Opening Bell: 07.17.13

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Wild Cards for the Fed's Exit Strategy (WSJ)
The Federal Reserve's plans to wind down its big bond-buying program depend on solving four economic puzzles involving the job market, the inflation rate and fiscal policy. Fed Chairman Ben Bernanke gets another chance to clarify the central bank's thinking when he testifies before Congress on Wednesday and Thursday, after weeks of market volatility generated largely by confusion and uncertainty about the Fed's plans. Here are four questions that Fed officials are considering as they think about when to pull back on the monetary throttle and that lawmakers might pose to Mr. Bernanke in the days ahead: Is job growth sustainable? ... Is the jobless rate overstating the labor market's health? ... Will inflation return to target? ... Is more fiscal chaos coming?

Bank of England puts QE differences on hold at first Carney meeting (Reuters)
Bank of England Governor Mark Carney and fellow policymakers voted unanimously against more bond purchases earlier this month, surprisingly setting aside their differences ahead of a review on giving guidance about future interest rates. British government bond prices slid and the pound rallied following release on Wednesday's of the minutes of the bank's July 3-4 meeting, the first under Carney and the first to show no support for more quantitative easing bond purchases since last October.

Top Witness for the S.E.C. Turns Testy on the Stand (DealBook)
Over around two hours of testimony, Mr. Pellegrini, a tall, imposing investment executive, repeatedly paused and claimed he could not remember what he previously said. At one point, he complained that his questioner, Matthew T. Martens of the Securities and Exchange Commission, was being too imprecise in his queries, making them hard to answer. “It’s a bit of a trick question, but I’ll try to answer it,” he said. ... Mr. Pellegrini at one point spent about 10 minutes bickering with Mr. Martens over the definition of a “custom C.D.O.” Later, Mr. Pellegrini sighed, “I am upset about this conversation.”

Morgan Stanley is having an identity crisis (Qz)
What does Morgan Stanley stand for? It has long been known as an investment banking powerhouse, often going head to head with Goldman Sachs in several areas such as mergers and acquisitions (M&A) and initial public offerings (IPOs.) But Morgan Stanley’s investment banking operations have faded a bit from the spotlight and its trading arm had been disappointing though is staging a comeback, while its wealth management arm is getting more attention—and seeing more success. Overall, Morgan Stanley hasn’t completely adjusted to the world after the financial crisis. In Wall Street’s map of the world, the bank is in something of a no-man’s land.

Alleged Oklahoma burglar accidentally dials 911 during break-in (UPI)
"There was a 911 call made by an individual who was breaking into a residence ... . We believe the 911 call was made accidentally by pocket dialing. The two burglars were discussing what they were taking from the house," Pittsburg County, Okla., Undersheriff Richard Bedford said. Emergency dispatchers listened to the conversation, Bedford added.

Yahoo trims 2013 sales outlook as CEO Mayer's effort falters (Reuters)
Yahoo Inc trimmed its outlook for 2013 revenue after revealing a sharp 12 percent slide in ad prices in the second quarter, signs that CEO Marissa Mayer's attempts to revive the struggling Internet giant may not produce quick results. The company is now forecasting revenue of $4.45 billion to $4.55 billion this year, down from $4.5 billion to $4.6 billion previously. Yahoo also reported that second-quarter net revenue was down slightly at $1.071 billion, though it posted adjusted profit that was ahead of Wall Street targets.

Spain Covered 63% of This Year’s Funding Goal, Official Says (Bloomberg)
Spain has covered 63.2 percent of its issuance target for 2013 including short-term bills after a debt sale yesterday and is open to other forms of funding, an Economy Ministry official said. The Treasury in Madrid will consider ways of diversifying its funding methods with instruments such as longer-dated bonds, inflation-linked bonds or dollar bonds if positive market sentiment continues, said the official, who asked not to be named in line with government policy. The yield on Spain’s benchmark 10-year bond has fallen about 300 basis points since European Central Bank President Mario Draghi pledged to support the euro in July 2012. Still, with the economy shrinking, the government is struggling to deal with its fiscal burden. The European Commission forecasts that debt will rise to 97 percent of output next year from 84 percent in 2012.

