Opening Bell: 10.01.13

Author:
Updated:
Original:

U.S. Shutdown Idles 800,000 as Congress Deadlocked (Bloomberg)
Congressional leaders have scheduled no further negotiations on spending legislation, raising concerns among some lawmakers that the shutdown could bleed into the more consequential fight over how to raise the U.S. debt limit to avoid a first-ever default after Oct. 17. Chances of a last-minute deal -- seen so often in past fiscal fights -- evaporated shortly before midnight as the House stood firm on its call to delay major parts of President Barack Obama’s health-care law for a year. Senate Democrats were equally firm in refusing to concede and planned a morning vote to reject the House’s call for formal talks. “It is embarrassing that these people who were elected to represent the country are representing the Tea Party,” Senate Majority Leader Harry Reid, a Nevada Democrat, said after midnight. “This is an unnecessary blow to America.”

Americans by 72% Oppose Shutdown Tied to Health Care Cuts (Bloomberg)
In a rejection of congressional Republicans’ strategy, Americans overwhelmingly oppose undermining President Barack Obama’s health-care law by shutting down the federal government or resisting an increase in the nation’s debt limit, according to a poll released today. By 72 percent to 22 percent, Americans oppose Congress “shutting down major activities of the federal government” as a way to stop the Affordable Care Act from going into effect, the national survey from Quinnipiac University found.

In Government Shutdown, Few Parallels With Most Recent One (WSJ)
"The biggest difference by far is that the last one was all about spending, and this one is not. It's about policy," said former North Dakota Sen. Byron Dorgan, who was in the Democratic leadership at the time. The budget fight in late 1995 and early 1996 between GOP House Speaker Newt Gingrich and Mr. Clinton was bitter and at times dramatic. But it was at heart a fight over taxes and spending, and it began and ended with protracted negotiations between the two sides. Neither is the case today. As the price of a budget deal, congressional Republicans demanded a delay in the implementation of President Barack Obama's health-care law, a position that Mr. Obama and Democrats have said was nonnegotiable. "The difficulty here is that Republicans have no achievable endgame," said Daniel Meyer, a former Gingrich chief of staff who went on to serve as White House liaison to the House for President George W. Bush.

RBS's new CEO takes reins with break-up decision looming (Reuters)
Royal Bank of Scotland's new chief executive, Ross McEwan, took up his role on Tuesday with Britain's finance ministry close to deciding whether to make the part-nationalized lender break itself up. The ministry is considering forcing RBS to hive off its problem loans into a separate legal entity, in a move designed to leave the rest of the bank better placed to lend. It is expected to make a decision this month, according to government sources.

Bank Secrets Exposed in EU’s Credit Derivatives Antitrust Probe (Bloomberg)
European Union regulators inadvertently sent confidential data to 13 of the world’s biggest lenders as part of an antitrust complaint in an investigation of the credit derivatives industry. The European Commission said sensitive information was accidentally left in the documents by law firms representing companies in the probe. After the revelation was discovered, recipients including Goldman Sachs Group and JPMorgan Chase were told they must promise to destroy the information without reading it.

JCPenney stake takes big bite out of NY billionaire (NYP)
New York billionaire Richard Perry disclosed late Monday he dumped nearly half his Penney stake following a slew of surprises from the retailer last week that hammered its stock. Hedge fund Perry Capital sold 9 million shares Friday in open-market trades at prices ranging from $9.02 to $9.59, according to a Monday filing with the Securities and Exchange Commission. Those prices are off nearly 50 percent from what Perry paid when he began to accumulate a 19-million share Penney stake this summer, filings show...Perry’s big sale came just a month after raising his ownership stake to 8.6 percent by acquiring 3 million shares from activist investor Bill Ackman — who exited as Penney’s largest shareholder following a bruising battle with the retailer’s board.

Buffett Feasts On Goldman Sachs' Famine (NYP)
The Oracle of Omaha extended a helping hand to the bank run by CEO Lloyd Blankfein during the depths of the financial implosion five years ago. Today, it continues to pay dividends — literally. Buffett stands to make a paper profit of $2.15 billion in Goldman after the investment bank hands him 13.6 million shares — without the savvy investor having had to pony up a red cent, based on a special arrangement with the bank.

CFTC Enforcement Chief To Leave (WSJ)
Mr. Meister's departure comes as the agency's enforcement division is still juggling two big cases: civil charges against former MF Global Holdings Ltd. Chief Executive Jon Corzine and potential charges against J.P. Morgan Chase for market manipulation in its "London whale" trading fiasco.

