Opening Bell: 08.19.14

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Bidding War Breaks Out to Dominate Dollar Stores (WSJ)
Dollar General Corp, the biggest dollar-store chain in the U.S., on Monday offered to pay $9 billion in cash for the second-biggest, Family Dollar Stores Inc., the latest in a wave of retail mergers that comes as companies struggle with weak traffic and a glut of stores. The offer is an attempt to elbow out the smallest of the three rivals, Dollar Tree Inc., which signed an agreement to acquire Family Dollar three weeks ago. Family Dollar's board said on Monday that it would review the new $78.50-a-share offer, but continued to recommend shareholders vote for its $74.50-a-share deal with Dollar Tree. Dollar Tree declined to comment. Family Dollar's stock closed above either price at $79.81, suggesting investors expect the bids to go higher.

Louis Bacon’s Bahamas battle reaches New York court (FT)
A battle over Clifton Bay, a postcard-perfect patch of turquoise waters off the western coast of the Bahamas, has raged for years between a billionaire hedge fund owner and a Canadian clothing mogul. It has now spilled into a New York courtroom in what one side hopes will finally settle the score. Louis Bacon, the billionaire founder of hedge fund Moore Capital Management, took legal action last week by asking a US court to try to gain access to videotaped footage he believes will help him prove that Peter Nygard, founder of clothing manufacturer Nygard International and his Bahamian neighbour, has engaged in a smear campaign against him. The backdrop is a long-running legal feud involving multiple lawsuits over whether Mr Nygard is, as Mr Bacon alleges, harming the environment around Clifton Bay, a beach made famous by James Bond movies, where both men have compounds... The setting for the feud is the exclusive Lyford Cay community on Clifton Bay. In 1993 Mr Bacon bought a 150,000 sq ft estate in a gated community. His nextdoor neighbour is Mr Nygard, who also owns a large estate and has been a permanent resident of the Bahamas since 1986. Mr Nygard has constructed a “Robinson Crusoe playground” with volcanic, smoking Mayan temples, a disco club and 20 themed cabanas where he has hosted celebrities, according to his website.

Goldman to face Libya's sovereign wealth fund in court over trades (Reuters)
Goldman Sachs and Libya's sovereign wealth fund are set to meet in a London court over claims the Wall Street bank exploited a position of trust by encouraging the fund to invest more than $1 billion in trades that ended up worthless...The fund, which became a Goldman client in 2007, alleges that the bank deliberately exploited the relationship of trust and confidence it had established with LIA staff, causing the fund to enter into the disputed trades. The LIA estimates that Goldman made substantial profit of around $350 million on the trades, while it was left with "colossal" losses.

BofA’s Montag Becomes Sole COO as Darnell Seeks Transfer (Bloomberg)
Bank of America's’s Thomas K. Montag, the lender’s top-paid senior manager, will become sole chief operating officer as co-COO David Darnell takes a new title so he can move to Florida. Darnell, 61, will be vice chairman and continue overseeing global wealth and investment management, as well as business banking, Chief Executive Officer Brian T. Moynihan wrote in a memo to employees. Montag, who has split the COO job with Darnell since 2011, will still run the investment banking and capital markets businesses.

Steven Cohen's Firm Loses Another Top Executive (WSJ, earlier)
Thomas Conheeney, who rose over 15 years to become president of Mr. Cohen's giant hedge-fund firm, resigned Monday, capping a tenure as head of the firm during which eight current or former employees were convicted on criminal charges related to insider trading. Mr. Conheeney was one of the firm's most vocal defenders during the government's prosecution of SAC Capital Advisors LP, now called Point72 Asset Management. He will be succeeded by Douglas Haynes, a former director at McKinsey & Co. who was appointed earlier this year to the hedge-fund firm's executive committee. The turn to Mr. Haynes, 48 years old, is the latest in a series of changes the firm has made—or had thrust upon it—as it has grappled with the effects of the government's insider-trading investigation.

