Opening Bell: 08.01.13

Author:
Updated:
Original:

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.

Related

Opening Bell: 5.12.16

Failed deals cost banks hundreds of millions; NY regulator asks Goldman for shell company info; Wife battered husband over candy, flowers; and more.

Opening Bell: 04.23.12

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: 3.28.16

Dan Loeb warns Seven‐Eleven Japan; American Psycho is back; Cupcake the cat survives 260-mile, 8-day journey through the mail; and more.

Opening Bell: 03.19.13

BlackRock To Layoff Nearly 300 Employees (Reuters) BlackRock President Rob Kapito told employees on Monday that despite the layoffs the firm, which oversees almost $4 trillion, would continue hiring and expected to end 2013 with more employees than it currently had. "These moves will give high potential employees greater responsibility and additional career opportunities, and will make us a more agile organization better positioned to respond to changing client and market needs," Kapito said in the memo. Blackstone Said to Mull Outbidding Silver Lake for Dell LBO (Bloomberg) Blackstone is weighing a bid for Dell, the computer maker seeking offers to rival the proposed $24.4 billion buyout by its founder and Silver Lake Management LLC, said people with knowledge of the matter. Blackstone may bid as part of a group including other investors, said one of the people, who asked not to be named because the process is confidential. The New York-based private- equity firm hasn’t made a decision, another person said. Under the go-shop provision of the Silver Lake merger agreement, Dell’s board has through March 22 to seek superior proposals, and can negotiate beyond that date if it receives an offer it deems serious. Fannie Sees A Way To Repay Billions (WSJ) The rebounding housing market has helped return Fannie Mae to profitability and now might allow the government-controlled mortgage-finance company to do the once unthinkable: repay as much as $61.5 billion in rescue funds to the U.S. Treasury. The potential payment would be the upshot of an accounting move that Fannie Mae's senior executives are looking to make whereby the company would reclaim certain tax benefits that were written down shortly after the company was placed under federal control in 2008. The potential move was disclosed last week in a regulatory filing in which the company said it would delay the release of its annual report, due by Monday, as it tries to reach resolution with its accountants and regulator over the timing of the accounting move. UBS becomes latest bank to quit Euribor rates panel (Reuters) UBS said it would pull out of money market rate Euribor, one of the most prominent banks to do so after a global benchmark rate-setting scandal, in a move that renews questions about the rate's future. "We have decided to withdraw from the Euribor panel and to focus on our core funding markets Swiss franc and U.S. dollar," a UBS spokesman said, adding the decision was linked to an October decision to shut down vast parts of its investment bank. Lululemon Pulls Yoga Pants From Stores (WSJ) The yoga-apparel retailer's shares tumbled late Monday after saying it has pulled some of its popular pants from stores, after a mistake by a supplier left the pants too see-through. Lululemon Athletica said the glitch involved pants using its signature fabric, known as Luon, that arrived in stores March 1. The retailer is offering refunds to customers. Citigroup to Pay $730 Million in Bond-Lawsuit Settlement (Bloomberg) The deal would resolve a lawsuit by investors who bought Citigroup bonds and preferred stock from May 2006 through November 2008, the New York-based lender said yesterday in a statement. The accord requires court approval and would be covered by existing litigation reserves, the bank said. Ex-Calpers CEO Buenrostro Indicted Over Apollo Investment (Bloomberg) Federico Buenrostro, former chief executive officer of the California Public Employees’ Retirement System, was charged with conspiring to trick the pension fund into paying millions of dollars in fees for a $3 billion investment into funds managed by Apollo Global Management. Buenrostro, 64, who led the state’s public pension fund from 2002 to 2008, was accused along with Alfred Villalobos, 69, of conspiracy to defraud the U.S., engaging in a false scheme against the U.S. and conspiracy to commit mail fraud and wire fraud in a grand jury indictment announced yesterday by U.S. Attorney Melinda Haag in San Francisco. Bernanke Tightens Hold on Fed Message Against Hawks (Bloomberg) The Fed chairman, starting tomorrow, will cut the time between the release of post-meeting statements by the Federal Open Market Committee and his news briefings, giving investors less opportunity to misperceive the Fed’s intent. In recent presentations, he has pledged to sustain easing, defending $85 billion in monthly bond purchases during congressional testimony last month and warning that “premature removal of accommodation” may weaken the expansion. Deli Workers Have Some Choice Words for Mayor Bloomberg’s New Cigarette Proposal (Daily Intel) "It's stupid. He needs to f*ck off," Fernando, the manager at M&M Market Deli on Broome Street, said. "You want to smoke, you're going to smoke no matter what. And especially at that young age, you're curious about everything." It was the principle of the thing that so irritated Fernando more than any potential loss of business. "You don't make money on cigarettes," he said. "I mean, our profit on cigarettes is 75 cents, a dollar? The whole purpose of cigarettes is to get people in — you want to buy cigarettes, then you also pick up a sandwich."

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.