Opening Bell: 10.28.13

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Man Making Ireland Tax Avoidance Hub Proves Local Hero (Bloomberg)
Google Inc., Facebook Inc. and LinkedIn Corp. wound up in Ireland because they could reduce their tax bills. Their success is leading European and U.S. politicians to label the country a tax haven that must change its ways. The grand architect of much of that success: Feargal O’Rourke, the scion of a political dynasty who heads the tax practice at PricewaterhouseCoopers in Ireland. He advises both multinational companies and the government on tax policy and has emerged as his country’s leading defender. “Under no circumstances is Ireland a tax haven,” O’Rourke said recently at his corner office on the River Liffey in Dublin, a ritual stop for many tech companies in their Irish quest. “I’m a player in this game and we play by the rules.”

JP Morgan's Subprime Troubles Ran Deep (WSJ)
J.P. Morgan sidestepped many of the subprime-mortgage problems that bedeviled rivals during the financial crisis, and avoided much of the postcrisis scrutiny that dragged down others on Wall Street. But now its own behavior during the housing boom is coming under close examination as investigators work through a backlog of cases. The bank dealt with some of the biggest subprime lenders of the time, including Countrywide Financial Corp., Fremont Investment & Loan and WMC Mortgage Corp., a former unit of General Electric, according to the Federal Housing Finance Agency complaint. J.P. Morgan's relationship with New Century, a subprime lender that went bankrupt in 2007 and later faced a Securities and Exchange Commission investigation and shareholder suits, shows that the New York bank was part of the frenzied push to package mortgages for investors at the end of the housing boom.

Hedge Fund Chief Set On Selling NY-Based Satellite Company (NYP)
Rachesky, who is Loral’s chairman and biggest shareholder with a 38 percent stake, is putting the New York satellite company on the block, sources told The Post. The 55-year-old investor has recently put out feelers to potential suitors, a source close to the situation said. While Rachesky, a medical doctor and a former protégé of Carl Icahn, is set on selling Loral, a holding company whose biggest asset is a 62.8 percent stake in Telesat, a Canadian satellite company, he has not yet hired a sell-side banker, a source said. Some investors are hoping Rachesky’s tough negotiating tactics don’t foil any potential sale. In 2011, the investor rejected a $6 billion offer for Telesat, calling it too low. The auction was then canceled, sources said. Private equity firms Carlyle, KKR and Providence Equity Partners each has bid for Telesat. The Ottawa-based company owns a fleet of 13 in-orbit satellites that offer telecommunication services to the private sector and government from perches 22,000 miles above Earth.

At Fed, Some Want A Rule For When To Act (WSJ)
The Federal Reserve has struggled to communicate clearly about its plans for winding down its $85 billion-a-month bond-buying program. Some Fed officials think they'd have an easier time if they established a rule to determine when and how to trim the purchases. With the Fed unlikely to change the program at its policy meeting Tuesday and Wednesday, discussion is likely to focus on issues such as this. Some members of the Fed's policy-making committee want to clearly define when they will start scaling back the program—also known as quantitative easing, or QE—perhaps when the unemployment rate reaches a certain point. But others worry that firm rules could limit their options as they navigate unknown territory or be hard to follow when circumstances change.

Georgia Man Runs Into Burning Home To Save Beer (ABC)
The flames broke out while six adults and two young children were watching TV. Everyone quickly made it outside safely. But then Walter Serpit, who walks with a cane, rushed back into the burning building to save something near and dear to him. "I told them to get the kids out and everything, and me myself, being an alcoholic, I was trying to get my beer out," he said. "You feel me?" Serpit managed to rescue several cans of beer from the fire without getting burned. Firefighters say you should never go back into a building that's on fire.

If Wall Street Worked Like the Art Market, It Would Be a Crime (Bloomberg)
The way the game is supposed to work, art essentially comes with a money-back guarantee. If a client wants to sell work, he or she sells it back to the gallery — which then turns around and sells it to another client. Some powerful galleries even write the option to buy back a work into sales contracts with collectors.

China Is Back In Vogue With Investors (WSJ)
The willingness to take another chance on Chinese stocks and on other markets tightly linked to the country's economy underscores the paucity of attractive options available. Global growth continues to be soft, while hefty central-bank support for Western economies has resulted in near record prices in many stock and bond markets. Though China's economic rise drove global markets for much of the past decade, the recent rough patch presents a fresh opportunity to get in, some investors say. "China comes along with a story—a real bombed-out market, with low valuations—and a lot of people jumped on that," said Gary Dugan, chief investment officer, Asia and Middle East at private bank Coutts & Co. Ltd., who raised his allocations to Chinese stocks in September.

