Opening Bell: 09.04.13


S&P Accuses U.S. of Vengeance (WSJ)
S&P has previously indicated that it believes the U.S. lawsuit was politically motivated, but the language in Tuesday's court filing is its strongest to date. The Justice Department "commenced this action in retaliation for [S&P's] exercise of their free speech rights with respect to the creditworthiness of the United States of America," lawyers for S&P wrote in court documents filed Tuesday in the U.S. District Court for the Central District of California. A Justice Department spokeswoman said in a statement that "the allegation is preposterous."

Switzerland Still Most Competitive Economy as U.S., Germany Gain (Bloomberg)
Switzerland remained the most competitive economy as the U.S. and Germany gained ground lost in recent years, the World Economic Forum said. Switzerland held the top spot for a fifth year, while Germany and the U.S. rose two slots to fourth and fifth respectively in the Geneva-based organization’s 148-nation league. Singapore and Finland retained their second and third positions.

Protégés’ funds soar (NYP)
Call it the battle of the mini-titans. Two new activist hedge funds — one run by a former Carl Icahn lieutenant and the other by one of Bill Ackman’s former portfolio managers — are battling with more established rivals to become the fastest-growing funds of the year. Corvex Management, the fund launched in 2011 by Keith Meister, the 39-year-old former right-hand man of Icahn, hit $4.2 billion on July 1 — a 106 percent gain this year. Meanwhile, Marcato Capital Management, founded in 2010 by 36-year-old Mick McGuire after a stint as a portfolio manager at Ackman’s Pershing Square, grew by 80 percent in the first half of this year to $1.8 billion.

JPMorgan Case Tests U.S. Law on Buying Influence Abroad (Dealbook)
Reports that JPMorgan Chase hired scores of children of powerful government officials throughout Asia have put the bank squarely in the sights of the United States government for violating the Foreign Corrupt Practices Act. An investigation will test how broadly the law applies to almost commonplace conduct by firms seeking any small advantage over rivals to win business from foreign governments.

SEC chief calls for ‘exchange’ (NYP)
Wall Street watchdog Mary Jo White wants the major market exchanges to play nice. The Securities and Exchange Commission chief is holding a meeting next week with exchange bosses after Nasdaq OMX and NYSE Euronext took turns blaming each other for a technical glitch that paralyzed trading in thousands of Nasdaq-listed stocks for nearly three hours. A key talking point will be how well the rival exchanges work together during times of crisis, according to sources. “The finger-pointing has to stop,” said one exchange official, who declined to be identified ahead of the meeting. The squabbling makes the exchanges look “like a bunch of fools and just leads to further degradation of confidence in the market,” the source added. Regulators called for the face-to-face powwow after Nasdaq, led by CEO Bob Greifeld, was quick to point the finger at archrival NYSE for the massive Aug. 22 meltdown.

Man wears sign apologizing for threatening police (WKYC)
If you passed by Cleveland's Second District police station Monday, you may have noticed an unusual sight -- a man wearing a sign. The signs says he is an idiot for making 911 calls threatening police. Richard Dameron, 58, threatened police during 911 calls and then skipped out on his punishment. Cleveland Municipal Court Judge Pinkey Carr ordered him to hold a sign this week outside of the Second District police station in Cleveland. The sign reads, in part: "I was being an idiot and it will never happen again." He told Carr he couldn't show up to his last court appearance because he didn't have a ride.

Euro-Zone Recovery Broadens (WSJ)
The figures bolster signs the euro-zone economy as a whole will continue to grow in the third quarter. The recovery is expected to be fragile, however, since affordable corporate loans are hard to come by in many countries and unemployment across the currency area is close to record highs.

Dark Clouds Over Australia's Economy (WSJ)
For more than two decades, Australia's economy has avoided recession, fed by a mining boom that forged one of the world's richest societies. Now, that once-in-a-generation expansion—stoked by China's demand for Australia's natural resources—could be coming to a close. As China's economic engine slows, sending prices for iron ore and coal sharply lower, Australia is facing an economic dislocation, with unemployment rising to a 12-year high and growth slowing rapidly. The economy expanded by 2.6% on-year in the 12 months to end-June, data released Wednesday showed, much slower than quarterly growth rates as high as 4% last year.

