Opening Bell: 09.18.13
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.
