Opening Bell: 09.18.13

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BOE Officials See No Case for More Stimulus (Bloomberg)
Bank of England policy makers voted unanimously to keep policy unchanged this month as an improving economic outlook prompted agreement that no more stimulus was needed. In a switch from August, when some Monetary Policy Committee members saw a “compelling” case for a loosening of policy, the minutes of the Sept. 3-4 meeting showed that “no member judged that further stimulus was appropriate at present.”

Blankfein: Fed should taper bond buying (CNBC)
The Federal Reserve should taper its massive bond-buying program at this point, but that shouldn't be as big as deal a investors are making it out to be, Goldman Sachs chief Lloyd Blankfein told CNBC on Wednesday. If the Fed scales back its $85 billion monthly asset purchases by $10 billion, the market will be "very, very happy," but anything more it will be "very sad," Blankfein said on "Squawk Box" from Chicago, where the investment bank just held a CFO conference.

Paulson Leads Deal Magicians Amid Tight Spreads (Bloomberg)
John Paulson, Drew Figdor and Peter Schoenfeld are outperforming funds that seek to profit from corporate mergers -- a strategy that has trailed broader hedge-fund returns since the financial crisis. Paulson & Co. posted an 11 percent gain in its merger fund this year through August. Figdor, who runs TIG Advisors LLC’s merger fund, returned 9.6 percent, and P. Schoenfeld Asset Management LP’s fund rose 8.8 percent through July, according to investors who asked not to be named.

SEC Charges 23 Hedge Funds With Illegal Short Sales (NYP)
The federal regulator on Tuesday charged 23 funds with stock manipulation — improperly profiting from a company’s stock by shorting it five days before a secondary offering, and then buying shares in the offering. The $23 billion D.E. Shaw fund, one of the largest hedge funds in the country, was one of 22 firms settling with the Securities and Exchange Commission. D.E. Shaw paid $667,000 to settle the charges it improperly pocketed profits of $447,794. It did not admit or deny wrongdoing. The SEC has been trying to stop improper short-selling for years, and previously brought similar cases against such big names as Harbinger Capital, Touradji Capital, Level Global, Carlson Capital and Appaloosa Management. Since January 2010, the SEC has collected more than $42 million, settling more than 40 such cases. In Tuesday’s cases, a total of $14.4 million was paid by the 22 firms. G-2 Trading, a broker-dealer and the 23rd company accused by the SEC, is fighting the charges.

When Teams Lose, Fans Tackle Fatty Foods (NYT)
When Vinnie Richichi started watching the Pittsburgh Steelers’ home opener against the Tennessee Titans last Sunday, he was feeling great. After all, the Steelers had won their first home game six years in a row. Then things indeed went south. “The worse they looked, the more I kept going to the fridge,” recalled Mr. Richichi, a co-host of a sports talk show on KDKA-FM in Pittsburgh. “First a couple of Hot Pockets. By the second quarter I threw in a box of White Castle hamburgers. As the game progressed, I just went through the refrigerator: the more fear, the more emotion, I’m chomping down. But I’m not going near the salad or the yogurt. If it doesn’t have 700 calories, I’m going right past it.” The aftereffect of the Steelers’ ignominious defeat by a score of 16-9 clung to Mr. Richichi on Monday, when he rejected his regular breakfast of yogurt and strawberries in favor of a bagel sandwich with sausage, eggs, cheese, peppers and hot sauce. Then, his mood hardly improved after spending four hours on the air railing and commiserating with Steelers’ fans, he had pizza for lunch. “My weight goes up and down with my teams, “ said Mr. Richichi. “My team does well? I’m 40, 50 pounds lighter.” Mr. Richichi’s eating habits, joined at the waistline with the N.F.L., were reflected in a recent study that investigated whether a football team’s outcome had an effect on what fans ate the day after a game. Although the study did not look at weight fluctuations, researchers found that football fans’ saturated-fat consumption increased by as much as 28 percent following defeats and decreased by 16 percent following victories. The association was particularly pronounced in the eight cities regarded as having the most devoted fans, with Pittsburgh often ranked No. 1. Narrower, nail-biting defeats led to greater consumption of calorie and fat-saturated foods than lopsided ones.

