Opening Bell: 12.02.13

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Diverse Menu of Bonds Is Served Up to Investors (WSJ)
With corporate-debt issuance racing toward a record, some large companies are rolling out unusual offerings in a bid to serve the bond market's every nook and cranny. Recent weeks have brought a $500 million "green bond" from Bank of America Corp., which has pledged to use the proceeds to finance renewable-energy and energy-efficiency projects, and a $1 billion Goldman Sachs Group bond that offers variable interest rates for 10 years, much longer than normal. The sales underscore the robust appetite for debt issued by well-known, highly rated issuers and come at a time when low interest rates have put a premium on income-generating assets and a roaring stock-market rally has prompted some more-conservative investors to diversify.

Bull Market Shows No Sign of Death With Yellen Support (Bloomberg)
“The weakness in jobs is continuing fodder for the Fed to fulfill its most recent and steadfast comments about the support of the economy,” Holland, who oversees more than $4 billion in New York, said in a Nov. 26 phone interview. “Until the labor market gets better, the two parts of dual mandate have to be served,” he said.

No Penalties Planned in Swaps Probe (WSJ)
A four-year-old U.S. Justice Department civil probe into allegations that large banks and others conspired to thwart competition in the $24.3 trillion market for credit-default swaps is winding down and penalties aren't planned, said people familiar with the matter.

Nobel Prize economist warns of U.S. stock market bubble (Reuters)
"I am not yet sounding the alarm. But in many countries stock exchanges are at a high level and prices have risen sharply in some property markets," Shiller told Sunday's Der Spiegel magazine. "That could end badly," he said. "I am most worried about the boom in the U.S. stock market. Also because our economy is still weak and vulnerable," he said, describing the financial and technology sectors as overvalued.

My life as a call girl in Love Guv ring (NYP)
"Going full time as an escort with the Emperors Club was a life-enhancing experience. And the sex wasn’t as difficult as people might expect...the one I’ll always remember, my dream client, was a sexy French restaurateur. I knew who he was before we met in his room at the Hudson Hotel — I had Googled him, something I often did with clients. He greeted me at the door with a glass of wine and a gift bag from Victoria’s Secret, a kind gesture that wasn’t expected or required. I tried on the lingerie, and we took full advantage of the mirror against the wall. I didn’t expect I would ever be so turned on by a man who paid me to be with him, but this was a pleasant surprise. I insisted we fit a second round in before our time was up...Another client was an older man, probably 40 years my senior, with a thin upper lip that covered slightly yellowed teeth. And as Southern men are said to be, he was very much a gentleman. He knew me as Ashley because he had selected me from the higher-end “Icon Model” portfolio. He was the first of only two clients to meet Ashley. This meant he paid $5,400 for the two hours as opposed to the $3,000 I would have made as Raquel. Icon Models had interests like classical music and equestrian sports. They hunted pheasant, studied at Oxford, knew the difference between a watch and a timepiece and could participate in a debate over the superiority of Walker Black versus Laphroaig. They had pedigree, or at least the ability to appear like they did. They also had an expensive wardrobe, the ability to sit up straight, speak proper English and pretend for a couple of hours that they were genuinely interested in the hobbies and fineries of the ruling class. I wore my most elegant pieces: diamonds, Gucci dress, Prada heels, a golden silk pashmina and Agent Provocateur underneath. The only thing that wasn’t designer was my clutch, but it matched my shoes and was just big enough to fit a nice stack of cash. I sipped a martini, and he enjoyed a scotch on the rocks. He told me about his family. Unfortunately, his wife didn’t care to be affectionate with him anymore. It was not an unusual story, and I was happy to fill the void. He had children and grandchildren. We cuddled and caressed. He needed the affection. At the end, he told me that I was a wonderful companion and that he would love to meet again. Nobody had ever called me a wonderful companion. I put a lot of love into my visit with him, and I was touched by his compliment. Despite his age and looks, he was a great client. What I didn’t realize was that he would also be my last. The Emperors Club was busted; the FBI showed up at my door, and I had to hire an attorney. I signed a proffer agreement with the feds; they asked me to identify people in photos, but it was clear I had no information they didn’t already have from their surveillance."

Moody's upgrades Greece's debt rating (FT)
Moody's, the international rating agency, has upgraded Greece by two notches, reflecting good progress with fiscal consolidation despite continued recession and fragile political stability. The upgrade from Caa3 to single C with a stable rating still leaves Greek sovereign bonds deep in junk territory, but supports the coalition government's forecast of a primary budget surplus this year before debt repayments, rising to 1.5 per cent of output in 2014.

