Opening Bell: 08.13.14

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Barclays Seen Facing $2 Billion in Misconduct Costs (Bloomberg)
The U.K.’s second-largest lender may incur a 700 million-pound charge to settle a foreign-exchange probe with regulators and a further 200 million pounds relating to a U.S. investigation into its private-trading venue, Chirantan Barua, an analyst at Bernstein in London, said in a note today. The bank could reach settlements by the end of 2014, he said.

Banks Woo Treasury Sanctions Pros to Navigate Complex U.S. Rules (Bloomberg)
Companies including HSBC Holdings Plc (HSBA) and Deloitte Touche Tohmatsu Ltd. are beefing up compliance expertise to ensure they or their clients don’t violate the set of programs the Treasury Department has more than doubled to 37 over the past decade. At least eight people of a staff of about 200 have left the Treasury’s Office of Foreign Assets Control in the past year, including no fewer than six in 2014. As sanctions become the key weapon of economic pressure the U.S. is using to achieve its security and foreign policy goals, companies are rushing to hire employees versed in the intricacies of the Treasury’s rules. For banks, investment firms and the consulting companies helping them steer clear of violations, the stakes are higher because fines are getting bigger and the list of banned individuals and businesses has swelled to about 5,800.

Banks Retreat From Market That Keeps Cash Flowing (WSJ)
A critical part of the plumbing that keeps money flowing through the financial system is experiencing turmoil as new regulations prompt banks to step back from the multitrillion-dollar "repo" market. The large and opaque market for repurchase agreements helps keep finance and trading moving, allowing hedge funds, investment banks and other financial firms to borrow and lend short-term funds, often overnight. But there have been increasing signs of trouble. Big banks, which act as middlemen between borrowers and lenders, have been pulling back. In recent weeks, senior bankers have said they are reluctant to participate in the market because of regulatory requirements that make repo trading more expensive.

Using Software to Keep Pro Athletes and Startup Millionaires From Going Broke (BusinessWeek)
Wealthfront recently announced another publicity-friendly program, this time with a different group of millennials in mind: pro athletes. The company has an agreement with the San Francisco 49ers to offer investment advice to the organization’s employees and alumni, with the team covering fees on the first $100,000 each person invests. The idea is that rookie athletes aren’t so different from startup founders when it comes to their finances. Both might be about 23 years old, earn a salary of a few hundred thousand dollars, and wonder what to do with incentives that can reach into the millions—like a signing bonus or endorsement deal for the player, or equity for the coder. As part of the 49ers deal, Wealthfront will offer seminars on how to handle these windfalls. Professional athletes are notoriously bad at managing their finances. A 2009 Sports Illustrated investigation found that 78 percent (!) of former NFL players have gone bankrupt or are under financial stress within two years of retiring.

CrossFit Flirting: Talk Burpee to Me (NYT)
On a recent Saturday night at the Promenade Bar and Grill in the Kips Bay neighborhood of Manhattan, the gym buddies Festa Radoni, 26, and Ellen Gerlach, 29, flexed their biceps, comparing muscles as a male friend snapped photos. “She’s much better at pull-ups,” Ms. Gerlach said, laughing as she elbowed Ms. Radoni. Over in the corner, Caley Crawford, 25, in five-inch green heels and polka-dot shorts, hung out in a squat position while sipping her drink and chatting. Nearby, two women in strappy dresses discussed how much weight they could snatch — move quickly from ground to overhead — with two men who, like everyone else at the evening’s event, do CrossFit, a popular high-intensity strength and conditioning program that involves lifting very heavy weights. “Her grip strength is unreal,” one of the men said later of one of the women. He sounded awed. It was a fairly tame evening out with Team Dangerous, a kind of interfraternity council for CrossFit gyms in the five boroughs, whose other events — among them a prom (dress code: “gym flair”) — have been known to devolve into tequila-fueled handstand push-ups in the street or a penalty of 10 burpees (an explosive squat-push-up-leap combination) for whoever stopped drinking beer. The two-year-old group’s stated mission is to combine fitness and social activities with charity, but it mostly functions to widen the dating pool for CrossFitters. “I don’t want to jinx myself, but that’s very true,” admitted a co-founder, Jason Lucking, 27, who is British, tall and flirtatious (he was, by several accounts, a credible copy of the Australian actor Chris Hemsworth at a CrossFit Halloween party).

