Opening Bell: 05.14.14

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Geithner Must Provide S&P With Documents in Fraud Lawsuit (Bloomberg)
Ex-U.S. Treasury Secretary Timothy Geithner must comply with Standard & Poor’s demand that he provide documents related to its claim the U.S. sued the company in retaliation for downgrading government debt. Geithner is the highest former government official the McGraw Hill Financial (MHFI) Inc. unit has pursued for information to support its allegations. S&P, the only credit rating company sued by the Justice Department for allegedly giving fraudulent ratings to mortgage-backed securities, has said it was singled out because of the downgrade.

For BNP Paribas, Credit Suisse, Too Big to Jail Gets Lost in Translation (BusinessWeek)
While Lawsky has indicated he plans to pursue individuals at the companies who were involved in the alleged wrongdoing, possibly requiring that they lose their jobs and return back compensation, the Justice Department is seeking settlements with the banks rather than charges against individuals—so those eye-popping fines will be paid by the corporation, but no one is threatened with jail. Remarkably, the two banks faced with pleading guilty to an actual crime are both non-U.S. institutions. This can’t be a coincidence: Not only is it less painful politically to extract a guilty plea from a European company, but the effects on the rest of the U.S. financial system would be far less than they would be for an American bank of similar size.

Tech Firms' Cash Piles Cool Fears of a Meltdown (WSJ)
The two-month swoon in technology stocks has given investors flashbacks to the dot-com meltdown. But at least one harbinger of trouble is absent today: tech firms in danger of collapse. A Wall Street Journal analysis of 148 U.S. tech companies with recent or pending initial public offerings found none on a path to burn through their cash within a year, based on their pace of spending in 2013. Those findings are in contrast to the health of young tech companies during the last run-up of U.S. technology stocks, which peaked in March 2000. A cover story that month in the financial magazine Barron's spotlighted how one-quarter of 207 Internet companies were on track to run out of cash within a year. And many did.

Fed Warns Of Crackdown On Takeover Deals (WSJ)
The statements by a Fed official in remarks prepared for a regulatory conference were the latest warning that U.S. regulators want banks to end practices they see as risky in so-called leveraged lending markets. The Fed and the Office of the Comptroller of the Currency told banks in March 2013 to avoid funding takeover deals that would leave companies with high levels of debt. "Judging from aggregate market data, it appears that many banks have not fully implemented standards set forth" in the March 2013 guidance, said Todd Vermilyea, senior associate director in the Fed's Division of Banking Supervision and Regulation, at a Charlotte, N.C., event hosted by the Federal Reserve Bank of Richmond.

Alec Baldwin arrested for disorderly conduct after flare-up with New York cops (NYDN)
Alec Baldwin...went on a New York City-dissing Twitter tear — after he was busted Tuesday for flipping out on two cops who were just doing their jobs. “New York City is a mismanaged carnival of stupidity that is desperate for revenue and anxious to criminalize behavior once thought benign,” Baldwin wrote. Then, in a subsequent tweet, Baldwin gave up the name and badge number of the female officer who ended his foul-mouthed tirade by cuffing him. And finally, incredibly, Baldwin boo-hooed that “the police did nothing” about the photographers who were drawn by his bad behavior to his East Village building. “Meanwhile, photographers outside my home ONCE AGAIN terrified my daughter and nearly hit her with a camera,” he tweeted...Baldwin’s latest blow-up came after he was stopped at 10:15 a.m. for riding his bicycle against traffic on Fifth Ave. near 16th St. in the Flatiron District. When the cops asked him for identification, Baldwin lost it on them, sources told The Daily News. "He became belligerent, yelling and screaming at the officers, 'I don't have ID. Just give me the f-----g summonses,'" one police source said...Baldwin was still seething when he arrived at Manhattan’s 13th Precinct and was charged with disorderly conduct.
“How old are these officers?” Baldwin groused. “They don’t even know who I am.”

U.S. regulator opens door wider for Americans on mortgages (Reuters)
The regulator of Fannie Mae and Freddie Mac laid out plans for the government-run companies on Tuesday that could make it easier for Americans to obtain mortgages, marking a sharp departure from a predecessor who wanted to aggressively shrink their role in the housing finance market.