Local Florida Woman Is Crime Kingpin, Cops Say (OS)
Charmaine Roman lived in a Dr. Phillips condo, drove a Land Rover and helped raise her young grandson — nothing likely to rouse an outsider's suspicion. But law-enforcement officers say Roman's lifestyle was funded not by her concert-promotion business but by a violent Jamaican drug-trafficking ring that brought thousands of pounds of marijuana into Central Florida and a host of violent crimes. Metropolitan Bureau of Investigation agents who have been investigating Roman for years say the 42-year-old was in charge of the group's finances and laundered money at the Wynn Casino in Las Vegas.

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By Evan-Amos (Own work) [CC0], via Wikimedia Commons

Opening Bell: 8.31.16

El-Erian sees September rate hike; The CIA has a venture capital firm; Paris targeting Brexit jobs; Police hunt for armed, naked candy bandit; and more.

Opening Bell: 02.07.13

Credit Suisse Returns To Profit (WSJ) In the fourth quarter, Credit Suisse's net profit was 397 million francs, compared with a net loss of 637 million francs a year earlier when restructuring charges weighed on earnings. Revenue, which includes interest income, fees and trading proceeds, rose 29% to 5.8 billion francs. Analysts had expected a profit of 563 million francs and revenue of 6.14 billion francs. State Lawsuits Could Add To S&P Exposure (WSJ) On Tuesday, the Justice Department sued S&P for allegedly causing some banks and credit unions to lose $5 billion after relying on the company's ratings of mortgage-linked securities. However, the $5 billion claim, which S&P has dismissed as "meritless," is only part of the legal battle being fought by the world's largest credit-ratings firm by number of deals rated. Thirteen states and the District of Columbia have followed in the Justice Department's footsteps, filing separate lawsuits against S&P on Tuesday. The California attorney general alone is suing S&P for about $4 billion to recover funds for two of the country's largest public pension funds, according to its lawsuit. Other states, such as Colorado and Arkansas, are demanding S&P give back the revenue it earned on precrisis ratings of hundreds of securities. State prosecutors allege S&P presented its ratings as based on objective and independent analysis but actually were inflated to cater to the banks that helped arrange and sell the securities. S&P Hires Top Defense Attorney for $5 Billion Lawsuit (Reuters) Standard and Poor's has hired John Keker, one of the country's top white-collar defense attorneys, to help fight the $5 billion lawsuit brought by the U.S. government this week. Keker, who is based in San Francisco and has represented everyone from cyclist Lance Armstrong to Enron's Andrew Fastow, was hired at the recommendation of Floyd Abrams, a prominent New York attorney who also represents the ratings firm. RBS Settles Rate Charges (WSJ) CFTC enforcement chief David Meister said Wednesday that the trading floor was "laden with conflicts of interest," where RBS traders "seized the opportunity to ask colleagues sitting in the next chair for false rate submissions." From mid-2006 to the end of 2010, traders at RBS tried hundreds of times to rig the London interbank offered rate, or Libor, sometimes succeeding, said U.S. and U.K. regulators as they announced a $612 million settlement with the British bank. ‘Historic Winter Storm’ Moving Toward U.S. Northeast (Bloomberg) A “potential historic winter storm” and blizzard may dump 2 feet of snow on Boston and eastern Massachusetts, potentially causing power outages and leaving 10 inches in New York City. Eighteen to 24 inches (46 to 61 centimeters) of snow may fall in Boston, and the city has an 85 percent chance of receiving at least 12 inches from the storm that is expected to arrive in two days, according to the latest forecast from National Weather Service in Taunton, Massachusetts, published at at 4:25 a.m. Eastern Standard Time. “Heavy snow and gusty winds will bring the potential for blizzard conditions. The worst of the storm will be Friday night into the morning,” the weather service said. The storm arrives on almost the 35th anniversary of the Blizzard of 1978, which killed 99 people, destroyed 2,000 homes, drove 10,000 residents into shelters and paralyzed eastern Massachusetts and northern Rhode Island for a week, according to the weather service. Ireland Moves Toward Debt Deal (WSJ) Under Ireland's new proposal, the government will provide a long-term bond to the Irish central bank that replaces the note, the Irish finance ministry said. IBRC will be liquidated and its remaining commercial property assets will be dispatched to Ireland's so-called bad bank, the National Asset Management Agency. Mr. Noonan told lawmakers early Thursday that there was still "no deal," but he needed to announce new powers to liquidate IBRC—the first step toward potentially striking such a debt agreement—to protect the country from unspecified legal challenges. Man Claims IRS Agent Coerced Him Into Sex (CBS) An Oregon man is suing the U.S. Government and a female IRS agent he alleges pressured him into sex, by threatening a tax penalty. Vincent Burroughs, of Fall Creek, Ore., says the harassing relationship