Opening Bell: 09.10.13

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Life On Wall Street Grows Less Risky (WSJ)
By both force and choice, Morgan Stanley has upended its culture and ethos. Go-go trading businesses once hailed as its future are gone or curtailed. In their place, the storied investment bank has embraced the retail-brokerage business—peddling stocks and doling out financial advice to ordinary investors—a less exclusive club more often associated with names like Merrill Lynch and Schwab. Morgan Stanley's transformation has been dramatic. The firm's top five executives before the financial crisis have all left. Mr. Gorman, a onetime Merrill Lynch & Co. executive and McKinsey & Co. consultant, became Morgan Stanley CEO in 2010 after being at the firm for just four years. He pushed for the $9 billion acquisition of brokerage firm Smith Barney, essentially doubling down on the business of catering to regular investors while dealing away riskier units, including four proprietary trading desks that bet the firm's own money, and an actual casino it was helping develop in Atlantic City, N.J. The firm also has changed in less noticeable ways. There now are 3,000 different limits that restrict such things as how much capital traders can put at risk, up from 30 before the crisis. About 50 full-time government regulators are now stationed at Morgan Stanley. There were none before 2008, when it was regulated as a brokerage firm instead of a bank. Most deals over $10 million now require a green light from a risk committee and Mr. Gorman.

Tiger Global Goes Long-Only (NYP)
After giving back $2 billion to investors in his Tiger Global hedge fund at the end of last year, Chase Coleman’s now trying to raise almost that much for a fund launching Oct. 1. The new Tiger Global fund will invest only in stocks on the long side, according to a Sept. 5 letter to investors obtained by The Post, and thus is not a hedge fund. Coleman, 38 — a descendant of Peter Stuyvesant, the last Dutch governor of New York — expects to start with between $1 billion and $1.5 billion. He will run the fund along with portfolio managers Feroz Dewan and Scott Schleifer.

What Might Have Been, and the Fall of Lehman (Dealbook)
Sorkin: Let’s play a game. It is called “What if … .”

Young analyst draws Wall Street ire taking on Kinder Morgan (Reuters)
Kevin Kaiser, a 26-year-old analyst only three years into his first job out of the Ivy League, jolted Wall Street last week with a pithy email taking aim at North America's largest oil and gas pipeline and processing company - Kinder Morgan. The email, sent to clients of independent research firm Hedgeye Risk Management, said Kinder Morgan and its associated companies "is a house of cards, completely misunderstood and mispriced." No specifics were provided, but the missive and his comments on Twitter spooked investors who shaved $4 billion off the company's market capitalization and sent Kinder Morgan Inc (KMI.N) shares down 6 percent last Wednesday. Analysts are not certain why Kaiser's comments resonated with so many investors, but they underscore the growing influence of social media like Twitter, which can deliver investment information - accurate or not - to thousands in seconds at the push of a button. Some compared the market to a circus. "Here is your PT Barnum people," one user tweeted as Kaiser caused a firestorm on Twitter and prompted people to question his experience. "It seems a little surprising that enough people would be spooked by unsupported assertions," said Jason Stevens, an analyst at Morningstar. The email titled "New Best Idea: Short Kinder Morgan," was a teaser for a report to be issued on Tuesday. No analysis was provided: only seven bullet points with topics that the report will address, including the valuation of the company's sprawling oil and gas business, which has surged as exploration companies tap into shale deposits driving a U.S. energy boom.

Man charged with theft at Town Center of Boca Raton tries to chew receipt to elude police (PBP)
An officer pulled his patrol car alongside Ojea and told him stop. Ojea was walking while talking on a cellphone. He sped up his pace but was caught and forced to sit down by deputies. While being questioned, Ojea told deputies he bought Gucci items with cash. Ojea was asked if he had any weapons on him and gave deputies permission to search him. During the search, he reached into his pocket and grabbed the Nordstrom receipt, the report said. Before deputies could grab the receipt, Ojea allegedly put it in his mouth and quickly chewed it. He was taken to the ground and placed in handcuffs. A security officer for Norstrom printed a new receipt that showed Ojea spent $561.80 using a Visa card. The bank confirmed that the name on the card did not match the number or three-digt security code on the back of it, police said.

BofA Cuts Jobs As Mortgage Slump Ensnares JP Morgan, Wells Fargo (Bloomberg)
Mortgage lenders including Wells Fargo & Co. and JPMorgan Chase & Co. that feasted on refinancings as interest rates reached all-time lows are now warning that the drop in demand may be steeper than expected. Even Bank of America Corp., which fell to fourth in U.S. mortgages last year as it scaled back after buying Countrywide Financial Corp., is reducing capacity further as surging interest rates crimp demand. The Charlotte, North Carolina-based firm is eliminating 2,100 jobs and closing 16 offices by Oct. 31, said two people with direct knowledge of the plan.

