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Opening Bell: 10.29.14

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Facebook Vows Aggressive Spending (WSJ)
On a conference call with analysts, finance chief David Wehner said he expects Facebook to incur higher expenses than normal in the quarters to come, in the wake of big investments in both engineering talent and acquisitions. He expects costs to rise as much as 75% for the year. Mr. Wehner and other Facebook executives urged analysts and investors to look further into the future, and not just at the financial results before them. Mr. Zuckerberg kicked off the call by stressing the company’s long-term goals stretch more than a decade into the future and require “investing aggressively.”

Deutsche Bank Swings to Third-Quarter Loss (WSJ)
Deutsche Bank AG swung to a net loss in the third quarter after the lender boosted its reserves to cover fines from pending litigation. Germany’s largest bank on Wednesday reported a net loss of €94 million ($119.7 million) for the quarter, compared with a net profit of €41 million in the same period last year. The loss was expected after the bank said last week that it would book €894 million in additional litigation reserves in the quarter, which was more than analysts had expected. The lender has now set aside €3 billion to cover fines from pending investigations.

Pimco Replaced by BlackRock at $6 Billion Prudential Fund (Bloomberg)
Pacific Investment Management Co., seeking to stem redemptions after its co-founder Bill Gross left unexpectedly, was dropped as manager of a $6.16 billion strategy offered by a unit of Prudential Financial Inc. Pimco, based in Newport Beach, California, will be replaced as subadviser of the AST Pimco Total Return Bond Portfolio by BlackRock Inc. and Loomis Sayles & Co., according to a filing with the U.S. Securities and Exchange Commission yesterday. Pimco will also be dropped as manager of the U.S. fixed-income portion of the AST Advanced Strategies Portfolio, which had $8.75 billion in assets as of Sept. 30.

Translation Adds Complexity to European Central Bank’s Supervisory Role (WSJ)
The European Central Bank’s impending role as supervisor of the eurozone’s largest banks is reviving an issue that has long complicated its activities: the language in which it does business. About a quarter of the 120 banks the ECB will start supervising in November have chosen their national language, rather than English, for written correspondence with their new regulators. The ECB’s draft framework text for supervision made it clear it wanted banks to use English, its working language since its creation in 1998. But the ECB can’t insist on that provision because European law allows citizens to contact European institutions in any of the European Union’s 24 official languages. After negative feedback from banks, the final version of the regulation lost the reference to seeking an explicit agreement to use English.

Split MSG business would be a garden of delight for investors (NYP)
MSG, which is exploring a possible separation into two publicly traded entities — one for its Knicks, Rangers and MSG Network and the other for the venues — could be worth as much at $9.7 billion after the separation, the Wall Street pros said.

How a $1,000-an-hour escort rose to the top 1% of her field by playing the 'perfect woman' for Wall Street (DM)
Svetlana Z, as she refers to herself, moved to New York from Chelyabinsk, Russia, when she was 19 years old and had $300 to her name. Lured by the promise of quick money, she entered the escort industry and made a small fortune by catering to investment bankers, 90per cent of them married. 'Mostly, I offered understanding,' she wrote for Medium. 'The truth is, even for guys who hire me for three or four hours, the sex usually only takes about 15 minutes.' Not bad for $1,000 an hour. Svetlana - who describes herself as 5ft 7in, 119lbs, with long legs, hazel eyes, full lips and a slender figure - remarks that when it did come to sex, however short-lived, massaging her client's ego was key.
Around 98per cent of men wanted to go down on her, and 80per cent of them would ask if she had come, or insist she had multiple orgasms before they did. This wasn't about her pleasure, of course, it was their need to 'prove themselves.'
Svetlana faked orgasms with relative ease and presumably on nearly every occasion. Her mind, she says, was always in business mode. She refers to one instance in which a client asked to pour honey all over her before they had sex. She agreed - but only after he agreed to pay triple her hourly rate - and she spent the whole rampant session mulling over cleaning the sheets and re-doing her hair and make-up...Svetlana was highly tactful when it came to demanding the best. Rather than appear spoiled in her requests to fly first class while travelling with clients, she would weave silky allusions into the conversation. For example, she would claim that her 'really long legs' would get cramped in coach, which would hinder her 'flexibility' and thus affect her 'd***y-style' performance...And perhaps in part to her dogged attention to detail and her carefully considered approach, she managed to avoid any dangerous or traumatic experiences.When she once caught a client attempting to videotape them having sex on the sly, she simply grabbed his phone, erased the footage, and told him to 'get the hell out' of her apartment. Another threatened to call the cops on her if she didn't give him free sex, so she threatened to post his phone number to a gay escort listing...Then there was the client who had sex with her for a full hour straight, all the while making 'woo woo woo' train noises. Aside from these mentions, life as a high-class escort appears to have suited Svetlana. Couples were her favorite sorts of clients, and she got to charge double the fee for the same amount - often less - of work. 'That's the cool thing about capitalism,' she points out.

