Opening Bell: 11.25.13

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Former Treasury chief nixed BlackRock offer (NYP)
Tim Geithner passed up a chance to work at mega-fund manager BlackRock, according to sources. Geithner, who has landed a plum private-equity gig with Warburg Pincus, opted against joining CEO Fink’s BlackRock — with $4 trillion in assets under management — because he wanted to have a more involved role with any company he ended up joining. “I don’t think [Geithner] wanted to be someone’s arm candy,” said one source familiar with the situation.
Sources said Geithner appreciated the fact that Warburg’s top officials consisted of “talented guys with no big egos.”

Swiss Reject High-Pay Initiative (WSJ)
Swiss voters overwhelmingly rejected an initiative that would have restricted executive salaries to 12 times that of the lowest-paid employee. Roughly 65% of Swiss voters Sunday opposed the 1:12 Initiative for Fair Pay, according to results from all of the country's 26 cantons reported by Swiss television. Another 34% supported the proposal, which was named for the organizers' belief that no one in a Swiss company should earn more in a month than someone else makes in a year. The rejection of the 1:12 initiative marks a move away from Swiss efforts to more tightly govern how companies compensate their employees that has been driven by a growing wealth gap between the country's executive class and everyday workers.

Wall Street May Take Derivatives Regulator to Court (Bloomberg)
Wall Street banks reeling from a flurry of activity by departing U.S. Commodity Futures Trading Commission Chairman Gary Gensler are considering taking the agency to court. Gensler has issued more than a dozen advisory opinions directed at reining in the largest financial firms and swap traders without votes by his fellow commissioners. He’s also insisting on tightening the Volcker rule ban on proprietary trading by banks, making last-minute demands that could derail a regulation that must be approved by five U.S. agencies. The financial industry’s trade groups have consulted with lawyers about how to block Gensler’s final moves, according to four people briefed on the matter. A lawsuit would probably be focused on CFTC guidance issued in July that described when the agency should defer its rules in favor of regulations by foreign derivatives overseers, the people said.

Private Equity Returns To Spain, Italy (WSJ)
Spain and Italy, two countries the private-equity industry had forgotten, could soon become a deal playground for European and U.S. buyout firms. At least 15 private-equity groups focused on the countries are looking to raise funds with a combined value of more than €4 billion ($5.4 billion), according to several people familiar with the matter and Preqin, a data provider. That is way more than the €1 billion raised since the start of 2010. The Spanish and Italian markets enjoyed popularity with private-equity firms between 2005 and 2008 but activity died down during the financial crisis. It has been further hit by the euro zone's troubles.

Police to bars: Please don't serve Santa (DDN)
For many, spotting jolly old Saint Nick will on the street will bring a smile to the face and warm feelings of holiday cheer. But you might excuse the New York Police Department for having thoughts of dread instead. The arrival of SantaCon now signals the onslaught of thousands of drunken holiday revelers dressed up as Santa on the city's streets, and at least one police officer has had enough. The New York Daily News reports that a lieutenant with NYPD's Midtown North Precinct recently wrote to bar owners in the area asking them to ban participants of the 2013 SantaCon. The event was originally billed as a fund-raiser, but has since evolved into a massive bar hop. In a letter to about three dozen bars and clubs in the Midtown and Hell's Kitchen neighborhoods Lt. John Cocchi warns of "thousands of intoxicated partygoers" roaming the streets while "urinating, littering, vomiting" and other naughty behavior. The event is set to begin on Dec. 14 and while many bar owners welcome the extra business, many of those who live in the area aren't so enthusiastic about the festivities. Bob Miner, a member of a local block association is hoping the revelers will pass by his neighborhood, "What do you tell a 5-year-old when they see a Santa passed out on the street, or carried by his buddies, or vomiting or defecating in front of the house?”

Chrysler Postpones IPO to 2014 (WSJ)
Sergio Marchionne, chief executive of both the U.S. car maker and its majority owner, Fiat, had been aiming for a listing before the Christmas holidays, a move seen as a bid to accelerate his plans for Fiat to buy out the stake it doesn't already own in Chrysler. People familiar with the matter had recently suggested a price range could be set for the initial public offering of stock as early as this week. A roadshow to drum up interest among investors would have followed. But Fiat said in a written statement on Monday that Chrysler's board had decided against it. "It will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013," it said.

