Opening Bell: 06.25.13


Walking Back Bernanke Wished on Too Much Information (Bloomberg)
“Will the Fed try to walk back from how the market has perceived its comments?” Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said yesterday in an interview on Bloomberg Radio’s “Bloomberg Surveillance” with Tom Keene and Mike McKee. Pimco, based in Newport Beach, California, manages the world’s biggest bond fund. “The central-bank brand, this notion that the markets had that they were wise, they were powerful and were effective is under assault,” El-Erian said. “The Fed has to be very careful what it does with its reputation here.”

Falling Debt Prices Roil Market (WSJ)
Trading desks at Wall Street firms are increasingly worried about the demand for bonds, or liquidity, they can expect from investors, and they don't want assets that could stick them with losses if prices fall further. Many investors and banks close their books for the second quarter of 2013 at the end of the week. ... "We're coming from an environment where liquidity was already difficult," said Andrew O'Brien, partner and portfolio manager at Lord, Abbett & Co., whose group manages $45 billion in bonds. He said that, unless there is a buyer already lined up, it is difficult to trade anything.

U.S. Civil Charges Against Corzine Are Seen as Near (DealBook)
The Commodity Futures Trading Commission, the federal agency that regulated MF Global, plans to approve the lawsuit as soon as this week, according to law enforcement officials with knowledge of the case. In a rare move against a Wall Street executive, the agency has informed Mr. Corzine’s lawyers that it aims to file the civil case without offering him the opportunity to settle, setting up a legal battle that could drag on for years.

For Third Point Manager, It's Not Easy Being Short (CNBC)
Amid a 10 percent Standard & Poor's rally this year, some of Third Point's short holdings have held it back, as even the most beaten-down companies have staged remarkable comebacks. Against that backdrop, Jim Carruthers, the Third Point partner who handled the company's research-driven small-stock short positions from San Francisco, is retiring from the company this summer, according to a recent investor letter.

Tory minister breaks foot after table-dancing in Soho (Telegraph)
Mark Harper, a Conservative minister has broken his foot after dancing on a table in Soho. Mr Harper, an immigration minister responsible for the policing of Britain's borders, revealed the accident happened during a night out on the town. He was quick to point out that his wife was with him at the time of his visit to the trendy London district, which is also known for having a seedy side. In a statement, the minister said: "I was dancing on a table in a bar in Soho when I fell off and broke my foot. "My wife Margaret was with me - but thankfully she’s a far better dancer so didn’t fall off."

Short Term, Markets Are Oversold: Marc Faber (CNBC)
"Treasury bonds, gold and equity markets are oversold in the near-term and they can rebound for the next ten days or even the next month," Faber, the author of "The Gloom, Boom & Doom Report," said on Tuesday.

PBOC Addresses Cash Crunch (WSJ)
Speaking at a news conference in Shanghai, an official of the city's central bank branch said that recent volatility in interbank credits—some rates spiked to 30% last week—was temporary and that the People's Bank of China would be flexible in managing liquidity. "We will continue to closely monitor changes in liquidity in the interbank market," said Ling Tao, a deputy director of the Shanghai branch of the People's Bank of China. "And we will step up communication with the market to stabilize expectations and guide market interest rates into a reasonable range."

Qatar emir hands power to son, no word on prime minister (Reuters)
Qatar's emir Sheikh Hamad bin Khalifa al-Thani handed power on Tuesday to his son, Crown Prince Sheikh Tamim, taking the rare step for a Gulf Arab ruler of voluntarily ceding power to try to ensure a smooth succession. But the 61-year-old emir made no immediate mention of the public face of Qatar's assertive foreign policy, prime minister and foreign minister Sheikh Hamad bin Jassim, a veteran politician who had been expected also to step down.

Mark Carney confirms plan for Libor reform committee (FT)
The steering committee, to be chaired by Martin Wheatley of the UK’s Financial Conduct Authority and Jeremy Stein from the US Federal Reserve, will also solicit recommendations from a panel of market participants. ... Mr Carney said the oversight group would be considering “the ease of potential transition” to a new way of calculating an interbank benchmark and would “recognise there is considerable improvement being made” over how Libor is presently derived, through submissions from panel banks.