Argentina slams U.S. debt case judge despite contempt threat (Reuters)
Argentina came out swinging on Wednesday against the U.S. judge overseeing its debt default case, in defiance of a threatened contempt order, and disappointed market hopes it might soon restart talks with the hedge funds suing the country. A group of holdout investors have sued the South American country for full repayment on bonds that went into default in 2002. The funds rejected debt restructurings in 2005 and 2010, holding out for better terms. U.S. Judge Thomas Griesa, overseeing Argentina's long-running battle with the funds, said in New York on Friday that he would issue a contempt order unless the government stopped claiming it had met its obligations and was not in default. Far from backing off of those assertions, Cabinet Chief Jorge Capitanich said Griesa had been paralyzed by his own lack of understanding of the case and that no new talks had been scheduled with the hedge funds. "The proper conditions do not exist to negotiate," Capitanich said.

Wall Street Faces Pushback on CMBS Deals as Supply Booms (Bloomberg)
Bond buyers are pushing back as banks aim to sell at least $6 billion of the debt in August in the busiest U.S. summer since before the financial crisis for securities backed by loans tied to properties such as strip malls or skyscrapers. After overlooking deteriorating underwriting standards for months, investors are becoming more selective as geopolitical turmoil sparks a flight from risky assets, according to Bank of America Corp. analysts.

Banking Lobby Backs Stricter Codes of Conduct for Currency Traders (WSJ)
A lobby group for the biggest banks in the foreign-exchange market is backing tougher codes of conduct for traders, while seeking a cautious approach to tweaking currency benchmarks that are at the center of a yearlong regulatory investigation. The Global Financial Markets Association, whose members represent 90% of the $5.3 trillion-a-day currencies market, laid out a series of proposals for changes in a nine-page paper posted on its website late Tuesday. The document comes as a response to a call for ideas by the Financial Stability Board, which coordinates global financial regulatory efforts. The FSB published its own set of proposals for tweaks to the market in July and gave an Aug. 12 deadline for participants to respond.

Japanese Company Fights 'Moobs' With Bra For Men (HP)
Kaku Nishioka, owner of a Tokyo clothing store, has just started selling a guys-only garment known in Japanese as the Kahei Oyasumi bra. It is designed to help perk up a man's chest, called "moobs" by some, while he sleeps. "If a man has good pectoral muscles he is at just the same risk as a woman of having them gradually stretched and left out of shape," he told the Mirror. "A man who wears this bra to bed at night will find everything is held firmly in place and looking good the next day." The effects of gravity on a man's pectoral muscles have been underreported according to Nishioka.

