Opening Bell: 10.06.14

Bill Gross told rival Gundlach: ‘I am Kobe, you are LeBron’ (Reuters)
It was one of the most extraordinary meetings in the history of the bond market. Two of the biggest-ever names in fixed-income investing, Bill Gross and Jeffrey Gundlach, fierce rivals who had never previously talked, held a secret meeting over glasses of lemonade, water, and plates of crudites about whether to join forces. In the week of Sept. 15, just before Gross shocked the investment world on Sept. 26 by storming out of Pimco, he approached Gundlach and dropped a bombshell. According to Gundlach, Gross said he was about to be fired by the firm he had helped launch more than four decades ago and had built into a $2 trillion investment powerhouse. [...] Gundlach said that Gross called him out of the blue. "Bill called through the DoubleLine switchboard," said Gundlach. Skeptical that it was really Gross, Gundlach said he "told the receptionist to take a number and then call it to verify it was not some prankster. A couple of hours later I called Bill from home." [...] Discussing their potential legacies, Gundlach said Gross spun an analogy to National Basketball Association star players Kobe Bryant and the younger LeBron James. "I am Kobe. You are LeBron James," Gross told Gundlach. "I have five rings, you have two rings - probably going to five,” a reference to the number of NBA championships the two players have each won.

Trio of Officials Key to AIG Bailout Face Grilling (WSJ)
Besides Mr. Bernanke, other high-profile witnesses will include former U.S. Treasury Secretary Henry Paulson and former Federal Reserve Bank of New York President Timothy Geithner. Court filings indicate each will field hours of questions. The lawsuit argues that the government cheated shareholders of $40 billion. It was filed by Starr International Co., an investment and charitable firm run by Mr. Greenberg that was AIG’s largest shareholder in 2008. The judge overseeing it in the U.S. Court of Federal Claims has certified it as a class action, and about 300,000 shareholders would share any award.

Hackers’ Attack Cracked 10 Financial Firms in Major Assault (Dealbook)
Questions over who the hackers are and the approach of their attack concern government and industry officials. Also troubling is that about nine other financial institutions — a number that has not been previously reported — were also infiltrated by the same group of overseas hackers, according to people briefed on the matter. The hackers are thought to be operating from Russia and appear to have at least loose connections with officials of the Russian government, the people briefed on the matter said.

Hewlett-Packard Plans to Break in Two (WSJ)
Hewlett-Packard Co. plans to separate its personal-computer and printer businesses from its corporate hardware and services operations, the latest attempt by the technology company to improve its fortunes by breaking itself in two. The company intends to announce the move on Monday, people familiar with the plan said. It is expected to make the split through a tax-free distribution of shares to stockholders next year, said one of the people. If the division goes off as planned, it would give rise to two publicly traded companies, each with more than $50 billion in annual revenue.

Poker Pro Says He Preys on Casinos With All Legal Means (Bloomberg)
Phil Ivey, a 10-time winner of the World Series of Poker tournament who’s suing a Genting Bhd. unit for 7.7 million pounds ($12.3 million) in unpaid winnings, said he uses every strategy that is legal to boost his chances. “As a professional gambler, my job is to seek to lawfully reverse or reduce the perceived house edge,” Ivey said in a witness statement on the second day of a London trial. Ivey, 38, won the money playing a form of Baccarat called Punto Banco, using a technique known as edge sorting, at Genting’s Crockfords casino in London, according to his lawyers. Genting refused to pay up, saying the practice is unfair. “I would not be doing my job very well if I did not seek to use to my benefit weaknesses that I identify in the way that casinos set up or offer particular casino games,” he said in his statement made available by the court.

