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Opening Bell: 09.26.13

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Deutsche Bank Proposes Creating Bond Platform With Rivals (Bloomberg)
Deutsche Bank is trying to drum up interest with some of its largest competitors to create a multi-dealer U.S. bond trading platform at the same time that asset managers discuss ways to make buying and selling debt easier, according to people familiar with the matter. Europe’s biggest investment bank by revenue has pitched its plan for an electronic trading network to JPMorgan Chase & Co., Citigroup Inc. and Barclays Plc, according to five people briefed on the talks, who asked to not be named because the discussions are private.

JPMorgan in talks to settle government probes for $11 billion: sources (Reuters)
The sum could include $7 billion in cash and $4 billion for consumers, said the sources, who asked not to be identified because the negotiations are private. The talks are fluid and the $11 billion amount could change, the people familiar with the matter said. The discussions include the U.S. Department of Justice, the Securities and Exchange Commission, the U.S. Department of Housing and Urban Development and the New York State Attorney General, the sources said.

Ackman strikes again? Air Products looks for new CEO (CNBC)
Air Products also announced it will add three new independent directors to its board immediately.

NYSE, Nasdaq May Team Up on Glitches (WSJ)
Longtime rivals NYSE Euronext and Nasdaq OMX Group Inc. are discussing a plan with other exchanges in which each company would run a backup for the other's benchmark stock-pricing data, according to people involved in the discussions. If one exchange group's feed went down, traders could turn to its competitor for data while the problem was being fixed.

Judge bans ‘screw’ from Madoff trials (NYP)
Manhattan federal Judge Laura Taylor Swain on Wednesday sided with a lawyer for Daniel Bonventre, one of Bernie Madoff’s top officers, who had asked that she bar prosecutors at his fraud trial from showing photographs to jurors of a 4-foot sculpture of a screw that the Ponzi king had proudly displayed on his desk. It was called “The Soft Screw” and Madoff was known to personally dust it. After prosecutors complained that many of their photos of Madoff’s office had the sculpture in it, Swain suggested they “Photoshop it out.” “Get that screw out of the pictures,” Swain ordered.

Barclays to shut wealth management services in 130 countries (Reuters)
Barclays Plc will stop offering wealth management services in about 130 countries by 2016 and cut jobs in the unit as part of an effort to rein in costs and boost profit. "This is part of our new strategy, focusing on reducing complexity and competing where we can win," a Barclays spokesman said.

UK Growth Quickens As Consumers Blunt Investment Drop (Bloomberg)
While the recovery is gathering momentum, Bank of England policy makers speaking this week emphasized their commitment to keeping the key interest rate at a record low at least until unemployment drops to 7 percent.

Pimco Sees Buffett’s India Dream Cut to Junk as Vote Looms (Bloomberg)
Little more than two years after Warren Buffett labeled India a “dream market,” the economy is expanding at the slowest pace in a decade and the nation’s debt ratings are at risk of being cut to junk.

Twitter Taps Two More Banks (WSJ)
Twitter Inc. has tapped two more banks, J.P. Morgan Chase and Morgan Stanley, to help lead its coming initial public offering, said people familiar with the matter. The banks will join Goldman Sachs Group Inc., which until now has been working exclusively with Twitter to prepare its confidential IPO filing and will remain in the top role, these people said. The company announced its still-private filing with a tweet earlier this month. Twitter's IPO could come in November, people close to the company said. The secret IPO filing was made weeks before the tweet, and the regulatory approval process is already under way, they said.

O.J. Simpson caught stealing cookies from prison cafeteria (DM)
The former gridiron great was recently caught pilfering the sweet treats from the cafeteria of his Nevada prison - something which is strictly forbidden. According to a source, guards noticed the 66-year-old hiding something under his prison clothes as he walked back to his cell after lunch. When they quizzed him, he revealed a stash of more than a dozen oatmeal cookies, which were then seized. 'O.J. just stood there with a goofy grin on his face as the guard kept digging inside his shirt and throwing the cookies on the floor,' the source said...Doctors had previously warned Simpson, who is looking noticeably tubby, to ease up on the fat and sugar laden foods and start exercising more because he suffers severe diabetes. And the once-chiseled prisoner, who is serving a 33-year sentence for armed robbery, has been trying to diet but gave up after a few weeks. 'The temptation of the cookies in the prison chow line was too much for him, the source said.