Krispy Kreme's Doughnuts Aren't the Only Thing Rich (WSJ)
Openings in locales such as Singapore, Seoul, Bogotá and Moscow are creating nearly as much buzz as the 1996 debut in New York that inspired the first Krispy Kreme mania in the early 2000s. Once again, though, it seems things have gone too far. There is no sign of the financial snafus that slammed the company a decade ago, but growth isn't all it seems. Krispy Kreme trades at over 34 times the next 12 months' earnings—rich compared even with also-hot Dunkin' Brands Group Inc. at 28 times. And healthy trends at company-owned stores mask some disturbing signs in the international-franchise part of the business. Same-store sales in the fiscal second quarter in that segment fell by 13% versus a year earlier. Overall they grew by just 0.5% as the store count expanded nearly 15%. What's more, domestic company stores are growing fast but aren't very profitable. An expansion into coffee may help, although it sets up a collision with Dunkin and Starbucks Corp.

Sony seeks ‘at least one new director’ (NYP)
Sony, under pressure to cut costs and shake up its moribund business, is looking for new blood for its board, The Post has learned. The Japanese media and electronics giant is seeking to add at least one new director and has approached several US-based media executives, according to sources familiar with the search. The company has been under attack from activist investor Dan Loeb since May, when his Third Point hedge fund proposed that Sony spin off its entertainment arm. Loeb has been seeking a seat, although it’s unclear if Sony is open to the idea. While Sony rejected Loeb’s proposal in August, CEO Kazuo Hirai has vowed to be more transparent about the company’s entertainment business, which includes Sony Pictures and Sony Music Entertainment.

Italian Banks' Woes Hurt Small Firms (WSJ)
The woes of smaller banks like Banca Marche are washing over the millions of small Italian businesses that depend on them for financing. Moreover, the deep ties the banks have to Italy's small towns mean that the consequent losses in banking jobs, share prices and even charitable donations weigh heavily on some local communities. Small and midtier banks like Banca Marche account for about half of overall lending in the country. In turn, Italian companies rely on banks for about 70% of their funding, more than double the rate in the U.K. or U.S., according to Bank of Italy data.

Moonshine makes a potent comeback in Central Florida bars (Orlando Sentinel)
Moonshine is making a comeback at liquor stores and nightspots across the country, including a pair of Orlando bars that offer the spirit as their signature drink. And makers and retailers are hoping the "bad boy" reputation sticks. "People really, really love it," said Chris Noble, the manager of downtown's Hooch and Shine nightspots. "They had that feeling in their head that it's moonshine, it's the strongest thing, it's going to make you go blind. It's that crazy-strong alcohol." The alcohol's kick appeals to Orlando resident Chance Kirkpatrick. "It'll put hair on your chest," said the 34-year-old radio intern. "It's one of those shots like ouzo [a Greek aperitif], where you've got to breathe out the fumes as soon as you drink it."

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By elaine ross baylon from Quezon City, Philippines (krispy kreme donutsUploaded by JohnnyMrNinja) [CC BY 2.0], via Wikimedia Commons

Opening Bell: 7.29.16

UBS tops estimates; Banks' risky lending jumps; Hedge funds want Hillary; Florida man arrested when police confuse doughnut glaze for meth; and more.