The Reason We Yawn (WSJ)
To get to the bottom of yawning, scientists have performed dozens of experiments on groups of people and animals, including baboons and parakeets. Yawning is one of the animal kingdom's great unifiers. It seems almost any creature with a backbone does it. A leading hypothesis is that yawning plays an important role in keeping the brain at its cool, optimal working temperature. The brain is particularly sensitive to overheating, according to Andrew Gallup, an assistant professor of psychology at the State University of New York at Oneonta. Reaction times slow and memory wanes when the brain's temperature varies even less than a degree from the ideal 98.6 degrees Fahrenheit.

Man Fakes Death To Avoid Wedding (HP)
August 15 would have been Alex Lancaster's wedding day -- if her fiancee hadn't faked his own death. Lancaster, 23, of the United Kingdom, reportedly met Tucker Blandford, also 23, in August 2012, when she was attending college in Connecticut. The two fell quickly in love. "He was such a gentleman. He showered me with jewelry. We would go out for a posh dinner on the tenth of every month to celebrate the day we got together," Lancaster said, according to the Mirror. "I'd never been in love like that before. I met his family and they treated me like a daughter. His mum and I became so close." Lancaster feared their good thing would come to an end when she returned home, so when Blandford proposed marriage, she was eager to say yes. The two talked every day and started planning a wedding in Connecticut. Lancaster said she spent money on a dress, invitations and for flights for Blandford so he could see her in the U.K. Things changed a few months ago, when she got a call from a man who said he was Blandford's father. "He told me Tucker had been deeply depressed and wanted to die, so had thrown himself in front of a car," she said, according to Yahoo! News UK. "The man explained that they had been trying to send Tucker off to a psychiatric unit for help. But it was too late. I couldn't breathe. It was absolutely devastating." She got off the phone emotionally shattered, but things took a weird turn when she called the family back a short time later. Blandford's mom answered the phone, but had no clue that her son had died. In fact, he was alive and well. "She said Tucker was absolutely fine –- but she also thought we'd split up," Lancaster told Reveal.co.uk. "She knew nothing about the wedding." Lancaster quickly discovered that the venue they had supposedly reserved for their wedding had no record of their booking. Although Blandford has since texted to say he was sorry, and has paid back half the $1,200 he owes her for wedding-related expenses, Lancaster refuses any contact...Blandford admits Lancaster's allegations are true. "I’m a terrible, awful person. I know I shouldn’t have told her I was dead, but I didn’t know what else to do," he said.

Singer to subpoena 123 companies for Argentina money (NYP)
Billionaire Paul Singer’s treasure hunt for Argentine assets will lead to a slew of fresh subpoenas this week, including one to a company located on Manhattan’s Madison Avenue, The Post has learned. Singer’s hedge fund Elliott Management, which has been in hot pursuit of assets to satisfy $1.5 billion in judgments tied to defaulted Argentina bonds, won a big victory last week when a federal judge in Nevada authorized him to go after 123 Nevada-based companies tied to Argentine businessman Lazaro Baez. The probe into Baez put Elliott hot on the trail of another Argentine businessman Cristobal Lopez — the wealthy and well-connected pal of the late Argentina President Nestor Kirchner, sources close to the matter tell The Post. Nestor’s widow, Cristina, succeeded him as president. Now Singer intends to use the powers granted by the Nevada court last week to issue subpoenas to at least two Nevada companies tied to Lopez, a source familiar with Singer’s thinking said. He is seeking information that could let him seize state assets.

Pimco Scoops Up Quality Junk Cast Off in High-Yield Fund Exodus (Bloomberg)
In their rush to meet redemptions, high-yield money managers picked the wrong assets to sell and created pricing that’s “quite attractive” for some instruments rated just below investment grade, Mark Kiesel, Pimco’s global head of corporate bond portfolio management, said at a media briefing in Sydney today. “High-yield managers have been selling, in our opinion, what they shouldn’t be selling,” said Kiesel, who’s also a deputy chief investment officer at the Newport Beach, California-based company. “They’ve been selling the safest part of the high-yield market, the BBs. We’ve been cherry picking many of these assets over the last couple of weeks and buying them because they’re trading at significant discounts to where we think fundamental value is.”

SNB to Cap Franc Until 2016 as Euro-Area Recovery on Hold (Bloomberg)
The Swiss National Bank is seen maintaining its cap on the franc for at least another two years as the economic revival in the neighboring euro area struggles to gain tractions. More than three quarters of the respondents in the Bloomberg Monthly Survey of 23 economists say that the central bank will keep its ceiling of 1.20 per euro at least until 2016. Not even a 10th say it will remove the barrier next year.

