Opening Bell: 05.01.13

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Spring Slowdown Paints Ugly Picture for Jobs: ADP (CNBC)
The gloomy news continued for jobs as ADP reported Wednesday that private companies created just 119,000 new positions in April. That was well below expectations and confirmation that the labor market is slowing heading into late spring and early summer. Economists surveyed by Reuters expected the ADP report to show the private sector created 150,000 jobs in April, down from 158,000 in March.

Fed Seen Slowing Stimulus With QE Cut by End of This Year (Bloomberg)
Chairman Ben S. Bernanke will probably reduce the Federal Reserve’s monthly bond buying in the fourth quarter to $50 billion from $85 billion as he begins to unwind record stimulus, economists said in a Bloomberg survey. Policy makers must find a way to slow the pace of purchases enough to signal confidence the economy is strengthening without prompting a sudden rise in interest rates, said former Fed economists Michael Feroli and Joseph LaVorgna.

High-Speed Traders Exploit Loophole (WSJ)
High-speed traders are using a hidden facet of the Chicago Mercantile Exchange's computer system to trade on the direction of the futures market before other investors get the same information. Using powerful computers, high-speed traders are trying to profit from their ability to detect when their own orders for certain commodities are executed a fraction of a second before the rest of the market sees that data, traders say.

Fed weighs tighter cap on bank leverage (FT)
According to people familiar with the matter, Fed officials have discussed increasing the amount of equity capital banks are required to hold, setting the bar higher than the 3 per cent of assets level agreed internationally. The move is being considered amid growing scepticism about the Basel III capital accords, which impose higher capital requirements on banks around the world but allow them to vary the amount depending on the riskiness of individual assets. Officials are concerned that some banks are gaming the system. However, critics of a higher leverage ratio argue that it is a blunt tool that makes no distinction between safe securities, such as US Treasuries, and risky assets such as leveraged loans, and could result in banks taking on more risk.

Berkshire Hathaway to Buy Rest of IMC for $2 Billion (DealBook)
Berkshire Hathaway has agreed to buy the 20 percent of IMC International Metalworking Companies that it does not already own for $2.05 billion, giving it full control of the company. The deal was announced on Wednesday, just days before Berkshire holds its annual shareholder meeting, where Warren E. Buffett is expected to tell investors that he remains on the hunt for big deals. It is the second big acquisition by Mr. Buffett’s company this year, following the blockbuster $23 billion takeover of H.J. Heinz by Berkshire and 3G Capital.

Florida office manager accused of performing surgery on patient's face (Fox)
Authorities in Florida say an office manager performed a surgical procedure on a patient's face at her brother's cosmetic surgery office. The Sarasota Herald-Tribune reported that 44-year-old Christine Patterson was arrested this week and charged with practicing medicine without a license. Sarasota County Sheriff's officials said a patient went to Sarasota Surgical Arts for a follow-up visit with Dr. Alberico Sessa the day after surgery in April 2011. Patterson allegedly examined the patient and re-wrapped the bandages. The following day, the patient returned with a swollen face and Patterson allegedly decided to insert a drain to remove excess fluid, according to a sheriff's office news release. Patterson contacted Sessa, who was out of town, prior to performing the procedure, the news release states. She allegedly told a co-worker on the day of the incident that she had seen the procedure done "plenty of times."

Chinese manufacturing growth slows in April (FT)
China’s official purchasing managers' index (PMI) fell to 50.6 in April from 50.9 in March, indicating a slowdown in manufacturing activity that was led by a slump in new export orders. ... “The slight fall in the PMI reading for April shows that the economic recovery is still not on a solid foundation,” the China Federation of Logistics and Purchasing, which publishes the PMI with the National Bureau of Statistics, said on Wednesday.

How Google UK clouds its tax liabilities (Reuters)
For tax purposes, Google, which is headquartered in Mountain View, Calif., says it does not have a British presence. From 2006 to 2011, Google generated $18 billion in revenues from the UK, according to statutory filings, and paid just $16 million in taxes. If the UK tax authority were to decide that UK-based employees do sell to British clients, UK law could consider Google to have a tax residence, lawyers and academics say.