JP Morgan Whale Hunt Isn't Over (WSJ)
The Commodity Futures Trading Commission is investigating whether the nation's largest bank manipulated a market index tied to corporate bonds, according to people familiar with the situation. The Federal Bureau of Investigation and Manhattan prosecutors, meanwhile, continue to gather evidence for what could result in criminal charges against J.P. Morgan over the London whale trades, people familiar with the situation said. J.P. Morgan has expressed interest in settling all related probes, according to people familiar with the matter. But negotiations with the CFTC hit a snag over whether J.P. Morgan would admit to manipulation, according to one person. J.P. Morgan on Tuesday took steps to move past the matter. Chief Executive James Dimon said in a company-wide note that the bank is making compliance and controls "priority #1." "If you don't acknowledge mistakes, you can't fix them and learn from them," Mr. Dimon wrote. "So now, as in the past, we are recognizing our problems, rolling up our sleeves and fixing them."

Morgan Stanley Grilled By Twitter Execs (NYP)
The firm’s well-buffed reputation as the savviest tech banker in Silicon Valley was dented and dirtied by Twitter executives as the micro-blogging site interviewed candidates to lead its high-profile stock offering, The Post has learned. Twitter officials, led by Chief Financial Officer Mike Gupta, solicited feedback from other bankers about Morgan Stanley’s performance on its previous efforts in bringing tech firms public over the past two years, sources said. Gupta and other Twitter brass highlighted deals like Morgan Stanley’s well-publicized stumble with Facebook’s IPO as prime examples of scenarios they wanted to avoid, people familiar with Twitter’s talks with banks said. The tech company has chosen Goldman Sachs to be its lead banker.

Top CEOs Downgrade Outlook As Washington Threats Loom (WSJ)
The nation’s top business executives view political gridlock in Washington as a bigger threat to the U.S. economy than higher interest rates, at least in the short run, leaders of the Business Roundtable said Wednesday. The group, a lobbying organization for large-company CEOs, said business executives have scaled back expectations for economic growth since the summer. One main reason is the growing prospect that Congress and the White House will struggle to reach a deal this fall to raise the government’s borrowing limit, a development that could rattle financial markets even if the U.S. ultimately avoids defaulting on its debt. The business group’s CEO Economic Outlook Index fell to 79.1 in the third quarter from 84.3 in the summer. That’s still in line with an economy expected to grow by roughly 2.2% in 2013. But CEOs increasingly have a “downside bias,” the group said, a posture that could affect hiring and investment plans. “CEOs clearly remain very concerned about the large-scale economic uncertainty” caused by political squabbling in Washington, Business Roundtable president John Engler told reporters. “Business leaders are troubled by the inability of Washington policy makers to enact policies that promote growth.”

Former teacher Ethel Anderson accused of having sex with student takes the stand, admits to texts (ABC)
While she admits to sending sexual text messages, Anderson says she never actually had sex or any sort of sexual contact with the young boy, she only wanted to help him become a better student. "My concern for him was that he was going through puberty and only focused on things that 12-year-old boys think about, being of a sexual nature, and at the time with him struggling in school, and having behavioral issues, and anger issues, and acting out at home, and not being able to connect with his family, that was my purpose. To gain his attention. And, yes, I did it in an inappropriate way, but that was my goal," Anderson said. Anderson says the sexual texts were "fantasy," but the discussions she had with the boy about his grades, God, and Christianity were all real. "Part of fantasy, sexual therapy for a troubled youth?" Peters asked. "Correct," Anderson answered.

