Opening Bell: 07.30.14

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Argentine Bond Standoff Puts U.S. Judge in Focus (WSJ)
As Argentina hurtles toward a second default in 13 years, the local press has lit upon a convenient villain: 83-year-old U.S. District Judge Thomas Griesa. Cartoons in Argentine newspapers have shown the judge with a vulture perched behind him, accusing him of cozying up to the bondholders that Argentine government officials call "vulture funds." A journalist appearing on Argentine television said Judge Griesa is "not right in the head." A newspaper ad placed by the Argentine government blamed the judge, who has presided over the government's disputes with bondholders for more than a decade, for pushing the country toward default. Judge Griesa is squarely in the spotlight as Argentina faces a Wednesday deadline for more than $500 million in debt payments. Argentina is seen as unlikely to make the payments, bringing to a head a standoff with holdout hedge funds that have refused the country's two debt-restructuring offers over the past decade. At the center of the dispute is Judge Griesa's 2012 ruling that Argentina isn't allowed to pay its restructured bondholders until it pays the holdouts—a decision that legal analysts call unprecedented and that the Argentine government contends puts it in a costly legal bind. A default could keep Argentina out of international credit markets and dent a struggling economy.

As Talks Falter, Bond Default by Argentina Appears Likely (Dealbook)
On Tuesday, a group of investors of Argentina’s euro-denominated exchange bonds urged the judge to issue an emergency stay on his ruling. But this is unlikely to be granted unless the holdouts request it, analysts said, or the court-appointed mediator, Daniel Pollack, recommends it...last week, Judge Griesa ordered the Argentine delegation and the holdouts to meet with Mr. Pollack and talk “continuously” until an agreement was reached. The response from Argentina was tepid; the delegation met twice with Mr. Pollack last week before returning home to Buenos Aires for the weekend to consult with the government. When a group of lawyers returned to Mr. Pollack’s offices on Tuesday, they arrived more than 15 minutes late. And despite Mr. Pollack’s insistence that they engage in “face-to-face conversations with the bondholders,” as of Tuesday evening, the Argentines had yet to sit down across the table from the holdouts.

Schneiderman probes Credit Suisse’s ‘dark pool’ (NYP)
New York Attorney General Eric Schneiderman has launched an investigation into whether Swiss bank giant Credit Suisse misled investors about its “dark pool” trading platform, The Post has learned. The probe comes a month after Schneiderman sued Barclays for allegedly lying about the presence of predatory traders in its dark pool. The British bank denied wrongdoing and has asked a judge to dismiss the suit. Regulators are taking a closer look at dark pools — lightly regulated alternative trading systems — because of concerns that high-frequency traders are leveraging them to their advantage. Credit Suisse is the operator of the largest bank dark pool in the US, accounting for about 14 percent of all trades, according to data from the Financial Industry Regulatory Authority.

Icahn cuts stake in Family Dollar (Reuters)
Activist investor Carl Icahn cut his stake in Family Dollar Stores Inc (FDO.N), a day after the company agreed to be bought by rival discount chain Dollar Tree Inc (DLTR.O) for $8.5 billion. Icahn said he was "determined" to dispose part of his stake rather than wait for the deal to close or for higher offers to emerge. Icahn, who had threatened a proxy war against the struggling discount chain if it did not put itself up for sale, said on Monday there were "a handful of potential buyers" who could be a better fit to buy Family Dollar.

Wall Street Bids Farewell to Alan Greenberg, Head of Bear Stearns (Dealbook)
The service began on time at 11 a.m. and lasted just about an hour, honoring the no-nonsense style of Mr. Greenberg, who was known as Ace. The mourners recalled his idiosyncratic business advice, his love of big-game hunting and his magic tricks. A representative of the Society of American Magicians, as is customary, snapped Mr. Greenberg’s magic wand in two.

Man Lied About Pen!s Amputation During Circumcision: Doctors' Lawyer (AP)
An attorney for two Alabama doctors accused in a lawsuit of amputating a man's penis in what was supposed to have been a routine circumcision filed a motion Tuesday seeking to dismiss the claims. Attorney Mike Florie says his clients, Dr. Michael Bivins and Dr. Alan Aikens, never performed a circumcision on Johnny Lee Banks Jr. that involved the removal of tissue or the amputation of the man's penis. He said the suit's claims are false. Banks' attorney, John Graves, filed the lawsuit on July 22, accusing the doctors and their medical groups of malpractice, negligence and other wrongdoing. It seeks an unspecified amount of money. Graves says he stands firmly by the allegations but would not comment on specifics of the case. "I don't file frivolous lawsuits," he said.

Europe’s investment banks bounce back (FT)
After a long period in which they lost market share to their US rivals in the crucial business of debt sales and trading, they are finally regaining some ground. Both Deutsche Bank and UBS published results on Tuesday that showed an outperformance in the business of trading debt and currency instruments. However, what looks like a robust showing compared with their US rivals is not actually a positive performance in absolute terms. Deutsche just managed to keep its revenues in fixed income and currencies steady at €1.8bn compared with a year ago, while Swiss rival UBS reported a drop of 2 per cent to SFr355m – excluding a one-off gain from an asset sale – in its foreign exchange, rates and credit unit. These numbers compare with an average fall in fixed income, currencies and commodities of 9 per cent across the biggest US banks. This was still much better than expected after analysts had expected steep declines in FICC trading.