SEC Weighs Cross-Border Swap Rules Amid Calls to Restrict Reach (Bloomberg)
The Securities and Exchange Commission plans to propose measures determining when U.S. rules apply to cross-border swap trades amid calls from foreign counterparts to limit the reach of Dodd-Frank Act oversight. SEC commissioners meeting in Washington today probably will approve a 1,000-page proposal that could influence how global regulators address rule differences while working to reduce risk and increase transparency in the swaps market.

Keyboard Crazy: Is BlackBerry Back in the Game? (CNBC0
Retailing at 579.99 pounds ($898) the Blackberry Q10 has caused "a bit of pent up demand" according to Mark Sue, an analyst at RBC Capital Markets, who said that the launch saw "modest crowds" at the London store. RBC is increasing its near-term assumptions on better-than-expected demand for the phones as well as keyboard-less bigger brother, the Z10. "Some people love those buttons," Sue said in a research note on Monday. "We see the stock range bound between $12 to $18 and largely driven by sentiment."

Martha, you’ve got male (NYP)
Martha Stewart’s Match.com inbox was flooded with date requests yesterday after the domestic diva announced that she was joining the popular Web site to find a man to “sleep with.” More than 1,000 suitors requested to connect with the 71-year-old media mogul within hours of her profile being outed. ... Despite her age, the randy grandmother said she knows how to attract a man — keeping a “tiny waist.” “No matter your age, your waist should measure the same as your head... Maintaining a tiny waist is a very important factor in successful aging,” she told New You magazine of the invaluable advice she received from designer Carolina Herrera.