Van Gogh Work Missing for Century on Show in Amsterdam (Bloomberg)
A new painting by Vincent Van Gogh has been discovered after two years of research to determine its authenticity, the Van Gogh Museum in Amsterdam said today. “Sunset at Montmajour” (1888) -- painted during the artist’s time in the southern French city of Arles -- will be on display from Sept. 24 in the current “Van Gogh at Work” exhibition (ending Jan. 12), the museum said in a news release. It was during the same Arles period that Van Gogh painted his “Sunflowers,” “The Yellow House” and “The Bedroom.” “A discovery of this magnitude has never before occurred in the history of the Van Gogh Museum,” director Axel Rueger said.

Crop Insurers’ $14 Billion Some See as Money Laundering (Bloomberg)
Former American International Group Inc. chief Maurice “Hank” Greenberg has a new business partner: the U.S. taxpayer. Greenberg’s Starr Indemnity & Liability Co. is one of 18 companies approved to get federal cash for insuring farmers against loss of crops or income. Wells Fargo & Co., the nation’s fourth-largest bank by assets, Zurich-based Ace Ltd. and units of American Financial Group Inc., Deere & Co. and Archer-Daniels-Midland Co. all enjoy similar public backing. The government subsidies show how a program created to safeguard the nation’s farmers has evolved into a system that in most years all but guarantees profits for insurers. In 2012, taxpayers spent $14 billion paying more than 60 percent of farmers’ insurance premiums, the companies’ operating costs and the lion’s share of claims triggered by a historic drought, according to the Congressional Research Service. “What we’ve got is a money-laundering operation,” says Harwood Schaffer of the University of Tennessee’s Agricultural Policy Analysis Center. “It looks like we’re doing a free market thing and it’s not free market at all.”

FBI Collars Pink Polka Dot Dress Bank Robber (TSG)
A 50-year-old man wore a “pink with purple polka dots dress, a pink wig, and sunglasses” during a bank robbery that briefly netted him $1537, according to the FBI...The teller told FBI agents that the robber tried to disguise his true voice by speaking in a “high pitched squeaky voice.” Though it was difficult to decipher what the robber was saying through his white rag, the teller reported hearing “Give me all the money.”

