Opening Bell: 09.13.13

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Twitter Files To Go Public (WSJ)
In fewer than 140 characters, Twitter Inc. broke the news Thursday on its own short-message service that it has filed confidential paperwork to begin the process for its highly anticipated public offering. An IPO would mark a business milestone for seven-year-old Twitter, which is used by more than 200 million people and created a global online communication culture, but has yet to prove itself as a big and lasting business in the mold of Google and Facebook. Since Twitter's filing was submitted to the Securities and Exchange Commission under a new law that allows small companies to keep their IPO documents private, Twitter didn't reveal how fast it is growing or whether it is profitable. Goldman Sachs is the lead underwriter on the planned initial stock sale, people familiar with the matter said. One person familiar with the matter said other banks are expected to join Goldman in managing what is likely to be one of the highest-profile IPOs since Facebook went public in the spring of last year. A Twitter spokesman declined to comment.

Embattled JP Morgan Bulks Up Oversight (WSJ)
JP Morgan Chase facing a host of regulatory and legal woes, plans to spend an additional $4 billion and commit 5,000 extra employees this year to clean up its risk and compliance problems, according to people close to the bank. As part of a companywide effort, the bank is spending an additional $1.5 billion on managing risk and complying with regulations, including a 30% increase in risk-control staffing, these people said. In addition, it expects to add $2.5 billion to its litigation reserves in the second half of the year, these people said.

Hedge Funds Are Among the Winners of the Lehman Spoils (WSJ)
Paulson, which made a fortune on a well-timed housing-market bet in the early stages of the financial crisis, is up more than $1 billion on its investments in Lehman claims, while Elliott is ahead by more than $700 million, according to the people familiar with the matter.

Michael Lewis On The Next Crisis (BusinessWeek)
BusinessWeek: Has Silicon Valley replaced Wall Street as the place for bright young people to make their millions? Michael Lewis: My sense is that even though the financial crisis has lessened the appeal of the big Wall Street firm, it’s still appealing to kids in school, for the simple reason that unlike Silicon Valley, where you do have to know something to break in, the barriers to entry on Wall Street are quite low once you have the [Ivy League] credentials. If you’re a certain kind of kid who doesn’t actually know anything about anything, Wall Street is still a great place to go.

Subprime lending execs back in business 5 years after crash (CFIR)
Five years after the financial crisis crested with the bankruptcy of Lehman Bros. Holdings Inc., top executives from the biggest subprime lenders are back in the game. Many are developing new loans that target borrowers with low credit scores and small down payments, pushing the limits of tighter lending standards that have prevailed since the crisis. Some experts fear they won’t know where to stop. The Center for Public Integrity in 2009 identified the top 25 lenders by subprime loan production from 2005 to 2007. Today, senior executives from all 25 of those companies ‒ or companies they swallowed up before the crash ‒ are back in the mortgage business. Most of these newer “nonbank” lenders are making or collecting on loans that might be too risky to qualify for backing by the U.S. government. As the industry regains its footing, these specialty lenders represent a small but growing portion of the market.

David Hasselhoff Returns To Berlin (dm)
...he may be somewhat of a joke in the English speaking world, but his reputation in Germany is far more serious...in 1989 the former Baywatch star played a bizarre part in one of the most defining moments of the 20th century, the fall of the Berlin Wall. During the summer of that pivotal year, his hit Looking For Freedom topped the German charts and is said to have helped inspire the resistance and spirit that eventually lead to the wall being toppled. On New Year's Eve 1989 he performed the song a top of the rubble of the wall to a newly unified Germany. And this week the 61-year-old paid a visit to the sight of that iconic performance. The Britain's Got Talent judge tweeted a picture of himself standing by his hotel window with The Brandenberg Gate in the background...After posting the imagine, the star later tweeted: 'I love Berlin! My heart is here!'

Hank Paulson to Tom Keene: Ben Bernanke has been a hero (BloombergTV)
" I believe that Ben Bernanke has been a hero. To be where we are today, where you have growth of 2% since late 2009 while we have been undergoing this necessary and massive deleveraging of consumers, it’s important. There is bound to be volatility. The next Fed Chairman, again, which is a huge, very important decision for President Obama, the key qualities are, first of all, fierce, independence, great ability, and to be someone who you want to see a return to and Ben Bernanke. And then someone who is a good communicator."