Greenspan Sees Turmoil as QE Boost to Markets Unwinds (Bloomberg)
Former Federal Reserve Chairman Alan Greenspan said he doesn’t think the Fed can unwind years of extraordinary stimulus without causing turmoil in financial markets. “I don’t think it’s possible,” Greenspan said during an event today at the Council on Foreign Relations in New York, responding to a question about the likely market impact of the Fed’s exit.

Norway’s $860 Billion Wealth Fund Bets Big on Modi’s India (Bloomberg)
Norway’s sovereign wealth fund, the world’s largest, will increase its holdings “significantly” in India as Prime Minister Narendra Modi opens Asia’s third-largest economy to investments and competition. The fund today revealed that it raised its holdings of Indian bonds and stocks to 0.9 percent of its fixed-income and equities portfolios, as part of a broader plan to increase its presence in emerging markets and generate bigger returns. “India is one of those markets where you should expect that we will continue to increase our investments over time, significantly,” Yngve Slyngstad, chief executive officer of the Oslo-based fund, said in an interview after a press conference today. “Relative to the size of the economy our investments are smaller than you would expect.”

Exclusive: SEC probing private equity performance figures - sources (Reuters)
The U.S. Securities and Exchange Commission is examining how private equity firms report a key metric of their past performance when they market new funds to investors, as the regulator boosts its scrutiny of the industry, according to people familiar with the matter. At issue is how private equity firms report how they calculate average net returns in past funds in their marketing materials, the sources said.

Firm: Free beer for workers who finish timesheets (UPI)
The Tapserver at Minneapolis firm Colle + McVoy asks employees to scan their keycards and the system then verifies that the worker's time sheet has been completed. The worker is rewarded with their choice of beer from the machine's "multi-keg beer deployment system," which includes several different brews. "The technology used includes several Arduinos, a Node-based server, solenoids and a Raspberry Pi. The software was written to tie seamlessly with Colle + McVoy's timekeeping application," the company said. The company said timesheet completion has improved by 90 percent since the machine was deployed.

