Opening Bell: 09.04.14

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Trader Brings NFL Algorithms Back to Defend Betting Title (Bloomberg)
By day, David Frohardt-Lane puts his math skills to use as an algorithmic trader for 3Red Group in Chicago. Away from work, he uses them to cash in on the National Football League. Frohardt-Lane is seeking a repeat title in the Las Vegas Hotel SuperBook’s SuperContest, a season-long NFL betting competition that drew about 1,200 entrants this season. The winner earns more than $600,000, and the total prize pool approaches $2 million. The tournament begins with the NFL opener tonight, when the Green Bay Packers visit the champion Seattle Seahawks. “I enjoy my job quite a bit, but nothing compares to an unexpected breakaway touchdown just when you’ve given up on a game,” Frohardt-Lane said in a telephone interview. “For that rush, nothing compares to sports gambling.”

Apple Celebrity Nude-Photo Hack Shows Risk in Security Questions (Bloomberg)
Apple yesterday said that a spate of nude photos from actresses including Jennifer Lawrence that were recently posted online were individually stolen from Apple accounts. The celebrity accounts were “compromised by a very targeted attack on user names, passwords and security questions, a practice that is all too common on the Internet,” the Cupertino, California-based company said in a statement. The incident underscores how techniques adopted by companies to step up security are far from foolproof, exposing a risk for everyday Internet users. As people post more sensitive information to social networks, it has become easier for criminals to obtain the answers to security questions. That means consumers can rarely rely on just one set of defenses and have to add more layers, even if it makes online accounts less convenient. That’s especially true for famous people, who have long been ripe hacking targets because security questions protecting their online accounts from intruders are trivial to answer. Based on the public information available about them, basic questions such as where somebody went to high school or what their birthday is can be easily figured out -- and don’t end up being much of a security barrier.

Investment Technology Group to Launch Dark Pool for Bond Trading (WSJ)
The New York-based brokerage and technology firm said Wednesday that it is planning to launch a trading venue known as a dark pool, a private platform in which buyers and sellers remain anonymous. While most bond trading takes place over the telephone between dealer banks and customers, ITG and a host of others are trying to tap into increasing demand from fixed-income investors to trade more cheaply and through electronic networks. The credit market has, until recently, resisted the incursion of fully electronic trading more so than markets for currencies, stocks and some derivatives. Similar efforts by firms such as Goldman Sachs Group Inc. and BlackRock Inc. have faltered, but ITG is betting it can leverage its track record in stock trading and technology to make inroads into credit markets. One of its chief rivals, Liquidnet Holdings Inc., announced in March it would open its own credit-trading network in the fall.

Regulators Propose Rule to Reduce Risk of Derivatives (Dealbook)
The Federal Reserve and the Office of the Comptroller of the Currency, as well as three other agencies, proposed a rule that would apply to over-the-counter derivatives, the financial instruments that banks and other financial entities use to speculate or hedge their risks. American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them. But the 2008 crisis revealed how flaws in the market had allowed for dangerous buildups of risk at large Wall Street firms and worsened the run on the banking system. Since then, regulators have been trying to make the derivatives market less risky. The rule proposed on Wednesday focuses on margin payments, which traders in derivatives make to each other to protect against the risk that they don’t get paid what they are owed. Such margin payments add discipline to a high-octane trading activity and make it more likely that derivatives traders can bear losses if one large entity collapses. But the industry, seeking to minimize its costs, has not applied margin requirements evenly across the system. The proposed rule aims to change that.

Police: Roommate stabbed birthday boy for loud threesome (MSA)
Antonio Flores Narcisso, 42, was arrested Tuesday and charged with burglary of a habitation with the intent to commit felony force, according to an arrest warrant affidavit. On May 8, Narcisso allegedly kicked down his roommate's door while the roommate was having sex with two women and told them they were being too loud, according to the affidavit. When the roommate told Narcisso to get out, Narcisso allegedly grabbed a knife from the kitchen and stabbed the roommate a number of times in the head, back and hands, the affidavit states. The roommate, who turned 35 that day, was taken to University Hospital with non-life threatening injuries, according to the affidavit.