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Opening Bell: 03.28.12

Top MF Global Witness Talks Deal With Justice (WSJ) The star witness in a congressional hearing about MF Global Holdings Ltd.'s collapse has told Justice Department representatives through her lawyers details about transactions that ended up dipping into customer funds, people familiar with the matter said. But Edith O'Brien, the assistant treasurer at MF Global, isn't expected to reveal those details when she appears at Wednesday's hearing of the House Financial Services Committee's oversight and investigations subcommittee. Ms. O'Brien plans to invoke her constitutional right against self-incrimination and to decline to answer questions, people familiar with the matter said. J.P. Morgan Was 'Assured' on MF GlobalTransfers (WSJ) MF Global Holdings Ltd. Chairman and Chief Executive Jon S. Corzine was in direct contact with J.P. Morgan Chase officials about a large transfer of customer funds to the bank shortly before the securities firm collapsed, according to prepared testimony from a J.P. Morgan lawyer for a House subcommittee hearing Wednesday. The testimony by Diane Genova, deputy general counsel for J.P. Morgan, provides additional details about a transfer of $175 million in MF Global customer funds to a J.P. Morgan account on Oct. 28. That move is the subject of scrutiny as investigators hunt for clues about how MF Global firm lost about $1.6 billion in customer funds. Magic Johnson Group to Buy L.A. Dodgers for $2 Billion (Bloomberg) The group was chosen yesterday by Dodgers owner Frank McCourt over billionaire Steve Cohen, who runs hedge fund manager SAC Capital Advisors LP, and Stan Kroenke, who owns the National Football League’s St. Louis Rams and Arsenal of English soccer’s Premier League. [WHO DOES STEVE COHEN HAVE TO SCREW AROUND HERE TO BUY A BASEBALL TEAM???] BATS Chairman Will Give Up Post (WSJ) BATS Global Markets Inc.'s directors voted to remove Joe Ratterman as chairman Tuesday, while expressing unanimous support for him to stay on as the company's chief executive. The vote came after Friday's collapse of the exchange operator's initial public offering, which raised questions about BATS's technology and put Mr. Ratterman on the defensive...BATS has launched a search for a new chairman, according to a spokesman. Face time with Facebook CEO stirs concerns on Wall Street (Reuters) Two people who attended Facebook's March 19 meeting remarked on the young CEO's absence and privately said they expected at least a cursory appearance. One analyst asked how involved Zuckerberg would be in future. In response, the company said expectations should be set pretty low, according to one of the two who was at the meeting. "Investors are crazy to want to get in bed with a company where the guy who controls it doesn't even pretend to care about the rest of the shareholders," said Greg Taxin of activist investment firm Spotlight Advisors, who will not buy shares. "That seems like a recipe for disaster." Texas journalist Sarah Tressler outed for leading a double life (NYDN) By day, she’s a reporter who strips through the veneer of Houston’s high society. By night, she’s a reporter who strips off her clothes. And Sarah Tressler, a 2008 graduate of NYU’s School of Journalism, is not ashamed. In fact, until recently, the 29-year-old brunette blogged about her after-hours gig and posted pictures of herself in scanty outfits on a Facebook page entitled “Diary of an Angry Stripper.” Since the outcry, that — and her titillating Twitter account — have been moved to a protected site. Before Tressler went underground, one of her juicier postings was about an alleged and “somewhat disappointing” sexual encounter with “Entourage” star Jeremy Piven. Europeans Sees Crisis Near End (Bloomberg) The euro area’s woes are “almost over” after a slow initial response by policy makers, Italian Prime Minister Mario Monti said in Tokyo today. German Chancellor Angela Merkel said yesterday that the crisis is ebbing and her country’s borrowing costs will probably rise as its status as a haven wanes. Jefferies CEO Handler’s Pay Drops 7.9% for 2011 After Stock Rout (Bloomberg) Handler, 50, was awarded $14 million for the fiscal year ended Nov. 30, compared with $15.2 million for the 11 months through November 2010, New York-based Jefferies said today in a filing. The package included $1 million in salary and $13 million in restricted-stock units that were granted in 2010. Handler elected to not receive a bonus for 2011. Goldman Bows To Pressure (WSJ) Goldman Sachs agreed to change its board structure in order to persuade a union pension fund to drop a shareholder proposal that could have cost Chief Executive Lloyd C. Blankfein his job as chairman. The deal between the New York securities firm and the American Federation of State, County and Municipal Employees means Goldman will appoint a "lead" director, but shareholders won't get a chance to vote at the firm's annual meeting in May on the proposal to replace Mr. Blankfein with an independent chairman. Ben Bernanke: The World Needs More Nerds (OS) In an exclusive interview with ABC’s Diane Sawyer, Federal Reserve Chairman Ben Bernanke said it’s important not to be complacent about the improving economy...[he also said] he takes no offense that Time magazine, in naming him Person of the Year for 2009, described him as “the most powerful nerd on the planet.” “I am very proud of my nerd-dom,” he told Sawyer. “In fact, the world needs more nerds. Nerds, you know, create more jobs and advance science, and I hope make good economic policy, but that remains to be seen.”