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Eurogroup approves Spanish banking sector bailout (Reuters) Euro zone finance ministers approved an agreement on Friday to lend up to 100 billion euros ($123 billion) to Spain so it can recapitalize its banks, but the exact size of the loan will probably only be determined in September. Yahoo To Pay Mayer $100 Million Over 5 Years (WSJ) Ms. Mayer is expected to receive around $5.4 million from Yahoo for the remainder of this year and around $20 million a year after that, though some of that amount is tied to performance targets set by the board...The Yahoo pay package includes restricted stock units valued at $14 million in order to "partially compensate" Ms. Mayer for forfeiting her compensation from Google. It also includes a one-time retention award that is valued at $15 million and will vest over five years. Morgan Stanley Joins Citigroup In Job-Cut Push Amid Slump (Bloomberg) Headcount at Morgan Stanley will decline by about 700 in the second half, bringing total 2012 staff reductions to 4,000, Chief Financial Officer Ruth Porat, 54, said yesterday in an interview. Deutsche Bank, Europe’s biggest lender by assets, is considering about 1,000 job cuts at its investment bank, while Citigroup plans to chop about 350, people with knowledge of the decisions said this week. London Fund-Raisers Put Romney in a Scandal’s Glare (NYT) The former chief executive and a top lobbyist for Barclays, the bank at the center of the scandal, helped organize a Romney fund-raiser. The former chief executive, Robert E. Diamond Jr., has since withdrawn his name as the event’s co-host. The bank’s lobbyist, Patrick J. Durkin, remains a co-chairman: he has bundled $1.1 million for Mr. Romney from friends and business associates, more than any other lobbyist, according to federal records. Nasdaq to Release Compensation Plan for Investors Hurt by Facebook IPO Mess (FBN) Nasdaq is looking to release next week the compensation plan for investors who lost out on the bungled IPO of Facebook...Sources say the deal being discussed will be all in cash, and likely above the $40 million originally proposed...Nadsaq had proposed a $40 million deal in which $27 million of it involved trading credits--a move that outraged investors and market makers who may have lost a combined $200 million or more on the botched IPO. Because of that one source says the new Nasdaq proposal could be as high a $100 million and all of it in cash. Insider Traders Face Longer Sentences As Judges Get Tough (Bloomberg) Since Jan. 1, 2011, the judges have sent the average violator to prison for more than 22 months, according to an analysis of sentencing data by Bloomberg News. That was a 20 percent increase from the average term of 18.4 months during the previous eight years. Boxer’s Bloody Nose Leads to Bank Robbery Charges (AP) Martin Tucker won his latest boxing match, but a bloody nose in the ring could send him to prison for bank robbery. The FBI said it obtained a swab used to stop the bleeding and found that DNA matched Tucker's DNA on other evidence from a 2009 robbery at Monroe County Community Credit Union in Temperance, near the Michigan-Ohio border. In a court filing, agent Robert Schmitz said he was aware of Tucker's bout in April in Toledo, Ohio, and obtained the "discarded" Q-tips swab. Tucker's DNA matched DNA from a mask believed to have been used in the robbery and from the steering wheel of the getaway car, the FBI said...Detroit FBI spokesman Simon Shaykhet declined to discuss how Schmitz got the bloody swab. Defense attorney Haytham Faraj said there seems nothing illegal about acquiring it. "We leave our fingerprints, bits of hair and skin all over the place. If you're a boxer, sometimes you leave your blood around," Faraj said in an interview Thursday. Bank of England Says New York Fed Gave No Warning on Rate-Rigging (Dealbook) The call for a review into Libor in 2008 came after Mr. King and Mr. Geithner had talked about potential problems with the rate during a meeting in Basel, Switzerland, in early May 2008. This discussion was followed by a flurry of e-mails a month later in which Mr. Geithner, who is now the Treasury secretary, recommended changes to the rate, which is used as a benchmark for more than $360 trillion financial products worldwide. The suggestions included ‘‘strengthen governance and establish a credible reporting procedure’’ and ‘‘eliminate incentive to misreport,’’ according to documents released by the New York Fed. Mr. King told Mr. Geithner that he supported the suggestions. Yet the New York Fed did not make any allegations of wrongful behavior connected to Libor, according to documents released on Friday. Mr. King told a British parliamentary committee on Tuesday that Mr. Geithner’s suggestions did not represent a warning about the potential manipulation of Libor. Geithner-Led Fed Didn’t Do Enough in Libor Scandal: Sheila Bair (CNBC) "Looking at those emails, it looks like they had pretty explicit notification of some very bad behavior, and I don't understand why they didn't investigate," Bair said today. Banks in Libor probe consider group settlement (Reuters) A group of banks being investigated in an interest-rate rigging scandal are looking to pursue a group settlement with regulators rather than face a Barclays-style backlash by going it alone, people familiar with the banks' thinking said...Barclays Plc was the first to settle with U.S. and British regulators, paying a $453 million penalty and admitting to its role in a deal announced June 27. Its chief executive, Bob Diamond, abruptly quit the next week, bowing to public pressure and erosion of the bank's reputation. The sources told Reuters that none of the banks involved now want to be second in line for fear that they will get similarly hostile treatment from politicians and the public. Rex Ryan's Biggest Loss (NYP) “My surgeon told me one time, ‘How many tacos do you eat?’ because I told him how much I love Mexican food,” Ryan recalled. “I said, ‘I probably can eat about 12 tacos.’ He’s like, ‘OK.’ Never flinched. He said by the time this is really working, you’ll eat about a half or three-quarters of a taco and that’s it. I was like, ‘Why would I want to do that?’ And he said, no, you’ll be satisfied. That’s exactly where I’m at now...I have no clothes that fit. Socks are the only things that fit. Even a hat, underwear, I’ve got to change everything.”

