Opening Bell: 11.11.13

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Big Banks May Block Traders From Chat Rooms (WSJ)
JP Morgan and Credit Suisse are discussing internally whether to disable computerized chat rooms that electronically link traders across multiple banks and are used by tens of thousands of employees globally, according to people familiar with the discussions. Royal Bank of Scotland Group, Barclays, UBS, and Citigroup among others, also are reviewing chat-room use and standards for controlling and monitoring all electronic communications, according to people at those and other banks and firms that do business with them. Chat rooms have become integral to the way traders communicate with one another and clients. Trading desks around the world that buy and sell currencies, commodities, equities and fixed-income assets rely, at least in part, on so-called multidealer chat rooms, which link multiple banks and their clients primarily through their Bloomberg terminals. But a series of regulatory probes into interest-rate rigging and possible manipulation of other markets has turned a spotlight on the chat rooms. The potential for hefty fines and damage to their reputations has some banks considering what would amount to a radical overhaul of the way traders conduct their business.

SAC plea deal on ice as judge delays decision (NYP)
The hedge-fund giant pleaded guilty Friday to insider-trading charges and agreed to pay $900 million in criminal penalties to settle a long-running probe by the Justice Department. But in a surprise move before a packed courtroom, Manhattan federal judge Laura Swain said she would hold off until March on whether to approve the plea deal. Swain said she wanted to see pre-sentencing reports prepared by the probation department before allowing the landmark settlement to proceed...Swain set the sentencing for March 14 — after two more insider trading trials involving former SAC money managers. Michael Steinberg goes on trial Nov. 18, while Mathew Martoma’s case is set for January.

Regulators urged to probe metals markets abuse (FT)
Britain’s parliamentary financial watchdog has urged regulators to probe potential abuses in metals markets as deeply as they are investigating the ongoing scandals over foreign exchange and Libor benchmark interest rates.
Andrew Tyrie, chairman of the Treasury select committee, told the Financial Times that MPs were conscious of growing concerns that the manipulation of rates – already exposed in the Libor affair, and now under investigation in a mounting regulatory probe into potential forex abuses – may go well beyond those areas and into metals markets.

Twitter Puts Spotlight on How Firms Burnish Results (WSJ)
The strong interest in Twitter's initial public offering brought back to the fore the accounting methods that companies can use to burnish otherwise lackluster results. Twitter has recorded a loss of more than $130 million this year using traditional accounting measures. But after stripping out several costs, Twitter posted a nine-month profit of almost $31 million...Today, it is common for tech companies to exclude large stock payments to employees from preferred measurements. Some also remove other costs, such as restructuring or acquisition expenses. Some companies even tout nonfinancial measurements, such as an increase in the user base. The SEC is watching that practice. "Our staff's concern has been the impact on investors of the sheer magnitude of some of these metrics," SEC Chairman Mary Jo White said in a speech Wednesday. For investors "it can be hard not to think that these big numbers will inevitably translate into big profits for the company. But the connection may not necessarily be there." She didn't name any companies.

Edwin Tobergta, Sentenced To 11 Months For Sex With Pool Raft, Also Had Sex With Pumpkin (HP)
Edwin Tobergta of Hamilton, Ohio, is now famous as the man caught having sex with a pool raft. His sentencing hearing this week offered a little insight into his proclivities. One thing that stands out: He once pleasured himself with a pumpkin. Tobergta was sentenced this week to 11 months in prison for defiling the inflatable raft, according to WXIX. He committed the act in June, in front of children. At an earlier court session, Tobergta plead guilty to public indecency. This is the second time Tobergta has been caught in flagrante delicto with an inflatable pool toy. The same thing happened in 2011. But a less reported aspect of Tobergta's checkered history with the law occurred in 2002, when he was arrested for allegedly diddling an inflatable pumpkin that was part of a Halloween display...Tobergta apologized in court before being sentenced. "I do want to apologize for my actions, I'm sorry," he said. "I'm ready to get my life together and quit all this nonsense."

'Long-only' Funds Lose Their Edge (WSJ)
On the heels of a multiyear market rally, a slew of hedge-fund firms are launching "long-only" funds betting that at least some stocks have further to climb. The moves come amid a brutal stretch for short bets against companies, traditionally a key strategy for hedge funds. The new funds also represent a shift by hedge-fund managers—known for their sophisticated tactics and exclusivity—into the kind of old-fashioned stock picking more associated with Main Street mutual funds. But some wonder if the latest craze is merely a grab for fees, or perhaps even a sign of the top of the stock market. The new entrants to the field include several firms with ties to Julian Robertson's investment firm Tiger Management, including Tiger Global Management and Coatue Management. Tiger Management-backed Hound Partners is planning to launch one of its own next year, according to people familiar with the firm.