Pimco: Bull markets as we know them about to end (Reuters)
Pimco, the manager of the world's largest bond fund, said on Tuesday in its three-to-five-year outlook titled "The New Neutral" that low central bank interest rates underscore an end to bull markets in financial assets. In the report released on the firm's website, Pimco said that neutral real, or inflation-adjusted, central bank policy interest rates close to zero suggest "an end to bull markets as we've known them, but no perceptible growling from the bears."

Goldman Says Appeal of Commodities as an Asset Class Remains (Bloomberg)
Commodities as an asset class remain appealing as the global economic recovery extends into 2015, according to Goldman Sachs Group Inc. The bank raised its 12-month allocation for commodities to neutral from underweight, analysts led by Jeffrey Currie and Damien Courvalin wrote in a report dated yesterday. They increased their three and six-month price forecasts for nickel and rolled the 12-month predictions for aluminum and zinc forward to higher levels.

IRS paid at least $13B in improper tax credits (AP)
The IRS said it is aggressively fighting tax fraud, and is improving its efforts to police EITC payments. The agency said it has stopped nearly 15 million suspicious returns since 2011, blocking more than $50 billion in fraudulent refunds.

Shaq on Charles Barkley: ‘I would definitely kick his ass’ (NYP)
Charles Barkley and Shaquille O’Neal won’t meet in the ring for a mixed martial arts match as planned. “We are not going to fight,” Shaq said of a bout scheduled for Wednesday on “Inside the NBA.” “But I would definitely kick his ass because I’m from the streets and he’s not.” The big man further taunted, “He backed out … I’m serious, I would kill him.” When we asked if he was kidding, the retired star reiterated at BTIG’s Commissions for Charity Day, “That’s no joke. You can quote me on it.”

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Opening Bell: 02.21.13

Feds Split Over When To Close Cash Spigot (WSJ) Minutes released Wednesday from the Fed's January policy meeting show officials concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets. The Fed is buying $85 billion in mortgage and U.S. Treasury securities a month to drive down long-term rates and has promised to keep short-term rates near zero until unemployment improves. Citigroup Chairman Not Pressing Bank Breakup (WSJ) Michael E. O'Neill was among a small group of directors who after the financial crisis urged the company to weigh the pros and cons of splitting up the third-largest U.S. bank, said people familiar with the deliberations. Mr. O'Neill, now chairman, has overseen a management shake-up in the past year and is backing a broad cost-cutting plan. But exploring a breakup is no longer among his top priorities. Mr. O'Neill has concluded that breaking up Citigroup doesn't make sense now, given economic and regulatory uncertainty as well as a host of financial considerations, these people said. Wells Fargo ramps up private equity despite Volcker Rule (Reuters) The fine print of the Volcker Rule is expected to be finalized as soon as this year. Major banks such as Bank of America Corp and Citigroup are already pulling back from private equity investments ahead of the rules. But Wells Fargo is taking a different path. The bank invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees. By avoiding equity from outside investors, the bank is considered to be engaging in "merchant banking," an activity that is likely to be exempt under the Volcker Rule, lawyers and people familiar with the matter said. Dimon Defends His Duel Leadership Roles (NYP) JPMorgan Chase CEO Jamie Dimon has no intention of relinquishing his chairmanship, insiders say, despite renewed calls from a group of shareholders to split the roles at the nation’s biggest lender. The American Federation of State, County and Municipal Employees, a granddaddy of public employee unions, as well as New York City and Connecticut pension funds, are pressuring the bank in the