Opening Bell: 02.14.14

Author:
Updated:
Original:

Banks in London Devise Way Around Europe’s Bonus Rules (Dealbook)
...the bank giants operating in London — including Goldman Sachs, Bank of America Merrill Lynch and Barclays — are seeking to outflank the new restrictions. Responding to the law, they are structuring new pay packages that try to satisfy both their emboldened regulators and their very expensive employees. So goodbye, big bonus. Hello, role-based pay. Other banks have called their new payments “allowances.” At least one labeled it “reviewable salary.” One of the European lawmakers who led the push for bonus caps is not buying the semantic somersaults. “These are bonuses in disguise,” said Philippe Lamberts, a Belgian member of the Green Party in the European Parliament. “I wonder how they will hold up in a court of law.”

AIG Ramps Up Reward To Investors (WSJ)
The insurer, which nearly collapsed during the financial crisis, boosted its common-stock dividend and share-repurchase target in the latest sign of the insurer's improved health since it nearly collapsed in 2008. Not everyone will cheer Thursday's news. The company, already roughly half its precrisis size, said it will eliminate about 3% of its workforce. The cuts, totaling about 1,600 jobs, will be made by year-end, according to a person familiar with AIG's plans.

New Mexico County's Bond Buys Set Off Alarm, Probes (WSJ)
New Mexico's most populous county is facing a budget crunch amid allegations that its treasurer's office mismanaged more than $250 million in its investment portfolio, a situation that has triggered state investigations and a recall drive. Bernalillo County, which includes about a third of the state's two million residents, has responded by implementing cost-cutting measures and is exploring selling a jail and other real estate in Albuquerque to raise funds. Treasurer Manny Ortiz also sold some bonds early, at a loss of about $750,000, to address cash-flow concerns. Through his lawyer, Mr. Ortiz has denied wrongdoing.

Ackman talks Herbalife, P&G, Target, Air Products (NetNet)
On Target, Ackman warned that the company had lost the buzz that once surrounded it and is likely to lose additional sales to online retailers like Amazon. "It's a well-run retailer but it has lost some of its magic," Ackman said. "It seems to have lost some of its brand appeal. It's become more of a commodity retailer. It's selling food. It seems more like a slightly higher-end Wal-Mart. That's a bit of a risky place to be in the world."

Al Roker & de Blasio in Twitter feud over snow (NYP)
Roker, at the Olympics in Sochi with the “Today” crew, was incensed that de Blasio allowed public schools to open during this snow storm. “I knew this am @NYCMayorsOffice @NYCSchools would close schools. Talk about a bad prediction,” Roker tweeted from Russia. “Long range DiBlasio forecast: 1 term.” Roker misspelled the mayor’s name. The mayor fired back, telling Roker to stick to weather. “I respect Al Roker a lot, watched him on TV for many years,” de Blasio said. “It’s a different thing to run a city than give the weather on TV.” The mayor added: “It’s weather, none of us controls this.” But Roker stuck to his guns. “Gov Cuomo declaring state of emergency for the Mid-Hudson, New York City, and L.I. as a Nor’Easter storm continues to affect NY,” Roker tweeted. The normally jovial weatherman accused de Blasio of wrongly blaming the National Weather Service. “How dare @NYCMayorsOffice @NYCSchools throw NWS under the school bus,” Roker wrote.

Goldman Misses Out, Barclays Scores in Cable Deal Outcome (WSJ)
Goldman Sachs Group Inc., the perennial leader in the rankings of merger advisers, will come away empty-handed should Comcast manage to consummate the deal. That is because Goldman is among the banks that signed up to back Charter Communications Inc.'s now-thwarted pursuit of Time Warner Cable...Among the banks where a lot of high-fiving will be taking place are J.P. Morgan and Barclays PLC, which are advising Comcast; and Morgan Stanley, Allen & Co., Citigroup Inc. and Centerview Partners, which are advising Time Warner Cable. Paul J. Taubman, also advising Comcast, continues his streak of advising on virtually all the deals that really matter since he departed Morgan Stanley last year. Mr. Taubman also advised Verizon Communications Inc. on its $130 billion agreement last year to buy the chunk of Verizon Wireless it didn't own from Vodafone PLC.

