Opening Bell: 07.09.13

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U.K. Treasury Endorses Banking Reforms (WSJ)
The U.K. Treasury said Monday in a report on its efforts to overhaul the nation's banking industry that it is proposing a criminal law to punish "reckless" misconduct by senior bankers. The Treasury also said it was working with regulators to ensure bonuses can be deferred for up to 10 years, and clawed back when a bank is bailed out by the government. How the new law would work will be hashed out by government officials over the summer; an amendment that would put it into effect will be added to the Banking Reform Bill that currently is being debated in Parliament. The bill is expected to be passed in early 2014 and would apply to all banks that have headquarters in the U.K.

FDIC to Tighten Screws on Banks, Require 5% Leverage (CNBC)
The FDIC on Tuesday will propose a leverage rule requiring big banks to have common equity equal to at least 5 percent of their assets—stricter than the international banking regulations known as Basel III, sources told CNBC. The asset number includes off-balance-sheet items and will not be adjusted for riskiness. The proposed rule for so-called "simple leverage" is 2 percent higher than the minimum simple leverage rule under Basel III.

Why I Became a Chinese Shadow Banker (Bloomberg)
Since 2011, I have run a microcredit firm in Guangzhou, which provides loans to thousands of small-scale entrepreneurs: florists, restaurateurs, fish farmers, vegetable growers, roadside hawkers. Although we charge about 24 percent annually for our money, demand remains virtually unlimited. Our customers are too small and too unstable to get traditional bank loans. At the same time, because we keep our loan amounts small -- $20,000 apiece on average -- and because we have close contact with our clients, the business has proved reasonably secure. Our bad debts have not strayed above 5 percent since the firm was founded five years ago.

Merchant Banks Make a Comeback (WSJ)
At least half a dozen so-called merchant banks have cropped up since the 2008 financial crisis, touting themselves as practitioners of old-fashioned relationship banking when others on Wall Street are increasingly wary of potential conflicts. ... Merchant banks are mostly matchmakers. They connect clients looking to raise private capital with those who have money to invest. Most merchant banks operate funds containing outside money as well as their own.

Triple - Kippah On Madoff (YouTube)
It's the latest video from Bernie Madoff's fake nephew. (Earlier.)

Staring contest triggered stabbing on 6 train by subway rider gone berserk, witness says (NYDN)
A woman went berserk on a packed Manhattan subway train Monday morning and stabbed a female straphanger after an impromptu staring contest, authorities said. The crazed suspect, 31, stabbed the 39-year-old victim in the shoulder and abdomen on an uptown 6 train as it approached the 59th St. station about 9:45 a.m., officials said. The pair, who police do not believe knew each other, engaged in an unfriendly staring match before the attack, cops said. No words were ever exchanged between them.

China Inflation Accelerates More Than Forecast on Food Prices (Bloomberg)
The consumer price index rose 2.7 percent from a year earlier, the National Bureau of Statistics said today in Beijing, compared with a median estimate of 2.5 percent in a Bloomberg News survey and a 2.1 percent gain in May. Producer prices fell 2.7 percent. The lowest first-half inflation since the financial crisis in 2009 and prolonged factory-gate deflation underscore weaker demand that leaves the government at risk of missing its annual growth target for the first time since 1998. Premier Li Keqiang is trying to focus on spurring longer-term expansion by restructuring the economy and curbing the state’s role.

Barnes & Noble CEO resigns after Nook sales slump (Reuters)
Barnes & Noble Inc (BKS.N) CEO William Lynch resigned on Monday, an acknowledgement that its digital division Nook has failed to compete successfully in the e-reader and tablet markets and possibly presaging a further shake-up in the company. Chairman and founder Leonard Riggio, the largest shareholder of Barnes & Noble, said the company is reviewing its strategic plan and announced a series of executive changes.

Macau Considers Requiring Tourists to Declare Cash (Bloomberg)
Macau is considering a system requiring travelers to declare the cash they carry across the border, according to a government agency that sets anti-money laundering guidelines. The world’s largest gambling hub is studying a “cross-border cash declaration system, but no timeframe, declaration threshold or penalties are determined yet at the present stage,” Deborah Ng, director of the city’s Financial Intelligence Office, said in an e-mail yesterday.