Bitcoin’s Price Falls 12%, to Lowest Value Since May (Dealbook)
“This is just how Bitcoin trades, for better or worse,” said Barry E. Silbert, who oversees a Bitcoin investment fund through his company, SecondMarket. “This is normal — par for the course.”

Every time a congressional staffer has edited the Choco Taco Wikipedia page (WaPo)
The Twitter bot @CongressEdits has, since July 9, gleefully collected the Wikipedia edits of anonymous congressional staffers. Some of the edits are funny; some serious; some mundane. But surely none has enchanted the cynical public more than the entry for Choco Taco, which has been edited six times by staffers at either the House of Representatives and the State Department, during the workday (!!), since the page was opened in January 2007.

Zoo-Goer Climbs Into Giraffe Pen, Gets Kicked In Face (AP)
A police report says 24-year-old Amanda Hall, of San Luis Obispo, California, climbed over one fence and almost got over the second fence of the giraffe enclosure at the Henry Vilas Zoo about 5:30 p.m. Saturday. A 2-year-old, 12-foot-tall giraffe named Wally gave Hall a lick, then turned and kicked her in the face. Zoo staff told police that giraffes are capable of killing lions, so the woman was fortunate that her injuries were not life-threatening. Police ticketed Hall for harassment of zoo animals, which has a fine of $686. The police report says Hall told officers she climbed into the exhibit because she loves giraffes.

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Opening Bell: 04.22.13

Bill Gross Attacks UK and Euro Zone Austerity (FT) Bill Gross, manager of the world's largest bond fund for Pimco, has launched a stinging attack on efforts by Britain and much of the euro zone to cut debt rapidly with severe austerity measures, warning that such action risks stifling recovery. "The U.K. and almost all of Europe have erred in terms of believing that austerity, fiscal austerity in the short term, is the way to produce real growth. It is not," Mr Gross told the Financial Times. "You've got to spend money." Argentina's New Debt Offer Rejected by Holdout Creditors (WSJ) Holdout creditors on Friday rejected Argentina's proposal to pay them about 20 cents on every U.S. dollar of bonds they own, leaving a U.S. appeals court to decide how to enforce a ruling that may push Argentina into a new default. "Not only are the details of Argentina's proposal unacceptable and unresponsive; Argentina fails even to provide this court with meaningful 'assurances' that it will actually comply with its own proposal," said Theodore Olson, a lawyer for the holdouts, in a brief filed Friday. Argentina's own math values the offer at $210 million, less than 15% of the $1.47 billion that holdouts were owed on their defaulted bonds as of March 1, according to the brief. Hedge Fund Stars Suit Up At Yankee Stadium To Attract Investors (NYP) Hedge-fund mogul Stevie Cohen will be pitching at Yankee Stadium tomorrow. No, the 56-year-old billionaire is not suiting up for the Bronx Bombers — but he will be hoping the magic of the House that Ruth Built will yield some investment cash. Cohen, whose SAC Capital faces a loss of $1.7 billion from investors who want out of his $15 billion hedge fund, is one of about 70 hedge fund managers who’ll be at the Stadium tomorrow making a pitch to prospective new investors at a day-long event sponsored by Goldman Sachs. Singapore Will Replace Switzerland As Wealth Capital (CNBC) Switzerland has $2.8 trillion in assets under management, with $2.1 trillion of that coming from offshore wealth. Switzerland accounts for 34 percent of the $8.15 trillion in total global wealth. Yet the report said Singapore could overtake Switzerland in offshore assets under management by 2020. It said Swiss offshore assets could fall below $2 trillion by 2016, while Singapore's assets could more than quadruple by then. Somali Banking Starts From Ground Up (WSJ) Abdusalam Omer is a central bank governor without much to govern. The Central Bank of Somalia doesn't hold reserves in the country's currency, the shilling. There are no functioning commercial banks in the strife-torn country for it to regulate. The 75-strong staff that still turns up for work after two decades of civil war is a motley crew of money men and handymen. "I don't know why the central bank employs painters," says the 58-year-old who was named the country's top banker in January. Eventbrite Funding Slows Its IPO Chase (WSJ) Eventbrite Inc., an event ticketing company, has raised $60 million from two investors, making it the latest example of a startup to raise significant private late-stage funding that puts off an initial public offering. San Francisco-based Eventbrite had sparked expectations of an imminent IPO when it said earlier this month that it hired a chief financial officer, Mark Rubash, who previously worked at Yahoo Inc. and eBay Inc. Instead, it joins a growing number of companies that have found plentiful funding in the private markets rather than going public at an early stage. The company has raised the new cash from mutual-fund firm T. Rowe Price Group Inc. and Tiger Global Management LLC, an investment-management firm, said Kevin Hartz, co-founder and chief executive. That brings its total private fundraising to some $135 million since its inception in 2006. "This gives us flexibility in setting the timeline for a later IPO, on our schedule," said Mr. Hartz. Deutsche Bank Margin Call on Vik Sparks $2.5 Billion Dispute (Bloomberg) Alexander Vik went to Deutsche Bank AG’s London office in October 2008 to meet account managers who congratulated the Norwegian entrepreneur on how well his Sebastian Holdings Inc. investment fund was doing. Within a month, as global markets tumbled into crisis, the same bankers demanded about $530 million against the fund’s currency bets and began to liquidate its positions. Vik, 58, will argue at a 12-week trial starting in London today that the bank’s actions resulted in losses and missed profits totaling about $2.5 billion. A judge will have to decide whether Sebastian’s calculation of lost trading gains is accurate, said John Day, a lawyer at London-based litigation firm DaySparkes. Zimbabwe Prepares Law to Seize Company Stakes Without Paying (Bloomberg) Zimbabwe’s government is preparing a law that would allow it to seize controlling stakes in companies without compensation, according to a draft of the legislation obtained by Bloomberg News. The law would be an amendment to a 2007 act that compels foreign and white-owned companies such as Rio Tinto Group, Sinosteel Corp. and Impala Platinum Holding Ltd. to sell or cede 51 percent of their shares to black nationalsor state-approved agencies.

