Opening Bell: 03.18.14

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Wall Street Trains Fire on Idea of a Bank Tax (WSJ)
Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and other big banks are marshaling opposition on Capitol Hill to kill a proposal by House Ways and Means Committee Chairman Dave Camp (R., Mich.) to tax the nation's largest financial firms, according to people familiar with the efforts. The companies are curtailing financing for GOP lawmakers and warning of an economic hit, these people say. Goldman Sachs, which was in discussions to hold a fundraiser for the National Republican Congressional Committee, recently opted not to move forward because of concerns about Mr. Camp's bank-tax proposal, according to people familiar with the plans.

Investment Banking Drives Jefferies to Strong Results (WSJ)
For the quarter ended Feb. 28, Jefferies recorded net earnings of $112.4 million on revenue of $899 million. Jefferies had preliminarily forecast earnings of $105 million on revenue of $875 million. A year earlier, the bank earned $80.1 million profit on revenue of about $818.5 million. The quarter's bottom-line growth was driven by a 44% rise in investment banking revenue to $414.3 million, on the back of strength in both the capital markets and advisory businesses. Jefferies had previously reported preliminary investment banking revenue of $410 million.

BlackRock Says Bears Blundering by Exiting Emerging Markets (Bloomberg)
Investors “are selling emerging markets which have very low valuations, significant dividend yields but have underperformed in recent times,” Vecht, London-based portfolio manager at BlackRock Emerging Europe Trust Plc, said in e-mailed comments yesterday. In exchange, they’re buying assets in the developed world, “which has relatively high valuations, potentially limited long-term earnings growth and where markets have just gone up rather fast.”

Bristol man gets revenge by texting works of Shakespeare to rogue internet seller (BP)
A Bristol graphic designer who was ripped off by an internet seller has turned to Shakespeare to get his revenge. Edd Joseph, 24, who lives in the city with his girlfriend, was furious when he bought a PS3 games console for £80 and the seller failed to deliver the goods. So Edd decided to take his revenge by sending him the entire works of the Bard - by text. Edd discovered he could copy the words from the internet and paste them into a text message - without costing him a penny on his unlimited mobile phone package. He sends it as one text but his victim can only receive them in 160 character chunks - meaning the 37 works of Shakespeare will buzz through in 29,305 individual texts. So far Edd has sent 22 plays including Hamlet, Macbeth and Othello which have been delivered in 17,424 texts. He reckons the remaining 15 works will take another few days to send - meaning his adversary's phone will have been constantly beeping for nearly a week. Edd said: "I was really annoyed and I was trying to think of ways of being more in the position of power because I felt so helpless about it. "My first thought was that I could try and pretend I had found out where he lived but it was all a bit of a cliche and it wasn't going to worry him really.

Treasury's Cohen Warns Unregistered Bitcoin Exchanges (WSJ)
We "know there are many virtual currency exchangers and administrators that have not registered with FinCEN and are not fulfilling their recordkeeping and reporting requirements," Mr. Cohen said, speaking at an event at Bloomberg News in New York. "Those that do not comply with these rules should understand that their actions will have consequences."

Germany will support Portugal's decision on bailout exit: Merkel (Reuters)
"It is a decision for the Portuguese government," Merkel said at a news conference in Berlin with Portugal's Prime Minister Pedro Passos Coelho. "I completely understand it when the Portuguese Prime Minister says he will take the decision when it needs to be taken and Germany will support any decision.. We have stood by Portugal and we will continue to do so," she said.

High-Speed Trading Said to Face N.Y. Probe Into Fairness (Bloomberg)
Attorney General Eric Schneiderman is examining the sale of products and services that offer faster access to data and richer information on trades than what’s typically available to the public, according to the person. Wall Street banks and rapid-fire trading firms pay thousands of dollars a month for these services from firms including Nasdaq OMX Group Inc. (NDAQ) and IntercontinentalExchange Group Inc.’s New York Stock Exchange.

Housing Starts in U.S. Little Changed From Stronger January (Bloomberg)
The 0.2 percent decrease to 907,000 homes at an annualized rate last month followed a revised 909,000 pace in January, figures from the Commerce Department in Washington showed today. The median estimate in a Bloomberg survey called for a 910,000 rate after a previously reported 880,000 in January.

Manchester man accused of concealing poultry products in pants in theft attempt (WMUR)
A Manchester man who allegedly concealed poultry products in his pants and left the store was arrested and charged with willful concealment this weekend. Police said Jonathan Hood, 31, left the Hannaford's in Hooksett without paying for the products he had hidden in his pants. He was detained by supermarket employees until police arrived.