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Opening Bell: 11.19.12

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

Opening Bell: 04.04.12

Chinese Premier Blasts Banks (WSJ) In an evening broadcast on state-run China National Radio, Mr. Wen told an audience of business leaders that China's tightly controlled banking system needs to change. "Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly," said Mr. Wen, according to the transcript of the program on the broadcaster's website. "To break the monopoly, we must allow private capital to flow into the finance sector." Regulators Expected to Penalize JPMorgan Over Lehman Collapse (NYT) The Commodity Futures Trading Commission is expected this week to file a civil case against JPMorgan. The bank is expected to settle the Lehman matter and pay a fine of approximately $20 million...The Lehman action stems from the questionable treatment of customer money — an issue that has been at the forefront of the recent outcry over MF Global. JPMorgan was also intimately involved in the final days of that brokerage firm. The trading commission is expected to accuse JPMorgan of overextending credit to Lehman for two years leading up to its bankruptcy in 2008, the people briefed on the matter said. Fitch Ditched in Bond Dispute (WSJ) Fitch Group's new chief executive said Credit Suisse Group AG CSGN.VX -1.61% dropped the firm's rating from a mortgage-backed security because Fitch took a harsher view than two rivals that assigned triple-A ratings to the deal. "It was an 11th-hour thing when they decided which agency it would be to publicly rate it," said Paul Taylor, who took over this week as chief executive of Fitch Group, in an interview. "We had a materially different take." Mr. Taylor said Fitch Group, which includes credit-rating firm Fitch Ratings, had been compensated for its rating on the mortgage-backed deal. Fitch shared its differing view with investors after the deal closed Friday, publishing a report critical of Standard & Poor's Ratings Services and DBRS Ltd. for issuing triple-A ratings on the residential-mortgage-backed security issued by Credit Suisse. Fed Signals No Need for More Easing Unless Growth Falters (Bloomberg) “A couple of members indicated that the initiation of additional stimulus could become necessary if the economy lost momentum or if inflation seemed likely to remain below” 2 percent, according to minutes of their March 13 meeting released today in Washington. That contrasts with the assessment at the FOMC’s January meeting in which some Fed officials saw current conditions warranting additional action “before long.” Spanish Bond Sale Fizzles (WSJ) Spain sold a total of €2.589 billion ($3.43 billion) of the 4.4% January 2015, 4.25% October 2016 and 4.85% October 2020 bonds, against its €2.5 billion to €3.5 billion target. Wednesday's sale, brought forward by one day due to a national holiday on Thursday, brought Spain's 2012 bond issuance completion to almost 46% of the €86 billion gross bond issuance target. ‘Apple Fever’ Prompts Predictions of $1 Trillion Value (Bloomberg) “Apple fever is spreading like a wildfire around the world,” Brian White, the Topeka analyst, said in a report that initiated coverage of the company with a buy recommendation. White’s new 12-month target of $1,001 is the highest among the 45 analysts tracked by Bloomberg and represents a 59 percent increase over today’s closing price. He said Apple’s market value will eventually top $1 trillion. £200,000 bar bill trader, arrested in FSA probe (CityAM) Alex Hope, the 23 year-old trader who hit the headlines after spending £125,000 on a single bottle of champagne, has been arrested on suspicion of being involved in an unauthorised foreign exchange trading scheme. Hope, who claims to be a self made foreign exchange trader, became infamous when he ran up a £125,000 bar bill in one evening at a Liverpool nightclub. Most of this was spent on a single 99lb bottle of champagne...Hope's publicist last night confirmed that he had been arrested but said that he denies all allegations. His personal website describes him as “a name to watch out for in the city” and “an expert in the UK economy” who regularly "trades millions." It calls him a “talented, charismatic and thoroughly likeable man." SEC Puts Exchanges on Notice Over Computer-Driven Trades (Bloomberg) “The consequences of a big failure are so severe that the SEC should be paying close attention to these issues,” James Angel, a finance professor at Georgetown University’s business school in Washington, said in an e-mail. “No human system is perfect and eventually something will happen, so they also want policies and procedures in place for catching problems quickly and cleaning up the mess afterwards.” Ready for a rumble: Falcone vs. Icahn (NYP) Falcone, who has funneled a whopping $2.9 billion into LightSquared, is desperate to salvage his shaky investment amid a battle with federal regulators over building out the wireless network. Falcone has said both publicly and privately that bankruptcy is not an option. However, some LightSquared creditors, including Icahn, would rather put the company into bankruptcy as part of a plan that would give them equity stakes in the company and greater control over its future, sources said. The deadline for creditors to decide is fast approaching. Icahn and other owners of LightSquared’s $1.6 billion loan due 2014 have given the company until the end of April before they decide whether to put LightSquared into default for breaching some loan covenants tied to its customer contracts. ADP: 209,000 Jobs Added (WSJ) Private businesses hired at a modest rate in March close to what economists expected, according to a report released Wednesday. Private-sector jobs in the U.S. increased 209,000 last month, according to a national employment report published by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The gain was just above economists' median expectation of 200,000 contained in a survey done by Dow Jones Newswires. Occupy London Hinders Burrito Sales More Than Banker Bonuses (Bloomberg) The protesters were evicted from St. Paul’s on Feb. 28 and at least one restaurant found its bookings jump back to pre- occupied levels. Sales were down 40 percent to 50 percent while the camp was at St. Paul’s, resulting in two or three staff members losing their jobs, said Pollie Hall, events manager at the Paternoster Chop House. “This isn’t the corporate fat cats they were affecting, it was average working Joes,” said Hall, who said her customers were verbally abused by protesters and she was called a “devil- worshipping mason.” A wedding scheduled at the restaurant on the first day of the protest had to be moved. Mega ‘winner’: $105M tix stashed in this McDonald's (NYP) The Baltimore woman who claims to have one of three winning Mega Millions tickets now says it’s hidden somewhere in the McDonald’s restaurant where she works. Marlinde Wilson, 37, coyly wouldn’t reveal whether she had stashed the slip of paper behind the McFlurry machine or under the all-beef patties. “I’m waiting for things to calm down so I can go back to McDonald’s and get it. The people [at McDonald’s] are too excited. I want their heads to cool down before I go back,” she said.