Emerging Nations Save $2.9 Trillion Reserves in Rout (Bloomberg)
Developing nations from Brazil to India are preserving a record $2.9 trillion of foreign reserves and opting instead to raise interest rates and restrict imports to stem the worst rout in their currencies in five years. Foreign reserves of the 12 biggest emerging markets, excluding China and countries with pegged currencies, fell 1.6 percent this year compared with an 11 percent slump after the collapse of Lehman Brothers Holdings Inc. in 2008, data compiled by Bloomberg show. The 20 most-traded emerging-market currencies have weakened 8 percent in 2013 as the Federal Reserve’s potential paring of stimulus lures away capital.

LinkedIn To Offer $1 Billion In Stock (WSJ)
LinkedIn is offering Class A shares valued at $1 billion, with underwriters holding the option to sell $150 million in additional stock, according to the filing. LinkedIn said the proceeds will be used for general purposes, ranging from improving its balance sheet to investments in international expansion and product development.

Speed Demon's Manhattan Record (NYP)
A driver set an illegal land speed record for a single lap around the borough — cutting and weaving through the 26.5-mile route in a hair-raising 24 minutes. The anonymous speed demon averaged about 66 mph during the late-night circuit, which was captured on a dramatic dashboard-cam video and posted to YouTube under the username AfroDuckProduction. The drive breaks the previous mark of 26 minutes set in 2010. In both runs, the drivers cut out the top of Manhattan above the Cross Bronx Expressway. “You frankly can’t identify who I am by just looking at the video,” AfroDuck boasted to the car-geek Web site Jalopnik about his Aug. 26 ride, “and records were meant to be broken.” Police Commissioner Ray Kelly promised to hunt down the dangerous driver, saying, “We now have license-plate readers in the city that will assist in this type of investigation.”


Opening Bell: 3.17.15

Pinterest; Insider trading; The stockbroker who smokes 10 joints/day; Tech bubble fears; "Big Box Store Employee Discovers Meth Lab In Bathroom"; AND MORE.