Misjudged Annuity Guarantees May Cost Life Insurers Billions (WSJ)
Life insurers in the U.S. face charges against earnings potentially totaling billions of dollars from miscalculations about the number of customers who would exercise lifetime-income guarantees sold with the retirement products known as variable annuities, according to a new report from Moody's Investors Service. Variable annuities are a tax-advantaged way to invest in stock and bond funds, and these particular guarantees promise steady payouts if owners' fund accounts become depleted. ... Over the past couple of years, many insurers have clamped down on fund choices, raised fees, forbid additional account contributions and sought to buy back the contracts. In one of the latest efforts, Hartford Financial Services Group Inc. is requiring owners of certain of its guarantees to move at least 40% of their money into bond funds—and lose their guarantee if they fail to transfer the money out of stock funds.

Men's Wearhouse founder clashed with CEO, mulls comeback (Reuters)
Tensions started rising at Men's Wearhouse Inc over the past six months, as founder and executive chairman George Zimmer increasingly butted heads with his handpicked CEO over the clothing retailer's strategy. ... Zimmer, who is known to U.S. TV audiences for his advertising catch phrase "you're gonna like the way you look - I guarantee it," was seen by company directors to be undermining Ewert's authority. ... Zimmer, who was shocked by the decision, quit the board on Monday, and is now mulling his options, they added. While Zimmer is still unclear what those options might be, an attempt to stage a comeback at the company is possible. He is talking to his advisers, including legal counsel Cooley LLP, but a decision is not imminent, the sources said. Industry bankers and lawyers said these options could involve teaming up with private equity firms to launch a buyout bid or trying to wage a proxy battle with the help of shareholder activists or institutional investors.

Crocs Answers Clog Haters With Leopard-Print Ballet Flats (Bloomberg)
Chief Executive Officer John McCarvel is all too aware of the Crocs animus and how it complicates his strategy to attract new customers and double sales in five years. The clogs still generate 47 percent of sales because lots of people like them, especially medical professionals and kids. Yet to hit his target, McCarvel must persuade the haters to buy the company’s other footwear. That’s why Crocs is telling the world all about its wedges, sneakers and leopard-print ballet flats -- and hiding Crocs in the back of stores the way grocers do with milk. “Our milk are those clogs,” McCarvel said in a telephone interview on June 5. “If someone wants them, make them walk through all the new stuff first.”

Connect the snots: The new 'Harvard' club for the digital age (NYP)
[P]otential IvyConnect members’ applications include a résumé, a photo, a list of cities they frequently visit (there is a pull-down menu of 50 acceptable ones to choose from) and a checklist of personality traits. (When asked to fill out the form, Triebel checked off “open-minded” and “driven,” whereas Meric highlighted “adaptive” and “optimistic.”) ... “I think from the outside looking in, with a name like IvyConnect, sure, it seems elitist, but that’s taking the easy look,” says member Jean-Claude Homawoo, 33, an exec for e-commerce site The Cools. “Dating and social connections are always a matter of perceived affinities initially. It’s self-selected.”


Opening Bell: 8.14.15

Flash crash trader out on bail; Hedges funds screwed on China; Tsipras needs a friend; "Man Clogs Casino Pipes With Counterfeit Chips Worth $2.7 Million"; and more.

Opening Bell: 2.3.16

Argentina attempting to settle with hedge funds; Parmesan bonds; Horse Owner Complains Man Took Prize-Winning Selfie Without 'Consent'; and more.

Looking a little sadder than usual. Dietmar Rabich / Wikimedia Commons / “Frankfurt am Main, Skulptur -Bulle & Bär- -- 2015 -- 6763” / CC BY-SA 4.0, via Wikimedia Commons

Opening Bell 8.8.17

Google axes memo bro; Gundlach draws a line in the sand; Swedish banker regrets whipping it out; Driving bear poops in car; And more!

Opening Bell: 10.01.12

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

By Evan-Amos (Own work) [Public domain], via Wikimedia Commons

Opening Bell: 8.30.16

Mondelez snubs Hershey; Valeant sued over alleged racketeering; Warsaw woos London bankers; Harambe-costumed teen re-enacts tragedy at high school football game; and more.