Hollande Sets Out EU3 Billion in Cuts in Face of Poll Slump (Bloomberg)
President Francois Hollande’s government will today set out 3 billion euros ($3.9 billion) in spending cuts and close tax loopholes as he struggles to revive a stalled economy and his own slumping popularity. The savings are part of Hollande’s MAP program to modernize government services and range from trimming consular services to eliminating special low-tax rates on diesel fuel for farmers and fisherman, according to a presentation to journalists by officials yesterday. For Hollande, cutting state spending is a priority as he seeks to reduce France’s budget deficit after he and his predecessor Nicolas Sarkozy increased taxes by 70 billion euros over three years, helping to choke off growth in Europe’s second-largest economy. Business leaders including Total Chief Executive Christophe de Margerie this month urged the government to shrink itself to give businesses room to grow.

International Paper's Big Pulp Bet Hits a Frosty Siberia (WSJ)
International Paper's joint venture in Bratsk has the advantage of being able to harvest logs more cheaply than in most parts of the world. Labor costs are also relatively low, and there is a rail connection to China. But the U.S. company needs to show it can thrive in a business climate hobbled by inefficiency, corruption and bureaucracy. ... The company also faces the Wild East atmosphere around the Bratsk mill, a smoky jumble of more than 500 buildings occupying 3,700 acres surrounded by pine-wooded hills along the Angara River. It is a place where temperatures can plunge to 65 below zero Fahrenheit and the air is foul with a putrid smell from pulp production. ... After the Soviet Union's collapse in 1991, however, Bratsk became better known for its crime than its industry. At one point, the pulp plant ran short of money and paid workers with cafeteria coupons. Armed standoffs over ownership of factories took place in Bratsk and elsewhere across Siberia.

Formula 1 boss Ecclestone indicted (BBC)
German prosecutors have indicted Formula One boss Bernie Ecclestone for alleged bribery. The charge relates to a $44m (£29m) payment to a German banker, Gerhard Gribkowsky of Bayern Landesbank. It was linked to the sale of a stake in F1. Mr Ecclestone said he had paid Mr Gribkowsky to avoid a UK tax inquiry into the sale of Formula 1 in 2006, but denied the payments were bribes.

Mass. man fights shark and brings it to shore (CBS)
"I had my shark gear in my car, ran out and got it, threw out half a bluefish on a hook and like 30 seconds later I had hooked up on this shark," Sudal said. "It just pulled out like a 150 yards of line and started going." Sudal fought with the brown shark for 45 minutes. When the shark got ashore, he handed the fishing rod to his cousin and then went into the water. "You have to run in the water and grab it by the tail and pull it on shore because you can't just drag it on because they're too heavy," he explained. After having the shark on shore for about a minute, Sudal, who said he caught 100 sharks in the last eight months, let the shark go back into the water.

Vatican offers 'time off purgatory' to followers of Pope Francis tweets (Guardian)
In its latest attempt to keep up with the times the Vatican has married one of its oldest traditions to the world of social media by offering "indulgences" to followers of Pope Francis' tweets. ... But a senior Vatican official warned web-surfing Catholics that indulgences still required a dose of old-fashioned faith, and that paradise was not just a few mouse clicks away. "You can't obtain indulgences like getting a coffee from a vending machine," Archbishop Claudio Maria Celli, head of the pontifical council for social communication, told the Italian daily Corriere della Sera. Indulgences these days are granted to those who carry out certain tasks – such as climbing the Sacred Steps, in Rome (reportedly brought from Pontius Pilate's house after Jesus scaled them before his crucifixion), a feat that earns believers seven years off purgatory. But attendance at events such as the Catholic World Youth Day, in Rio de Janeiro, a week-long event starting on 22 July, can also win an indulgence. Mindful of the faithful who cannot afford to fly to Brazil, the Vatican's sacred apostolic penitentiary, a court which handles the forgiveness of sins, has also extended the privilege to those following the "rites and pious exercises" of the event on television, radio and through social media. "That includes following Twitter," said a source at the penitentiary, referring to Pope Francis' Twitter account, which has gathered seven million followers. "But you must be following the events live. It is not as if you can get an indulgence by chatting on the internet."