Opening Bell: 01.23.13

Greece Charges Statisticians Over Size of Deficit (FT) Greece has brought criminal charges against the official responsible for measuring the country's debt, thereby calling into question the validity of its 172 billion euros second bailout by the EU and International Monetary Fund. Andreas Georgiou, head of the independent statistical agency Elstat, and two senior officials are accused of undermining the country's "national interests" by inflating the 2009 budget deficit figure used as the benchmark for successive austerity packages. The three statistical experts face criminal charges of making false statements and corrupt practices, a judicial official said, adding that if found guilty they could serve prison terms of five to 10 years. They have denied any wrongdoing. Spain's Recession Deepens (WSJ) Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. Obama-Bashing Swapped for Pragmatism at Davos (Bloomberg) “We have to move on in our society,” Blackstone found Stephen Schwarzman said today in an interview in Davos with Bloomberg Television’s Erik Schatzker. “I like President Obama as a person, and he’s well- intentioned.” Schwarzman, 65, warned in Davos in 2010 that banks could restrict lending because “their entire world is being shaken and they’re being attacked personally.” Later that year, at a nonprofit group meeting, he likened Obama’s tax proposals to Hitler’s invasion of Poland. Third Point LLC CEO Daniel Loeb, who in 2010 compared Wall Street’s Obama supporters to “battered wives,” will help lead a Jan. 25 Davos dinner discussion, “Can Capitalism Evolve?” Schwarzman apologized in 2010 for his comparison of Obama’s effort to double taxes on private-equity income to the invasion of Poland. He said the analogy was inappropriate and that the administration’s need to work with business “is still of very serious concern.” JPMorgan's Jamie Dimon Apologizes, Attacks (WSJ) James Dimon of J.P. Morgan Chase was prepared in Davos to apologize for the more than $6 billion of trading losses racked up by the so-called London Whale, but he certainly wasn’t prepared to abase himself...Min Zhu, deputy managing director of the International Monetary Fund, reeled off a string of statistics to show that the industry certainly hadn’t cleaned up its act since the crisis, and Paul Singer, principal of hedge fund Elliott Associates, was also keen to lambaste big banks, including Mr. Dimon’s. The two had some testy exchanges and the body language indicated that Messrs. Singer and Dimon have exchanged fire quite a few times previously. Still, Mr. Dimon gave us good as he got. He kicked off with repeating his apology to shareholders for the London Whale trading losses, which led to his own bonus being slashed, saying, “If you’re a shareholder of mine, I apologize deeply.” Having offered this apology he then went on the offense. He pointed out that his bank lent money to a whole host of worthy organizations such as schools, hospitals, governments, and Italian and Spanish corporates and governments. And he also had some snappy comebacks. Elliott’s Singer said that the global banks are “too big, too leveraged, too opaque,” which left Mr. Dimon with an easy retort about how could a hedge fund possibly criticize a bank about being opaque? “Our [securities filing] 10K is 400 pages long,” Mr. Dimon said. “What would you like to know?” Geithner Exit Next Friday (AFP) US Treasury Secretary Timothy Geithner, who steered the administration of President Obama through the financial crisis, will step down from his post Friday, a source told Agence France Presse yesterday. Golfer Mickelson recants tax rant (NYP) Mickelson — who hinted he might move from his home state of California to escape higher taxes — said he regretted his public rant on the issue after setting off a political firestorm. “Finances and taxes are a personal matter and I should not have made my opinions on them public,” according to a statement from Mickelson, who plans to elaborate today at the Farmers Insurance Open. “I apologize to those I have upset or insulted and assure you I intend to not let it happen again.” Senator Lautenberg Suggests Spanking In Store For Mayor Cory Booker (CI via DI) "I have four children, I love each one of them. I can't tell you that one of them wasn't occasionally disrespectful, so I gave them a spanking and everything was OK," Lautenberg