Opening Bell: 10.15.13

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Citigroup Results Hit by Weak Fixed Income Trading (WSJ)
Citi--which in the year-earlier period logged a $4.7 billion charge tied to its brokerage joint-venture Morgan Stanley Smith Barney--reported a profit of $3.23 billion, or $1 a share, compared with a profit of $468 million, or 15 cents a share, a year earlier. However stripping out one-time items and debt valuation adjustments--which are charges or gains the bank books in relation to the value of its own debt--per-share earnings were down at $1.02 from $1.06. Revenue rose 30% to $17.88 billion, but dropped 4.9% on an adjusted basis to $18.22 billion. Analysts polled by Thomson Reuters recently expected per-share earnings of $1.04 on revenue of $18.62 billion.

Central Banks Gaming Out U.S. Default as Deadline Nears (Bloomberg)
Central banks have begun making contingency plans on how they would keep financial markets working if the U.S. defaults on the world’s benchmark debt. Policy makers discussed possible responses when they met at the International Monetary Fund’s annual meetings in Washington over the weekend, said officials who spoke on condition of anonymity because the talks were confidential. The discussions continued as policy makers headed home.

U.S. senators hint at possible fiscal deal on Tuesday (Reuters)
Senate Majority Leader Harry Reid, a Democrat, and his Republican counterpart, Mitch McConnell, ended a day of constant talks with optimistic proclamations, as details leaked out of the pact they were negotiating. "We've made tremendous progress," Reid said at the end of a Senate session during a federal holiday, underscoring the urgency of settling a fiscal crisis that was nearing a Thursday deadline. The U.S. Treasury Department estimates it will reach a $16.7 trillion borrowing limit on October 17. "We hope that with good fortune ... that perhaps tomorrow will be a bright day," Reid said, hinting at the possible Tuesday announcement of a bipartisan Senate deal.

Currency Probe Looks At Former RBS Trader (WSJ)
A U.K. investigation into potential manipulation of currency markets is looking at a former trader at Royal Bank of Scotland Group who participated in electronic chat sessions with traders at other banks, according to people familiar with the investigation. Richard Usher, currently J.P. Morgan Chase's London-based head of spot trading for Group of 10 currencies in the region covering Europe, the Middle East and Africa, took part in the chat sessions with top traders from various financial institutions when he was an employee of RBS, these people said. The group of traders in the chat rooms was known by various monikers including "The Bandits' Club," and "The Cartel," the people said.

Fama’s Nobel Work Shows Active Managers Fated to Lose (Bloomberg)
Fama, 74, has argued that financial markets are efficient and that stock-price movements are unpredictable, making it impossible for even professional money managers to gain an advantage. His conclusion that investors would be better off in low-cost funds that track the market’s performance helps explain the success of Vanguard Group Inc., the biggest U.S. mutual-fund company, as well as the rise of passive investments, which had more than $2.6 trillion in U.S. assets between exchange-traded funds and mutual funds at the end of 2012.

City Council Member Accused Of Exposing Self After Bar Confrontation (KHQ)
Spirit Lake City Council Member James "Jimmy" Brown is facing two misdemeanor charges of Indecent Exposure and Battery. The Kootenai County Sheriff's office is investigating the alleged incident between Brown and Eric Vangemert, a Spirit Lake resident. Court documents accuse Brown of having a physical confrontation with Vangemert and exposing himself to Vangemert's wife and saying, "This is what a real man looks like". Investigators say the confrontation happened outside Joe's Hole, a Spirit Lake tavern and grill. In court documents Brown denies ever getting physical with Vangemert. Brown also told investigators, "That guy had one sole purpose in mind and that was to get me in trouble". KHQ spoke to Vangemert over the phone on Monday and he admits to calling Brown a vulgar name but believes this was an "unprovoked" fight. Vangemert also told KHQ that the fight, he believes, stems from an incident between he and one of Brown's friends several years ago. According to court documents Brown asked Spirit Lake Police Chief Gene Marquez if he was "exempt from the law because I'm a city council member." A statement which Brown denies he exactly said.