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Opening Bell: 11.20.12

Former UBS Trader Found Guilty (WSJ) Former trader Kweku Adoboli was found guilty on one count of fraud in connection with a $2.3 billion loss the Swiss bank suffered last year, as the juryin the alleged rogue-trading case continued to deliberate on five other counts he was charged with. The partial verdict comes nearly a week after the jury began deliberating following a roughly eight-week trial. It is unclear when the jury might reach verdicts on the other five counts or when sentencing might take place. Mr. Adoboli pleaded not guilty to all six counts. Shakeup At Credit Suisse (WSJ) Credit Suisse said Tuesday that it will combine the Swiss bank's asset management unit with its private bank, but stopped short of announcing the more drastic revamp analysts expected after crosstown rival UBS decided to fire 10,000 bankers. Robert Shafir, who currently heads the U.S. business of Credit Suisse, will take the helm of a new private banking and wealth management division jointly with Hans-Ulrich Meister, who has run the private banking business, the bank said. At the investment bank, Gael deBoissard is being promoted to co-head of the division, jointly with incumbent Eric Varvel. Following the revamp, Credit Suisse will have only two units—wealth management and investment banking--which are distinctly separate from each other, a move that is "in alignment with the new regulatory reality," Chairman Urs Rohner said. Greece Waits Nervously For Vital Bailout Funds (Reuters) Officials familiar with preparations for the finance ministers' meeting expect a "political endorsement in principle" on unfreezing loans to Athens, after Greece completed almost all the reforms that were required of it in exchange for funding. The final go-ahead from the ministers is likely to come only once the remaining few Greek reforms are in place and once there is agreement in the euro zone on how to reduce the country's huge debt and secure extra financing while it is being done. French Downgrade Widens Gulf With Germany as Talks Loom (Bloomberg) France’s loss of the top credit rating at Moody’s Investors Service may weaken President Francois Hollande’s leverage in European budget talks and deepen concern in Germany over its neighbor’s lagging competitiveness. The downgrade late yesterday of Europe’s second-biggest economy underscores the concern expressed by allies of German Chancellor Angela Merkel that the Socialist Hollande’s failure to recognize the urgency of France’s woes risks a deepening of Europe’s slump. “This downgrade will certainly increase pressure on France big-time,” Jan Techau, director of the Carnegie Endowment for International Peace office in Brussels, said today in a phone interview. “It gives Germany more of an edge over France.” ‘Tide Turning’ Against France, Say Economists (CNBC) “The tide is turning for France. Although the country's bond market is likely to remain resilient — the yield on 10-year paper is little changed [Tuesday] morning and still stands a whisker above its record low of 2.06 percent on July 19 — French debt looks more and more overvalued relative to fundamentals,” Nicholas Spiro, Managing Director of Spiro Sovereign Strategy, said in a note on Tuesday. France has enjoyed low borrowing costs as investors have viewed the country as a safe haven in comparison with its southern European cousins. The downgrade of France to AA1 with a negative outlook by Moody’s has thrown its “deteriorating fundamentals….into sharp relief” Spiro said. China’s Richest Woman Divorces Husband, Fortune Declines (Bloomberg) Longfor Properties Co. Chairwoman Wu Yajun is no longer China’s richest woman after divorcing Cai Kui and transferring about 40 percent of the developer’s shares the couple used to own to her ex-husband. Her stake in Longfor, which Wu co-founded with Cai, dropped from a combined 72 percent to 43 percent, while Cai retains 29 percent, according to filings from Hong Kong’s stock exchange. Wu’s net worth is estimated at $4.2 billion, down from $7.3 billion as of 5:30 p.m. New York time yesterday, according to the Bloomberg Billionaires Index. New York Prepares Lawsuit Against Credit Suisse (Reuters) The New York attorney-general is preparing to file a civil lawsuit against Credit Suisse for misleading investors who lost billions of dollars on mortgage-backed securities, according to a source familiar with the matter. The lawsuit, which is expected to be filed on Wednesday, will allege that Credit Suisse misrepresented the quality of loans packaged in securities, according to the source. Petraeus Mistress Paula Broadwell To Jill Kelley: 'I can make you go away' (NYDN) The