Opening Bell: 06.04.12

Kerviel’s Refusal To Be SocGen Scapegoat May Harm Appeal Chances (Bloomberg) Jerome Kerviel began his fight today against a 2010 conviction for Societe Generale’s 4.9 billion- euro ($6.2 billion) trading loss, telling a Paris appeals court that the bank knew about his actions. His lawyers said they’ll show judges at the four-week appeal starting today that the bank knew before the 2008 trading loss that he was exceeding his mandate with risky bets and can’t claim to be an innocent victim. “I think that I’m not responsible for this loss,” Kerviel told judge Mireille Filippini at the start of the hearing today in response to a question about why he was appealing. “I always acted with the knowledge” of the bank. Germany Signals Crisis Shift (WSJ) Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe. China Making Contingency Plans for a Greek Exit (Reuters) The Chinese government has called on key agencies, including the central bank, to come up with plans to deal with the potential economic risks of a Greek withdrawal from the euro zone, three sources with knowledge of the matter told Reuters on Monday. The sources said the plans may include implementing measures to keep the yuan currency stable, increasing checks on cross-border capital flows, and stepping up policies to stabilize the domestic economy. Oversight Of JPMorgan Probed (WSJ) A federal agency that oversees J.P. Morgan Chase is taking heat over how much it knew about risk-taking in the part of the bank that suffered more than $2 billion in trading losses. Sen. Sherrod Brown (D., Ohio) asked Comptroller of the Currency Thomas Curry in a letter Friday for details about the regulator's supervision of trading operations at the largest U.S. bank by assets. Mr. Brown also wants more information about the Office of the Comptroller of the Currency's "process for reviewing trading operations" at J.P. Morgan and other big banks. The Senate Banking Committee, which includes Mr. Brown, is scheduled to hold a hearing Wednesday that will focus on the trading loss. JPMorgan Was Warned About Lax Risk Controls (NYT) A small group of shareholder advocates delivered an urgent message to top executives at JPMorgan Chase more than a year ago: the bank’s risk controls needed to be improved. JPMorgan officials dismissed the warning from the CtW Investment Group, the advocates, who also cautioned bank officials that the company had fallen behind the risk-management practices of its peers. Merrill Losses Were Withheld Before Bank of America Deal (NYT) What Bank of America’s top executives, including its chief executive then, Kenneth D. Lewis, knew about Merrill’s vast mortgage losses and when they knew it emerged in court documents filed Sunday evening in a shareholder lawsuit being heard in Federal District Court in Manhattan: Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed. Mets crasher out of jail, says he 'got caught up in the moment' (NYP) Mets fanatic Rafael Diaz said he got such an adrenaline rush from Johan Santana’s no-hitter at Citi Field that “he couldn’t help” himself from running on the field to celebrate. “I was overcome with emotion, just being a die-hard Mets fan,” Diaz said after his release from jail yesterday. “That’s all it was.” Diaz, 32, was charged with trespassing for taking part in the on-field celebration. He spent two nights behind bars before a Queens judge released him and pal John Ries, 25, on their own recognizance. Diaz returned to his Massapequa, LI, home, wearing the same Gary Carter No. 8 jersey he had on Friday night. He hit the showers and donned a fresh Santana jersey before explaining his stunt. After Santana retired the final St. Louis batter on Friday night, Diaz jumped over the railing on from his field-level perch on the first-base side of Citi Field. Moments later, Diaz was rubbing elbows with Santana, R.A. Dickey and Ike Davis in a joyous Mets mob. “I couldn’t help myself,” Diaz said. “I just wanted to be on the mound