began in August of 2011 when Dora Abrahamson, an agent with the Internal Revenue Service, called him and said he would be audited, CBS affiliate KVAL reports. Burroughs says he didn't know Abrahamson, and that he hadn't met her before those calls - nor had he heard that he was being audited by the IRS. "She was sending me texts that she wanted to come out, give me massages because she needed to help me relax," Burroughs said in a phone interview with KVAL News. Over the next two months, Burroughs alleges that Abrahamson sent him several flirtatious text messages - offering to give massages, asking to meet him, and sending racy photos of herself to his cell phone. "She said she knew more than my mother knew about me," said Burroughs. In the lawsuit, Burroughs says in September 2011 Abrahamson came to his home wearing provocative attire. "Next thing I know, she's at my gate, honking...so I opened my gate, she came into my property dressed exactly like [when] she texted me," Burroughs said. The lawsuit states: "She said that she could impose no penalty, or a 40% penalty, and that if he would give her what she wanted, she would give him what she needed." E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad (NYT) When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix. Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews,according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors. The trove of internal e-mails and employee interviews, filed as part of a lawsuit by one of the investors in the securities, offers a fresh glimpse into Wall Street's mortgage machine, which churned out billions of dollars of securities that later imploded. The documents reveal that JPMorgan, as well as two firms the bank acquired during the credit crisis, Washington Mutual and Bear Stearns, flouted quality controls and ignored problems, sometimes hiding them entirely, in a quest for profit. Harvard’s Gopinath Helps France Beat Euro Straitjacket (Bloomberg) When French President Francois Hollande unveiled a plan in November for a business tax credit and higher sales taxes as a way to revive the economy, he was implementing an idea championed by economist Gita Gopinath. Gopinath, 41, a professor at Harvard University in Cambridge, Massachusetts, has pushed for tax intervention as a way forward for euro-area countries that cannot devalue their exchange rates. “Fiscal devaluation” is helping France turn the corner during a period of extreme budget constraints, former Airbus SAS chief Louis Gallois said in a business- competitiveness report Hollande commissioned. Gopinath’s support for the theory took shape through her years teaching at Harvard and the University of Chicago and particularly as a Ph.D. student at Princeton University under the guidance of Kenneth Rogoff, Pierre-Olivier Gourinchas and Ben Bernanke, now chairman of the Federal Reserve. While her earlier work on current accounts and balance of payments garnered praise, it is her recent focus on the 17 euro nations that has national leaders paying action. John Thomas Financial Said To Draw Regulatory Probe (NYP) Wall Street brokerage firm John Thomas Financial, owned by flamboyant founder and CEO Tommy Belesis — who gained more than 15 minutes of fame from his role in Oliver Stone’s “Wall Street: Money Never Sleeps” — is being probed by the brokerage industry, the Securities and Exchange Commission and the FBI, The Post has learned. Agents from the FBI’s New York office have been knocking on doors of people associated with the firm, asking questions about JTF’s business practices, including cold calling by brokers and Belesis’ overseas accounts, sources told The Post. Fewer Workers Filed Claims for U.S. Jobless Benefits Last Week (Bloomberg) Applications for jobless benefits dropped 5,000 to 366,000 in the week ended Feb. 2, Labor Department figures showed today. Economists forecast 360,000 claims, according to the median of 53 estimates in a Bloomberg survey. Big Mac Prices Show Which Euro Zone States Best at Belt-Tightening (Reuter) Economist Guntram Wolff took the data and found that the price rise in Greece, Portugal and Spain has been less than the euro zone average, while in Ireland the price actually fell. These are the main countries undergoing deep economic reform due to the debt crisis. This contrasts with price rises above the euro zone burger average in Germany. Wolff concludes from this that economic adjustment is working. For example, In Ireland, which has made spending cuts after receiving international aid, the burger price has fallen from 3.80 euros to less than 3.50 euros. There is one notable exception, however. Heavily-indebted Italy is the most expensive country in the euro area to buy a Big Mac - 3.85 euros - while it costs just 3.64 euros in Germany. PETA: Naked chicken corpses aren't sexy (CM) The American founder of People for the Ethical Treatment of Animals, president Ingrid Newkirk, criticised a newspaper for running a picture of a raw chicken. "We don't want to see any chickens on display, but instead want them to live natural, happy lives with their families. Sexily displaying the corpse of a chicken who has been bred to grow so big, so quickly, that many collapse under their own weight, is just additionally offensive."