notes Paula Broadwell sent to Jill Kelley were far more sinister than previously reported and seemed like the rantings of someone “clearly unhinged,” a close friend of Kelley said Monday. “This wasn’t just a catfight. Any normal person who got emails like that would have immediately called the police,” said the friend. She said Kelley read her the emails when she called, panic-stricken and seeking advice in the days before the scandal became a stunning public spectacle and led to Petraeus’ resignation as CIA director. The friend, who did not want to be identified, said Kelley saw the emails as death threats, specifically one in which Broadwell vowed to “make you go away.” [Meanwhile,] Broadwell...bloodied a female news photographer’s forehead Monday in a confrontation outside the biographer’s Charlotte, N.C., home. Broadwell smacked the photographer with the driver’s-side door of her Nissan Pathfinder SUV. “I had my camera and in all the chaos the door slammed and I got hit in the head with the flash,” said Nell Redmond, a freelancer for The Associated Press. Redmond suffered a small cut and is not pressing charges. Morgan Stanley’s Doom Scenario: Major Recession in 2013 (CNBC) The bank’s economics team forecasts a full-blown recession next year, under a pessimistic scenario, with global gross domestic product (GDP) likely to plunge 2 percent. “More than ever, the economic outlook hinges upon the actions taken or not taken by governments and central banks,” Morgan Stanley said in a report. Under the bank’s more gloomy scenario, the U.S. would go over the “fiscal cliff” leading to a contraction in U.S. GDP for the first three quarters of 2013. In Europe, the bank’s pessimistic scenario assumes a failure of the European Central Bank (ECB) in cutting rates and a delay of its bond-buying program. Judge Tosses Suit Over AIG (WSJ) A federal judge in Manhattan dismissed a $25 billion lawsuit by Starr International Co., which Mr. Greenberg runs, against the New York Federal Reserve Bank over claims the Fed breached its fiduciary duty to AIG's shareholders in the rescue during the U.S. financial crisis. It is one of two lawsuits Starr, AIG's largest shareholder at the time of the government takeover, is pursuing over the bailout. Mark Cuban Throws A Tantrum On Facebook Fee (NYP) Facebook used to be a “time suck” — now it just sucks. That’s the view of Dallas Mavericks owner Mark Cuban, who is urging marketers to take their business elsewhere after the social network started charging the tech billionaire to send messages to all the team’s fans. “In the past we put FB first, Twitter second,” Cuban wrote in a roughly 1,700-word blog post calling out the social network. “FB has been moved to the bottom of a longer list.” He added: “FB doesn’t seem to want to accept that its best purpose in life is as a huge time suck.” At issue is Facebook’s filtering of posts that appear in users’ news feeds. The site says it is trying to present users with content that they have shown an interest in while cutting down on spam. But Cuban says it is a pay-to-play move. He argues that Facebook is making it harder for marketers to reach their fans without paying for so-called “promoted posts.” And making the site more targeted and efficient is actually a mistake, according to Cuban. He claims most people go to the site because it’s a “time suck” that they enjoy. Cannibal Cop Pleads Not Guilty (NYDN) “cannibal cop,” accused of conspiring with an online buddy to kidnap, rape and slow-cook women, pleaded “not guilty” Monday to two federal charges. Gilberto Valle, 28, was arraigned in Manhattan Federal Court on charges of conspiracy to commit kidnapping and accessing the federal National Crime Information Center database without authorization. Valle’s public defender, Julia Gatto, made a third attempt at getting bail for her now-infamous client. "You have a hard row to hoe," said Judge Paul Gardephe...Valle — who was suspended after being arrested last month in a joint NYPD and FBI investigation — is accused of chatting last July with a sick online buddy about “kidnapping, cooking and eating body parts” of a woman identified as Victim 1, according to the indictment released Friday.

Opening Bell: 2.6.15

RadioShack brought to its knees by "a series of missed financial targets and strategic confusion that handed power to bare-knuckled lenders"; Rich Brazilians are getting the fuck out; Swiss National Banc still curbing that franc; Jobs report did pretty okay for itself; "You need to focus again on the attractive benefits of our funds and stop this nonsense that there are no products available – because if there are no products, go home, get a new job!"; Marijuana Lovahs; AND MORE.