Opening Bell: 07.29.13


Merger Is Set To Create World’s No. 1 Ad Company (NYT)
After decades of buying up boutique firms, the advertising conglomerates Omnicom Group and Publicis Groupe finally set their sights on one another. The two announced a merger on Sunday that would create the world’s biggest family of agencies, with a stock market value of $35.1 billion and more than 130,000 employees.

Moelis, Rothschild Take Lead on Omnicom-Publicis Merger (Bloomberg)
For bankers, the merger of Publicis Groupe SA (PUB) and Omnicom Group Inc. (OMC) was notable for what it didn’t involve: the participation of a single large investment bank. Instead, New York-based boutique Moelis & Co. and Rothschild, the storied Paris-based merger adviser, worked with Omnicom and Publicis, respectively, shutting out their bigger competitors. The deal, which will create a globe-spanning advertising company with a market capitalization of more than $30 billion, will also give both firms a significant jump up the league tables for merger advice. ... “The reason we didn’t add more advisers is because we didn’t need them at the end of the day,” Omnicom Chief Executive Officer John Wren said at a press conference in Paris yesterday. “Maurice and I settled many of the issues,” he said, referring to Publicis CEO Maurice Levy.

Federal Reserve 'Doves' Beat 'Hawks' in Economic Prognosticating (WSJ)
The Wall Street Journal examined more than 700 predictions made between 2009 and 2012 in speeches and congressional testimony by 14 Fed policy makers—and scored the predictions on growth, jobs and inflation. The most accurate forecasts overall came from Ms. Yellen, now the Fed's vice chair. She was joined in the high scores by other Fed "doves," policy makers who wanted aggressively easy money policies to confront a weak U.S. economy and low inflation. Collectively, they supported Fed Chairmen Ben Bernanke's strategy to pump money into the U.S. economy. The least accurate forecasts came from central bank "hawks," those who feared Fed policies would trigger rising inflation.

Barclays to give capital plans update on Tuesday (Reuters)
Barclays confirmed it will set out how it plans to meet tougher UK rules on capital on Tuesday, responding to media reports it is considering selling new shares. Barclays said on Monday it had been in talks with Britain's financial regulator and would update the market alongside its half-year results. The bank is expected either to sell bonds that are wiped out if it hits trouble, known as CoCos, or to raise equity or a combination of both.

'Fart Spray,' Deer Repellant Draw Hazmat Team To Camp Wo-Me-To (Fallston Patch)
More than a dozen campers from Camp Wo-Me-To in Jarrettsville were decontaminated and six taken to a local hospital for treatment after deer repellent and fart spray caused them physical irritation. The Harford County Hazardous Materials team was called to the Christian-run camp near Rocks State Park after a 9-1-1 call around 10 p.m. Wednesday, according to a release from Harford County Department of Emergency Services. ... The Hazmat team determined two products—a deer spray and a product labeled "Liquid Ass"—were sprayed in two different cabins on Camp Wo-Me-To grounds, according to the release.

Yield Seekers Get Their Second Wind From Fed (WSJ)
As investors search for ways to earn more income from their portfolios while interest rates are still historically low, there has been a rebound in high-income-generating stocks such as utilities, real-estate investment trusts and energy-focused companies known as master limited partnerships, or MLPs. These stocks pay out a high level of dividends or other income relative to their share prices. "Interest-rate-sensitive sectors have definitely come off their lows and recovered," said Margie Patel, who oversees more than $1.5 billion as a senior portfolio manager at Wells Capital Management. "There's still a huge fundamental demand for income, and that's what stepped in when these companies got too cheap."

What next for the 'Wall Street Refiners' as JPM exits physical commodities? (Reuters)
As JPMorgan Chase & Co prepares to exit physical commodities trading, the spotlight is turning to the future of the two banks that have dominated Wall Street's involvement in the natural resources supply chain for 30 years. Goldman Sachs and Morgan Stanley two decades ago became known as the 'Wall Street Refiners' for their mastery of both financial and physical commodities. But since 2012 Morgan Stanley has looked at selling its commodity arm and Goldman has made moves to scale back its physical operations.

