Opening Bell: 03.03.14

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Losses Mobilize The Bitcoin Police (WSJ)
So far, U.S. financial regulators have avoided stepping into the fray. But they are trying to determine whether their oversight extends to bitcoin, according to government officials. Some, like the Federal Reserve, have indicated they can't oversee bitcoin without legislative action. Fed Chairwoman Janet Yellen said at a Senate hearing last week that the central bank doesn't have the authority to regulate bitcoin as long as the currency remains separate from the banking system the Fed oversees. Other regulators, including the Federal Trade Commission, appear more inclined to act. "Consumer protections with virtual currencies, to the extent they exist at all, are in no way comparable to the protections" for credit cards or other traditional payment methods, said Lois C. Greisman, associate director of the Federal Trade Commission's division of marketing practices, in an interview.

Britain to scrap VAT on Bitcoin trades (FT)
Britain’s tax authority plans to ditch value added tax on Bitcoin trading only days after the collapse of Mt Gox, one of the virtual currency’s leading exchanges, losing almost $500m of customer deposits. The UK’s welcoming approach to Bitcoin contrasts with the approach of other countries, amid concerns about its use for tax evasion and money laundering as well as its notoriety for wide fluctuations in value.

Mexican Police Question Citigroup Employee Over Alleged Fraud (WSJ)
Mexican police questioned a Citigroup Inc. C -0.12% employee suspected of participating in the alleged theft of $400 million from the bank, according to a person familiar with the matter. The employee, described by the person familiar with the matter as junior at the company, worked for the bank's Mexico unit, Banco Nacional de Mexico, or Banamex. The employee isn't currently in police custody, the person added. It wasn't clear whether the person is still working for Citigroup or when the questioning occurred.

Buffett Sets Fresh Goal as Berkshire Misses Five-Year Target (Bloomberg)
Warren Buffett said his performance at Berkshire Hathaway Inc. should be measured over the course of stock market cycles after missing a five-year target for the first time. Berkshire’s net worth failed to rise as much as the Standard & Poor’s 500 Index from the end of 2008 through 2013, the company’s annual report showed yesterday. It was the only five-year period that happened since Buffett took control in 1965. Still, the billionaire Berkshire chairman and chief executive officer said he can beat the index over equity market cycles, like he did in the six-year period that ended Dec. 31. “Through full cycles in future years, we expect to do that again,” Buffett wrote in the report. “If we fail to do so, we will not have earned our pay.”

Warren Buffett admits to $873 million mistake (CNBC)
Unlike the contents of its stock portfolio that must be filed with the SEC four times a year, Berkshire doesn't have to publicly disclose its debt holdings. In his letter to shareholders released Saturday, however, Buffett admitted to a money-losing bond buy involving Energy Future Holdings. "Most of you have never heard" of the company, he wrote. "Consider yourselves lucky; I certainly wish I hadn't." Buffett said he decided to buy about $2 billion of EFH's debt when it was created in 2007 as part of a leveraged buyout of Texas electric utility assets. He made that decision "without consulting with (business partner) Charlie (Munger). That was a big mistake." Buffett wrote that unless there's a big increase in natural gas prices, the company will "almost certainly" file for bankruptcy protection this year. Last year, Berkshire sold the bonds for $259 million. Adding back the $837 million received in cash interest, Buffett's decision produced a pre-tax loss of $873 million. "Next time," Buffett promised, "I'll call Charlie."

‘Flushable’ wipes clogging up drains citywide (NYP)
Sales of wipes have soared to $6 billion a year, with advertisers claiming the products are the best way to get clean — and safe to toss in the toilet. But the messy truth, say consumers like Dr. Joseph Kurtz of Flatbush, who is suing the makers of Cottonelle and Costco-brand wipes in Brooklyn federal court, is that “flushable” wipes aren’t really flushable. “They do not break down as manufacturers advertise,” according to the class-action suit filed by Kurtz. The 35-year-old, who used the products in his Brooklyn and New Jersey homes last summer, was forced to spend $600 on plumbers to clear his backed-up pipes, lawyer Mark Reich said.

Schwarzman of Blackstone Made $375 Million in 2013 (Dealbook)
Mr. Schwarzman, 67, earned a salary of $350,000 and did not take a bonus, the filing showed. He earned carried interest — his share of Blackstone’s investment profits — of $21.6 million. But he made most of his money from his partnership units, collecting $352.5 million. Separately from that compensation, Mr. Schwarzman received $78.2 million from his personal investments in Blackstone’s funds. Including that would bring his total earnings to $452.7 million. The second in command at Blackstone, Hamilton E. James, who is known as Tony, made $99 million, the filing shows. That includes dividends on his partnership units and common units, as well as his salary, bonus and share of carried interest. Mr. James got $15.7 million from his investments in Blackstone’s funds.