Japan finance minister: will mull economy stimulus without resorting to government debt (Reuters)
Japanese Finance Minister Taro Aso said on Friday that the government will consider offering a stimulus package for the economy without issuing new bonds to finance it. Aso made the comment in a news conference after a cabinet meeting.

Hello Kitty Billionaire Found as Plush Toy Sales Surge (Bloomberg)
Loyal fans like Stanich have helped make Shintaro Tsuji, the 85-year-old founder of Tokyo-based Sanrio, a billionaire. Since introducing Hello Kitty in 1974, Tsuji has captured the hearts and wallets of girls, women and celebrities such as Lady Gaga by licensing the character, which appears as stuffed toys, as well as on airplanes, golf bags and even vibrators.

Republicans Holding Next Fed Chairman’s Fate Stay Quiet (Bloomberg)
U.S. Senate Republicans, whose votes President Barack Obama will need to approve his pick for Federal Reserve chairman, have adopted an unofficial strategy: stand on the sidelines and watch the Democrats feud. “No party enjoys anything more than watching the other party go at each other,” said Mark Calabria, a former top aide on the Senate Banking Committee. “There really is very little incentive right now for Republicans to get involved.”

Beauty queen: Miss America ‘fat as [bleep]‘ (NYP)
There’s drama behind the scenes of the Miss America beauty pageant after Miss New York, Nina Davuluri, was allegedly tape-recorded blasting Miss America Mallory Hagan as “fat as [bleep].” Sources tell The Post’s Michael Riedel that Davuluri allegedly made the comments in her hotel room after she was crowned Miss New York on July 16 on Staten Island...a fellow beauty queen was in the next room and recorded the comments, along with other allegedly offensive remarks made by others.