wake of its $6 billion “London Whale” trading blunder. The shareholders, which hold about $1 billion worth of bank shares, say the move would help to avoid a repeat of last year’s debacle, which led the board to slash Dimon’s pay in half. JPMorgan officials, though, don’t want to go as far as splitting the roles, saying their boss steered the bank successfully through the financial crisis and is well suited for both jobs. Regulator Weighs Ban For Corzine (WSJ) Two newly elected directors of the National Futures Association plan to push the agency to hold a hearing on the matter, having criticized the response of federal regulators some 16 months after the industry was shaken by the collapse of brokerage MF Global where the former New Jersey governor was chief executive. Shia LaBeouf Pulls Out Of Broadway's Orphans (NYP) Producers announced that LaBeouf parted ways with the show after just a week of rehearsals due to “creative differences,” even though the play’s scheduled to begin previews March 19. But last night LaBeouf, 26, posted e-mail exchanges on Twitter revealing divisions between him and bombastic Baldwin. In a message titled “Creative Differences” LaBeouf posted an e-mail to him from director Dan Sullivan, which reads, “I’m too old for disagreeable situations. You’re one hell of a great actor. Alec is who he is. You are who you are. You two are incompatible. I should have known it. This one will haunt me. You tried to warn me. You said you were a different breed. I didn’t get it.” Russia's Missing Billions Revealed (FT) Russia's central bank governor has lifted the lid on $49 billion in illegal capital flight - more than half of which, he says, is controlled "by one well-organized group of individuals" that he declined to name. Sergei Ignatiev, due to step down in June after 11 years in his post, is seldom outspoken about any issue other than interest rates. But he unburdened himself in an interview with the Moscow newspaper Vedomosti about money leaving the country through the back door, which he said equaled 2.5 percent of gross domestic product last year. "This might be payment for supplies of narcotics...illegal imports...bribes and kickbacks for bureaucrats...and avoiding taxes," he told the daily, which is part-owned by the Financial Times. New York Times Looks To Sell Boston Globe (CNBC) This follows the Times Company's sale of other regional papers as well as the About.com group, as it focuses in on its core asset — the New York Times brand. And with that focus, the publisher is honing in on what's really been working for the company — the New York Times subscription model. The company has retained Evercore Partners to advise on and manage the sale, but won't say who it's already talked to, or how much it thinks the assets are worth. Citi analyst Leo Kulp, who calls this a "positive move," estimates that the segment could fetch about $200 million. The segment generated $395 million in 2012 revenue, which Kulp says implies about $67 million in EBITDA in 2012. He applies a three times multiple — "on the high end of comparable large metro newspaper sales" — to give the paper a $200 million price tag. Herbalife Prez Goes On Offensive (NYP) President Des Walsh, in a conference call, said that “despite what we believe to be unprecedented, unfair and untrue attacks on this company, our business continues to do well.” Deputies: Couple started fighting over man scratching himself (WWSB) According to the Manatee County Sheriff’s Office, Shalamar Petrarca complained to her boyfriend, 30-year-old Ronald Howard, that it was rude and disgusting to be “scratching his testicles” while she was about to eat dinner. She told deputies that Howard began yelling at her, pushed her into the kitchen, causing her to get a scratch on her ankle, then threw her out of the house. Howard told deputies that she punched him in the eye for “scratching his balls”, and the he pushed her through the door in self-defense. Deputies say Howard had no visible injuries, but Petrarca did have a scratch on her ankle.

