Opening Bell: 10.06.14

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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.

Related

Probably what keeping this promise is going to take.

Opening Bell: 12.2.16

More knocks against Mnuchin; Gross not sold on Trump rally; nude man seeks love at Mormon church; and more.

Opening Bell: 06.11.12

Nasdaq CEO Lost Touch Amid Facebook Chaos (WSJ) At the end of Facebook's disastrous first day of trading May 18, the phone in Robert Greifeld's New York office rang. It was Mary Schapiro, head of the Securities and Exchange Commission, wanting an explanation from the chief executive of Nasdaq OMX Group for the epidemic of glitches and delays in one of the most anticipated initial public offerings ever. Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast. So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him. Three weeks later, Mr. Greifeld still isn't sure why technology systems failed during the crucial IPO. Nasdaq's failure to see the problem coming is something its engineers are still dissecting. "You wake up, you turn around, and there's a black or dull spot," Mr. Greifeld said in an interview, sucking on Life Savers candy at a conference table in his office. "You can't get away from it." Spain’s Bailout Gives Rajoy Best Chance To Fix Banks (Bloomberg) Spain’s request for as much as 100 billion euros ($125 billion) of European bailout funds may provide the country with enough money to shore up its banking system after three failed attempts in as many years. “Now that they have this money, it will hopefully finally be possible to recognize all the hidden losses and clean up the system,” Luis Garicano, a professor at the London School of Economics, said in a phone interview. The amount sought is about 2.7 times the funds deemed necessary for Spanish banks by the International Monetary Fund in a report released June 8 and five times the total requested by the Bankia group, the country’s third-biggest lender, to cleanse its balance sheet. Spain's economic misery will get worse this year despite bailout request, prime minister says (NYP) A day after the country conceded it needed outside help following months of denying it would seek assistance, Rajoy said more Spaniards will lose their jobs in a country where one out of every four are already unemployed. "This year is going to be a bad one," Rajoy said Sunday in his first comments about the rescue since it was announced the previous evening by his economy minister. IPOs Dry Up Post Facebook (WSJ) In the aftermath of Facebook's botched trading debut, the IPO market has gone three weeks without an offering, the longest drought in five months. It is the slowest stretch in initial public offerings since a four-week span at the end of 2011 and the beginning of this year, according to data from Ipreo. Greece Threatens Wall Street Jobs In Third Trading Plunge (Bloomberg) For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months. Nickelback Review Goes Viral (Poynter) Music critic Josh Gross has written hundreds of stories about bands, but none has brought him as much attention as the brief he wrote this week about Nickelback’s upcoming appearance in Idaho, where Gross writes for the Boise Weekly. He summarizes the response: "In the past day, I have been told that I am a genius, a king amongst men and a hack that could be easily outdone by a one-armed cat. I should alternately win the Pulitzer and forcibly insert 45 pickles into my bum. There has been little middle ground. Why? Because I had the audacity to point out that seeing Canadian “rock” band Nickelback at the Idaho Center may not be the best use of one’s $45." Gross wrote of the Nickelback: "You can spend $5 to go see Nickelback this week. Or you could buy 45 hammers from the dollar store, hang them from the ceiling at eye level and spend an evening banging the demons out of your dome...$45 is also enough to see Men In Black III five times, buy a dozen Big Macs, do 10 loads of laundry or so many other experiences as banal and meaningless as seeing Nickelback but come without actually having to hear Nickelback. But if you must, the band is playing The Idaho Center on Wednesday, June 13, at 6PM tickets start at $45." Dimon Faces Washington Grilling Over Trading Debacle (Reuters) The Senate Banking Committee has asked Dimon to come prepared Wednesday to provide "a thorough accounting of the trading losses," a committee aide said. Senators will also ask what he knew about the risks involved in the trading strategy. Fed Colleague Backs Dimon (WSJ) "I do not think he should step down," Lee Bollinger said in an interview with The Wall Street Journal. He said Mr. Dimon appears to have done nothing wrong, that critics attacking the Fed have a "false understanding" of how it works, and that it is "foolish" to say Mr. Dimon's presence on the New York Fed board creates an appearance of a conflict when the law requires bankers to serve on such boards. Private lunch with investor Warren Buffett sells for $3.5 million (WaPo) The previous four winning bids have all exceeded $2 million with records set every year. Last year’s winner, hedge fund manager Ted Weschler, paid $2,626,411. India Could Be First BRIC to Lose Investment Grade: S&P (Reuters) Standard & Poor's said on Monday that India could become the first of the so-called BRIC economies to lose its investment grade status, sending the rupee and stocks lower, less than two months after cutting its rating outlook for the country. "Slowing GDP growth and political roadblocks to economic policymaking are just some of the factors pushing up the risk that India could lose its investment-grade rating," the ratings agency said in a statement issued Monday on a report dated June 8. Town Considers Fines For Cursing (WSJ) Mimi Duphily was hanging baskets of pink geraniums on antique street lamps downtown for the Middleborough Beautification and Activities Group when she noticed something else that needed cleaning up—citizens' mouths. "The cursing has gotten very, very bad. I find it appalling and I won't tolerate it," said Ms. Duphily, a civic leader in the otherwise quiet New England community, which calls itself the Cranberry Capital of the World. "No person should be allowed to talk in that manner." Soon, Middleborough residents who do could risk a $20 fine. Ms. Duphily, 63 years old, tried scolding the cursers—whom she describes as young people shouting the "F word" back and forth—with a stern, "Hey kids, that's enough!" Then she conferred with the Beautification and Activities Group, which informed the Middleborough Business Coalition, which then called a summit with Middleborough Police Chief Bruce Gates, who now, in his sworn role, is trying to stomp out swears.