Microsoft Says Initial Xbox One Sales Exceed 1 Million (Bloomberg)
The tally surpassed first-day sales for the predecessor Xbox 360 and set a record for Microsoft, the Redmond, Washington-based company said yesterday in a statement. The Xbox One went on sale in Australia, Austria, Brazil, Canada, France, Germany, Ireland, Italy, Mexico, New Zealand, Spain, the U.K. and U.S. after the company cut eight countries from the initial sales list, citing production issues.

Canadian Consumer Confidence Hits Eight-Week High (Bloomberg)
The Bloomberg Nanos Canadian Confidence Index rose to 59.4 in the week ended Nov. 22, the highest since the end of September, from 59.0 during the previous period. The proportion of respondents who said they felt better off financially than a year earlier rose to the highest since January.

At an SAC Parade Party, All Blown Up but Nowhere to Go (Dealbook, Earlier)
In finance, balloons are classic symbols of both growth and collapse. So when SAC Capital Advisors, the embattled hedge fund run by the billionaire Steven A. Cohen, sponsored a balloon-inflation party on Saturday in its hometown, Stamford, Conn., it was a particularly striking image. As Kesha’s “Die Young” blasted from loudspeakers and hip-hop dance groups performed in frigid temperatures, industrial air pumps inflated 16 giant balloons of characters including Elmo, the Cookie Monster and Kermit the Frog...A low-key “SAC Hospitality Tent,” open only to SAC employees and their families and event organizers, stood along a wind-whipped block. In the early afternoon, the only occupants were private security guards, food servers and two hired men, one dressed as Santa and the other, a dwarf, as an elf. “You can’t go in here – they’ll be drinking, and nobody is going to talk to you,” said an older security guard in a black jacket who declined to provide his name. By drinking he meant juice, at least in part, as evidenced by a table of children’s juice boxes visible through the tent’s clear plastic windows. Other tables sported bottles of white wine in blue tubs. Coffee, hot cocoa and a steamer-tray buffet with macaroni and cheese, eggplant and pizza snaked around the side – a far cry from the lavish parties Mr. Cohen is known for throwing at his estate in East Hampton. Even Stamford Downtown, the nonprofit organizer of the weekend event, was in a less-than-celebratory mood. When asked if there were any SAC employees with whom a reporter could speak, Annette Einhorn, the organizer’s director of events and marketing, replied, “There are no executives here.” She swiftly brought over a Stamford police captain to emphasize her point.