Topless trio make Sports Illustrated swimsuit cover (Reuters)
Sports Illustrated magazine on Thursday unveiled its annual swimsuit issue with models Nina Agdal, Lily Aldridge and Chrissy Teigen on the cover of its 50th anniversary edition. Agdal, 21, from Denmark, and Americans Teigen and Aldridge, both 28, are the latest models to win a spot on the cover of the magazine's swimsuit issue, which has boasted the likes of Heidi Klum, Elle Macpherson, Tyra Banks and Kate Upton on its cover early in their careers. The three models, wearing just bikini bottoms and knee-deep in light blue water, coyly turn their heads and smile with their backsides facing the camera on the cover...The 50th anniversary cover that is seen by some 70 million readers in the magazine, online and on mobile devices was unveiled on ABC's late night talk show "Jimmy Kimmel Live."...

To Stop the Coffee Apocalypse, Starbucks Buys a Farm (BusinessWeek)
Carlos Mario crouches next to a knee-high seedling growing in a plug of volcanic soil wrapped in black plastic. The young plant will one day be a coffee tree. A yellow sign identifies it as “Par 1 Plan 1,” the code name for a new coffee hybrid. The mermaid logo on Mario’s black cap identifies his employer. Par 1 Plan 1 is one of 165,000 seedlings growing on a Costa Rican ridge 4,500 feet above sea level. The plants are arranged in long, neat rows within a 7.5-acre trapezoid crisscrossed with white irrigation pipe; there are scores of varieties, with names like Obata, Bourbon 2, and Et 47-P1. The patch is an open-air laboratory where Mario, a slight, 52-year-old agronomist with a salt-and-pepper mustache, tends to what he calls his “little babies.” Caressing the leaves of Par 1 Plan 1, Mario says it’s a cross between a Costa Rican variety known for the bright flavor favored by U.S. coffee drinkers, and an African breed with a bitter taste but the resilience to battle a fungus ravaging Latin America’s coffee crop. After a year in the nursery, a few hundred of these seedlings will be replanted nearby. Seeds from the trees that can fend off disease and yield the most abundant, high-quality beans will be replanted again in a cycle that could take five years before Par 1 Plan 1 is ready for Costa Rican farmers. The plant Mario is holding might never be responsible for a Starbucks venti latte, but its grandchild or great-grandchild might. “We have hopes,” he says.

European Banks Avoiding Risky-Loan Disclosure Face Review (Bloomberg)
A dark corner of European finance is about to be illuminated by European Central Bank inspectors who are sifting through loans that banks restructure for clients and don’t fully disclose. “What’s scaring investors is the question of whether banks are giving money to companies that deserve to go bankrupt and keeping them alive to avoid recording losses,” Mascia Bedendo, an assistant professor of finance at Bocconi University in Milan, said in a phone interview. “The amount of forborne and nonperforming loans is still very obscure.”

Sochi Olympics: Under Armour Suits May Be a Factor in U.S. Speedskating's Struggles (WSJ)
In the hours after gold-medal favorite Shani Davis finished nowhere near the podium, the U.S. speedskating team pored over data through the early morning Thursday, questioning everything from race strategy to skate blades. After an equally disastrous outcome in the women's 1,000-meter race later on Thursday, a suspect emerged: the high-tech racing suits the team adopted for the Winter Olympics. These suits—designed by apparel sponsor Under Armour and billed before the Games as a competitive advantage—have a design flaw that may be slowing down skaters, according to three people familiar with the U.S. team. Vents on back of the suit, designed to allow heat to escape, are also allowing air to enter and create drag that keeps skaters from staying in the low position they need to achieve maximum speed, these people said. One skater said team members felt they were fighting the suit to maintain correct form. Kevin Haley, the senior vice president of innovation for Under Armour, which has sponsored the U.S. team since 2011, said he was confident the suits were fast, but, in the absence of medal-winning performances, "we'll move heaven and earth to make them better."