celebrating the no-hitter.” Diaz paid a stiff penalty, both at home and Citi Field. He missed his 1-year-old son’s birthday party Saturday, and the Mets have banned him for life from their home park. “That’s the bad part,” Diaz said of missing his son’s bash. Feds Eye MFGlobal's False Promise (Bloomberg) Three days before MF Global filed for bankruptcy-court protection, CME Group was assured by the New York company of a $200 million cushion in accounts that ensured customer funds were being kept separate from the firm's own money. But the customer accounts actually were in the red, and the deficit ballooned to more than $900 million on the night of Oct. 30. MF Global tumbled into Chapter 11 on Oct. 31. The bankruptcy trustee trying to recover money for the firm's U.S. customers has estimated that the shortfall now is roughly $1.6 billion. A large chunk of the money is stuck outside the U.S. IPO doubts plague Nasdaq’s Grief-eld (DJ) Companies in the early stages of going public are raising questions about whether they want to list with Nasdaq...The questions, coming two weeks after Bob Greifeld’s exchange botched the largest, most anticipated initial public offering in a generation – Facebook’s $16 billion coming-out party – are the first indication that Nasdaq’s headaches over the snafu are likely to linger. “There’s no question, this Facebook situation has put on the table the question of Nasdaq’s market structure and its market quality,” one exchange expert said. Madoff kin having trouble finding an apartment (NYP) Andrew Madoff and girlfriend Catherine Hooper have tried to cover up their connection to the Ponzi schemer by making appointments under Hooper’s name. She then shows up alone to view the $20,000-per-month pads, brokers said. Hooper speaks generally, saying the space is for her, her fiancé and their children, the sources said. But once the brokers explain who Hooper is to the landlord, the couple is immediately rejected, the sources added. “My owners would never, ever rent to him,” said a broker. “They will go through a lot of rejections.” China Muzzles Online Talk of Tiananmen Anniversary (WSJ) China's Internet monitors have unleashed a broad clampdown on online discussion of the 23rd anniversary of the Tiananmen Square crackdown, restricting even discussion of the nation's main stock market when it fell by a number that hinted at the sensitive date. Officials minding China's popular Twitter-like microblogging service Sina Weibo beginning this weekend began blocking a number of terms that could refer to the 1989 Tiananmen Square crackdown, an incident often referred to as June 4 or 64 in the Chinese-speaking world. Under the crackdown the government ordered troops to fire on unarmed demonstrators, likely killings hundreds. Dennis Gartman: 100% Chance Of Further Fed Easing (CNBC) Gartman believes a third round of quantitative easing could come as early as the Fed’s next meeting on June 19-20, or at the following meeting on July 31-Aug. 1. The central bank will want to ease as “far ahead” of the U.S. presidential election in November as possible, so it doesn't come off as being "politically amenable" to the current administration, he noted. Dutch artist turns dead cat into remote-controlled helicopter, dubbed ‘Orvillecopter’ (NYDN) A Dutch artist, upset over losing his beloved pet, Orville, had the animal stuffed and transformed its body into a remote-controlled helicopter. The “half cat, half machine” piece of art was dubbed the “Orvillecopter.” The cat, who was killed when it was hit by a car, was named after famed American aviator Orville Wright. “After a period of mourning, he received his propellers posthumously,” Jansen said. A video posted to YouTube shows the flying feline slowly hover several feet in the air in a park, it's body permanantely spread eagle with propellors on its front paws. Artist Bart Jansen teamed up with radio control helicopter expert Arjen Beltman after having a taxidermist preserve the pussy cat.