Opening Bell

Opening Bell: 06.28.12

Interest Rate Probe Escalates (WSJ) Investigators in the U.S., Europe and Asia have been probing alleged wrongdoing in the interest-rate-setting process for about two years. The Barclays settlement marks their biggest win yet. A series of Wall Street Journal articles in 2008 raised questions about whether global banks were manipulating the process by low-balling a key interest rate to avoid looking desperate for cash amid the financial crisis. Emails and instant messages disclosed in the bank's settlement show how Barclays's traders tried to manipulate rates to benefit their own trading positions. "This is the way you pull off deals like this chicken," one trader told another trader in March 2007, according to the U.K. regulator. "Don't tell ANYBODY." Other banks that have disclosed they are under investigation include Citigroup, JPMorgan, Lloyds Banking Group, and RBS. None of these banks have been charged with any wrongdoing in the matter by U.S. or U.K. regulators. Calls for Diamond’s Exit After Barclays ‘Moral Failure’ (CNBC) Lord Oakeshott, a high-profile Liberal Democrat politician, said: "If Bob Diamond had a scintilla of shame he would resign. If Barclays' board had an inch of backbone between them they would sack him." Barclays admitted Wednesday that the actions "fell well short of standards.” Madoff's Brother To Plead Guilty (WSJ) Peter Madoff, 66 years old, is expected to plead guilty to two charges at a hearing Friday in Manhattan federal court, including falsifying the records of an investment adviser and a broad conspiracy count to commit securities fraud and other crimes, according to a letter sent to U.S. District Judge Laura Taylor Swain and filed in court on Wednesday. However, Peter Madoff, the firm's chief compliance officer, isn't expected to admit to knowing about the fraud itself. Instead, he is expected to admit to conduct that enabled the fraud to continue, even if he didn't know new investor money was being used to pay older investors or that no trading was being conducted at the investment firm. JPMorgan Trading Loss May Reach $9 Billion (WSJ) The bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year. As JPMorgan has moved rapidly to unwind the position — its most volatile assets in particular — internal models at the bank have recently projected losses of as much as $9 billion. In April, the bank generated an internal report that showed that the losses, assuming worst-case conditions, could reach $8 billion to $9 billion, according to a person who reviewed the report. With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion. Kerviel ‘Love’ May Not Be Enough To Overturn SocGen Verdict (Bloomberg) Jerome Kerviel’s statement last week that he “loved” Societe Generale may have come too late to help him win a reduced sentence for causing the bank’s 4.9 billion-euro ($6.1 billion) trading loss. Kerviel lawyer David Koubbi may use his client’s remarks during closing arguments in Paris today to offset his own frequent clashes with Judge Mireille Filippini, who threatened to notify the bar about his treatment of witnesses. With Time Running Out California Gorging Itself On Foie Gras (WSJ) California will ban foie gras sales starting Sunday. Meanwhile, goose-liver lovers still have time to enjoy foie gras jelly doughnuts at Umamicatessen in Los Angeles. Chefs there and around the state are counting down their foie gras days by putting it anywhere they can. Some plan foie gras finale feasts on Saturday night. Others offer foie gras in cotton candy, cheesecake, waffles and toffee. "It's a very difficult thing to say goodbye to," says Michael Cimarusti, co-owner and chef at Providence, a celebrated Los Angeles restaurant. He plans to leave a gap on his menu in memory of the dearly departed, with the notation: "formerly a foie gras dish."