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Greece Plans 'Special Economic Zones' to Boost Growth (Reuters) Greece plans to set up "special economic zones" to attract private investment and help lift its debt-laden economy out of depression, the government said on Tuesday. The zones would offer investors tax and administrative advantages. Athens is already in talks with the European Commission to get approval for the move, Development Minister Costis Hatzidakis told a news conference. "We believe these zones will boost the real economy by creating a special regime to attract investment and generate exports," Hatzidakis said. Spain's Catalonia to Ask for Aid From Madrid (WSJ) Catalonia, Spain's most indebted region, said Tuesday it will ask for €5.02 billion ($6.27 billion) in financial assistance from the Spanish government's liquidity program, as it struggles to pay for basic services such as hospitals, schools and care homes. Catalan government spokesman Francesc Homs said at a news conference that the government will ask for the funding to "face debts maturing in the coming months." ECB's Draghi Stuck At The Office, To Skip Jackson Hole Symposium (WSJ) "ECB President Mario Draghi had hoped to attend the annual economic symposium in Jackson Hole organized by the Federal Reserve Bank of Kansas City, but has decided not to go to Jackson Hole, due to the heavy workload foreseen in the next few days," an ECB spokesperson wrote in an email. Leonardo DiCaprio To Bare All In 'Wolf Of Wall Street' (NYDN) “There will be some pretty illicit sex scenes coming up,” said a set insider. “It involves four guys and two girls.” And there’ll even be a little guy-on-guy action in one of the orgies — but DiCaprio won’t be in those. Not that there would be anything wrong with that. Scorsese’s film follows the rise and eventual imprisonment of drugged-out real-life former stockbroker Jordan Belfort, who is now a motivational speaker and says he has been sober since his life imploded in the go-go late ’90s and he went to prison. The movie started shooting in the Financial District over the weekend and there’ll be more filming in midtown this week. Later this month, the action will move to a Hamptons estate. DiCaprio was spotted rehearsing at Bank of America with co-star Jonah Hill. Matthew McConaughey also stars, as Belfort’s mentor. “They were incognito and Leo didn’t take his sunglasses off the entire time,” said a Merrill Lynch source. There are some scenes you can bet will be shot strictly behind closed doors. “We have a scene in an office with a troupe of hookers during a coffee break,” the set insider told us. “They are in the process of casting a ton of beautiful models, who are willing to bare it all, to portray escorts and strippers,” our source said. “The girls have to be incredibly hot.” Connecticut Homes Biggest Losers As Wall Street Cuts (Bloomberg) Connecticut, for 25 years the state with the highest per capita income in the U.S., is now leading the nation in home-price declines as Wall Street trims jobs and bonuses that had driven multimillion-dollar property sales. Prices in the Fairfield County area, home of the banker bedroom communities of Greenwich and New Canaan, tumbled 12.9 percent in the second quarter from a year earlier, the biggest decline of the 147 U.S. metropolitan areas measured by the National Association of Realtors. Hero Reagan’s Compromise Would Collide With Tea Party Certitude (Bloomberg) Ronald Reagan remains the modern Republican Party’s most durable hero. His memory will be hailed as The Great Uncompromiser by those who insist the GOP must never flag in its support for smaller government, lower taxes and conservative social values. His record tells a different story. During Reagan’s eight years in the White House, the federal payroll grew by more than 300,000 workers. Although he was a net tax cutter who slashed individual income-tax rates, Reagan raised taxes about a dozen times. His rhetoric matched that of many of today’s most ardent Christian conservatives, yet he proved to be a reluctant warrior on abortion and other social issues. Perhaps most tellingly, he was willing to cut deals, working closely with Democratic leaders such as House Speaker Tip O’Neill of Massachusetts to overhaul Social Security and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois to revamp the tax code. Ann Romney Takes Biggest Stage Yet To Humanize Husband (Bloomberg) Mitt Romney’s likability gap was evident in a Washington Post/ABC News poll released yesterday. The poll, taken Aug. 22-25, showed 27 percent of registered voters find Romney to be more friendly or likable among the two candidates, compared with 61 percent for the incumbent. Kidney for Ohio patient's transplant put in trash (AP) A nurse accidentally disposed of a kidney from a living donor this month at an Ohio hospital, and doctors tried unsuccessfully for at least two hours to resuscitate the organ in what medical experts describe as a rare accident, health officials said. "Human error rendered the kidney unusable," University of Toledo Medical Center spokesman Toby Klinger said Saturday, but he declined to give more details, citing the hospital's investigation into what happened and its respect for the privacy of the patients involved. But one of the doctors involved told Dr. David Grossman, a Toledo-Lucas County health commissioner, that a nurse disposed of the kidney improperly. Two nurses have been placed on paid administrative leave while the hospital reviews what happened, Klinger said.