Twitter Tops Quarterly Estimates for Sales, User Growth (Bloomberg)
The microblogging company’s active membership in the quarter reached 271 million, with year-over-year growth at 24 percent, compared with 25 percent in the prior period, Twitter said in a statement today. That exceeded analysts’ projections of 267 million monthly active users for the quarter, according to data compiled by Bloomberg. Sales more than doubled to $312.2 million, exceeding the $282.8 million average estimate.

HSBC, ABN Sue Metals Trader Detained Over Qingdao Probe (Bloomberg)
Chen, who has been detained in China according to Singapore’s foreign ministry, is the focus of a Chinese probe into alleged fraud at Qingdao port, two bankers assisting with the investigation said last month. Chinese banks have about 20 billion yuan ($3.2 billion) exposure to Chen’s companies, two China government officials said July 16.

Oklahoma Woman Calls Cops To Complain About Purity Of Her Meth (HP)
Police often have to ferret out illegal drug users. But a 54-year-old Oklahoma woman reportedly made it easy for the law. She allegedly called the cops to complain that she thought her methamphetamine was laced. Lynette Rae Sampson invited the officer over, showed him the goods and got arrested, despite her uncommon hospitality. "I'm glad you came," she allegedly told the policeman when he arrived.

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Opening Bell: 01.28.13

Davos Money Men Say World Emerges From Doldrums Fretting Relapse (Bloomberg) “Optimism, but with a sober tone,” was how Bank of America Chief Executive Officer Brian T. Moynihan characterized the mood pervading the World Economic Forum’s annual meeting, even as investors were lifting the Standard & Poor’s 500 Index above 1,500 for the first time since 2007. Fed To Keep Money Spigot Open (WSJ) Federal Reserve officials are likely to continue their easy-money policies when they gather this week to weigh a mixed economic outlook and a recent run of low inflation. The Fed has said it would maintain its $85 billion bond-buying programs, aimed at boosting the economy by lowering long-term interest rates, until it sees substantial progress in labor markets. It has also said it would keep short-term interest rates near zero until the jobless rate drops to at least 6.5%, as long as inflation remains steady. Beneath the Calm, SAC Works to Contain Fallout From Inquiry (NYT) "This has always been a stressful place to work," said an SAC employee who requested anonymity because he was unauthorized to speak publicly about the fund. "Now it's just more stressful." Mr. Cohen's fund was dealt a blow last week when a Citigroup unit that manages money for wealthy families disclosed that it was withdrawing its $187 million investment. The move by the bank was the most prominent client departure since November, when the multiyear investigation into SAC's trading practices entered a more serious phase. Citigroup's withdrawal represents a tiny percentage of SAC's $14 billion in assets under management. The fund has said it expects total investor redemptions for the first quarter of up to $1 billion, a number that an SAC spokesman has said will not adversely affect its business...Still, the Citigroup decision stung, say peopleclose to SAC's business, because of the longstanding and lucrative relationship between the bank and the fund. Another concern, said these people, is that the move could influence other large SAC investors currently weighing whether to keep their money at the fund. For Citigroup, its withdrawal of money from SAC carries substantial business risk. The bank has a vast relationship with SAC, earning revenue by providing the fund with financing and trading services. SAC could exact retribution on Citigroup by terminating, or at least scaling back, its broader relationship with the bank. An SAC spokesman declined to comment. Credit Suisse Could Owe $2 Billion Over Fraud (Reuters) Credit Suisse Group faces a potential $2 billion of exposure over fraud that occurred a decade ago at National Century Financial Enterprises, a result of a federal judge's determination on how to apportion responsibility. Friday's decision by U.S. District Judge James Graham could expose the Swiss bank to hundreds of millions of dollars of added liability over the activities of Lance Poulsen, who co-founded National Century in 1990 and was its chief executive. He is now serving a 30-year prison term and is presumed insolvent. Goldman Raising $1 Billion From ICBC Share Sale (WSJ) The Wall Street company is selling the Hong Kong-listed shares in a block trade at 5.77 Hong Kong dollars (US$0.74) each, the people said, without disclosing the number of shares. The price represents a 3.0% discount to ICBC's HK$5.95 closing price Monday. A person familiar with the situation said the sale reflects prudent risk management on Goldman's part to reduce the size of its ICBC investment. MBA's Salary Enhancing Power Slashed (FT) Students on the top US MBA programs in the mid-1990s saw their salaries triple in five years, but those who graduated from the same schools in 2008 and 2009 saw that increase halved, according to data collected for the FT's annual Global MBA rankings. At the same time, MBA fees have risen by 7 percent a year. MBA students who enrolled in 2012 paid 62 percent more in fees - up 44 percent in real terms - than those who began their programs in 2005, even though the increases in post-MBA salaries remained in line with inflation. Beyonce has yet to apologize to Chuck Schumer for lip-syncing at inauguration (NYP) The New York senator angrily admitted yesterday that the