...At Craftsman & Wolves, a San Francisco bakery, Chef William Werner covers a chunk of foie-gras torchon with a chocolate cremeux that he inserts into chocolate cake batter to create his Devil Inside cake. Some chefs accept the inevitable. Celebrity chef Thomas Keller at Bouchon in Los Angeles recently replaced his foie gras dog biscuits with ones made from chicken livers. Others are looking for ways to duck the ban. Daniel Scherotter, who owns Palio D'Asti in San Francisco, is checking with his lawyer to see whether he can legally give away—rather than sell—a serving of foie gras with a $20 salad. Mr. Scherotter and others expect some restaurants to turn into "duckeasies," where diners can order foie gras using certain code words. They take inspiration from chefs such as Didier Durand, who says that, during a Chicago foie gras ban from 2006 to 2008, he served it at his Cyrano's Bistrot by listing it as potatoes. "People understood that roasted potatoes wouldn't cost $21," he says, but that's what he charged. After two years the ban was rescinded. Merkel Stands Ground Ahead Of Euro Summit (Reuters) EU leaders arrived for a Brussels summit on Thursday more openly divided than at any time since the euro crisis began, with Germany's Chancellor Angela Merkel showing no sign of relenting in her refusal to back other countries' debts. Merkel is being urged at home to hang tough and reject all efforts to make Germany underwrite European partners' borrowing or banks, while her European Union partners say that may be the only way to save the single currency. "Nein! No! Non!" shouted a headline splashed across the front page of the normally sober German business daily Handelsblatt, with a commentary by its editor-in-chief saying Merkel must remain firm at the two-day summit. Lenny Dykstra Takes Plea Deal On Fraud Charges (LAT) Former New York Mets star and self-styled financial guru Lenny Dykstra, already sentenced to three years in state prison for a car scam, has agreed to a plea deal on federal bankruptcy fraud charges after allegedly looting his mansion of valuables as he struggled to battle numerous creditors...According to federal prosecutors, Dykstra sold sports memorabilia and items from his Ventura County mansion, including a $50,000 sink, that were frozen as part of the bankruptcy case. Typically, a person in bankruptcy can't touch assets that are part of the case so that they are available to repay creditors. Dykstra allegedly had dozens of items, including chandeliers, mirrors, artwork, a stove and a grandfather clock delivered to a consignment store, Uniques, on South Barrington Avenue in West Los Angeles. The owner of the store paid him cash for a U-Haul truckload of goods, according to the agent. Manhattan philanthropist behind alleged madam's $250K bond post (NYP) Bonnie Lunt is the mystery hero who put up $250,000 collateral to spring the accused hockey mom madam from Rikers last night, court records show. The 65-year-old Lunt -- a top New York headhunter who has been dubbed the “Jerry Maguire of the communications industry”-- posted her own Upper East Side home to help Gristina make bail, according to bail documents. Lunt’s East 76th street pad is just around the corner from the tiny East 78th Street apartment prosecutors claim Gristina used as headquarters for an alleged multi-million dollar prostitution operation. Miami attacker who chewed man's face was not high on 'bath salts,' officials say (DJ) The Miami "cannibal" who chewed off half of another man's face last month had no drugs in his system other than marijuana, officials said Wednesday, defying suspicions that he was high on "bath salts" during the grisly attack. Rudy Eugene, 31, was shot and killed by police on May 26 after he was found naked and biting into a homeless man's face and eyes beside Miami's MacArthur Causeway. Authorities had suspected Eugene was under the influence of synthetic drugs sold as "bath salts," which have been known to make some users aggressive and behave bizarrely. Witnesses said he had taken off his clothes and was swinging on a light pole before the attack.

