutschke, 41, dressed in an orange prison jumpsuit, said only, “Yes” and “I do” to procedural questions before a federal judge declared him “a flight risk and a danger to the community.” ... Dutschke, who claims to be a member of the high-IQ Mensa society, is a failed congressional candidate who also describes himself as “a philosopher trapped in the body of an insurance agent.” He is due back in court for a detention hearing Thursday.

Lloyds Bank Swings to Profit (WSJ)
Lloyds Banking Group PLC Tuesday swung to a substantial profit in the first quarter of the year as impairment charges dropped, helping push the U.K. bank's share price close to a two-year high. The 39%-government-owned bank said it made a net profit of £1.53 billion ($2 billion) in the first three months of the year, compared with a £5 million loss the same period last year. First-quarter revenue, net of insurance claims, was £5.9 billion, up from £4.88 billion the year before.

BNP Paribas Like SocGen Braces for French Eldorado End (Bloomberg)
BNP Paribas SA, Societe Generale SA and Credit Agricole SA, which spent much of the European-crisis years fixing operations outside France, are now counting the cost of the economic slump at home. After shrinking units, reinforcing capital and seeking more stable funding sources for their businesses in the so-called euro-area periphery, the banks -- which report first-quarter results starting this week -- are contending with slowing lending growth, rising bankruptcies and doubtful-loan losses in France, their biggest market for deposits and revenue.

Studying the Dark Art of Leaking Deal Talks (DealBook / Andrew Ross Sorkin)
[S]ellers are often perversely rewarded by leaks in the marketplace: buyers of companies involved in deals that leaked before the announcement paid a premium averaging 18 percentage points more than in deals that did not leak. ... Leaked deals were 9 percent less likely to close than those kept under wraps and took, on average, a week longer to complete, perhaps given the added commotion and complexity created by the leak.

Brokerage Ills Stir Auditor Scrutiny (WSJ)
The CFTC hasn't accused the auditors for MF Global and Peregrine of wrongdoing. But their inability to spot problems is spurring the agency to examine more closely under its existing rules if accountants are properly policing the financial controls at thousands of U.S. futures and swaps firms. "Accountants haven't been our prime focus," said Bart Chilton, one of the CFTC's five commissioners. Now, though, the agency has "increased our efforts," though it isn't clear how far enforcement officials will go to crack down on allegedly shoddy accounting.

Insider-Trading Probe Trains Lens on Boards (WSJ)
Federal prosecutors launched a criminal investigation into whether corporate directors misused government-sanctioned trading plans to sell company shares for investment funds they run. ... At issue are preset trading arrangements known as 10b5-1 plans, initiated by the SEC in 2000. The plans allow corporate executives and nonexecutive directors a way to sell some shares despite potentially having knowledge of nonpublic information about their companies, though such plans must be set up when the executive doesn't possess inside information. Prosecutors are interested in whether insiders are using such plans to shed their positions when they are privy to private information about companies, the person familiar with the probe said.

Dutch King Willem-Alexander succeeds mother Beatrix (Reuters)
Queen Beatrix of the Netherlands abdicated on Tuesday, handing over to her eldest son, Willem-Alexander, who became the first King of the Netherlands in over 120 years. ... Willem-Alexander, a 46-year-old water management specialist, is expected to bring a less formal touch to the monarchy together with [Queen] Maxima, a former investment banker from Argentina.

Ex-UBS Executive Convicted of Paid Sex With Underage Girl (Bloomberg)
Former UBS AG Executive Director Juerg Buergin was convicted of two charges of having paid sex with an underage prostitute in Singapore, with the judge saying that mistaking a minor’s age isn’t a defense. ... He testified in his defense that he couldn’t remember if he had sex with the underage prostitute at the Shangri-La Hotel in September 2010 and the Mandarin Oriental Hotel in January 2011. He had sought the services of at least 10 other escorts from the same pimp who were between 20 and 43 years old, his lawyer had said during the trial to show that he hadn’t been seeking younger prostitutes.

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