Founder: Some women can’t wear Lululemon yoga pants (NYP)
Wilson was on Bloomberg TV for a promotional interview on a new meditation initiative created by Wilson and his wife, former Lululemon head designer Shannon Wilson. Once the promo drifted toward the company and how it was faring over the sheer yoga-pants production problems, Chip Wilson spread himself a little thin.
Wilson first stuck to his knitting, saying, “There’s no doubt we made a mistake,” adding that it’s “almost impossible’ to “build quality control” to cover all situations. So far, so good. But, alas, he followed up with: “Quite frankly, some women’s bodies just don’t work for it. . . . It’s about rubbing through the thighs and how much pressure there is.” When the interviewer pressed, “Not every woman can wear a Lululemon pant?” Wilson said, “I think they can — it’s how you use it.”

German Savings Banks Flex Political Muscle (WSJ)
Germany's public savings banks have become the most powerful little lenders in the world, exploiting their political clout to punch loopholes into Europe's postcrisis banking laws. Untouched by the image problems that have beset big U.S. and European lenders, the banks, known as Sparkassen, can count on political ties reaching from local councils all the way to the federal government in Berlin and the European Parliament.

Pay Raises for Bank Risk Officers in Asia Trump New York (Bloomberg)
Salaries for banks’ risk and compliance officers in Singapore and Hong Kong rose at about twice the pace of pay for similar positions at New York and London firms amid a shortage of skilled staff members, a recruiter said. Pay excluding bonuses for people who changed jobs in the Asian cities rose as much as 20 percent this year, compared with 10 percent in the Western hubs, said Neil Owen, a director for Robert Half International Inc. in London. A senior official in Singapore is paid as much as S$250,000 ($201,000) annually, compared with Hong Kong’s HK$1.8 million ($232,000), London’s 175,750 pounds ($281,000) and New York’s $323,595, data compiled by the firm show.

Hedge Fund Invests In Argentina (WSJ)
As head of a hedge fund that specializes in distressed debt, David Martinez has had lots of practice trying to figure out when an asset's value has been beaten down so much that it is a buy. He has just made an unusual call: Invest in Argentina. Mr. Martinez's investment group, Fintech Advisory, plans to buy Telecom Argentina and related assets for $960 million from Telecom Italia, TIT.MI -5.56% which is selling its Argentine unit to pay down debt. Mr. Martinez confirmed the purchase Friday. Argentina has been a cautionary tale for many investors since its 2001 default on $100 billion in sovereign debt. Since then, a husband-and-wife team of populist politicians, the late Néstor Kirchner and his wife, President Cristina Kirchner, has used higher commodity prices and public spending to get the economy back on its feet. But it has come at the cost of high inflation, price controls and growing fiscal problems.

It's not easy to land a job as a balloon handler in the Macy's Thanksgiving Day Parade (NYDN)
“Email everyone you know who works for Macy’s!” suggests Jorge Lee, 44, who scored his first balloon assignment through a friend in 2004 — and has held on tight ever since, rising through the ranks to become captain of the Elf on the Shelf balloon for this year’s Nov. 28 parade...Getting in is tough, and it’s no picnic even after scoring a spot. “It is very physical,” warns Elvia Negron-Perez, 52, from the Bronx, who landed on Julius the Sock Monkey’s balloon last year after Lee vouched for her. “I thought it was going to be easy with so many people. How heavy is a helium balloon?” The pull from the balloon lift can be 300 to 500 pounds. Factor in the cold and the wind, and the 2½-mile parade feels like a marathon. That’s why handlers must be over 18, weigh at least 120 pounds and have strong backs and knees with no heart problems. Handlers attend balloon boot camps in September and October to learn the ropes. “I recommend doing pullups, pushups, bicep and tricep workouts to get ready, because you really put your body into holding that balloon down,” says Negron-Perez.

