Opening Bell: 05.20.14


EU Files Formal Charges Against Three Banks Over Interest-Rate Cartel (WSJ)
The move comes five months after EU authorities fined six banks €1.71 billion ($2.3 billion) for colluding to manipulate key benchmark interest rates, representing the EU's largest ever penalty in a cartel case. Three banks— Crédit Agricole, HSBC, and JP Morgan —didn't settle with regulators in December over a cartel to rig the pricing of interest rate derivatives denominated in euros. It is those banks that have now been sent a so-called statement of objections, which outlines the European Commission's concerns. The EU in December settled with four other banks— Barclays, Deutsche Bank, RBS, and Société Générale —which admitted involvement in the cartel, and had their fines reduced by 10% for agreeing to settle.

Princeton’s Top Money Managers Get 46% Pay Raise in 2013 (Bloomberg)
Andrew Golden, the president of Princeton University Investment Co., the company known as Princo that manages the school’s $18.2 billion endowment, collected $3.9 million in total compensation last year. The 55-year-old’s remuneration included a 94 percent increase in retirement and deferred compensation and a 48 percent jump in bonus pay, according to the university’s latest tax return.

Ackman takes aim at Allergan CEO (NYP)
Activist investor Bill Ackman alleged in a letter Monday that Allergan Chairman and CEO David Pyott has been conducting “one-on-one” meetings with the Botox maker’s largest shareholders while refusing to allow independent directors to talk with them. Allergan last week rejected a hostile takeover bid valued at $50 billion by Valeant Pharmaceuticals, supported by Ackman, whose Pershing Square hedge fund holds a 9.7 percent stake in Allergan. The activist investor, in his letter, said Pyott has a “disabling conflict of interest” because he will likely lose his CEO position if the merger goes through. The letter was addressed to Michael Gallagher, Allergan’s lead independent director, who refused to have a private conversation with Ackman.

Swiss Face Conundrum as ECB Signals Further Stimulus (Bloomberg)
Swiss policy makers are under increasing pressure to come up with a contingency plan to curb gains in the franc that would likely result from a fresh round of stimulus from the European Central Bank next month. The Swiss National Bank already has a zero interest-rate policy, in part to keep the nation’s currency from rising beyond the 1.20 franc-per-euro cap in place since 2011. It would need to take steps to defend that level if the ECB cut rates or broadened asset purchases, according to 52 percent of respondents to a Bloomberg News survey this month.

Man Wearing "It's All Fun & Games Until The Cops Show Up" T-Shirt Is Arrested When The Cops Show Up (TSG)
The 35-year-old bank robbery suspect was wearing a t-shirt declaring “It’s all fun & games until the cops show up” when police showed up yesterday morning and arrested him as he exited an Idaho motel. Fisher and Jennifer Balfe, 19, were collared in connection with Friday’s robbery of a U.S. Bank branch in Cottonwood (pop. 900). They were each jailed on robbery, burglary, and grand theft counts. Investigators reportedly got on Fisher’s tail after receiving an anonymous tip that a man matching the suspect’s description had been spending wads of cash at a local casino.

Investors Plow Into Riskier Bonds (WSJ)
Investors have been buying up corporate bonds with a triple-C rating, a grade that analysts and investors consider highly speculative. That buying is driving up prices on those bonds and pushing down their yields, which this month fell to 8.187% on a closely watched Bank of America Merrill Lynch index—the lowest level on record. Yields fall when prices rise. Demand for those and other bonds rated below investment grade—so-called junk bonds—is helping fuel corporate merger-and-acquisition activity. Ortho-Clinical Diagnostics Inc. on May 8 sold $1.3 billion of junk notes to yield 6.625%, in part to back Carlyle Group LP's acquisition of Ortho-Clinical from Johnson & Johnson. The sale was increased from $1.15 billion.

ECB Said to Weigh Fed-Style Meeting Schedule on Policy (Bloomberg)
The European Central Bank is considering holding its meetings to set interest rates every six weeks instead of monthly, according to three people familiar with the discussions. Extending the period between monetary policy decisions could help the ECB to agree on and publish minutes before the next rate-setting session, the people said, asking not to be identified because the plans are still being discussed. The timetable echoes that of the U.S. Federal Reserve, which has eight scheduled meetings a year and publishes an account three weeks later.

Target gives ex-CEO $16M severance package (NYP)
Target’s former CEO took a steep pay cut in his final year — but he’s not going to starve. Still smarting from its embarrassing holiday credit-card data breach, Target said Monday it slashed Gregg Steinhafel’s 2013 compensation by 37 percent and trimmed $5.4 million from his retirement benefits. That left Steinhafel with just under $13 million in total compensation last year, down from $20.6 million a year earlier, the company disclosed in its annual proxy. Nevertheless, the ex-CEO will still receive a severance package valued at $15.9 million under provisions governing his “involuntary termination for reasons other than for cause,” according to the filing.

Woman's car attacked by self-identified 'high elf' battling evil (KATU)
The last thing the woman from Northeast Portland probably expected when she got up Tuesday morning was that she would be attacked by a sword-wielding elf. But that's what happened around 7 a.m. as she drove her red BMW by the intersection of Southeast 7th and Morrison. A man dressed in chain-mail with a helmet, shield and carrying a sword and staff ran into traffic and started attacking her car. She called 911, reporting that "a pirate" was attacking her car. When police got there, they detained Konrad Bass of Glendale, Oregon. Bass told officers that he wasn't a pirate but a "high-elf engaged in battle with the evil Morgoth." Morgoth is a character created by JRR Tolkien in a prequel to the Lord of the Rings stories. In the stories, he is the character from which all evil grew. Bass, who was cited for criminal mischief and transported to Providence Hospital, also told officers he had taken LSD. The woman's car had several puncture marks.


Opening Bell: 4.18.16

Morgan Stanley beats estimates; Osborne says UK economy faces permanent hit with Brexit; Owl's ring delivery goes spectacularly wrong at Canadian wedding; and more.