said with a smile in his first public comments since Booker announced he was considering a run for Senate. Banker's Latest Bet: Teamwork on Bonds (WSJ) Texas banking tycoon Andrew Beal is known for making unconventional moves, including gambling on high-stakes poker and a self-financed plan to launch rockets into space. His latest gambit: an attempt to wring money from giant banks by banding together aggrieved bondholders. Mr. Beal's CXA Corp. ran a pair of advertisements late last year, one appearing in The Wall Street Journal. The ads listed an alphabet soup of residential mortgage-backed securities held by CXA and asked those with positions in the same securities to join the company in investigating possible infractions by banks that sold the debt. If the groups can prove the mortgages that underlie the bonds were approved through shoddy underwriting, they could be entitled to compensation—CXA's payday alone could be tens of millions of dollars. Firms Keep Stockpiles Of 'Foreign' Cash In US (WSJ) Some companies, including Internet giant Google, software maker Microsoft, and data-storage specialist EMC Corp, keep more than three-quarters of the cash owned by their foreign subsidiaries at U.S. banks, held in U.S. dollars or parked in U.S. government and corporate securities, according to people familiar with the companies' cash positions. In the eyes of the law, the Internal Revenue Service and company executives, however, this money is overseas. As long as it doesn't flow back to the U.S. parent company, the U.S. doesn't tax it. And as long as it sits in U.S. bank accounts or in U.S. Treasurys, it is safer than if it were plowed into potentially risky foreign investments. SEC Reins In Ratings Firm (WSJ) The U.S. Securities and Exchange Commission barred Egan-Jones Ratings Co. from issuing ratings on certain bonds, an unprecedented step by the regulator and a setback for a small credit-rating firm with a history of courting controversy. The SEC said Tuesday that Egan-Jones couldn't officially rate bonds issued by countries, U.S. states and local governments, or securities backed by assets such as mortgages, for at least the next 18 months. The ban was part of an agreement the SEC reached with Egan-Jones and its president, Sean Egan, to settle charges that they filed inaccurate documents with the regulator in 2008. The SEC alleged that Egan-Jones misled investors about its expertise, and that Mr. Egan caused the firm to violate conflict-of-interest provisions. Lindenhurst dentist busted after reporting to work reeking of booze and drilling teeth while allegedly drunk (NYDN) Dr. Robert Garelick was hauled out of his Lindenhurst office in handcuffs Monday after his dental hygienist smelled booze on his breath and caught him administering Novocain to the wrong side of a patient’s mouth. “I observed Dr. Garelick looking for cavities in the right side of the patient’s mouth, but the cavities were in the left side,” hygienist Kimberly Curtis told police in a written statement. “I pointed this out to the doctor and that’s when he ordered more Novocain for the patient,” Curtis told cops. “So now, he basically numbed the whole patient’s mouth.” After noticing Garelick’s wobbly behavior Monday, Curtis texted co-worker Dina Fara, who called 911. Curtis said she sent the message after Garelick used a drill to treat another patient who had a chipped tooth. “He was filing the tooth down,” Curtis said. “When you’re using that drill, you have to be very careful and have a steady hand.” She said that just before Garelick treated the chipped tooth, he slipped into his office. “I noticed that he was drinking from a white and purple squeeze bottle,” Curtis said. “At first I didn’t think anything was wrong,” Curtis said. “But right after, he took a drink from that bottle, he got up and walked past me. When he did this I smelled a strong odor of alcohol.” The dentist initially claimed he only had a couple of beers with pizza during lunch Monday, according to Suffolk County cops. But Garelick, who was charged with misdemeanor reckless endangerment, later confessed to his drunken dentistry while being taken to a police precinct in the back of squad car. “I never had any beers with my pizza. I’ve been sipping at that bottle all along today,” he told police, referring to his squeeze bottle filled with vodka, according to a criminal complaint.

