Opening Bell: 08.01.13

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Fresh Squeeze? Ackman Questions Soros' Buy of Herbalife (FBN)
Are some investors manufacturing a “short squeeze” in shares of Herbalife in order to force activist investor William Ackman to capitulate on his massive bet against the health-product manufacturer? Those representing Ackman think so, and they’re pressing officials in the New York office of the Securities and Exchange Commission to investigate, people with knowledge of the matter tell the FOX Business Network. ... Soros’ investment represents less than 5% of outstanding shares of Herbalife or securities rules would have forced his fund to disclose the size of the position with the regulators. However, if his fund purchased shares in concert with other investors, or as a “common group,” that could also prompt a filing of a shared position, securities lawyers say.

Investment Banking Spurs Profit Surge at Societe Generale (DealBook)
The French bank Société Générale reported better-than-expected second-quarter earnings on Thursday, buoyed by a strong performance in its investment and corporate banking division. The bank, France’s second-largest behind BNP Paribas, said net income in the three months ended June 30 more than doubled, to 955 million euros ($1.26 billion), from the period a year earlier, while revenue fell slightly, to 6.2 billion euros. Société Générale’s strong earnings, which beat analysts’ estimates, come after the announcement of a restructuring drive that aims for cost savings of 900 million euros by 2015. The bank said on Thursday that it had already achieved 170 million euros of those savings by the end of the second quarter.

Lloyds to Start Dividend Talks After Swinging Into Profit (Bloomberg)
Lloyds Banking Group Plc said it will seek to resume dividends, five years after receiving a taxpayer bailout, as the government prepares to cut its stake in the British lender. The stock hit a two-and-a-half-year high. Net income rose to 1.56 billion pounds ($2.4 billion) in the first half from a 697 million-pound loss in the year-earlier period, Britain’s biggest mortgage lender said in a statement today. Loan impairments fell 43 percent to 1.8 billion pounds.

Obama Defends Summers in Meetings With Lawmakers (WSJ)
In separate closed-door meetings with House and Senate Democrats, the president made clear he hasn't decided on a nominee to succeed Ben Bernanke as central bank chairman, according to lawmakers at the meetings. He told them he had interviewed several people, indicating he is considering candidates beyond the two viewed as his most likely picks, Mr. Summers and Janet Yellen, the vice chairwoman of the Fed's Board of Governors. In the meeting with House Democrats, Mr. Obama added a fresh name to the top tier of candidates: Donald Kohn, a former Fed vice chairman and a longtime Fed staff economist and adviser. Mr. Kohn is now a senior fellow at the Brookings Institution and serves on the Bank of England's Financial Policy Committee.

Drunk US tourist who insisted on singing with band in Thailand bar stabbed to death by one of the musicians (AP)
Bobby Ray Carter Jr., 51, died at a hospital of a stab wound in his chest after a brawl broke out early Wednesday at the bar at Ao Nang beach in Krabi province, police Lt. Col. Jongrak Pimthong said. He said Carter, a Texas native, was intoxicated, began singing with the band and refused to leave the stage to let other customers sing. "Witnesses said Carter got angry when the band played 'Hotel California' instead of the song he requested, and he refused to step down," Krabi city police chief Col. Taksin Pochakorn said. Police said the band then stopped playing and Carter and his 27-year-old son got into a furious argument with the musicians. Jongrak said Carter was stabbed in his chest with an iron rod during the fight outside the bar and his son was injured in the head.

SAC Seen Avoiding $14 Billion Death Penalty From U.S. (Bloomberg)
John Coffee, a securities-law professor at Columbia Law School, said Bharara’s view that the government is entitled not only to ill-gotten gains but also to a share of any funds with which those gains have been commingled is flawed. “They are pushing the commingling theory to the limits of its logic and beyond” he said. “The government is stretching the envelope further than it is entitled to. It’s like taking an eyedropper full of tainted chemicals, dropping it into Lake Superior and saying you have to forfeit everything in the lake.”