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US Wants Criminal Charges For RBS (WSJ) U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks.U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland Group RBS.LN +0.52% PLC that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks. IRS can seek UBS records for taxpayers hiding income at Wegelin (Reuters) A federal judge on Monday authorized the Internal Revenue Service to seek records from UBS AG of U.S. taxpayers suspected of hiding their income in accounts with Swiss bank Wegelin. Wegelin, the oldest Swiss private bank, pleaded guilty in Manhattan federal court on January 3 to charges of helping wealthy Americans evade taxes through secret accounts and then announced it would close down as a result. Little Debbie Maker to Buy Drake’s Brand, Hostess Says (Bloomberg) Hostess Brands Inc. said McKee Foods Corp., maker of Little Debbie snacks, agreed to pay $27.5 million for its Drake’s brand and United States Bakery Inc. offered to buy certain bread brands for $28.9 million. “The contemplated purchase prices for Drake’s and the four bread brands, together with our previous announced stalking- horse bid for the majority of our bread business, means we have agreements to sell these assets for at least $440 million,” Hostess Chief Executive Officer Gregory F. Rayburn said today in a statement. United States Bakery agreed to buy the Sweetheart, Eddy’s, Standish Farms and Grandma Emilie’s bread brands, four bakeries and 14 depots, plus certain equipment, according to court papers. Iceland Wins Case On Deposit Guarantees (WSJ) Iceland won a sweeping victory in a court fight over its responsibilities to foreign depositors in Icelandic bank Landsbanki, which failed in 2008. The court of the European Free Trade Association on Monday said Iceland didn't breach European Economic Area directives on deposit guarantees by not compensating U.K. and Dutch depositors in Landsbanki's online savings accounts, known as Icesave accounts. The EFTA Surveillance Authority, or ESA, which brought the case against Iceland, had claimed that Iceland should have made sure U.K. and Dutch savers who lost money on Icesave got repaid from deposit insurance. Jamie-Lynn Sigler engaged to Lenny Dykstra's son (NYDN) The actress who played Meadow Soprano announced on Twitter Monday that she's engaged to Cutter Dykstra, a baseball player with the Washington Nationals. "So this just happened," she tweeted along with a photo showing off her huge new diamond alongside her smiling fiancé. "Thank you so much for all the love everyone. I am so happy and more importantly lucky," Sigler, 31, said in a follow-up tweet. "She said yes!!" Cutter, 23, wrote on his own Twitter feed. Sigler was by Cutter's side last month when family members filed into a federal courthouse in downtown Los Angeles for Lenny Dykstra's sentencing in his bankruptcy fraud case. Yahoo Profit Drops But Revenue Rises (WSJ) For Ms. Mayer, the results were enough that the "honeymoon period is going to last at least a couple of more quarters" while investors wait to see progress, said Sameet Sinha, an analyst at B. Riley & Co. 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Because now it’s three with the gray,’” Quinn continued. TARP Firms' Pay Unchecked (WSJ) Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, on Monday said the Treasury failed to look out for taxpayers by relying "to a great extent on the companies' proposals and justifications without conducting its own independent analysis." Ms. Romero also said the Treasury hasn't put in place policies that would ensure salaries are within guidelines designed to discourage excessive risk taking by companies receiving bailout aid. Bridgewater’s Dalio Sees ‘Game Changer’ as Money Shifts (Bloomberg) Ray Dalio, founder of Bridgewater Associates LP, the world’s biggest hedge fund, said 2013 will be a “game changer” for the economy as investors reallocate money after risks such as Europe’s sovereign debt crisis receded. “There’s a lot of money in a place that’s getting a very bad return and in this particular year there’s going to be, in my opinion, a shift,” Dalio said at a Bloomberg panel discussion at the World Economic Forum in Davos, Switzerland. “The complexion of the world will change as that money goes from cash into other things. The landscape will change, particularly later in the year and beyond.” Will the New BlackBerry Win Back Corporate Customers? (WSJ) Survey says: probably not but maybe, who knows. 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Reports in the South American country suggest he was ready and willing, and only escaped death because he noticed a strange smell. The curious husband then took his wife to hospital in Sao Jose do Rito Preto to find out the cause of the unusual odour. The alleged attempt on his life was exposed when tests on his wife discovered traces of a poisonous substance down below.

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