Opening Bell: 01.06.13

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High-Speed Traders Form Trade Group To Press Case (WSJ)
To counter what they say is the industry's unfair reputation as a disruptive force in the markets, a group of high-frequency trading firms have hired a pair of heavy-hitting political strategists and formed a trade group to press their case with regulators and lawmakers. The strategists, Kevin Madden and Erik Smith, last week submitted paperwork to found a group called the Modern Markets Initiative, with headquarters in Washington, D.C. Backed by four high-speed firms, it plans to bolster a website Tuesday that will include a video arguing that high-frequency traders have made the financial markets cheaper and faster for investors, a blog to respond to critics and links to academic research.

For Mark Zuckerberg, Tumult and Turnaround (WSJ)
Mr. Zuckerberg still wears jeans and a T-shirt to work, drives a black, stick-shift Volkswagen GTI and keeps the temperature in his glass meeting room, known as the "aquarium," near 68 degrees to keep everyone alert. As a holiday gift, friends of Mr. Zuckerberg got socks decorated with the image of Beast, his white, woolly Hungarian shepherd. Yet Mr. Zuckerberg has learned to embrace—or at least accept—the reality that he now is in charge of what might be bluntly described as the most visible advertising business in the world. It is a big leap for the college dropout who wrote in a letter to potential investors just before the initial public offering: "Facebook was not originally created to be a company."

Steven Cohen Appears Oblivious to the Law (Bloomberg)
A Frontline documentary, “To Catch a Trader,” to air Jan. 7 on PBS stations, makes clear that Cohen has no one but himself to blame. Using never-before-published video, “To Catch a Trader” reveals snippets of a 2011 deposition in which Cohen is asked about his understanding of the SEC rules governing insider trading. Cohen was being deposed as part of a lawsuit brought by Fairfax Financial Holdings alleging that a group of hedge funds conspired to drive down the price of the Canadian insurer’s stock; the lawsuit was eventually dismissed. The director of the documentary, Nick Verbitsky, received a copy of Cohen’s two-day deposition on a USB drive -- with a Bugs Bunny head on top of it -- from an anonymous source who left it for him across the street from Frontline’s New York City office, wedged between two bars of scaffolding. (“You can’t make this stuff up,” Verbitsky e-mailed me.) At one point in the deposition, Michael Bowe, a lawyer representing Fairfax, asked Cohen about his familiarity with insider-trading rules. You would think Cohen would be very knowledgeable on the subject. “The way I understand the rules on trading inside information, it’s very vague,” Cohen replied.

JPMorgan Chase Nears a $2 Billion Deal in a Case Tied to Madoff (Dealbook)
The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff’s Ponzi scheme, according to people briefed on the case. All told, after reaching the Madoff settlements with federal prosecutors in Manhattan and regulators in Washington, the bank will have paid some $20 billion to resolve government investigations over the last 12 months.

Iowa Man Arrested After Fight Over PB&J Sandwiches (AP)
Police say an Iowa man was arrested after he pulled a knife on his brother during a fight over peanut butter and jelly sandwiches. The Des Moines Register reports that Jerome Davis was arrested on Friday after the confrontation with his brother in their Des Moines home. Both men are in their 50s. Davis' accuser told police he was angry because he believed his brother was eating too many peanut butter and jelly sandwiches. Davis allegedly made three sandwiches and ate them in their living room, and made another less than an hour later. A police report says the brothers began to argue about laziness and overeating. Davis allegedly pulled out a folding knife and held it his brother's face. Davis was charged with domestic abuse with a weapon.

Study Suggests Recovery in U.S. Is Relatively Vital (NYT)
The study, presented over the weekend at the annual meetings of the American Economic Association, rejects comparisons with regular postwar American recoveries, as other economists have made, and instead examines 100 major, or “systemic,” financial crises that have occurred over the last two centuries, in the United States and abroad. It found that relative to previous American financial crises, the current economy is doing substantially better. Across nine major financial crises in the United States, the average peak-to-trough decline in inflation-adjusted per-capita gross domestic product is about 9 percent, and it has taken an average of 6.7 years to recover to the precrisis peak. During the years after crises, five of the nine episodes also had a “double-dip” downturn. By contrast, the recent American subprime crisis beginning in 2007 had “only” a 5 percent drop in per capita output, and took “only” six years to get back to the precrisis peak. And so far, at least, there has been no second downward turn.

‘Polar Pig’ Threatens Coldest U.S. Weather in Two Decades (Bloomberg)
The coldest air in almost 20 years is sweeping over the central U.S. toward the East Coast, threatening to topple temperature records, ignite energy demand and damage Great Plains winter wheat...Hard-freeze warnings and watches, which are alerts for farmers, stretch from Texas to central Florida. Mike Musher, a meteorologist with the U.S. Weather Prediction Center in College Park, Maryland, said 90 percent of the contiguous U.S. will be at or below the freezing mark today.

