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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Opening Bell: 04.05.13

U.S. Economy Adds Just 88,000 Jobs (WSJ) U.S. employers added jobs at the slowest pace in nine months in March, suggesting weakening economic growth as higher taxes and government spending cuts start to have an impact. Employers added 88,000 jobs last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, fell one-tenth of a percentage point to 7.6%, largely because of people dropping out of the work force. Economists surveyed by Dow Jones Newswires expected nonfarm payrolls to rise by 200,000. Obama Budget to Include Cuts to Programs in Hopes of Deal (NYT) In a significant shift in fiscal strategy, Mr. Obama on Wednesday will send a budget plan to Capitol Hill that departs from the usual presidential wish list that Republicans typically declare dead on arrival. Instead it will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations. Congressional Republicans have dug in against any new tax revenues after higher taxes for the affluent were approved at the start of the year. Big inflows into bonds undercut the "Great Rotation" (Reuters) Big names like Pacific Investment Management Co (PIMCO), DoubleLine, Loomis Sayles and TCW have seen their main bond funds take in an aggregate total of roughly $5 billion during January and February. Vanguard's indexed Total Bond Market portfolios have received over $5.6 billion for the same period, according to the latest data provided by Morningstar. More broadly, while U.S. funds that invest in stocks have gained $78.88 billion in new cash so far this year amid the U.S. stock market's run-up, taxable bond mutual funds have garnered roughly the same - $76.41 billion, according to data from Thomson Reuters' Lipper service. Finding a Rate That’s Fairer Than Libor (NYT) Mr. Gensler would like to develop an alternative and points to two options. One would essentially be dependent on the Federal Reserve’s setting of the federal funds rate — the rate at which it will lend to banks. The other would be based on rates charged on secured loans. In each case these are real markets, at least in dollar-based transactions. He would like to phase in one of them as a replacement for Libor. Autonomy deal debacle takes toll at HP (FT) Hewlett-Packard’s chairman and its longest-serving directors resigned from their positions on Thursday in a delayed reaction to last year’s disastrous $8.8bn writedown relating to the company’s $11bn acquisition of Autonomy. Ray Lane will be succeeded as chairman temporarily by Ralph Whitworth until a permanent replacement is identified. Mr Whitworth, an activist investor who joined the board as an independent director in 2011, is HP’s fifth chairman in a decade. Argentina's Cristina Kirchner 'is an old hag' (Telegraph) Uruguay's President Jose Mujica has been left red-faced after apparently saying his Argentine counterpart Cristina Kirchner was "an old hag" in remarks picked up by an open microphone. ... "This old hag is worse than the cross-eyed man," Mujica was caught saying at the start of a news conference while speaking quietly with another official. El Observador newspaper, which posted the audio on its website, said Mujica was referencing the Kirchners and did not realise that the microphones were already on. Nestor Kirchner died suddenly of a heart attack in 2010 and had a lazy eye. Millionaires Got $80 Million in Jobless Aid in Recession (Bloomberg) The U.S. government paid almost $80 million in unemployment benefits during the worst of the economic downturn to households that made more than $1 million, including a record $29.9 million in 2010, tax records show. Almost 3,200 households -- about 20 percent of them from New York -- that reported adjusted gross income of more than $1 million received jobless-insurance payments averaging $12,600 in 2010, the latest year for which figures are available, according to IRS data compiled by Bloomberg. Those payments outpaced the total incomes for about 25 million U.S. households. Wells Hit on Pace of Mortgage Relief (WSJ) New York's top prosecutor is raising concerns about the pace of relief provided to the state's mortgage borrowers by Wells Fargo WFC -1.38% & Co. under a landmark $25 billion settlement, in the latest sign of dissatisfaction with the foreclosure-related legal remedies agreed to by banks and state and federal officials. "We are concerned that Wells Fargo is underperforming compared to other banks," said Attorney General Eric Schneiderman. "By identifying this pattern early, there is still time to address this issue and increase activity so that Wells's customers will be afforded meaningful assistance to keep their homes." Stephen Friedman to Retire From Goldman Board (DealBook) A onetime leader of Goldman who worked at the firm for nearly 30 years, Mr. Friedman is stepping down on May 22, the day before Goldman’s annual shareholder meeting. He will be replaced by Adebayo O. Ogunlesi, a well-known figure on Wall Street who joined the board last fall. ... Upon stepping down from the helm of Goldman in 1994, Mr. Friedman dismissed rumors that he was in poor health. “Only on Wall Street,” he told The New York Times at the time, “do people think it bizarre that I don’t want to spend half of my day on the telephone and the other half on an airplane.” Historical Echoes: Central Bank and Paper Money Innovator Given Death Sentence for His Efforts (Liberty Street Economics) In 1668, but still: watch out Bernanke. University of Rhode Island campus gunman scare may have been sparked by 'Humans vs. Zombies' game A police probe revealed that there never was a gun or active shooter on the Kingston campus, and that no one was ever in danger. However, Nerf guns were uncovered during a room-by-room search of Chafee Hall, which is where the incident started. The toy guns, which blast out foam balls or darts, are used in a game called “Humans vs. Zombies,” campus police Major Stephen Baker told WPRI. On Thursday, a student group was in the middle of a week-long round of the game, which is an extreme version of tag popular on college campuses across the country.