Opening Bell: 08.05.13

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HSBC Profit Rises 23% on Cost Cuts (WSJ)
HSBC Holdings PLC posted a 23% increase in net profit for the first half of the year, as a three-year cost-cutting plan bore fruit and loan impairments fell. The bank said Monday that net profit attributable to ordinary shareholders for the six months of the year was $10 billion, compared with $8.15 billion in the first half of 2012. Revenue fell 7% to $34.4 billion, as the bank continued to cut its global footprint to focus on more profitable markets. Meanwhile, underlying costs were down 8% on the back of lower regulatory fines and charges for the misselling of financial products.

New guidance will stamp Carney’s authority on Bank of England (FT)
Barely a month after taking up his job as governor, Mark Carney has his chance to stamp his authority on the Bank of England. The test comes on Wednesday, when the governor will unveil a new framework for what is known in central bank parlance as forward guidance. It is possible that Mr Carney could end up disclosing the biggest change to UK monetary policy since the BoE was granted operational independence in 1997.

Veto of Apple Ruling Likely to Upend Big Patent Battles (WSJ)
The Obama administration's decision to overturn an international trade ruling against Apple Inc.—the first such veto in more than 25 years—promises to upend long-running battles over intellectual property in the smartphone market and change the strategies some of the world's biggest technology companies use to defend their inventions. ... In a letter explaining the veto, U.S. Trade Representative Michael Froman, who was charged with overseeing a presidential review of the ITC ruling, said he came to his decision after extensive consultations with government trade bodies "as well as other interested agencies and persons." Mr. Froman said he based the decision on the potential harm the sales ban would cause to consumers and the U.S. economy. He suggested Samsung could still enforce its patents in the courts. He said he "strongly shares" concerns raised in January by the Justice Department and the U.S. Patent and Trademark Office, which said ITC product bans should rarely be allowed in cases involving standard-essential patents.

Wall St falls out of love with commodities trading (FT)
Over the weekend, broker Marex Spectron emerged as a potential bidder for JPMorgan’s warehousing business, Henry Bath. Last week, a senior EDF Trading executive expressed interest in JPMorgan’s physical commodities portfolio, but the division of the French utility later said it was undecided. The fact that JPMorgan is considering a sale is the clearest sign yet that Wall Street’s commodities trading boom has fizzled out. Coalition, a consultancy, reports that the combined revenues of the top 10 banks in the commodities sector was $6bn last year, down 22 per cent on 2011. Revenues peaked at $14.1bn in 2008, the same year the oil price peaked. Morgan Stanley is cutting personnel and Barclays has reduced front-office commodities headcount by 18 per cent in the past year. Goldman Sachs is running its commodities business in the face of intense scrutiny from Washington.

Anthony Weiner of Boston, 25, gets caught up in his own sexting scandal (NYDN)
A suburban Boston man with the same name as the pervy New York pol was caught in his own sexting scandal — and landed in jail for putting the wood to a man caught wooing his wife with text messages, authorities said. This Anthony Weiner, 25, of Revere, Mass., used his wife's phone to send a text luring the 21-year-old Winthrop man to another house in Revere. Once there, the guest was greeted with a bat to the head. Prosecutors said Weiner tied the man to a chair, threatened him with a power tool and a BB gun, and only released him when the terrified victim began vomiting.

Berkshire Avoids Bond Rout as Buffett Builds Shareholder Equity (Bloomberg)
Warren Buffett’s preference for buying stocks and whole companies rather than bonds is helping Berkshire Hathaway Inc. weather a spike in interest rates better than other insurers. Book value rose 2 percent to about $122,900 per Class A share in the three months ended June 30, Omaha, Nebraska-based Berkshire said Aug. 2. Insurance competitors including Allstate Corp., American International Group Inc. and Travelers Cos. posted second-quarter declines in the measure of assets minus liabilities. ... “He just plays a different game,” Tom Lewandowski, an analyst at Edward Jones & Co., said in an interview. “He can take more risk in his investment portfolio” than other insurers, because Berkshire keeps a lot of cash on hand and has other sources of earnings.

Norway’s $740 Billion Fund May Be Restructured, Solberg Says (Bloomberg)
Norway needs to review its $740 billion sovereign wealth fund to find a more competitive model that will boost returns, according to the head of the opposition bloc leading in polls ahead of elections next month. The investments “might be too big to be handled by just one fund,” Erna Solberg, leader of the Conservative Party and the candidate most polls show will oust Labor leader Jens Stoltenberg to become prime minister after Sept. 9 elections, said in an interview in Oslo. “You could split it either on getting different handlers to compete better, or have different objectives for your investments in different funds. We’re going to explore it, develop and see if it’s a good idea.”

Tycoon's 10-year crusade to get a Big Mac in Vietnam (Reuters)
Tycoon Henry Nguyen mopped floors, flipped burgers and even cleaned toilets over a 10-year campaign to convince McDonald's Corp to let him bring Big Macs and Happy Meals to communist Vietnam. ... Nguyen, a Vietnamese-American who set up Pizza Hut in Vietnam six years ago, says he has lived and breathed McDonald's. He studied its business model as part of his master's degree, and pursued the Vietnam franchise opportunity for a decade - even as he worked with rival Yum. When he visited his hometown of Chicago, he would meet McDonald's executives at the company's headquarters in suburban Oak Brook, Illinois. The Golden Arches will first appear in Ho Chi Minh City in early 2014 and later in the capital Hanoi, but the expansion will be "step by step", said Nguyen, who worked at McDonald's in the United States as a teenager and again this year at a Singapore outlet.

SEC Gets ‘Shot in the Arm’ With Victory in Tourre Case (Bloomberg)
“To take on cases that are low-hanging fruit and pound its chest in front of Congress is not the same as winning a high-profile trial,” said Jacob Frenkel, a former SEC lawyer and now partner at Shulman Rogers Gandal Pordy & Ecker PA in Potomac, Maryland. “It’s a tremendous shot in the arm for an agency that has come under criticism for its enforcement program.”

What student debt? How the other millennials think about money (Reuters)
When Josh McFarland graduated from Stanford he owed $40,000 in student loans and couldn't fathom a way he'd ever pay it off and have a future for himself - not unusual for the typical young adult these days. Then he went to work for Google.

Bank teller gets one day for embezzlement 'for love' (UPI)
A teller for Chase Bank stole $10,000 from his branch "for love." He was sentenced to a day in prison in federal court Wednesday. In April, 24-year-old Imran Cheema pleaded guilty to one count of embezzling. Cheema told district judge Michael Watson that he took the money to impress his girlfriend.

New Yorkers use bogus 'therapy dog' tags to take Fido everywhere (NYP)
Phony “service dog” tags have become common among city pooch owners, who use them for everything from taking Fido bar-hopping to pick up chicks to getting discounts on the Hamptons Jitney. Dog owners can easily snap up bogus tags, vests, patches and certificates on the Internet, circumventing the city Health Department and undermining federal regulations designed to aid the disabled. “I was sick of tying up my dog outside,” said Brett David, 33, a restaurateur whose tiny pooch, Napoleon, wore an unofficial “therapy dog” patch during a visit to Whole Foods on Houston Street. ... “He’s been to most movie theaters in the city, more nightclubs than most of my friends,” David boasted of Napoleon, a Maltese Yorkie.

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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?’"