Banks Find S.&P. More Favorable in Bond Ratings (NYT)
S.& P. has been giving higher grades than its big rivals to certain mortgage-backed securities just as Wall Street is eagerly trying to revive the market for these investments, according to an analysis conducted for The New York Times by Commercial Mortgage Alert, which collects data on the industry. S.& P.’s chase for business is notable because it is fighting a government lawsuit accusing it of similar action before the financial crisis. As the company battles those accusations, industry participants say it has once again been moving to capture business by offering Wall Street underwriters higher ratings than other agencies will offer. And it has apparently worked. Banks have shown a new willingness to hire S.& P. to rate their bonds, tripling its market share in the first half of 2013. Its biggest rivals have been much less likely to give higher ratings.

Merchants Notch Win in Feud Over Debit-Card Fees (WSJ)
Every mom-and-pop shop, Starbucks and 7-Eleven won a potential victory Wednesday when a federal judge tossed out a Federal Reserve rule on fees banks can charge merchants when they swipe customers' debit cards, saying the Fed didn't do enough to limit the levies. The decision likely will force the Fed to slash those fees, further crimping a once-lucrative business for banks and card giants like Visa Inc. V and MasterCard Inc. ... The 2010 Dodd-Frank financial law required the Fed to ensure these "interchange fees" reflect the actual cost of processing debit-card transactions. The Fed initially proposed capping fees at 12 cents a transaction, but ultimately set the cap at 21 cents—plus the potential of a few cents more to cover costs such as fraud. Before the rule went into effect, banks charged an average of 44 cents a transaction.

Shell's Profit Falls on Shale Write-Down (WSJ)
The company warned that its North American exploration and production division was likely to remain at a loss during at least the second half of the year, and announced a strategic review of its North American portfolio with a view to selling some assets. "Higher costs, exploration charges, adverse currency exchange-rate effects and challenges in Nigeria have hit our bottom line," said Shell Chief Executive Peter Voser in a statement. "These results...were clearly disappointing for Shell."

Uruguay votes to legalise marijuana (FT)
Uruguay’s lower house of Congress has passed a groundbreaking bill to legalise marijuana, despite high public disapproval of the plan. Deputies approved the law by 50 votes to 46 after a day-long debate whose outcome had hung in the balance amid criticism from some within the ruling leftist coalition. ... As in Colorado, Uruguayans will be allowed to grow up to six cannabis plants for personal use. But only the Uruguayan government will be allowed to sell the drug, and only to users aged over 18 on a federal registry. The state would control and regulate the marijuana trade, harvest, sales, storage and distribution.

Dungeon Guide for Administrative Assistant Quest (McSweeney's)
Return the key to Sherryl by placing it on her desk while she’s at lunch. Otherwise, she will ask what you are doing this weekend and you will have to play the Weekend Work Social Obligations side quest which will cost you $60 and force you to attend a baby shower on a Saturday morning. (This will decrease your charisma by 3.) Play the Assemble the Reports mini-game. If you get more than 5 paper cuts you will bleed on the reports, lose the game and have to start over. Complete the mini-game by 2:45 and bring the reports to Conference Room A. There you will find Your Superior who will tell you that the meeting has moved upstairs to Conference Room C but no one knows the room has changed. Make two signs for the room change and make sure to put the second one on the back door that attaches to the administrative office suite or The Boss will blame you for missing the meeting.

Social climbers are clamoring to get into the Southampton Bathing Corp., the most exclusive beach club in town — despite its dismal amenities, $30,000 initiation fee and high rejection rate (NYP)
“The most popular dish is just mayonnaise,” quips the anonymous guest, who adds that if she and her husband were ever to join a club in Southampton, they’d join a Jewish one, even though they’re not members of the tribe. “They know what good food is. They know what amenities are, and they know how to take care of their properties."

Belarus leader beats Putin's pike with man-sized catfish (Reuters)
Just days after Russian President Vladimir Putin landed a giant pike on a fishing trip, his Belarussian counterpart Alexander Lukashenko has boasted about catching a man-sized catfish. Putin's office said last week he had caught a 21 kg (46 lb) pike while fishing in Siberia, describing it as a "gigantic animal". The latest in a long string of macho exploits by the Kremlin leader drew skepticism and mockery on social media. On Wednesday, Belarussian state television showed Lukashenko telling a government meeting about his own catch, including a 57 kg (126 lb) catfish hauled out of the Pripyat river. He did not mention Putin or say exactly when he had landed the monster. "It was as long as I am tall," said Deputy Prime Minister Mikhail Rusiy.