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Opening Bell: 03.06.12

Goldman Secret Greece Loan Reveals Sinners (Bloomberg) On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said. Papanicolaou and his predecessor, Christoforos Sardelis, revealing details for the first time of a contract that helped Greece mask its growing sovereign debt to meet European Union requirements, said the country didn’t understand what it was buying and was ill-equipped to judge the risks or costs...“Like the municipalities, Greece is just another example of a poorly governed client that got taken apart,” Satyajit Das, a risk consultant and author of “Extreme Money: Masters of the Universe and the Cult of Risk,” said in a phone interview. “These trades are structured not to be unwound, and Goldman is ruthless about ensuring that its interests aren’t compromised -- it’s part of the DNA of that organization. Greece Pushes For Aid Tranche (WSJ) Greece's international creditors are considering whether to grant the country a small, tranche of the €130 billion ($171.8 billion) bailout agreed earlier this month in the weeks ahead as part of efforts to pump liquidity into the country's moribund economy. Speaking to the privately owned Mega television channel Tuesday, Deputy Finance Minister Philippos Sachinidis said the money would go to paying off some of the €6 billion in accumulated arrears that the Greek government owes private contractors. He added that the disbursement could come before Greece goes to elections that are widely expected to be held in late April. "There is a discussion that, likely before the elections, we will get a tranche that will allow us to pay some of, not the total, of the arrears," Mr. Sachinidis said. Bondholder Group Sees 1 Trillion Euro Greek Default Risk (Reuters) A disorderly Greek default would probably leave Italy and Spain needing outside help to stop contagion spreading and cause more than 1 trillion euros ($1.3 trillion) of damage to the euro zone, the group representing Athens' bondholders warned. Greek private creditors have until Thursday night to say whether they will take part in a bond swap that is part of a 130 billion euros bailout deal to put the country on a more stable footing and cut its debt by more than 100 billion euros. Paulson’s Advantage Plus Declines in February (Bloomberg) John Paulson lost 1.5 percent in February in one of his largest hedge funds, according to an investor update, paring this year’s gain and setting back efforts by the New York-based manager to recoup record losses in 2011. Paulson’s Advantage Plus Fund, which seeks to profit from corporate events such as takeovers and bankruptcies and uses leverage to amplify returns, gained 3.5 percent in the first two months of 2012, according to the update IBM’s Watson Gets Wall Street Job After ‘Jeopardy’ Win (Bloomberg) International Business Machines Corp’s Watson computer, which beat champions of the quiz show “Jeopardy!” a year ago, will soon be advising Wall Street on risks, portfolios and clients. Citigroup, the third-largest U.S. lender, is Watson’s first financial services client, IBM said yesterday. It will help analyze customer needs and process financial, economic and client data to advance and personalize digital banking. Ann Romney: ‘I Don’t Even Consider Myself Wealthy’ (ABC) Mitt Romney may have more money than any other presidential candidate in the race, but his wife said today that she does not consider herself wealthy. “We can be poor in spirit, and I don’t even consider myself wealthy, which is an interesting thing,” Ann Romney said in an interview on Fox News. “It can be here today and gone tomorrow.” Swiss Pass Proposal to Help Nab US Tax Evaders (Reuters) Specifically, the plan would allow Switzerland to hand over data on suspected tax evaders, even if U.S. tax authorities cannot identify alleged offenders by name or bank account. The big-spending businessman who ran up £203,948 bar bill was 23-year-old City whizkid (Mirror) The businessman who blew £203,948 on bubbly in a single night in Liverpool was 23-year-old Alex Hope...His biography reads: “Despite his tender years, Alex is a name to watch out for in the city. An expert in the UK economy, he works the currency markets, regularly trading millions.” Describing his rapid career rise from humble beginnings to working for trading company Zone Invest Group, it adds: “A talented, charismatic and thoroughly likeable man, Alex Hope exudes knowledge and you can’t help but respect and admire this self-taught and self-made young trader.” Banker Bonus Limits Sought by EU Lawmakers (Bloomberg) Members of the European Parliament’s Socialist and Green parties have proposed that a draft EU law to bolster bank capital should include new pay rules, as well as stricter curbs on risk taking, according to two members of the institution’s financial affairs committee. “Wrong incentives were part of the banking culture that caused the crisis,” said Udo Bullmann, a German lawmaker following the proposed law for the parliament’s Socialist group. “I expect there will be quite a lot of sympathy among different party groups” for further rules on pay. Judge throws heat at Picard’s claim vs. Mets (NYP) Picard’s best evidence may be from Noreen Harrington, a former chief investment officer for a hedge fund partially owned by the Mets’ owners, who is expected to say that she told Katz and another Sterling Equities executive that she thought Madoff’s reported returns were “fiction” and not “worth the paper they’re written on.” The Mets will argue they were bamboozled by Madoff, along with the nation’s top regulators and major banks. Bill Clinton Said to Agree to Join Obama at Campaign Fundraisers (Bloomberg) While Obama raised $5 million on his last fundraising trip to New York, including $2 million from a March 1 event with members of the financial services industry, he is collecting less money from Wall Street this year compared with four years ago, according to the Center for Responsive Politics. When Gaming Is Good For You (WSJ) People who played action-based video and computer games made decisions 25% faster than others without sacrificing accuracy, according to a study. Indeed, the most adept gamers can make choices and act on them up to six times a second—four times faster than most people, other researchers found. Moreover, practiced game players can pay attention to more than six things at once without getting confused, compared with the four that someone can normally keep in mind, said University of Rochester researchers. The studies were conducted independently of the companies that sell video and computer games.