Daring Investors Brave Pakistan Market (WSJ)
In a daring move, investors are heading to Pakistan and braving one of the world's most dangerous countries to benefit from a newly elected government that is rolling out an economic program to aid the struggling economy. The benchmark index traded in the financial capital Karachi jumped 49.4% last year, ranking as one of the world's top performers. The market jumped another 2.8% Thursday, the first trading day of 2014.

Big Board Scores One for the Humans (WSJ)
For the first time in at least 19 years, the New York Stock Exchange in 2013 landed more initial public offerings of technology and Internet companies than the Nasdaq Stock Market, the home of Apple Inc., Google Inc. and Amazon.com Inc. Officials at the Big Board and several young technology firms attribute some of the shift to the comfort that investors and executives take in knowing trading in NYSE-listed stocks is overseen by so-called designated market makers. Formerly known as specialists, they are a dwindling band of stock traders who help set prices around the opening and closing bells and ensure orderly trading, at times by overriding the NYSE's automated trading system to smooth volatility. All trading on Nasdaq takes place electronically. Companies preparing to make their public debut are increasingly anxious about technical hiccups, analysts say, in the wake of snafus that have hit markets in recent years, including the 2010 "flash crash" and the technology lapses that marred Facebook Inc.'s 2012 debut on Nasdaq.

Pope Francis leaves New Year's voice mail for nuns in Spain (CNN)
The nuns in a Carmelite community in Lucena, Spain, received a voice-mail message on New Year's Eve that they had to share with the world. The caller was Pope Francis. "What are the nuns doing that they can't answer?" the Pope said jokingly. "I am Pope Francis, I wish to greet you in this end of the year, I will see if I can call you later. May God bless you!" The nuns passed the audio message to the Spanish radio network COPE, which is linked to the body that runs the Roman Catholic Church in Spain. The nuns were praying when Francis called shortly before noon, and so didn't answer, the radio network said. When they played the voice mail back, they got a surprise. The prioress of the convent, Sister Adriana, told the radio network she "literally wanted to die" when she first heard the message. "Our friendship goes back 15 years but we never thought the pope would remember to think of us," she said. After the nuns realized that they had missed a phone call from the Pope, they didn't know what to do. They consulted with their local bishop and tried to call Francis back, without success, the radio network said. The nuns decided simply to wait in hope of another call. Hours later, the phone rang again -- and this time they answered.