Goldman Sachs Head Hunts in Australia to Meet Fixed-Income Surge (Bloomberg)
Goldman Sachs is in hiring talks with about 10 people as it seeks to expand Australian businesses from trading to capital markets with global banking regulation forcing some competitors to dial back. Australian fixed-income trading is the firm’s biggest growth area after moving its rates and credit derivatives businesses to Sydney from Hong Kong, said Simon Rothery, chief executive officer for Australia and New Zealand at Goldman. Rothery sees opportunities to arrange debt offerings as competition eases, and also wants to gain the top spot in Australian equity capital markets after naming Sean Walsh to head the unit and adding UBS AG’s Sarah Rennie and Bank of America Merrill Lynch’s Belinda Sara in the past 1 1/2 years.

GrubHub’s Official IPO Filing Suggests a Company With an Appetite (BusinessWeek)
GrubHub, which operates the online delivery software for restaurants, is by far the largest in its cohort of delivery middlemen. The company works with about 29,000 restaurants and brought in $137 million in revenue on $1.3 billion in gross food sales last year. But as it’s grown, GrubHub has become less profitable. In 2013 its profit was less than half what it was two years earlier, and its technology and operational costs are growing faster than its revenue.

Artists create ice cream that plays a melody when licked (NYDN)
The brainchild of food designer Emilie Baltz and smart object designer Carla Diana, the interactive food is placed in a cup that sits inside a plastic cone featuring capacitive sensors embedded within it. The sensors can perceive when ice cream in the cup is touched. When a tongue makes contact with the ice cream, a signal is sent to an electronic board and then to a computer with stored sound loops of melodies and beats. Licking the ice cream in different ways produces different sounds.