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Opening Bell: 02.07.13

Credit Suisse Returns To Profit (WSJ) In the fourth quarter, Credit Suisse's net profit was 397 million francs, compared with a net loss of 637 million francs a year earlier when restructuring charges weighed on earnings. Revenue, which includes interest income, fees and trading proceeds, rose 29% to 5.8 billion francs. Analysts had expected a profit of 563 million francs and revenue of 6.14 billion francs. State Lawsuits Could Add To S&P Exposure (WSJ) On Tuesday, the Justice Department sued S&P for allegedly causing some banks and credit unions to lose $5 billion after relying on the company's ratings of mortgage-linked securities. However, the $5 billion claim, which S&P has dismissed as "meritless," is only part of the legal battle being fought by the world's largest credit-ratings firm by number of deals rated. Thirteen states and the District of Columbia have followed in the Justice Department's footsteps, filing separate lawsuits against S&P on Tuesday. The California attorney general alone is suing S&P for about $4 billion to recover funds for two of the country's largest public pension funds, according to its lawsuit. Other states, such as Colorado and Arkansas, are demanding S&P give back the revenue it earned on precrisis ratings of hundreds of securities. State prosecutors allege S&P presented its ratings as based on objective and independent analysis but actually were inflated to cater to the banks that helped arrange and sell the securities. S&P Hires Top Defense Attorney for $5 Billion Lawsuit (Reuters) Standard and Poor's has hired John Keker, one of the country's top white-collar defense attorneys, to help fight the $5 billion lawsuit brought by the U.S. government this week. Keker, who is based in San Francisco and has represented everyone from cyclist Lance Armstrong to Enron's Andrew Fastow, was hired at the recommendation of Floyd Abrams, a prominent New York attorney who also represents the ratings firm. RBS Settles Rate Charges (WSJ) CFTC enforcement chief David Meister said Wednesday that the trading floor was "laden with conflicts of interest," where RBS traders "seized the opportunity to ask colleagues sitting in the next chair for false rate submissions." From mid-2006 to the end of 2010, traders at RBS tried hundreds of times to rig the London interbank offered rate, or Libor, sometimes succeeding, said U.S. and U.K. regulators as they announced a $612 million settlement with the British bank. ‘Historic Winter Storm’ Moving Toward U.S. Northeast (Bloomberg) A “potential historic winter storm” and blizzard may dump 2 feet of snow on Boston and eastern Massachusetts, potentially causing power outages and leaving 10 inches in New York City. Eighteen to 24 inches (46 to 61 centimeters) of snow may fall in Boston, and the city has an 85 percent chance of receiving at least 12 inches from the storm that is expected to arrive in two days, according to the latest forecast from National Weather Service in Taunton, Massachusetts, published at at 4:25 a.m. Eastern Standard Time. “Heavy snow and gusty winds will bring the potential for blizzard conditions. The worst of the storm will be Friday night into the morning,” the weather service said. The storm arrives on almost the 35th anniversary of the Blizzard of 1978, which killed 99 people, destroyed 2,000 homes, drove 10,000 residents into shelters and paralyzed eastern Massachusetts and northern Rhode Island for a week, according to the weather service. Ireland Moves Toward Debt Deal (WSJ) Under Ireland's new proposal, the government will provide a long-term bond to the Irish central bank that replaces the note, the Irish finance ministry said. IBRC will be liquidated and its remaining commercial property assets will be dispatched to Ireland's so-called bad bank, the National Asset Management Agency. Mr. Noonan told lawmakers early Thursday that there was still "no deal," but he needed to announce new powers to liquidate IBRC—the first step toward potentially striking such a debt agreement—to protect the country from unspecified legal challenges. Man Claims IRS Agent Coerced Him Into Sex (CBS) An Oregon man is suing the U.S. Government and a female IRS agent he alleges pressured him into sex, by threatening a tax penalty. Vincent Burroughs, of Fall Creek, Ore., says the harassing relationship began in August of 2011 when Dora Abrahamson, an agent with the Internal Revenue Service, called him and said he would be audited, CBS affiliate KVAL reports. Burroughs says he didn't know Abrahamson, and that he hadn't met her before those calls - nor had he heard that he was being audited by the IRS. "She was sending me texts that she wanted to come out, give me massages because she needed to help me relax," Burroughs said in a phone