Opening Bell: 03.20.13

JPMorgan Bosses Hit By Bank Regulator (WSJ) JP Morgan was downgraded in a confidential government scorecard over concerns about the company's management and its board, a blow to a firm that has long been considered one of the best-run on Wall Street. The New York company's management rating from the Office of the Comptroller of the Currency fell one notch last July to a level that signifies oversight "needs improvement," following the revelation of what are known as the "London whale" trading losses, said people familiar with the regulatory assessment. Grading is on a scale of 1 to 5, with 5 being worst. J.P. Morgan had been at level 2, indicating "satisfactory management." The people said the downgrade to level 3 wasn't solely related to a London employee's large trades—in indexes tracking the health of a group of companies—that led to losses exceeding $6 billion. BlackRock’s CEO Fink Says Cyprus Is Not a Major Problem (Bloomberg) Laurence D. Fink, chief executive officer of BlackRock, the world’s largest asset manager, said Cyprus is not a major problem and U.S. equities will rise 20 percent this year as the economy rebounds. “It has some symbolism impact on Europe, but it’s not a really major economic issue,” Fink said of Cyprus in a Bloomberg Television interview in Hong Kong today. “It’s a $10 billion issue. It does remind us of the frailty of Europe. It does remind us that the European fix will be multiple years.” Freddie Mac Sues Big Banks (WSJ) sued more than a dozen of the world's biggest banks for alleged manipulation of interest rates, in the first government-backed private litigation over the rate-rigging scandal. The lawsuit, filed in U.S. District Court for the Eastern District of Virginia, by the mortgage-finance giant joins scores of other suits piling up in U.S. courts, seeking billions of dollars in damages from banks that allegedly manipulated the London interbank offered rate and other crucial financial benchmarks. Freddie Mac sued the British Bankers' Association alongside the banks, putting the private association of large British banks for the first time in the cross hairs of a Libor lawsuit. A probe by U.S. and U.K. regulators has uncovered evidence of widespread rate rigging by some traders. Three banks have agreed to pay penalties totaling about $2.5 billion, and about a dozen companies remain under investigation. The BBA has agreed to transfer its responsibility for overseeing Libor to a new operator. Litigation Forces Deutsche Bank to Restate Profits (Reuters) Deutsche Bank cut its previously reported 2012 pretax profit by 600 million euros ($773 million) on Wednesday, hit by new charges related to mortgage-related lawsuits and other regulatory investigations. Europe's biggest bank by assets declined to say why it had increased litigation provisions to 2.4 billion euros, forcing it to correct its Jan. 31 earnings report which already showed the worst quarterly loss in four years. Yoga-Pants Supplier Says Lululemon Stretches Truth (WSJ) A Taiwanese supplier to Lululemon Athletica was bent out of shape on Tuesday after the yoga-clothes retailer blamed it for producing a shipment of pants that were unacceptably see-through. The supplier, Eclat Textile Co. of Taiwan, hit back at Lululemon, saying the clothes it shipped weren't "problematic." "All shipments to Lululemon went through a certification process which Lululemon had approved," Eclat Chief Financial Officer Roger Lo said in an interview. "All the pants were manufactured according to the requirements set out in the contract with Lululemon." Bernanke Seen Keeping Up Pace of QE Until Fourth Quarter (Bloomberg) The Fed chief will probably halt the unprecedented easing in the first half of next year after expanding central bank assets to a record of about $4 trillion, according to median estimates by 46 economists surveyed March 13-18 before a two-day meeting of policy makers ending today. Unemployment will have fallen to 7.3 percent from its current 7.7 percent when the Fed starts to pull back on its buying, the economists said. Supreme Court Sacks Goldman (NYP) The Supreme Court yesterday refused to hear the bank’s appeal of a federal court ruling in a lawsuit alleging it misled investors about dicey mortgage-backed securities. SEC Digging Into Fund Fees (WSJ) The Securities and Exchange Commission is closely scrutinizing the fees and expenses, including travel and entertainment, that hedge funds and private-equity firms charge to their investors. As part of the Dodd-Frank financial law, the SEC now oversees more than 1,500 additional such advisers that were required to register with the agency. In that capacity, the SEC is checking to ensure they are charging their investors reasonable expenses. "Exotic" expenses like travel, entertainment and consulting arrangements are more likely to attract the agency's attention than routine charges like legal and accounting fees, say compliance consultants who advise funds on registration and reporting requirements. A Volatile Investor Buys Into a Softer Approach (WSJ) It has been a long slog for Mr. Hohn, whose fund bets big on a small number of out-of-favor stocks and often holds on for several years. It lost 43% in 2008, among the worst losses by a hedge-fund that year, according to industry-tracker HFR. Hedge funds on average lost 19% that year. Even the Standard & Poor's 500-stock index, which plunged as the economy descended into the worst financial crisis in decades, did better. But with a 30% return in 2012 and a 14% gain this year, TCI has crossed its high-water mark, or the point at which investment gains make up for losses and managers can begin collecting performance fees again, according to clients. "A lot of people wrote me off," Mr. Hohn said in an interview last month. "A lot of people fired us, a few people stuck by us, and we've worked and worked and made it all back for them." JPMorgan, MF Global Trustee Reach $546 Million Settlement (Reuters) As part of a settlement reached with James Giddens, the trustee who is tasked with liquidating MF Global Inc, JPMorgan will pay $100 million that will be made available for distribution to former MF Global customers. JPMorgan will also return more than $29 million of the brokerage's funds held by the bank, while releasing claims on$417 million that was previously returned to Giddens. Man, 18, forbidden from saying 'bingo' for 6 months (NKY) As part of 18-year-old Austin Whaley’s punishment, Kenton District Judge Douglas Grothaus recently ordered the Covington man not to say the word “bingo” for six months. “Just like you can’t run into a theater and yell ‘fire’ when it’s not on fire, you can’t run into a crowded bingo hall and yell ‘bingo’ when there isn’t one,” said Park Hills Police Sgt. Richard Webster, the officer who cited Whaley. On Feb. 9, Webster was working an off-duty security detail at a Covington bingo hall on West Pike Street when Whaley entered the hall with several other youths and yelled “bingo,” Webster said. “This caused the hall to quit operating since they thought someone had won,” Webster wrote on his citation. “This delayed the game by several minutes and caused alarm to patrons.” Webster said the crowd of mostly elderly women did not take kindly to Whaley’s bingo call. “At first, everybody started moaning and groaning when they thought they’d lost,” Webster said. “When they realized it wasn’t a real bingo, they started hooting and hollering and yelling and cussing. People take their bingo very seriously.” Had Whaley apologized for his actions, Webster said he probably would have sent him on his way with a warning. “But he refused to say he was sorry,” Webster said...WhenWhaley appeared in Kenton District Court last week, the judge ordered Whaley: “Do not say the word ‘bingo’ for six months.” The youthful defendant could have faced up to 90 days in a jail and a $250 fine on the misdemeanor charge. So long as Whaley, who had no prior criminal record, doesn’t get into any more trouble within six months, though, the charge will be dismissed.