Opening Bell: 04.22.13

Bill Gross Attacks UK and Euro Zone Austerity (FT) Bill Gross, manager of the world's largest bond fund for Pimco, has launched a stinging attack on efforts by Britain and much of the euro zone to cut debt rapidly with severe austerity measures, warning that such action risks stifling recovery. "The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not," Mr Gross told the Financial Times. "You've got to spend money." Argentina's New Debt Offer Rejected by Holdout Creditors (WSJ) Holdout creditors on Friday rejected Argentina's proposal to pay them about 20 cents on every U.S. dollar of bonds they own, leaving a U.S. appeals court to decide how to enforce a ruling that may push Argentina into a new default. "Not only are the details of Argentina's proposal unacceptable and unresponsive; Argentina fails even to provide this court with meaningful 'assurances' that it will actually comply with its own proposal," said Theodore Olson, a lawyer for the holdouts, in a brief filed Friday. Argentina's own math values the offer at $210 million, less than 15% of the $1.47 billion that holdouts were owed on their defaulted bonds as of March 1, according to the brief. Hedge Fund Stars Suit Up At Yankee Stadium To Attract Investors (NYP) Hedge-fund mogul Stevie Cohen will be pitching at Yankee Stadium tomorrow. No, the 56-year-old billionaire is not suiting up for the Bronx Bombers — but he will be hoping the magic of the House that Ruth Built will yield some investment cash. Cohen, whose SAC Capital faces a loss of $1.7 billion from investors who want out of his $15 billion hedge fund, is one of about 70 hedge fund managers who’ll be at the Stadium tomorrow making a pitch to prospective new investors at a day-long event sponsored by Goldman Sachs. Singapore Will Replace Switzerland As Wealth Capital (CNBC) Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth. Switzerland accounts for 34 percent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore's assets could more than quadruple by then. Somali Banking Starts From Ground Up (WSJ) Abdusalam Omer is a central bank governor without much to govern. The Central Bank of Somalia doesn't hold reserves in the country's currency, the shilling. There are no functioning commercial banks in the strife-torn country for it to regulate. The 75-strong staff that still turns up for work after two decades of civil war is a motley crew of money men and handymen. "I don't know why the central bank employs painters," says the 58-year-old who was named the country's top banker in January. Eventbrite Funding Slows Its IPO Chase (WSJ) Eventbrite Inc., an event ticketing company, has raised $60 million from two investors, making it the latest example of a startup to raise significant private late-stage funding that puts off an initial public offering. San Francisco-based Eventbrite had sparked expectations of an imminent IPO when it said earlier this month that it hired a chief financial officer, Mark Rubash, who previously worked at Yahoo Inc. and eBay Inc. Instead, it joins a growing number of companies that have found plentiful funding in the private markets rather than going public at an early stage. The company has raised the new cash from mutual-fund firm T. Rowe Price Group Inc. and Tiger Global Management LLC, an investment-management firm, said Kevin Hartz, co-founder and chief executive. That brings its total private fundraising to some $135 million since its inception in 2006. "This gives us flexibility in setting the timeline for a later IPO, on our schedule," said Mr. Hartz. Deutsche Bank Margin Call on Vik Sparks $2.5 Billion Dispute (Bloomberg) Alexander Vik went to Deutsche Bank AG’s London office in October 2008 to meet account managers who congratulated the Norwegian entrepreneur on how well his Sebastian Holdings Inc. investment fund was doing. Within a month, as global markets tumbled into crisis, the same bankers demanded about $530 million against the fund’s currency bets and began to liquidate its positions. Vik, 58, will argue at a 12-week trial starting in London today that the bank’s actions resulted in losses and missed profits totaling about $2.5 billion. A judge will have to decide whether Sebastian’s calculation of lost trading gains is accurate, said John Day, a lawyer at London-based litigation firm DaySparkes. Zimbabwe Prepares Law to Seize Company Stakes Without Paying (Bloomberg) Zimbabwe’s government is preparing a law that would allow it to seize controlling stakes in companies without compensation, according to a draft of the legislation obtained by Bloomberg News. The law would be an amendment to a 2007 act that compels foreign and white-owned companies such as Rio Tinto Group, Sinosteel Corp. and Impala Platinum Holding Ltd. to sell or cede 51 percent of their shares to black nationalsor state-approved agencies.