interview with KVAL News. Over the next two months, Burroughs alleges that Abrahamson sent him several flirtatious text messages - offering to give massages, asking to meet him, and sending racy photos of herself to his cell phone. "She said she knew more than my mother knew about me," said Burroughs. In the lawsuit, Burroughs says in September 2011 Abrahamson came to his home wearing provocative attire. "Next thing I know, she's at my gate, honking...so I opened my gate, she came into my property dressed exactly like [when] she texted me," Burroughs said. The lawsuit states: "She said that she could impose no penalty, or a 40% penalty, and that if he would give her what she wanted, she would give him what she needed." E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad (NYT) When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix. Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews,according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors. The trove of internal e-mails and employee interviews, filed as part of a lawsuit by one of the investors in the securities, offers a fresh glimpse into Wall Street's mortgage machine, which churned out billions of dollars of securities that later imploded. The documents reveal that JPMorgan, as well as two firms the bank acquired during the credit crisis, Washington Mutual and Bear Stearns, flouted quality controls and ignored problems, sometimes hiding them entirely, in a quest for profit. Harvard’s Gopinath Helps France Beat Euro Straitjacket (Bloomberg) When French President Francois Hollande unveiled a plan in November for a business tax credit and higher sales taxes as a way to revive the economy, he was implementing an idea championed by economist Gita Gopinath. Gopinath, 41, a professor at Harvard University in Cambridge, Massachusetts, has pushed for tax intervention as a way forward for euro-area countries that cannot devalue their exchange rates. “Fiscal devaluation” is helping France turn the corner during a period of extreme budget constraints, former Airbus SAS chief Louis Gallois said in a business- competitiveness report Hollande commissioned. Gopinath’s support for the theory took shape through her years teaching at Harvard and the University of Chicago and particularly as a Ph.D. student at Princeton University under the guidance of Kenneth Rogoff, Pierre-Olivier Gourinchas and Ben Bernanke, now chairman of the Federal Reserve. While her earlier work on current accounts and balance of payments garnered praise, it is her recent focus on the 17 euro nations that has national leaders paying action. John Thomas Financial Said To Draw Regulatory Probe (NYP) Wall Street brokerage firm John Thomas Financial, owned by flamboyant founder and CEO Tommy Belesis — who gained more than 15 minutes of fame from his role in Oliver Stone’s “Wall Street: Money Never Sleeps” — is being probed by the brokerage industry, the Securities and Exchange Commission and the FBI, The Post has learned. Agents from the FBI’s New York office have been knocking on doors of people associated with the firm, asking questions about JTF’s business practices, including cold calling by brokers and Belesis’ overseas accounts, sources told The Post. Fewer Workers Filed Claims for U.S. Jobless Benefits Last Week (Bloomberg) Applications for jobless benefits dropped 5,000 to 366,000 in the week ended Feb. 2, Labor Department figures showed today. Economists forecast 360,000 claims, according to the median of 53 estimates in a Bloomberg survey. Big Mac Prices Show Which Euro Zone States Best at Belt-Tightening (Reuter) Economist Guntram Wolff took the data and found that the price rise in Greece, Portugal and Spain has been less than the euro zone average, while in Ireland the price actually fell. These are the main countries undergoing deep economic reform due to the debt crisis. This contrasts with price rises above the euro zone burger average in Germany. Wolff concludes from this that economic adjustment is working. For example, In Ireland, which has made spending cuts after receiving international aid, the burger price has fallen from 3.80 euros to less than 3.50 euros. There is one notable exception, however. Heavily-indebted Italy is the most expensive country in the euro area to buy a Big Mac - 3.85 euros - while it costs just 3.64 euros in Germany. PETA: Naked chicken corpses aren't sexy (CM) The American founder of People for the Ethical Treatment of Animals, president Ingrid Newkirk, criticised a newspaper for running a picture of a raw chicken. "We don't want to see any chickens on display, but instead want them to live natural, happy lives with their families. Sexily displaying the corpse of a chicken who has been bred to grow so big, so quickly, that many collapse under their own weight, is just additionally offensive."