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SEC Warns Netflix CEO Over Facebook Post (WSJ) Mr. Hastings boasted on his Facebook page in July that Netflix exceeded 1 billion hours of video streaming in a month for the first time. The post may have violated rules of fair disclosure, the SEC said. The SEC said it may also issue a cease-and-desist proceeding against Netflix and Mr. Hastings. Mr. Hastings responded in another Facebook post Thursday. He said further disclosure at the time wasn't necessary because he has more than 200,000 subscribers to his Facebook page, which makes it a "very public" forum. Netflix had also disclosed on its blog in June that it was nearing the 1 billion streaming hours milestone, he said. Mr. Hastings, who is also on the board of Facebook, added that, at any rate, such information isn't a "material" event to investors. Germany's Central Bank Cuts Forecasts (WSJ) "The cyclical outlook for the German economy has dimmed [and] there are even indications that economic activity may fall in the final quarter of 2012 and the first quarter of 2013," the Bundesbank said in its monthly report. In its semiannual economic projections, the central bank slashed its forecast for German growth next year to 0.4% from its previous estimate of 1.6% in June. It also lowered its forecast for 2012 growth to 0.7% from 1.0%. Moody's: It's Deal Or Die (NYP) The American economy will fall into “severe recession by the spring” unless Congress lessens the tax increases and spending cuts that are set to begin in January, said Mark Zandi, chief economist at Moody’s Analytics. “We’ve got to nail this down; uncertainty is killing us,” Zandi told lawmakers yesterday at a Joint Economic Committee hearing in Washington...If Congress were to “kick the can down the road” by extending the current tax-and-spend policies, Zandi predicted the US would lose its Aaa rating because “it would signal that the political will is lacking to put the nation on a sustainable fiscal path.” Fiscal Cliff? France Has ‘Fiscal Mountain’: PPR CEO (CNBC) The head of one of France's biggest companies has warned that France's problems dwarf those of the U.S. in an interview with CNBC. Francois-Henri Pinault, chief executive of luxury goods company PPR, said: "When we talk about the fiscal cliff in France it's a mountain, it's much higher than a cliff. And when it comes to France the only solution that has been put on the table is tax raises, nothing about cutting expenses. So it's a completely different situation." Greece sticks to buyback plan, says will shield banks (Reuters) Greece says it is sticking to plans to close its offer to buy back its own bonds from investors on Friday in a deal that should meet a debt writedown target set by its international lenders. The government said it would shield the country's banks from any lawsuits over losses booked if they take part in the buyback. The buyback, part of a broader debt relief package worth 40 billion euros ($52 billion) agreed by Greece's euro zone and International Monetary Fund lenders last month, is central to efforts to bring its debt to manageable levels. Judge: Ganek, Steinberg conspirators (NYP) Manhattan federal judge Richard Sullivan yesterday ruled that SAC Capital money manager Michael Steinberg and Level Global co-founder David Ganek can be named co-conspirators in the current insider trading case unfolding downtown. Neither Steinberg nor Ganek has been charged in the case, but the ruling lets prosecutors submit their e-mails and instant messages as evidence in their case against Todd Newman, a former portfolio manager at Diamondback, and Anthony Chiasson, Ganek’s former Level Global partner. The feds have accused Chiasson and Newman of improperly profiting off insider tips on Dell and Nvidia. Chiasson lawyer Greg Morvillo objected, saying that Chiasson’s former analyst Sam Adondakis, who pleaded guilty, testified that he never told Ganek he had an inside source at Dell. Judge Sullivan said the evidence is “certainly circumstantial” but sufficient enough for the government’s request to be granted. Sullivan cited the “precise information” Ganek had received leading up to Dell’s earnings as well as the “large trading positions” he authorized on the computer maker. The judge relied on three e-mail communications to implicate Steinberg, one of which he said made “clear references to keeping things on the down-low and being extra sensitive.” Burglary suspect calls 911 after Springtown homeowner holds him at gunpoint (DN) In a strange flip of events, a burglary suspect called 911 early Tuesday to report that he was being held at gunpoint by a Springtown homeowner and his son. The homeowner called 911, too, but by then he was in control, holding him at gunpoint and demanding to know what he was doing in his home. “Just unlucky, I guess,” the man responded, according to a release from the Parker County Sheriff’s Department. The incident happened around 12:30 a.m. when the homeowner and his wife woke up to find an intruder in the bedroom of their home in the 100 block of Lelon Lane. The suspect, identified as 41-year-old Christopher Lance Moore of Bedford, left the home and sat in his GMC pickup, parked in the family’s driveway. The homeowner followed him with a pistol, took the suspect’s keys and blocked his getaway with his own vehicle, while his stepson trained a shotgun on Moore, Fox 4 News reports. “If he gets out of the truck, shoot him in the legs,” James Gerow told his son. “You ain’t gotta kill him; just shoot him in the legs. … If he’d got out, I’d have expected him to shoot him.” When deputies arrived, both men were on the phone with 911. Deputies asked Moore why he had broken into the home, to which he merely said he had “bad intentions.” Morgan Stanley Alters Broker Pay Plan as Revenue Bonus Takes Hit (Bloomberg) Morgan Stanley, the brokerage with the biggest corps of financial advisers, changed its wealth- management compensation plan to encourage brokers to increase revenue and allow them to buy discounted stock. The 2013 program pays a bonus of 2 to 5 percentage points of revenue for advisers who bring in new assets and are in the top 40 percent in revenue growth, according to terms outlined in a summary obtained yesterday by Bloomberg News. That comes at the expense of a 2 percentage-point reduction in the revenue bonus paid to all brokers who generate at least $750,000. JPM Bonus Bummer (Bloomberg) JPMorgan Chase’s bonus pool for the corporate and investment bank may shrink as much as 2 percent this year as the firm completes performance reviews, three executives with direct knowledge of the process said. Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (Bloomberg) A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. Danger Lurks Inside The Bond Boom (WSJ) Amid the rush of bond deals, which already have topped $1 trillion in value, these managers—from BlackRock to Federated Investment Management Co.—are pointing to unusual wrinkles suggesting that now could be one of the most dangerous times in decades to lend to investment-grade companies. Interest rates are so low and bond prices so high, they warn, that there is little room left for gains. Some worry that even a small increase in interest rates—a traditional enemy of bond returns—could eat away at bond prices. College Student Poisons Roommate's Iced Tea With Bleach Following Argument (DM) A college student faces 15 years in jail after she allegedly sprayed bleach into her roommate's iced tea. Kayla Ashlyn Bonkowski, 19, was charged with felony poisoning and appeared in court on Wednesday. She reportedly told police that she had put chemicals in the drink following an argument about cleaning the dishes with her 20-year-old roommate Emily Joseph. The poisoning occurred on November 7 at the students' apartment in Union Township, located near the Mount Pleasant school of Central Michigan University, authorities said. Miss Joseph was taken to hospital for treatment but later released. After she filed a complaint, Bonkowski was arrested. The 19-year-old 'verbally admitted' to police that she put bleach in the drink because 'Joseph is mean', according to ABC. She was arraigned on Wednesday at 2pm before posting $2,000 bond. She entered a plea of not guilty to the charge of poisoning a food, drink, medicine or water supply. The college student faces up to 15 years in prison. Reached by e-mail, Bonkowski said on Wednesday morning that she needed to consult with a lawyer before commenting.