CFTC Weighs Delay of Swaps Rules (WSJ)
The head of the Commodity Futures Trading Commission is proposing to partially delay controversial cross-border derivatives rules slated to go into effect Friday, according to people familiar with the negotiations. The move is an about-face for CFTC Chairman Gary Gensler, who previously refused to delay a requirement that U.S. banks operating abroad comply with U.S. swaps rules, despite mounting pleas from fellow commissioners, lawmakers and overseas policy makers. Mr. Gensler now is floating a compromise that would implement some provisions almost immediately and delay others until the end of the year, said the people familiar with the negotiations.

Perelman Sues Old Friend Milken (Not to Worry. It Isn’t Personal.) (DealBook)
One of Mr. Perelman’s companies, Harland Clarke Holdings, filed a little-noticed lawsuit last month accusing Mr. Milken of fraud. The case stems from Harland Clarke’s 2011 purchase of GlobalScholar, an education technology company backed by Mr. Milken, the fallen financier and philanthropist. The lawsuit, filed in state court in San Antonio, was said to have surprised Mr. Milken, who had done business with Mr. Perelman for decades and counts him as a friend, according to a person briefed on the matter who is not authorized to discuss the lawsuit publicly.

U.S. Suit Against S&P Tentatively Allowed to Proceed (WSJ)
U.S. District Judge David O. Carter for the Central District of California in Santa Ana said that he tentatively rejected S&P's bid to dismiss outright the federal government's lawsuit but cautioned that he would make a final ruling by July 15. ... Judge Carter made the ruling after he heard several hours of arguments from lawyers on both sides of the $5 billion lawsuit.

68-year old 'gambling nun' sentenced to 90 days in jail for stealing $130,000 from local parishes (AP)
A Roman Catholic nun has been sentenced to 90 days in jail for stealing nearly $130,000 from two western New York parishes to support a gambling addiction. Sister Mary Anne Rapp also was ordered at Monday's sentencing to perform 100 hours of community service and repay $128,000. Rapp pleaded guilty to grand larceny in Orleans County Court in April. The 68-year-old admitted stealing from St. Mary's Church in Holley and St. Mark's Church in Kendall from 2006 to 2011. The thefts were discovered during an audit. Investigators have said she stole the money to feed a gambling addiction and spent the money at western New York casinos.