Tough Times For OJ (WSJ)
Orange-juice futures fell Monday after U.S. retail sales of the breakfast beverage dropped to their weakest level in at least 15 years. Americans bought just 563.2 million gallons of the beverage in the year ended Sept. 28, according to Nielsen data. That is the lowest since 1998-99, the oldest data available. Analysts have said a greater variety of beverages, including acai juice and energy drinks, have taken market share from orange juice, whose retail prices have soared.

Corzine makes moves to lift $30M defense-fund cap (NYP)
Jon Corzine and the team of executives who toppled commodities brokerage firm MF Global don’t deserve another $10 million of insurance monies to pay their already “exorbitant” legal bills, a bankruptcy administrator said. Corzine, the disgraced former MF Global CEO and New Jersey governor, wants the $30 million defense-fund cap lifted, but the court-appointed administrator responsible for liquidating MF Global Holdings Ltd., the brokerage firm’s parent company, is fighting the move. While the money would come from insurance, it could reduce distributions to other creditors, bankruptcy experts said.

Hero or Goat? Jamie Dimon Inspires No Consensus (NYT)
...there is an almost bizarre disconnect between the headlines and what the people who matter — the investors, analysts, board members and, yes, even regulators — are seeking. None of them want him fired.

Dodgers fan dressed as a bear dances on top of Cardinals dugout during Game 3 of NLCS (NYDN)
A Dodgers fan dressed as a bear danced a jubilant dance atop the Cardinals’ dugout during the 8th inning of Game 3 of National League Championship Series Monday night. The bear's time in the spotlight was brief - video captured shows the bear up on the dugout for about 20 seconds before being pulled off by security - but certainly memorable. The furry fanatic got some big air and busted more than just a move, working in a cabbage patch and two jumping splits before being yanked off the dugout stage. The Dodgers got an insurance run in the inning, prompting some fans on Twitter to give birth to the hashtag #RallyBear.

