Opening Bell: 10.17.13

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Goldman third quarter revenue down 20 percent, bank slashes costs (Reuters)
Goldman responded to the weaker revenue by cutting the money set aside for compensation by 35 percent, to $2.38 billion. So far this year it has set aside $10.4 billion to pay employees, down 5 percent from the first nine months of 2012. Overall, Goldman reported net income for common shareholders of $1.43 billion, or $2.88 per share, down 2 percent from $1.46 billion, or $2.85 per share, a year earlier. Per-share earnings rose because of stock repurchases. Analysts had been expecting earnings of $2.43 per share, on average, according to Thomson Reuters I/B/E/S. But analysts had forecast higher revenue, and most of Goldman's earnings beat came from cost-cutting.

U.S. failure to fix fiscal 'mess' undermines Fed on jobs: Fisher (Reuters)
"As long as inflationary expectations are held at bay, we can fully open the monetary throttle in an effort to deliver on the mandate Congress gave us to help achieve full employment," Dallas Fed President Richard Fisher said in remarks prepared for delivery to the Economic Club of New York. "But it is for naught as long as the fiscal authorities are slamming on the brakes and leaving everyone in the dark as to how they will cure the fiscal mess they have wrought."

Business Voices Frustration With GOP (WSJ)
The budget stalemate that had the U.S. flirting with default has left business and the Republican Party, longtime political allies, at a crossroads. In interviews with representatives of companies large and small, executives predicted a change in how business would approach politics. They didn't foresee a new alignment with Democrats but forecast backing challengers to tea-party conservatives in GOP primaries, increasing political engagement with centrist Republicans and, for some, disengaging with politics altogether. Many business executives say they were dismayed that some Republicans didn't heed their warnings that closing the government and risking default would hurt the U.S. economy. Others expressed disgust with Washington politics in general. All said the crisis could have been averted with a more pragmatic approach.

Boehner’s Favorite Diner Hit As $24B Lost in Shutdown (Bloomberg)
Pete’s Diner & Carryout, a 50-year-old Capitol Hill eatery frequented by House Speaker John Boehner, lost about 80 percent of its usual business, said Tong, surrounded by empty seats and Halloween decorations.

Kim Kardashian does not qualify for a star on Hollywood Walk of Fame, says landmark rep (NYDN)
Kanye West’s recent claim that girlfriend Kim Kardashian deserves a star on the Hollywood Walk of Fame was less that stellar in the eyes of the tourist-magnet’s managers. "We don't have a category for reality stars on the Walk of Fame," the landmark’s spokeswoman Ana Martinez told the Daily News. “They’re not giving a performance, it’s just them going through their daily lives and rituals on TV,” she said. “We honor people who’ve acted in or directed or produced an award-winning show or film. And it’s the same with music, people who maybe have gold records. West appeared on “Jimmy Kimmel Live” last week and griped that his baby mama hasn’t been offered a star on the Walk of Fame despite her worldwide fame and long-running show “Keeping Up with the Kardashians.” "People are so, so dated and not modern. It’s like, there's no way Kim Kardashian shouldn't have a star on the Walk of Fame. It’s ridiculous, old concepts,” he said. Kardashian, 32, accompanied West, 36, to his Kimmel appearance but remained backstage with their infant daughter North. “This Jimmy Kimmel interview is the truth,” she tweeted that night.

Blackstone's Profit Rises 33% on Real-Estate Gains (WSJ)
New York-based Blackstone posted a profit of $171.2 million, or 29 cents a share, compared with its year-earlier gain of $128.8 million, or 24 cents a share. The firm reported economic net income of $640.2 million, up from $621.8 million for the same period a year ago. Fee revenue led to the higher profits, as asset sales slowed from earlier this year. The firm's real-estate segment rode higher deal profits to a 43% jump in economic net income, while its private-equity unit saw such fees fall sharply from a year earlier, resulting in economic net income that was 57% lower. Blackstone's credit and hedge-fund business saw slightly weaker results, but its advisory business reported a 40% rise in revenue. Blackstone's assets under management grew to $248 billion at the end of September, up 21% from a year ago and 8% higher than the end of June.

Consumers’ Outlook for U.S. Economy Plunges to Two-Year Low (Bloomberg)
The monthly Bloomberg Consumer Comfort Index expectations gauge plunged to minus 31, the lowest level since November 2011, from minus 9 in September, a report showed today. The share of people projecting the economy will worsen jumped by the most since the collapse of Lehman Brothers Holdings Inc. five years ago. The weekly measure of current conditions fell to minus 34.1 in the period ended Oct. 13, the weakest since March.

Butterfinger ready to stick it to Reese's-- with a new cup (CNBC)
The nation's top-selling candy bar is about to find itself with an unlikely new competitor in the peanut butter cup category: Butterfinger. Wednesday, Nestle announced plans for a 2014 rollout of its most radical-ever twist to the 90-year-old old candy bar, perhaps best-known for the way it sticks, crunches and oozes between teeth. So convinced are Nestle U.S.A. executives that the Butterfinger Peanut Butter Cup will be a smash, that Nestle has even purchased its first-ever Super Bowl commercial to tout it. "The peanut butter cup is America's favorite candy," says Jeremy Vandervoet, brand manager for Butterfinger. "This is the first time the peanut butter cup will change." But executives at Hershey, maker of No. One Reese's, say they're not worried. "Reese's is one of America's most beloved brands," says Anna Lingeris, senior manager of brand PR and consumer engagement at Hershey. She says its sales topped $1.5 billion last year, making it the top-selling confection brand. No other domestic candy brand topped $1 billion in sales last year, Nielsen reports.