Man Floating In Bubble Rescued By Coast Guard (AP)
A longtime endurance runner and peace activist whose latest goal was to reach Bermuda in a homemade floating "Hydro Pod" was rescued by the U.S. Coast Guard on Saturday after he began suffering from fatigue. Coast Guard air crew were able to safely pick up Reza Baluchi and the bubble Saturday morning, Coast Guard spokeswoman Marilyn Fajardo said in a statement. He was transported to a nearby Coast Guard station and found to be uninjured, Fajardo said...The "Hydro Pod" is a large bubble made of 3-mm- (0.11-inch)-thick plastic, Baluchi's website, "Run With Reza" says. The bubble, which he propelled forward by running inside and pushing it with his arms, was housed in a large aluminum-type frame studded at intervals with inflated soccer balls. A man who appears on a video during the bubble's construction compares it to a hamster wheel. According to the site, Baluchi planned to run in the bubble in the mornings, cool off in the sea while leashed to the floating sphere, and sleep in a hammock inside it at night. In addition to the protein bars the Coast Guard said it found in his bubble, he planned to catch and eat fish, the site said.

Ben Bernanke Can't Refinance Because Credit Is Still Ridiculously Tight (BusinessWeek)
The kind of loan that Bernanke is presumably trying to get is actually easier to obtain than the ones most Americans go for. It’s a jumbo–that is, too big to be bought by Fannie Mae or Freddie Mac, the two mortgage-finance giants. The last time he refinanced, in 2011, it was into a $672,000 loan. That’s above the 2014 conforming loan limit of $625,500 for the District of Columbia, where he owns a townhouse. Fewer regulations apply to jumbo loans because the wealthy people who apply for them are presumed to be more financially savvy. Even so, “the underwriting process is still more thorough, more stringent than it used to be,” says Joel Kan, economic forecasting director for the Mortgage Bankers Association. The risk pendulum has clearly swung too far, from reckless to fraidy-cat, which is (not) the technical banking term. “I don’t blame this on Bernanke per se. I think it’s mostly Congress,” says Christopher Whalen, senior managing director at Kroll Bond Rating Agency in New York. Whalen says the Dodd-Frank Act of 2010 went too far in tightening mortgage-lending standards in response to the abuses that led to the 2008-09 financial crisis. “These are the same people who [before the crisis] were talking money from Fannie [Mae] and Freddie [Mac] with both hands,” Whalen says. “Now they want to act like Calvinists and punish everybody. We need to find a middle ground. It will take time.”

Yahoo Nears Investment in Snapchat (WSJ)
The Internet portal has committed to an investment in Snapchat at a $10 billion valuation, people familiar with the matter said. One of the people said Yahoo is investing about $20 million.

Ex-Bloomberg exec challenging terminals with mobile platform (NYP)
Downey, former global head of commodities at Bloomberg for four years, plans to take on his former firm’s ubiquitous trading-floor presence: the terminal. Downey is launching Money.net, his new trading platform, on Monday, and he’s guessing that being mobile is the way to outflank Bloomberg. It’s a trading platform anyone can use to watch or participate in the financial markets — in real-time — on a desktop and on mobile devices, Downey says. Here’s the kicker: Money.net costs only $50 a month for individual investors — and a bit more for professional traders with accreditations. But the pro fees will be a far cry from the $24,000 a year some 321,000 traders and analysts’ employers pay for the Bloomberg terminal, giving that company nearly $9 billion in revenue for 2014.

Catalan Standoff to Hit Spain Economy, Whoever Wins (Bloomberg)
Catalan President Artur Mas, backed by about two-thirds of the region’s lawmakers, is defying orders from Spain’s highest court and pressing ahead with a vote on independence on Nov. 9. The wrangling last week pushed the gap between Spanish and German bond yields to the widest since Scotland voted to remain in the U.K.“Investors are pricing the risk of political instability in Catalonia,” said Francesco Marani, a fixed-income trader at Auriga Global Investors SA in Madrid, who trades government and regional debt. “The independence issue has already been hurting the Spanish economy, and it’s not over.”

'Hugging Chair' Invented To Cure Loneliness (HP)
One hug used to take two people, but that's changed thanks to a Japanese company that has invented a chair that does the job. The so-called "tranquility chair" has an upper half with arms that wrap around the sitter. But those long arms don't scare away birds, they embrace humans affectionately, the New York Daily News reports. UniCare, the company that created the cheer-inducing chair, is selling it in Japan for around $419. "It makes you feel safe,” a UniCare spokesperson said...No word on when or if the hugging chairs would come to America.