Opening Bell: 10.05.12

Merkel’s First Greek Crisis Visit Seen Sending Signal to Critics (Bloomberg) German Chancellor Angela Merkel will travel to Athens for the first time since Europe’s financial crisis broke out there three years ago, a sign she’s seeking to silence the debate on pushing Greece out of the euro. Merkel’s visit to the Greek capital Oct. 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the 17-nation currency region. “The meeting could mark the turning point to the Greek crisis,” said Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens. “This is a very significant development for Greece ahead of crucial decisions by the euro zone for the country.” Spain Finance Minister’s ‘No Bailout’ Remark Sparks Laughter (CNBC) “Spain doesn’t need a bailout at all,” finance minister Luis de Guindos said, straight faced and somber, as mirth spread throughout the audience (even de Guindos’ assistant interpreter couldn’t mask a smile). US Probes Credit Suisse Over Mortgages (Reuters) U.S. federal and state authorities are investigating Credit Suisse over mortgage-backed securities packaged and sold by the bank, people familiar with the probe said on Thursday. The Justice Department and the New York Attorney General are among those probing Credit Suisse's actions, according to the sources, who spoke on condition of anonymity. New Shuffle At JPMorgan (WSJ) Barry Zubrow, a trusted lieutenant of J.P. Morgan Chase Chief Executive James Dimon, is expected to give up his job as regulatory affairs chief in what would be the latest reshuffling to follow a multibillion-dollar trading blunder. The change is expected before year-end, said people close to the bank. It is possible the 59-year-old executive will remain with the company in an advisory role, these people added. More executive shifts also are possible. The chairman of the corporate and investment banking unit, Jes Staley, was recently in the running to become chief executive of British banking giant Barclays PLC, according to people close to Mr. Staley, but didn't get the job. He gave up day-to-day oversight of J.P. Morgan's investment bank in a July reorganization. J.P. Morgan declined to comment about Mr. Staley, and he couldn't be reached. Investors Back Away From 'Junk' Bonds (WSJ) The massive "junk"-bond boom is raising alarm bells among some large money managers, who warn the market is showing signs of overheating. So much money has flooded into the junk-bond market from yield-hungry investors that weaker and weaker companies are able to sell bonds, they say. Credit ratings of many borrowers are lower and debt levels are higher, making defaults more likely. And with yields near record lows, they add, investors aren't being compensated for that risk. India’s NSE Says 59 Erroneous Orders Caused Stock Plunge (Bloomberg) “India has joined the big league with this trading disaster,” A.S. Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors Pte., which manages about $400 million, said by phone from Singapore. “It’s very surprising so many erroneous orders went through. Exchanges and regulators must be one step ahead as systems and technologies upgrade.” Halloween Horror Story: Case Of The Missing Pumpkin Lattes (WSJ) For Asher Anidjar, the arrival of fall isn't marked by turning leaves or a chilly breeze, but a steaming seasonal drink. Recently, though, when he headed to his local Starbucks for a Pumpkin Spice Latte, he left with a bitter taste in his mouth. They were out of the special sauce that gives the treat its distinctive autumnal flavor. "I just left, depressed," said Mr. Anidjar, a 26-year-old commercial real-estate analyst who lives in Manhattan. The drink crops up on the Starbucks menu annually for a limited time, and this year there has been an unusual run on the pumpkin batch. Thanks in part to a frothy dose of buzz brewed up by the Seattle-based coffee giant before the beverage's Sept. 4 debut, the craze has drained supplies at stores across the country. Baristas are hitting the street, searching for stashes of the flavored sauce at other stores. Customers denied their fix—which costs about $4 for a small cup, or "tall" in Starbucks speak—are tweeting about their dismay. "My world almost ended this morning when the local Starbucks told me they were out of Pumpkin Spice Latte," tweeted Jason Sizemore, 38 years old, of Lexington, Ky. Fed Seeks To Clarify Plans (WSJ) Since August 2011, the Fed has been saying it will keep short-term interest rates near zero until a particular date. Right now that date is mid-2015. The hope has been that these assurances would help hold down longer-term interest rates, as well as short-term ones, and thus boost spending and investment. But the Fed isn't happy with this approach. While central-bank officials believe the assurances have helped hold down long-term interest rates, they find the fixed date to be confusing, and they are looking at a new approach. The idea under consideration is to keep offering assurances of low rates, but tie those assurances to what is happening in the economy rather than a point on the calendar. Dave And Buster's IPO Plan A Bust (Bloomberg) Dave & Buster’s Entertainment, operator of 59 company-owned dining and gaming stores, withdrew its plans for a US initial public offering, citing market conditions. The company had sought to raise as much as $107.7 million. Black Swans In The Red Until Turmoil Hits (NYP) The Apocalypse has not arrived — but that hasn’t stopped some of the country’s wealthiest investors from betting on it. The investors, mostly pensions funds, hedge funds of funds and deep-pocketed individuals that were burned during the financial meltdown in 2008, are jumping into these so-called Black Swan investments that carry promised returns of up to 1,000 percent — if another financial Armageddon strikes. The Cassandras of the hedge-fund world that are offering these funds — also called tail risk funds and often with a geographic focus — would suffer terribly in the absence of disaster...The hot sector has attracted such well-known names as Saba Capital’s Boaz Weinstein, Hayman Capital’s Kyle Bass, Corriente Advisors’ Mark Hart, and Universa’s Mark Spitznagel...When markets are buoyant, of course the funds lose money. Through August, Saba Tail Hedge was down 16 percent, Pine River Tail Hedge had fallen 23 percent and Corriente Europe Divergence is down 24 percent, according to investors. Bass’s Japan short fund, which he launched two years ago, is down more than 60 percent since inception. By design, it will lose all of its investors’ money in three years if Japanese bonds don’t go into a tailspin. Bridezilla’s demanding email to potential bridesmaids: If you can’t commit, ‘you’re going to the wrong wedding’ (NYDN) One woman’s over-the-top email of demands to potential bridesmaids has gone viral since it was posted on Gawker.com. “You all have a big roll [sic] in this wedding, so before we continue I’m going to be setting some ground rules and it’s very important you read and think everything through before you accept this honor to be a bridesmaid,” the unnamed bride-to-be begins. If recipients don’t answer emails when outside the country, can’t attend every wedding-related event, or don’t have the cash for several flights and a bridesmaid’s dress, they might not make the cut. “If money is tight and you can’t afford to contribute to the bachelorette party or won’t be able to afford a dress, then [I] don’t have time to deal with that, I’m sorry,” the woman wrote. Of course, she’ll aim for what’s affordable, but, “If you think it’s going to be a $25 Forever 21 dress then you’re going to the wrong wedding.” The lucky bridesmaids must also be available — at any moment — between February and August. “If you don’t think you’ll be able to attend one party but can make the rest of them, I’m sorry, but I’ll have to take you out as a bridesmaid and put you as a guest,” the woman wrote. And please, don’t ignore phone calls. “I don’t have time to wait around for responses, everyone has their phone on them,” she wrote. “It shouldn’t take you more than a day to get back to me. Really think about everything I've said. This is really going to be the most epic wedding ever so I hope you girls can share this special day with us!"

(Trump image courtesy Flickr user Gage Skidmore)

Opening Bell: 12.21.17

Taxes taxes taxes; JPMorgan dinged over 1MDB; PE firms regret plunging into subprime auto; someone just put a million bucks on bitcoin $50,000; yes, there is a crypto dominatrix; and more.