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Goldman Sachs Board Must Act on Smith Op-Ed, Ex-Partner Writes (Bloomberg) Goldman Sachs directors must investigate a former employee’s allegations about a change in the firm’s culture, Jacki Zehner, who was a partner when she left the firm in 2002, wrote on her blog. “These are very serious accusations from a credible person in my view and I hope it does indeed provide a ‘wake-up’ call to the board of directors,” wrote Zehner, who was the first female trader promoted to partner and is married to a former partner. She is now CEO and president of Women Moving Millions, a non- profit supporting the advancement of women and girls worldwide. “It is the board that is accountable to shareholders and before they take another paycheck I hope they ask a heck of a lot of questions and get honest answers,” Zehner, 47, wrote in her March 16 commentary...Janet Tiebout Hanson, who left Goldman Sachs after almost 14 years in 1993 and in 1997 founded the women’s networking firm 85 Broads, wrote her own blog response to Smith’s op-ed piece, calling it a “cowardly act.” “By tossing a verbal hand grenade on his way out the door, he sullied the reputations of the vast majority of the people at the firm who work and live by the highest possible professional standards every single day,” wrote Hanson, who was the first woman at Goldman Sachs to be promoted into sales management. “He is just a quitter who never gave management an opportunity to respond before he verbally strafed the entire firm in print.” Is it Magic Johnson vs. Steve Cohen for Dodgers? (CBS) Cohen's appeal? Cash, mostly. Although Johnson is believed to have the highest total offer on the table (a rumored $1.6 billion), Cohen's bid has more cold, hard, redeemable U.S. currency involved ($900 million, to be precise). That may appeal to McCourt, who's facing a pricey divorce settlement with little more than exposed pocket linings and the Dodger Stadium parking lots to his sullied name. Additionally, as CBSSports.com Insider Jon Heyman has reported, Cohen may have additional credibility in the eyes of MLB because of his willingness to bring on board seasoned baseball men like Tony La Russa and former deputy commissioner Steve Greenberg. Lagarde Says World Can’t Be Lulled Into Sense of Security (Bloomberg) nternational Monetary Fund Managing Director Christine Lagarde urged policy makers to be vigilant as oil prices, debt levels, and the risk of slowing growth in emerging markets threaten global economic stability. “Optimism should not give us a sense of comfort or lull us into a false sense of security,” Lagarde said today at a speech in Beijing at the China Development Forum. “We cannot go back to business as usual.” Gupta’s Lawyer Says ‘Wrong Man’ on Trial in Insider Case (Bloomberg) Gupta’s lawyer, Gary Naftalis, said that Rajaratnam had a different Goldman Sachs tipper, who gave him confidential information about Intel Corp. and Apple, the lawyer said. That Goldman source was also caught on government wiretaps passing the inside information, Naftalis said. Where Was The Bracket Born? (WSJ) Steven Murray, a Colorado Mesa University professor who has studied the history of sports, said the concept that inspired the bracket—a single-elimination sporting competition with many rounds—isn't a modern invention. He said the ancient Greeks held wrestling and boxing competitions starting around 700 B.C. where the combatants would draw lots to set pairings. If the tournament pairings were posted in a bracket form, Murray said, they probably would have been painted with pigment on scrolls, placards or walls and wouldn't have survived...By some accounts, the oldest existing sports bracket lies in the archives of the Wimbledon Lawn Tennis Museum, which houses memorabilia from the famous tennis tournament. According to the curator, Honor Godfrey, the Lawn Tennis Championship printed a bracket in the program to display the pairings in its inaugural year, 1877. Godfrey said she couldn't find a copy of that program, but she did unearth a Xeroxed copy of the program from the following year, 1878. That program, issued by the "All England Croquet and Lawn-Tennis Club" announced the "Lawn Tennis Championship Meeting," which would be contested for a prize of 19 Guineas. Inside, on a full page, is a one-sided bracket with 34 names. To make the pairings add up correctly, a certain E.R. Seymour and a certain H.F. Lawford were awarded byes. To this day, Wimbledon's program includes a bracket of the tournament field. Apple To Say Monday How It Will Use Cash Hoard (NYT) Apple has finally decided what to do with its cash hoard of nearly $100 billion. The company issued an unusual media alert on Sunday evening saying it planned to announce on Monday morning the long-awaited outcome to a discussion by its board about what to do with its cash balance. It will announce its plans in a conference call at 9 a.m. Eastern time. Goldman's God Problem Goes Away, For Now (Reuters) For the past two years, a group of religious institutions that hold Goldman shares has asked the investment bank to review executive compensation packages and has been successful in getting its proposal taken up at regular shareholders' meetings. This year, the group, including the Sisters of St. Francis of Philadelphia, again sought to have its proposal voted on by shareholders. But for the first time, the U.S. Securities and Exchange Commission sided with Goldman, which argued it had already complied with the request Scores Arrested as the Police Clear Zuccotti Park (City Room) The operation occurred after hundreds of people had gathered in the financial district to observe the founding of Occupy Wall Street six months ago. Earlier, protesters had embarked upon a winding march, after which police officers made initial arrests of about a dozen people near the park...Kobi Skolnick, 30, said that officers pushed him in several directions and that as he tried to walk away, he was struck from behind in the neck. “One of the police ran and hit me with a baton,” he said. Cambodia Embracing Capitalism With First IPO Since Khmer Rouge (Bloomberg) Enthusiasm about the start of trading at the exchange, which opened last July without a single listed company, extends beyond the borders of the Southeast Asian country. Investors including Templeton Emerging Markets Group Chairman Mark Mobius said they plan to participate in Cambodia’s stock market after state-owned Phnom Penh Water Supply Authority has its initial public offering next month. “The potential for investors in Cambodia is excellent,” Mobius, who oversees about $50 billion, wrote in an e-mail. “The listing of publicly traded stocks will drive up interest and demand. If a country can list its state-owned enterprises and list enough stocks so that foreign investors can get involved, then it can be very, very good.” E! Network Brings Clint Eastwood Clan (WSJ) Actor and director Clint Eastwood is about to add a credit to his nearly 60-year career: reality-television star. Mr. Eastwood; his wife, Dina; and two of his children, 18-year-old Francesca and 15-year-old Morgan, will appear in "Mrs. Eastwood & Co.," a reality series that tracks the family in Los Angeles, at their Carmel, Calif., home and beyond. The 10-episode series also will follow Overtone, a South African singing group that Mrs. Eastwood manages. The band appeared on the soundtrack of Mr. Eastwood's 2009 film "Invictus," which recounts Nelson Mandela's attempt to use rugby to help unify post-apartheid South Africa.