Opening Bell

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Opening Bell

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Opening Bell

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Trading Case Embroils KPMG (WSJ) Scott London, the partner in charge of audits of Herbalife Ltd. and Skechers USA Inc. until KPMG fired him last week, told The Wall Street Journal Tuesday that "I regret my actions in leaking nonpublic data to a third party." Mr. London said his leaks "started a few years back," adding that KPMG bore "no responsibility" for his actions. "What I have done was wrong and against everything" he believed in, said Mr. London, who was based in Los Angeles for the accounting firm...Neither KPMG nor Mr. London named the recipient of Mr. London's tips. The recipient isn't associated with a hedge fund or other professional investor, said one person familiar with the matter. Obama Proposes $3.77 Trillion Budget to Revive Debt Talks (Bloomberg) Obama’s budget for fiscal 2014 proposes $50 billion for roads, bridges and other public works, $1 billion to spur manufacturing innovation and $1 billion for an initiative to revamp higher education, according to administration officials who briefed reporters and asked to not be identified. It renews his request to raise $580 billion in revenue by limiting deductions and closing loopholes for top earners. Obama again seeks adoption of the Buffett rule, named for billionaire investor Warren Buffett, to impose a 30 percent minimum tax on households with more than $1 million in annual income. The administration projects the deficit for fiscal 2014 would be $744 billion, or 4.4 percent of the economy. That would mark the first budget shortfall of less than $1 trillion since Obama took office. Soros Tells Germany It Should Leave The Euro (CNBC) "The financial problem is that Germany is imposing the wrong policies on the euro zone. Austerity doesn't work. You can't shrink the debt burden by shrinking the budget deficit," Soros, the founder and chairman of Soros Fund Management,said during a speech in Germany's financial center of Frankfurt on Tuesday. Ackman Expected To Stick With JCPenney (NYP) The New York hedge-fund tycoon is expected to stay put as JCPenney’s biggest investor, with a nearly 18 percent stake, and back the retailer’s scramble to repair the damage done by ousted CEO Ron Johnson, sources told The Post. That’s despite the fact that it was Ackman who installed Johnson at the helm of the company 17 months ago with an ambitious but doomed plan to overhaul the aging department-store chain. “The priority right now is stabilizing the company and finding a permanent CEO,” according to an insider close to the situation, adding that Ackman appeared to be playing a key role in the process. Blackstone Solicits Partners For Dell Bid (WSJ) Blackstone Group LP is talking to several technology companies about potentially joining its bid to take computer maker Dell private, people familiar with the matter said. Any technology firm that joins the private-equity giant's potential bid for Dell would likely be involved in the company's strategic direction as well as having a financial role, the people said. Blackstone has discussed a number of scenarios with prospective partners, including an equity stake, debt financing or a combination of the two, one of the people said. City officials say they're powerless to stop Time Square's growing hoard of costume-wearing hustlers (NYP) The city used to tell the furry fiends where they could set up. But a court decision last year ruled the characters could not be treated like vendors because they are entertainers who work for tips. “Our ability to treat these characters as vendors was eliminated,” said city lawyer Gabriel Taussig. “And, absent of vending laws, there is no other law that comes close to dealing with where they can be located.” The most recent trouble came when Osvaldo Quiroz-Lopez, who was dressed as Cookie Monster, got into a tussle with the toddler son of Bollywood star Parmita Katkar after the mom said she didn’t have the money to tip for a picture. His bust followed a slew of similar cases, including a man dressed as Super Mario who was accused of groping a woman and an Elmo who went on an anti-Semitic rant. Some Fed Members Fear Monetary Policy Effects (CNBC) Minutes from the most recent Fed meeting suggest that members have grown increasingly concerned that things could get messy if it continues its policies too far into the future. Among those concerns are instability to the financial system, a sudden rise in interest rates and inflation. Bill Gross Raises Holdings of Treasuries to Highest Since July (Bloomberg) Gross raised the holdings of Treasuries held in his $289 billion flagship fund at Pacific Investment Management Co. to 33 percent of assets last month, the highest level since July. JPM On A Whale Of A Roll (NYP) Jamie Dimon is hoping another solid performance from his sprawling bank can finally sink the London Whale. JPMorgan Chase will kick off bank earnings as it nears the anniversary of the embarrassing trading scandal, which Dimon famously dismissed back on April 13 of last year as a “tempest in a teapot.” The bank is expected to benefit from the continuing stabilization of the US economy that could allow it to release capital reserves again — a move that will have the effect of helping boost its overall earnings. Barclays analyst Jason Goldberg estimates that JPMorgan will report earnings of $1.33 a share — 6 cents less than consensus estimates of $1.39 a share. Some analysts believe that the bank will beat the consensus by a few cents after buying back shares and hiking its dividend to 38 cents. Soup heist ends with Tamarac turnpike arrest (Sun Sentinel) A Florida Highway Patrol trooper tracking the rig's GPS signal arrested the driver for the alleged soup heist on Florida's Turnpike in Tamarac about 12:30 a.m. Sunday. Eusebio Diaz Acosta, 51, of Orlando, was charged with two counts of grand theft — one for the tractor trailer and one for the cargo, with a combined value of $350,000. "These are very unusual facts," Broward County Judge John "Jay" Hurley said as he read from Acosta's arrest report Monday morning. "The court has seen many things stolen. … This is the first time the court's ever seen $75,000 worth of soup stolen."

Opening Bell

Opening Bell: 12.8.14