Michael Bloomberg Returning to Run Bloomberg LP (WSJ)
Less than a year after leaving office as mayor of New York City, Michael Bloomberg will return as head of Bloomberg LP, the financial data and media firm he founded and still controls, the company announced Wednesday. Mr. Bloomberg, 72 years old, will take charge at the end of the year, when Daniel Doctoroff, who has been chief executive since 2008, will step aside, the company said. In a statement, Mr. Bloomberg said he hadn't intended to return to Bloomberg LP after his mayoral stint was completed. "However, the more time I spent reacquainting myself with the company, the more exciting and interesting I found it—in large part, due to Dan's efforts. I have gotten very involved in the company again and that led to Dan coming to me recently to say he thought it would be best for him to turn the leadership of the company back to me."

Beige Book: U.S. Economic Outlook Brightens During Summer (WSJ)
The U.S. continued its run of solid-if-unremarkable growth during the summer, the Federal Reserve found in its latest survey of regional conditions that offered little to suggest the economy was either decelerating or overheating. While Wednesday's report said more employers are voicing concerns about shortages of certain skilled workers, there were few signs of broad-based wage growth. The Labor Department is set to report job figures for August on Friday; net job growth has exceeded 200,000 for six straight months through July. "Businesses still mentioned difficulties in finding qualified workers, which seem to be both intensifying and broadening across skills and occupations," the Atlanta Fed reported, pointing to shortages in trucking, engineering, construction and information-technology sectors.

Trader Who Scored $100 Million Payday Bets Shale Is Dud (Bloomberg)
Hall is going all in on a bet that the shale-oil boom will play out far sooner than many analysts expect, resulting in a steady increase in prices to as much as $150 a barrel in five years or less. Investing ever-larger sums of his own money, he’s buying contracts for so-called long-dated oil, to be delivered as far out as 2019, according to interviews with two dozen current and former employees and advisers who are familiar with Hall’s trading but aren’t authorized to speak on the record. To attract buyers, the sellers of these long-dated contracts -- typically shale companies that have financed the boom with mounds of debt -- need to offer them at a discount to existing prices.

Trump Taj Mahal may be headed for bankruptcy (NYP)
The Trump Taj Mahal, the 24-year-old boardwalk casino, has recently broken some of its loan covenants and without a quick deal with its creditors could be headed for a Chapter 11 reorganization within days, The Post has learned. So far, talks between Trump Entertainment Resorts — which owns the Taj and its neighbor, the soon-to-close Trump Plaza — and its creditors have not found an out-of-court solution, sources said. There was hope around the negotiation table that Carl Icahn, who owns much of the Trump Entertainment debt, would agree to convert that debt into equity and keep the 2,248-room hotel-casino out of Chapter 11. That hope now appears to have faded.

'Mickey Mouse' And Other Costumed Characters Beat Motorist In Bizarre Road Rage Incident (HP)
The clip, caught on camera in Russia over the weekend, shows a motorist stopping a vehicle with which he's had some kind of problem. But as people dressed as Mickey Mouse, Spongebob Squarepants, Scrat from "Ice Age" and some kind of spotted creature jump out and start beating him, he was probably wishing he had just stayed home and watched cartoons. Australia's 9News reports that the title of the video translates into "severe Chelyabinsk Disney,” implying that the incident took place in the Russian city of Chelyabinsk. It should be noted, however, that while Mickey Mouse is a Disney character, neither Spongebob nor Scrat are.