Voting Rule Change Is Viewed as Crucial to Dell Founder’s Takeover Bid (DealBook)
According to recent tallies, of the roughly 1.1 billion shares that have been cast so far, about 579 million have been cast in favor, while 563 million have been voted against the deal, people briefed on the matter said. That is not enough to win at the moment, however. According to the current rules set by Dell’s board, a majority of the company’s 1.476 billion shares eligible to be voted must be cast in favor of the deal; that number excludes the 16 percent stake that Mr. Dell holds. So the more than 334 million shares that have not voted yet are treated as no votes.

Treasury pledges extra £2m for Barclays probe (FT)
The UK Treasury is expected to pledge special “blockbuster” funding to the Serious Fraud Office to back its investigation into Barclays’ emergency fundraising five years ago, in a sign of the agency’s escalating probe into the bank. ... The agency announced in August 2012 that it had “opened an investigation into certain commercial arrangements between Barclays Bank and Qatar Holding in 2008”.

Man accused of drunk boating ‘devastated’ after bride-to-be and best man died in Hudson River crash (NYP)
The banker who killed a bride-to-be and her fiancé’s best man in a grisly boat crash has a history of reckless partying — and is shaking with guilt over his role in the tragic accident, friends told The Post yesterday. A pal of JPMorgan Chase employee Jojo John said the gregarious party boy — who has a 2010 drug-possession conviction — enjoyed speeding around local waterways with friends after a few drinks.

P&G chief seizes opportunity in era of three-day stubble (FT)
Men who are more willing to shave their bodies than their faces are looming as an opportunity for AG Lafley, Procter & Gamble’s newly-returned chief executive, as he seeks to revive the struggling business.

Robber Steals $53M in Jewels at Cannes Hotel (ABC)
The gunman walked into the luxury Carlton Intercontinental Hotel at around noon and headed for "La Cote," a room housing a temporary exhibit of jewelry by the prestigious Leviev diamond house, owned by the London-based Russian Israeli billionaire Lev Leviev, that had been due to run until the end of August. "The thief in his mid-40s entered the room of the exhibition, pulled a Colt .45 out at the employees, stuffed a bag with gems and walked out of the hotel," a Cannes police officer, speaking on condition of anonymity, told ABC News. "We do not know yet if the thief had accomplices, but we are investigating everything. It's a full scale investigation."