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(Getty Images)

Opening Bell: 6.13.17

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Opening Bell: 08.17.12

Facebook Investors Cash Out (WSJ) Mr. Zuckerberg has long exhorted employees not to pay attention to the stock price, instead pushing them to focus on developing the social network. But in a companywide meeting earlier this month, he conceded that it may be "painful" to watch as investors continue to retreat from Facebook's stock, according to people familiar with the meeting. Facebook Second-Worst IPO Performer After Share Lock-Up (Bloomberg) Facebook's 6.3 percent drop yesterday, after the end of restrictions on share sales by its biggest investors, was the second-largest post-lock-up decline among companies that have gone public since January 2011. Wall Street Bonus Estimates Cut By Pay Consultant Johnson (Bloomberg) Incentive pay for senior management, excluding the executives named on proxy filings, will be unchanged to 10 percent higher, Johnson Associates estimated in an Aug. 14 report. That’s down from May, when the firm predicted senior managers would get bonus boosts of 5 percent to 15 percent. The biggest increases are still likely to come in fixed- income and is now forecast to be 10 percent to 20 percent instead of 15 percent to 25 percent, the new report showed. “They had a terrible 2011, so it’s off of a low base,” Johnson said. “We hoped that that business would have recovered more dramatically, but it hasn’t, so I guess you’d say it’s gone from terrible to so-so.” Executives Say Obama Better For World Economy (Reuters) Twice as many business executives around the world say the global economy will prosper better with President Barack Obama than with Mitt Romney, according to a poll out Friday. Democrat Obama was chosen by 42.7 percent in the 1,700-respondent poll, compared with 20.5 percent for Romney. The rest said "neither." 'Broken' Fund Shifts Blame (WSJ) Nearly four years after the collapse of Lehman Brothers Holdings Inc. "broke the buck" at his money-market mutual fund, Bruce R. Bent is blaming the U.S. government. The 75-year-old Mr. Bent and his son, Bruce Bent II, are set to go on trial in October on civil charges of misleading investors, ratings firms and trustees of the Reserve Primary fund as it wobbled in September 2008. The Securities and Exchange Commission alleges that the two men falsely claimed they would prop up the fund's $1 net asset value even though they "secretly harbored" doubts. The two Bents have denied the allegations in the SEC's civil lawsuit ever since it was filed in U.S. District Court for the Southern District of New York in 2009. Former Spitzer call girl Ashley Dupre is engaged and pregnant (NYP) “On the record, yes, I can confirm I’m almost seven months,” Dupre, 27, enthused when contacted yesterday. “I can’t tell you when the wedding date is just yet.” In four short years, Dupre’s gone from Client No. 9 to Husband No. 1, and now owns Femme by Ashley, a lingerie and swimwear shop in Red Bank, NJ, which she her husband to be, New Jersey asphalt scion Thomas “TJ” Earle, helped her open in May. Ex-MS Banker In China Bribery Case (CNBC) Garth Peterson joined Morgan Stanley in Asia in 2002, just as the Chinese real estate market was taking off. His job would be making real estate deals for the firm, and Peterson seemed the ideal person for the position. A blonde, blue-eyed American raised in Singapore, Peterson — then in his early 30s — was fluent in Mandarin, and in the local culture. “The language is, you know, essential, I would say, being able to speak Mandarin well,” Peterson said. “But beyond that, I worked in the Chinese real estate industry since 1993.” In 2006 alone, according to news reports at the time, Morgan Stanley invested $3 billion in Chinese real estate. Peterson, by then a vice president, was at the forefront. “I was given more and more support, and the business just grew exponentially,” he said. Today, his fortunes have drastically changed. On Thursday, Peterson was sentenced to 9 months in prison and 3 years supervised release after pleading guilty to evading Morgan Stanley’s internal controls — a federal offense. Prosecutors said he engineered a deal that transferred Morgan Stanley’s interest in a multi-million dollar Shanghai real estate development to a shell company secretly controlled by Peterson and a Chinese government official. The official, who was not identified, made an instant paper profit of $2.5 million. Treasury To Amend Terms Of Fannie, Freddie Bailout (WSJ) Under the new arrangement between Treasury and the companies' federal regulator, all the firms' quarterly profits would be turned over to the government as a dividend payment; the government wouldn't require such payments in periods when the firms are unprofitable. Backstop For Futures Trades (WSJ) Support is growing for an insurance fund that would protect customers of futures brokerages that collapse. While numerous hurdles remain, the process took an important step Thursday when futures-exchange operator CME Group met with other industry officials and a customer-advocacy group in Chicago to discuss how to set up a customer-protection fund. It could take months or even longer for a specific plan to emerge, but participants in the meeting said it is increasingly likely that the government, futures industry or both will propose such an insurance fund. "Restoring customer confidence is very important," and "we're looking at all potential solutions, including an insurance fund," said Walt Lukken, president of the Futures Industry Association, a trade group.