Opening Bell: 08.27.12

RBS May Be Bigger Libor Culprit Than Barclays, Says MP (Guardian) John Mann, a Labour MP on the Treasury select committee, said "City insiders" had suggested RBS's involvement may be "noticeably worse" than Barclays.' [...] Mann's comments came as a former RBS trader claimed that the bank's internal checks were so lax that anyone could change Libor rates. Court documents filed in Singapore show that Tan Chi Min, who is suing RBS for wrongful dismissal, claimed that in 2008 a trader for the bank, Will Hall, changed the Libor submission even though he was part of the Japanese yen swap desk in London. The papers show that Tan, who worked for RBS in Singapore, raised the issue at his disciplinary meeting last September, saying the bank's internal procedure in London seemed to be that "anyone can change Libor". Spain Expects to Tap About $75 Billion in Rescue Financing for Its Banks (NYT) Spain expects to use about 60 billion euros, or $75 billion, of the 100 billion euros of bank rescue financing offered by European finance ministers in June, according to the Spanish economy minister, Luis de Guindos. UK Investment Bankers Prefer Singapore (FT) The southeast-Asian city state has become the most favored location for investment bankers who are based in London, research by financial services recruitment firm Astbury Marsden shows. Of the 462 investment bankers that were asked, 31 percent said they would most like to work in Singapore. By comparison, only a fifth preferred New York and only 19 percent opted in favor of London. In the year before, 22 percent named London as their preferred location, underlining how the British capital has lost some appeal among investment bankers amid tighter regulation and a clampdown on bonuses. “A fast growing, low tax and bank friendly environment like Singapore stands as a perfect antidote to the comparatively high tax and anti-banker sentiment of London and New York,” said Mark Cameron, chief operating officer at Astbury Marsden. “Far more London-based bankers are now more willing and able to relocate the 6,700 miles to Singapore.” Another Madoff Name Nix (NYP) The second of Ponzi-schemer Bernie Madoff’s daughters-in-law is asking a court for permission to shed her now notorious married name. Deborah West Madoff, who started divorce proceedings against Bernie’s son Andrew back in 2008, has sought permission in Manhattan Supreme Court to revert to her maiden name. The couple have two children. She’s not the first in the family to do so: in 2010, her sister-in-law made a similar court application. Suits Mount In Rate Scandal (WSJ) It won't be easy for the plaintiffs to win in court even though financial institutions are likely to reach settlements with regulators in coming months totaling billions of dollars, according to people close to the Libor investigation. The plaintiffs must prove that banks successfully manipulated interest-rate benchmarks such as the London interbank offered rate, or Libor, and caused the plaintiffs to suffer a loss. Still, some investors and analysts are forecasting huge damages despite the legal hurdles. In a July report, Macquarie Research estimated that banks face potential legal liability of about $176 billion, based on the assumption that Libor was "understated" by 0.4 percentage points in 2008 and 2009. Carlyle Group marketed $25 million deal without license: Kuwaiti firm (AP) A Kuwaiti company suing the Carlyle Group over a $25 million investment that went bad is now accusing the private equity firm of marketing the deal without a license as it seeks to have its case heard in Kuwaiti courts. The latest claim by Kuwait's National Industries Group adds a new twist to its more than