BOE Warns Of Cyberattacks (WSJ)
The Bank of England said it is reviewing whether its systems can withstand a cyberattack and is pushing banks to do the same, amid heightened international concern over online threats. The U.K. central bank's Financial Policy Committee concluded in September the threat to the financial system from attackers in cyberspace "had many dimensions and was growing," according to a record of the panel's Sept. 18 policy meeting. The FPC is tasked with safeguarding financial stability.

Man named Fudge accused of stealing from Coldstone Creamery (DMR)
Iowa City Police say security footage showed Conor P. Fudge, 25, entering the 39 S. Dubuque St. Cold Stone Creamery after business hours on Sept. 11 and 12 and taking money from a safe. Fudge was also witnessed on security footage taking cakes and containers of ice cream, police say. The owner of the business told officers that Fudge used an unauthorized key to enter the business, according to a police complaint. Fudge hadn’t worked at the ice cream shop since Aug. 27, according to police. The value of stolen money and property was worth $501, according to police. Fudge has been charged with third degree burglary, a class D felony, and an aggravated misdemeanor count of third degree theft.

Related

Opening Bell: 8.5.15

Puerto Rico; Jeb; Soros 2.0; "Meth lab remnants found inside Iowa Taco Bell"; and more.

Opening Bell: 7.30.15

Zuckerberg tells Wall Street to chill; Petco IPO; Clinton & UBS; "A Vancouver man was taken into police custody after a standoff that featured the suspect serenading officers with a banjo"; and more.

Opening Bell: 11.4.15

Spoofing trader found guilty; Goldman probed; Ackman loses big on Valeant; Icahn plays coy on Valeant; "You Can Finally Get Bernie Sanders-Themed Undies"; and more.