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Opening Bell: 7.29.15

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Opening Bell: 09.28.12

Bank Of America Reaches Settlement In Merrill Lynch Acquisition-Related Class Action Litigation (BW) Under terms of the proposed settlement, Bank of America would pay a total of $2.43 billion and institute certain corporate governance policies. Plaintiffs had alleged, among other claims, that Bank of America and certain of its officers made false or misleading statements about the financial health of Bank of America and Merrill Lynch. Bank of America denies the allegations and is entering into this settlement to eliminate the uncertainties, burden and expense of further protracted litigation. Greece Seeks Taxes From Wealthy With Cash Havens in London (NYT) At the request of the Athens government, the British financial authorities recently handed over a detailed list of about 400 Greek individuals who have bought and sold London properties since 2009. The list, closely guarded, has not been publicly disclosed. But Greek officials are examining it to determine whether the people named — who they say include prominent businessmen, bankers, shipping tycoons and professional athletes — have deceived the tax authorities by understating their wealth. Libor Riggers May Be Criminal, Even If Acts Not Illegal at Time (CNBC) Those who took part in the manipulation of the London interbank offered rate (Libor), the key benchmark rate, could face criminal prosecution even though Libor manipulation is not yet a criminal offense. Martin Wheatley, who is advising the U.K. government on what changes could be made to Libor to stop manipulation in the future, said that U.K. regulator the Financial Services Authority (FSA) is considering prosecuting those who took part under “broad principles of conduct.” He also recommended that the government should give the FSA power to prosecute future Libor manipulation. Libor Furor: Key Rate Gets New Scrutiny (WSJ) "There's a concern that if you're going to base financial decisions on a particular interest rate" it should be a measure that responds to changes in market conditions, "and that's not Libor," said Andrew Lo, a finance professor at the Massachusetts Institute of Technology. Macquarie Bonuses Whack Profit (WSJ) Macquarie Group may have lost its reputation as the Millionaire’s Factory as profits slumped since the onset of the global financial crisis, but according to Citigroup analysts the bank’s net profit could have been 60% higher last financial year if not for a dramatic rise in bonus payments to staff...Wes Nason estimates that while the bank’s return on equity fell to 6.8% last financial year-–hitting its lowest level since it listed in the first half of fiscal 2012 and compared with a 10-year average of 18.4%—-its average bonus payments almost tripled to A$73,000 a head, up from A$26,000 in 2009. Replacement referee Lance Easley stands by touchdown call (NYDN) Lance Easley has been vilified for awarding the Seattle Seahawks a touchdown on its Hail Mary pass in the closing seconds of Monday night’s game against the Green Bay Packers even though pretty much everyone in the country saw that the pass had been intercepted. “I processed everything properly,” Easley told the Daily News Thursday. “It was supported on video. But the bad thing is, people don’t understand the rules in that whole play. “But that play rarely ever happens, it rarely happens in the field of play and it never happens in an NFL game,” he added. “And here I got stuck in the middle of it.” The call was reviewed on instant replay — and, amazingly, upheld, despite the refs also missing a pass interference infraction by a Seattle player. Since then the 52-year-old Bank of America banker has been swept up in a whirlwind of national outrage — one that forced the NFL to end a seven-week lockout of its unionized refs early Thursday. But Easley said he and his replacements did a good job in their stint in zebra stripes. “I know where I stand,” he said. “Everything I did ... I got support from all the referees and everything, and replay and our league office and anybody else that understands the rules and how those plays function. Spanish Rescue May Throw Crisis Spotlight on Italy (Reuters) Italian government bonds risk being thrown back into the spotlight of the euro zone debt crisis once Spain decides to request aid and secures central bank support for its debt. A partial bailout for Madrid would probably trigger the European Central Bank's bond-buying plan, lowering Spain's borrowing costs and increasing investor appetite for riskier assets in general, including debt issued by Italy. But Italy could then return to the forefront of market concern as the next weak link. "The risks increase that you will get a contagion into Italy," said David Keeble, global head of fixed income strategy at Credit Agricole. Cyber Attacks On Banks Expose Computer Vulnerability (WSJ) Cyber attacks on the biggest U.S. banks, including JPMorgan Chase & Co. and Wells Fargo & Co., have breached some of the nation’s most advanced computer defenses and exposed the vulnerability of its infrastructure, said cybersecurity specialists tracking the assaults. The attack, which a U.S. official yesterday said was waged by a still-unidentified group outside the country, flooded bank websites with traffic, rendering them unavailable to consumers and disrupting transactions for hours at a time. Such a sustained network attack ranks among the worst-case scenarios envisioned by the National Security Agency, according to the U.S. official, who asked not to be identified because he isn’t authorized to speak publicly. The extent of the damage may not be known for weeks or months, said the official, who has access to classified information. Fitch Ratings Cuts China, India 2012 Growth Forecasts (CNBC) In its September Global Economic Outlook, the ratings agency said it now expected China’s economy, the world’s second largest, to grow 7.8 percent this year, down from a forecast of 8 percent made in June. It also lowered its forecast for economic growth in India to 6 percent in the financial year ending in March 2013 from a previous estimate of 6.5 percent. CIT Chief Tries To Rescue Reputation (NYP) John Thain yesterday said he brought up executive compensation at the time his firm was getting bailed out by taxpayers not for selfish reasons but to determine how much control Washington would have over his company. “One of the issues we were worried about at the time was, if you take government money how much say does the government have in how you run your business?” Thain said during an interview on CNBC. Days earlier, Thain was trashed by former bank regulator Sheila Bair, who, in her upcoming book, “Bull By the Horns,” accuses the Wall Street veteran of being fixated on pay during the height of the financial Armageddon. Bair, the former Federal Deposit Insurance Corp. boss, wrote that Thain “was desperate for capital but was worried about restrictions on executive compensation.” “I could not believe it. Where were this guy’s priorities?” she wrote, referring to Thain. The CEO, who was tapped to run the troubled lender in 2010, also addressed during the CNBC interview rumors that CIT was looking to sell itself to a large bank. “It’s absolutely not true,” Thain said yesterday. Canada Cheese-Smuggling Ring Busted (BBC) A Canadian police officer was among three people charged as the country's authorities announced they had busted a major cheese-smuggling ring. A joint US-Canadian investigation found C$200,000 (£125,600) of cheese and other products were illicitly brought over the border into southern Ontario. The smugglers sold large quantities of cheese, which is cheaper in the US, to restaurants, it is alleged. The other two men charged were civilians, one a former police officer. The charges come three days after CBC News first reported the force was conducting an internal investigation into cheese smuggling. A pizzeria owner west of Niagara Falls told CBC that he had been questioned by police over the issue, but assured them he had not bought any contraband dairy. "We get all our stuff legit," said the restaurateur. "We thought it was a joke at first. Who is going to go around trying to sell smuggled cheese?"