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Opening Bell: 06.08.12

Capital Rule Is One Size Fits All (WSJ) The Federal Reserve shocked bankers Thursday by approving a proposal that would force even the smallest lenders to comply with the elaborate international bank-capital standards known as Basel III. The draft requirements would apply to all 7,307 U.S. banks, according to a proposal circulated by the Fed. Many bankers had expected regulators to exempt some small lenders from the new rules, which are aimed at shoring up the biggest global banks whose troubles fueled the financial crisis. While the core Basel III rules will apply to all banks, other aspects of the new regime single out the biggest, most complex banks for tougher treatment than their smaller peers. The Fed, for instance, has embraced slapping a handful of the biggest U.S. banks with a capital surcharge of between 1% and 2.5%. The Fed has yet to introduce the specific proposal. Europe's Vulnerable East Braces for Possible Greek Exit (WSJ) Government officials and central bankers in the European Union's eastern wing say they are in better shape to weather any storm than they were four years ago when the collapse of U.S. investment bank Lehman Brothers sparked a global financial crisis. But they are still vulnerable. Investors fearful that Greek elections next week will spark Athens's disorderly departure from the euro have already been selling Polish, Hungarian, Romanian and Czech assets, hitting local currencies and stock markets. Hungarian Prime Minister Viktor Orban, whose heavily indebted country is considered especially at risk, said "work has begun" on strengthening defenses "so that such a quake doesn't bring Hungary down on one knee." Euro Breakup Precedent Seen When 15 State-Ruble Zone Fell Apart (Bloomberg) The 1992 Soviet experience tells us “an exit like this is messy and leads to loss of income and inflation, and people are right to be scared of it,” said Harold James, a professor of history at Princeton University. 'Bargain' Bid as Warren Buffett Lunch Auction Goes Into Final Day (CNBC) With just over 24 hours to go, the high bid for lunch with Warren Buffett is just over $200,000. That's around 8 percent of last year's record $2,626,411 winning bid by Ted Weschler, who is now working for Buffett as a Berkshire Hathaway portfolio manager. Ted also won the previous year's auction with a bid of $2,626,311. Bear Stearns Accord Turns Another Page (WSJ) Former top executives at Bear Stearns Cos., including James E. Cayne and Alan "Ace" Greenberg, have agreed to a $275 million settlement of a shareholder lawsuit over the demise of the Wall Street firm four years ago. The deal with investors led by the State of Michigan Retirement Systems puts to an end the last major dispute surrounding the demise of Bear Stearns, whose near-collapse in March 2008 marked the beginning of the worst period of the financial crisis. Mr. Cayne, a former CEO, and Mr. Greenberg, who was Mr. Cayne's mentor and predecessor, and the other former top executives named in the lawsuit won't have to pay any of the settlement, according to people close to them. The money will come from a $9 billion fund set aside by J.P. Morgan Chase. for litigation and other expenses in 2008, when it bought Bear Stearns in a cut-price deal blessed by the government. Woman who allegedly ran down boyfriend after he damaged her iPhone says she still loves him (NYP) Jasmine Diaz told her Bronx Central Booking cellmate that she is still in love with Franklyn Hernandez, her 17-year old boyfriend who she's accused of running down with an SUV after he accidentally damaged her iPhone. “She says she loves him and she feels like s ---t, ” the 21-year-old cellmate, Michelle Rodriguez, said after being released on a shoplifting charge. Diaz, 25, was held without bail after her arraignment on manslaughter and leaving the scene of an accident for allegedly mowing down Hernandez early Wednesday morning a block away from his home on Morris Ave and E. 165th St. “Franklyn jumped in front of the vehicle and I just kept going,” she told investigators, a prosecutor said in court. Wearing a matching blue jean jacket and pants, Rodriguez said Diaz was pensive while awaiting her turn to see the judge. Bernanke Sees Risks To Economy From Europe To U.S. Budget (Bloomberg) Bernanke also warned lawmakers that “a severe tightening of fiscal policy at the beginning of next year that is built into current law -- the so-called fiscal cliff -- would, if allowed to occur, pose a significant threat to the recovery.” Prosecutors Hone Gupta Case (WSJ) Using a variety of charts and graphs, Mr. Barnacle described a repetitive, and potentially damning, pattern: Mr. Gupta would call into meetings by the boards or committees at Goldman or Procter & Gamble Co, where he was also a director, and shortly thereafter a call from one of his associated phone lines would reach out to Mr. Rajaratnam. Harvard Professor: 'Greece Is Beyond Repair' (CNBC) “The best situation for Greece is to leave the euro zone, devalue a new currency, and be able therefore to grow again,” he said. “Letting Greece go will be painful in the short run but will be better for Greece, and for Europe, in the long-run,” said Feldstein, who is also president emeritus of the U.S. National Bureau of Economic Research, and also served as chief economic advisor to President Ronald Reagan. Lightbulb eating record holder charged in string of bank robberies (NYP) R.J. Williams, 22, who holds the world record for wolfing down a light bulb in 33 seconds, was busted yesterday after a failed bank robbery attempt in Brooklyn, cops said. Williams, who lives on the Upper West Side, allegedly scored nearly $14,000 after knocking off seven branches in Manhattan, Brooklyn, Queens and the Bronx. He was nabbed when he fled an Apple Bank yesterday in Midwood. Williams had begun to write a note to a teller on a deposit slip at one of the counters when employees started staring at him, police said, because he previously tried to rob the bank on Friday.

By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Opening Bell: 9.9.16

Gundlach gets defensive; Deutsche Bank nears settlement; Investors prefer computers to traders; Judge cracks food jokes during Chipotle exec’s court appearance; and more.