Opening Bell: 03.20.12

Bernanke Returns to Academic Roots to Justify Fed’s Existence (Bloomberg) Bernanke will lecture to about 30 undergraduate students at George Washington University in the first of four hour-long talks on the history of the Fed as part of what public relations specialist Richard Dukas called a “P.R. offensive” to buff the central bank’s tarnished image. The Fed is being attacked from both the left and the right, with liberals criticizing it for not doing enough to bring down unemployment, and conservatives blaming it for doing too much and risking faster inflation...The lecture series -- the brainchild of the Fed and the first by a sitting chairman -- will be streamed live on the central-bank’s website and on ustream.tv. Afterwards, it will be posted on the Fed’s YouTube page. The central bank said transcripts also will be available. “I understand he’s excited about coming back and being in the classroom,” said Tim Fort, the professor in charge of the half-semester class. Mets owners could actually make money in Madoff settlement (NYP) Under the deal, Mets owners have agreed to pay back $162 million in phantom profits that they withdrew from their Madoff accounts between 2002 and 2008 — the year the Ponzi pyramid collapsed. Picard also dropped his claim that the owners were “willfully blind” to the scheme — allowing them to claim up to $178 million as victims of the fraud. Goldman Sachs Cuts Staff in Annual Review Process (Reuters) Goldman Sachs has begun a new round of staff cuts in its trading and investment banking divisions, three sources familiar with the matter said, a sign of continued cutbacks on Wall Street...The latest round of cuts is part of Goldman's annual employee review process. It's unclear how many people will be affected by the job eliminations, which began two weeks ago, because different divisions have received different targets, sources said. While management has formulated an overall plan for cost-cutting, all of the job cuts may not be completed for months, said a source familiar with the matter. Deutsche Bank Cuts Board’s Pay 19% as Profit Goal Missed (Bloomberg) Jain earned 5.81 million euros ($7.67 million) in salary and bonuses for last year, down from 7.55 million euros, Deutsche Bank said today in its financial report. Jain and the board’s other six members received 26.4 million euros compared with 32.4 million euros in 2010, when there were eight members. Jefferies Net Down 12%; Revenue Tops Forecasts (WSJ) Fixed-income trading revenue came in at $339.1 million in the quarter ended Feb. 29, up 6.6% from a year earlier and more than double what the firm booked in the prior quarter. Investment-banking revenue rose to $285.8 million, up 20% from a year earlier and 9.4% from the previous quarter. Overall, Jefferies reported a profit of $77.1 million, or 33 cents a share, compared with a year-earlier profit of $87.3 million, or 42 cents a share. Revenue increased 2.2% to $758.1 million. Analysts expected a per-share profit of 29 cents on $699 million in revenue, according to a poll conducted by Thomson Reuters. The Banker And The Cabbie: When Two Worlds Collide (Reuters) The day, December 21, 2011, had started out normally as Jennings left the kind of home - sweeping curved staircase, perfectly plumped chintz pillows, backyard swimming pool and a Ferrari in the garage - that makes many New Yorkers deeply jealous, and headed to the steel-and-glass tower in midtown Manhattan where he directed the firm's bond business...Morgan Stanley has already placed him on leave. The firm's spokesman declined to comment, other than to say no decision has been made regarding Jennings' longer-term status at the firm. One top-ranking Morgan Stanley executive, though, said he "does not stand a chance of getting his job back." Deutsche Bank Sued In US Over Libor (CNBC) Deutsche Bank said it received subpoenas and requests for information from U.S. and European Union agencies as part of a global probe into interbank offered rates and that it was also being sued over alleged dollar interbank rate manipulation...The inquiries relate to periods between 2005 and 2011, the bank said, adding it was cooperating with the investigations. Geithner Warns Europe Against Draconian Austerity (Reuters) "Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms," Geithner said in remarks prepared for delivery to the House Financial Services Committee on Tuesday. "If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity," he said. Wall Street Can Learn From The Goldman Flap (WSJ) Rather than extolling Goldman's "client-driven" culture, as they did in their response to Mr Smith last week, Mr Blankfein and his No. 2 Gary Cohn should have seized the opportunity to explain how the business of finance really works. Jobseekers Get Asked For Facebook Passwords (AP) Bassett, a New York City statistician, had just finished answering a few character questions when the interviewer turned to her computer to search for his Facebook page. But she couldn't see his private profile. She turned back and asked him to hand over his login information. Bassett refused and withdrew his application, saying he didn't want to work for a company that would seek such personal information. Jon Hamm sticks to his guns in calling Kim Kardashian an 'idiot (NYDN) NBC “Today” show host Matt Lauer asked the AMC retro-series actor to clarify the earlier comments he made to Elle UK about Kardashian being a famous-for-being-famous “idiot,” which the reality starlet called “careless.” “I don’t think it was careless. I think it was accurate,” he told Lauer.