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Opening Bell: 05.14.12

JPMorgan Loss Claims Official Who Oversaw Trading Unit (NYTimes) The $2 billion trading loss at JPMorgan Chase will claim its first casualty among top officials at the bank as early as Monday, with chief executive Jamie Dimon set to accept the resignation of the executive who oversaw the trade, Ina R. Drew. Ms. Drew, a 55-year-old banker who has worked at the company for three decades and serves as chief investment officer, had repeatedly offered to resign since the scale of the loss became apparent in late April, but Mr. Dimon had held off until now on accepting it, several JPMorgan Chase executives said. Two traders who worked for Ms. Drew also planned to resign, JPMorgan Chase officials said. Her exit would mark a stunning fall from grace for one of the most powerful women on Wall Street, as well as a trusted lieutenant of Mr. Dimon...Former senior-level executives at JPMorgan said it was a shame that Ms. Drew has ended up suffering much of the fallout from the soured trade. They said that Thursday’s announcement of the $2 billion loss was the first real misstep that Ms. Drew has had and said that the position was not meant to drum up bigger profits for the bank, but rather to ensure that JPMorgan could continue to hold lending positions in Europe. “This is killing her,” a former JP Morgan executive said, adding “in banking there are very large knives.” Jamie Dimon: Trading Losses Are Not Life-Threatening (CNBC) “This is a stupid thing that we should never have done but we’re still going to earn a lot of money this quarter so it isn’t like the company is jeopardized,” he said in an interview with NBC’s “Meet with Press.” “We hurt ourselves and our credibility, yes — and that you’ve got to fully expect and pay the price for that.” Yahoo’s Thompson Out Amid Inquiry; Levinsohn Is Interim CEO (Bloomberg, earlier) Thompson, 54, was brought on to orchestrate a turnaround after Google Inc. and Facebook Inc. lured users and advertising dollars. Thompson’s undoing stems from erroneous biographical references to him as holding a bachelor’s degree in computer science from Stonehill College. A former EBay Inc. (EBAY) executive, he earned a degree in accounting from the Easton, Massachusetts- based school, and the information is correctly listed in EBay regulatory filings and some Yahoo press releases. The incorrect degree showed up in Yahoo’s April 27 10-K filing, as well as on the company’s website. As part of the board changes, Daniel Loeb, chief executive officer of Third Point, joins as a director along with Harry Wilson and Michael Wolf. A fourth nominee, Jeffrey Zucker, said in today’s statement that he withdrew his nomination to allow a quick transition. Euro Officials Begin to Weigh Greek Exit (Bloomberg) Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay. LightSquared Moves Toward Bankruptcy Filing (WSJ) Hedge-fund manager Philip Falcone's LightSquared Inc. venture was preparing Sunday to file for bankruptcy protection after negotiations with lenders to avoid a potential debt default faltered, said people familiar with the matter. LightSquared and its lenders still have until 5 p.m. Monday to reach a deal that would keep the wireless-networking company out of bankruptcy court, and there were some indications over the weekend that a final decision hadn't yet been reached on its fate. Still, the two sides remained far apart, and people involved in the negotiations expected LightSquared to begin making bankruptcy preparations in earnest. Facebook cofounder living large in Singapore as he stiffs US for a possible $600M in taxes (NYP) Saverin is renouncing his US citizenship in favor of Singapore, the Southeast Asian city-state that has no capital-gains tax, where he has lived like royalty since 2009. The move already has saved him about $288 million in taxes, and will save him much more if he chooses to sell his $4 billion personal stake in Facebook, which goes public next week. “This pisses me off,” fellow tech-industry billionaire Mark Cuban spat on Twitter Friday upon hearing news of Saverin’s decision. Saverin’s spokesman has defended the move, claiming he has investments in the Far East, and Europe and the permanent move makes perfect sense. “Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time,” Saverin’s spokesman told Bloomberg. JPMorgan Unit's London Staff May Go as Loss Prompts Exits (Bloomberg) The entire London staff of JPMorgan Chase’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. In Wake Of JPMorgan Loss, Rivals Fret About New Rules, Downgrades (WSJ) Over the weekend, rival banks scurried to explain why they believe a similar trading loss couldn't happen at their firm. Some companies pointed to moves already taken to reduce risk and sell off volatile and opaque assets such as derivatives on credit indexes. In a statement, Citigroup "has a small amount of straight-forward economic hedges managed at the corporate center to mitigate our credit exposure, principally relating to consumer loans." About half of that total is in cash, with most of the rest in U.S. Treasury bonds and other conservative investments. At Morgan Stanley, the portfolio most similar to J.P. Morgan's investment office is a $32 billion "available for sale" portfolio. The portfolio primarily consists of easily traded U.S. Treasury and government agency securities. It doesn't hold any derivatives instruments, a person familiar with Morgan Stanley's operations said. Goldman Sachs has no similar unit to the one at J.P. Morgan that suffered the loss. Apple Founder Wozniak to Buy Facebook Regardless of Price (Bloomberg) “I would invest in Facebook,” he said in an interview yesterday on Bloomberg Television. “I don’t care what the opening price is.” Missing: Stats on Crisis Convictions (WSJ) It is a question that has been asked time and again since the financial crisis: How many executives have been convicted of criminal wrongdoing related to the tumultuous events of 2008-2009? The Justice Department doesn't know the answer. That is because the department doesn't keep count of the numbers of board-level prosecutions. In a response earlier this month to a March request from Sen. Charles Grassley (R.,Iowa), the Justice Department said it doesn't hold information on defendants' business titles. "Consequently, we are unable to generate the [requested] comprehensive list" of Wall Street convictions stemming from the 2008 meltdown, the letter from the Department of Justice to Mr. Grassley said. Man Charged in Death Offers Victim's Foot for Deal (AP) A homeless man charged with killing and dismembering his friend says he can't remember much about the crime. But in a jailhouse interview, Leslie Sandoval told the Anderson Independent-Mail he remembers where he put the victim's missing left foot and is willing to tell a prosecutor if she will make him a deal. Sandoval says he went on a January drinking binge with Seth Foster. Foster's torso was found under an Anderson home, and his head, hands and right foot were found different places. Sandoval says he is confused about exactly what happened. But he disagrees with a coroner's finding he beat Foster and denies a claim from investigators that he confessed and gave them the knife used to dismember Foster.

By kloniwotski (Flickr) [CC BY-SA 2.0], via Wikimedia Commons

Opening Bell: 9.11.17

Goldman wants to conquer U.K. retail; China is done tolerating bitcoin; Jamie Dimon's fondness for D.C. grows; don't shoot guns at the hurricane; and more.