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Opening Bell: 07.24.12

Libor Probe Expands To Bank Traders (WSJ) One of the sprawling probe's biggest targets: a group of traders whose efforts allegedly were coordinated by Thomas Hayes, who worked for UBS from 2006 to 2009 and then moved to Citigroup, according to a person with knowledge of the investigation. Mr. Hayes was fired by Citigroup in 2010, according to people familiar with the matter. He couldn't be reached for comment. Mr. Hayes allegedly worked with the other traders to push submissions up or down for a benchmark interest rate called yen Libor, according to court filings by Canada's competition regulator, which identified him only as "Trader A." The agency said it was told by UBS that Trader A told another trader at Royal Bank of Scotland Group PLC "who his collusive contacts were and how he had and was going to manipulate yen Libor." Trading Surges Boosted Whale Positions Before Audits (Bloomberg) Trading surges that temporarily boosted the value of credit derivatives held by JPMorgan may provide clues about whether traders at the bank masked losses that have spiraled to $5.8 billion. Spikes in late January and again at the end of February, which more than doubled the volume of trades in an index tied to the creditworthiness of companies, lowered the cost of the index, raising the value of the bank’s holdings. The surges came just before end-of-the-month bank audits to verify prices. Ex-Anglo Irish Bank Chief Charged With Fraud (AP) Sean FitzPatrick was arrested Tuesday at Dublin Airport as he returned from holiday. Two other senior former Anglo executives were arrested in Dublin and charged with 16 fraud-related counts Monday. The 64-year-old Mr. Fitzpatrick presided over Ireland's runaway property boom, which was swiftly followed by the banking collapse at the heart of the country's 2010 international bailout. Anglo's losses on bad loans to property speculators are nearing €30 billion ($36 billion), or more than €6,500 for every person in Ireland. Fed Official Wants Tougher Volcker Rule (WSJ) Fed Governor Sarah Bloom Raskin said that the market-making and hedging exemptions should be extremely narrow "because of the potentially severe dangers of, and costs associated with, proprietary trading by institutions that have access to the federal safety net." She raised the possibility that the financial system would be better off if banks ceased market making and hedging as well, saying it is possible that the combined regulatory, compliance and other costs could "outweigh the benefits we as a society supposedly receive." LI teen crashes car into neighbor's house, cops say don't worry about it (NYP) A 15-year-old Long Island teen lost control of his dad’s car while taking it for a joy ride on Saturday — driving it across two lawns and then into a house — and cops refused to arrest him or even give him a ticket. The resident of the Massapequa home returned from dinner at 6 pm to find a Nissan Altima — driven by Robert Carracher — had wrecked the fence attached to the side of his house along with an air conditioner and sprinkler system. He also learned that Nassau cops were unwilling to charge the teen in the accident. “I’m outraged. A car hits your home and nobody gets arrested?” said Vincent Grande, a criminal attorney. He estimated the damage at more than $5,000. “When I used my phone to take pictures, the kid turned away and his dad gave me the finger.” Police explained that Carracher wasn’t charged because it was accidental and the youth was too young to have a license. Moody’s Ratings Cut Fuels German Resentment (Reuters) The prospect of Europe's biggest economy losing its cherished AAA credit status has unsettled Germans, already angry about footing the bill for bailouts, and triggered calls for an even tougher stance on Greece and other euro zone laggards. While politicians and economists were at pains to argue that Moody's downward revision to Germany's credit rating outlook would have little immediate impact on borrowing costs, ordinary Germans said they were worried. "If things pan out the way Moody's have predicted then we will have problems here with unemployment, if we lose confidence that things will get better, it'll mean big problems for the economy," said Memet Dogan, a 45-year-old transport worker near Berlin's Brandenburg Gate. Citi's New Chairman Takes Hands-On Approach (WSJ) The new chairman's attention to the operational side contrasts with Mr. Parsons, who focused more on the job's diplomatic aspects. Mr. Parsons stepped down in April after three years as chairman and more than 16 years on Citigroup's board. The 65-year-old Mr. O'Neill, who a decade ago turned around Bank of Hawaii Corp. and briefly ran Barclays PLC, is a "nitty-gritty operations guy" who "understands what he doesn't understand," say people close to the company. Worker charged with arsons in Maine sub fire (AP) A civilian employee set a fire that caused $400 million in damage to a Navy submarine because he was suffering from anxiety and wanted to get out of work early, Navy investigators said in a complaint filed Monday. Casey James Fury, 24, of Portsmouth, N.H., faces up to life in prison if convicted on two counts of arson for allegedly setting fire to the USS Miami nuclear-powered attack submarine while it was in dry dock on May 23, and setting a second fire outside the sub on June 16. Fury, who was working on the sub as a painter and sandblaster, initially denied starting the fires, but eventually acknowledged his involvement, the affidavit reads.