Opening Bell: 03.07.13

Fed's Fisher Pins Slow Growth on Politicians (WSJ) Federal Reserve Bank of Dallas President Richard Fisher on Wednesday blamed both major U.S. political parties for a "horrid" political climate in Washington, and said monetary policy alone can't drive the economy. "We provided the fuel for economic recovery," Mr. Fisher said of the central bank, describing the Fed's stimulus as "very high-octane, dirt-cheap gasoline." But he said that neither Republican nor Democratic politicians in Washington have done their part by putting policies in place that spur the private sector "to take the cheap fuel that we have provided and step on the accelerator." Banks Said to Weigh Defying Fed With Dividend Disclosures (Bloomberg) The largest U.S. banks are weighing whether to disregard a Federal Reserve request and announce their dividend plans shortly after the central bank’s stress tests are released, people with knowledge of the process said. The Fed has asked 18 firms, including JPMorgan and Goldman Sachs, to wait until next week, even though the lenders will get preliminary word today about whether their capital plans were approved. Bank executives are concerned that investors could be confused and are considering whether securities laws may require prompt disclosure of their plans for dividends and share repurchases, the people said. Paulson Gold Fund Down 18% as Metal’s Slump Foils Rebound (Bloomberg) John Paulson posted an 18 percent decline in his Gold Fund last month as a slump in the metal, after more than a decade of gains, undermined efforts by the billionaire hedge-fund manager to rebound from two years of losses in some strategies. The $900 million Gold Fund, which invests in bullion- related equities and derivatives, is down 26 percent this year, Paulson & Co. said yesterday in a client update obtained by Bloomberg News. The firm’s Advantage funds also fell in February after the metal and related stocks weakened as signs of economic optimism curbed gold demand. “Despite the volatility and drawdown of our gold equity positions, we believe in the long-term outlook for these positions as quantitative easing programs continue around the world, credit expands in the United States, and gold equities continue to trade at a significant discount” to historical average valuations, the hedge fund said in a letter sent yesterday to investors, which was obtained by Bloomberg News. Carl Icahn Rachets Up Dell Fight (WSJ) In a letter released by Dell Thursday, Mr. Icahn said he has a "substantial" position in the company, and asked Dell to pay a per-share dividend of $9 if the deal is voted down by shareholders. He said that by his calculations, that transaction would be superior to the current going-private offer, citing a "stub" value of $13.81 a share which, combined with the special dividend, represents a 67% premium to the current $13.65 per-share offer price. Dell 'Welcomes' Carl Icahn to Go-Shop Process (CNBC) Dell on Thursday said it welcomed Carl Icahn, who has built up a 100 million share stake in the company, and other interested parties as the computer maker seeks to go private. The special committee appointed by the board said it was conducting a "robust go-shop process" and was looking at other alternatives after a $24.4 billion buyout led by founder Michael Dell faced opposition from some shareholders. Bad-News Bears Crash The Party (WSJ) For all their conviction, the bears realize it may be awhile before their dark predictions come true. "Unfortunately, I am bearish and I have been wrong," said Samer Nsouli, chief investment officer at Lyford Group International, a hedge fund, who argues that recent weakness in copper and oil is a portent of a global slowdown. "Make no mistake, it will end in tears. The eternal question is when." Lions Maul Two To Death In Kariba (Herald) Two people were yesterday mauled to death by lions in Mahombekombe suburb in the resort town of Kariba. Sources say the man only identified as Musinje and the woman Sharai Mawera, were attacked while spending time in a bushy area with the man managing to escape, leaving the woman behind. The man went on to report the case to police who, with the assistance of officers from the Zimbabwe Parks and Wildlife Management Authority, went in search of the lions. During the search they found an arm belonging to a man with investigations pointing to the lions having made a kill the previous night. That, the sources say, could have been the reason the lions did not completely eat the woman. BofA Times An Options Trade Well (WSJ) Bank of America's trading desk last June purchased options to buy 150,000 shares of Constellation Brands, an aggressive wager that the wine-and-beer seller's shares would rise, according to a Wall Street Journal analysis of options-market data and of quarterly regulatory filings made by institutional investors. The trade helped push the volume in thinly traded Constellation options that day to more than 13 times the previous 30 days' daily average, the options data show. A week later, Constellation announced a pact to buy a Mexican beer maker out of a joint venture that imports Corona Extra and other beers into the U.S. market. Bank of America led a duo of banks that financed the $1.85 billion deal. Constellation shares soared 24% on June 29, the day the deal was made public, and Bank of America generated an estimated paper profit of more than $1 million from the options trading, the options-market data indicate. China Imitates Singer (NYP) Paul Singer’s battle with Argentina over defaulted debt is beginning to ripple through the bond world. Creditors looking to force deadbeat countries to pay up are turning to the controversial legal argument Singer used to press his case against the South American country in the US courts. On Monday, China’s Ex-Im Bank, which has an unpaid judgment worth $32 million against Grenada, sued the tiny Caribbean country in New York federal court to get its money back. China wheeled out the same “equal treatment” argument that Singer’s Elliott Management used against Argentina, and which was recently upheld at the appeals level for the first time in the US. China’s move marks the first time a creditor other than Singer and his cohorts have tested the maneuver in the US. Obama Tries Charm Offensive to Woo Republicans on Deficit (Bloomberg) The president broke bread last night with a dozen Republican senators, hosting a dinner at a luxury Washington hotel near the White House. Next week, he’ll visit Capitol Hill to meet separately with Republicans and Democrats in the Senate. Obama has also spoken by telephone with at least a half- dozen Republican lawmakers over the past few days about the budget and other priorities of his second term, including a rewrite of immigration laws and controlling gun violence. “There have been some problems, but we’re all adults and you just have to put the country ahead of party and you’ll be fine,” Senator Lindsey Graham of South Carolina, who helped organize the dinner, said before the meal. The increased outreach marks a shift in strategy for the White House, amid signs the president’s poll numbers are falling after he and Republicans were unable to avert the across-the- board spending cuts that took effect March 1. Jobless Claims in U.S. Unexpectedly Fall to a Six-Week Low (Bloomberg) First-time jobless claims unexpectedly fell by 7,000 to 340,000 in the week ended March 2, the lowest since the period ended Jan. 19, according to data today from the Labor Department in Washington. The median forecast of 50 economists surveyed by Bloomberg called for an increase to 355,000. The four-week average dropped to a five-year low. JC Penney Board Can’t Be 'Delusional': Ex-CEO (CNBC) Former JC Penney CEO Allen Questrom told CNBC on Wednesday that the company's board of directors is wrong in thinking the struggling retailer can change its fortunes under current boss Ron Johnson. "The board has to take action. They can't be delusional like Ron Johnson is," Questrom said on "Fast Money Halftime Report." "This has been going on long enough. You can't say you're going to make your numbers for the year and then drop a billion dollars." Questrom, who has watched from afar as Penney's sales and stock have suffered, told CNBC that directors needed to act quickly. "If they think if it all of a sudden going to turn itself around, there is no way they can have reliable information – because Ron is not a source for that," he said. "The sooner they act, the better." 1 in 10 Yale students have engaged in prostitution, 3% have had sex with an animal (NYDN) Sexologist Dr. Jill McDevitt hosted the sex workshop session where around 55 students used their cellphones to answer questions about sex. The results were then published in real time on a screen. McDevitt, who also owns the Feminique sex store in West Chester, Pennsylvania, said the results showed "you can't have assumptions about people's backgrounds." Student Giuliana Berry, who hosted the event, told Campus Reform the workshop - part of Yale's Sex Weekend - aimed to increase understanding and compassion for people who indulged in "fringe sexual practices."

Opening Bell: 4.17.15

Greece "is moving ever closer to the abyss"; Bloomberg terminals go down for hours; Hank Greenberg faces fraud trial; "Office manager at Bronx dental practice operated on patients behind real dentist's back"; and more.