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Draghi Says Officials Agree On ECB Unlimited Bond-Buying (Bloomberg) The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” Draghi said at a press conference in Frankfurt after the ECB held its benchmark rate at a record low of 0.75 percent. “Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.” Positive Signs Emerge For Job Market (WSJ) Private-sector jobs in the U.S. increased by 201,000 last month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. The August number was well above the 145,000 expected by economists. The July estimate was revised to 173,000 from the 163,000 reported last month. AIG To Sell $2 Billion Of AIA Shares (WSJ) AIG is seeking to raise around US$2 billion by selling more shares in AIA Group Ltd, its former pan-Asian life insurance unit, as it continues to repay the U.S. government bailout it received during the 2008 financial crisis. The U.S. insurer also said in a statement it plans to buy back another $5 billion in stock from the U.S. Treasury. AIG has been aggressively buying back shares this year and is expected to buy more from the Treasury this fall, as part of a push that could make the U.S. government a minority shareholder before the November elections and enable the company to fully repay its bailout sooner than expected. The Treasury Department sold $5 billion worth of shares in AIG last month, its fourth sale so far, reducing the government's stake to 55% and bringing down the amount the government needs to recoup from the bailout to $25 billion. Summer Rally Puts The Hurt On Fund Managers (WSJ) "The gap we are looking at is going to be very hard…for hedge funds to make up," said Anurag Bhardwaj, head of hedge-fund consulting at Barclays PLC. "At this late stage in the year, when the rally has been around for a bit, do you decide to get into the game now?" Alec Baldwin's daughter discusses ‘pig’ call (NYP) Alec Baldwin’s daughter Ireland has talked for the first time about his infamous 2007 voice mail in which he called her, then 12, “a rude, thoughtless, little pig” — saying he often speaks like that “because he’s frustrated.” Ireland, the 16-year-old daughter of Baldwin and Kim Basinger, thinks the incident — which created a viral scandal and prompted Baldwin to temporarily lose visitation rights — was blown wildly out of proportion. “The only problem with that voice mail was that people made it out to be a way bigger deal than it was,” she tells Page Six Magazine, out today. “He’s said stuff like that before just because he’s frustrated. “For me it was like, ‘OK, whatever.’ I called him back I was like, ‘Sorry Dad, I didn’t have my phone.’ That was it.” DE Shaw Is Back On Top (DJ) This year, Shaw has had the biggest asset growth among the top 20 hedge fund firms in Absolute Return’s Billion Dollar Club, which tracks the biggest hedgies twice a year. Shaw added $2.4 billion to its hedge-fund coffers this year, a 14 percent gain, bringing its assets to $19.4 billion as of July 1, according to the ranking out today. Clinton Nominates Obama, Rebuts Romney Criticism On Jobs (Bloomberg) Bill Clinton said President Barack Obama deserves re-election because he contained the economic crisis and put the nation on a path to recovery, casting the 2012 election as a choice between “shared opportunities and shared responsibility” and a “winner-take-all, you’re-on-your- own society.” Clinton, 66, praised Obama’s commitment to “constructive cooperation” and described him as a man who is “cool on the outside, but who burns for America on the inside.” The former president used a 48-minute address before the Democratic National Convention in Charlotte, North Carolina, last night to deliver a rebuttal of criticisms leveled at Obama by challenger Mitt Romney and his running mate during last week’s Republican National Convention in Tampa, Florida -- at one point saying it “takes some brass” for Obama’s partisan adversaries to lob some of their attacks. “Nobody’s right all the time and a broken clock is right twice a day,” Clinton said. “We’re compelled to spend our fleeting lives between those two extremes.” Most Of Nomura's Cuts To Come In Europe, US (WSJ) The brokerage house said Thursday 45% of the cuts would be in Europe and 21% in the U.S. Nomura said 45% of the total cuts would be in the form of labor costs. Love Triangle Leads To Million-Dollar Return Battle At Neiman Marcus (FDL) The meeting was awkward. Malcolm Reuben, the buttoned-up vice president and general manager of Neiman Marcus’ NorthPark Center store, stood inside the multimillion-dollar Addison home of one of his top customers, Patricia Walker. Beside him were two colleagues: a Neiman Marcus attorney and his store’s loss-prevention manager. Walker was joined by her own attorney and her personal assistant. It was a summer day in 2010. Glancing around the sleek Max Levy–designed house, the only things more dazzling than the sculptural masonry columns or the steel-and-glass staircase were the piles of designer goods: handbags, shoes, furs, clothing, crystal figurines, fine jewelry. It represented the bulk of $1.4 million in merchandise charged to Walker over a period of years. “There was a variety of merchandise laying all over the house,” Reuben testified in a March video deposition. “She wanted to return all of the merchandise because of the affair.” Oh, yes. The affair. Walker had learned that Favi Lo, her longtime Neiman Marcus sales associate at NorthPark, was sleeping with her husband. And Walker saw that her charges had soared in recent years while she recovered from a horrific head-on auto collision. She came to believe that her husband was responsible for many of the purchases and had used them to pump up commissions for his mistress.

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