Opening Bell: 03.05.13

Senate Report Said To Fault JPMorgan (NYT) A report by the Senate Permanent Subcommittee on Investigations highlights flaws in the bank's public disclosures and takes aim at several executives, including Douglas Braunstein, who was chief financial officer at the time of the losses, according to people briefed on the inquiry. The report's findings — scheduled to be released on March 15 — are expected to fault the executives for allowingJPMorgan to build the bets without fully warning regulators and investors, these people said. The subcommittee, led by Senator Carl Levin, could ask Mr. Braunstein and other senior executives to testify at a hearing this month, according to the people. The subcommittee does not currently intend to call the bank's chief executive, Jamie Dimon, but Congressional investigators interviewed Mr. Dimon last year. Citi CEO Is Keeping Score (WSJ) At a gathering of 300 executives last month at a Hilton Hotel in East Brunswick, N.J., Mr. Corbat proposed a slate of new, more-rigorous ways to track both the performance of individual executives and the third-largest U.S. bank as a whole, said people who were there. His approach includes score cards that will rate top managers across the New York company in five categories. "You are what you measure," Mr. Corbat told the gathering. Report Faults FSA Over Rate Rigging (WSJ) The report, commissioned by the FSA in the wake of the Barclays BARC.LN +1.48%PLC £290 million ($436.1 million) settlement with regulators over attempted rate-rigging, shows the regulator either ignored or failed to follow up on a series of red flags highlighting problems with the rates. Between 2007 and 2009, the FSA said it found 26 pieces of correspondence citing direct references to "lowballing"—where banks understated their borrowing costs to make their funding positions look stronger. These include two telephone calls from Barclays managers flagging problems with rate-setting process. The regulator also said it overlooked an article in The Wall Street Journal highlighting problems with the London interbank offered rate because the article wasn't widely read within the FSA. Heinz CEO's Golden Exit Deal (WSJ) The total would consist of a $56 million "golden parachute" including bonus payments and other items, $57 million in pension and deferred compensation and $99.7 million of Heinz shares that Mr. Johnson owns or controls, according to a Securities and Exchange Commission filing Monday. 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He wouldn’t leave, and he wouldn’t let anyone talk to him about shutting up, or what an oppressive country North Korea is. Eventually he had to leave the bar because the bartender was starting to get [bleep]ed-off.” Ikos Co-Founder Coward Sues Ex-Wife Over Hedge-Fund Software (Bloomberg) Martin Coward, the co-founder of Ikos Asset Management Ltd., sued his estranged wife, Elena Ambrosiadou, in a U.K. court over the copyright ownership of computer software that runs the hedge fund’s trading platform. Coward was the “architect” of the “bedrock of the family business,” his lawyers said at the start of a three-week trial in London today. “Practically all of the financial markets expertise at Ikos resided in Coward himself,” said Michael Bloch, Coward’s lawyer. Ikos, which uses computer algorithms to spot profitable trades in futures markets, has been embroiled in lawsuits involving Coward and other former employees around the globe. The estranged couple, who started divorce proceedings in Greece in 2009, have filed more than 40 lawsuits against each other in at least four countries. Sequester Leaves US In 'Fantasy' World: Analyst (CNBC) Stephen King, chief global economist at HSBC, said that the U.S. was living in a"fantasy world" over its growth forecasts. "If you look at the projections from the Congressional Budget Office (CBO) they assume that growth goes back to between 4 to 5 percent in real terms between 2014 and 2018. Their numbers suggest that the U.S. will post the fastest rate of productivity growth of any decade in the last 50 or 60 years," King told CNBC's "European Closing Bell." Former Lehman Derivatives Banker Helps Paschi Unravel Contracts (WSJ) Riccardo Banchetti, whose work packaging derivatives at Lehman Brothers Holdings Inc. got him the top European job at the firm a week before it failed, is now making a living unraveling the kind of deals he once developed. Banchetti worked with Banca Monte dei Paschi di Siena SpA to uncover 730 million euros ($955 million) of losses that the world’s oldest bank hid through the use of derivatives. The Italian banker, who also advised JPMorgan Chase & Co. (JPM) on its defence against fraud charges over swaps with Milan, has scrutinized more than 10 billion euros of transactions since leaving Lehman, according to a person with knowledge of his activities who asked not to be identified because they weren’t authorized to speak publicly. Drugs found in Florida suspects' orifices, deputies say (WPBF) According to the Charlotte County Sheriff's Office, a deputy who initiated a traffic stop on a car without brake lights found cocaine in a man's prosthetic leg. The deputy also found morphine and hydromorphine pills in a woman's bra and a hypodermic needle hidden in another woman's buttocks.

Photo: Bob Riha Jr/Getty Images

Opening Bell: 10.5.16

Julian Robertson sees 'a lot of sharks in the water looking to eat us right up'; Bill Gross says markets are 'a casino'; Twitter investor Chris Sacca suggests Twitter sucks; British man solves 'world's smallest Rubik's cube' with tweezers; and more.