pop queen has not called him to say sorry after she turned last week’s inaugural bash into an unexpected Milli Vanilli concert by lip-syncing “The Star-Spangled Banner.” “I have not heard from her before, during or after,” a testy Schumer told The Post after he was asked if Beyoncé had called him to give a musical mea culpa. “She did not talk to me at all. I didn’t say any words to her, period.” Schumer has been credited with drawing the pop diva and her hubby Jay-Z to the inauguration, where many said they stole the show from the president and first lady walking hand-in-hand on the steps of Capitol Hill. Schumer was seen beaming with pride just steps behind Beyoncé while she appeared to be belting out the National Anthem. Obama administration insiders and inauguration planners were in the dark about Beyoncé’s decision to use a prerecorded tape of her singing with the Marine Band during the swearing in. They were later left fuming over the embarrassment, according to reports. Some on Capitol Hill have even placed the blame on Schumer for the Star-Spangled sham. There’s a Twinkie in the eye of Apollo (NYP) Hostess Brands is expected to name Leon Black’s Apollo Global Management as the preferred bidder for Twinkies and its other snack brands, The Post has learned. The announcement from the bankrupt baker could come as soon as today, sources said. The selection of Apollo would give Manhattan buyout billionaire Leon Black the inside track to buying one of the country’s most well-known consumer brands. Black’s Apollo and co-bidder C. Dean Metropoulos, a veteran food exec, were vying with Grupo Bimbo, the Mexico-based baker, for the right to be the preferred, or stalking horse, bidder for Twinkies, Ho Ho’s, Ding Dongs and other Hostess snacks. Bank of America Moves $50 Billion of Derivatives to UK (FT) Bank of America has begun moving more than $50bn of derivatives business out of its Dublin-based operation and into its UK subsidiary, according to people close to the operation. The move, part of the group's global drive to rationalize its operations, has been encouraged by regulators but will also allow BofA to benefit from tax breaks stemming from the accumulated losses in its UK business. Singer Backs Off Aggressive Stance In Dealings With Buenos Aires (NYP) After a decade of aggressively pursuing $1.44 billion he claims the country owes him and a group of bondholders, including successfully pressing Ghana to seize a locally docked Argentine naval vessel to help pay down the debt, the billionaire New York hedge fund mogul is sounding like Bobby McFerrin in “Don’t Worry, Be Happy.” Singer’s Elliott Management now feels Argentina will do the right thing, according to recent court filings. It’s quite a change from last fall’s legal arguments, in which Singer urged a federal judge to hurry up and force Buenos Aires to put some of the monies owed into escrow, citing the country’s president’s plot to avoid the debt payment. Italians Have a New Tool to Unearth Tax Cheats (NYT) Despite the government's best efforts, tax evasion remains something of a pastime in Italy, where, famously, more than a few of the Ferrari-driving set claim impoverishment when it comes to declaring their incomes. So this month, not without controversy, the National Revenue Agency decided to try a new tack. Rather than attempting to ferret out how much suspected tax cheats earn, the agency began trying to infer it from how much they spend. The new tool, known as the ''redditometro,'' or income measurer, aims to minimize the wiggle room for evasion by examining a taxpayer's expenditures in dozens of categories, like household costs, car ownership, vacations, gym subscriptions, cellphone usage and clothing. If the taxpayer's spending appears to be more than 20 percent greater than the income he or she has declared, the agency will ask for an explanation. Traders Make Peace With Computers (WSJ) On a recent day on Barclays PLC's stock-trading desk in Manhattan, an electronic platform posted a notice that Barclays was selling a large block of Pfizer shares. In recent years, a computer typically would have swiftly matched such an order with a buyer, sidestepping trading floors altogether. But soft trading volume has left many traders unable to move stock as quickly as they might like. That is one reason why Barclays connected its recently launched DirectEx platform to its trading floor. The move paid off when a client who was buying 150,000 shares on the electronic network decided, after chatting with a Barclays salesman, to take an additional 150,000 shares. Woman Found with 92 Pounds of Marijuana in N. Bellmore (Patch) According to detectives, around 6 p.m., an unmarked First Precinct police car observed Mizzie Artis, 27, of Bellport, operating a 1999 Hyundai eastbound on Columbus Avenue while talking on a cell phone and not wearing a seat belt. Police then observed Artis drive to Armand Street where she met with a male subject in a minivan. As officers drove by both vehicles to further observe, the male subject fled the scene in the van, police said. Artis drove away and failed to stop at a stop sign and did not signal when turning, police said. Officers stopped Artis and, upon approaching the car, observed two large cardboard boxes in the auto. Officers also detected an odor of marijuana emanating from the vehicle. K-9 officers responded to the scene and performed a narcotic search of the vehicle. The cardboard boxes in the front seat had a positive alert for narcotics, police said. Two additional boxes were recovered from the trunk containing marijuana, bringing the total approximate weight to 92 pounds.