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Opening Bell: 3.23.15

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Opening Bell: 03.05.12

Greek Bond Swap Deal Rests on Knife Edge (FT) People close to some bondholders warned other investors to take seriously threats by policymakers that if the deal fails Greece will default on its debt. “Some investors seem to think they will be rescued. That just isn’t the case,” one said. People involved in the deal denied that there was any nervousness about the outcome but nobody was willing to guess how high the participation rate would be. Slim Beats Gates in First Daily Billionaire Ranking (Bloomberg) If you like obsessively measuring your penis you'll love this: Carlos Slim, the telecommunications tycoon who controls Mexico’s America Movil SAB, is the richest person on Earth, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 20 wealthiest individuals...The Bloomberg Billionaires Index takes measure of the world’s wealthiest people based on market and economic changes and Bloomberg News reporting. Each net worth figure is updated every business day at 5:30 p.m. in New York. The valuations are listed in U.S. dollars. Zuckerberg Doesn’t Rank on Billionaire Index (Bloomberg) Sad trombone: At the time of the offering, Zuckerberg is likely to sell about $1.75 billion of Facebook stock to pay off the tax obligation he will incur when he exercises options to buy 120 million shares. The combined transactions will dilute Zuckerberg’s stake from 28.4 percent to about 21 percent. If the company maintains its projected $100 billion valuation, that would make Zuckerberg worth about $21 billion, less than the $28.4 billion implied by his stated ownership. At that net worth, Zuckerberg isn’t rich enough to qualify for the Bloomberg Billionaires Index, a new daily ranking of the world’s 20 richest people. The 20th spot is currently occupied by L’Oreal heiress Liliane Bettencourt. AIG to Sell $6 Billion In Asian Insurer's Stock (WSJ) American International Group Inc. kicked off a $6 billion sale of shares in Asian life insurer AIA Group Ltd. on Monday morning in Hong Kong, moving forward with plans to repay another chunk of its 2008 U.S. bailout. AIG said the shares will be placed with institutional investors and expects them to be priced by Tuesday. The 1.7 billion shares up for sale represent around 14% of AIA, less than half the 32.9% stake AIG holds, according to a term sheet. Proceeds from this week's sale have been earmarked to repay the U.S. government, which rescued AIG from near collapse during the financial crisis with a record $182.3 billion bailout that has been partially repaid. The Treasury Department still has to recoup about $50 billion in taxpayer funds, and about $8.4 billion of that amount will be repaid when AIG sells the AIA shares and other assets, including its airplane-leasing subsidiary. The rest of the money—roughly $42 billion—is supposed to come from the government's sale of its 77% stake in AIG. Lenders Stress Over Test Results (WSJ) The 19 biggest U.S. banks in January submitted reams of data in response to regulators' questions, outlining how they would perform in a severe downturn. Now, citing competitive concerns, bankers are pressing the Fed to limit its release of information—expected as early as next week—to what was published after the first test of big banks in 2009. JFK Airport search of drug mule who said she was three months pregnant reveals she carried $20,000 worth of heroin (NYDN) Awoyemi, coming off an Air France flight from Paris to New York and wearing a “loose-fitting dress” was asked whether she was pregnant, and the woman replied that she was three months along, Homeland Security special agent John Moloney stated in a complaint filed in Brooklyn Federal Court. The customs inspector noted that Awoyemi appeared nervous, so she was selected for a pat-down search. After feeling a “bulge” in Awoyemi’s groin area, the situation escalated to a partial strip-search, according to the complaint. When she dropped her drawers, Awoyemi’s scheme fell apart. Pellets containing brown powder began dropping from her groin area — and the substance tested positive for heroin. Awoyemi was taken to a medical facility at the airport, where the federal cops administered a pregnancy test that came back negative. An X-ray showed more pellets in her intestinal tract, and by the end of the day she had passed about 25 pellets of heroin in a special commode that Customs officials have dubbed the “Drug Loo.” The high-tech toilet sanitizes the incriminating evidence. More On The Morgan Stanley Executive Charged in Cab Hate Crime Attack (Bloomberg) Jennings left a bank holiday party sometime before 11 p.m. and headed to the street, where he was supposed to be met by a car service, Jennings said. He hailed Ammar’s cab after the livery car didn’t appear, according to the report. Ammar said Jennings agreed on the fare and told him he would pay cash. Jennings fell asleep during the trip, the driver said. Once at the destination, though, Jennings said “he did not feel like paying” because he was already home, Ammar told police...When Ammar threatened to call the local police, Jennings said they wouldn’t do anything to help because he pays $10,000 in taxes, according to a report by the Darien police department...The Morgan Stanley executive told police he was afraid to come forward after the incident because the cab driver knew where he lived. He then went on vacation to Florida, police said. Jennings told officers he subsequently called his lawyer after a friend told him police were looking for a suspect in the stabbing incident, according to the report. JPMorgan Star To Launch Own Hedge Fund (FT) London-based Mike Stewart, JPMorgan’s global head of proprietary trading, and former head of emerging markets, is set to start his own new hedge fund, Whard Stewart, in the second quarter, people familiar with his plans said. Mr Stewart’s emerging markets trading team at the bank is expected to join him. The departures come despite word last week that US regulators will probably delay implementation of the so-called “Volcker rule” , under which banks are in effect banned from proprietary trading. Friends With Benefits (NYP) Unlike his fallen pal Raj Rajaratnam, former Goldman Sachs director Rajat Gupta appears to have no shortage of character witnesses willing to testify at his upcoming insider trading trial. Indeed, dozens of well-heeled supporters are already putting their names on the line for the former consulting titan, including world-renowned speaker Deepak Chopra and Mukesh Ambani, the ninth-richest man in the world. “I have never seen him ask for anything for himself, always for the greater good,” Ambani, the chairman of Reliance Industries, said recently on a little-noticed website called friendsofrajat.com. Cigarettes: The Most Stable International Currency (BusinessWeek) Cartons of Good Cat brand cigarettes are selling for as much as RMB5,600 (US$890) per carton in the city of Xi’an, in Shaanxi Province. The suspicion, according to reports this week, is that they are being used to bribe officials. Election Year Poses Challenge For Stocks (WSJ) The Dow is off to its best start to a year since 1998. But if history is a guide, this exuberance soon could give way to the first pangs of electoral anxiety. In a typical presidential-election year, stocks start well but slip into a funk by spring, according to Ned Davis Research, which has measured election-year trends back to 1900. At least in part, the slump reflects the electoral unknowns, Ned Davis has concluded. In a good year, investors deal with their jitters by late summer or early autumn and stocks recover. People get more comfortable with the November election outlook and put money back into stocks. This year, with the Dow Jones Industrial Average up 6.2% in just over two months, many investors and analysts expect a pullback soon. The looming election adds to ambient uncertainty about European debt and U.S. and Chinese growth prospects. Tony Welch, an analyst at Ned Davis Research, says the Dow could pull back 5% or 6% in the coming weeks. "We think the election-year trend could be strong this year," Mr. Welch says. "The market prefers certainty. It doesn't like unknowns." Ochocinco was urinated on by a lion and lived to tweet the tale (YS) The New England Patriots receiver was at a charity event in Miami on Saturday night when he ran into the caged animal. According to Ochocinco's Twitter account, the king of the jungle proceeded to become the urine sprayer at the party. Tweets included: "Swear to lil 10 pound bearded baby Jesus I just got peed on by a real "Lion" I'm not lying either. And y'all wonder why I don't go out!!!!!," "It's not funny i have on my good church clothes," and "I wasn't that close, he sprayed like a water gun."