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IMF And World Bank Meetings End With Little Agreement (NYT) To be sure, the additional $430 billion in lending capacity contributed by developed economies like Japan, Britain, Saudi Arabia and South Korea was seen as a major achievement. The contributions came after I.M.F. economists determined that countries around the world might require up to $1 trillion in new loans because of the combined effects of the sovereign debt crisis in Europe and sluggish global economic growth. The I.M.F. agreed to raise about half that amount if Europe would raise the other half. But finance ministers are still at odds over the effect of debt reduction on economic growth. Geithner urges 'aggressive' action to fight financial crisis (DowJones) US Treasury secretary Timothy Geithner said Saturday that the eurozone needed stronger action from authorities, including the European Central Bank, to tame a potential deterioration in the debt crisis. "The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank, to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner told the International Monetary Fund's policy steering committee. Hedge Fund Short-Sellers to Target Wal-Mart Mexico (Reuters) Hedge fund managers are bracing for selling pressure in shares of Wal-Mart Stores on Monday, but market experts said it is the retail giant's less visible Mexican unit that could be the more attractive target for short sellers. The New York Times reported on Saturday that Wal-Mart de Mexico, which is 69 percent owned by Wal-Mart Stories, had orchestrated a widespread bribery campaign in 2005 to win market dominance. The investigative article alleged that senior Wal-Mart executives knew about the matter and tried to cover it up. "I would not consider Wal-Mart shares expensive, but I definitely would not be a buyer at these levels in the 60s. I'm more interested in shorting the Mexico traded 'pure play,'" said private activist investor Daniel Yu, who has presciently shorted such stocks including Green Mountain Coffee Roasters and Sino-Forest. Wal-Mart said in a statement on Saturday that it was "deeply concerned" about the allegations in the Times report and began an investigation into its compliance with anti-bribery laws last autumn. MF Global Customers Press JPMorgan For Funds (WSJ) In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately." J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global. Vietnam Funds Beat India, China in Attracting Investors (Bloomberg) Vietnam-focused stock funds became the only emerging market equity assets in Asia to lure investors every week this year as the nation’s benchmark index rose to an 11-month high, Emerging Portfolio Fund Research said. Table Hockey, on Ice Since Heyday in 1970s, Makes a Comeback (WSJ) Carter Campbell leaned over the stick-figure hockey players, loosening up his wrists and hopping from one foot to the other. The 14-year-old's cap was turned around. His iPod blared tunes from the classic-rock band Rush. Across from him, 35-year-old, No. 1 ranked table hockey champ Mark Sokolski hunched over his own players. "I'm gonna stomp this kid," Mr. Sokolski said. At stake was a slot in the elite eight of this year's Canadian Table Hockey Championships, the best-attended North American tournament that the game has seen in decades. Across the U.S. and Canada, a resurgence of table hockey is under way, drawing younger players and women to a sport that has long been the domain of older men in their basements reliving a game that hasn't been popular since they were kids. Global Crisis Not Over, China Reforms to Go On: Wen (Reuters) The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a "tortuous" recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany. Wen also said China, the world's biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country. Buffett Joined by 12 Families Pledging Wealth to Charity (Bloomberg) Twelve families promised to donate most of their wealth to philanthropy, joining the Giving Pledge initiative started by Warren Buffett and Bill and Melinda Gates. The families include hedge-fund manager Bill Ackman and his wife Karen, Tesla Motors Inc.’s billionaire owner Elon Musk and film producer Steve Bing, according to an e-mailed statement from the initiative. Arthur M. Blank, Edgar M. Bronfman, Glenn and Eva Dubin, Red and Charline McCombs, Michael Moritz and Harriet Heyman, John and Ginger Sall, Henry and Susan Samueli, John A. and Susan Sobrato, John Michael Sobrato, and Ted and Vada Stanley also signed the pledge. Aiming for Clarity, Fed Still Falls Short in Some Eyes (NYT) But as Mr. Bernanke prepares to meet the press for the fifth time Wednesday afternoon, after a scheduled meeting of the Fed’s policy-making committee on Tuesday and Wednesday, there are reasons to doubt that the efforts are increasing public understanding of monetary policy. Experts and investors have continued to disagree about the plain meaning of the Fed’s recent policy statements. Some say the increased volume of communication is creating cacophony rather than clarity. Political criticism of the Fed has continued unabated. Man's nightmare since NYPD labeled him ‘Gentleman Groper’ (NYP) A citywide manhunt ensued after four Manhattan women were fondled in tony neighborhoods in a 35-day stretch. On April 13, authorities paraded their main suspect past snapping cameras. He defied the conventional image of a creepy perv. He was young, handsome, well-dressed, affluent, educated, a churchgoer. A gentleman groper. That suspect, Karl Vanderwoude, says if the scene seemed implausible — that’s because it was. “I didn’t do it. I wasn’t even in the vicinity of these incidents,” he said in his first interview since his arrest. “It’s a case of mistaken identity.” The 26-year-old Bible-study leader’s nightmare began 10 days ago, when he left early from his job as an operations coordinator at a Flatiron District private equity firm because he felt sick. He was in his Park Slope apartment for about an hour when the doorbell rang. “I thought it was my roommate who had been locked out and forgot his keys, which has happened, so I go to answer the door,” he recalled. Instead, two NYPD detectives were standing in the threshold. “They’re like, ‘Are you Karl? May we speak with you?’"