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Opening Bell: 11.19.12

Geithner: Deal To Avoid 'Fiscal Cliff' Can Be Made In Weeks (Bloomberg) Treasury Secretary Timothy F. Geithner said he’s confident an agreement on averting the fiscal cliff can be concluded within weeks after White House talks between President Barack Obama and congressional leaders. “It was a good meeting, and the tone was very good,” Geithner said in an interview in Washington. “I think this is doable within several weeks.” Geithner said a deal must be reached soon to prevent further damaging consumer confidence. The lack of agreement is “this huge cloud of uncertainty hanging over the economy,” he said. As the peak of holiday shopping season approaches, “You’d want to do it as soon as you can.” “This is within our grasp, within our reach,” Geithner said. “It’s not that complicated.” Geithner repeated the administration’s calls for an immediate extension of middle-class tax cuts, and said a deal on high-end tax cuts shouldn’t be delayed. “I think deferring things doesn’t work,” he said. “You know, we’ve had several periods now where there was a choice made to defer.” Obama Calls CEOs, Including Buffett, Dimon (Politico) President Obama made calls to a handful of top business leaders over the weekend, a White House official said Sunday, as part of effort to build support for his approach to averting the fiscal cliff. In conversations that came during his weekend of travel to and in Asia, Obama stressed "the need to find a balanced deficit reduction solution that protects the middle class and continues to move our economy forward," the official said. Obama spoke to Berkshire Hathaway CEO Warren Buffett, Apple CEO Tim Cook, JPMorgan Chase CEO Jamie Dimon, Boeing CEO Jim McNerney and Costco CEO Craig Jelinek, the official said. Lagarde: Reality' Not 'Wishful Thinking' Needed on Greece (Reuters) "I am always trying to be constructive but I am driven by two objectives," Lagarde said in an interview, "to build and approve a program for Greece that is solid, that is convincing today, that will be sustainable tomorrow, that is rooted in reality and not in wishful thinking. Investment Falls Off A Cliff (WSJ) U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery. Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls. Sahara Feeling Heat Over Bond Sales (WSJ) India's Sahara Group has built an empire by offering financial products to tens of millions of rural Indians who typically stashed their meager savings under the mattress. Business was so good that Sahara, using fees and investments from its customers' deposits, grew into a multi-billion-dollar conglomerate that includes a 10,000-acre township, New York's Plaza Hotel building and a Formula-1 racing team. Today, the company's practices are coming under intense public scrutiny, the product of years of tussle between Sahara and regulators who worry India's informal financial sector has grown dangerously fast and without oversight. Many savers who scraped together money to put with Sahara now fear they could face lengthy delays in getting their money back. Opportunists Stockpile Twinkies for Big Payday (AP) Hours after the maker of Twinkies, Hostess Brands, announced its plans to close forever, people flocked to stores to fill their shopping baskets with boxes of Twinkies, which are cream-filled sponge cakes, and other snacks made by the company — Ding Dongs, Ho Hos and Zingers. Late Friday and Saturday, the opportunists took to the Web sites eBay and Craigslist. They began marketing their hoards to whimsical collectors and junk-food lovers for hundreds, in some cases thousands, of dollars. That is a fat profit margin, considering the retail price for a box of 10 Twinkies is about $5. Bond Investor Takes Big Punt On Ireland (FT) Franklin Templeton funds increased their holdings of Irish bonds by more than a third to at least €8.4 billion in the third quarter. This means that the San Francisco-based US asset manager now controls almost a 10th of Ireland’s entire government bond market. Most of the bonds have been snapped up by funds controlled by Michael Hasenstab, co-director of Franklin Templeton’s international bond department, and particularly by the $64 billion Templeton Global Bond Fund he manages. Kim Kardashian Weighs In On The Israeli-Palestinian Conflict (HP) Kim Kardashian is apparently neutral when it comes to the current Israeli-Palestinian conflict. The reality star first tweeted support for Israel: "Praying for everyone in Israel," she wrote. And after five minutes of backlash, the star tweeted again: "And praying for everyone in Palestine and across the world!" she wrote. Kardashian is clearly the last person anyone wanted to hear from regarding the issue, and the 32-year-old was immediately hit with more backlash over the tweets -- including death threats. The star has since deleted the tweets and explained her reasons for tweeting about the conflict in a blog post on her website. Shadow Banking Grows to $67 Trillion Industry, Regulators Say (Bloomberg) The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off- balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board said in a report, which utilized more data than last year’s probe into the sector. “Appropriate monitoring and regulatory frameworks for the shadow banking system needs to be in place to mitigate the build-up of risks,” the FSB said in the report published on its website. Lehman Trustee Ends Citigroup Fight (WSJ) The trustee unwinding Lehman Brothers Inc. reached an agreement with Citigroup that ends a long-running legal fight over more than $1 billion that Lehman deposited at the bank the week it filed for bankruptcy protection. The deal puts $435 million in the coffers of Lehman's brokerage unit, LBI, for distribution to customers and other creditors, according to the settlement filed Friday night in U.S. Bankruptcy Court in Manhattan. Europe Seeks More Taxes From US Multinationals (NYT) Google, Amazon, Starbucks and other American companies facing tax scrutiny say they are doing nothing wrong. They use complex accounting strategies to exploit national differences across Europe in corporate tax rates, which range from less than 10 percent to more than 30 percent, and loopholes that can reduce their effective European tax levies to almost nothing. Google, for example, records most of its international revenue at its European headquarters in Ireland, where the corporate tax rate is 12.5 percent. Across Europe, customers who buy advertising, Google’s primary source of revenue, sign contracts with the company’s subsidiary in Ireland, rather than with local branches. Google ends up paying Irish taxes on only a fraction of the billions of euros that course through its Dublin office. That is because the company uses a variety of methods, including royalty payments to a unit in Bermuda, to reduce further the amount of money exposed to tax liability. So, while Google told the Securities and Exchange Commission that it generated more than $4 billion in sales in Britain last year, it reported revenue of only £396 million, or $629 million, in itsofficial filings there. Central New York district attorney Marc Suben admits to '70s porn star past (NYDN) Prior to this year’s election, Marc Suben denied appearing in 1970s skin flicks, telling reporters he was the subject of a campaign by political rivals who wanted to sully his reputation. But Friday, CNYCentral.com published a story highlighting a YouTube video comparing Suben with porn actor Gus Thomas, whose IMDB film credits include “Deep Throat Part 2” and “Doctor’s Teenage Dilemma.” Suben swiftly called a press conference and “humbly” apologized to those he had deceived. He admitted to using “bad judgment” both by appearing in adult films in his youth and by lying about them as a public official. He was first elected in 2008. “I was shocked and embarrassed to be confronted with this so many years later,” said Suben, who has also served as a judge. “I was embarrassed for my family and friends who stood by me. I also denied my actions to my family, my friends and my staff.” He declined to say whether he plans to resign.

Opening Bell: 3.31.15

Steve Cohen starts tech VC unit; Amish bank is killing it; PIMCO loses popularity contest; "Woman Stabbed Boyfriend In Groin For Eating All Her Salsa"; and more.

(Getty Images)

Opening Bell: 9.28.17

Hugh Hefner headed to that playboy mansion in the sky; guy accused of stealing secrets from Google for Uber started an AI-based religion; Lyft nears IPO; killer clown mystery solved; and more.