Opening Bell: 05.21.12

JPMorgan CIO Risk Chief Said To Have Trading-Loss History (Bloomberg) Irvin Goldman, who oversaw risks in the JPMorgan Chase & Co. (JPM) unit that suffered more than $2 billion in trading losses, was fired by another Wall Street firm in 2007 for money-losing bets that prompted a regulatory sanction at the firm, Cantor Fitzgerald LP, three people with direct knowledge of the matter said. JPMorgan appointed Goldman in February as the top risk official in its chief investment office while the unit was managing trades that later spiraled into what Chief Executive Officer Jamie Dimon called “egregious,” self-inflicted mistakes. The bank knew when it picked Goldman that his earlier work at Cantor led regulators to penalize that company, according to a person briefed on the situation. Risk Manager's Past Scrutinized (WSJ) Mr. Goldman joined J.P. Morgan's CIO in January 2008 as a trader. The bank placed him on leave in September 2008 after it learned that NYSE Arca had opened a regulatory inquiry tied to his trading activities at Cantor Fitzgerald, people familiar with the matter said. After J.P. Morgan placed him on leave, Mr. Goldman founded a consulting firm based in New York called IJG Advisors LLC. He rejoined J.P. Morgan in September 2010 in the Chief Investment Office, this time focusing on strategy. Current J.P. Morgan Chase Chief Risk Officer John Hogan chose Mr. Goldman to serve as CRO of the office, a position that had been filled by Peter Weiland, who remains with J.P. Morgan's CIO. Mr. Hogan wasn't aware of the Cantor Fitzgerald incident or the earlier trading losses at J.P. Morgan Chase, said a person close to the bank. Eurobonds To Be Discussed At EU Summit (Reuters) Merkel has said she is not opposed to jointly underwritten euro area bonds per se, but believes it can only be discussed once the conditions are right, including much closer economic integration and coordination across the euro zone, including on fiscal matters. That remains a long way off. Will Greece Be Able to Print Drachma in a Rush? (Reuters) If or when policymakers finally decide Greece should leave the euro, the exit could happen so quickly that "new drachma" currency notes might not be printed in time. "It would be chaos," says Marios Efthymiopoulos, a visiting scholar at Johns Hopkins University Center for Advanced International Studies and president of Thessaloniki-based think tank Global Strategy. "The banks would collapse and you would have to nationalize them. You wouldn't be able to pay anyone except in coupons. There is only one (currency) printing press in Greece. It is in the museum in Athens and it doesn't work any more." Ryanair CEO: ‘No’ Campaigners in Irish Vote Are Crazy (CNBC) “I think Ireland will vote yes in the referendum and Ireland should vote yes. We have no alternative. People who are borrowing $15 billion a year to keep the lights turned on don’t have the wherewithal to vote no to the people that are lending them the money. There is no argument for voting no,” Michael O'Leary, CEO of budget airline Ryanair said. He described “no” campaigners as a “bunch of idiots and lunatics.” Barclays To Sell Entire BlackRock Stake (WSJ) Barclays said BlackRock agreed to repurchase $1 billion worth of the 19.6% stake that the bank holds in the asset-management company. The remainder of the stake will then be listed on a stock exchange. The decision to sell comes as the bank faces pressure from investors to boost its return on equity and prepares to mitigate the effects of regulation that will force the lender to hold a bigger capital buffer. Mark Zuckerberg Gets Married (AP) The couple met at Harvard and have been together for more than nine years, a guest who insisted on anonymity said. The ceremony took place in Zuckerberg's backyard before fewer than 100 guests, including Facebook's chief operating officer Sheryl Sandberg. The guests all thought they were coming to celebrate Chan's graduation but were told after they arrived that the event was in fact a wedding. "Everybody was shocked," the guest said. The two had been planning the marriage for months but were waiting until Chan had graduated from medical school to hold the wedding. The timing wasn't tied to the IPO, since the date the company planned to go public was a "moving target," the guest said. Zuckerberg designed the ring featuring "a very simple ruby." Hedge Funds Rebuild Euro Bear Bets On Greek Exit Banks Weigh (Bloomberg) Hedge funds and other large speculators, which pared trades that would profit from a drop in the euro to the lowest levels since November, rebuilt them to a record high last week, figures released May 18 by the Washington-based Commodity Futures Trading Commission showed. The premium for options that grant the right to sell the euro has more than doubled since March. Nasdaq CEO Blames Software Design For Delayed Facebook Trading (Bloomberg) Nasdaq OMX Group, under scrutiny after shares of Facebook Inc. were plagued by delays and mishandled orders on its first day of trading, blamed “poor design” in the software it uses for driving auctions in initial public offerings. Fed Proves More Bullish Than Wall Street Forecasting U.S. Growth (Bloomberg) Stephen Stanley, chief economist at Pierpont Securities LLC, has derided the Federal Reserve for downplaying improvement in the U.S. economy. Yet his 2.6 percent forecast for growth this year is below the midpoint in the central bank’s projection of 2.4 percent to 2.9 percent...“I’ve been banging my head against the wall,” said Stanley in Stamford, Connecticut, a former researcher at the Federal Reserve Bank of Richmond, who had predicted an interest- rate increase as early as last year and now says the Fed probably will tighten in the middle of next year. “They’re willing to let things run for longer and let inflation accelerate more than historically.” Judge mulls suit vs. woman sending messages to driving boyfriend (NYP) In a case believed to be the first of its kind in the country, a New Jersey college student could be held liable this week for texting her boyfriend — knowing he was behind the wheel — and allegedly causing him to crash into a couple riding a motorcycle. “She texts. Instantly, he texts back, and, bang, the accident occurs,” said Skippy Weinstein, attorney for motorcycle enthusiasts David and Linda Kubert, both 59, who lost their left legs in the horrific 2009 accident in Mine Hill. It’s now up to a Superior Court judge in Morristown, NJ, to decide whether Shannon Colonna can be added to the suit against driver Kyle Best.

Opening Bell: 12.15.15

Big bankers ditch Wall Street for fintech; Bond investors are freaking out; Bill Gross says chill; New startup wants you to bet $10k on your marriage lasting; and more.