Opening Bell: 04.09.13

KPMG Fires L.A. Partner Over Alleged Insider-Trading Tips (WSJ) KPMG LLP has fired a senior partner in its Los Angeles office, saying the unidentified partner had provided inside information about its clients to someone who had used that information in stock trading. In a statement late Monday night, the Big Four accounting firm also said it had resigned as the outside auditor of two of its clients because of the actions of the partner, who it described as the partner in charge of its audit practice in its Los Angeles business unit. KPMG said the partner "was involved in providing nonpublic client information to a third party, who then used that information in stock trades involving several West Coast companies." The firm didn't identify the third party or any of the companies involved. 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Fed Warned To Reign In QE (FT) Rick Rieder, who oversees $763 billion in fixed income investments for BlackRock, spoke out as the Fed debates how long to persist with the unorthodox measures it has used to stimulate the U.S. economy. His comments add BlackRock to the growing list of Fed critics who are warning of trouble ahead for the bond market. Fitch Cuts China Debt Rating (WSJ) The credit-rating firm Tuesday lowered China's long-term local currency rating to A-plus from AA-minus, with a stable outlook. It kept the foreign-currency rating unchanged at A+, saying it is well supported by China's massive foreign exchange reserves, worth $3.387 trillion at the end of 2012. KKR, Others In Mega-Deal (NYP) Private-equity titans Henry Kravis and Steven Schwarzman are teaming up on what is likely the biggest leveraged buyout in several years. KKR has joined an investor group of Blackstone, Carlyle, TPG Capital and Temasek to bid more than $12 billion for Life Technologies, a source said. SeaWorld IPO Could Raise $621 Million (Deal Journal) SeaWorld Entertainment plans to sell 10 million shares and Blackstone Group plans to sell the other 10 million, giving each up to $270 million a piece. Following the sale, Blackstone will continue to be the company’s majority shareholder, and would hold about 70.5% of the stock if the underwriter’s sold their full option. 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EU Launches Probe Into MasterCard (WSJ) The European Union has opened an antitrust investigation into MasterCard, following concerns that some of the credit-card company's interbank fees are anticompetitive. Citigroup To Cut Senior Posts In Streamlining (WSJ) Under Mr. Forese's plan, there no longer will be a head of securities and banking, a post that Mr. Forese had held until his elevation to his new position. Also expected to go is the head of transaction services, currently occupied by Francesco Vanni d'Archirafi. Clarence man with frog phobia wins $1.6 million verdict (Buffalo News) “I’m petrified of the little creatures,” said Marinaccio, 65. If that sounds bizarre or far-fetched, consider one of Marinaccio’s childhood memories. He traces his deep-seated fear of frogs to when he was a child in an Italian vineyard, where his parents worked. He remembers wandering to a nearby property for figs and being chased away by a man holding bullfrogs. 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Jay Powell

Opening Bell: 11.2.17

Janet who?; SEC tells celebs not to hawk cryptocurrencies; Guggenheim might have done a little self-dealing; CDOs are back again, again, baby; Osama bin Laden was a 9/11 truther?; and much more.