Related

Opening Bell: 08.28.12

Greece Plans 'Special Economic Zones' to Boost Growth (Reuters) Greece plans to set up "special economic zones" to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday. The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference. "We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports," Hatzidakis said. Spain's Catalonia to Ask for Aid From Madrid (WSJ) Catalonia, Spain's most indebted region, said Tuesday it will ask for €5.02 billion ($6.27 billion) in financial assistance from the Spanish government's liquidity program, as it struggles to pay for basic services such as hospitals, schools and care homes. Catalan government spokesman Francesc Homs said at a news conference that the government will ask for the funding to "face debts maturing in the coming months." ECB's Draghi Stuck At The Office, To Skip Jackson Hole Symposium (WSJ) "ECB President Mario Draghi had hoped to attend the annual economic symposium in Jackson Hole organized by the Federal Reserve Bank of Kansas City, but has decided not to go to Jackson Hole, due to the heavy workload foreseen in the next few days," an ECB spokesperson wrote in an email. Leonardo DiCaprio To Bare All In 'Wolf Of Wall Street' (NYDN) “There will be some pretty illicit sex scenes coming up,” said a set insider. “It involves four guys and two girls.” And there’ll even be a little guy-on-guy action in one of the orgies — but DiCaprio won’t be in those. Not that there would be anything wrong with that. Scorsese’s film follows the rise and eventual imprisonment of drugged-out real-life former stockbroker Jordan Belfort, who is now a motivational speaker and says he has been sober since his life imploded in the go-go late ’90s and he went to prison. The movie started shooting in the Financial District over the weekend and there’ll be more filming in midtown this week. Later this month, the action will move to a Hamptons estate. DiCaprio was spotted rehearsing at Bank of America with co-star Jonah Hill. Matthew McConaughey also stars, as Belfort’s mentor. “They were incognito and Leo didn’t take his sunglasses off the entire time,” said a Merrill Lynch source. There are some scenes you can bet will be shot strictly behind closed doors. “We have a scene in an office with a troupe of hookers during a coffee break,” the set insider told us. “They are in the process of casting a ton of beautiful models, who are willing to bare it all, to portray escorts and strippers,” our source said. “The girls have to be incredibly hot.” Connecticut Homes Biggest Losers As Wall Street Cuts (Bloomberg) Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales. Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors. Hero Reagan’s Compromise Would Collide With Tea Party Certitude (Bloomberg) Ronald Reagan remains the modern Republican Party’s most durable hero. His memory will be hailed as The Great Uncompromiser by those who insist the GOP must never flag in its support for smaller government, lower taxes and conservative social values. His record tells a different story. During Reagan’s eight years in the White House, the federal payroll grew by more than 300,000 workers. Although he was a net tax cutter who slashed individual income-tax rates, Reagan raised taxes about a dozen times. His rhetoric matched that of many of today’s most ardent Christian conservatives, yet he proved to be a reluctant warrior on abortion and other social issues. Perhaps most tellingly, he was willing to cut deals, working closely with Democratic leaders such as House Speaker Tip O’Neill of Massachusetts to overhaul Social Security and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois to revamp the tax code. Ann Romney Takes Biggest Stage Yet To Humanize Husband (Bloomberg) Mitt Romney’s likability gap was evident in a Washington Post/ABC News poll released yesterday. The poll, taken Aug. 22-25, showed 27 percent of registered voters find Romney to be more friendly or likable among the two candidates, compared with 61 percent for the incumbent. Kidney for Ohio patient's transplant put in trash (AP) A nurse accidentally disposed of a kidney from a living donor this month at an Ohio hospital, and doctors tried unsuccessfully for at least two hours to resuscitate the organ in what medical experts describe as a rare accident, health officials said. "Human error rendered the kidney unusable," University of Toledo Medical Center spokesman Toby Klinger said Saturday, but he declined to give more details, citing the hospital's investigation into what happened and its respect for the privacy of the patients involved. But one of the doctors involved told Dr. David Grossman, a Toledo-Lucas County health commissioner, that a nurse disposed of the kidney improperly. Two nurses have been placed on paid administrative leave while the hospital reviews what happened, Klinger said.

Opening Bell: 3.11.15

Gundlach can't believe these "blockheads" at the Fed; New Credit Suisse CEO knows about risk unlike some people; Stress tests; Bales of weed for everyone; AND MORE.