Opening Bell: 06.22.12

Citigroup Leads Wall Street Banks In Moody’s Downgrade Dismissal (Bloomberg) Moody’s two-grade cut of Citigroup’s ratings was unwarranted, arbitrary and failed to recognize the lender’s financial strength, the New York-based bank said in a statement. Investors shouldn’t rely on “opaque” credit ratings, it said. “Moody’s approach is backward-looking and fails to recognize Citi’s transformation over the past several years,” said the bank. “Citi believes that investors and clients have become much more sophisticated in their credit analysis over the past few years, and that few rely on ratings alone -- particularly from a single agency -- to make their credit decisions.” Moody's Downgrade of Banks ‘Absurd,’ Says Dick Bove (CNBC) “This is one of the most absurd things that Moody’s has ever done perhaps in the history of the company,” said Dick Bove, Vice President of Equity Research in the Financial Sector at Connecticut-based Rochdale Securities. JPMorgan Trading Loss Drove Three-Level Standalone Cut (Bloomberg) “It illustrates the challenges of monitoring and managing risk in a complex global organization and highlights the opacity of such risks,” Moody’s said. Ratings Downgrade Cuts Deeply At Morgan Stanley (NYT) In an e-mail sent to staff members after the downgrade was announced, Mr. Gorman tried to reassure employees about the bank’s future. “While we do not believe that this outcome reflects all of the transformative changes we have made to the firm, there is an acknowledgment in Moody’s decision today that real progress has been made at Morgan Stanley, in what is an extremely difficult environment for our industry,” he wrote. Hedge Funds Mask Identities (WSJ) It is the latest in-vogue accessory among hedge-fund managers: a "masked fund." Bridgewater Associates has "ZQPGGAV00000," John Paulson has "Paulson Fund 1" while Cliff Asness's AQR Capital Management prefers "805-1355888867." The cryptic monikers, more product barcodes than real handles, enable the hedge-fund managers to shield the identities of their funds from the prying eyes of regulators and outsiders in forms filed with the Securities and Exchange Commission...The practice, allowed under a new SEC instruction that lets firms preserve the anonymity of their clients in certain cases, has irked some investors and their advisers. They argue that hiding funds' identities in regulatory filings undermines Washington's efforts to make the reticent world of hedge funds more transparent and hinders investors' efforts to keep tabs on the firms that manage their assets. Emails Ties Goldman Manager, Rajaratnam (WSJ) A current Goldman managing director exchanged emails with Galleon founder Raj Rajaratnam ahead of a daily "morning meeting" at Galleon, according to previously undisclosed emails and wiretapped phone call transcripts reviewed by The Wall Street Journal. In the emails, the Goldman manager offered what he called "tiddie biddies" about some top technology firms, including Apple and Intel Corp. Anderson Cooper Berates Photo-Snapping Airplane Passenger (LAT) "Normally I would just be like, 'We're not going to win this one,' but I've lately become emboldened," Cooper said in an interview. "I grabbed the guy on the shoulder and I said something to the effect of, 'Bitch, what ... are you doing?'" Pimco’s Gross Warns Of Risk Assets (Bloomberg) Gross, who manages $261 billion for the Pimco Total Return Fund (PTTRX), said in a Twitter post that risk markets are vulnerable as the “monetary bag of tricks empties.” Spanish Plan Is Flawed, Says IMF (WSJ) The euro zone needs to quickly set up a mechanism that allows it to directly recapitalize weak banks, "in order to break the negative feedback loop that we have between banks and sovereigns," IMF Managing Director Christine Lagarde said after a meeting with the bloc's finance ministers in Luxembourg. Ms. Lagarde also called for "creative and inventive" measures from the European Central Bank, suggesting that the bank could restart its bond-buying program to keep struggling countries' funding costs in check or further cut already-low interest rates. Einhorn Enters $1 Million Buy-In Poker Tournament For Charity (Bloomberg) Einhorn, who finished 18th in the World Series of Poker’s main event in 2006, is among at least 42 entrants for the July 1-3 charity event in Las Vegas, known as the Big One for One Drop. Angry Moms Take On Nutella (Bloomberg) Laura Rude-Barbato, a coffee shop owner in Imperial Beach, California, used to feed her children Nutella several times a week [because she for some reason didn't realize that a chocolate spread might be filled with sugar]. It was easy to identify with the advertising that depicted a frenzied mom serving up the chocolate-hazelnut spread with the tagline “breakfast never tasted this good,” said Rude-Barbato. Then she noticed the 10.5 grams of sugar per tablespoon. “I had no idea,” she says. “I might as well have been giving my kids a brownie for breakfast.” Rude-Barbato kicked the Nutella habit, then joined a class action lawsuit in a federal court in California that claimed Ferrero SpA’s U.S. unit misled consumers via labeling and marketing into thinking Nutella was healthy.