Opening Bell: 1.26.16

Ackman regrets not cutting Valeant, Canadian Pacific; Deutsche Bank, RBS earnings will be bleak; AIG tells Icahn to mind his own biz; 112-year-old woman smokes 30 cigarettes a day; and more.

Opening Bell: 02.22.13

AIG Swings to Loss on Sandy Costs, Sale of Unit (WSJ) AIG posted a loss of $3.96 billion, or $2.68 a share, compared with profit of $21.5 billion, or $11.31, a year earlier. Its life-insurance and retirement-services business earned $1.09 billion, up 20% from a year earlier. The company also said it would take a loss of about $4.4 billion on the planned sale of a 90% stake in the plane unit, International Lease Finance Corp. AIG's full-year net income of $3.4 billion marked a sharp decline from the $20.6 billion profit the company posted for 2011, when it adjusted its balance sheet to reflect its expected use of more than $18 billion in tax benefits. CFTC Sues CME Group, Alleging Trade-Data Leaks (WSJ) U.S. regulators took aim at the world's largest futures-exchange operator, accusing CME Group Inc. and two former employees of allegedly sharing details on clients' trades with a commodities broker. The civil charges, leveled Thursday by the Commodity Futures Trading Commission, mark the first time the agency has sued CME in federal court. The case also highlights how regulators have responded to flagging confidence in the financial markets by scrutinizing more closely some of Wall Street's central pillars: the exchanges. The CFTC charged a unit of Chicago-based CME and two former employees with disclosing private information about trading in its big energy markets to an outside party between 2008 and 2010 in return for meals and entertainment. CME said Thursday it would contest the charges. "Markets are too important for this [type of allegation] to be taken lightly," Bart Chilton, a CFTC commissioner, said in an interview. Citigroup bows to shareholder pressure, overhauls pay (Reuters) Citigroup said on Thursday it has overhauled an executive pay plan that shareholders rejected last year as overly generous, revising it to tie bonus payments more closely to stock performance and profitability. The company also said it will pay new Chief Executive Mike Corbat $11.5 million for his work in 2012, in line with remuneration for his peers at other major banks. The new plan was crafted after board Chairman Michael O'Neill and other directors met with "nearly 20" shareholders representing more than 30 percent of Citigroup stock, Citi said in a filing. Watchdog Says LinkedIn paid no federal income tax over past three years (NYP) The Mountain View, Calif., social network for professionals escaped the tax man because of a rule that allows companies to deduct expenses from employee stock awards, the watchdog, the Center for Tax Justice, told The Post. It’s a longstanding accounting trick that has spared many tech firms — including Amazon and Yahoo from 2009 to 2011 — from sharing any of their profits with the IRS, the CTJ said. “On $160 million profits over the last three years, LinkedIn paid zero federal income taxes,” said the CTJ’s Rebecca Wilkins. “The stock option deduction was big enough to wipe out all their taxes.” Unemployment applications up 20,000 last week to 362,000 (AP) The Labor Department said Thursday that thefour-week average, a less volatile measure, rose 8,000 to 360,750, the highest in six weeks. Trump Twitter Mystery! Who Hacked the Donald? (CNBC) In what appears to be the latest in a minor wave of attacks on Twitter accounts belonging to out-sized corporate entities, an out-of-character tweet from Donald Trump's verified account set the Internet abuzz, and then disappeared, shortly before noon ET on Thursday. "These hoes think they classy, well that's the class I'm skippen," read the suspect remark issued from @realDonaldTrump. It was a glaring non sequitur following tweets such as "Republicans must be careful with immigration—don't give our country away," and "Wow, Macy's numbers just in-Trump is doing better than ever — thanks for your great support!" "Yes, obviously the account has been hacked and we are looking for the perpetrator," Rhona Graff, senior