two-and-a-half year legal challenge to Carlyle, and could complicate the American company's relationships with other wealthy Mideast investors. NIG's lawsuit focuses on a Carlyle investment fund that was one of the earliest casualties of the financial crisis when it collapsed in 2008. The fund has been the subject of multiple lawsuits against Washington-based Carlyle. Couple in court for disturbing the peace for 'screaming, moaning and swearing during seven-hour sex romps five nights a week' (DM) Jessica Angel and Colin MacKenzie had been issued with an order requiring them to prevent ‘screaming, loud moaning, swearing and raised voices’ after police were called to their flat 20 times in just four months. However, following further complaints from neighbours, the couple were charged under the Environmental Protection Act. They face a £3,000 fine if convicted...Mr MacKenzie, 45, from Sturt, South Australia, said: ‘How can you live in a place where you can’t have sex? It’s ridiculous. Anyway, it’s mostly Jessie. The sex goes from four to seven hours, five nights a week. I’ll probably die of a heart attack – she’s almost killing me.’ German Official Opposes European Debt Purchases (NYT) The president of the German central bank said in an interview published Sunday that he remained staunchly opposed to government bond purchases by the European Central Bank, a position that could make it more difficult to deploy a weapon many economists believe is essential to saving the euro. But in a sign that the mood in Germany could be shifting, Chancellor Angela Merkel adopted a more dovish tone during a separate interview. She told members of her governing coalition to stop talking about Greece leaving the euro. “We are in a decisive phase in the battle against the euro zone debt crisis,” Ms. Merkel told ARD television. “Everyone should weigh their words very carefully.” Fed mulls open season on bond buys to help economy (Reuters) The Federal Reserve is considering a new approach to unconventional monetary policy that would give it more leeway to tailor the scale of its stimulus to changing economic winds. While fresh measures are not assured and the timing of any potential moves are still in question, some officials have said any new bond buying, or quantitative easing, could be open-ended, meaning it would not be bound by a fixed amount or time frame. "I am inclined to think that if the Fed decides on more QE it would be of the open-ended variety," said Michael Feroli, chief U.S. economist at JPMorgan and a former Fed economist. BlackRock Bullish On Thai Bonds, Region’s Worst (Bloomberg) BlackRock is bullish on Thai bonds, Asia’s worst-performing in 2012, saying the central bank has room to ease monetary policy as a global slump cools demand for exports from Southeast Asia’s second-largest economy. Former SC Gov. Mark Sanford to wed ex-mistress Maria Belen Chapur (NYDN) "Yes, we are engaged, and I'm both happy and excited for what that means," Sanford said in a statement obtained by CNN. "I have long expressed my feelings for her, she's a wonderful person. My closest friends have met and love her, and I look forward to introducing her to still many more that have yet to do so." The conservative Republican's political aspirations were dashed in 2009 when he disappeared from South Carolina for five days under the pretense that he was hiking the Appalachian Trail. The father of four, who was once thought to be a potential 2012 presidential contender, later admitted that he was actually visiting Chapur, who he professed to be his "soul mate." "I've been unfaithful to my wife," Sanford said at the time. "I developed a relationship with what started as a dear, dear friend from Argentina."