Opening Bell: 06.05.12

Germany Pushes EU Bank Oversight (WSJ) Though Berlin has resisted a banking union, Ms. Merkel's initiative shows Germany is willing to talk about an overhaul and is trying to focus the debate on Europe's biggest banks. "We will discuss to what extent we need to put systemically relevant banks under a specific European supervisory authority so that national interests do not play such a large role," Ms. Merkel told reporters ahead of a meeting in Berlin with European Commission President José Manuel Barroso, referring to the June 28-29 summit. Citi Bets That Proof Leads To Profits (WSJ) Seeking a shot in the arm for the ailing banking business, Citigroup Inc. C -2.30% is expanding into a little-known but fast-growing field known as identity proofing—the tedious and time-consuming task of proving people are who they say they are. The third-biggest U.S. bank by assets later this month will begin issuing digital-identity badges to the employees of Defense Department contractors, ranging from makers of high-tech engineering parts to the janitors who clean the bathrooms. Citigroup is the only financial institution that has clearance to sell the identity cards and grab a piece of a market whose annual sales could reach into the billions of dollars. But the badge business is just the beginning. Citigroup's hope is that the contractors will eventually use the plastic on which the badges are issued for more than just identity verification. If companies adopt the technology, their employees will be able to collect paychecks and pay business expenses using the cards—enabling Citigroup to collect fees on all of those transactions. John Paulson Buys Saudi Prince’s $49 Million Aspen Palace (CNBC) The lavish ranch, sold by Saudi Prince Bandar bin Sultan, was once the most expensive estate ever listed in the U.S., with a price tag in 2006 of $135 million. The property includes a main house with 15-bedrooms, 16-baths, and 56,000-square-feet. It also includes several side buildings, as well as a water treatment plant, gas pumps and other high-tech features. Mr. Paulson’s $49 million purchase included two properties — the 90-acre main property as well as a 38-acre property nearby called Bear Ranch. Bear Ranch and Hala Ranch together might have once fetched more than $150 million in 2006 or 2007, according to Aspen real-estate experts. Blankfein: Nyet to Petersburg leaks (NYP) Goldman Sachs CEO Lloyd Blankfein yesterday squarely disputed his former director Rajat Gupta’s claim that Gupta was permitted to speak about details of a 2008 board meeting with his alleged co-conspirator, hedge-fund titan Raj Rajaratnam. “Did you authorize Mr. Gupta to reveal any of the confidential information discussed at the board meeting in St. Petersburg, Russia?” prosecutor Reed Brodsky asked the CEO. “No,” Blankfein said. The details included directors discussing the possibility of Goldman buying a commercial bank or insurance company, including AIG, in the early days of the mortgage crisis. MF Global Trustee Sees $3 Billion in Potential Claims (Reuters) MF Global Holdings could have more than $3 billion in claims against its former affiliates, Louis Freeh, the trustee overseeing the wind-down of the parent company of the collapsed broker-dealer, said in his first status report. The potential recoveries for the parent company's creditors will come primarily from such claims, Freeh said in his 119-page report that was submitted to the bankruptcy court. Former bath-salts addict: 'It felt so evil' (CNN) The man is strapped onto a gurney and restrained, yet he is singing, making faces and twitching. "You know where you're at?" a paramedic asks him, but Freddy Sharp can't answer. He was, he explained later, off in his own world after overdosing on the synthetic drug known as "bath salts." "I'd never experienced anything like that," Sharp told CNN's Don Lemon. "It really actually scared me pretty bad." He said he was hallucinating about being in a mental hospital and being possessed by Jason Voorhees, the character from the "Friday the 13th" movies. "I just felt all kinds of crazy," said Sharp, now 27, of Tennessee, who says he hasn't used bath salts in months. "It felt so evil. It felt like the darkest, evilest thing imaginable." The drug made national headlines recently after a horrific crime in Miami, where a naked man chewed the face off a homeless man in what has been called a zombie-like attack. Australia Central Bank Cuts Rates to Fight Global Gloom (Reuters) Australia's central bank cut interest rates for a second month running on Tuesday in a bid to shore up confidence at home, just as finance chiefs of advanced economies around the world prepare to hold emergency talks on the euro zone debt crisis. Citing a weaker outlook abroad and only modest domestic growth, the Reserve Bank of Australia cut its cash rate by 25 basis points to 3.5 percent. Burbank Bets On Global Recession With Subprime Conviction (Bloomberg) In the dozen years that John Burbank has run his $3.4 billion Passport Capital hedge fund, he’s never been as negative on global stocks as he is now. Burbank, 48, expects that the U.S. and much of the rest of the world will slide into a recession, and he’s setting up for that event with a big wager that global stocks will fall. Most of his peers are still betting that stocks, especially those in the U.S., are more likely to rise than decline. “You have a great contrarian outcome here that will be obvious in hindsight, just like subprime was,” Burbank said in an interview last month. “I have a lot of conviction about something that others don’t seem to see clearly.” In Facebook, Options Traders Shift to Post-Earnings Bets (WSJ) While June and July bets have been most active since Facebook options began trading last Tuesday—accounting for more than half of the total options outstanding—contracts expiring in August and September have been picking up steam. Downside options that expire after the company's first public earnings report—expected at the end of July, though no date has been set—were the most actively traded Monday. The most popular positions included bets Facebook would fall below $25 a share over the next two to three months. Real life Garfield eats his way to 40-pound frame (NYDN) A tubby tabby named Garfield was dropped off at the North Shore Animal League last week tipping the scales at nearly 40 pounds, and now the no-kill shelter is hoping to turn him into the biggest loser. “He needs to lose at least 20 pounds,” shelter spokeswoman Devera Lynn said. “He’s so big, he’s like a dog. He actually has his own room.” Garfield meanders slowly in smaller spaces. He’s being moved to a foster home Tuesday in hopes that a next of kin claims the orange-and-white kitty. But if that doesn’t happen, the North Shore Animal League has received several applications from folks willing to give him a permanent home. Lynn said they’ll work with an owner to put the cat on a healthier track. “He’s actually outgoing for a cat,” Lynn said. “Once he loses that weight, he’s going to be a rock star.”

(Getty Images)

Opening Bell: 3.14.17

Robert Shiller is doing that thing he always does; Carl Icahn strikes fear into the heart of AIG; Texas bill would ban male masturbation; and more.