vice president, assistant to the president of the Trump Organization, told NBC News via email. This confirmation was quickly echoed by Trump himself, in a tweet that read, "My Twitter has been seriously hacked — and we are looking for the perpetrators." UBS to Trade Equity Swaps in China in Structured-Product Push (Bloomberg) Chinese regulators last month decided to allow UBS to trade total return swaps, Thomas Fang, the bank’s managing director for equities derivatives sales for Asia, said in a phone interview. The bank will use the derivatives to create structured products tied to local stocks, with plans to boost the size of its staff in the country for the business, Fang said. The China Securities Regulatory Commission’s press office didn’t immediately respond to a faxed request for confirmation. A Tax That May Change The Trading Game (NYT) The tax would be tiny for investors who buy and hold, but could prove to be significant for traders who place millions of orders a day. Under the proposal, a trade of shares worth 10,000 euros would face a tax of one-tenth of 1 percent, or 10 euros. A trade of a derivative would face a tax of one-hundredth of 1 percent. But that tax would be applied to the notional value, which can be very large relative to the cost of the derivative. So a credit-default swap on 1 million euros of debt would have a tax of 100 euros, or about 0.4 percent of the annual premium on such a swap. On Currencies, What's Fair Is Hard to Say (WSJ) What's the fair value of a euro? That depends on whether the answer comes from Berlin or Paris. German Chancellor Angela Merkel on Wednesday weighed in on what the currency should be worth, saying the euro's exchange rate is "normal in the historical context." French Finance Minister Pierre Moscovici had a different take earlier this month, calling the euro "perhaps too strong." Economists say Ms. Merkel is right—technically. The euro's buying power is roughly where it should be, according to the Peterson Institute for International Economics, which judges currencies based on countries' current-account balance. But others caution Germany's relatively robust economy props up the euro's value; if weaker countries like Spain or Italy still had their own currencies, they'd be worth much less. Singapore GDP Growth Beats Initial Estimate as Asia Recovers (Bloomberg) Gross domestic product rose an annualized 3.3 percent in the three months through December from the previous quarter, when it shrank a revised 4.6 percent, the Trade Ministry said in a statement today. That compares with a January estimate of 1.8 percent and the median in a Bloomberg News survey for a 2 percent expansion. KFC employee fired for making out with boob-shaped mashed potatoes (DD) A KFC employee in Tennessee is out of a job after photos of the culprit making out with a plate of mashed potatoes ended up on Facebook. The mashed potatoes, which were apparently not served to some unknowing customer, had been arranged into the shape of a woman's boob. In the photos, the former employee can be found licking what we'd have to consider the underboob of the mashed potato mammary before throwing it into an oven. The photo became public information when it showed up on the Facebook page for Johnson City, Tenn., news channel WJHL, where it was shared 2,000 times and received more than 700 comments. Once the news organization was able to determine its locational origin—the KFC on North Roan Street—the suspected employee was terminated. KFC spokesman Rick Maynard confirmed the firing but would not name the culprit because that "wouldn't be appropriate." He stressed that the employee who took the photos is no longer with the company. "Nothing is more important to KFC than food safety," he wrote to WJHL. "As soon as our franchisee became aware of the issue, immediate action was taken.

Opening Bell: 10.14.15

JP Morgan says trading looks bleak; Tech exec headed to Chipotle; Hedge funds' rough ride; Ex-Bank of America employee's murder trial gets date; Brooklyn taqueria will award 10% stake in business to anyone who can finish 30 pound burrito (plus margarita) in an hour; and more.